Morning Brief: Top Financial Stories Dominating on Wednesday, May 11

Reuters

US Court Rules Against Elon Musk’s Infamous’ Funding Secured’ Tweet

• U.S. District Judge Edward Chen of San Francisco ruled that Elon Musk’s 2018 tweets of secured funding to take Tesla, Inc TSLA private were inaccurate and reckless.
• The court added that “there was nothing concrete” about Saudi Arabia’s sovereign wealth fund financing during that time.
• In 2018, Musk met with Saudi Arabia’s Public Investment Fund representatives and discussed taking Tesla private.

Germany’s Allianz Sets Aside Additional $2B For Fund Fiasco

• Allianz SE ALIZY said it would set aside another €1.9 billion ($2 billion) as it braces for the outcome of U.S. regulatory investigations into a multibillion-dollar trading debacle at its fund’s arm.
• The collapse of a $15 billion set of investment funds during the pandemic market turmoil in early 2020 has cast a long shadow over the financial firm.
• The new provision comes on top of €3.7 billion the company set aside in February to cover litigation and U.S. regulatory investigations into the funds’ demise. It brings the total to €5.6 billion.

Coinbase CEO Armstrong Clarifies New Disclosure Does Not Mean Bankruptcy Risk

• Coinbase Global Inc COIN chief executive stated that the disclosure in its latest quarterly filing did not indicate the cryptocurrency exchange operator faced a bankruptcy risk, and it had been made to meet SEC requirements, Reuters reported.
• The company’s 10-K on page 83 stated that “in the event of bankruptcy, crypto assets held by the exchange could be considered property of the bankruptcy proceedings, and customers could be treated as general unsecured creditors.
• An unsecured creditor would be one of the last to be paid in any bankruptcy and last in line for claims.

Google Forges Agreements To Pay Over 300 News Publishers in EU

• Alphabet Inc GOOG GOOGL Google forged deals to pay over 300 publishers in Germany, France, and four other EU countries.
• Google will also roll out a tool to make it easier for others to sign up.
• Among Google’s fiercest critics, news publishers have long urged governments to ensure online platforms pay fair remuneration for their content.

 

Bloomberg

SEC’s Gensler Criticized Cryptocurrency Exchanges For Trading Against Customers

• On Tuesday, Gary Gensler, chairman of the U.S. Securities and Exchange Commission, reiterated that most digital assets fall under his agency’s purview and that venues trading them should register with the regulator. He also stated that the SEC is stepping up its enforcement activities.
• In an interview with Bloomberg News, Gensler expressed concern that crypto exchanges are not putting up sufficient barriers between different parts of their businesses, such as custody, market-making, and offering a trading platform. He believes that “commingling” services may not be in clients’ best interests.
• “Crypto’s got a lot of those challenges-- of platforms trading ahead of their customers,” Gensler stated.

Nike To Add Counterfeiting Claims, False Advertising To Its Law Suit Against StockX

• Nike, Inc NKE asked a federal judge to let it add counterfeiting claims and false advertising to the current trademark-infringement lawsuit against sneaker marketplace StockX, Bloomberg reports.
• Nike prosecuted StockX in February in federal court in Manhattan for “blatantly freeriding” on Nike’s trademarks and goodwill with a service called Vault NFTs.
• StockX argued that its NFTs were simply listings for physical sneakers stored in its vault and can be traded by users.

Brookfield Asset Management Nears One Of 2022’s Biggest Take-Privates In UK

• Brookfield Asset Management Inc BAM is nearing a takeover of UK-based emergency household repairs provider HomeServe Plc, reported Bloomberg.
• According to people familiar with the matter, the deal would be one of the U.K.’s largest take-private transactions this year.
• The deal is set to value HomeServe plc HMSVF at about $5 billion. Brookfield is working on the final transaction terms and could reach an agreement in the coming days, as per the people close to the matter.

Partners Group To Acquire US Rental Homes For $1B

• Asset manager Partners Group Holding AG PGPHF has agreed to buy rental houses owned by Fortress Investment Group for $1 billion, Bloomberg reported.
• The deal includes more than 2000 new-build homes operated by Kairos Living and about 1,000 homes in contract.

 

Benzinga

Analyst Says Peloton Could Flash A Buy Signal Soon: What To Watch For

• Peloton Interactive, Inc. PTON shares sank further into negative terrain on Tuesday after it reported disappointing first-quarter results and issued weak guidance.
• Further Downside Limited: TFI Securities analyst Ming-Chi Kuo is optimistic that a turnaround could be in the cards.
• The analyst noted that Peloton shares have declined nearly 50% since April 7, when he tweeted that the company cut all component orders for 2022. A further downside could be limited, the analyst said.

