Barron's : This Garbage Stock Isn’t Garbage. Why It’s Time to Buy GFL Now.

This Garbage Stock Isn’t Garbage. Why It’s Time to Buy GFL Now.
Waste hauler GFL Environmental has trailed its peers. With a transformational deal in the works, that’s about to change.

Waste hauler GFL Environmental is a catalyst-rich stock in a profitable industry, interesting in any environment and especially appealing in this one. Its plan for the future sets it up for success, and it should see little impact from artificial intelligence, politics, or the broader market. That’s a rare and powerful combination that should catch investor attention.

Waste hauler GFL Environmental is a catalyst-rich stock in a profitable industry, interesting in any environment and especially appealing in this one. Its plan for the future sets it up for success, and it should see little impact from artificial intelligence, politics, or the broader market. That’s a rare and powerful combination that should catch investor attention.
Appealing might not be the first term that comes to mind with garbage, but it should apply to waste-management stocks. Historically, they are stable growers that do well in most market environments because they serve an essential, universal need. The way our detritus is being discarded is gradually becoming more complicated, as recycling and composting gain in popularity. The companies have also learned how to capture renewable natural gas from their landfills, offering another potential opportunity.

More waste volume and complex handling boil down to more growth—and higher stock prices—for garbage companies. Waste Connections, Waste Management, Republic Services, and Casella Waste Systems have returned an average of 59%, including reinvested dividends, over the past three years, beating the S&P 500 index’s 40% total return over the same period. GFL, however, has returned just 39%, the only one of the group to underperform the benchmark.

The company, which is based in Vaughan, Ontario, also has offices in Raleigh, N.C., and conducts about 70% of its waste-management business in the U.S. It’s unlikely to be affected by tariffs.

One big issue: GFL is carrying a lot of debt. It has some $6.6 billion due between 2025 and 2032, about four times 2025’s earnings before interest, taxes, depreciation, and amortization, or Ebitda. Industrial companies in the S&P 500 typically operate with a ratio of less than two times, and other waste players are all between two and three times.

High debt is a legacy of GFL’s ownership and strategy. Before its IPO in 2020, GFL was owned by private-equity firms led by BC Partners, which were happy to see founder and CEO Patrick Dovigi expand the company by rolling up other waste haulers. BC Partners still holds about 24% of the shares outstanding, which creates another problem for investors: Private-equity players typically don’t hold publicly traded stocks for the long haul—and no one wants to buy a stock right before a large holder liquidates a position.

All that is changing. In January, the company signed an agreement to sell its hazardous-waste-handling environmental services business for an enterprise value of $5.6 billion to Apollo and BC Partners. GFL will receive some $4.3 billion in cash proceeds and retain a minority equity stake worth $1.2 billion. With the cash, GFL will repay about $2.7 billion in debt and repurchase $1.6 billion of shares—likely from BC Partners.

“They’re selling their environmental services assets at a premium to where the current [company] is trading at despite the fact that solid waste is a better business…higher margin, lower capital intensity, better free-cash-flow conversion,” says Brandon Geisler, a portfolio manager at Fred Alger Management.

The environmental services business is going for about 16 to 18 times estimated 2025 Ebitda—depending on how investors want to allocate overhead. It leaves GFL’s solid-waste business trading for about 13 times. Peers trade for an average of about 16 times.

There is little reason for a discount after the deal is done. GFL’s debt will be reduced, and the balance sheet will be investment-grade. Less stock will be in the hands of private-equity players. What’s more, GFL will still have the $1.2 billion stake in the environmental services business run by Apollo and BC Partners.

Looking ahead, Wall Street projects about 6% sales growth for the solid-waste business over the coming three years, with margins expanding another two percentage points.

“We see a path for the company’s margins to expand at a greater rate compared with the Big 3,” writes CIBC analyst Kevin Chiang, referring to Republic Services, Waste Connections, and Waste Management. He projects about 1.5 percentage points of margin improvement in 2025. Chiang rates shares Buy, with a $53 target price target.

With a better balance sheet and a renewed focus on solid waste, GFL’s growth can beat the current targets, a strong catalyst for higher multiples after investors evaluate the remaining business. Seeing the valuation gap vanish after the sales would push shares into the mid-$50s from Tuesday’s close of $44.18.

GFL’s remaining stake in the environmental services business and a 45% stake in road paver Green Infrastructure Partners are worth roughly $4 to $5 a share. That’s nothing to throw away.

So why the discount? For starters, it’s a complicated situation and investors are waiting. The debt paydown and stock repurchase are coming, and the deal is closing. The company is hosting an investor event in February to help demystify the stock and the future.

Post-deal, “we’re going to look like everybody else,” says Dovigi. With the business and balance sheet restructured, he’s focused on doubling free cash flow over the coming four or five years—similar to GFL’s performance between 2020 and 2024.

If he’s successful, the coming catalysts will position GFL to trade at a premium in the waste space—and as a winning stock.

TechCrunch : Tesla’s Dojo, a timeline

Tesla’s Dojo, a timeline

Elon Musk doesn’t want Tesla to be just an automaker. He wants Tesla to be an AI company, one that’s figured out how to make cars drive themselves.

Crucial to that mission is Dojo, Tesla’s custom-built supercomputer designed to train its Full Self-Driving (FSD) neural networks. FSD isn’t actually fully self-driving; it can perform some automated driving tasks, but still requires an attentive human behind the wheel. But Tesla thinks with more data, more compute power and more training, it can cross the threshold from almost self-driving to full self-driving.

And that’s where Dojo comes in.

Musk has been teasing Dojo for some time, but the executive ramped up discussions about the supercomputer throughout 2024. Now that we’re in 2025, another supercomputer called Cortex has entered the chat, but Dojo’s importance to Tesla might still be existential — with EV sales slumping, investors want assurances that Tesla can achieve autonomy. Below is a timeline of Dojo mentions and promises.

