NYT : Israel Planted Explosives in Pagers Sold to Hezbollah, Officials Say

Israel Planted Explosives in Pagers Sold to Hezbollah, Officials Say
Small amounts of explosive were implanted in beepers that Hezbollah had ordered from a Taiwanese company, according to American and other officials briefed on the operation.

Israel carried out its operation against Hezbollah on Tuesday by hiding explosive material within a new batch of Taiwanese-made pagers imported into Lebanon, according to American and other officials briefed on the operation.

The pagers, which Hezbollah had ordered from Gold Apollo in Taiwan, had been tampered with before they reached Lebanon, according to some of the officials. Most were the company’s AR924 model, though three other Gold Apollo models were also included in the shipment.

The explosive material, as little as one to two ounces, was implanted next to the battery in each pager, two of the officials said. A switch was also embedded that could be triggered remotely to detonate the explosives.

At 3:30 p.m. in Lebanon, the pagers received a message that appeared as though it was coming from Hezbollah’s leadership, two of the officials said. Instead, the message activated the explosives. Lebanon’s health minister told state media at least 11 people were killed and more than 2,700 injured.

The devices were programmed to beep for several seconds before exploding, according to three of the officials.

Hezbollah has accused Israel of orchestrating the attack but has described limited details of its understanding of the operation. Israel has not commented on the attack, nor said it was behind it.

The American and other officials spoke on the condition of anonymity given the sensitive nature of the operation.

Independent cybersecurity experts who have studied footage of the attacks said it was clear that the strength and speed of the explosions were caused by a type of explosive material.

“These pagers were likely modified in some way to cause these types of explosions — the size and strength of the explosion indicates it was not just the battery,” said Mikko Hypponen, a research specialist at the software company WithSecure and a cybercrime adviser to Europol.

Keren Elazari, an Israeli cybersecurity analyst and researcher at Tel Aviv University, said the attacks had targeted Hezbollah where they were most vulnerable.

Earlier this year, Hezbollah’s leader, Hassan Nasrallah, strictly limited the use of cellphones, which he saw as increasingly vulnerable to Israeli surveillance, according to some of the officials as well as security experts.

“This attack hit them in their Achilles’ heel because they took out a central means of communication,” Ms. Elazari said. “We have seen these types of devices, pagers, targeted before but not in an attack this sophisticated.”

Over 3,000 pagers were ordered from the Gold Apollo company in Taiwan, said several of the officials. Hezbollah distributed the pagers to their members throughout Lebanon, with some reaching Hezbollah allies in Iran and Syria. Israel’s attack affected the pagers that were switched on and receiving messages.

It remained unclear on Tuesday precisely when the pagers were ordered and when they arrived in Lebanon.

>>> After Hours Summary: LUNR +32.6% wins NASA contract; BLK, MSFT and others la

After Hours Summary: LUNR +32.6% wins NASA contract; BLK, MSFT and others launch new AI infrastructure fund

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: None.

Companies trading higher in after hours in reaction to news: LUNR +32.6% (wins NASA contract worth up to $4.82 bln), QTRX +4.8% (Director bought 47000 shares), CMPO +4.5% (Resolute completes acquisition of majority interest), EWTX +1.9% (to discuss top-line data from Phase 1 and Phase 2 trials), BJ +1.7% (Director bought 2455 shares), ALK +0.6% (ALK announces interim leadership team to guide HA ops), SHAK +0.5% (CEO appears on CNBC), BLK +0.3% (BLK, MSFT and others launch new AI infrastructure fund), LMT +0.2% (selected by NASA to develop lightning mapper for NOAA), MSFT +0.1% (BLK, MSFT and others launch new AI infrastructure fund)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: None.

Companies trading lower in after hours in reaction to news: CBUS -11.1% (stock offering), CWST -2.8% (commences $400 mln stock offering), PHR -0.9% (awarded a CDC research grant), GPCR -0.5% (names new CMO), CRM -0.3% (CRM and NVDA to collaborate to develop AI capabilities for the enterprise), LUV -0.1% (Elliott Mgmt still wants to replace CEO, according to Reuters), NVDA -0.1% (CRM and NVDA to collaborate to develop AI capabilities for the enterprise), ALSN -0.1% (announces partnership with LiuGong), JPM -0.1% (increases dividend)

(Makor) VIV FP - Update on SOP, share buy back and split project

 VIV FP - Update on SOP, share buy back and split project


1/ Conclusion

The last update on the split project was on Jul 25th. We should find out in coming weeks the date of the EGM.

