>>> US After Hours Summary: CPRI -46% as judge reportedly blocks TPR acquisition

After Hours Summary: CPRI -46% as judge reportedly blocks TPR acquisition; WDC +9.3%, DECK +8.8%, SKX +5%, APPF +4.6% higher on earnings; COUR -16.1%, TBBK -10%, MHK -9.1%, DXCM -4.7% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: MGRC +13.1%, WDC +9.3%, DECK +8.8%, RMD +7.5%, DLR +6.2%, SKX +5%, APPF +4.6% (also CFO steps down; also co acquires LiveEasy, a concierge platform), LHX +4.4%, COF +4%, FHI +3.7% (also increases share repurchase authorization by 5 mln shares), VTMX +2.9%, BYD +2.6%, SAM +1.4%, ZYXI +1.3%, AJG +0.6%, HTH +0.1%

Companies trading higher in after hours in reaction to news: LYEL +26.6% (to acquire ImmPACT Bio USA; also discontinuing development of LYL797, LYL845 and earlier-stage TIL programs), TPR +11.6% (judge has blocked TPR acquisition of CPRI, according to CNBC), COF +4% (with judge blocking TPR/CPRI deal, other pending M&A names react), EPSN +2.7% (to form a joint venture in Canada), DFS +2% (with judge blocking TPR/CPRI deal, other pending M&A names react), KR +1.5% (with judge blocking TPR/CPRI deal, other pending M&A names react), SUN +0.9% (files common units representing limited partner interests offering), MDT +0.8% (receives FDA approval of Affera mapping and ablation system), AROC +0.4% (increases dividend), ARDX +0.3% (shares additional data supporting XPHOZAH), MS +0.3% (CEO Ted Pick to also become Chairman; James Gorman to step down as Chairman and retire), SEDG +0.3% (applauds Treasury Dept's Final Rule), MUSA +0.1% (increases dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: COUR -16.1%, TBBK -10%, MHK -9.1%, OLN -7.7%, FIX -6.7% (also increases dividend), CUZ -6%, UHS -5.6%, PFG -5%, DXCM -4.7%, ROG -3.5%, ATR -3.4%, HIG -2.9% (also increases dividend), SSNC -2.5%, FIBK -2.4%, KNSL -2% (also authorizes new $100 mln share repurchase program), DOC -1.9%, GLPI -1.7%, ABCB -0.7%, ENSG -0.6%, CINF -0.4%, TXRH -0.4%, WY -0.4%, EW -0.1%

Companies trading lower in after hours in reaction to news: CPRI -46% (judge has blocked TPR acquisition of CPRI, according to CNBC), JOBY -9.3% (launches $200 mln stock offering; also files mixed shelf offering; also files for offering by selling shareholders), XRAY -6.7% (announces voluntary suspension of sales of its Byte Aligners as it reviews regulatory requirements; also provides upside Q3 guidance), ADC -2% (4 mln share offering), RIGL -1.4% (issues letter for GAVRETO), ACI -1.4% (with judge blocking TPR/CPRI deal, other pending M&A names react), NOG -0.9% (provides Q3 operations update), VLTO -0.3% (files mixed shelf securities offering), GOLD -0.2% (responds to Mali Govt's claims of breaching its commitments; denies the allegations), TSM -0.1% (Arizona plant production yields 4 percentage points higher than its Taiwan factories, according to Bloomberg)

FT : Ari Emanuel’s Endeavor transfers bull riding league in $3.25bn deal

Ari Emanuel’s Endeavor transfers bull riding league in $3.25bn deal
Transaction consolidates sports businesses into newly-listed owner of WWE and UFC

Hollywood powerbroker Ari Emanuel is transferring three businesses to the listed company behind Ultimate Fighting Championship and World Wrestling Entertainment, consolidating his sports and entertainment conglomerate in a $3.25bn deal.

TKO Group, a newly-listed business majority owned by Emanuel’s Endeavor, is buying sports agency IMG, hospitality business On Location and the Professional Bull Riders league from its largest shareholder in an all-stock transaction, it said on Thursday.

The deal creates a group spanning live sport and scripted entertainment, media rights, events, ticketing and branding, and is the latest in a series of transactions that have shaken up Endeavor’s portfolio.