2019
First mentions of Dojo

April 22 – At Tesla’s Autonomy Day, the automaker had its AI team onstage to talk about Autopilot and Full Self-Driving, and the AI powering them both. The company shares information about Tesla’s custom-built chips that are designed specifically for neural networks and self-driving cars.

During the event, Musk teases Dojo, revealing that it’s a supercomputer for training AI. He also notes that all Tesla cars being produced at the time would have all hardware necessary for full self-driving and only needed a software update.

2020
Musk begins the Dojo roadshow

Feb 2 – Musk says Tesla will soon have more than a million connected vehicles worldwide with sensors and compute needed for full self-driving — and touts Dojo’s capabilities.

“Dojo, our training supercomputer, will be able to process vast amounts of video training data & efficiently run hyperspace arrays with a vast number of parameters, plenty of memory & ultra-high bandwidth between cores. More on this later.”

August 14 – Musk reiterates Tesla’s plan to develop a neural network training computer called Dojo “to process truly vast amounts of video data,” calling it “a beast.” He also says the first version of Dojo is “about a year away,” which would put its launch date somewhere around August 2021.

December 31 – Elon says Dojo isn’t needed, but it will make self-driving better. “It isn’t enough to be safer than human drivers, Autopilot ultimately needs to be more than 10 times safer than human drivers.”

2021
Tesla makes Dojo official

August 19 – The automaker officially announces Dojo at Tesla’s first AI Day, an event meant to attract engineers to Tesla’s AI team. Tesla also introduces its D1 chip, which the automaker says it will use — alongside Nvidia’s GPU — to power the Dojo supercomputer. Tesla notes its AI cluster will house 3,000 D1 chips.

October 12 – Tesla releases a Dojo Technology whitepaper, “a guide to Tesla’s configurable floating point formats & arithmetic.” The whitepaper outlines a technical standard for a new type of binary floating-point arithmetic that’s used in deep learning neural networks and can be implemented “entirely in software, entirely in hardware, or in any combination of software and hardware.”

2022
Tesla reveals Dojo progress
August 12 – Musk says Tesla will “phase in Dojo. Won’t need to buy as many incremental GPUs next year.”

September 30 – At Tesla’s second AI Day, the company reveals that it has installed the first Dojo cabinet, testing 2.2 megawatts of load testing. Tesla says it was building one tile per day (which is made up of 25 D1 chips). Tesla demos Dojo onstage running a Stable Diffusion model to create an AI-generated image of a “Cybertruck on Mars.”

Importantly, the company sets a target date of a full Exapod cluster to be completed by Q1 2023, and says it plans to build a total of seven Exapods in Palo Alto.

2023
A ‘long-shot bet‘

April 19 – Musk tells investors during Tesla’s first-quarter earnings that Dojo “has the potential for an order of magnitude improvement in the cost of training,” and also “has the potential to become a sellable service that we would offer to other companies in the same way that Amazon Web Services offers web services.”

Musk also notes that he’d “look at Dojo as kind of a long-shot bet,” but a “bet worth making.”

June 21 – The Tesla AI X account posts that the company’s neural networks are already in customer vehicles. The thread includes a graph with a timeline of Tesla’s current and projected compute power, which places the start of Dojo production at July 2023, although it’s not clear if this refers to the D1 chips or the supercomputer itself. Musk says that same day that Dojo was already online and running tasks at Tesla data centers.

The company also projects that Tesla’s compute will be the top five in the entire world by around February 2024 (there are no indications this was successful) and that Tesla would reach 100 exaflops by October 2024.

July 19 – Tesla notes in its second-quarter earnings report it has started production of Dojo. Musk also says Tesla plans to spend more than $1 billion on Dojo through 2024.

September 6 – Musk posts on X that Tesla is limited by AI training compute, but that Nvidia and Dojo will fix that. He says managing the data from the roughly 160 billion frames of video Tesla gets from its cars per day is extremely difficult.

2024
Plans to scale

January 24 – During Tesla’s fourth-quarter and full-year earnings call, Musk acknowledges again that Dojo is a high-risk, high-reward project. He also says that Tesla was pursuing “the dual path of Nvidia and Dojo,” that “Dojo is working” and is “doing training jobs.” He notes Tesla is scaling it up and has “plans for Dojo 1.5, Dojo 2, Dojo 3 and whatnot.”

January 26 – Tesla announced plans to spend $500 million to build a Dojo supercomputer in Buffalo. Musk then downplays the investment somewhat, posting on X that while $500 million is a large sum, it’s “only equivalent to a 10k H100 system from Nvidia. Tesla will spend more than that on Nvidia hardware this year. The table stakes for being competitive in AI are at least several billion dollars per year at this point.”

April 30 – At TSMC’s North American Technology Symposium, the company says Dojo’s next-generation training tile — the D2, which puts the entire Dojo tile onto a single silicon wafer, rather than connecting 25 chips to make one tile — is already in production, according to IEEE Spectrum.

May 20 – Musk notes that the rear portion of the Giga Texas factory extension will include the construction of “a super dense, water-cooled supercomputer cluster.”

June 4 – A CNBC report reveals Musk diverted thousands of Nvidia chips reserved for Tesla to X and xAI. After initially saying the report was false, Musk posts on X that Tesla didn’t have a location to send the Nvidia chips to turn them on, due to the continued construction on the south extension of Giga Texas, “so they would have just sat in a warehouse.” He noted the extension will “house 50k H100s for FSD training.”

He also posts:

“Of the roughly $10B in AI-related expenditures I said Tesla would make this year, about half is internal, primarily the Tesla-designed AI inference computer and sensors present in all of our cars, plus Dojo. For building the AI training superclusters, NVidia hardware is about 2/3 of the cost. My current best guess for Nvidia purchases by Tesla are $3B to $4B this year.”