Since July 25th, VIV has bought back 17.9m shares or 13% of the ADV.
VIV also announced on Sep 09th an increase to its Share buy-back program (see section 5 for details).
VIV is clearly accelerating its SBB ahead of the Split project.

VIV is currently trading at a 38% discount to our NAV (see section 3 for details).

The value per VIV share of the Split project is €14.4 if the spin-offs distributions are 50% taxed at a 30% flat tax rate (guidance from CFO on call), a 41% upside from VIV’s current price (see section 4 for details).

Such position could be hedged by shorting 26% of UMG (its % of VIV's NAV). We would not hedge the other listed VIV assets and a decision has to be made on whether to hedge the unlisted assets with for example the SXMP.

We believe the time is right to set-up a long VIV FP's position. 
Even if the hedging of such position is far from straight forward, the risk/reward is attractive enough to consider setting up the position.


2/ Last update on Split project


The last update on the split project was communicated to the market on July 25th during Q2 results:

  • Timing:
    • “If this project were to proceed following the information and consultation procedures, a decision could be taken at the end of October 2024, with the aim of submitting it to an Extraordinary Shareholders’ Meeting which could be held in December 2024 (two-thirds majority)”
    • “If approved by the Extraordinary Shareholders’ Meeting, the allocation of the shares in the various companies concerned to Vivendi’s shareholders and their listing on the stock market, are expected to take place in the days following such meeting”
  • Canal+:
    • Would remain a company incorporated and taxed in France
    • Be listed on the London Stock Exchange
    • Could be subject to a secondary listing on the Johannesburg stock market
  • Havas:
    • Would become a Dutch public limited liability company (NV)
    • Would remain French tax resident for French corporate income tax purposes
    • Be listed on Euronext Amsterdam stock exchange
    • A Dutch legal foundation would guarantee the preservation of the group’s independence and identity, and multiple voting rights, initially double after two years of holding, then quadruple two years later, would be offered to long term committed shareholders, taking into account the length of time the Vivendi shares were held for the double voting rights
  • Louis Hachette Group:
    • Be comprised of VIV’s 63.5% stake in MMB as well as 100% of Prisma Media
    • Would be listed on Euronext Growth in Paris
    • Would have no debt of its own except for Lagardère’s Net debt of approximately €2 billion which has recently been refinanced
    • Continued listing of its subsidiary Lagardère SA on the regulated market of Euronext Paris
  • Vivendi RemainCo:
    • Remain listed on the regulated market of Euronext Paris
    • Retain the minority interest it could acquire in Lagardère SA through the exercise of the transfer rights issued as part of the 2022 public tender offer, which remain exercisable until June 15, 2025

Furthermore, VIV has provided details on the debt allocation between the various entity. The investment company would basically keep all debt excepted the debt raised for the Multichoice tender offer. The investment company would end up with a Net debt of €1.5-2.0bn.
The implementation of this project is not expected to lead to the launching of a public tender offer for Vivendi or for any of its separated entities.

3/ VIV Updated SOP


VIV is currently trading at a 38% discount to our NAV.



4/ Implied value of Split project

Assuming:
  • The resulting investment company trades at a 20% discount to its NAV as investors will clearly price in the probability of BOL taking full control (All debts, liabilities and Holdco costs at the investment company level)
  • Louis Hachette at a 20% discount
We still have uncertainties on how the holding costs would be allocated as it does not make sense for all of them to be allocated to VIV InvestCo (as done for now).
The value per VIV share would be:
€16.2 if the spin-offs distributions are tax free, a 59% upside from VIV’s current price


€14.4 if the spin-offs distributions are 50% taxed at a 30% flat tax rate (guidance from CFO on call), a 41% upside from VIV’s current price



5/ VIV Share Buy-back program

Since July 25th, VIV has bought back 17.9m shares or 13% of the ADV.
VIV announced on Sep 09th that the size of its SBB program would be increased from 25,407,259 to 35,146,514 shares.
Most importantly, all the additional shares to be bought back should be cancelled.
As of Sep 09th, VIV has 38.1m shares in treasury of which 32.1m shares to be cancelled or 3.12% of VIV’s capital.
There is still 10m shares to be bought back in the increased program or an additional 0.97%.