Endeavor acquired WWE, the pro wrestling group led for decades by Vince McMahon, in April last year, and merged it with UFC into TKO, which began trading on the New York Stock Exchange in September 2023. The group’s shares have risen about 50 per cent over the past year.

TKO also set out plans to return up to $2bn to holders of its class A common stock through a buyback programme, and pay a quarterly cash dividend worth $75mn.

On Thursday TKO president and chief operating officer Mark Shapiro said the addition of PBR, On Location, and IMG would help the group strengthen its position in premium sports.

“Within TKO, [the businesses] will help power the growth of our revenue streams and position us to capture even more upside from some of the most attractive parts of our sports ecosystem: media rights, live events, ticket sales, premium experiences, brand partnerships and site fees,” said Shapiro.

It comes as Endeavor, which is controlled by Emanuel and investment firm Silver Lake, works towards taking the company private, and streamlining it to focus on talent representation business WME. The company’s portfolio also includes the Frieze Art Fair.

TKO said it created a special committee of independent directors to review, negotiate, and consider the proposed deal.

Endeavor expects to own roughly 59 per cent of TKO on completion of the $3.25bn acquisition, which is expected to take place in the first half of 2025. The group said in August that it was also planning to sell sports data and technology businesses OpenBet and IMG Arena.

Silver Lake said in April that it would take Endeavor private, leaving the New York Stock Exchange in a deal that valued the group at $13bn.

Morgan Stanley advised TKO. Moelis advised the special committee.

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:
  • MC -22.3%, ICLR -16.9%, BYON -12%, CYH -8.8%, DAR -7.2%, WEX -6.6%, GTX -6.3%, WNC -6.2%, NEM -5.3%, IBM -5.1%, WH -5%, CARR -4.9%, PI -4.7%, SLM -4.6%, TECK -4.4%, HAS -3.3%, ROL -3% (also names new exec chairman), HON -3%, LEA -3%, SAH -3%, URI -2.9%, TXT -2.9%, RES -2.9%, DOV -2.7%, EPRT -2.6%, AAL -2.6%, ASGN -2.5%, CNX -2.4%, CVBF -2.3%, XPRO -2.3%, R -2.1%, AMBP -2.1%, TSCO -2.1%, VLY -2.1%, RBBN -2%, EEFT -2%, TPH -2%, FCFS -1.9%, HOG -1.9%, ORLY -1.7%, VIRT -1.4%, LKQ -1.3%, LTH -1.3%, GSHD -1.1%, KDP -1.1%, OII -1%, MSM -1%
Other news:
  • ODV -19% ($50 mln private placement)
  • BNED -4.2% (stock offering by selling shareholders)
  • BA -3.6% (Frontline Boeing workers voted 64% against accepting the latest contract proposal put forth by their employer; awarded transaction agreement with the US Space Force Space Systems)
  • TXT -2.9% (CFO to retire, names new CFO)
  • KDP -1.1% (to acquire GHOST energy drink business)
  • CMBT -1.1% (launches the reopening of its public takeover bid and concurrent new U.S. offer on CMB.TECH NV)
Analyst comments:
  • DYN -1.9% (downgraded to Neutral from Overweight at JP Morgan)
  • HLX -1.9% (downgraded to Neutral from Buy at BTIG Research)
  • ATI -1.4% (downgraded to Sector Weight from Overweight at KeyBanc Capital Markets)
  • WSC -1% (downgraded to Neutral from Outperform at Robert Baird)
  • HWM -0.9% (downgraded to Sector Weight from Overweight at KeyBanc Capital Markets)