July 1 – Musk reveals on X that current Tesla vehicles may not have the right hardware for the company’s next-gen AI model. He says that the roughly 5x increase in parameter count with the next-gen AI “is very difficult to achieve without upgrading the vehicle inference computer.”

Nvidia supply challenges
July 23 – During Tesla’s second-quarter earnings call, Musk says demand for Nvidia hardware is “so high that it’s often difficult to get the GPUs.”

“I think this therefore requires that we put a lot more effort on Dojo in order to ensure that we’ve got the training capability that we need,” Musk says. “And we do see a path to being competitive with Nvidia with Dojo.”

A graph in Tesla’s investor deck predicts that Tesla AI training capacity will ramp to roughly 90,000 H100 equivalent GPUs by the end of 2024, up from around 40,000 in June. Later that day on X, Musk posts that Dojo 1 will have “roughly 8k H100-equivalent of training online by end of year.” He also posts photos of the supercomputer, which appears to use the same fridge-like stainless steel exterior as Tesla’s Cybertrucks.

From Dojo to Cortex
July 30 – AI5 is ~18 months away from high-volume production, Musk says in a reply to a post from someone claiming to start a club of “Tesla HW4/AI4 owners angry about getting left behind when AI5 comes out.”

August 3 – Musk posts on X that he did a walkthrough of “the Tesla supercompute cluster at Giga Texas (aka Cortex).” He notes that it would be made roughly of 100,000 H100/H200 Nvidia GPUs with “massive storage for video training of FSD & Optimus.”

August 26 – Musk posts on X a video of Cortex, which he refers to as “the giant new AI training supercluster being built at Tesla HQ in Austin to solve real-world AI.”

2025
No updates on Dojo in 2025
January 29 – Tesla’s Q4 and full-year 2024 earnings call included no mention of Dojo. Cortex, Tesla’s new AI training supercluster at the Austin gigafactory, did make an appearance, however. Tesla noted in its shareholder deck that it completed the deployment of Cortex, which is made up of roughly 50,000 H100 Nvidia GPUs.

“Cortex helped enable V13 of FSD (Supervised), which boasts major improvements in safety and comfort thanks to 4.2x increase in data, higher resolution video inputs … among other enhancements,” according to the letter.

During the call, CFO Vaibhav Taneja noted that Tesla accelerated the buildout of Cortex to speed up the rollout of FSD V13. He said that accumulated AI-related capital expenditures, including infrastructure, “so far has been approximately $5 billion.” In 2025, Taneja said he expects capex to be flat as it relates to AI.

CrunchBase : The Week’s Biggest Funding Rounds: BlinkRx, Tidal Vision Lead Anoth

The Week’s Biggest Funding Rounds: BlinkRx, Tidal Vision Lead Another Slow week

For the past couple of weeks large rounds have barely trickled in, and this week continues that trend. Just three deals hit $100 million or more as investors seem to have pulled back on big rounds early in the year.

1. (tied) BlinkRx, $140M, pharmaceutical: The biggest raise this week came from the pharmaceutical and prescription industry. BlinkRx, a prescription access platform, raised a $140 million Series D led by 1789 Capital. Donald Trump Jr., a partner at the investment firm, was named to the New York-based startup’s board. BlinkRx promises price transparency on drugs and delivery. Founded in 2014, the company has raised $315 million, per Crunchbase.

1. (tied) Tidal Vision, $140M, biotech: Biotech firm Tidal Vision tied for the biggest round this week, raising a $140 million Series B financing from several investors including Eni Next. The Bellingham, Washington-based company creates scalable biomolecular solutions for critical industries — including water treatment, agriculture and material science. Tidal is building new infrastructure in Europe, Texas and Ohio and will use the new cash to accelerate research and development in chitosan — a nontoxic biopolymer — and adjacent technologies. Founded in 2015, the company has raised nearly $224 million, per Crunchbase.

3. Semgrep, $100M, cybersecurity: Although cybersecurity venture funding bounced back some last year, it ended 2024 being relatively stagnant. This year, not much has changed, but this week did see the biggest round of the year so far for the industry. Application security startup Semgrep raised a $100 million Series D funding led by Menlo Ventures. Lightspeed Venture Partners led the company’s $53 million Series C in 2023. Founded in 2017, Semgrep has raised $204 million, according to the company. Semgrep’s autonomous code security platform allows developers and security engineers to create guardrails that proactively secure application development.

4. (tied) Hidden Level, $65M, defense: Another day and another big round for a defense tech firm. Hidden Level raised a $65 million Series C led by DFJ Growth. The Syracuse, New York-based startup said the new cash comes six months after it raised a previously unannounced $35 million Series B. Hidden Level’s passive radar systems allows users to detect and track drones and other objects in the air — a more common tactic in modern warfare. The passive radar systems cannot identify approaching aircraft without being detected. The company has contracts this year to support deployments for the U.S. Army, U.S. Air Force, U.S. Africa Command, U.S. Indo-Pacific Command, U.S. Central Command, U.S. Northern Command and other federal, state and local agencies. Hidden level is just the latest startup to collect a big check — or two — from VCs interested in defense tech. Just last week, El Segundo, California-based Castelion, a defense manufacturer developing long-range hypersonic strike weapons, raised a $100 million Series A in a mix of debt and equity. Lightspeed Venture Partners led the equity portion.

4. (tied) Nextworld, $65M, enterprise software: Denver-based Nextworld, a provider of enterprise platforms that enable businesses to create tailored software solutions, closed a $65 million Series F led by the McVaney Investment Partnership. The company plans to grow strategic partnerships and accelerate its research and development capabilities. Founded in 2016, this is the first announced round, per Crunchbase.

6. (tied) Berry Street, $50M, healthcare: New York-based Berry Street, a nutrition counseling platform, raised $50 million. No lead investors were named, but investors included Northzone, Sofina and others. Founded in 2022, the company has raised $59 million, per Crunchbase.

