Polymarket speaks
With the presidential race so tight, election watchers have become increasingly fascinated by political prediction markets, especially as the odds implied by wagers on their platforms suggest that Donald Trump is more likely to win the election.
Questions have arisen about a group of four accounts on Polymarket, one of the most popular platforms, and whether they artificially inflated Trump’s odds there. The start-up told DealBook’s Michael de la Merced that it didn’t believe that to be the case, and provided more information about who’s behind the bets.
The company said that one person was responsible, confirming online speculation. It said that a French national with “extensive trading experience and a financial services background” was the whale behind the accounts — Fredi9999, Theo4, PrincessCaro and Michie — dominating a particular bet about who will win the election. The collective size of the trading positions of the accounts was about $28 million as of Thursday morning, according to data on Polymarket.
Polymarket added that it had made contact with the trader as part of an investigation that was being carried out with the help of outside experts. (DealBook understands the platform worked with Nardello & Company, an investigations firm.)
DealBook hasn’t independently verified the details in Polymarket’s statement, though others have concluded that the four accounts are linked.
Polymarket said it had found no evidence of attempted market manipulation. Instead, it said the trader was “taking a directional position based on personal views of the election.” By spreading out relatively small bets on Trump’s odds, the trader’s goal appeared to be buying up the contract but not suddenly pushing up its price. (Bloomberg Opinion’s Matt Levine has made a similar argument.)
That said, Polymarket added that the person had agreed “not to open further accounts without notice.”
Polymarket said that its contract’s performance was “generally consistent with the price movements on other prediction market platforms.” The contract shows the odds of a Trump victory at over 60 percent Thursday morning. By comparison, similar contracts on PredictIt and Kalshi reflect a slightly tighter spread between Trump’s and Harris’s odds.
Worth noting: Polymarket doesn’t have a primary regulator. The company has been barred from allowing bets by Americans since 2022, as part of a settlement with the Commodity Futures Trading Commission. A Polymarket representative said it hoped to be allowed back in the United States and to be regulated by the agency.
Wagers on the presidential election have taken off in this cycle, especially after claims that these markets are better predictors of the White House race than traditional polls. More money has poured into them after a federal court cleared Kalshi to open up to American bettors.
But the seeming disparity between polls, which show a neck-and-neck race, and the odds on prediction markets has raised questions about potential manipulation to paint an overly rosy picture about Trump’s prospects.
Polymarket stressed in its statement that political prediction markets, which track the odds of a candidate’s victory implied by bets on a platform, aren’t the equivalent to polls, which show how people intend to actually vote.
HERE’S WHAT’S HAPPENING
Southwest reaches a settlement with its activist investor. The airline said on Thursday that it would give Elliott Investment Management several board seats. The deal averts a potentially costly and distracting proxy fight.
Apple and Goldman Sachs are fined nearly $90 million over credit cards. The Consumer Financial Protection Bureau accused the two companies of failing to properly handle fraud and refunds related to Apple Card, as well as misleading customers about interest-free payment options for some products.
The Group of 7 finalizes a $50 billion loan to Ukraine. Member nations agreed to give financing backed by frozen Russian central bank assets, essentially trying to force Moscow to pay for the damages of its invasion. The move gives Kyiv a financial lifeline without putting G7 nations’ taxpayers on the hook.
U.S. home sales tumble, again. Sales in September fell 1 percent from the previous month to a seasonally adjusted annual rate of 3.84 million; that’s down 3.5 percent year-on-year. It’s the lowest rate since October 2010, and puts 2024 on track to be the worst for existing home sales since 1995, amid elevated mortgage rates, high house prices and rising insurance costs.
The fallout from staying quiet about politics
DealBook wrote this week about normally outspoken business leaders staying mum about the presidential race. New developments suggest that doing so could lead to controversy.
The Los Angeles Times’s editorial board editor, Mariel Garza, resigned on Thursday, after accusing Patrick Soon-Shiong, the newspaper’s billionaire owner, of blocking an endorsement of Vice President Kamala Harris. “I want to make it clear that I am not OK with us being silent,” Garza told Columbia Journalism Review.
Soon-Shiong pushed back on X, writing that the editorial board was allowed to essentially draw up a comparison of the policies of Harris and Donald Trump and let readers decide whom to support. The editorial board decided to pass, he wrote. (Garza told The New York Times that what he had proposed was “not an endorsement, or even an editorial.”)
It’s another sign of corporate leaders’ cautiousness about publicly weighing in on the race, one shared by the likes of Jamie Dimon of JPMorgan Chase, Bill Gates and Warren Buffett. There’s another potential addition to the list: Jeff Bezos, whose Washington Post hasn’t yet endorsed a presidential candidate. (Status’s Oliver Darcy reports that inside The Post, employees believe a draft endorsement for Harris has been written.)
Bezos has been attacked by Trump over the years, and stood up to him when he was president. But other outspoken business moguls are now staying silent, fearful of potential retribution should Trump win.