>>>> US Gapping up

Gapping up
In reaction to earnings/guidance:
  • QS +18.7%, TSLA +13.3%, AMTB +11.7%, MXL +11%, MOH +10.9%, WST +10.3%, CLS +9.9%, FTI +9.3%, UPS +7.8%, LC +6.7%, LRCX +6.5%, GL +6.4%, PEGA +6.1%, VKTX +5.6%, CBRE +5.6%, EGBN +5%, LNN +5%, CACI +4.9%, ALKS +4.9%, AIRS +4.9%, TER +4.7%, PTEN +4.5%, WHR +4.4%, BCS +4.3%, SBSI +4.3%, GBX +4.1%, MAT +4%, KKR +3.9%, VC +3.9%, EQNR +3.8%, AIT +3.7%, ADT +3.2%, LVS +3%, SLP +3%, CLMT +3% (guidance), UL +2.8%, VIST +2.6%, POOL +2.6%, TMUS +2.4%, LH +2.4%, HALO +2.3% (guidance), SMPL +2.3%, DOW +2%, SEIC +1.8%, TYL +1.7%, RJF +1.6%, WU +1.5%, WCN +1.5% (also increases dividend), LUV +1.5%, NDAQ +1.4%, PLXS +1%, NOC +0.9%, VLO +0.8%
Other news:
  • MNOV +14.5% (Announces Update of Phase 2/3 Clinical Trial of MN-166)
  • MNPR +12.1% (entered into an agreement with Alexion, AstraZeneca Rare Disease for an exclusive worldwide license to ALXN-1840)
  • SDRL +10.3% (RIG and SDRL dicussing potential merger, according to Bloomberg)
  • FTI +9.3% (increases share buyback authorization)
  • EYPT +4.1% (announces first patient dosed in Global Phase 3 LUGANO Clinical Trial of DURAVYUTM)
  • AMSF +3.5% (declares special dividend of $3/sh)
  • SHEN +3.5% (increases dividend)
  • RIG +3.2% (RIG and SDRL dicussing potential merger, according to Bloomberg)
  • DFH +2.2% (to acquire Alliant National Title Insurance)
  • OKUR +2% (stock offering by selling shareholders)
  • BOW +1.7% (prices offering of 4.0 mln shares of common stock at $29.00 per share)
  • LHX +1.6% (LHX and PLTR announce strategic partnership to accelerate LHX's digital transformation)
  • PLTR +1.5% (LHX and PLTR announce strategic partnership to accelerate LHX's digital transformation)
  • BAK +1.5% (Q3 production)
  • SNOW +1.2% (NOW and SNOW partner on zero copy integration)
  • GRAL +1.2% (presents initial results from study of Galleri)
  • TKO +1.2% (TKO Group Holdings to purchase certain assets from Endeavor Group (EDR) for $3.25 bln; also announces $2 bln share repurchase and establishes quarterly dividend program)
  • BKD +1.1% (stock offering by selling shareholders)
  • KRT +1.1% (cybersecurity event)
Analyst comments:
  • NEP +2.7% (upgraded to Neutral from Underweight at JP Morgan)
  • RF +0.9% (upgraded to Buy from Hold at Deutsche Bank)

TechCrunch : Vinted hits $5.4B valuation amid wave of secondary share sales in E

Vinted hits $5.4B valuation amid wave of secondary share sales in Europe

Lithuania’s Vinted has secured a new valuation of €5 billion (around $5.4 billion at current exchange rates), after the second-hand fashion marketplace closed a secondary share sale worth €340 million ($367 million).

The transaction was led by private equity giant TPG, with other new participants including Baillie Gifford, FJ Labs, Hedosophia, Invus Opportunities, Manhattan Venture Partners, and Moore Strategic Ventures. It’s unclear how much Vinted’s existing investors cashed out, but the company says that all its existing institutional investors — which include Accel, EQT, Insight Partners, and Lightspeed Venture Partners — have retained at least some stake.

It’s proving to be a bumper year for secondary market transactions, particularly in Europe, as scale-ups seek to unlock liquidity for their employees and VCs in a decidedly tepid IPO market. In the past few months alone, we’ve seen neobanks Revolut and Monzo pursue secondary market routes, attaining lofty valuations off the back of strong user growth and profitability.

In the U.S., meanwhile, fintech giant Stripe followed a similar path to unlock liquidity, reaching a private valuation of $65 billion back in February as it continues to delay a long-rumored IPO. This figure later jumped to $70 billion as Sequoia sought a larger stake from existing investors.

Vinted CEO Thomas Plantenga (pictured above) noted that the sale “rewards our employees for their dedication in making Vinted a success.” The company was valued at €3.5 billion ($3.8 billion) pre-money for its previous €250 million Series F fundraise back in 2021. Since then, it has gone from strength to strength, reporting record revenue growth of 61% in 2023 compared to the previous year and reaching profitability for the first time.

At the same time, Vinted has expanded geographically and is also extending beyond its core fashion roots into the electronics realm — a growth trajectory that prompted marketplace stalwart eBay to respond by removing seller fees in key European markets.