David Darmouni​​​​
Equity Sales
Makor Securities London Ltd. | Makor Group
E: ddarmouni@makorsecurities.com
O: +44 207 290 5777
W: www.makor-group.com
6th Floor, 30 Panton Street, London, SW1Y 4AJ

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FT : A seismic hum signals a new era of climate uncertainty

A seismic hum signals a new era of climate uncertainty
An enigmatic sound has shown that the frozen corners of the world are creaking — and in more ways than one

Seismologists initially thought their instruments were faulty. The signal, detected by monitoring stations in September 2023, did not match the rich tapestry of frequencies characteristic of an earthquake or volcanic eruption. Besides, no such events had been reported. 

Yet there it was, plain to see on monitors world over: a single-frequency global hum, pulsing every 92 seconds, for nine days. On online academic message boards, the mysterious signal was ascribed to a USO, or unidentified seismic object.

A year on, scientists think they have cracked the puzzle of what shook the Earth: a climate change-induced landslide in eastern Greenland triggered a tsunami, which sloshed back and forth in a narrow fjord for nine days. The rhythmic slamming of water between the tall, steep parallel banks created detectable vibrations in the Earth’s crust.  

The saga shows how climate change is reconfiguring our world in hidden ways — and pushing scientists to the edge of their investigative capabilities. “Our existing [scientific] methods were not set up to deal with this because nothing like it has been seen before,” says Stephen Hicks, a computational seismologist at University College London, who, together with Kristian Svennevig from the Geological Survey of Denmark and Greenland, led an effort to decipher the signal’s backstory. The analysis, published last week in the journal Science, took months of collaboration between 68 scientists across 15 countries, who drew on satellite imagery, ground observations, massive computing power and input from the Danish military. 

The headline is not that climate change is happening, nor even that it is happening faster than anticipated. Rather, it is that the consequences are not always apparent, predictable, measurable or explicable. We are moving into a new era of climate uncertainty.

The signal, first picked up on September 16 2023, reached geographically scattered seismometers at different times, allowing the source to be traced back to eastern Greenland. The vibrations wobbled Antarctica, on the other side of the world, within an hour. After an initial seismic burst, one enigmatic, single-frequency signal persisted.

A string of before-and-after satellite images of the region revealed a massive dust cloud and subsequently altered landscape above an inland waterway called Dickson Fjord. A mountain had collapsed, triggering a landslide that, using subsequent measurements from satellites and drones, dumped 25mn cubic metres of rock and ice into the fjord.

This coincided with reports of a tsunami that had inundated a military site and research station about 70km away. The Danish navy photographed the aftermath while sailing in the fjord several days later: a 200m-high black line etched by debris on a nearby glacier marked the height of the initial tsunami.

The rock-ice avalanche tallies with the initial seismic burst — but what caused the longer-lived vibration? By modelling the material entering the water and using the fjord’s width, depth and shape, scientists were able to simulate a plausible scenario. 

The collapsed material plummeted into the nearly 3km-wide fjord on one bank, triggering a tsunami that set up a standing wave — called a seiche — sloshing to and fro across the fjord. Such waves, whether in a lake or a bathtub, tend to dissipate quickly but this happened in a stretch of water constricted by a glacier at one end and a tight bend at the other. Essentially, the standing wave was trapped, unable to empty its energy into the ocean around 200km away.

Simulations suggest the water would have swayed from one bank to the other about every 87 seconds, a reasonably close match to the observed signal. The modelling also indicates the seiche would have decayed slowly.

The real landslide, unseen by human eye, was caused by glacial thinning at the foot of the mountain, which destabilised the precipitous terrain. A landslide-tsunami is a first for eastern Greenland, and it happened on a popular tourist route for cruise ships. The Danish authorities, Hicks told me, are assessing the safety of the area. 

