WSJ : Michael Jordan Is Taking Over a New Sport. He’s Also Suing It.

Michael Jordan Is Taking Over a New Sport. He’s Also Suing It.
Ahead of this weekend’s Nascar championship race in Phoenix, Jordan’s team is chasing a title, even as his lawsuit alleging anticompetitive behavior in the car-racing empire is ongoing

An entire generation of NBA players found out the hard way that when Michael Jordan wants something, he usually gets it.

Now, another sport is learning the same lesson: Nascar.

This weekend in Phoenix, a racing team owned by the NBA legend will be gunning for a Nascar Cup Series championship, which would give Jordan yet another major title. But that’s just the start of his pursuit to shake up this insular sport, which has been run by the same family since 1948. While his driver chases a title on the track, Jordan is also suing Nascar and its chairman Jim France in a bid to topple what he views as an unfair, anticompetitive business model.

“The France family and Nascar are monopolistic bullies,” Jordan’s team, 23XI Racing, alleged in an antitrust lawsuit filed alongside another team in federal court last month. “And bullies will continue to impose their will to hurt others until their targets stand up and refuse to be victims.”

The lawsuit escalates a bitter dispute with the series over revenue-sharing. Jordan’s team says Nascar has abused its position as the country’s leading stock-car racing series to impose terms that make it economically impossible for some teams to operate. Jordan’s outfit, co-owned by driver Denny Hamlin, is joined in the suit by another Nascar team, Front Row Motorsports.

In a court filing, Nascar’s lawyers called the suit “meritless.”

“Everyone knows that I have always been a fierce competitor, and that will to win is what drives me and the entire 23XI team each and every week out on the track,” Jordan said. “I love the sport of racing and the passion of our fans, but the way NASCAR is run today is unfair to teams, drivers, sponsors and fans.”

The racing teams’ lawyer, Jeffrey Kessler, has a long track record of upending professional and college sports through litigation. He says that every one of those cases has come down to having someone willing to stand up and challenge the established order.

And Jordan, 61, has the celebrity and still-burning competitive fire to do just that.

As an athlete, Jordan was unwilling to give an inch, and his multi-billion-dollar fortune built largely from his empire of basketball shoes and apparel has given him the financial standing to go head-to-head with an entire league.

Jordan comes by his passion for motorsports honestly. Growing up in racing-mad North Carolina, he attended events as a child. While his 13 years as an owner of Charlotte’s NBA franchise were marked by disappointingly poor results, he has quickly realized a level of success as a Nascar owner.

After his driver Tyler Reddick won a playoff race in Miami last month to qualify for the championship, Jordan heaped praise on him in a way he was rarely able to do with his NBA employees.

“Little kid drove his ass off,” Jordan said of the 28-year-old in the No. 45 car. “I’m proud of him.”

But over his short tenure as a Nascar owner, Jordan quickly identified what he viewed as unfairness baked into Nascar’s business model. His complaint against Nascar says that at least four teams who signed the league’s charter agreement did so under duress, but are too afraid of retribution from Nascar to speak openly about the situation.

The suit casts Jordan, once the most famous and celebrated athlete in all of American sports, in a strange new role: the bombastic and feather-ruffling antagonist to the league itself. In many ways, he is taking on a role similar to the one that Al Davis, the late owner of the NFL’s Raiders, played in rattling pro football.

In 1980, Davis sued the NFL after it blocked his attempt to move the Raiders to Los Angeles from Oakland and eventually beat it in the courtroom. Then he beat the rest of the league on the field as his team won the Super Bowl after the 1983 season.

Jordan, too, is aiming to take down the competition on both fronts. As he left a hearing this week, Jordan left no doubt about his intentions.

“I’m looking forward to winning a championship this weekend,” he said.

