WWD : On’s Co-CEO Marc Maurer Says Zendaya and the Olympics Powered Record Q3 Re

On’s Co-CEO Marc Maurer Says Zendaya and the Olympics Powered Record Q3 Results
The red-hot Swiss brand also raised its projections for 2024 and now expect sales of 2.29 billion Swiss francs.

Zendaya is helping On shine a spotlight on its nascent apparel business.

The company’s fall campaign, which features the actress in the Swiss Alps wearing its apparel collection, is leading to increased sales, On Holdings’ co-chief executive officer Marc Maurer told WWD.

Thanks in part to its partnership with Zendaya and its strong presence at the Paris Olympics this summer, On Holdings continued to outperform in the third quarter, notching a record in net sales and profitability. And the company sees no end in sight, raising its full-year projections as it approaches what it expects to be a strong holiday season.

“Earlier this year, our team spent a full day in the Swiss mountains with Zendaya,” co-CEO Martin Hoffman told investors on its earnings call Wednesday morning. “The result was a beautiful campaign with full head-to-toe looks from our fall-winter season at the center. With millions of impressions across our different channels, we’re excited to continue building long-term brand awareness and momentum for our apparel category.”

The executive team stressed that while the bulk of its business still comes from running shoes, the company has been working to diversify its offerings and has significant businesses in training, tennis and lifestyle products as well.

Growing apparel, as well as scaling the company’s own retail network and increasing its reach in the Asia-Pacific region, were singled out as the key drivers for the company to reach its previously announced goal of doubling its 2023 revenues by 2026.

“We’ve been very consistent in executing that strategy,” Maurer said. “And we’re very happy to also see in the third quarter that it’s working out and that consumers are appreciating it, and we’re really looking forward to the holiday season. We very much feel we’re attacking it from a position of strength, and then we can take the momentum into 2025.”

He said the recent campaign with Zendaya that showed her in the Swiss Alps in On’s apparel is expected to provide a big boost to clothing sales going forward.

In the period ended Sept. 30, net sales for the Zurich-based brand increased 32.3 percent to 635.8 million Swiss francs. The jump was fueled by a significant increase in the company’s direct-to-consumer sales, which were up 49.8 percent to 246.7 million Swiss francs over the prior year. DTC sales now account for 38.8 percent of the company’s overall business.

But it wasn’t just DTC that did well, wholesale sales also increased 23.2 percent in the period, hitting 389.1 million francs.

As Maurer explained: “With everything we do, we really try to focus on long-term brand growth and reaching and tapping into new communities with lots of product innovation. What you saw over the summer with the Olympics, for example, is now playing out. We had a huge jump in brand awareness in the U.S. We grew to 20 percent aided awareness, which still leaves a lot of room to grow, but it is a significant jump from where we were before. I think this really converted into e-comm revenues.”

He also said the company’s partnerships with Zendaya as well as FKA Twigs, an English singer and dancer, “really allow us to gain additional credibility in those communities.”

In terms of profits, On achieved its highest gross profit margin since going public in September 2021, reaching 60.6 percent in the third quarter, up from 59.9 percent in the same period last year.

But net income decreased 48 percent to 30.5 million Swiss francs from 58.7 million francs in the same period last year.

Maurer explained that the company looks at other indices to determine its performance. “What’s important for us is when we look at sales and how it flows through,” he said. Maurer pointed to the gross profit margin that indicates the company’s ability to sell product at full price — a number that “really shows the long-term profitability potential of the brand.” Then adjusted EBIDTA margin, which stood at 18.9 percent, was also strong and an indicator that some distribution issues the company experienced in the second quarter are now basically cured. He credited the company’s team for navigating the “operational headwinds” that had impacted sales in the second quarter.

Now he said the company is able to “look super positively into the fourth quarter and the holiday season.”

Net income was also impacted by currency conversion issues and capital expenditures as On continues to aggressively add stores around the world, he said.

By region, net sales in the Americas rose 34.5 percent to 395.5 million francs, while Europe, Middle East and Africa were up 15.2 percent to 165.8 million francs and Asia-Pacific jumped 79.3 percent to 74.6 million.

By category, net sales of shoes rose 32.1 percent to 603.7 million francs, apparel was up 33.4 percent to 26.8 million francs, and accessories increased 53.9 percent to 5.3 million francs.

As a result, On raised its full-year net sales outlook to at least 32 percent on a constant currency basis, or 2.29 billion Swiss francs. Gross profit margin is now expected to be approximately 60.5 percent for the full year and adjusted EBITDA is expected to come in at the higher end of the previous expectation of 16 percent to 16.5 percent for 2024.

