>>> US After Hours Summary: UGI CEO steps down; ORRF and CVLY to merge; AMGN inc

After Hours Summary: UGI CEO steps down; ORRF and CVLY to merge; AMGN increases dividend

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: CCCC +12% (announces CFT7455 Phase 1 trial data), SOS +2.5% (ADS offering), TTC +2.4% (increases dividend), VET +1.4% (announces 2024 budget and updated return of capital framework; increases dividend), HBNC +1.3% (executes a balance sheet repositioning), XPEV +0.6% (BABA discloses a 12.5% passive stake), BEN +0.4% (increases dividend; authorizes repurchase of up to 27.2 mln addl shares), BBAI +0.3% (awarded $17.9 mln extension on Phase 2 of U.S. Army GFIM OTA), AMAT +0.2% (partners with Ushio to accelerate roadmap for heterogeneous integration of chiplets into 3D packages), SHEL +0.2% (announces final investment decision for three Gulf of Mexico wells), CALM +0.2% (facility in Kansas tests positive for Avian flu), PFE +0.2% (announces changes to its commercial ops following SGEN acquisition), WBD +0.2% (Tubi streaming service expands content deal with WBD), XPO +0.2% (to acquire 28 service centers as part of Yellow's bankruptcy), O +0.1% (increases dividend)

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: CRBU -0.9% (provides regulatory update on CB-010 with Phase 3 trial initiation expected by YE24), COMP -0.7% (COO to depart; COO role to be eliminated), EFC -0.3% (AAIC shareholders approve merger with EFC), ORI -0.2% (files for 600,000 share offering in connection with Shareholder Purchase & Reinvestment Plan), RBA -0.1% (names new CFO), GWW -0.1% (to sell E&R Industrial Sales)

>>> US Close Dow +0.48% S&P +0.46% Nasdaq +0.70% Russell -0.13%

Closing Summary - Gains build in front of FOMC decision

The major indices ended the session near their highs of the day. The S&P 500 and Dow Jones Industrial Average each logged a 0.5% gain and the Nasdaq Composite registered a 0.7% gain. Stocks started the session with more muted price action, though, as investors initially reacted to the November Consumer Price Index.

The report was largely in-line with expectations, but market participants got hung up for a bit on the sticky nature of core CPI, which was up 4.0% year-over-year, unchanged from October, and services inflation less rent of shelter, which was up 0.6% month-over-month and up 3.5% year-over-year.

Notably, rate hike expectations did not move much in response to the data. The probability of a 25 basis points rate cut in May stands at 75.8%, versus 74.9% yesterday, according to the CME FedWatch Tool.

Relative strength in the mega cap space offered some support to index performance, but many other stock participated in today's gains. The Vanguard Mega Cap Growth ETF (MGK) registered at 0.8% gain and the Invesco S&P 500 Equal Weight ETF (RSP) logged a 0.2% gain.

Ongoing buying activity in this seasonally strong period for the market was supported by early resilience to selling efforts, along with a fear of missing out on further gains.

Three of the 11 S&P 500 sectors traded down today, but the energy sector (-1.4%) saw the largest decline by a wide margin amid falling energy prices. WTI crude oil futures dropped 3.8% to $68.62/bbl and natural gas futures declined 5.3% to $2.33/mmbtu. That price action was a positive development as it relates to inflation and inflation expectations despite leading to losses in the energy sector today.

The information technology (+0.8%) and financial (+0.7%) sectors led the outperformers.

After some whipsaw action in response to the CPI data, the Treasury market was relatively calm today in front of Wednesday's FOMC meeting, which will include a new policy directive, an updated Summary of Economic Projections, and Fed Chair Powell's press conference. The 2-yr note yield rose one basis points to 4.74% and the 10-yr note yield fell four basis points to 4.20%.

Separately, Oracle (ORCL 100.81, -14.32, -12.4%) was a standout loser today following its mixed fiscal Q2 earnings report and in-line fiscal Q3 guidance.

