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Instructor Spreadsheet to accompany product W32151.

In July 2022, Celsius Network filed for Chapter 11 bankruptcy. CEO Alex Mashinsky acknowledged that Celsius had grown its assets "faster than the Company was prepared to deploy [them]" and as a result had made "certain poor asset deployment decisions." Two months after filing, Celsius initiated a marketing and sale process to identify potential buyers for its assets. By April 2023, the field was reduced to NovaWulf and Fahrenheit, LLC. Both bidders proposed reorganizing Celsius' business as a going concern and giving its creditors and 1.7 million customers near-total ownership of the reorganized company. However, the ultimate fate of Celsius' many stakeholders remained anything but clear.

It was September 2022, and, despite a long day at the office, Stephen Price had a lot to consider. He had just finished a meeting with the development and sales team at Graywood Developments (Graywood), during which they had discussed one of the latest developments in Graywood's pipeline-the Centricity project. With a zoning bylaw amendment (ZBA) in hand, kicking off sales for the project was the next step in the process. However, with a looming recession and an anticipated cooling of the real estate market, Price had to decide whether to proceed with a sales launch in the first quarter of 2023, or shelve the launch until market conditions improved. Graywood could ultimately launch sales in January 2023 in the hope of achieving an average selling price of CA$1,650 per square foot, or it could delay the launch until January 2024 and hopefully sell at $1,700 per square foot or higher-though there was no guarantee that the market would improve. He wondered what impact his decision would have on Graywood's plans to launch its tenth real estate fund in 2023. This case includes a complex merchant developer Microsoft Excel model, whereby students can adjust inputs and observe how key metrics change.

Spreadsheet Supplement for Case W34120

On March 10, 2023, Silicon Valley Bank (SVB) went into receivership. At the time, it was the second-largest US bank failure in history. What happened? The case briefly describes the story of SVB, from its origin in the early 1980s to March 2023, and focuses on the events surrounding its demise. The case discusses in detail the issues that led to SVB's bankruptcy, in particular interest-rate risk, asset-liability management (ALM), inadequate stress testing, risk management more broadly, corporate governance, regulation, issues related to the bank's focus on venture capital (VC) and private equity (PE) loans, and its exposure to the technology sector. The case also describes the Fed's reaction after the bankruptcy. The SVB episode offers an important learning opportunity that touches many facets of a bank and its environment. It has several clear messages about bank management leadership. The case is well suited for a course on financial institutions, money and banking, and risk management. Ideally it would be positioned after credit, interest-rate, and liquidity risks have been covered, so that students have a better understanding of these concepts before they tackle this case; it could also be used as an introduction to the banking model, its key risks, and the role of the Federal Reserve. At Darden, it is taught in the second-year elective, "Financial Institutions and Markets."

In April 2021, the owner and founder of Claw & Kitty (CK) in Markham, Ontario, was considering moving his claw machine arcade to a larger location to continue growing his business. The owner had managed to grow his business despite the challenge of numerous pandemic-related shutdowns, and now he wanted to expand. He needed to decide whether this was a good time to do so. Would CK be able to survive if the Ontario government implemented future lockdowns or capacity limits? The owner had to assess the return and payback he might expect on this large investment and consider how he would fund the expansion. He would need to analyze the incremental revenues and costs and compare these against the investment to determine whether this move made sense from both qualitative and quantitative perspectives.