Maurer said On is also pleased with the results of its recent collaborations with Loewe and Post Archive Faction, a technical label from South Korea, that is “gaining a lot of traction.”

“And we have very, very strong momentum on key franchises like the Cloudmonster and the Cloudrunner 2, which is an important run franchise, and our holiday campaign is really building around the strengths of some of our key franchises, and also pushing apparel,” the co-CEO said.

On will also continue to add to its retail footprint. Maurer said the company’s previously announced goal to add roughly 20 to 25 stores every year is on track. He pointed to two new U.S. units that recently opened in Chicago and New York’s Flatiron district, as examples. One more store will be added this year.

“We’re seeing own retail working exceptionally well,” he said. “The stores are elevating the brand experience. The stores allow us to showcase apparel in an even better way. And the stores also allow us to penetrate key markets in Asia-Pacific even further. So a large part of the store rollout is also driven by China. That’s a path we aim to continue. We’re super happy with how the retail strategy, which is basically in its infancy, is yielding very, very strong returns.”

Other On executives were also upbeat following the earnings report.

Caspar Coppetti, cofounder and executive co-chairman of On, said: “Just over a year ago, we shared our ‘Dream On’ vision with the world. This quarter’s record results are a testament to the incredible momentum we have built. From increasing our brand awareness amongst our core communities worldwide, to pushing the boundaries of performance credibility and deepening our sustainability impact, to expanding our premium footprint across all channels, we are turning our dream into a reality. With our continued relentless focus on performance, innovation and authentic partnerships, we are excited to inspire the world to move with even greater purpose.”

Martin Hoffmann, co-CEO and chief financial officer of On, said: “This quarter’s exceptional results are a demonstration of the incredible work of our team, the growing global demand for the On brand, and the power of On’s premium position. Our commitment to innovation and excellence has allowed us to capture this demand and deliver outstanding performance, particularly in our DTC channel. The resulting net sales and profitability ahead of our expectations puts us in a position to significantly increase our outlook for the full year 2024 and fuels our confidence as we head into the holiday season and continue to shape the future of sportswear.”

WSJ : Spirit Airlines Moves Toward Bankruptcy Filing After Frontier Drops Merger

Spirit Airlines Moves Toward Bankruptcy Filing After Frontier Drops Merger Bid
The budget carrier is in advanced discussions with bondholders over a filing that could occur within weeks

Spirit Airlines SAVE -5.29%decrease; red down pointing triangle is preparing to file for bankruptcy protection after merger talks with Frontier Airlines ULCC -0.74%decrease; red down pointing triangle broke down, according to people familiar with the matter.

The Florida-based budget airline is in advanced discussions with bondholders to hammer out a bankruptcy plan that would have support from a majority of creditors, as it struggles with mounting losses and looming debt maturities. A bankruptcy filing is expected to happen within weeks, the people said.

Spirit had also been in discussions with rival Frontier in hopes that the two carriers could revive earlier plans to join forces, likely as part of a broader restructuring in bankruptcy. Frontier decided not to move forward with such a merger at this time, the people said.

Frontier declined to comment.

Spirit said late Tuesday that it was in constructive discussions with a supermajority of bondholders to restructure debt due in 2025 and 2026. An agreement through a “statutory restructuring,” if reached, will wipe out existing shareholders, the company said. If no agreement is reached the carrier said it would consider all alternatives.

The company said the restructuring isn’t expected to impair general unsecured creditors, employees, customers and vendors among others.

Spirit shares fell more than 60% to $1.19 in after-hour trading.

The company also warned Tuesday that its quarterly filing with the Securities and Exchange Commission would be delayed, while providing a snapshot of financial pressures.

The airline said its operating profit margin in the third quarter was 12 percentage points lower than the same period a year ago, reflecting higher expenses and diminished revenue. It said revenue would be about $61 million lower, due in part, to the airline no longer charging change and cancellation fees.

Spirit, a once fast-growing airline, is among carriers that gained favor by offering cheap tickets with add-ons for pretty much everything beyond a seat to appeal to value-minded fliers.

That business model upended the airline industry, inspiring now commonplace surcharges for checked bags and seat assignments. The strategy worked well for years, but has more recently been challenged by high costs and more intense competition from bigger airlines.

Frontier and Spirit had been set to merge in 2022 when JetBlue Airways swooped in with a higher offer and eventually won Spirit’s investors over. But a federal judge in January barred JetBlue from acquiring Spirit, ruling that the deal would be detrimental to competition. Spirit has been on its back foot since.

