Morning Brief: Top Financial Stories Dominating on Wednesday, May 4

Reuters

HSBC Kick Starts Its $1B Planned Share Buyback

• HSBC Holdings plc HSBC has launched its planned $1 billion share buyback Wednesday as it seeks to redeploy excess capital and reward shareholders.
• The bank has appointed Merrill Lynch International to conduct the process, which could see as many as 2 billion HSBC common shares canceled in a move that should boost average EPS.
• Merrill Lynch will make trading decisions concerning the buyback independently of HSBC and purchase shares ‘on exchange,’ the bank said.

Fed Expected To Hike Interest Rate By Half Percentage Point To Curb Inflation

• On Wednesday, the Federal Reserve is expected to raise interest rates by half of a percentage point and announce the start of reductions to its $9 trillion balance sheet as U.S. central bankers work to combat high inflation.
• The decision would lift the Fed’s short-term target policy rate to 0.75% - 1% and set a plan to trim its Treasuries and mortgage-backed securities portfolio by as much as $95 billion a month.
• Markets have priced in further rate increases through this year and into next.

FAA Requires US Airlines To Upgrade And Replace Radio Altimeters

• The Federal Aviation Administration (FAA) plans to meet with telecom and airline industry officials to discuss a campaign to modify and eventually replace some airplane radio altimeters that could face interference from C-Band 5G wireless service.
• The altimeters provide data on a plane’s height above the ground and are critical for bad-weather landings. Still, airline fears about wireless interference from a planned 5G rollout caused issues at certain US airports earlier this year.

SAP Plans To Divest Profitable Corporate Learning Software Business

• German software firm SAP SE ADS SAP is working with investment bank Moelis & Company MC to divest its corporate learning software business Litmos.
• CEO Christian Klein looks to move towards subscription-driven services and increase cloud-based revenue.
• The report noted the sale of the profitable California-based Litmos could fetch a valuation of more than $1 billion.

Wall Street Journal

Welltower Made All-Cash $5B Bid For Healthcare Realty Trust

• Welltower Inc WELL, a healthcare-focused real estate investment trust, has reportedly made a nearly $5 billion all-cash bid for Healthcare Realty Trust Incorporated HR, according to people familiar with the matter.
• Welltower, with a market value of roughly $41 billion, has a portfolio of senior housing, rehabilitation centers, and medical offices. Healthcare Realty deal would expand its presence in medical-office buildings.
• Welltower remains interested after its bid was rejected and plans to say as much to Healthcare Realty this week, the people said.

Bloomberg

Jane Street Plans To Borrow $25M In USDC Crypto Via Clearpool

• Wall Street’s trading powerhouse Jane Street, famed for its domination in markets such as ETFs and corporate bonds, is turning to decentralized finance to borrow cryptocurrency.
• Jane Street plans to borrow up to $25 million in USDC, a stablecoin pegged to the US dollar, to expand to $50 million.
• It will borrow from the crypto business BlockTower Capital via Clearpool, a DeFi marketplace where institutions can obtain uncollateralized liquidity from a network of lenders. Clearpool is backed by worldwide investors such as Sequoia Capital and Arrington Capital.

India’s Biggest IPO Enjoys Analyst Confidence Thanks To Attractive Valuation, Retail Investor Discount

• India’s largest IPO has started taking orders from individuals and other categories after attracting anchor investors.
• Retail investors can place their orders for shares of India’s state-controlled Life Insurance Corporation until May 9.
• Retail investors will be allocated 35% of the stock on sale and will enjoy an ₹45 discount on the IPO price.

Financial Times

Aston Marin Names Former Ferrari Chief Amedeo Felisa As CEO

• Luxury sports car manufacturer Aston Martin Lagonda Global Holdings Plc ARGGY has disclosed Amedeo Felisa has joined as Chief Executive Officer, replacing Tobias Moers.
• The overhaul of its management structure comes ahead of a push into electric vehicles, Financial Times reported.
• Felisa has spent his entire career in automotive and engineering with over 26 years in leadership roles at Ferrari N.V. RACE including eight as CEO.