>>> US Research Calls I

Research Calls I
  • Upgrades:
    • ADTRAN (ADTN) upgraded to Buy from Neutral at Rosenblatt; tgt raised to $10
    • AppLovin (APP) upgraded to Outperform from Neutral at Daiwa Securities; tgt raised to $280
    • Bank of America (BAC) upgraded to Buy from Neutral at Citigroup; tgt raised to $54
    • BioNTech (BNTX) upgraded to Buy from Neutral at Goldman; tgt raised to $137
    • Chewy (CHWY) upgraded to Buy from Neutral at Citigroup; tgt raised to $40
    • CoreCivic (CXW) upgraded to Buy from Hold at JonesResearch
    • Domino's Pizza (DPZ) upgraded to Buy from Hold at Loop Capital; tgt raised to $559
    • Doximity (DOCS) upgraded to Equal Weight from Underweight at Wells Fargo; tgt raised to $41
    • Doximity (DOCS) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $70
    • Fluence (FLNC) upgraded to Neutral from Underperform at Exane BNP Paribas; tgt $22
    • Haemonetics (HAE) upgraded to Strong Buy from Outperform at Raymond James; tgt $120
    • Home Depot (HD) upgraded to Outperform from Market Perform at Telsey Advisory Group; tgt raised to $455
    • Innovative Industrial Properties (IIPR) upgraded to Buy from Neutral at Compass Point; tgt $125
    • Intl Flavors (IFF) upgraded to Buy from Neutral at BofA Securities; tgt $107
  • Downgrades:
    • ACI Worldwide (ACIW) downgraded to Neutral from Buy at DA Davidson; tgt raised to $60
    • Agilon Health (AGL) downgraded to Mkt Perform from Outperform at William Blair
    • AMN Healthcare (AMN) downgraded to Mkt Perform from Outperform at William Blair
    • Arhaus (ARHS) downgraded to Market Perform from Outperform at Telsey Advisory Group; tgt lowered to $11
    • Axcelis Tech (ACLS) downgraded to Hold from Buy at The Benchmark Company
    • Bath & Body Works (BBWI) downgraded to Underweight from Equal Weight at Barclays; tgt lowered to $28
    • Celanese (CE) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $98
    • Clearwater Analytics (CWAN) downgraded to Neutral from Buy at DA Davidson; tgt raised to $35
    • EnLink Midstream (ENLC) downgraded to Mkt Perform from Outperform at Raymond James
    • Enphase Energy (ENPH) downgraded to Neutral from Outperform at Exane BNP Paribas; tgt $88
    • Enphase Energy (ENPH) downgraded to Hold from Buy at HSBC Securities; tgt $81
    • Evolent Health (EVH) downgraded to Equal-Weight from Overweight at Stephens; tgt lowered to $16
    • Installed Building Products (IBP) downgraded to Underperform from Sector Perform at RBC Capital Mkts; tgt lowered to $197
  • Others:
    • ADC Therapeutics (ADCT) initiated with an Overweight at Stephens; tgt $6
    • Bicycle Therapeutics (BCYC) initiated with an Equal-Weight at Stephens; tgt $25
    • Cidara Therapeutics (CDTX) initiated with a Buy at Guggenheim; tgt $33
    • City Holding Co (CHCO) resumed with a Neutral at Piper Sandler; tgt $135
    • Community Trust Bancorp (CTBI) resumed with an Overweight at Piper Sandler; tgt $64
    • Cytokinetics (CYTK) initiated with an Outperform at RBC Capital Mkts; tgt $80
    • Dominion Energy (D) resumed with a Neutral at Goldman; tgt $61
    • Flutter Entertainment (FLUT) initiated with a Buy at UBS; tgt $306