Spirit this year has sharply cut back its growth plans, furloughed pilots and outlined plans to sell planes. In October, it signed a deal to sell 23 planes to company GA Telesis for $519 million.

However, these measures are likely insufficient to help the company address a $1.1 billion bond maturity in less than a year. Spirit also faces a late December deadline with the company that processes its credit card transactions to refinance those bonds.

WSJ : Inside VW and Rivian’s Big Bet to Rescue Each Other

Inside VW and Rivian’s Big Bet to Rescue Each Other
World’s second-largest automaker and the Silicon Valley startup are trying to address each other’s core weakness

In August, a small team of Volkswagen VOW3 -0.73%decrease; red down pointing triangle executives and engineers flew from Germany to Palo Alto, Calif., to take a top-secret vehicle for a spin.

Originally built as an electric Audi, the vehicle had been shipped to the U.S. startup Rivian RIVN -4.17%decrease; red down pointing triangle Automotive earlier in the year in an experiment to see if it could fuse Silicon Valley tech prowess with German engineering. The Germans were impressed by what they found in California: a car that had been retrofitted so that the controls for everything from air conditioning to rear-axle steering could be updated wirelessly through a laptop.

VW, which is weighing potentially historic job and cost cuts as its business flags, had spent years and billions of dollars trying to build a digital-first car like this, and Rivian had produced a promising prototype in less than three months.

“To get this up and running in the car within such a short time, even if you work day and night, this is really great,” said Michael Steiner, VW’s head of research and development, in a recent interview at the company headquarters in Wolfsburg.

Now the two companies are taking the partnership to the next level, in a deal that aims to address a core weakness for each: VW gets much-needed technology and Rivian gets much-needed cash.

According to terms completed this week, VW will invest up to $5.8 billion in Rivian stock and a joint venture—up from a $5 billion deal value envisaged when the collaboration was announced in June. In return, the German company gets access to a blend of onboard computing and software that Rivian spent billions of dollars to develop for its own vehicles.

The deal between the world’s second-largest automaker and a relatively unproven upstart highlights the depth of the challenges they face in the race to compete with Tesla and Chinese competitors. Traditional carmakers who perfected making combustion vehicles are struggling to match the speed and technology of dedicated EV companies. Meanwhile, innovative startups like Rivian lack the scale and funds to compete with entrenched players.

VW is hoping that some of Rivian’s fast-moving, innovation-minded culture rubs off on the German auto titan, said Wassym Bensaid, Rivian’s software chief.

VW has long prided itself on its engineering prowess. Its self-reliance is such that its vast manufacturing complex in Wolfsburg generates its own power, runs hotels and makes its own sausages to feed the tens of thousands of workers.

Now, under Chief Executive Oliver Blume, it is increasingly turning to technology partners based half a world away to play catch-up. In a statement to The Wall Street Journal, Blume called the partnership with Rivian “a perfect match.”

Car companies today want to make their vehicles as easy to connect and update as a smartphone. The push is partly about keeping infotainment screens fresh, but as manufacturers look to include more autonomous features, it extends to core driving functions too.

So far, EV startups—working without the mechanical complexity of traditional vehicles—have better integrated the new technology, which involves consolidating vehicle electronics around a much more powerful central computer.

The new approach enables the kind of feature-rich, web-connected technology experience that consumers increasingly expect.

The transition to digital controls is tougher for traditional automakers to manage than the shift to big batteries, industry executives including Ford CEO Jim Farley have said.

In a recent ranking of automakers by how “digital” they are, technology consulting firm Gartner put Tesla, Chinese manufacturers NIO and Xpeng and then Rivian, respectively, in the top four spots. VW came 13th, behind General Motors and Ford.

VW wants to use the joint venture for the digital plumbing of all its passenger cars outside of China—some 5.7 million vehicles based on last year’s sales. The first cars to include the new technology could be available for sale by 2027.

For Rivian, the cash injection from Volkswagen could ensure its survival.

The U.S. company has burned through over $19 billion since it went public in 2021, a large chunk of which was spent developing bespoke hardware and software. That investment has yet to pay off, in part because the company produces too few vehicles—likely less than 50,000 this year—to turn a profit.

Rivian aims to use its successful collaboration with VW to open doors for more cooperation with other carmakers.

Both companies face risks in joining hands. Rivian is offering up an asset that it spent billions of dollars to develop, and which it has said is a core competitive advantage. VW is relying on a new venture it won’t fully control for a technology that is vital for its future.