Nasdaq Composite: +38.9%
S&P 500: +21.0%
Dow Jones industrial Average: +10.4%
S&P Midcap 400: +8.7%
Russell 2000: +6.8%
Reviewing today's economic data:

  • November NFIB Small Business Optimism 90.6; Prior 90.7
  • November CPI 0.1% (Briefing.com consensus 0.0%); Prior 0.0%; November Core CPI 0.3% (Briefing.com consensus 0.3%); Prior 0.2%T
  • The key takeaway from the report is the recognition that core CPI was "sticky," largely because the shelter index (+0.4%) continues to be sticky. That should continue to give the Fed some pause about cutting rates anytime soon; and it may very well keep the Fed vocalizing the idea that it could possibly raise rates again if progress in fighting inflation stalls.

Wednesday's calendar features:

  • 07:00 ET: MBA Mortgage Applications Index (Prior 2.8%)
  • 08:30 ET: November PPI (Briefing.com consensus 0.1%; prior -0.5%) and Core PPI (Briefing.com consensus 0.2%; prior 0.0%)
  • 14:00 ET: FOMC policy directive and Summary of Economic Projections
  • 14:30 ET: Fed Chair Powell's press conference to discuss FOMC decision

Overseas:
  • Europe: DAX -0.0%, FTSE -0.0%, CAC -0.1%
  • Asia: Nikkei +0.1%, Hang Seng +1.3%, Shanghai +0.4%

Commodities:
  • Crude Oil -2.73 @ 68.62
  • Nat Gas -0.13 @ 2.33
  • Gold -1.30 @ 1993.20
  • Silver -0.09 @ 23.02
  • Copper unchanged @ 3.79

TechCrunch : Ukraine’s largest mobile operator Kyivstar downed by ‘powerful’ cyb

Ukraine’s largest mobile operator Kyivstar downed by ‘powerful’ cyberattack

Ukraine’s largest telecommunications operator Kyivstar says it has been hit by a “powerful” cyberattack that has disrupted phone and internet services for millions of people across the country.

In a Facebook post confirming the incident on Tuesday, Kyivstar wrote that the cyberattack has caused a “technical failure” that left customers without mobile connections or internet access. Kyivstar serves more than 24 million cell phone subscribers and more than 1.1 million home internet users, according to the company’s website, which was also inaccessible at the time of writing.

Officials in the northern Ukrainian city of Sumy also warned that its air raid alert system was also affected by the Kyivstar outage. “The notification system will temporarily not work,” according to a statement by Sumy’s regional military administration posted to Telegram.

Kyivstar CEO Oleksandr Komarov said in a video statement that Russia was responsible for the outage. “The war with the Russian Federation has many dimensions, and one of them is in cyberspace,” said Komarov. “Unfortunately, this morning the operator became the target of a super-powerful cyberattack, because of which communications services and internet access are unavailable.”

When asked whether it believed Russia was behind the attack, a spokesperson for Ukraine’s State Special Communications Service, or SSSCIP, told TechCrunch that “it is too early to draw conclusions.”

“The investigation of the incident, which caused a technical failure in the operator’s work, as a result of which communication and internet access services are temporarily unavailable, is ongoing by specialists of the relevant services,” the SSSCIP spokesperson, who did not provide a name, added. “Among others, specialists of the Government Computer Emergency Response Team CERT-UA are involved in this work.”

Kyivstar spokesperson Iryna Lelichenko was not immediately available to answer TechCrunch’s questions.

In his video statement, Oleksandr added that “it is still not completely clear” when the telecoms giant will restore normal operations. Netherlands-based VEON, Kyivstar’s parent company, said in a statement its technical teams are “working on eliminating the consequences of the hacker attack and restoring communication as soon as possible.”

Kyivstar apologized for the “temporary inconvenience” and promised to compensate users who were affected by the outage, but said that the personal data of subscribers had not been compromised. “Yes, our enemies are treacherous. But we are ready to face any difficulties, overcome them and continue to work for Ukrainians,” the company added.

At the same time that Kyivstar came under attack, Monobank, one of Ukraine’s largest financial institutions, said it had also been targeted by hackers. The bank’s co-founder Oleh Gorokhovsky said in a post on Telegram that the organization had been struck by a “massive DDoS” attack, referring to cyberattacks that involve floods of junk internet traffic aimed at downing online sites and services, but added that “everything is under control.”