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:
  • EVH -35.2% (also expands strategic medical oncology partnership with HUM), AGL -31.9%, MRVI -30.6% (also to acquire the DNA and RNA business of Officinae Bio), ARLO -24.8%, SG -17.3%, RVNC -14.5%, ESTA -13.3% (also announces $50 mln registered direct offering), FIGS -13%, PINS -12.9%, PACB -12.2% (also announces convertible notes exchange), BLMN -12.1%, CNH -10.6%, FLR -10.5%, TDW -10.1%, TTD -10.1%, IOVA -9.5%, RDFN -9.2% (also files mixed shelf securities offering), CPRI -8.5%, GETY -8.5%, AMN -8%, NET -7.3%, BLNK -7%, PDFS -6.6%, ABNB -6.5%, AKAM -6.4%, WMS -6.3%, GDOT -6%, DKNG -5.9%, IEP -5.7% (also cuts dividend) RXST -5.6%, SEMR -5.5%, CABO -5.4%, WTI -5.3%, MNST -5.2%, NVEE -5.1%, GTN -5%, ANET -4.9%, RRR -4.8%, ECO -4.6%, WEST -4.2%, BE -3.9% (also announces landmark project to deliver fuel cells to largest single-site installation to date in history ; also announces major expansion of existing agreement with Quanta Computer; also announces an agreement with FPM Development), FTNT -3.8%, STEP -3.5%, LGF.A -3.5%, ARRY -3.5%, SPT -3.2%, AFRM -3%, JAMF -3%, SQ -2.9%, ADEA -2.8% (also files patent infringement lawsuits against DIS), BEP -2.7%, FROG -2.6%, LAMR -2.6%, SVV -2.5%, MGNI -2.4%, U -2.3% (also names new CFO), OS -2.3%, RNG -2.1% (also names new CFO; also announces partnership with VRNT), STN -2%, LASR -2%, LPRO -1.8%, PWP -1.7%, GSAT -1.6%, FNKO -1.5%, EXPI -1.5%, GPRO -1.4%, MNKD -1.1%, YELP -1% (also to acquire RepairPal for $80 mln), DIOD -1%,
Other news:
  • LTRX -8.7% (to acquire from NetComm Wireless)
  • SERV -7.8% (to acquire the assets of Vebu)
  • DKNG -6% (entered credit agreement providing for a $500 million senior secured revolving credit facility)
  • TVTX -5.7% (prices offering of 7,812,500 shares of its common stock at $16.00 per share)
  • INFA -5.4% (prices secondary offering of 16.0 mln shares of common stock at $25.50 per share)
  • VLY -4.7% (prices offering of 42,780,748 shares of its common stock at $9.35 per share)
  • IONQ -4.7% (developing photonic ICs and chip-scale ion trap technology)
  • FORM -4.2% (announces partnership to develop test cell and measurement system)
  • CRBG -1.6% (prices secondary offering by AIG of 30 mln shares of common stock at $31.20 per share)
  • HIVE -1.5% (reports October production)
  • CUZ -1.3% (commences 6 mln share offering)
  • PLUG -1% (amended At Market Issuance Sales Agreement)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:
  • DOCS +38.5%, FIVN +23.4%, SEZL +21.8%, LITE +21.2%, UPST +20%, WBTN +19.3%, FTRE +18.3%, TOST +15.4%, AXON +14.9%, BILL +13.4%, ALRM +12.9%, INGN +11%, GCT +9.9%, CARG +9.4% (also authorizes new $200 mln share repurchase program), FLYW +9.3%, TU +8.8%, QDEL +8.3%, INDI +8.2%, GRND +8.1%, AAOI +7.9%, PBI +7.3%, SONY +6.9%, ADMA +6.5%, ZD +6.1%, PRA +5.8%, ADNT +5.6%, VCTR +5.5% (also increases dividend), VEEV +5.2%, DH +4.9% (also authorizes new $100 mln share repurchase program), ASAI +4.9%, DXC +4.7%, SYNA +4.7%, MSGE +4.5%, AAON +4.2%, AKRO +4.2%, LCID +4.1%, COLL +3.7% (also names new CEO), CLMT +3.7%, MSI +3.2%, REZI +3% (also CEO to retire; also Vice-Chair to become Chairman), KURA +3%, G +3%, ETNB +2.8%, ACVA +2.5%, PTCT +2.4%, NWSA +2.3% (also CFO to step down, names new CFO), PODD +2.3%, PARA +2.3%, AMPL +2.2%, OPK +2.1%, ACLX +1.9%, NRG +1.7%, ADPT +1.6%, AL +1.5%, SOLV +1.5%, PEB +1.4%, RCKT +1.4%, EXPE +1.3% (also CFO to step down) ASTH +1.2%,
Other news:
  • GHM +8.9% (to construct cryogenic propellant testing facility)
  • CVI +4.6% (Icahn Enterprises L.P. (IEP) confirms proposed tender offer to acquire 15 mln additional shares of CVR Energy common stock for a purchase price of $17.50 per share)
  • VTYX +3.6% (stock offering by selling shareholders)
  • DVAX +3.4% (authorizes new $200 mln share repurchase program)
  • TRML +2.7% (files $350 mln mixed shelf securities offering)
  • ACGL +2.2% (declares special cash dividend of $5/sh)
  • HIPO +1.9% (Centana Growth Partners has acquired a majority stake in insurtech platform First Connect Insurance Services, formerly an indirect wholly-owned subsidiary of Hippo Holdings)
  • TRIN +1.8% (authorizes new $30 mln share repurchase program)
  • NRG +1.7% (partners with Renew Home)
  • UVV +1.7% (authorizes new $100 mln share repurchase program)
  • NEXT +1% (provides Q3 update)
  • RLI +1% (declares special cash dividend of $4/sh)