VW is also in the midst of a painful restructuring, the result of tepid sales, intense competition in China and an expensive EV strategy. In continuing negotiations with the company’s powerful union, it has floated the possibility of the first German factory closures in VW’s history.

Of the Rivian deal, “Can we be sure that this isn’t the next billion-dollar grave?” asked Daniela Cavallo, VW’s top union representative, at an employee gathering in September.

The joint venture will be run by co-chief executives, whom the companies named on Tuesday. Rivian appointed Bensaid as the project’s leader with responsibility for technology, while VW put its chief technology engineer Carsten Helbing in charge of the operational side.

Rivian has long struggled with the complexities of manufacturing, and lost $39,000 on every vehicle it sold in the third quarter.

Rivian’s system of minicomputers that VW is acquiring is more expensive than off-the-shelf options from major automotive suppliers. Despite the costs, Rivian believes that its approach when applied at scale will ultimately be cheaper and represents a huge technological leap compared with VW’s current offering.

“There’s lots of opportunities for improvement,” said Bensaid.

For VW, teaming up with Rivian eases its dependence on its software unit Cariad, which has cost VW 7.8 billion euros, equivalent to about $8.3 billion, since it was split out in the company accounts in 2021, including almost €900 million in the latest quarter alone.

VW’s big wake-up call was the Shanghai auto show in April 2023, when the carmaker saw firsthand that digital features such as automated driving and voice control were proliferating on Chinese cars, while Cariad kept on missing deadlines.

A few months later, VW announced a deal to collaborate with Chinese startup Xpeng to jointly develop tech-forward EVs. But Steiner said VW knew that using Chinese technology in the rest of the world was a nonstarter.

Shortly after, Blume met Rivian CEO RJ Scaringe at the Porsche Performance Center in Atlanta.

The talks ultimately became serious enough for the companies to form “clean teams,” whose members would have been contractually barred from working on similar projects if the deal had fallen through.

By early June, they had stripped down a cutting-edge Audi Q6 e-tron shipped from Germany and fitted it with Rivian’s components as a lab project. The teams then started work turning a second Audi into a demonstrator vehicle that could actually be driven. A third Audi remained untouched as a reference point.

“In former times, we had kind of a claim that if something is not invented here within the VW ecosystem, it might not be good enough. Now this is gone,” said VW’s Steiner. “We cannot push the technological barrier in every area on our own.”

WSJ : 7-Eleven Owner Receives Buyout Proposal From Executive, Affiliated Firm

7-Eleven Owner Receives Buyout Proposal From Executive, Affiliated Firm
The company in September rejected a buyout offer from Canada’s Couche-Tard

Seven & i Holdings 3382 12.82%increase; green up pointing triangle has received a buyout proposal from its executive and his affiliated firm, it said Wednesday.

The Japanese retail company said its special committee is reviewing the proposal made by Vice President Junro Ito and his affiliated firm.

Seven & i said nothing has been decided on the proposal.

The 7-Eleven owner in September rejected a $39 billion buyout offer from Canada’s Alimentation Couche-Tard ATD 0.79%increase; green up pointing triangle, saying the proposal underestimated the company’s value and failed to sufficiently address regulatory issues.

In October, the Japanese company said it received a new proposal from Couche-Tard, without elaborating.

Seven & i has faced pressure from some foreign shareholders in recent years. It responded by shedding some businesses, such as unprofitable department-store operator Sogo & Seibu. In April, Seven & i said it was considering listing the supermarket business.

FT : Hedge funds circle a $20bn telco deal

Hedge funds circle a $20bn telco deal
Hedge funds that specialise in distressed situations don’t often find themselves at the centre of a $20bn deal. But that’s exactly what’s taking place with Verizon’s bid for Frontier Communications.

A group of investors that received equity through Frontier’s bankruptcy process are now in a position to vote on one of the biggest M&A deals of the year.

The transaction is probably headed for a showdown on Wednesday during the scheduled shareholder vote. Several big investors in the fibre network company have already said they plan to vote against it, and are instead demanding that Verizon bumps up its offer.

One significant flashpoint arrived last week with BCE’s proposed $3.6bn acquisition of Ziply — a telco with a fibre network similar to that of Frontier.

The Frontier investors have told Verizon and the Frontier board that the valuation in the Ziply deal implies a far higher purchase price because of the long-term growth prospects for fibre broadband service. (BCE was also a final bidder for Frontier, sources tell DD.)

The shareholders’ calculations show that the company’s projected growth makes its shares worth more than $50 a share — far higher than the deal price of $38.50.