FT : Hedge fund groups sue SEC in effort to block short-selling rules

Hedge fund groups sue SEC in effort to block short-selling rules
Industry says US regulator has not considered impact of its new measures on securities markets

A coalition of hedge fund groups has sued to invalidate a pair of US rules on short selling that they claim are in conflict and risk revealing investors’ positions. 

Three industry groups on Tuesday told the US federal appeals court for the fifth circuit that the Securities and Exchange Commission had taken an “arbitrary and capricious” approach when adopting two measures aimed at broadening short-selling disclosure. 

Short sellers, typically hedge funds, that want to wager that securities will fall in value must borrow stocks and bonds to make the bets before returning them to their owners. Securities lenders profit by charging a fee for the borrowed assets.

Industry groups have been arguing for months that the SEC has adopted too many rules too quickly without considering their combined impact on the securities markets, but this is the first time they have made the alleged clash the basis for a lawsuit.

The challenge takes aim at two SEC rules adopted on the same day in October. One measure requires securities lenders to report each loan individually as well as information including lending rates by the end of the day, data that is made public the next business day. Loan sizes are published 20 business days later.

The other rule requires some institutional investors to report short-selling activity that is then shared publicly on an aggregated and delayed basis. Names of the parties involved are not made public.

Short selling has long been a controversial practice with only very limited disclosure. It garnered regulatory attention most recently with the 2021 meme-stock boom and bust, when retail traders bought stocks such as retailer GameStop in the hope of financially hurting short sellers betting on price falls. 

The 2010 Dodd-Frank financial reforms that followed the 2008 global financial crisis also required the SEC to collect more information on short selling, of which the October rules were the result.  

The groups said the SEC “adopted fundamentally contradictory approaches” by opting for an aggregate, delayed disclosure regime on short positions, aimed at avoiding harms such as revealing confidential investment strategies, while requiring individual, daily disclosure of the securities loans associated with them “in a manner that effectively serves as a proxy for short-sale activity”, according to court filings.

“Despite our best efforts, the SEC decided to ignore the interconnected nature of these two rulemakings and failed to apply a consistent approach or principle to regulating these related markets,” said Bryan Corbett, president and chief executive of the Managed Funds Association, one of the plaintiffs. 

Jack Inglis, chief executive at the Alternative Investment Management Association, which also joined the lawsuit, added that the SEC had “ignored calls from industry, market participants and Congress to consider the interconnectedness and aggregate impact of its rulemakings”.

The groups also argued the rules burdened markets with “substantial costs” and were at odds with the SEC’s statutory authority as well as US laws on regulatory rulemaking.

The SEC said in a statement: “The commission undertakes rulemaking consistent with its authorities and laws governing the administrative process, and we will vigorously defend challenged rules in court.”

The lawsuit over the new US disclosure rules comes as the UK is going in the opposite direction, removing transparency from the practice. Last month the UK government introduced a draft statutory instrument that will remove the requirement for hedge funds to publicly disclose when they have a short position in individual firms, replacing it with an aggregate overall figure for companies.

When adopting the rules, SEC chair Gary Gensler said it was “important for the commission and the public to know more about short-sale activity in the equity markets, especially in times of stress or volatility”. 

The lawsuit has been filed with one of the most conservative courts in the country, rather than in Washington where most SEC-related appeals are heard. This is possible because the third plaintiff — the National Association of Private Fund Managers — is based in Texas, part of the fifth circuit. The group was founded last year as the SEC’s rule blitz gathered pace.

WSJ : Israel Begins Pumping Seawater Into Hamas’s Gaza Tunnels

Israel Begins Pumping Seawater Into Hamas’s Gaza Tunnels
Early effort to flood tunnels is one of several techniques aimed at destroying network that underpins Hamas’s operations

Israel’s military has begun to pump seawater into Hamas’s vast complex of tunnels in Gaza, according to U.S. officials briefed on the Israeli military’s operations, part of an intensive effort to destroy the underground infrastructure that has underpinned the group’s operations.

The move to flood the tunnels with water from the Mediterranean, which is in an early stage, is just one of several techniques Israel is using to try to clear the tunnels and destroy them.