>>> Europe : Brokers Upgrades & Downgrades - 8th of November 2024 V3(++)

>>> Up
* Airbnb PT Raised to $165 from $150 at Canaccord (+)
* Altarea Raised to Outperform at Oddo BHF; PT 120 euros (++)
* Bank of America Raised to Buy at Citi (++)
* BioNTech ADRs Raised to Buy at Goldman; PT $137
* Chemometec Raised to Hold at Nordea
* Elektro Importoren Raised to Buy at DNB Markets; PT 14.50 kroner (+)
* Equinor Raised to Buy at ABG; PT 325 kroner
* Expedia PT Raised to $153 from $134 at Barclays (++)
* FinecoBank Raised to Hold at Deutsche Bank (+)
* GN Store Nord Raised to Buy at Jyske Bank; PT 175 kroner (++)
* Great Portland Double-Upgraded at Citi, Best Value in a Decade
* IHG Raised at Peel Hunt on US Growth Outlook Following Election
* International Flavors Raised to Buy at BofA; PT $107 (++)
* Kojamo Raised to Buy at OP Corporate Bank; PT 10.50 euros (++)
* Liberty Formula One PT Raised to $90 from $80 at TD Cowen (+)
* Pexip Raised to Buy at Carnegie (++)
* Pirelli Raised to Outperform at Oddo BHF; PT 6 euros (+)
* Ralph Lauren PT Raised to $247 from $207 at Telsey (++)
* Redcare Pharmacy NV Raised to Hold at Kepler Cheuvreux (+)
* Under Armour PT Raised to $13 from $10 at Stifel (++)
* Wiit Raised to Buy at TP ICAP Midcap; PT 24.10 euros (+)
* Zealand Pharma Raised to Hold at Danske Bank Markets (+)

>>> Down
* Aedas Homes SA Cut to Underweight at Banco Sabadell (++)
* Airbnb Cut to Hold at Punto Casa de Bolsa; PT $157.52
* Alfen Cut to Sell at Van Lanschot Kempen; PT 10.70 euros (++)
* Celanese Cut to Underweight at Piper Sandler; PT $98
* Coty PT Cut to $10 from $12 at Canaccord (+)
* Coty PT Cut to $8 from $10 at JPMorgan (++)
* Daimler Truck Cut to Sell at mwb research AG; PT 35 euros (++)
* DNO Cut to Hold at Arctic Securities; PT 12 kroner (+)
* Foresight Environmental Cut to Hold at Stifel (++)
* Greggs Cut to Sell at Deutsche Bank (+)
* Kambi Cut to Hold at Pareto Securities; PT 117 kronor
* Mitchells & Butlers Cut to Hold at Deutsche Bank (+)
* OC Oerlikon Corp AG Pfaffikon Cut to Reduce at Kepler Cheuvreux (+)
* Sandvik Cut to Hold at ABG; PT 230 kronor
* Servizi Italia Cut to Hold at TP ICAP Midcap; PT 2.30 euros (+)
* Straumann Cut to Underperform at BNPP Exane; PT 100 Swiss francs (+)
* Verallia Cut to Hold at Berenberg

>>> Initiation
* Clariane Rated New Neutral at CIC; PT 2.40 euros (++)
* DHH Rated New Buy at TP ICAP Midcap; PT 30.20 euros (+)
* Emeis SA Rated New Neutral at CIC (++)
* LNA Sante Rated New Buy at CIC; PT 34 euros (++)

>>> Call
* Citi’s Manthey Sees German Snap Election Call Supporting Stocks (+)
* Deutsche Bank Strategists See European Earnings Recovery in 4Q
* Great Portland Double-Upgraded at Citi, Best Value in a Decade
* IHG Raised at Peel Hunt on US Growth Outlook Following Election
* Earnings Drop Sequentially in US, Europe: JPMorgan Strategists (+)