Glendon Capital Management and Cerberus Capital Management are among the investors angling for a higher deal price, DD’s Amelia Pollard and Sujeet Indap report.

But it’s not entirely clear where another major shareholder stands.

Ares Management, the private credit giant and Frontier’s single-biggest shareholder with around a 15 per cent stake, hasn’t said which way it plans to vote. (It did hire boutique bank Houlihan Lokey to evaluate options.)

Meanwhile, Verizon doesn’t seem to be budging. When the deal was agreed in September, the offer represented a 44 per cent premium over Frontier’s trading range at the time.

Frontier, for its part, has said that if the deal doesn’t go through, it’ll return to its strategy as a standalone business. Today, we’ll be keeping a close eye on who blinks first — or if the vote’s postponed.

FT : An activist investor takes on Nissan

An activist investor takes on Nissan
Nissan is again in a crisis. With its market value falling below $10bn, it was a matter of time before it became an activist target.

It turns out a fund managed by Effissimo, one of Japan’s most famous activists behind the campaign that took Toshiba private, has acquired a 2.5 per cent stake in Nissan.

The market was excited by the news, pushing Nissan’s share price up 20 per cent.

Analysts say some activist pressure is probably a good thing for Nissan. Japan’s third-largest carmaker shocked investors last week by announcing emergency measures to stem its losses.

The entire car industry has been under pressure from slowing growth in electric vehicles and the cut-throat competition with the cheaper offerings from Chinese rivals.

But even against those challenges, the sharp deterioration in Nissan’s financial performance has been extraordinary. Following a quarterly loss, the group is cutting 9,000 jobs, slashing production capacity by 20 per cent and selling down its stake in Mitsubishi Motors by 10 per cent.

So what does Effissimo bring to the table?

The news immediately spurred market hopes that the fund would trigger a wider shake-up in Japan’s car industry.

As its alliance with France’s Renault fades, Nissan is seeking deeper ties with Honda, and speculation is growing that Nissan’s crisis may force Honda to take a stake in its struggling rival.

But according to what Leo Lewis, the FT’s Tokyo bureau chief, is hearing, Effissimo’s real target is more likely to be Nissan Shatai, a car assembly company half-owned by the carmaker.

The fund has a near 30 per cent stake in Shatai and bankers say its stake-building in Nissan may be an attempt to put more direct pressure on the carmaker to fully acquire Shatai.

The question is whether Nissan would have the money to convert Shatai into a fully-owned subsidiary.

FT : Elliott’s $164bn corporate break-up target

Elliott’s $164bn corporate break-up target

Elliott’s biggest wager yet
Yesterday, some jaws were on the floor at Elliott Management’s London office after it was announced that the hedge fund’s golden boy of Europe, Nabeel Bhanji, was leaving for what the FT later reported was a top role at Citadel.

But the world’s leading activist firm has a penchant for being able to quickly change the conversation using its financial prowess and fearsome reputation.

Hours after DD unpacked Bhanji’s decampment to Ken Griffin’s hedge fund colossus, Elliott unveiled a massive corporate break-up push and the biggest single investment in the firm’s history.

The hedge fund, led by billionaire Paul Singer, has built a $5bn stake in industrial conglomerate Honeywell International and is pushing the $164bn company to break up into two businesses.

Armed with a 3 per cent stake, Elliott on Tuesday called for Honeywell to split its aerospace division, which supplies aircraft equipment, from its automation unit, which sells tools for warehouses and other plants.

The campaign follows a trend of other potential break-ups. Sometimes businesses are healthier — and more lucrative — as separate entities, as opposed to a hulking corporate giant.

This summer the FT broke the news that Warner Bros Discovery was drafting a plan to split its digital streaming and studio businesses from its legacy television networks. CVS Health also weighed a break-up before ousting its chief executive.

But a $5bn bet is a serious wager. Elliott manages $69bn in assets, and has this year embraced the approach of taking multibillion-dollar stakes, including a $2.5bn investment in chipmaker Texas Instruments and a $2bn stake in Southwest Airlines.

Part of Elliott’s playbook involves stealthily building a big stake before the target realises the activist has gotten a foothold.

Honeywell’s board and management “acknowledge and appreciate the perspectives of all our shareholders”, a spokesperson said. “Although Elliott had not made us aware of their views prior to today, we look forward to engaging with the firm to obtain their input.”

The North Carolina-based company is one of the last industrial conglomerates standing. Its American peers have shed businesses. Earlier this year, GE spun off its power and renewable energy unit, and 3M did the same to its healthcare division.