A spokesperson for the Israeli defense minister declined to comment, saying the tunnel operations are classified.

Israeli officials say that Hamas’s vast underground system has been key to its operations on the battlefield. The tunnel system, they say, is used by Hamas to maneuver fighters across the battlefield and store the group’s rockets and munitions, and enables the group’s leaders to command and control their forces. Israel also believes some hostages are being held inside tunnels.

The utility of using seawater in a vast underground labyrinth that extends for roughly 300 miles and includes thick blast doors is still being evaluated by the Israelis, according to U.S. officials.

Flooding the tunnels, which would likely be a weekslong process, began around the time Israel added two more pumps to the five pumps installed last month and conducted some initial tests, U.S. officials said.

Some Biden administration officials have been concerned that using seawater might not be effective and could endanger Gaza’s freshwater supply. Egypt in 2015 used seawater to flood tunnels operated by smugglers under the Rafah border crossing with Gaza, prompting complaints from nearby farmers about damaged crops.

But other U.S. officials say the technique might help destroy portions of the tunnel network. The Wall Street Journal has previously reported that flooding the tunnels with seawater was under consideration.

Military analysts have assessed that Israel hasn’t destroyed most of this tunnel network and that a variety of techniques will be needed to destroy or damage the underground system. In addition to the seawater, the Israeli military has sought to attack the network with airstrikes and liquid explosives, and by sending in robots, dogs and drones.

Israel’s military said it was intensifying operations underground in northern Gaza and beneath the southern city of Khan Younis, one of Hamas’s last strongholds. The underground labyrinth remains one of Israel’s main challenges to achieving its goal of destroying Hamas’s military capabilities both in areas it controls above ground and those where it so far hasn’t operated. The tunnels under the southern city of Rafah near the Egyptian border for example, analysts say, are used by Hamas to smuggle most of its weapons into Gaza.

Israel’s military has been reluctant to send soldiers underground, where they would lose their tactical firepower advantage and face subterranean warfare in tunnels that could be booby-trapped.

Speaking from Khan Younis on Monday, Israel’s top general, Herzi Halevi, said, “We are deepening our control over northern Gaza and our penetration into the southern strip, and also deepening activity underground.”

Israel has control of around 40% of the coastal enclave above ground, according to military analysts, who say that Hamas’s tunnels pose the greater obstacle.

“The territorial issue is not the issue, the problem is Hamas is going underground,” said former Israeli military intelligence chief Amos Yadlin.

Even in the areas that Israel has taken, “the subterranean [theater] continues to be the challenge,” said Miri Eisin, a retired colonel in Israel’s military intelligence.

Israel’s forces have encircled Jabalia in northern Gaza and the Shujaiya neighborhood of Gaza City, where it says Hamas keeps some of its fiercest fighters. Israeli Defense Minister Yoav Gallant said Monday evening that northern Gaza was at its “breaking point” and that Hamas was “on the verge of collapse” there.

Israel’s definition of control means having broken Hamas’s formal command structure, Eisin said, including dismantling the militant group’s battalions and reducing its members to operating as individuals at a very local level.

The spokesman for Hamas’s armed wing, Abu Ubaida, said Sunday that the group’s fighters had been able to repel Israeli forces in the strip.

Israel has used robots, dogs and drones to explore the tunnels under Gaza and has used liquid explosives and airstrikes to destroy them, among other methods. It has also considered flooding them with seawater.

Israeli military analysts say that taking control of Khan Younis would trap Hamas’s remaining aboveground fighters between Israeli positions in northern and southern Gaza as well as between the Khan Younis area and the Egyptian border area. Israel hopes that Hamas’s weak fighting position and the killing of around half of the group’s battalion commanders will spur lower-level fighters to surrender en masse.

Hamas can prevent that outcome, military analysts say, by holding out underneath Gaza until Israel is forced into a cease-fire, either by international pressure or in negotiations to release the hostages still held by Hamas.

As Israel consolidates its territorial control, its military and defense officials have increasingly called upon militants in Gaza to surrender. Israeli military spokesman Daniel Hagari said Monday evening that more than 500 militants had surrendered to Israeli forces in the past month and that half of them were taken for further questioning in Israel.