In other political news: The Justice Department reportedly warned Elon Musk’s pro-Trump super PAC that its $1 million sweepstakes for registered voters in battleground states may be illegal. And some Trump backers are said to have criticized Howard Lutnick, the financier leading the former president’s transition team, about mixing his business interests with his political work.
Tesla is riding high
Tesla has largely missed out on the bull market run that has pushed tech stocks to records over the past year. But it’s making up some lost ground after Elon Musk’s electric vehicle maker delivered blockbuster earnings and gave hints about how the company might capitalize on a potential Trump presidency.
Here are the big numbers:
Profits last quarter soared by 17 percent year-on-year on the strength of its battery storage and vehicle-charging businesses. The sale of regulatory credits to other car makers to meet their carbon emissions also helped.
Car sales grew modestly, but Tesla warned — not for the first time — that it expected only “slight growth” in deliveries this year.
Shares in Tesla, the first of the so-called Magnificent Seven tech companies to report results, jumped more than 10 percent in premarket trading — a surge that helped lift the broader S&P 500.
Musk outlined what he might do in a Trump administration. He called for a federal approval process for self-driving cars rather than a state-by-state regime. Musk said he would push for it if Donald Trump creates a government efficiency agency, which Musk wants to run. “If there’s a department of government efficiency, I’ll try to help make that happen,” Musk told analysts.
Tesla is trying to get approval for its autonomous robotaxis in California and Texas, and said that all of its models would eventually be self-driving.
The company plans to introduce a ride-hailing app. That, too, would require regulatory approval, which Musk said he expected would be easier to first obtain in Texas. After that, the rollout plan is California and “other states.”
Investors have Trump questions, too. Dozens of shareholders took to an online forum ahead of Wednesday’s earnings call to ask whether the company was taking into account the possible fallout of Musk’s advocacy of Trump. “How does Tesla address this, and can it confirm Musk’s actions are not harming sales or growth?” one post read.
Boeing remains grounded
Boeing’s brand-new turnaround plan is already hitting major turbulence.
Shares in the plane maker are down in premarket trading after the company’s largest union rejected a new labor deal just hours after the company reported a $6 billion quarterly loss.
Here’s the latest: Members of the union, the International Association of Machinists and Aerospace Workers, will extend a nearly six-week strike after voting against a four-year contract on Wednesday. The proposed new deal would have raised pay by 35 percent but was rejected by nearly two-thirds of union members who voted.
Inflation and pension concerns doomed the plan. The tentative contract left out a major union demand: the restoration of a defined-benefit pension plan that was frozen a decade ago. And one Boeing worker told The Wall Street Journal that the bump in pay was too low to bolster the “buying power” of members.
The strike has essentially shut down production of some of Boeing’s best-selling airliners as the company’s losses mount, and as it tries to avert a crippling credit downgrade. Boeing is looking to tap the bond and equities market to raise as much as $25 billion to fund operations. It is reportedly also mulling a wider asset sale and warned that its cash burn would worsen next year.
Boeing’s woes have reverberated throughout the industry, with some of its biggest airline customers, including Ryanair, warning that the production backlog will dent their growth.
But the contract’s defeat is a major blow to the new C.E.O.’s plans. Hours before the vote result, Kelly Ortberg, who was hired this summer to revive the crisis-plagued manufacturing giant, delivered a cautious proposal to revive the company’s fortunes. Job 1: ending the strike.
THE SPEED READ
Deals
Siemens is said to be in talks to buy Altair Engineering, an American software company whose market cap is more than $9 billion, in what would be one of the German manufacturer’s biggest deals. (Bloomberg)
Keurig Dr Pepper has reportedly agreed to buy Ghost, an energy drink maker, for more than $1 billion. (WSJ)
HPS Investment Partners, a giant of the private credit world, must now decide whether to go public, take on new investors or sell itself to a rival like BlackRock. (FT)
Elections, politics and policy
Records show that the son of Representative Richard Neal of Massachusetts, an influential Democratic lawmaker on tax policy, has been paid both by his father’s campaign and by lobbyists on tax matters including some tied to Blackstone, the giant investment firm. (Politico)
An employee of the crypto exchange Binance has been released from detention in Nigeria, where he was held for eight months as part of a criminal case against the company. (NYT)
How U.S. sanctions on Russia work, through the prism of a Russian oligarch’s seized $90 million yacht. (WaPo)
Best of the rest
Kroger and Walmart denied planning to put in effect surge pricing after adopting digital price tags. (NYT)
Here’s how American Airlines intends to crack down on “gate lice.” (NYT)
For a limited time, they’re not Pepperidge Farm Goldfish crackers. They’re “Chilean Sea Bass.” (CNN Business)
We’d like your feedback! Please email thoughts and suggestions to [email protected].
The post The French Connection to Online Bets on Trump appeared first on New York Times.