“The conglomerate structure that once suited Honeywell no longer does, and the time has come to embrace simplification,” Elliott’s Jesse Cohn and Marc Steinberg said in a letter.

Investors seem to agree — or at the very least think Elliott’s pressure might be for the best. The company’s shares rose about 4 per cent on Tuesday. The stock has lagged behind the wider market this year.

FT : ‘The most badass airline on the planet’: Lebanon’s carrier flies through wa

‘The most badass airline on the planet’: Lebanon’s carrier flies through war
Middle East Airlines is only operator serving the country in midst of Israeli bombardment and fighting with Hizbollah

Ever since Carla Haddad can remember, stepping aboard a Middle East Airlines aircraft was like being “one step closer to home”.

Growing up abroad, the 39-year-old would regularly fly back to visit family in her native Lebanon, the MEA flights full to the brim with fellow citizens excitedly heading back in an annual summer ritual.

But in late September, as Israel stepped up its campaign against Hizbollah in Lebanon, where she now lives, MEA became more than just a memory. As the violence moved closer to her Beirut doorstep in September, Haddad and her family boarded an MEA flight to the safety of Marseille. “It was the lifeboat that helped us escape yet another horrible war,” she said.

MEA has long been a mainstay of Lebanon’s collective imagination, with memories coloured by the country’s propensity for rose-tinted nostalgia. Lebanese have mixed feelings about their national carrier: it is as beloved for reuniting families during the lengthy civil war and serving sweet, fragrant knafeh for breakfast, as it is hated for its sky-high peak season prices and ageing fleet.

But for the past seven weeks, as its pilots have deftly navigated Israeli air strikes, MEA has become a beacon of national pride. The sole remaining airline currently flying in and out of Lebanon, MEA has helped ferry tens of thousands of desperate passengers out of the country and brought in vital humanitarian aid.

And it has done so from the country’s only commercial airport in south Beirut, which is located uncomfortably close to areas that Israel has fiercely bombarded in recent weeks.

While airport traffic has dropped to 30 per cent of its prewar average, MEA said it is still running only slightly fewer flights each day from its seasonal average of 45. But those flights have typically been departing Beirut full and returning two-thirds empty. While tens of thousands of Lebanese fled, others continue to travel for work or to visit family.

“Our goal is not to make money right now, it’s to keep this airport open and keep things running as best as we can for the country,” said Captain Mohammad Aziz, adviser to MEA chair Mohamad El-Hout.


The 79-year-old airline is almost entirely owned by Lebanon’s central bank, which has been at the centre of the country’s devastating economic meltdown in recent years. MEA has not released financial statements since 2021.

But photographs of the national carrier’s aeroplanes flying near blazing fires and thick plumes of black smoke — some of which were generated by artificial intelligence — have fuelled its newfound mythology, leading some to dub it “the most badass airline on the planet”. One Beirut bakery even made MEA-themed cupcakes, topped with planes and pilot hats, in a tribute to the airline’s “heroes”.

“The past six weeks have truly highlighted the resilience of our little airport and the exceptional airmanship of MEA pilots,” said Richard John, 33, a Lebanese aviation enthusiast who grew up close to the airport.

John has watched in awe as pilots touch down behind a veil of smoke while Israeli warplanes bomb nearby targets. “In other countries, total panic would ensue,” he said. “But we only have this one little airport. No diversions, no alternates, no room for panic.”

Aziz played down the dangers, saying while the pilots were courageous, MEA was conducting daily risk assessments and said “no planes were flying unless the conditions are 100 per cent safe”.

While risk and cost considerations have scared away other airlines, Aziz said, “MEA has a duty to keep going.”

This is despite immense challenges. GPS jamming by Israel has forced MEA’s pilots to return to systems that predate autopilot. And about 20 per cent of the airline’s fleet of 22 Airbus planes is parked overseas, owing to spiralling insurance costs and to reduce exposure to the conflict.

The airline, which along with its subsidiary companies employs about 5,000 people, has also reduced the number of staff at the airport in case they need to evacuate.

When Israel and Hizbollah last fought a war in 2006, Israeli strikes almost immediately put the airport out of commission by bombing its runways and fuel depots. While the airport has been spared this time around, it is eerily quiet nevertheless, with shops and cafés empty.

Aziz and Lebanese government officials told the Financial Times they have been assured through UN and western officials that Israel would not target the airport if it was being used solely for civilian purposes. Aziz said there was a “gentleman’s agreement” in place such that Israel would give a two-hour warning if it was to attack.