Hamas has denied that militants have surrendered and said Israeli forces have arrested civilians.

Jacob Nagel, a former Israeli national security adviser, said that if Israel can take control of Khan Younis above ground, then Hamas would be left without any of its important command-and-control centers, which could accelerate the pace of surrenders by low-level fighters.

More than two months into the fighting, Israel’s tactical achievements have yet to convert into strategic progress, said Eisin. “If we have until the end of January, we will most likely achieve the strategic aim of dismantling the bulk of Hamas’s military capabilities,” she said.

Israel though is unlikely to achieve its war goal of returning the almost 140 hostages still held by Hamas directly through force, Eisin added.

Israeli officials estimate the country’s military has killed at least 7,000 Hamas militants since the start of the war on Oct. 7, when militants from Gaza killed 1,200 people in southern Israel, according to Israeli authorities.

More than 18,400 Palestinians have died in Gaza, two-thirds of them women and children, according to Palestinian health authorities. The figures don’t distinguish between militants and civilians.

Following pressure from the U.S. and the United Nations, Israel on Tuesday began facilitating the movement of trucks of aid into Gaza from the Kerem Shalom crossing between Israel and Gaza. This is the first time the crossing has been used since it was damaged by Hamas during its Oct. 7 attacks on Israel, according to Israeli officials, who say the crossing’s use will double the aid that can enter the enclave.

The U.N. has warned that aid that has been moving through the Rafah border crossing between Egypt and Gaza falls far short of what is required to deal with the increasingly dire humanitarian situation inside the enclave, and has called for commercial convoys to be allowed in through Kerem Shalom as well as aid.

As Israel continued to bombard the strip, some 200 Palestinians were killed on Sunday, the Palestinian Health Ministry in Gaza said.

On Monday, two mothers were killed and several people were injured at northern Gaza’s Kamal Adwan Hospital, which the U.N. said Israeli forces had surrounded. About 3,000 people and dozens of patients have sheltered at the facility, unable to leave amid fighting in the vicinity between Israel and armed groups, the organization added.

Israel’s military said that it “continues to act against Hamas strongholds in the north of Gaza, among them the area of Beit Lahia,” and “takes all feasible precautions to mitigate harm to noncombatants, and is fighting against the Hamas terrorist organization, and not the civilians in Gaza or the medical teams operating there.”

The Israeli military said Tuesday that it recovered the bodies of two hostages held in Gaza since Oct. 7.

Eden Zakaria, 27, was kidnapped from an outdoor music festival, while Israeli soldier Ziv Dado, 36, was killed during Hamas’s initial attacks and his body was taken to the Strip.

Israel didn’t say how Zakaria died but said two additional soldiers were killed during an operation to recover Zakaria’s and Dado’s bodies, among them the son of a former Israeli military chief of staff and current war cabinet observer.

Gaza’s Health Ministry said Tuesday that Israeli forces gathered men including medical staff in Kamal Adwan’s courtyard, and it called for the International Committee of the Red Cross and other international groups to protect them.

Separately, medical charity Doctors Without Borders said one of its surgeons working at Al-Awda Hospital also in northern Gaza was injured by a shot fired from outside the facility. Israeli forces have surrounded the hospital in recent days.

The World Health Organization has stepped up calls for the protection of healthcare workers in Gaza. It said Israel detained and harassed two Palestine Red Crescent Society staff members in a U.N. convoy over the weekend. The convoy was on its way to deliver medical supplies to Al-Ahli Hospital in Gaza City when it was stopped at a checkpoint, the WHO said.

Israel’s military didn’t respond to requests for comment about the injured doctor and Red Crescent staff.

FT : Will a US-style upgrade draw homebuyers to Crans-Montana?

Will a US-style upgrade draw homebuyers to Crans-Montana?
Vail’s recent majority-stake acquisition of the Swiss ski resort will replace ageing infrastructure and improve snow-making

In the Swiss ski resort of Crans-Montana winter came early with a fortnight of cloudless cobalt skies above a fresh dump of snow — the best kind of “bluebird” days on the slopes, in US ski parlance. 