>>> US Early premarket gappers

Early premarket gappers
  • Gapping up:
    • DOCS +44.5%, LITE +24%, UPST +23.3%, FIVN +22.6%, SEZL +21.3%, TOST +16%, WBTN +15.9%, AXON +15.2%, BILL +13.5%, ALRM +12.9%, GHM +11.7%, INGN +11%, FTRE +10.8%, ADMA +10.7%, GCT +10.1%, CARG +9.4%, INDI +8.5%, QDEL +8.4%, AAOI +8.4%, FLYW +8.2%, G +7.5%, ADPT +6.6%, GRND +6.3%, SONY +5.9%, VCTR +5.5%, VEEV +5.3%, PBI +5%, DH +4.9%, ASAI +4.9%, PRA +4.8%, DXC +4.6%, INVX +4.4%, NRG +4.3%, AAON +4.2%, LCID +4.1%, EXPE +4%, DIOD +3.9%, ACVA +3.8%, COLL +3.7%, VTYX +3.6%, DVAX +3.4%, MSI +3.2%, OPEN +3.2%, KURA +3%, ETNB +2.8%, AMPL +2.5%, PTCT +2.4%, KKR +1.9%, ACLX +1.9%, TRIN +1.8%, SYNA +1.8%, UVV +1.7%, PBR +1.7%, RUN +1.6%, AL +1.5%, NEXT +1.4%, PEB +1.4%, RCKT +1.4%, ATEN +1.2%, ASTH +1.2%, RLI +1%, TSM +1%, ERJ +0.9%
  • Gapping down:
    • EVH -35%, AGL -30.8%, MRVI -26.7%, SG -16.7%, RDFN -14.1%, RVNC -13.8%, ESTA -13.3%, SEMR -13.2%, PACB -12.7%, FLR -12.6%, PINS -12%, CNH -12%, TDW -11.7%, FIGS -11.4%, ARLO -11.1%, BLNK -10.4%, WMS -9.2%, GETY -8.5%, TTD -8.4%, LTRX -7.9%, IOVA -7.7%, NET -7.7%, DKNG -7.6%, AMN -7.6%, CPRI -7.2%, AKAM -7.1%, U -7%, SERV -6.7%, PDFS -6.6%, ECO -6.3%, TVTX -6%, GDOT -6%, RXST -5.6%, MNST -5.6%, ABNB -5.6%, ANET -5.4%, CABO -5.4%, AFRM -5.4%, VLY -5.3%, NVEE -5.1%, SPT -4.9%, FTNT -4.9%, RRR -4.8%, BE -4.7%, IONQ -4.5%, FORM -4.2%, WEST -4.2%, SQ -4.2%, INFA -4.1%, STEP -3.5%, LGF.A -3.5%, ARRY -3.2%, JAMF -3%, ADEA -2.8%, YELP -2.8%, MGNI -2.6%, FROG -2.6%, PLUG -2.5%, SVV -2.5%, KTOS -2.4%, OS -2.3%, HRB -2.3%, CLFD -2.2%, RNG -2.1%, CRBG -2%, STN -2%, LASR -2%, ZD -2%, FNKO -1.9%, EB -1.8%, LPRO -1.8%, MNKD -1.5%, EXPI -1.5%, CUZ -1.3%, MP -1.3%, HIVE -0.9%

FT : BlackRock in talks to take minority stake in Millennium

BlackRock in talks to take minority stake in Millennium
Two groups explore strategic partnership as world’s largest asset manager seeks to expand in fast-growing alternatives

BlackRock is in early-stage discussions with Millennium Management about a strategic partnership that could lead to the world’s largest asset manager taking an equity stake in one of the most profitable hedge fund managers, according to people familiar with the situation. 

Although any equity stake is likely to be small, the potential tie-up reflects how BlackRock is seeking to expand into alternative investments and shows how Millennium’s 76-year-old founder Izzy Englander is continuing to build out and diversify his business.

Talks were at an early stage and may not lead to a deal, the people said. If the sale of an equity stake to BlackRock did come to fruition, it would mark the first time in its 35-year history that Englander had taken outside investment in Millennium’s management company. 

BlackRock and Millennium both declined to comment. 

Millennium has for years debated the merits of striking strategic partnerships or taking external investment, with incoming interest from groups ranging from private equity firms to sovereign wealth funds.

Last year, the hedge fund manager held talks to put billions of dollars to work with its smaller rival Schonfeld Strategic Advisors, but these were later called off when Schonfeld’s existing investors said they would give it more money to manage. 

Where other hedge funds have distributed equity among their top people, Englander still owns 100 per cent of Millennium, which he launched in New York in 1989 with just $35mn and has since grown to employ 5,900 people globally and manage $69.5bn in assets.

