TheChek News Flow

The tech giant can petition Biden administration or look to other options after a ruling it violated patents related to blood-oxygen sensor

A U.S. federal trade agency on Thursday found that Apple AAPL -2.46%decrease; red down pointing triangle violated the patent of a rival tech company, a ruling that could lead to an import ban for certain models of the company’s smartwatch.

The case revolves around medical-technology company Masimo MASI -1.81%decrease; red down pointing triangle, which alleged in a 2021 complaint to the U.S. International Trade Commission that Apple violated its patents related to measuring blood-oxygen levels. Apple has included a sensor, called a pulse oximeter, in most new models of the Apple Watch since 2020.

The commission found that Apple was in violation of U.S. trade law and issued a limited exclusion order on certain Apple Watches, banning their import into the U.S. The Biden administration has 60 days to overrule the trade commission’s decision.

There are several possible ways Apple could avoid a ban. The company also has the option to make changes to the Apple Watch—potentially in the software—that could avoid using the contested technology.

Apple could also seek to settle with Masimo. The two have been engaged in an ugly legal battle for the past few years, where Masimo has alleged that Apple stole its technology and poached its employees in order to launch a competing feature in the Apple Watch.

Apple said it would appeal the trade agency’s decision, which it said wouldn’t have an immediate impact on watch sales.

“Masimo has wrongly attempted to use the ITC to keep a potentially lifesaving product from millions of U.S. consumers while making way for their own watch that copies Apple,” an Apple spokeswoman said in a statement.

“Even the world’s largest company is not above the law,” Masimo Chief Executive Joe Kiani said in a statement. He said the ruling validated the company’s efforts to hold Apple accountable.

The relationship between Masimo and Apple began in 2013 when the two began exploring a partnership. Apple discussed potentially integrating Masimo’s technology into Apple products. The conversations between the two companies never ended up progressing.

At a later trial, it was revealed that Apple executives internally pitched the idea of buying Masimo and making Kiani vice president of medical technologies at Apple, according to court documents. But Apple decided against it because “acquisitions of this size aren’t our style,” an email reads. Masimo at the time of the talks was valued at more than $1 billion. Instead, Apple began hiring Masimo engineers and working on building the technology itself, Masimo said.

An Apple spokeswoman said that Masimo was one of many medical-technology companies it met with at that time. Apple opted to not work with Masimo because it viewed the company as more focused on clinical and medical applications rather than on consumers, the spokeswoman said.

A number of companies have complained about similar conduct by Apple over the years, The Wall Street Journal previously reported. The companies accused Apple of holding early partnership discussions with smaller companies and learning more about their technology. The companies said the conversations often don’t advance toward any type of partnership or acquisition—and they later see Apple launch a product or feature similar to theirs.

Apple has denied previous allegations that it copied smaller companies’ technology. When faced with claims of patent infringement, the company has said many of those patents are overly broad.

A company named AliveCor, which previously made Apple accessories that performed electrocardiograms, also alleged that Apple had violated its patents in launching similar health-sensing technology in the Apple Watch, starting in 2018. AliveCor said that in that year, Apple cut off access from its products, which previously integrated with the Apple Watch. The company sued Apple and complained to the trade commission, which ruled against Apple last year.

That ruling didn’t ultimately lead to negative repercussions for Apple. Apple was able to get AliveCor’s patents connected to the complaint invalidated through an appeal system at the U.S. Patent and Trademark Office. As a result of AliveCor losing the patents, the trade commission’s exclusion order on certain Apple Watches didn’t go through. AliveCor is currently appealing the patent office’s decision to revoke its patents.

The era of relentless Swiss franc appreciation is coming to an end

If the risk of wider regional conflict over Gaza recedes, the currency’s high valuation is unlikely to be sustained

Since the October 7 attacks carried out by Hamas in Israel, the Swiss franc has risen from already lofty levels to new all-time highs, reflecting its long status as a haven on currency markets in times of turmoil.