6. (tied) Fay, $50M, healthcare: Staying in the same nutritional sector, San Francisco-based Fay, a digital nutritional therapy platform, locked up a $50 million Series B led by Goldman Sachs at a $500 million valuation. Founded in 2022, Fay says it has raised $75 million.

8. (tied) 75F, $45M, smart building: Minneapolis-based 75F, a developer of AI-driven commercial HVAC automation, announced a $45 million Series B funding round led by Accurant International’s Net Zero Alliance. Founded in 2012, the company has raised nearly $75 million, per Crunchbase.

8. (tied) MagicSchool AI, $45M, edtech: Denver-based MagicSchool, an AI platform for education, raised a $45 million Series B led by Valor Equity Partners. Founded in 2023, the company has raised $62 million, per Crunchbase.

10. 7AI, $36M, cybersecurity: Boston-based 7AI, an agentic security platform, raised a $36 million seed. Investors included the likes of Greylock Partners and Spark Capital. Founded in 2024, this is the company’s first raise, per Crunchbase.

Big global deals
The largest deal of the week came from our neighbors to the north.
  • Toronto-based StackAdapt, a multichannel programmatic advertising platform that uses AI and automation in its software to enhance capabilities and user experience, raised a $235 million growth round led by Teachers’ Venture Growth.

TechCrunch : Anduril in talks to raise up to $2.5B at $28B valuation

Anduril in talks to raise up to $2.5B at $28B valuation

Just six months after defense tech Anduril raised a massive $1.5 billion round that valued the company at $14 billion, it’s in talks to raise another $2.5 billion, at a valuation of up to $28 billion, sources told CNBC.

The deal would, not surprisingly, be led by Founders Fund, which is reportedly writing a $1 billion check that represents its largest check ever. While Anduril founder Palmer Luckey is the face of the company, it names five men as co-founders, among them Founders Fund partner Trae Stephens. Founders Fund has been an investor in Anduril from the start, leading its seed round in 2017. It also co-led Anduril’s 2024 financing.

That previous round was to help pay for Anduril’s billion-dollar weapons megafactory it is building in Ohio. Sources also told CNBC that the company’s 2024 revenue doubled to $1 billion. Anduril declined further comment.

TechCrunch : Trump admin freezes EV charging program that gave Tesla millions

Trump admin freezes EV charging program that gave Tesla millions

The Department of Transportation (DOT) has paused funding for a $5 billion EV charging infrastructure program that Tesla has received at least $31 million from. The move is widely viewed to be illegal.

It’s the latest attempt from the Trump administration to hack away at federally funded renewable energy projects around the country, a clear priority for the president in his first few weeks back in office.

It’s also more evidence that Tesla CEO Elon Musk’s politics are increasingly at odds with his car company’s goal of advancing the transition to sustainable energy. By the middle of last year, Tesla had won around 6% of all awards from the National Electric Vehicle Infrastructure (NEVI) program in question, netting millions of dollars in the process.

One of the first executive orders Trump signed in January took aim at charging infrastructure programs, including NEVI.

Now, a letter sent Thursday to the directors of state DOT offices says that the “new leadership of the Department of Transportation” wants to “review the policies underlying the implementation of the NEVI” program.

The Federal Highway Administration, the DOT agency that wrote the letter, said it will update the guidance for NEVI and publish it for public comment in “the spring.” The DOT division says no new funding can go out until that new guidance is finalized. InsideEVs was the first to report the letter.

NEVI was part of the Bipartisan Infrastructure Law signed into law in 2021.  Congress had appropriated $1 billion annually to the program from 2022 to 2026.

Beth Hammon, senior vehicle charging advocate at the Natural Resources Defense Council, said in a statement that the Trump administration “does not have the authority to halt it capriciously. ”

“Stopping funding midstream will result in chaos and delays in states across the nation. It will throw state efforts into turmoil, wreak havoc with the companies that install the chargers and risk the jobs of their workers,” she said. “The only winner from this chaos is the oil industry.”

Sierra Club’s Clean Transportation for All director Katherine García also said the action was illegal and was an “attack on bipartisan funding that Congress approved years ago.”

The Trump administration is trying to stop the flow of money appropriated by Congress all across the government — which legal experts say is a major breach of the constitutional order.

His Office of Management and Budget announced a government-wide spending freeze that has already been met with a number of legal challenges. It then rescinded that memo, though it’s been reported that some payment freezes continue. Musk, meanwhile, is marauding around multiple government agencies with a team of engineers and tech executives and wresting computer access to the payment and other sensitive systems.

Barron's : BP Stock Has Fallen Behind. What It Must Do to Catch Back Up.

BP Stock Has Fallen Behind. What It Must Do to Catch Back Up.
The company made a big bet on green energy even as its rivals stayed focused on more-profitable fossil fuels.

BP has been falling behind its peers for years. If it doesn’t narrow the gap, its days as an independent company could be numbered.

The world’s fifth-largest oil major traces its origins to discoveries of oil in Iran in the early 20th century, but it has been on its back foot since the Deepwater Horizon oil spill in 2010, which cost the company $65 billion. BP’s decline has accelerated in recent years following a big and ultimately bad bet that demand for oil and gas wouldn’t stay strong, as the company leaned in hard on the transition to green energy. Rival energy companies that stayed focused on fossil fuels have fared better.

That bad bet could now push BP into the arms of its crosstown London rival Shell, or another suitor such as Exxon Mobil or Chevron in the U.S., if BP CEO Murray Auchincloss can’t find a way to bolster its flagging share price. In a worst-case scenario, BP could be dismantled and its profitable operations sold off.

“In the medium term, BP might be merging with Shell,” said Paul Gooden, a portfolio manager at Ninety One in London. “BP has been suffering from ‘noble cause corruption.’ They’ve been focused on something other than creating shareholder value.”