Scientists have combed through historical seismic data — and have, disturbingly, turned up similar, single-frequency signals in the same region as far back as 2016. This frozen corner of the world may have been creaking before last year’s cataclysmic event, with the odd landslide prompting smaller standing waves that have hitherto gone unnoticed. 

The melting landscape is quivering. We should be rattled.  

FT : SEC says FTX auditor did not understand the crypto market

SEC says FTX auditor did not understand the crypto market
Regulator’s case against Prager Metis details alleged failures in examining the exchange before its collapse

The US Securities and Exchange Commission has charged the auditor of collapsed cryptocurrency exchange FTX with misconduct, saying the firm took on Sam Bankman-Fried’s company as a client without properly understanding the crypto market.

Prager Metis, an accounting firm that ranks outside the top 50 US firms by revenue, gave a clean bill of health to FTX’s financial results for the two years before it collapsed in November 2022 with an $8bn hole in its balance sheet.

“In its rush to accept FTX as an audit client, Prager Metis assembled an engagement team that collectively lacked the competence, experience, and knowledge to appropriately conduct the audits,” the SEC’s complaint alleged, including a lead partner who “fundamentally did not understand FTX, or the crypto asset markets in which it operated”.

From this initial failure flowed a series of other auditing failures in the design and execution of the audits, the SEC said.

Specifically, Prager Metis failed to properly understand the relationship between Bahamas-based FTX and Bankman-Fried’s crypto hedge fund Alameda Research, which was later revealed to have had the ability to borrow unlimited customer funds from FTX. Bankman-Fried was sentenced in March to 25 years in prison for fraud.

Prager Metis will pay a civil penalty of $745,000 to settle the charges related to FTX, without admitting or denying the SEC’s findings.

According to the SEC’s complaint, FTX needed audited financial statements quickly and Prager Metis signed off on an initial set of accounts in July 2021 — five months after taking it on as a client — without properly exploring the borrowing by Alameda.

“Bankman-Fried and the FTX team had been unsuccessful in their prior attempts to identify a firm that was willing to audit FTX’s financial statements, and they were eager to obtain audited financial statements to support their plan of engaging in a public offering,” the SEC wrote.

Prager Metis took “at face value the statement that Alameda — the company Bankman-Fried owned and that served as the primary market maker for FTX — operated under terms that were no different than those that would apply to an individual customer purchasing a small amount of bitcoin on margin for the first time.”

The firm did not immediately respond to a request for comment. It also agreed on Tuesday to pay $1.2mn to settle separate SEC charges alleging violations of auditor independence rules in dozens of other audits.

WSJ : A U.S. National Debt Crisis Is Coming

A U.S. National Debt Crisis Is Coming
Trump and Harris are determined to ignore the problem—at the country’s peril.

Despite intensifying polarization, the Republican and Democratic parties are alike in one important respect: Both now behave as though budget deficits don’t matter. Red and blue politicians alike seem to think we can increase spending, cut taxes indefinitely, and borrow whatever we need to close the gap while running up the national debt—all without paying a price.

Why not make everyone happy by eliminating taxes altogether and borrowing everything? The answer is obvious: No prospective lenders would believe that they’d be repaid in full. They would thus demand ever-higher rates of interest on debt. Eventually, the merry-go-round would grind to a halt, triggering a crisis the likes of which the U.S. has never faced.

Our current course—beset with rising net interest outlays and stagnant revenue—could also halt the merry-go-round, though in slow motion. At some point, the volume of debt needed to finance our deficits would exceed lenders’ willingness to lend their cash reserves on terms that wouldn’t ruin the economy.

That this hasn’t yet happened is no evidence that it won’t or can’t. It proves only the wisdom of Adam Smith’s famous reminder that “there is a great deal of ruin in a nation.” We can recover from episodic folly, but if we persist in it, we’re asking for trouble.

Let’s recall recent history. The last time the U.S. federal government had a budget surplus was in 2001. Federal debt held by the public stood at $3.3 trillion, about 33% of gross domestic product, and the government was on track to pay it off completely by the end of the decade.

Over the next two decades, the combination of tax cuts, spending increases, costly wars and the fiscal pressure of an aging population reversed this trend. The national debt held by the public is now above $28 trillion and is 99% of GDP. The 2024 budget deficit alone will be nearly $2 trillion, which is 7% of GDP. The Congressional Budget Office projects that by 2035 debt held by the public will top $50 trillion and total debt will equal 122% of GDP.

