Hey folks!

X is down. And no, we’re 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 it’s not us saying this, but estimates from the investment management firm, Fidelity.

The culprit could be X’s ad revenue.

When Musk took over Twitter, advertisers were worried about the coinciding rise in hate speech and misinformation. They didn’t 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 Advertisers’ 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 group’s shutdown.

Despite GARM’s 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 X’s 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 X’s income, attempts to boost revenue by charging for verification haven’t really paid off.

And the end result is that as revenue continues to shrink, X’s price tag is shrinking too.

What do you think? Can X get back up?

Here's a soundtrack to put you in the mood 🎵

Cupcake by Mohit Gaur

This adorable song has been dedicated to all of us at Finshots by our reader, Karan Gangwani. He says that it’s now part of his everyday morning routine to wake up and make some time for our newsletter, as it keeps him updated on what’s happening in the world of finance. And by the tone of it, we can’t help but think that Karan might have a little crush on us! Thanks, Karan. We’re flattered!

Ready to roll?

What caught our eye this week 👀

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 ₹1.6 crores with fake currency notes from the ‘Resole Bank of India’ 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 Gandhi’s. That’ll remain a mystery, and we’ll only know if we’re right once they’re 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 wasn’t 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 India’s 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 wasn’t until 1969, during Gandhi’s 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 Gandhi’s smiling face on our notes permanently. And in case you’re 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 ₹1.

If you’re wondering why, there’s a simple reason. Unlike other notes, the ₹1 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. That’s because the money circulating in the economy is backed by assets like gold and foreign exchange reserves. But the ₹1 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 government’s guarantee. So, the government issues the ₹1 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 ✏️

This Day in Financial History 📜

5th of October, 1962 ― 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 here’s the twist. The film wasn’t released in the US until a year later.

And no, it wasn’t 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 wasn’t 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 that’s 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 ― 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, 1965’s 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 (£3 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 Bond’s thrilling adventures.

Thanks to Eady Levy, Bond wasn’t just a British spy but also a product of British financial policy.

And as they say, the rest is history!

Readers Recommend 🗒️

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. It’s 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 🧩

It’s time to announce the winner of our previous weekly quiz. And the winner is…🥁

Meenakshi Sundaram B. Congratulations! Keep an eye on your inbox and we’ll get in touch with you soon to send over your Finshots merch. And for the rest of you, we’ve 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, that’s it from us this week. We’ll see you next Sunday!

Until then, don’t forget to tell us what you thought of today’s newsletter. And send us your book, music, business movies, documentaries or podcast recommendations. We’ll feature them in the newsletter! Just hit reply to this email (or if you’re reading this on the web, drop us a message: morning@finshots.in).

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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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