It’s been a propitious start to the season in the mountain town, whose tourist office has also been taking calls from Americans keen to book holidays since the news broke in late November that Vail Resorts has acquired a majority stake in it. The US corporation — owner of 41 other ski resorts — is acquiring 84 per cent of the lift and mountain operations, and 11 restaurants.

Many homeowners are welcoming an upgrade to the Valais town’s ageing infrastructure. “A lot of old-style chairlifts need replacing,” says Australian David Milne, who, with his Ukrainian wife Viktoria, is retiring from corporate life in Lausanne to have a chalet built in Lens, below the town. “We hope that property prices will go up but assume that the cost of everything else will do too.”

Vail Resorts’ planned SFr30mn (€31.9mn) investment over five years will need to be recouped and, while the company says that ski lift prices will not alter this winter, there’s less certainty about whether the move will revive the sluggish property market. Rumours of the takeover have been attracting interest, though. “After having no US buyers last year, we now have five possibles,” says Alex Koch de Gooreynd of Knight Frank’s Swiss desk says “One is there now paying cash for an old chalet for SFr3mn.”


Crans-Montana’s property market has lower prices than other prime Swiss resorts, according to estate agents Knight Frank. At about €15,000 per sq m, it is half of the price of St Moritz and Verbier. Growth is also slower: the price of a four-bedroom chalet in a prime location was up by 2.5 per cent over the year to Q2 2023, less than the 4.4 per cent average of properties in the resorts surveyed for Knight Frank’s Ski Report. 

There are a lot of properties for sale, from second-hand chalets to new-build apartments with second-home status (in Valais ski resorts there are strict limits on the number of second homes), says Cassandra Levene of agent Alpine Homes.

“Some of the charm of [Crans-Montana] has been killed in recent years,” says Levene, referring to changes made in the resort. But that hasn’t put off wealthy retirees relocating for fiscal reasons, from mainly Geneva, France or the Benelux countries. Attracted by Valais canton’s lump-sum taxation, they’ll spend SFr3mn-SFr8mn on a chalet. Fixed-rate mortgages, at around 2 per cent, are still relatively low, though it’s hard for Americans to get loans.

David Bhagat of buying agent Property Vision International says that Le Régent School is the biggest catalyst for buyers relocating to Crans, followed by lump-sum taxation — especially of the Lens commune, one of the Crans-Montana area’s 11 communes, where the international school is based. “For our buyers it’s rarely just about the skiing — and second-home owners will usually look at other resorts.”

The resort’s south-facing slopes are the main reason it’s not more popular with serious skiers, which also affects property prices. Vail Resorts can’t move mountains but it plans to counter this with improved snow-making, non-skier activities and ensuring other (less slushy) slopes are accessible via its multi-resort Epic Pass, which will include Crans-Montana next winter.

The Milnes chose Crans-Montana over other Swiss resorts such as Verbier, Villars and Nendaz because they say it’s a better year-round town, with golf and high-end shopping. Rebecca Travis is of the same view. The voiceover artist and mother of three plans to relocate there when she’s sold her home near Cirencester in the Cotswolds, after previously living in Nyon, canton Vaud, for many years. “Some areas need a facelift but every time I am there I love it more, especially the dinky little cinema [Cinécran], restaurants and coffee shops,” she says. “It’s much less flash than Verbier but I’m hoping the new investment will lift it up.”

Her three-bedroom apartment is in Montana, the less smart and more affordable half of town — more snowboard shops than jewellers. While the prime area for chalets in Crans are Plans-Mayens, Les Briesses and around the golf course, there’s more space to build in Montana — home to a big development of apartments, Résidence Le Guépard, and Les Barzettes, the finish area for the FIS Alpine World Ski Championships in 2027.

Crans-Montana has put aside SFr30mn for the redesign of the finish area, new connecting paths and snow-making, says Bruno Huggler, head of its tourism office: “Vail Resorts’ experience of hosting this event [elsewhere] will be a great benefit to the town; we also expect more American visitors.” The town already hosts the Omega European Masters golf tournament every year.