BlackRock chief executive Larry Fink has identified alternative investments, which carry higher fees than traditional investment funds, as a strategic priority and has been on an acquisition march. Since the start of the year, the group has struck deals to buy Global Infrastructure Partners and Preqin, an alternatives data provider, and is in talks with private credit manager HPS.

BlackRock has also held preliminary conversations with a much wider range of potential partners that have yet to bear fruit. It uses a variety of dealmaking structures, from buying outright to joint ventures and taking minority stakes and doing investment partnerships.

The $11.5tn money manager has $450bn in alternative assets under management, now that the GIP deal has closed. That includes $76bn in hedge funds and other “liquid alternatives”, but BlackRock is not considered a standout player in that section of the industry. 

Millennium and Ken Griffin’s Citadel are the pioneers in the multi-manager sector, the fastest-growing and most lucrative corner of the $4.5tn hedge fund industry.

Millennium, which has more than 330 investment teams operating within strict risk controls, at present has just one flagship fund which has gained 10 per cent in the first 10 months of the year. It has notched up average returns of about 14 per cent a year since launch, according to investors. 

It is considering launching its first fund in more than three decades in a bid to target less liquid assets, including private credit, and help it sustain growth.

Englander has in recent years sought to institutionalise Millennium as part of a succession planning process, to provide stability when he eventually departs.

He established a trustee advisory board; secured Millennium’s capital base by moving the vast majority of investors into a long-term share class that takes five years to fully redeem; and has built out its leadership team — notably with senior hires from Goldman Sachs.

He also changed the firm’s fee structure last year, adding a minimum fee for investors on top of the expenses, which are passed through and regardless of performance. Investors pay annual fees of about 1 per cent of assets or 20 per cent of investment gains. 

At the time, bankers said that this amounts to a management fee, which the market values more highly than more volatile performance fees. They suggested that this made it easier to put a valuation on Millennium, which could pave the way for a sale of a minority stake in the business. 

>>> Europe : Brokers Upgrades & Downgrades - 8th of November 2024 V2(+)

>>> Up
* Airbnb PT Raised to $165 from $150 at Canaccord (+)
* BioNTech ADRs Raised to Buy at Goldman; PT $137
* Chemometec Raised to Hold at Nordea
* Elektro Importoren Raised to Buy at DNB Markets; PT 14.50 kroner (+)
* Equinor Raised to Buy at ABG; PT 325 kroner
* FinecoBank Raised to Hold at Deutsche Bank (+)
* Great Portland Double-Upgraded at Citi, Best Value in a Decade
* IHG Raised at Peel Hunt on US Growth Outlook Following Election
* Liberty Formula One PT Raised to $90 from $80 at TD Cowen (+)
* Pirelli Raised to Outperform at Oddo BHF; PT 6 euros (+)
* Redcare Pharmacy NV Raised to Hold at Kepler Cheuvreux (+)
* Wiit Raised to Buy at TP ICAP Midcap; PT 24.10 euros (+)
* Zealand Pharma Raised to Hold at Danske Bank Markets (+)

>>> Down
* Airbnb Cut to Hold at Punto Casa de Bolsa; PT $157.52
* Celanese Cut to Underweight at Piper Sandler; PT $98
* Coty PT Cut to $10 from $12 at Canaccord (+)
* DNO Cut to Hold at Arctic Securities; PT 12 kroner (+)
* Greggs Cut to Sell at Deutsche Bank (+)
* Kambi Cut to Hold at Pareto Securities; PT 117 kronor
* Mitchells & Butlers Cut to Hold at Deutsche Bank (+)
* Sandvik Cut to Hold at ABG; PT 230 kronor
* Servizi Italia Cut to Hold at TP ICAP Midcap; PT 2.30 euros (+)
* Straumann Cut to Underperform at BNPP Exane; PT 100 Swiss francs (+)
* Verallia Cut to Hold at Berenberg

>>> Initiation
* DHH Rated New Buy at TP ICAP Midcap; PT 30.20 euros (+)

>>> Call
* Citi’s Manthey Sees German Snap Election Call Supporting Stocks (+)
* Deutsche Bank Strategists See European Earnings Recovery in 4Q
* Great Portland Double-Upgraded at Citi, Best Value in a Decade
* IHG Raised at Peel Hunt on US Growth Outlook Following Election
* Earnings Drop Sequentially in US, Europe: JPMorgan Strategists (+)