Nio Surges As Singapore Listing Announced For May 20: What Investors Should Know

• Nio, Inc. NIO confirmed Wednesday its secondary listing in Singapore is expected to happen later this month.
• Shanghai-headquartered Nio said it expects its Class A ordinary shares to begin trading on the main board of the Singapore Exchange Securities Trading Limited, or SGX-ST, on May 20.
• The announcement follows the receipt of the eligibility-to-list, or ETL, letter from SGX-ST on May 5. The listing would be by way of introduction, the same route the company adopted for its secondary listing in Hong Kong earlier this year. This route allows listing without any issuance or sale of additional shares.

Amazon Key To Rivian’s Strategy, EV Maker’s Cash Burn In Question, Says Morgan Stanley Analyst

• Rivian Automotive Inc’s RIVN highly ambitious and capital intensive plan to ramp up production after initially missing production and delivery target last year could invite investor scrutiny on Wednesday when the electric vehicle startup reports first-quarter earnings after the bell, according to Morgan Stanley analyst Adam Jonas.
• The Rivian Analyst: Jonas has maintained an ‘overweight’ rating and an $85 price target on the electric vehicle startup’s shares that closed at $22.8 on Tuesday.
• The Rivian Thesis: The electric vehicle startup could burn $7 billion in cash this year and could raise an additional $3 billion of capital by the year-end to fund its “extraordinarily capital intensive” production ramp-up, Jonas said.

Coinbase Sees Crypto Trading Volume Declines 44% In Q1

• Shares of major crypto exchange Coinbase Global Inc COIN slid over 11% in extended trading on Tuesday, following dour quarterly earnings.
• The company reported a net loss of $430 million for the quarter, a considerable decline from the $840 million profit reported in the fourth quarter of 2021.
• The exchange recorded $309 billion in overall trading volume, down 44% from the last quarter.

Ford Sells 8M Shares Of Rivian At A Discount

• Ford Motor Co F said on Tuesday it sold 8 million shares in electric vehicle startup Rivian Automotive Inc RIVN, estimated to be $214.4 million, at a discount.
• Ford still owns 93.9 million shares in the Irvine, California-based electric-car maker.
• Ford sold the shares after the post-IPO lockup period for Rivian ended on Sunday. The legacy automaker had picked a stake in Rivian prior to its going public last year.

Philip Morris Offers To Acquire Swedish Match For ~$16B

• Philip Morris International Inc PM is set to acquire tobacco company Swedish Match AB SWMAF for SEK161.2 billion ($16 billion).
• ·Investors in the Stockholm-based company will receive SEK106 in cash for each share held.
• ·The decline of cigarette sales due to health reasons had pushed Philip Morris to diversify its portfolio into e-cigarettes, heated-tobacco devices and other products.

Elon Musk Not Worried About Impact Of China Lockdowns On Tesla Production

• Tesla Inc TSLA CEO Elon Musk said on Tuesday that China is lifting COVID-19 lockdowns rapidly, adding that he does not expect any delays amid reports of a fresh production halt due to supply-chain woes.
• Musk, speaking remotely at the Financial Times “Future of the Car” conference, said he had some recent conversations with the Chinese government on the curbs.
• “I’ve had some conversations with the Chinese government in recent days and it’s clear that the lockdowns are being lifted rapidly. So I would not expect this to be a significant issue in the coming weeks,” he said.

Apple’s Latest EV Patent: What You Need To Know

• Apple Inc AAPL is pushing ahead with its electric vehicle project codenamed Titan in several key areas.
• The Cupertino company received a patent on Tuesday that depicts a new design for its ideal charging station. As seen in the diagrams, the driver would approach the ‘outlet’ while remaining inside the vehicle, and the automated system would handle everything else.
• Benzinga’s take: Cameras near the charging port’s opening would likely facilitate this procedure, and the driver would have to position the vehicle’s tires similarly to a car wash tire conveyor belt.

Shiba Inu Sees 260% Surge In Large Transactions Over 24 Hours

• Meme-themed cryptocurrency Shiba Inu SHIB/USD saw a significant uptick in high-value transactions on Tuesday.
• What Happened: According to data from IntoTheBlock, SHIB recorded a 260% increase in large transactions over 24 hours.
• The price of the Dogecoin DOGE/USD rival also rallied 23% from an intra-day low of $0.00001447 to an intra-day high of $0.00001789 over the same period, suggesting these high-value transfers were likely large purchases.

Prologis Proposes Almost $24B Acquisition Deal For Duke Realty

• Prologis Inc PLD proposed to acquire Duke Realty Corporation DRE in an all-stock transaction valued at $61.68 per Duke Realty share.
• Under the terms of the proposal, each Duke Realty share would receive 0.466 shares of Prologis common stock, equivalent to a deal value of $23.7 billion.
• Prologis’ proposal represents a premium of 29% to Duke Realty’s closing price on May 9.

Photo via Wikimedia Commons