Gooden is referring to BP’s low-carbon investments in wind, solar, and other renewable-energy sources, which haven’t been as profitable as oil and gas. BP says it is committed to becoming an integrated energy company.

Its problem is that there is no easy way out. If the company stays on its current course, its performance compared with peers probably will only get worse—its total return, taking dividends into account, came to 39% for the past 10 years, compared with Shell’s 49%. It is even further behind Exxon’s 80% total return and Chevron’s 98%. But BP is also likely to be punished if it tries too aggressively to clean up its balance sheet. For example, slashing its stock-buyback program to pay down its debt, or selling off assets, could lead to an even sharper drop in the stock price.

BP reports fourth-quarter earnings on Feb. 11, and it hosts a capital markets day on Feb. 26. A spokesman for BP declined to comment on the company’s plans ahead of those events.

Gooden expects a “course correction” rather than an “overreaching review.” Auchincloss was chief financial officer under Bernard Looney, the previous CEO, who set the company on its current trajectory.

Even though Auchincloss has taken steps to simplify and slim down the company—he announced cuts of 4,700 employees, or about 5% of the workforce, and 3,000 contractors in January—he still represents continuity.

“Strategically, BP lost their way,” said Biraj Borkhataria, global head of energy transition at RBC Capital Markets in London. “BP needs to show evidence that its new engines are providing earnings growth. 2025 is an important year.”

BP remains a profitable company with a dividend yield of more than 6%. The issue is the company’s hefty debt, which means that the dividend and share buybacks may need to be cut quickly if oil and gas prices should fall—something that President Donald Trump has promised to make happen.

“BP has the highest debt profile versus its peer group,” said Bill Selesky, a strategist at Argus Research. “Investors expect oil and gas to be highly volatile, and they want a less risky investment.”

To illustrate: BP’s debt-to-equity ratio was 23.3% in the third quarter. TotalEnergies was at about 13%. At the end of last year, Exxon’s was 13%, and Chevron’s was 13.9%. Shell lies in between—its ratio was 17.7% in 2024.

Like other big oil companies, BP made record profits in 2022 as crude prices spiked in the wake of Russia’s invasion of Ukraine. Unlike its peers, the company didn’t use the funds to significantly reduce its debt load. Instead, it went shopping, snapping up firms like Archaea Energy, the largest renewable natural-gas producer in the U.S., and EDF Energy Services, a retail power company.

Auchincloss suggested in October that BP’s buyback plans may need to be revisited, indicating that investors are right to be worried that the distributions can’t last.

“High dividend yields are more of a red flag than a green light,” said Allen Good, a strategist at Morningstar. “Shell has the blueprint. They sold off some low carbon assets and reduced investment overall, while increasing investment in oil and gas, and they’re cutting costs.”

Good says a merger between BP and Shell isn’t out of the question, but it wouldn’t be easy. For one, BP hasn’t said it wants to sell, and Shell hasn’t said it’s interested in acquiring it. A spokesperson for Shell declined to comment.

Plus, Shell is still working to get its shares up after changing tack under CEO Wael Sawan, who took the reins at the start of 2023. Shell trades at 8.5 times forward earnings, the same as BP—which makes it hard to argue that BP’s shares are relatively undervalued in those terms. By comparison, Exxon trades at 13.7 times, and Chevron is at 13.8.

“Shell and BP trade on similar multiples, and so we don’t see the obvious accretion from a potential merger,” RBC’s Borkhataria noted.

BP could also consider splitting itself up. Its U.S. onshore oil-and-gas business, called BPX, is a prize asset. But if BP gets rid of its most promising oil and gas fields, it reduces its potential to grow.

It isn’t obvious how much time BP has before it reaches a crisis, but investors are getting frustrated. That could make them vulnerable to activist campaigns. One group, Bluebell Capital Partners, pushed for a strategy shift for years but just closed shop in December—ultimately, it was too small to wield much influence.

Others may see BP as ripe for a big shake-up. The pressure on Auchincloss is only going to increase.

Barron's : Banks Want to Crash the Bitcoin Party. Trump Is Opening the Door.

Banks Want to Crash the Bitcoin Party. Trump Is Opening the Door.
Companies like Bank of America may soon be able to offer more crypto services as Trump’s pro-crypto policies take shape.

The last time crypto collapsed, regulators celebrated that the country’s biggest banks had few ties to Bitcoin and other digital assets, leaving them unscathed. Next time may be different.

After years of being stymied by the Biden administration, banks might soon get a green light from President Donald Trump and his top officials to start offering cryptocurrency services. Trump, who has launched his own token, is creating a pro-crypto government. Banks that were shut out of the industry are poised to join it, vying with firms like Coinbase Global, Robinhood Markets, and BlackRock for a piece of the crypto pie.

The Federal Deposit Insurance Corp. plans to revise bank guidelines for crypto, aiming to allow banks to embark on some crypto activities without getting regulatory permission first. Some banks have met with government officials to push for offering custody of crypto assets, along with “tokenized deposits” that could put some checking accounts on blockchains, according to a person familiar with the matter.

“If the rules come in and make it a real thing that you can actually do business with, you’ll find that the banking system will come in hard on the transactional side of it,” Bank of America CEO Brian Moynihan said in a CNBC interview at the World Economic Forum in Davos, Switzerland, describing crypto as “just another form of payment.”

Banks aren’t entirely shut out of the crypto world, but allowing them to offer far more services and put deposits on blockchains would be a stark departure from Biden’s administration, which actively discouraged ties between banks and crypto. It would also be an about-face for independent regulators who have long worried about crypto’s uses for illicit activities and potential to destabilize the financial system.

Every major banking regulator—independent entities in the federal government—has raised alarms. The Federal Reserve, the Office of the Comptroller of the Currency, and the FDIC in 2023 issued a joint statement saying crypto raised “significant safety and soundness concerns” for banks. The regulators also required banks to get permission before embarking on significant crypto projects. Now—at least for some activities—that approach is going out the window.