Clearly, the prospect of a wider regional conflict has spooked investors. Given the geopolitical uncertainties, it is, of course, too early to tell whether that risk occurs. But if the threat recedes, the franc’s current high valuation is unlikely to be sustained.

In June 2022, the Swiss National Bank started to favour a policy of implicit franc appreciation as a means of reducing imported inflation. It correctly judged that the rise in Swiss inflation had been driven largely by imported effects, and franc appreciation would reduce those effects. Since then, roughly speaking, the euro has fallen from 1.05 to 0.95 against the franc. Even the dollar, so strong against other major currencies recently, has fallen from 1.00 to a July level of 0.85.

The policy has been successful, since Swiss inflation is now back below 2 per cent, meaning that the SNB is the only major central bank currently hitting its inflation target. Its latest forecasts project headline inflation of about 2 per cent over the coming two years.

The key to this policy of nominal franc appreciation has been the use of the SNB’s large stockpile of foreign exchange reserves, built up over the previous decade. The SNB’s latest quarterly foreign exchange transaction data shows that since the first quarter of 2022, it has spent just over SFr100bn on interventions to prop up the franc, selling euros and dollars and buying the Swiss currency. Without these interventions, the franc would probably be weaker.

To get an idea of how overvalued the franc currently is, it is useful to look at its exchange rates with similar currencies. A cursory look shows that the Swiss franc is trading around 50 per cent above its pre-pandemic level against the yen. This is an astonishing development when we consider that relative inflation trends have been very similar.

At its September meeting, the SNB opted to maintain its deposit rate at 1.75 per cent, and indicated that it would remain on hold for a considerable period. In a typical “buy the rumour and sell the fact” move, the franc weakened as investors took profits on “long” positions in the currency. Investors then turned significantly short, betting on a fall in the franc, as shown by IMM futures data.

In its statement, the SNB noted that headline and core inflation were almost wholly domestically generated, meaning that imported inflation effects have more or less dissipated. With headline inflation set to continue falling in the major economies over the coming year, the implication is that the SNB will no longer need to spend its foreign exchange reserves to prop up the franc. The recent bout of risk aversion has clouded this development, but the principle remains intact. The upshot is that when the current phase of risk aversion passes, investors will look to short the currency once again.

The return of meaningful positive interest rates among the major G10 currencies means that carry trades are likely to come back into fashion. This involves selling low-yielding currencies and buying higher-yielding ones with the aim of pocketing the interest-rate differential. The spreads of nominal interest rates in Switzerland and big economies have widened meaningfully against the franc in recent months. And the “higher for longer” mantra from the major central banks means that these spreads will be sustained. This marks a big change from the last decade, when nominal rate spreads were absurdly low.

This implies that investors will increasingly look to use the franc as a funding currency once again, with the result that it will face modest weakening pressure. The franc has all the necessary characteristics to fulfil the role of a funding currency: Switzerland has low and falling inflation rates, stable interest rates and a current account surplus.

Franc-denominated capital flows are unlikely to match those of the period before the global financial crisis. We very much doubt that international regulators will allow individuals to take out franc-denominated mortgages as they once did, thus preventing any aggressive weakness in the currency such as that seen between 2002 and 2006.

However, it is clear that franc valuations have moved towards unsustainable levels on a bilateral basis, and we now have several catalysts for a change in the currency’s underlying trading regime. The era of relentless franc appreciation is indeed coming to an end.

Opaque practices await UK regulators in private asset valuations probe

Insiders describe lack of transparency and poor methodology in some corners of the market

When UK regulators probe what private assets are really worth, they are likely to find a mix of rigour, guesswork and wishful thinking, industry insiders say.

The Financial Conduct Authority is expected to begin its review this year — a critical moment of scrutiny for a sprawling asset class that pension funds and other investors piled into as they hunted for returns during the long era of low interest rates.

Tracking the value of publicly traded stocks and bonds is easy. But private debt and equity and assets such as real estate and infrastructure are generally valued manually, and quarterly, using a wide range of techniques. Academics at business school Edhec wrote in a consultation paper submitted to the UK government last month that some of those methods for valuing infrastructure are “akin to fraud”.