The Information : Amazon Discussing New Multibillion-Dollar Investment in Anthro

Amazon Discussing New Multibillion-Dollar Investment in Anthropic

The Takeaway
• The funding discussion shows how cloud providers and AI developers they partner with have competing priorities
• An Amazon official has said Anthropic’s CEO expressed interest in a large supercomputing cluster of servers
• Anthropic’s ability to use servers from two different cloud providers might be an advantage

Amazon is discussing making a second multibillion-dollar investment in OpenAI rival Anthropic, according to a person involved in the discussions. The new deal is similar to Amazon’s initial $4 billion dollar investment in the startup, which was struck last year. But this time, Amazon wants Anthropic to make a concession.

The cloud giant is asking Anthropic, which uses Amazon’s cloud services to train its AI, to use a large number of servers powered by chips developed by Amazon, this person said. The problem is that Anthropic prefers to use Amazon servers powered by Nvidia-designed AI chips.

The size of Amazon’s total investment in Anthropic could depend on the outcome of this discussion, specifically on the number of Amazon chips Anthropic agrees to use, this person said. The status of the talks couldn’t be learned.

The discussions are an example of the competing priorities of large cloud providers and developers of conversational AI that have formed alliances due to the high cost and complexity of producing the technology. The first such marriage in the industry, between Microsoft and OpenAI, has been remarkably beneficial to both companies but has lately become fraught over OpenAI’s concerns that it isn’t getting enough servers from Microsoft to stay ahead of smaller AI rivals. And while Microsoft is developing its own AI server chip, which it hopes OpenAI will want to use, OpenAI hasn't been interested in it, said a person with direct knowledge of the situation. (OpenAI is also developing a chip to run its AI models.)

Shifting to the Amazon server chip could be technically challenging for Anthropic because the Amazon software that developers must use with the Traininum chips isn’t as mature as Nvidia’s Cuda software, which AI developers have become accustomed to. Such a move could also lock Anthropic into using Amazon Trainium servers, making it more difficult for the AI startup to use other cloud providers or to lease its own data centers in the future, as Amazon doesn’t make its hardware available to facilities run by other companies.

Amazon, though, has good reason to get Anthropic to use its own chips, known as Trainium: The cloud giant could reduce the number of Nvidia chips it has to buy. If it can get its cloud customers to agree to use Trainium-powered servers, it won’t need as many Nvidia chips. As part of Amazon's initial deal with Anthropic, the startup agreed to use some Trainium servers but mainly relied on Nvidia servers in Amazon data centers, said the person who has been involved in the discussions involving the companies.

Spokespeople from Amazon and Anthropic declined to comment.

Amazon has increasingly been selling artificial intelligence services powered by Anthropic, a major OpenAI rival, to Amazon’s cloud customers.

Anthropic recently sought funding from investment firms at a valuation of $30 billion to $40 billion, and any investment deal with Amazon could come in the form of convertible notes that become equity after Anthropic raises capital from other investors. In addition to the investment, the companies are negotiating a cloud deal in which the companies share revenue from the sale of Anthropic’s model to Amazon cloud customers such as Doordash and Goldman Sachs, and Anthropic agrees to rent out specialized servers from Amazon to develop its technology.

Amazon a year ago agreed to invest up to $4 billion into Anthropic in a similar deal that was completed earlier this year. Since then, Anthropic has likely spent hundreds of millions of dollars to rent Amazon servers and shared hundreds of millions of additional dollars with Amazon for reselling its models to cloud customers. Amazon also uses Anthropic to power its Q coding assistant for software developers, which competes with ChatGPT, Microsoft’s GitHub Copilot and coding assistant startup Cursor.

The partnership has helped Amazon’s cloud unit maintain its revenue growth rate of 19% in the third quarter though companies using generative AI have been making spending cuts elsewhere in their IT and cloud budgets, an Amazon Web Services executive told The Information.

An Anthropic Supercomputer?

A new deal could bring the companies even closer. A senior Amazon official privately said Anthropic CEO Dario Amodei earlier this year discussed his interest in using a large-scale AI data center server cluster to develop technology, similar to the ambitious data center plans of rivals such as Elon Musk’s xAI and OpenAI, according to a person who spoke to the official. It isn’t clear whether Amazon has committed to building a supercomputing cluster for Anthropic.