The push is moving forward despite Trump having not yet appointed permanent leaders for the regulators, which are supposed to operate independently from the administration. The FDIC has a five-member board, with Republican Travis Hill as acting chair. Biden holdover Michael Hsu runs the OCC, though he’s expected to be replaced by Trump at any time. Changes might come slowest at the Fed Board, where Chair Jerome Powell’s term lasts through 2026.

“The industry is working with policymakers to remove the guardrails in the banking system that kept banks out of crypto,” said Mark Hays, an associate director at Americans for Financial Reform, a Wall Street watchdog that’s been critical of the crypto industry.

Banks say they can put up safeguards, and they no longer want to be shut out of crypto services and underlying blockchain technology—arguing it could help them reduce their own costs, speed up payments, and generate new sources of revenue.

So far they have taken baby steps. JPMorgan Chase, for instance, launched “JPM Coin” in 2019, an internal token to settle payments between clients, though its volume pales in comparison to traditional transaction methods. Goldman Sachs Group last year said it planned to spin out a blockchain-based platform that could be used to tokenize and trade real-world assets, like real estate. Citigroup has experimented with Wellington Management and WisdomTree to tokenize private funds.

The Bank Policy Institute, an industry lobbying group, said banks are “ideal vehicles for exploring the benefits of new technology like blockchain,” in a paper after the November election.

Even if big banks start delving more into crypto, it’s unlikely to move the needle on their asset bases or financial results—which are far more tied to loan growth, net interest income, and balance sheets. But with few exceptions, banks have left lucrative businesses like brokerage services, custody, and dollar-tied tokens to upstarts like Coinbase, Robinhood, and Anchorage Digital.

The push by banks also stems from the wild success of spot-based Bitcoin exchange-traded funds. Launched about a year ago, the ETFs have swelled to about $120 billion in assets, earning fees for managers like BlackRock and Fidelity as well as the custodians of the underlying Bitcoin, like Coinbase.

Crypto firms, meanwhile, are encroaching on a core activity in banking: taking deposits, lending some out, and earning a yield on the reserves held against them. The way that works in crypto is with stablecoins—tokens pegged to the dollar that can be used in transactions, lent as collateral, and deposited in accounts that yield interest. The tokens collectively have a market value of more than $227 billion, earning considerable interest for companies like Coinbase, Circle Internet Financial, and Tether Holdings.

To compete with stablecoins, some banks this year met with senior FDIC officials to talk about potentially offering “tokenized deposits,” among other things, according to people familiar with the matter.

Tokenized deposits are essentially tokens that represent traditional deposits in a checking or savings account and can be transferred almost instantly on a blockchain, the digital ledger underlying most crypto assets. Banks say can it can reduce their costs. Integrated with other blockchains, tokenized deposits can also be used more seamlessly for crypto trading, lending, and other activities.

The FDIC, under Hill, is considering making it easier for banks to offer custody services. And the FDIC is considering rescinding or reworking guidance that had required banks to get permission for crypto-related activities, instead offering upfront guidance on how banks can use the technology.

“We are actively reevaluating our supervisory approach to crypto-related activities,” Hill said in a statement on Wednesday, adding that the agency sought to give “a pathway for institutions to engage in crypto- and blockchain-related activities while still adhering to safety and soundness principles.”

Financial watchdogs say major safeguards will be needed to avoid a sequel to the crash of 2022 —when a wave of corporate crypto failures bled into the banking system, leading to the demise of Silvergate Bank and Signature Bank. In its autopsy report on Signature, the FDIC attributed its failure in part to its “strategy of rapid growth and expansion into the digital asset markets.”

“Real people’s money is at stake,” said Shayna Olesiuk, director of banking policy at industry critic Better Markets, pointing to the failures of Silvergate and Signature.

Some financial-stability experts think it can be done safely, and argue that letting large banks into crypto might actually be positive. One reason Silvergate failed is because it had a disproportionate amount of crypto depositors and was known as a “crypto bank.” When FTX collapsed, Silvergate depositors panicked, causing a run. That risk might be alleviated if more crypto deposits were held at bigger banks, constituting only a small part of their liabilities, says Steven Kelly, associate director of research at the Yale Program on Financial Stability.

“If the crypto industry can mature and the regulations around it can mature enough, that’s a safer outcome than having institutions known as crypto banks,” he says.

Banks, of course, are eager to tap the digital-asset profit pool as a new pro-crypto federal government takes shape. Trump signed an executive order to create a crypto “working group” to study pro-crypto policies, including the potential creation of a federal Bitcoin stockpile. The Securities and Exchange Commission now has its own crypto working group, led by Commissioner Hester Peirce, nicknamed the “Crypto Mom” for her pro-industry views.

Republicans in Congress want to move forward with bills that would establish rules for stablecoins and brokerages/exchanges like Coinbase. Republican lawmakers also sound sympathetic to claims by crypto executives that they had been “debanked,” or denied basic banking services, merely because of the industry they worked in.

The Biden administration “was explicit about not wanting crypto to touch the banking system, period,” said J.W. Verret, a law professor at George Mason University. With Republicans, “that war is over.”

Barron's : Why T-Mobile Stock Is Trouncing Telecom—and Big Tech

Why T-Mobile Stock Is Trouncing Telecom—and Big Tech

Why is a phone company trading like a member of the Magnificent Seven? T-Mobile US stock is up 54% in a year and 694% over the past decade. That beats Amazon.com over the first time frame, Meta Platforms over the second, and Alphabet and Apple over both.

One theory doesn’t pan out: that a 2020 merger between T-Mobile and Sprint turned the industry into a lazy and lucrative triopoly. But a couple of antitrust oopsies might have played a role. More recently, telecom has been feasting at cable’s expense. T-Mobile’s frothy stock price of 23 times this year’s projected earnings might even be worth it, but parent Deutsche Telekom offers a cheaper way in.