In Andermatt-Sedrun, another Swiss ski and golf resort in which a majority stake was bought by Vail Resorts a year ago, the number of overnight stays by North Americans quadrupled last winter. “Vail Resorts have done good things quickly,” says Russell Collins, Andermatt’s head of sales, including chairlift upgrades, improved snow-making and expanding the Epic Pass ski area to the village of Disentis. “Americans have bought 12 properties — mostly two-bedroom apartments. Vail Resorts has been a catalyst.”

Meanwhile, Andermatt-based property developer Agostino Franzosi is betting on prices rising in Crans-Montana “since the rumours”. He’s bought three chalets in six months to refurbish — including one to live in. “Prices are crazy in Andermatt now, but Crans-Montana has room to grow,” he says.

Local environmental science teacher Ben Wood can’t wait for the pistes to be “managed more efficiently”. “Everyone here is pretty optimistic about the news,” says the keen skier, who has been renting a one-bedroom apartment for four years in Les Barzettes. “The après-ski is very limited, yet there’s so much potential.”

WWD : Farfetch Hit by Moody’s Debt Downgrade

Farfetch Hit by Moody’s Debt Downgrade
The cut to the luxury platform’s credit rating, to “Caa2,” comes amid growing uncertainty about the company’s future.

The turmoil at Farfetch has caught up to its credit rating — again.

A week after Standard & Poor’s cut its rating on the luxury platform, Moody’s Investors Service followed suit on Tuesday, lowering its ranking two notices to “Caa2” from “B3,” and put the company on review for further downgrade.

“Caa” ratings are “judged to be speculative of poor standing and are subject to very high credit risk,” according to Moody’s scale.

It has been a rough couple weeks for Farfetch — and more than the credit agencies are spooked.

It began on Nov. 28 with a report that José Neves, founder, chairman and chief executive officer, was working with J.P. Morgan to try to take the company private.

While the prospects of a buyout led to some initial stock bullishness, shares of Farfetch started to collapse when partner Compagnie Financière Richemont said it had no plans to invest in the company and was reviewing its deal to hand over control of Yoox Net-a-porter.

Shares of Farfetch fell 41 percent on Monday and were down another 17.4 percent to 60 cents in midday trading on Tuesday, leaving the company with a market capitalization of just $238 million.

While credit rating agencies like Moody’s usually focus on a company’s debt position, the stock price matters mightily in Farfetch’s case.

Moody’s pinned its downgrade on two main factors:

  • “The significant deterioration in Farfetch’s share price over the past year or more, which, in Moody’s opinion, will have a detrimental effect on the company’s ability to access capital markets to support its liquidity.”
  • “And Moody’s view that the luxury clothing market is experiencing soft demand as consumers in various parts of the world have pared back on discretionary spending.”
Moody’s said it could downgrade Farfetch “several notches” if its review “concludes that dwindling liquidity is likely to result in a financial restructuring.” Similarly, S&P said it could also downgrade the company’s debts on “what we see as escalating risk of a liquidity crisis or an insolvency event, including debt restructuring.”

Farfetch declined to comment on Tuesday and has not addressed its situation publicly since it canceled its third-quarter earnings report last month and warned its prior financial forecasts could no longer be relied on.

The silence has been deafening — but there are signs of lots of activity behind the scenes.

Farfetch is said to be mulling a sale of its Browns retail business, which has caught the attention of distressed investor Mike Ashley, the founder of Frasers Group, who is sometimes referred to as “Grim Reaper” of the high street.

The company also has a number of other businesses, assets and partnerships in something of a limbo right now given the uncertainty.

In addition to the Yoox Net-a-porter deal — which was approved by regulators, but hasn’t closed — Farfetch has a partnership with Alibaba, which has shown signs of shifting. Last month, the Chinese e-com giant’s president, Mike Evans, resigned from Farfetch’s board. In a filing Farfetch made with the Securities and Exchange Commission, the departure was attributed to the “furtherance of the arm’s length commercial relationship between Alibaba … and the company.”

Farfetch also holds a $200 million stake in Neiman Marcus Group and owns Stadium Goods and New Guards Group, which makes Off-White product under license and owns Palm Angels and other brands.

It is also unclear what Farfetch’s troubles will ultimately mean for the boutiques and brands that sell on the platform or the companies, such as Ferragamo, that use its technology to power their own websites.