Anthropic has a similar but smaller cloud partnership with Google, which has also invested billions of dollars into Anthropic. Google has also been selling its own AI, Gemini, to Google Cloud customers, meaning it hasn’t been as reliant on Anthropic as Amazon has.

Amazon also has been developing its own AI that could eventually rival Anthropic’s.

OpenAI is in a much stronger financial position than Anthropic, in terms of losses as a percentage of revenue. Anthropic recently projected it would generate $83 million of revenue a month by the end of this year, with 25% to 50% of that figure being paid out to Anthropic’s cloud partners in the form of revenue sharing. OpenAI generates four to five times more revenue than Anthropic and pays a smaller percentage to Microsoft, its exclusive cloud provider.

Anthropic’s ability to use servers from two different cloud providers might be an advantage compared to OpenAI’s situation. OpenAI has been frustrated with Microsoft’s ability to provide it with servers, prompting OpenAI to seek an alternative provider—Oracle and Crusoe.

FT : Trump victory hands hedge funds $1.2bn win from bet against renewables

Trump victory hands hedge funds $1.2bn win from bet against renewables
Clean energy shares have tumbled on fears Republican president-elect will scrap subsidies and tax breaks

Investors running bets against renewable energy stocks have racked up profits of more than $1.2bn from the heavy sell-off that swept the sector in the wake of Donald Trump’s US presidential election victory.

Arrowstreet Capital and Qube Research & Technologies were among firms that had built up short positions against companies such as Norwegian hydrogen firm Nel and German wind turbine manufacturer Nordex, according to data group Breakout Point.

Shares in these companies fell sharply on Wednesday amid concerns that the president-elect will “terminate” President Joe Biden’s Inflation Reduction Act, a move that could result in a halt to tax credits, and pull the plug on offshore wind development.


Hydrogen producer Plug Power and solar developer Sunrun, both of which have been heavily shorted by hedge funds, fell 22 per cent and 30 per cent, respectively, as investors fled stocks likely to be hit by Trump’s plans. The two US stocks together generated around $350mn in profits for short sellers, according to calculations by data group S3 Partners.

In Europe, Denmark’s Ørsted, the world’s biggest offshore wind farm developer, fell nearly 13 per cent on Wednesday, while Nordex lost close to 8 per cent.

In total, funds made more than $1.2bn from bets against 20 of the largest renewable stocks in US and Europe, according to S3’s data.


The clean energy sector has been a popular target for short sellers, as high inflation and interest rates placed strains on businesses whose shares had soared in the early stages of the coronavirus pandemic. The growing possibility of a second Trump presidency has added to those worries this year.

“There have been jitters over the prospect of the US election result,” said Deepa Venkateswaran, head of utilities and clean energy research at Bernstein. “It’s only in the coming months we’ll know what the policies actually are.”

Trump has pledged to end offshore wind in the US on “day one” of his presidency and halt the rollout of subsidies that featured under Biden’s IRA.

Renewables have been in trouble for “a long time”, with investors losing patience with many of these stocks, said Eirik Hogner, deputy portfolio manager at Clean Energy Transition, a hedge fund spun out of Lansdowne Partners.

But on Wednesday, “every stock that was in the renewable basket collapsed”, he added. “Everyone knows how big the IRA announcement was for the sector when it was introduced.” He declined to say whether he had profited from Wednesday’s sell-off.

Bosses of renewables firms including Ørsted and wind turbine maker Vestas sought to stem negative commentary during their quarterly results on Tuesday as US voters went to the polls, telling the Financial Times that renewables played a key role in job creation in Republican-leaning states.

Henrik Andersen, chief executive of Vestas, said statements made during the contest may not be put in to practice when Trump takes office. “Sometimes comments are comments made in political statements, and then we will see what actually comes out of it,” he said.

Andersen on Thursday bought 10,000 shares in the business he leads, according to public filings.

Some analysts have pointed to the growth in renewables during Trump’s first term in office as a reason for optimism on the sector, although others have argued that a partial repeal of the IRA would significantly slow down growth.

Michelle Davis, head of global solar power research at Wood Mackenzie, said she anticipated elements of IRA would be “significantly modified”. She expects one-third less renewable energy capacity could be built over the next decade in a worst-case scenario under which tax credits are significantly changed.

Meanwhile, the “permitting process for future [offshore wind] projects might be halted by federal government agencies”, analysts at RBC warned on Wednesday.