Start with some merger history: A decade ago, Verizon Communications Communications and AT&T controlled a combined 72% of national cell service. T-Mobile and Sprint split the rest. T-Mobile was slowly gaining market share for two reasons. First, it was giving customers a better deal than the others, at the expense of its free cash flow, which was under $1 billion a year, versus $15 billion for AT&T and $21 billion for Verizon. Second, Sprint stunk, making it a market share donor.

The growth mismatch between T-Mobile and Sprint meant that T-Mobile was running low on wireless spectrum, whereas Sprint had plenty that it couldn’t use. So in 2018, T-Mobile said it would buy Sprint for $26.5 billion. Antitrust regulators challenged the deal, and then relented in 2019, with one main condition: T-Mobile had to sell its Boost prepaid cellphone service and some spectrum to Dish to create a new, fourth industry competitor.

Enough time has gone by to make judgments about who stuck what to whom. Boost, now owned by EchoStar, remains a nonfactor. The U.S. industry is a triopoly. But it isn’t a “cozy” one, according to a paper last year in the journal Regulation Magazine; it’s competitive. The deal has resulted in “substantial improvement in consumer welfare,” argue researchers at Clemson University and Technology Policy Institute, a think tank. T-Mobile has led on 5G deployment, making service faster. Adjusting for this service improvement, the real price of wireless service fell 15.3% over three years after the deal, versus a 9.8% decline over the three years prior.

If the deal had hurt competition, all industry participants would be enjoying the benefits. But since the April 2020 merger closing, T-Mobile stock has gained 191%, versus 15% for AT&T, and a 25% decline for Verizon.

T-Mobile is still thriving. On Jan. 29, the company reported record gross additions of postpaid accounts last year, along with record-low churn. It’s no longer giving it away; free cash flow is running around $17 billion a year—close to that of Verizon and AT&T. One reason for T-Mobile’s success is that although the government failed to create a fourth rival, it succeeded too well in keeping Verizon and AT&T out of the bidding for that Sprint spectrum. The study authors calculate that T-Mobile paid no more than 65 cents per MHz-pop, a measurement that factors in radio frequency and population. Competitors buying spectrum elsewhere at auction had to cough up $1.10.

T-Mobile is focusing growth efforts in rural markets, as well as the 30% of top 100 markets where it remains underpenetrated. Business services, where it is a laggard but is growing quickly, are another priority. One of the sweetest growth opportunities is home broadband service. Cable companies, stung by customers canceling their television channel bundles, ratcheted up the price of high-speed internet to make up for lost revenue. Telecoms, flush with cash now that their 5G networks are built, have swooped in with broadband service of their own.

One service type is called fixed wireless, and involves using a cellphone signal for home broadband. The main appeal there for T-Mobile is that it can earn money on unused spectrum. The bigger long-term moneymaker is fiberoptic service. With prices up, and customer churn typically low, management reckons that internal rates of return on fiber are over 20%.

That provides T-Mobile with a profitable place to direct its now-hefty free cash flow. It has used joint ventures with regional players to get a jump on boosting its fiber footprint. J.P. Morgan predicts that T-Mobile will grow its share from 4% to 10% by 2030. Earnings are seen growing by double-digit percentages over the next five years, which could make the stock’s premium valuation worth paying. But Deutsche Telekom, which owns a majority stake, offers a cheaper way to invest.

Deutsche Telekom shares are up more than 120% over the past five years, but earnings per share have risen just as fast, so shares still trade below 16 times earnings. Remarkably, J.P. Morgan counts only 10 large-cap European companies whose earnings are expected to grow at double-digit rates. Deutsche Telekom is one of them, even if the U.S. is driving its growth. The other nine companies trade at an average of 23 times earnings, just like T-Mobile. Deutsche Telekom’s lower valuation leads JPM to conclude that its shares are headed 30% higher. They pay a 2% dividend.

Quick note on an overly complicated topic: Collateralized loan obligations only sound thermonuclear. Ones rated AAA and AA have never had a loss. There are exchange-traded funds for them now, like Janus Henderson AAA CLO. Last April, I laid out BofA’s case that these are a better deal for yield hunters than pricey private credit. I should have known better.

Buyers of that Janus ETF have done fine. They’ve made 5.5%, which annualizes to just over 7%. But so much cash has sloshed in from investors seeking higher yields in fancy places that assets under management tripled last year to over $20 billion. Janus is suddenly the third-largest active fixed income ETF seller. That means that what I really should have told investors to buy is stock in Janus Henderson Group, which has returned 49% with dividends since then.

FT : Why Trump wants an American sovereign wealth fund

Renault has reactivated talks with Taiwanese iPhone contract manufacturer Foxconn regarding its stake in Nissan following the collapse of merger talks between the Japanese carmaker and its rival Honda.

Renault’s move to launch its own search for new investors came on the back of concerns that it would be left with depressed shares in Nissan, with the Japanese group lacking a new partner, according to people with knowledge of the situation. The search will be expansive with approaches to be made to technology groups worldwide including Apple, they added. 

Renault has been reducing its stake in Nissan following a restructuring of the carmakers’ 25-year alliance in 2023. At present, it holds a 36 per cent stake in Nissan, including a remaining 18.7 per cent held in a French trust that it wants to offload. 

Jun Seki, chief strategy officer for Foxconn’s electric vehicle division and a former Nissan executive, met Renault’s chief executive Luca De Meo in December for talks about acquiring the shares held in the trust, triggering panic within Nissan and frantic negotiations with rival Honda that fell apart earlier this week. 

“There is no need to defend against Foxconn. They should at least be considered [as a potential partner],” said one person close to the discussions.

n a statement, Renault said it was “assessing all options” and that it would “vigorously defend” the interests of the group and its stakeholders. “Today, the priority is Nissan’s turnaround,” it added. 

