Terra spooks, LIC delivers

Good morning! Welcome to The Daily Moon. There is a lot happening in our world. Everything has layers, and each layer has to be carefully peeled so you, the reader, know how the world of money is changing every day. That’s our ambition. Help you unpeel the onions, which are the public markets in the US, India, and crypto, so that you know just a little more. We know you’re busy, so this won’t take more than three minutes of your time. Let’s get started. 

Terra’s terror tale and Zora’s funding tryst 

If you’ve been closely following the world of stablecoins, there was a disturbance in the force. Terra is trading at a three-month low of $61.25. It has been sliding for the past week. The indication is that there is more to come. 

What happened?

The crypto community is saying it got FUD-ed by the whales. Let’s break these two terms — whales and FUD — down. A whale is someone who holds a large amount of crypto assets ($1 million or more). FUD translates to Fear, Uncertainty and Doubt. These investors have been taking global cues, i.e., the Fed rate hike, the ongoing war in Ukraine, and the turmoil in the US markets to place a large sell order. 

Let’s go deeper

Now, with the whales dumping UST, there is a large sell order. And the market is starting to question the fundamentals of the token. And so we have what we have. This should raise two questions. 

1. How can a handful of investors tank a token? It should worry people who wade into crypto assets. Research before you buy. Just like you would with a regular stock. Understand what’s driving it before buying. If whales own these tokens, things could change very quickly for you, the investor. 

2. What are the other effects of this slump? Now, UST is pegged to the dollar. That simply means $1= 1UST. Like most stablecoins, UST is not driven by the wild west of crypto. But for all its stability, it couldn't survive this. Its peg fell as low as $0.98/Terra, as opposed to the standard $1/Terra. 

It’s not all bad

NFTs are getting hot. Zora Laps has raised capital from Katie Haun’s venture fund.  The startup allows artists to create NFT markets and collections, much like OpenSea. It was valued at $600 million.

Everyone Wants A Share 

It’s the biggest IPO of the season. And naturally, retail investors are pumped. Among the many records that Life Insurance Corporation of India (LIC) can boast about, is the fact that over 5.9 million retail investors have applied for its IPO. This is the highest number of applications ever, beating the 4.8 million clocked during Reliance Power’s 2008 listing. 

The sweet gains 

The IPO has already been subscribed 2.89 times. Retail investors are in a bit of a frenzy, trying hard to grab a share. This doesn’t come as a total surprise, though. At $2.75 billion, this is the largest-ever IPO in India. And it has been a listing that investors were waiting for. LIC is no ordinary company. With a balance sheet of $516 billion, LIC’s assets are more than the entire MF industry. Go figure.

Policyholders were particularly interested, considering the Rs 60 special discount. No wonder customers made a beeline, bidding for 5X the number of shares on offer. 

What changes after the IPO?

Once it is listed, LIC’s investments will be under close watch. It is the biggest corporate investor in India, and often traders follow LIC’s buy/sell moves to make their own decisions. Policyholders’ interests matter too. After all, what LIC invests into stocks is the premium it collects from customers like us. If it makes a profit, we get bonuses and higher returns. And with the IPO, all investment tweaks will be publicly announced. Going public also means some performance pressure on the LIC. So no equity purchase or sale by the insurer will go unnoticed. 

If you’re one of those who has applied to get a piece of this mega IPO pie, you’ll know in about a week if you’ll be a LIC shareholder. 

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