The business world has been captivated by the slow-moving train wreck that is Evergrande, a massive Chinese real estate developer that’s buried up to its penthouse in debt. Investors have feared that because of Evergrande’s size and interconnectedness with other companies, its impending collapse could do its best Covid impression and spread contagion across markets.

The latest: Evergrande was able to make an interest payment on a domestic bond yesterday, but the bigger question is whether it’ll be able to settle a $83.5 million bill due today. If it can’t pay up in 30 days, it could default, which might cascade across the global economy.

Why is it a big deal?

Because in China, real estate is the biggest game in town, and the town is pretty big—China is the world’s second-largest economy. In China, real estate contributes a mind-boggling 29% of GDP (compared to 6.2% in the US in 2018). Building has literally built China into the superpower it is today.

But thanks to super-low borrowing costs, the Chinese property sector has been feasting on empty calories, leading to astronomical debt loads ($300+ billion, in the case of Evergrande) and a chronic oversupply of housing.

• There is enough empty property in China to house more than 90 million people, according to the Rhodium Group’s Logan Wright. The entire population of France, Germany, Italy, the UK, or Canada could easily fit into those empty apartments.
• A viral video from last month shows 15 unfinished high-rise apartment buildings getting demolished in a matter of seconds.

Like an angry parent whose credit card was abused by their teenager, China’s government has recently taken steps to limit the amount of debt that property developers can take on. Letting Evergrande implode would show that President Xi Jinping is serious about this crackdown.

Bottom line: Some observers have compared Evergrande’s woes to the epic collapse of the investment bank Lehman Brothers during the 2008 financial crisis. But other experts say this isn’t a Lehman Brothers moment—it could be worse, if you view China’s gargantuan real estate sector as rotten to the core.—NF

We celebrated the first day of fall with six gallons of chili for dinner; Robinhood celebrated by announcing the rollout of a crypto wallet. The wallet will be available for a small test group in the next few weeks, and then to the rest of its users next year.

What is a crypto wallet? Just like regular wallets store dollars, crypto wallets are where you store your cryptocurrency. They make it possible to spend crypto like other forms of money and buy things like NFTs.

Can’t you buy crypto on Robinhood already? Kinda, in the sense that you can buy some cryptocurrencies, like bitcoin and ethereum, but you don’t own them. When you buy crypto on Robinhood, the company buys it and then stores it in its own wallet—which means users can’t transfer it out of the app to spend on their favorite CryptoPunk. Hardcore crypto people have complained that this defeats the entire purpose of cryptocurrency.

Zoom out: Robinhood’s going full laser eyes. In its latest earnings report, the company said crypto made up over half of its transaction-based Q2 revenue. While there are still some limitations to its wallet, Robinhood is building the bridge for the crypto-curious into the deeper ecosystem.—MM

Netflix has acquired the rights to all of Roald Dahl’s works, including Matilda, Charlie and the Chocolate Factory, and other tales that kept you up at night as a kid (remember “the Chokey”?). Reportedly ringing in at over $680 million, it’s among the biggest acquisitions Netflix has made over the past decade.

The deal expands on a 2018 partnership Netflix made for 16 Dahl licenses, which allowed it to start working on several animated series, plus a Matilda the Musical adaptation. Now, Netflix’s ambitions for Dahl’s stories are bigger than the Giant Peach and include games, live theater, products, and more.

• Less than a year ago, the Dahl estate publicly apologized for antisemitic comments the author made. To make amends, part of this sale’s proceeds will create a charitable fund focused on “children’s health, anti-hate, and anti-racism.”

Big picture: The competition to chill with you is fierce. Netflix is still the largest streaming service in the world with 209 million subscribers, but competitors are catching up—especially Disney+, which launched less than two years ago but already has 116 million subscribers. Dahl’s trove of kids content could help Netflix keep its edge over Disney...and all the other streamers beefing up their catalogs.—JW

Stat: Californians used just 1.8% less water at home in July than a year before, despite extreme (or worse) drought conditions covering almost 90% of the state. Gov. Gavin Newsom had urged residents to cut domestic water use by 15% in early July.

Quote: “I just think it’s time for some of our dearest friends around the world to prenez un grip about this and donnez-moi un break.”

British Prime Minister Boris Johnson engaged in some light mocking of France after the country got snubbed from a nuclear submarine pact among the US, UK, and Australia. Pardon your French, Mr. Johnson.

Read: San Francisco’s bizarre, costly quest for the perfect trash can. (Mission Local)

Toast, the restaurant tech startup, jumped about 56% in its IPO yesterday to close at a $36 billion valuation.

Chances are you’ve put your card into one of Toast’s readers to pay for your fried ravioli, because its products are used at 48,000+ restaurants around the country. That’s on the front end...but on the back end, Toast also provides management software so restaurants can digitally track orders and operate delivery networks.

It wasn’t always champagne and stock exchange. The onset of Covid-19 had Toast looking...well...like toast. Within two months of the start of the pandemic, the company laid off or furloughed half of its employees and revenue plummeted 80%.

But when restaurants had to pivot to contactless everything, Toast was there, lurking in the walk-in freezer. And after powering through 2020, it’s currently riding the dining-out wave: Annual recurring revenue climbed 118% last quarter.—MM

Made for the (literal) long run. Tracksmith makes the highest quality, performance running apparel that works as hard as you do—and dang if it doesn’t make you look great while you do it. Get yours here.*

The one thing better than pizza? Investing in pizza robots. Piestro makes artisanal pies at a fraction of the cost—and now you can get in on all that dough-making potential. With $580M in commercial pre-orders already, now’s the time to invest—the last day is 9/30.*

Touching obit: This short obituary from a brother to his sister who could never speak more than three words is quite moving.

SNL hosts for the fall: No tech CEOs this time, but we do get a Jason Sudeikis appearance. Check out the rest of the hosts and musical guests.

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Brew Mini: You've made it past Hump Day, so solving this mini puzzle should be no problem.

Three Headlines and a Lie

Three of these news headlines are real and one is faker than the excitement for a couple’s costume. Can you guess the odd one out?

1. "Samuel Adams' latest potent beer is illegal in 15 states"
2. "With natural gas prices skyrocketing in Europe, one UK man sees gold in bottled flatulence."
3. "Tim Cook says employees who leak memos do not belong at Apple, according to leaked memo"
4. "Rwandan court finds Hotel Rwanda film hero guilty in terrorism case"

*A Note From Fidelity Investments

Investing involves risk, including risk of loss.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917