Challenges : Atos : un plan de sauvegarde en forme de bouée de sauvetage

Atos : un plan de sauvegarde en forme de bouée de sauvetage

Le tribunal de commerce a validé ce jeudi matin le plan de sauvegarde accélérée d’Atos, offrant au groupe une dernière chance de se redresser, alors que dans le même temps, le groupe annonçait des résultats en forte baisse. Dans ce contexte, les négociations avec l’Etat se poursuivent sur de nouvelles bases pour la reprise des actifs stratégiques du groupe.

C’est une bouée de sauvetage que le tribunal de commerce a offert ce jeudi 24 octobre au groupe Atos, en validant son plan de sauvegarde accélérée. Mais une bouée de sauvetage aux airs de baroud d’honneur en cas d’échec du plan. D’où une forte pression sur Philippe Salle, le nouveau président du conseil d’administration du groupe, qui prendra officiellement les rênes du groupe en février 2025 et qui a réagi ce matin dans un communiqué : « Cette étape importante garantit la pérennité des activités d’Atos dans le meilleur intérêt de nos employés et de nos clients, et permet de projeter le groupe sereinement vers une nouvelle page de son histoire. »

Dans un récent article du Monde, il en disait plus sur son calendrier : « La situation financière nécessite d’aller très vite et de lancer dès la fin de cette année un plan d’urgence pour endiguer la consommation de cash. La vision stratégique, puis la mise en place de la nouvelle organisation, viendront à partir de mars 2025. »

Objectif : éviter le naufrage
Juste avant la décision du tribunal, le groupe a présenté ses résultats du troisième trimestre qui font état d’une activité en berne, avec un chiffre d’affaires à 2,3 milliards d’euros (-10,5 % sur un an). Une baisse qui concerne aussi bien le pôle Eviden – qui regroupe la cybersécurité, le numérique et le « big data » et dont les revenus ont baissé de 9 % à 1,1 milliard d’euros –, que la branche Tech Foundations (infogérance), qui a connu un recul de ses ventes de 11,7 %, à 1,2 milliard d’euros.

En cause pour l’activité numérique, un « ralentissement général du marché en Amérique, des réductions de périmètres de contrats au Royaume-Uni et en Europe centrale (lorsqu’un client décide de ne pas renouveler 100 % des services fournis par Atos, ndlr), et des fins de contrats », a indiqué Jacques-François de Prest, directeur financier du groupe, lors d’un échange avec la presse. Atos a notamment perdu son contrat historique avec le CIO, qui faisait du groupe le pilier technologique des Jeux Olympiques depuis trente jusqu’à l’édition 2024 à Paris. Pour son développement numérique, le CIO aura désormais recours à l’américain Deloitte. Et ce, dès les Jeux d’hiver de 2026 en Italie. Les prises de commandes ont, elles, dégringolé de plus de 30 %, à 1,5 milliard d’euros au troisième trimestre.

L’ex-fleuron de la tech, dont le cours de l’action en Bourse a chuté de plus de 90 % depuis le début de l’année, compte donc sur la réalisation de son plan de restructuration entre novembre et décembre 2024 voire janvier 2025 au plus tard, pour redresser la barre et éviter le naufrage. Ce plan, voté début septembre par les créanciers et les actionnaires, prévoit un allègement de la dette de 3 milliards d’euros, sur un total de près de 5 milliards, une augmentation de capital et une dilution « massive » des actionnaires.

Actifs stratégiques : après Thalès, la participation de Dassault
La récente cession au groupe français d’ingénierie Alten de Worldgrid, filiale hautement critique qui conçoit les systèmes de pilotage des centrales nucléaires, devrait aussi être finalisée d’ici la fin de l’année et pourrait permettre au groupe de récupérer des liquidités. En revanche, les discussions avec l’Etat sur la cession des « activités stratégiques » traînent en longueur.

En juin, l’Etat français avait fait une offre de 700 millions d’euros pour éviter que ces activités sensibles, qui comprennent notamment les supercalculateurs utilisés pour la dissuasion nucléaire, ne tombent entre les mains d’acteurs étrangers. Une proposition qui n’était pas au goût d’Atos, qui n’entend pas céder ses actifs stratégiques à moins d’un milliard et qui a fourni à l’Etat une offre révisée. Depuis les négociations ont repris sur de nouvelles bases.