This case involves quantifying emissions, their impact, and applying the social cost of carbon to complete a comparative financial valuation for a fictional startup, VerticalFarm Co. (VFC). VerticalFarm Co. sites, develops, and owns/operates vertical farms in retrofitted buildings such as warehouses or high rises. These vertical farms grow fresh produce (e.g., lettuce, spinach, microgreens and herbs), using lighting, water nutrient delivery systems, and temperature control. VFC's leadership is passionate about providing fresh, nutritious food in traditionally food-insecure urban areas and creating employment opportunities in the local community. They aim to expand their operations to a building in Chicago for which they seek venture capital (VC) investment. The fictional protagonist is a senior investment analyst at a large VC firm. She is asked by her boss to evaluate how the social cost of carbon would affect the firm's current valuation of VCF-and her analysis and recommendation is due in just a few days, per the request of the firm's board of directors. Students are asked to act as the protagonist and incorporate the social cost of carbon into the proforma projections and then compare them to the original due diligence analysis. Finally, they will make a recommendation either "for" or "against" investing in VFC. The case provides an overview of climate change; why emissions are a challenge (from both global stability and monetary impact quantification perspectives); an overview of controlled environment agriculture; and the framework for an analysis and the quantification of the social cost of carbon. Data on alternative estimates of the carbon price for the United States are provided.

As the cofounder and CEO of Whole Foods, John Mackey had spent the better portion of his life rapidly growing the company from a niche natural grocery store in Austin, Texas, into the premier natural-foods grocer in the United States. Highly regarded as industry leader, Whole Foods contributed to the explosion in health-conscious eating sweeping the country. But not all good things lasted forever. Whole Foods had been treading increasingly choppy waters since early 2014. Increased competition in the natural-grocery space and broader macroeconomic factors wore on earnings and contributed to lackluster stock returns. Investors were becoming increasingly frustrated with company's leadership team. By the end of April 2017, Whole Foods had received a number of inquiries from both strategic and financial buyers. A full-blown sale process was launched, and though tech giant Amazon entered the bidding war late, its offer was fast and decisive, not giving Whole Foods much time to contemplate or find a competing bid. Now Mackey faces a decision that will not only shape the fate of his company, but the broader direction of the grocery industry for years or even decades to come.

Social Finance is a Boston-based nonprofit that works at the intersection of finance and policy. It raises, allocates, and manages capital to fund projects in the areas of education, early childhood development, criminal justice, and health. The case explores how Social Finance designs and implements programs related to worker training. While Social Finance's recently launched New Jersey Pay It Forward program has garnered nationwide interest, the organization currently serves around 50,000 people and has ambitions to eventually help upskill millions of Americans. Social Finance's leadership is now examining how best to expand its reach, at a time when rampant shortages of "middle skill" labor threaten to slow economic growth and the energy transition in the United States.

This case covers the events leading up to the 2021 GameStop short squeeze. Using GameStop as an illustrative example, the case explores the rise in retail trading, increased financial information sharing on social media, and the gamification of investing enabled by trading applications (apps) such as Robinhood.

Bob Hall, President of Green Gables Partners, evaluated whether to angel invest into an up-and-coming ski brand. As the son-in-law of the founder of Vera Bradley and having retired from a lengthy career on Wall Street, Hall was well-versed in both direct investing and the consumer goods industry alike. He also loved learning about new entrepreneurs pushing the boundaries of their industry-and taking a hands-on approach to his investments. With his lifelong love for skiing, he found himself drawn to emerging ski-preneur, Curt Nichols, and his ski goggle brand Glade Optics. Bob weighed Nichols' proposal for a direct investment deal and the terms. How should he evaluate the proposal, his increasing concentrated risk in ski apparel, and whether he could invest for both financial returns and the future of an industry he loved?

This case study examines the pivotal role of centralized exchanges in today's digital asset ecosystem and emphasizes the importance of thorough due diligence for institutional investors when assessing digital asset companies. It underscores the need to recognize potential warning signs, such as inadequate regulatory oversight, inexperienced management, or intricate corporate structures. Furthermore, it delves into effective practices for Sovereign Wealth Funds (SWFs) and other institutional investors venturing into the digital asset landscape to adeptly manage risks. In this case, students assume the role of Raffi, an analyst at a prominent Middle Eastern SWF. The SWF contemplates digital asset investments as part of its portfolio diversification strategy but is wary of associated risks, especially in the aftermath of the FTX collapse. Consequently, they assign Raffi the task of investigating the FTX collapse, extracting essential lessons, and formulating a robust due diligence framework to mitigate risks in future digital asset investments. This case aims to provide students with a comprehensive understanding of the factors contributing to the FTX collapse and acquaint them with best practices for institutional investors navigating the digital asset space, focusing on the identification and mitigation of counterparty risks.