Iran-backed Hizbollah, which is the dominant political and military force in the country, has historically exerted considerable influence over the airport’s security functions. Israel has accused the militant group of using it to transport weapons, something Hizbollah and the state deny.

Government officials and diplomats say that since Israel stepped up its campaign against Hizbollah, Lebanon’s government and army have taken extra precautions to ensure the airport was free of military activity.

This has meant flights coming from destinations Israel considers suspicious, such as Iran, Iraq and Algeria, have been subject to greater scrutiny, even when carrying humanitarian aid, government officials, aid workers and diplomats told the FT.

In September, Lebanon blocked an Iranian plane from landing in Beirut, following Israeli threats. In another instance last month, dozens of boxes of medical aid brought by an Iranian official could not be unloaded until they underwent inspection by Lebanese Armed forces, they said.

“There’s continuous communication between the prime minister, the US ambassador and the MEA chair,” Aziz said.

Underlining the very real danger, Israel issued an evacuation order last week for a building between two of the airport’s runways.

A flight from Riyadh landed just 15 minutes after the evacuation order was issued shortly before midnight, with one passenger describing scenes of quiet panic as airport workers, cab drivers and travellers scrambled to leave the airport before Israel struck within the hour.

In recent weeks, MEA has worked with the government, army and aid agencies to bring in humanitarian goods, as well as bringing in at least 27 tonnes of medicine in individual efforts driven by its vast diaspora.

“How would we have sent desperately needed medicines to Lebanon without MEA right now?” said Larissa Ratl, 35, who helped organise a 1-tonne shipment last month.

After weeks abroad, Haddad has started thinking about returning to Lebanon from France, inspired by the trickle of people who have gone back after weeks overseas. Her toddler has been watching MEA’s dance-filled safety video on repeat since first hearing it when they fled in September.

“She keeps repeating a catchy line from the video, ‘Let’s fly, let’s fly away’, and pretending she’s an aeroplane,” she said. “I’m scared to go back, but sooner or later, we have to go home.”

>>> US After Hours Summary: DAVE +32.4%, PAY +26%, CAVA +16.2%, ICUI +6.7%, SPOT

After Hours Summary: DAVE +32.4%, PAY +26%, CAVA +16.2%, ICUI +6.7%, SPOT +6.4% higher on earnings; RIVN +8.2% to launch JV with VW; HNRG +17.7% on deal with data center developer

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: DAVE +32.4%, PAY +26%, RKLB +23.5% (also signs multi-launch agreement with satellite operator; also awarded a federal defense contract), CAVA +16.2%, NTRA +14%, DNA +11.2%, HNST +10.6%, AMBC +10.4% (also authorizes new $50 mln share repurchase program), RPAY +7.5%, PRDO +7.4%, ICUI +6.7% (also creates joint venture), SPOT +6.4%, MODG +6.1%, SDRL +6%, CAE +5.1% (also CEO to step down), RXT +4.9%, FNA +3.5%, BHVN +3.3%, DHT +2.9%, PUBM +2.6%, OXY +0.8%, NATL +0.6%, TTGT +0.3%, SU +0.1%

Companies trading higher in after hours in reaction to news: HNRG +17.7% (signs term sheet with data center developer to supply power for 10+ years; also reports earnings), DSP +12.8% (acquires IRIS.TV), RIVN +8.2% (RIVN and Volkswagen (VWAGY) to launch joint venture), SNY +6.6% (treatment of acute myeloid leukemia granted orphan status by FDA), MRVI +6.3% (Exec Chairman disclosed the purchase of 175,000 shares), MIST +4.3% (files $250 mln mixed shelf securities offering), EXAI +2.2% (EXAI shareholders voted in favor of RXRX merger), RCEL +1% (signs distribution agreement with Revolution Surgical to expand into Australia and New Zealand), RXRX +0.9% (EXAI shareholders voted in favor of RXRX merger), IONQ +0.7% (issued 5 new patents), VKTX +0.7% (to Present Data from Phase 2b VOYAGE Study), AB +0.4% (reports Oct AUM), AMZN +0.4% (Jeff Bezos sold another 5,992,724 shares), JNJ +0.2% (receives IDE approval for OTTAVA robotic surgical system), AER +0.1% (insurance policy settlement update)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SIBN -22.5%, CHGG -14.4% (also undertakes additional restructuring, $300 mln increase to securities repurchase program), ZI -12.8%, RUM -12.2%, RKT -10.9%, SOUN -7%, PGNY -6.9%, PLUS -6.3%, MARA -6%, CART -5.3%, IAS -5%, PRTA -5%, LNW -4.4%, SWKS -2.6%, CNNE -1.6%, CRNX -1.3% (also to showcase pipeline advancements), MTTR -1.2%, HPP -0.5%, NVEI -0.5%, WULF -0.4%, AHR -0.1%