Shares in Nissan rose more than 7 per cent on Friday following a media report that Foxconn’s chair Young Liu instructed Seki to connect with Renault. 

Foxconn did not immediately respond to a request for comment. Nissan declined to comment. 

But even if Renault is open to selling its shares in Nissan, the Japanese group has the first right of refusal so it would be difficult for the sale to materialise without its agreement.

One banker involved in automotive deals said Renault “wanted to play an active role in the situation”, adding that it was torn between the idea of selling and recouping cash or remaining involved with Nissan. “They are not in a rush,” he said.

Nissan is also conducting its own search for a strategic partner in the tech industry after its board decided to end talks with Honda to create the world’s fourth-largest carmaker.

The discussions fell apart after Honda demanded that Nissan accept a new offer to become a fully owned subsidiary, deviating from the initially agreed structure of a joint holding company.

Nissan has come under financial pressure due to competition from Chinese rivals and a lack of strong product offerings. As part of its turnaround efforts, the company has said it plans to cut 9,000 jobs and a fifth of its production capacity.

TechCrunch : The Week’s Biggest Funding Rounds: BlinkRx, Tidal Vision Lead Anoth

The Week’s Biggest Funding Rounds: BlinkRx, Tidal Vision Lead Another Slow week

For the past couple of weeks large rounds have barely trickled in, and this week continues that trend. Just three deals hit $100 million or more as investors seem to have pulled back on big rounds early in the year.

1. (tied) BlinkRx, $140M, pharmaceutical: The biggest raise this week came from the pharmaceutical and prescription industry. BlinkRx, a prescription access platform, raised a $140 million Series D led by 1789 Capital. Donald Trump Jr., a partner at the investment firm, was named to the New York-based startup’s board. BlinkRx promises price transparency on drugs and delivery. Founded in 2014, the company has raised $315 million, per Crunchbase.

1. (tied) Tidal Vision, $140M, biotech: Biotech firm Tidal Vision tied for the biggest round this week, raising a $140 million Series B financing from several investors including Eni Next. The Bellingham, Washington-based company creates scalable biomolecular solutions for critical industries — including water treatment, agriculture and material science. Tidal is building new infrastructure in Europe, Texas and Ohio and will use the new cash to accelerate research and development in chitosan — a nontoxic biopolymer — and adjacent technologies. Founded in 2015, the company has raised nearly $224 million, per Crunchbase.

3. Semgrep, $100M, cybersecurity: Although cybersecurity venture funding bounced back some last year, it ended 2024 being relatively stagnant. This year, not much has changed, but this week did see the biggest round of the year so far for the industry. Application security startup Semgrep raised a $100 million Series D funding led by Menlo Ventures. Lightspeed Venture Partners led the company’s $53 million Series C in 2023. Founded in 2017, Semgrep has raised $204 million, according to the company. Semgrep’s autonomous code security platform allows developers and security engineers to create guardrails that proactively secure application development.

4. (tied) Hidden Level, $65M, defense: Another day and another big round for a defense tech firm. Hidden Level raised a $65 million Series C led by DFJ Growth. The Syracuse, New York-based startup said the new cash comes six months after it raised a previously unannounced $35 million Series B. Hidden Level’s passive radar systems allows users to detect and track drones and other objects in the air — a more common tactic in modern warfare. The passive radar systems cannot identify approaching aircraft without being detected. The company has contracts this year to support deployments for the U.S. Army, U.S. Air Force, U.S. Africa Command, U.S. Indo-Pacific Command, U.S. Central Command, U.S. Northern Command and other federal, state and local agencies. Hidden level is just the latest startup to collect a big check — or two — from VCs interested in defense tech. Just last week, El Segundo, California-based Castelion, a defense manufacturer developing long-range hypersonic strike weapons, raised a $100 million Series A in a mix of debt and equity. Lightspeed Venture Partners led the equity portion.

4. (tied) Nextworld, $65M, enterprise software: Denver-based Nextworld, a provider of enterprise platforms that enable businesses to create tailored software solutions, closed a $65 million Series F led by the McVaney Investment Partnership. The company plans to grow strategic partnerships and accelerate its research and development capabilities. Founded in 2016, this is the first announced round, per Crunchbase.

6. (tied) Berry Street, $50M, healthcare: New York-based Berry Street, a nutrition counseling platform, raised $50 million. No lead investors were named, but investors included Northzone, Sofina and others. Founded in 2022, the company has raised $59 million, per Crunchbase.

6. (tied) Fay, $50M, healthcare: Staying in the same nutritional sector, San Francisco-based Fay, a digital nutritional therapy platform, locked up a $50 million Series B led by Goldman Sachs at a $500 million valuation. Founded in 2022, Fay says it has raised $75 million.

8. (tied) 75F, $45M, smart building: Minneapolis-based 75F, a developer of AI-driven commercial HVAC automation, announced a $45 million Series B funding round led by Accurant International’s Net Zero Alliance. Founded in 2012, the company has raised nearly $75 million, per Crunchbase.

8. (tied) MagicSchool AI, $45M, edtech: Denver-based MagicSchool, an AI platform for education, raised a $45 million Series B led by Valor Equity Partners. Founded in 2023, the company has raised $62 million, per Crunchbase.

10. 7AI, $36M, cybersecurity: Boston-based 7AI, an agentic security platform, raised a $36 million seed. Investors included the likes of Greylock Partners and Spark Capital. Founded in 2024, this is the company’s first raise, per Crunchbase.

Big global deals
The largest deal of the week came from our neighbors to the north.

Toronto-based StackAdapt, a multichannel programmatic advertising platform that uses AI and automation in its software to enhance capabilities and user experience, raised a $235 million growth round led by Teachers’ Venture Growth.