Aiming to blaze the trail that would lead the air travel industry out of the pandemic, SITA decided to reshuffle and renew its credit facilities. In the process, it established that sustainability - particularly ESG factors - would play an increasingly critical role in the financing of the struggling aviation sector. Negotiating a sustainability-linked revolving credit facility (RCF) that connected specific ESG targets to potential pricing benefits proved to be an opportunity for SITA's executives to (1) draw on and gauge the impact of SITA's established credentials and experience in areas that included carbon-neutral certification and accessing alternative sources of funding such as Schuldschein; (2) alleviate financial risk for airlines (as SITA members); and (3) kickstart a broader, organization-wide change process led by Finance and Treasury, of ESG learning, data collection (encompassing scope 2 and 3) and building a culture of sustainability. Although the purely economic gains of ESG compliance for SITA might be modest overall, several positive links emerged. They include those between meeting ESG targets and obtaining priority access to funding, better compliance with regulatory requirements, increased customer loyalty and employee productivity, and improved firm value and financial performance.

The release of ChatGPT and other generative AI models marked the beginning of a revolution in various industries by automating work processes. These AI technologies, accessible through chatbot interfaces, could generate text, audio, code, images, and videos, saving time and resources. In 2023, generative AI was starting to transform the way professionals worked in the accounting industry, enabling them to streamline auditing and accounting processes, utilizing natural language processing (NLP), and improving information search. The big-four accounting firms invested heavily in developing their own AI solutions to enhance efficiency and offer innovative client solutions. However, in early 2023, some big-four offices restricted the use of generative AI models, while other firms embraced the technology, providing guidance and training to their staff. The rapid growth of generative AI posed challenges for businesses unprepared for automation, leading them to assess the risks and benefits before adopting AI. Joesy Loh, an audit partner at a Singaporean CPA firm serving SMEs, recognized the potential of generative AI to improve audit efficiency and financial statement preparation. How can Joesy persuade her partners to embrace generative AI technology, considering their concerns about the accuracy of the generated output and data security for their firm and clients?

In its effort to fight climate change, the Royal Bank of Canada (RBC) established its RBC Climate Blueprint, an enterprise strategy to accelerate clean economic growth and support its clients in a socially inclusive transition to net-zero. RBC holds itself accountable to this plan through its Environment, Social, and Governance (ESG) Performance Report, which quantifies the bank's climate change actions. Any business activities that contradict RBC's strategy may adversely impact the bank's reputation. This study was carried out in response to a strategic decision-making requirement from RBC regarding Bitcoin and new technology investment. The case discusses the definition of cryptocurrency, the Bitcoin mining process, energy consumption associated with the mining procedure, and the impact of Bitcoin mining on climate change. After thoroughly describing and analyzing each topic, we will draw conclusions about the effects of Bitcoin mining energy consumption on climate change. At the end of the study, we will be able to answer this question: What environment-related reputational risk might RBC face if the bank were to support products and services around Bitcoin?

Spreadsheet Supplement for Case W33551

Spreadsheet Supplement for Case W33551

In January 2021, Indigo Paints Limited launched an initial public offering of ordinary equity shares to list the company on a stock exchange. It was one of the most subscribed public offers in recent times in India. The company was in the business of manufacturing and selling decorative paints. A retail investor from Mumbai, India received an allotment of Indigo shares and wondered if the grey market premium indicated a fair value for the stock. He understood that initial public offerings were generally underpriced, but wondered what the company’s intrinsic value actually was. He sought input from his friend, who was an independent financial advisor, to help him understand the value proposition that the initial public offering would bring to Indigo Paints Limited. The two friends consulted all relevant financial statements and began their calculations.

Spreadsheet to accompany product W31083.