Hey folks!
X is down. And no, weâre not talking about the website or app being unavailable.
Its valuation is literally 80% down from the $44 billion Elon Musk paid for it a couple of years ago.1 And itâs not us saying this, but estimates from the investment management firm, Fidelity.
The culprit could be Xâs ad revenue.
When Musk took over Twitter, advertisers were worried about the coinciding rise in hate speech and misinformation. They didnât want their ads appearing next to inappropriate content as it could damage their reputation. So, they wanted Musk to assure them that X would handle this problem better.
With little progress on that front, the World Federation of Advertisersâ Global Alliance for Responsible Media (GARM) nudged companies to pause their ad spending on X.2 This quickly escalated into a lawsuit from X against GARM, which ultimately led to the groupâs shutdown.
Despite GARMâs demise, the fiasco influenced many companies, both those involved with GARM and those not, including Dell, BP, Electronic Arts, IKEA, Microsoft and PepsiCo, to stop advertising on X. And eventually Xâs ad revenue began to free-fall.
For context, in the first half of 2024, advertisers spent just $740 million on the platform, which is 24% lower than their spending in the same period last year. With ads making up nearly 90% of Xâs income, attempts to boost revenue by charging for verification havenât really paid off.
And the end result is that as revenue continues to shrink, Xâs price tag is shrinking too.
What do you think? Can X get back up?
Here’s a soundtrack to put you in the mood đ”
Cupcake by Mohit Gaur
This adorable song has been dedicated to all of us at Finshots by our reader, Karan Gangwani. He says that itâs now part of his everyday morning routine to wake up and make some time for our newsletter, as it keeps him updated on whatâs happening in the world of finance. And by the tone of it, we canât help but think that Karan might have a little crush on us! Thanks, Karan. Weâre flattered!
Ready to roll?
What caught our eye this week đ
How did the Father of the Nation become the face of Indian currency notes?
Some crooks just got caught up in a counterfeit currency case. And while we have no clue of their identities, we know one thing about them. They might be Anupam Kher fans!3
How do we know that?
Well, it seems they duped a gold firm owner of âč1.6 crores with fake currency notes from the âResole Bank of Indiaâ featuring none other than actor Anupam Kher instead of Mahatma Gandhi!
But hey, we could be wrong in calling them fans because they might have just picked Kher because he shares the same hairdo as Gandhiâs. Thatâll remain a mystery, and weâll only know if weâre right once theyâre caught.
But that got us thinking. Why is Gandhi the face of our currency notes and not someone else?
Now, we know that Gandhi seems like a natural first choice to represent India. But he wasnât actually the first pick. After independence, we needed to move away from colonial symbols like King George VI on our currency.4 And Gandhi was on the shortlist too. But ultimately, the Lion Capital of Ashoka at Sarnath was chosen to symbolise Independent India on our notes.
Over time, our notes began telling stories of Indiaâs growth.5 Early designs featured animals like tigers and sambar deer, while the 1970s shifted to images of agriculture, plucking tea leaves and farming scenes. The 1980s celebrated scientific achievements, with images like the Aryabhata satellite. And it wasnât until 1969, during Gandhiâs 100th birth anniversary, that his image first appeared on Indian currency as part of a special series of notes issued by the RBI.
Fast forward to the 1990s, and the RBI (Reserve Bank of India) realised that Indian currency notes needed more security features to combat counterfeits. So in 1996, it decided to phase out the Lion Capital and put Gandhiâs smiling face on our notes permanently. And in case youâre curious, this picture was cropped out from a photo with British politician Lord Pethick-Lawrence, taken just before independence. Since his smiling expression seemed most suitable to appear on our currency, that image went on to become the face of all Indian rupee notes except âč1.
If youâre wondering why, thereâs a simple reason. Unlike other notes, the âč1 note is issued directly by the Government of India and not the RBI. It even bears the signature of the Finance Secretary, not the RBI Governor. Thatâs because the money circulating in the economy is backed by assets like gold and foreign exchange reserves. But the âč1 coin and its paper equivalent are fiat currency not backed by anything tangible such as gold like it used to be decades ago. Instead, they derive their value from the governmentâs guarantee. So, the government issues the âč1 coin and note, along with all other coins. And in turn the RBI circulates this currency and issues notes, helping it balance its assets and debts.