DiDi Faces Double Whammy Of US, China Investigations

• The U.S. SEC is probing DiDi Global Inc’s DIDI botched U.S. IPO.
• DiDi’s annual report disclosed that “the SEC contacted us and made inquiries in relation to the offering.”
• DiDi President Jean Liu also made her posts on the Chinese social media platform Weibo Corporation WB invisible to her 10 million followers over the weekend.

Benzinga

Elon Musk Bashes Apple Once Again — Says iPhone Maker Imposes’ 30% Tax On The Internet

• Tesla Inc TSLA CEO Elon Musk says Apple Inc’s AAPL app store fees is like having a “30% tax on the Internet.”
• Musk was responding to a Tweet by Slashdot that featured an article on how PayPal Holdings Inc PYPL +0% helped initiate a European Union antitrust complaint against Apple payments.
• Musk, who is also a co-founder of PayPal, said it was “definitely not ok” that Apple’s store could extort a “30% tax.”

Facebook’s Parent Developed A New AI Language Model — Now It’s Giving It Away For Research

• Facebook parent Meta Platforms Inc FB says it is giving away research surrounding a large language model in its commitment to “open science.”
• The artificial intelligence (AI) language it is sharing is called Open Pretrained Transformer (OPT-175B). Meta says it is a language model with 175 billion parameters trained on publicly available data sets, according to a statement from Meta AI.
• Large language models are natural language processing (NLP) systems with more than 100 billion parameters, according to Meta AI.

Volvo Cars Registers ~25% Decline In April Sales

• Swedish automaker Volvo Car Group has reported a 24.8% decline in April sales.
• The company attributed the steep fall to lockdowns in eastern China due to a rise in COVID-19 cases and the persisting global supply chain challenges.
• Electrified Recharge models grew 18.7% Y/Y, constituting 38.4% of total sales. Fully electric cars share was 10% in the month.
• Car sales in the U.S. decreased 9.2% Y/Y. Sales in Europe fell 23.2%. China sales declined 47.8%

Shiba Inu Flips FTX Token Again For Ethereum Whales’ Biggest Dollar Holding

• Shiba Inu SHIB/USD is once again the most held token among the 100 largest Ethereum ETH/USD whales.
• According to an alert from on-chain wallet tracker Whale Stats, SHIB flipped FTX Token FTT/USD to become the biggest dollar holding among the richest Ethereum whales.
• While the token has reclaimed the top spot among Ethereum whales, the average number of transactions has seen a significant decline.

No More Free Twitter? Elon Musk Says These Types Of Users May Have To Shell Out Money To Use The Platform

• Tesla Inc TSLA CEO Elon Musk on Tuesday teased plans to monetize Twitter Inc TWTR, a platform he calls “the bedrock of a functioning democracy” and where he has promised to return free speech after completing his $44 billion take-private deal.
• The billionaire entrepreneur said he plans to keep the microblogging site free for casual users while charging commercial and government users a slight fee.
• Musk in an earlier Tweet said, “the downfall of the Freemasons was giving away their stone cutting services for nothing.

Tesla Confirms Plans For New Shanghai Plant That Would Double China Capacity

• Tesla Inc TSLA has confirmed plans to build a second manufacturing plant in Shanghai as it looks to double production capacity in China, Reuters reported on Tuesday, citing a letter from the Elon Musk-led company addressed to local officials.
• Tesla plans to expand its plant in Shanghai and build a new facility on nearby land in the same area.
• The new facility will add an annual capacity of 450,000 cars and produce Model 3s and Model Ys.

Self-Proclaimed Satoshi Nakamoto Sues Coinbase, Kraken Over ‘Fake’ Bitcoin Sales

• Craig Wright, the Australian computer scientist who claims to be Bitcoin’s BTC/USD creator, is now suing major cryptocurrency exchanges, Kraken and Coinbase Global Inc COIN.
• According to an intellectual property claim issued by ONTIER LLP on Friday, Wright is alleging that Kraken and Coinbase are “misrepresenting” BTC as Bitcoin Core when in fact, it is a software implementation created in 2017 that is separate from the original system.
• “The only digital asset that remains true to the original Bitcoin protocol is ‘Bitcoin Satoshi Vision’ BSV/USD, which is the software implementation of the original Bitcoin protocol,” stated ONTIER on behalf on Wright.

Photo via Wikimedia Commons