Si la première proposition de l’Etat prévoyait une prise de participation en tandem avec le groupe Thalès, cette fois-ci c’est le groupe Dassault qui participerait discrètement aux négociations. Une autre hypothèse pourrait aussi comprendre une reprise totale des activités stratégiques par l’Agence des participations de l’Etat avant d’envisager une revente d’une partie de ces actifs à des acteurs français. Des options que personne n’a souhaité commenter au sein du groupe Atos.

>>> US Election Call Makor / ACG : 5pm ldn time / 12pm NY Time

We are hosting a US election call with ACG analytics (they will be live from the IMF conference in Washington)
Thursday 24th of October at 5pm London time / 12pm NY

Zoom Meeting Webinar
ID: 826 7429 1139 / password: 049943

DIRECT ZOOM LINK

Join Zoom Meeting

Meeting ID: 826 7429 1139
Passcode: 049943

WSJ : Gucci Has Problems. The Biggest May Be a Safe New Look

Gucci Has Problems. The Biggest May Be a Safe New Look
The Italian brand’s owner, Kering, issued its third profit warning in a row as demand for a toned-down Gucci disappoints

A tough market for luxury goods is covering up deeper issues at Gucci. The brand’s revamp isn’t taking off yet and its owner’s pockets are shrinking.

Kering, the French luxury group that is Gucci’s owner, issued its third profit warning of the year on Wednesday evening as it unveiled quarterly results and now expects 2024 operating income to be barely half last year’s levels. Its star brand is weak. Sales at Gucci fell 25% in the third quarter compared with the same period of 2023. The label has been shrinking for more than a year and its performance has fallen behind rival fashion brands at luxury giant LVMH MC 2.48%increase; green up pointing triangle.

Kering is giving Gucci a makeover and replaced its creative team a year-and-a-half ago. The flashy designs that Gucci had become known for are out in favor of a more subtle look. If the brand can successfully pull off this new classic image, it should be less vulnerable to the fickle fashion cycles that have made Gucci’s sales volatile in the past.

New designer Sabato de Sarno’s collections still only make up around a third of what is available in Gucci’s stores. But when asked how new handbag models are selling, Kering’s finance chief sounded muted. Gucci’s wholesale business had a very weak quarter. This could be a sign that the brand is being disciplined about who it sells inventory to, as luxury brands battle a surging parallel market for designer goods in China. Or it might instead be a sign that Gucci’s new collections haven’t been a hit with industry buyers who select the stock for luxury department stores.

Some challenges are out of Kering’s control. Gucci’s sales to Chinese consumers fell 35% in the quarter. Many of the factors that led China’s shoppers to spend heavily on luxury goods over the past decade, such as booming property prices and strong economic growth, have evaporated, with implications for the entire luxury goods industry.

But Americans and Europeans also reacted tepidly to Gucci’s new look, with third-quarter sales down a fifth in both regions. Luxury shoppers have become more selective as they have less money to splurge. The trend is benefiting the highest-quality brands like Hermès RMS 1.50%increase; green up pointing triangle, whose sales rose 14% in the third quarter, while hampering weaker labels like Gucci and Burberry BRBY 3.96%increase; green up pointing triangle.

Kering relies heavily on Gucci as its main cash cow. In better years, the Italian brand generated two-thirds of the group’s total operating profit. The Paris-listed company has spent billions of euros over the past year on luxury real estate in New York and Milan and a 30% stake in luxury brand Valentino. Net debt is expected to hit 11 billion euros this year, equivalent to around 2.5 times the company’s estimated earnings before interest, taxes, depreciation and amortization for the year. That isn’t at uncomfortable levels yet, and Kering still expects to maintain its dividend, but the cash needs to start flowing again at Gucci soon.

Luxury makeovers take time to build momentum, and it is still early days at Gucci. That could leave profit margins under pressure for a while. There is only so much cost cutting a top luxury brand can do without damaging its image. Kering will close some Gucci stores next year to reduce its rent bills, probably in China. But absolute spending on advertising will stay the same as last year as the company tries to grab attention for its new collections.

After a 40% fall so far this year, Kering’s stock is back at levels last seen in early 2017. The shares will surge at the first signs of recovery at Gucci, but there aren’t any yet.