Interesting, no?
Jargon of the day âïž
This Day in Financial History đ
5th of October, 1962 â The first James Bond movie and the Eady Levy
On this day, the world was introduced to a suave British secret agent with a licence to kill.
Dr. No, the first James Bond movie, premiered in the UK.
The film was made on a modest budget of about $1 million, a relatively small sum even by 1960s standards. But Dr. No defied expectations, grossing over $59 million worldwide.
But hereâs the twist. The film wasnât released in the US until a year later.
And no, it wasnât some clever marketing strategy. The delay was actually caused by a little-known financial policy called the Eady Levy.6
Back in the 1950s, the UK film industry was struggling. To give it a much-needed boost, the British government introduced the Eady Levy, a fund designed to support local filmmakers. This fund was formed as a result of cinema owners charging slightly higher ticket prices and funnelling a portion of that revenue into the fund pool. This money was then distributed to British filmmakers based on the box-office success of their films.
But it wasnât just British filmmakers who saw an opportunity. Hollywood studios too, soon realised that they could access these subsidies by meeting a few key criteria.
And thatâs exactly how Dr. No got made.
To finance the Bond film, American studio United Artists (UA) teamed up with Albert R. Broccoli (an American) and Harry Saltzman (a Canadian). Together, they set up Eon Productions, a British film production company, with the goal of creating a truly British product but with American dollars.
To tap into the Eady Levy, Dr. No had to fulfil two key conditions â a film with an almost entirely British cast and crew and filmed in the UK or the British Commonwealth.
With Pinewood Studios in the U.K. as the primary filming location and scenes shot in Jamaica (then a British Commonwealth country), Dr. No checked all the boxes.
The Eady Levy effectively reduced production costs, allowing Broccoli and Saltzman to bring 007 to life on the big screen without breaking the bank.
And it paid off.
Dr. No became a huge hit, grossing $840,000 in just two weeks in the UK. The Bond franchise went on to benefit even more from the Eady Levy in the following years.
For instance, 1965âs Thunderball, the fourth Bond film, received $2.1 million from the Eady fund or about a whopping 15% of the total subsidies available that year. By the early 1970s, the Bond series had drawn more than $7 million (ÂŁ3 million) from the Eady Levy.
But there was a trade-off.
To qualify for this financial support, the film had to be released in the UK first, which meant that the US audiences had to wait until 1963 to catch Bondâs thrilling adventures.
Thanks to Eady Levy, Bond wasnât just a British spy but also a product of British financial policy.
And as they say, the rest is history!
Readers Recommend đïž
This week our buddy Harshit Nayyar is back with another recommendation. He suggests reading The Prize, a recommendation inspired by our section This Day in Financial History. Itâs about the history of oil and the struggle for wealth and power that has always surrounded the prized commodity.
Thanks for the rec, Harshit!
Finshots Weekly Quiz đ§©
Itâs time to announce the winner of our previous weekly quiz. And the winner isâŠđ„
Meenakshi Sundaram B. Congratulations! Keep an eye on your inbox and weâll get in touch with you soon to send over your Finshots merch. And for the rest of you, weâve moved the quiz to our weekly wrapup. So make sure you answer all the questions correctly by 12 noon on October 12, 2024 (Saturday) and tune in here next week to check if you got lucky.
Anyway, thatâs it from us this week. Weâll see you next Sunday!
Until then, donât forget to tell us what you thought of todayâs newsletter. And send us your book, music, business movies, documentaries or podcast recommendations. Weâll feature them in the newsletter! Just hit reply to this email (or if youâre reading this on the web, drop us a message: [email protected]).
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Don’t forget to share this edition on WhatsApp, LinkedIn and X.
Sources: CNN Business [1], Quartz [2], Business Standard [3], Deccan Herald [4], The Indian Express [5], Sheffield Hallam University [6]
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But should you even consider doing that? Find out in this video of Finshots TV!