These numbers may sound abstract, but they have real consequences. Over the past half-century, interest payments on the federal debt averaged 2.1% of GDP, compared with 3.1% this year. If current trends continue, the annual interest payment will reach $1.7 trillion—4.1% of GDP—by 2034. The CBO is required to base its estimates on current law, which includes a planned termination of many of the 2017 tax cuts next year. Extending those tax cuts would make the deficit and debt projections even worse. The budget office projects that defense spending, which has averaged 4.2% of GDP over the past 50 years, will shrink to 2.8% by 2034. The growing burden of interest payments, including to foreign creditors, makes it harder to afford the national security we need.

Perhaps because a national-debt crisis seems distant and intangible to the average American, voters are focused on more urgent matters, such as high prices, immigration and abortion. But it’s the duty of public officials—especially candidates for high office—to tell the people what they need to know, not only what they want to hear. Ignoring tough issues may yield short-term gains for politicians, but future generations will judge their silence harshly.

Politicians should start by talking frankly about the social safety net. Donald Trump agrees with Kamala Harris and most Democrats that Social Security and Medicare must be preserved for future generations without benefit cuts. But the stream of revenue into these programs isn’t enough to finance current benefits, and both programs are running deficits. Social Security’s reserves are projected to run out by 2033, Medicare’s by 2036. Republicans who back Mr. Trump on Social Security and Medicare are tacitly endorsing increased revenue for these programs. Why not level with the American people about the coming crisis and persuade them to begin phasing in the added revenues from taxes needed to forestall it?

The balanced budgets we enjoyed at the end of the 20th century won’t return anytime soon. Fortunately, fiscal sustainability doesn’t require this. As I’ve argued in previous columns, politicians should at a minimum stabilize the national debt as a share of GDP so that the burden of interest payments and debt refinancing grows no faster than the economy. If long-term projections for 2% annual economic growth and inflation rates are accurate, this target would require a cut of about $9 trillion, or 40%, in addition to the debt projected over the next decade. Bringing Social Security and Medicare into balance would be a big step toward this goal, but we would have to do more to meet it. We can’t ignore the deficit and debt indefinitely, even though we like to pretend that we can.

WWD : Deloitte Predicts Slow Increase to Holiday Sales

Deloitte Predicts Slow Increase to Holiday Sales
Expectations for holiday e-commerce sales are projected to be a key driver in growth.

Unsurprisingly, e-commerce will play a large role in holiday sales this upcoming season, according to Deloitte’s latest holiday prediction report — a prediction that is similar to other predictions for the season as reported by WWD.

Ahead of the season, Deloitte’s team said they expect holiday retail sales to increase between 2.3 percent and 3.3 percent in 2024, with e-commerce forecasted to grow between 7 and 9 percent year-over-year.

“Following a sharp rise in spending post-pandemic, this season’s retail sales are expected to moderately increase in line with trends over the past decade,” said Michael Jeschke, principal at Deloitte Consulting LLP and Retail and Consumer Products leader at Deloitte. “Our forecast indicates that e-commerce sales will remain strong as consumers continue to take advantage of online deals to maximize their spending.”

This expectation sees retail and consumer products to total $1.58 trillion to $1.59 trillion (with e-commerce seeing growth of between $289 billion and $294 billion) during the November to January timeline, specifically. Notably, Deloitte’s predictions in 2023 expected to see a 3.5 to 4.6 percent increase during the same months.

Acknowledging that the pace of increase for holiday sales will be slower this year compared to last, Akrur Barua, economist at Deloitte Insights, said the company does “expect that healthy growth in disposable personal income, combined with a steady labor market, will support a solid holiday sales season.”

And moreover, Barua said, inflation will be both a headwind and tailwind to holiday sales. “While declining inflation aids consumers’ purchasing power, it also is expected to negatively impact the nominal rise in the dollar value of sales.” Rising credit card debt and consumers seeing an edit to pandemic-era savings “will likely weigh on sales growth this season compared to the previous one.”

Jeschke added that “while this holiday season reflects a return to trend levels of growth, retailers who focus on building loyalty and trust with consumers could be well positioned for success.”