Companies trading lower in after hours in reaction to news: SAVE -39.1% (moving toward bankruptcy after merger talks with ULCC break down, according to WSJ), GRPN -20.7% (negotiates with convertible notes holders; also reported Q3 results), SGMO -9% (files $500 mixed shelf securities offering), GDYN -8.5% (stock offering), VVX -5.4% (stock offering), LAZR -4.4% (to delay 10-Q filing), OS -3.7% (15 mln share offering), EBS -1.9% (stock offering by selling shareholders, relates to warrants), SHOP -1.8% (files mixed shelf securities offering), ETNB -1.1% (commences $100 mln offering), EXP -0.4% (files mixed shelf securities offering), RGEN -0.4% (to delay 10-Q filing)

TechCrunch : The Rivian-Volkswagen joint venture deal is now up to $5.8B

The Rivian-Volkswagen joint venture deal is now up to $5.8B

Rivian and Volkswagen Group have finalized a multi-billion-dollar joint venture to develop software, paving the way to let the German auto giant leverage the EV startup’s more technical chops in the coming years. Volkswagen will invest up to $5.8 billion by 2027, about 16% more than when the deal was first announced in June.

Volkswagen Group has already made an initial investment of $1 billion in the form of a convertible note.

The new joint venture — Rivian and Volkswagen Group Technologies — will officially kick off November 13 as an independent company. And, if successful, it could be a boon for both companies. Rivian gets a needed injection of capital and the opportunity to diversify its business, while VW Group gains a next-generation electrical architecture and software for EVs that will help it better compete. Both companies argue the joint venture will reduce development costs and help scale new technologies more quickly.

The companies designed the joint venture as a 50-50 partnership with co-CEOs, who will report into both Rivian and Volkswagen Group. Rivian’s head of software Wassym Bensaid and Carsten Helbing, who is chief technical engineer at Volkswagen Group, will lead the joint venture. Developers and software engineers from both companies will join the joint venture, according to Rivian and VW. The team will be based initially in Palo Alto, California. Three other sites are in development in North America and Europe, the companies said Tuesday.

VW, and more specifically its software arm Cariad, has struggled in recent years to deliver what some in the industry have dubbed a “software-defined vehicle.” This jargon industry term, sometimes abbreviated SDV, means any car, truck or SUV with capabilities that can be upgraded over time (or even new functions added) via software. Automakers view these so-called software-defined vehicles as a new way to make money via in-car entertainment and services; it’s also seen essential for automakers aiming to compete with Tesla.

Earlier this year, Rivian started producing the next-generation of its R1T pickup truck and R1S SUV, an upgrade that reworked the guts of its vehicles, including a new electrical architecture and compute platform. That new electrical architecture is seen internally as a key innovation at Rivian and one that allows the company to wirelessly update software.

With the Rivian-VW joint venture steering software development for the German automaker’s next-generation of EVs, Cariad’s future is uncertain. VW Group CEO Oliver Blume said Tuesday that Cariad will continue to play a “central role” in its global software strategy at Volkswagen Group, adding the software arm will be responsible for the existing software platform in today’s vehicles over the next decade. Cariad is also in charge of software governance, which covers autonomous driving, data management and cloud services.

Prior to the initial June announcement, Cariad had hired at least 23 of Rivian’s top employees over the past several months to bolster its Silicon Valley outpost called the SDV Hub. The SDV hub is ground zero for Cariad’s next-generation software architecture known as “software 2.0.”

Now, Rivian will contribute even more talent towards the joint venture. “Rivian will be contributing a significant portion of the team,” Rivian founder and CEO RJ Scaringe said during a press conference Tuesday afternoon.

The JV team plans to use the existing Rivian electrical architecture and software technology stack to enable the launch of Rivian’s R2 midsize SUV in the first half of 2026 and support the expected launch of the first models from the Volkswagen Group as early as 2027, the companies said.

Last month at Disrupt 2024, Bensaid described the joint venture as an opportunity for Rivian to bring its software to multiple brands, including the VW spinoff Scout. He said each brand that uses the joint venture’s software will “continue to have their own identity,” as well as “their own features.”

“We’re enabling competition,” Bensaid said at the time.

Scout has since confirmed that its vehicles will be among the first to use the new zonal architecture built by the Volkswagen Group-Rivian joint venture.