“[It is] fundamentally a problem of data, which data is being used and how reliable is this data,” said Frédéric Blanc-Brude, founder of Scientific Infra, an offshoot of the French business school.

“Each one of those assets should say in the annual report how they are valued, all the details. If those numbers are strange or they never change, then that would prompt them to ask some questions and maybe avoid nasty surprises later on.”

His concern is primarily habitual poor practices on infrastructure valuations rather than the “rare” people who “may try to cook the books”. 

Even so, the FCA review reflects growing concern from global regulators about the potential for shocks in private assets, whose value hit $11.7tn last year, according to consultants at McKinsey. 

Regulators have three reasons to be worried.

Private assets more than doubled between 2017 and mid 2022, accounting for a record share of global financial assets, leading to fears that an upset there could ricochet across broader markets. 

Rising interest rates and slowing economic growth represent a danger to some private equity models, as highlighted by regulators including Iosco, which recently warned about difficulties in refinancing assets and potential fire sales.

The method for valuing the assets is a grey area. Owners are required to hold assets at “fair value” under accounting rules. Typically, private equity firms will use the valuations of comparable public companies as a guide for audits and investors. How accurate these are will only be determined when the asset is sold.

Carl Astorri, head of investments, Europe at AustralianSuper, Australia’s largest superannuation fund with about A$9bn in UK private markets, welcomed the review but said there is “an element of judgment in any valuation and its inputs. That, after all, is what makes a market.”

He added that AustralianSuper’s valuations are independently checked.

Judgment carries risks, especially when managers are incentivised to present a rosy picture for as long as they can, particularly if they are seeking to raise money from investors. It often also suits investors such as pension funds to cling on to upbeat, but stale, valuations.

“Private equity has the luxury of being able to kick the can down the road and hope for brighter tomorrow,” one valuations expert told the Financial Times, asking not to be named so he can speak freely on what he sees as questionable practices.

Valuation gaps are most apparent in listed private equity trusts, which trade on stock exchanges and should trade close to the value of their assets.

UK private equity trust net asset values are currently about 30 per cent above share price valuations, data from the Association of Investment Companies shows. That gap is close to a historic high, suggesting that share prices are cheap or asset valuations far in excess of what could be achieved in a sale tomorrow.

Nick Britton of the AIC said the private equity managers are “all saying the same thing: the valuations at which they’re holding investments on their balance sheets they believe are conservative and the evidence they’re presenting is that when they’ve exited investments in the last decade, it’s consistently been at an uplift to their valuation”.

While listed private equity has traded at a discount since the financial crisis, “they’re struggling to understand how extreme it is at the moment”, he added.

Real estate and infrastructure are particularly sensitive. Interest rate rises and infrequent valuations mean “there is potential for there to be some inaccuracies”, said Nick Knight, executive director of valuation advisory services at CBRE.

Infrastructure valuations rely on assumptions about future cash flows, which are heavily dependent on the inputs that Edhec says should be made public. If the inputs are outdated, valuations can miss an impending crisis, as illustrated by this year’s collapse of Thames Water.

The British Private Equity & Venture Capital Association said its members’ valuation methods were subject to regulation and annual external audits, and followed relevant accounting standards. Its members deliver “robust valuations to ensure global institutions can invest confidently in the asset class”.

But experienced market professionals describe issues in an industry increasingly targeting rich individuals alongside large institutions such as pension funds, and one with an influx of relative newcomers.

A valuations specialist recalled a call earlier this year with a private equity manager seeking advice on whether he would have to cut the value of an asset because of new regulations.

When the specialist said the cut was unavoidable, the chief financial officer of the private equity manager asked his team, also on the call, to “see which other assets we can increase the value of to offset this”.

Another issue, the valuations specialist said, was that private equity owners often presented investors with confusing marketing.

Chris Addy, chief executive of Castle Hall Diligence, a provider of due diligence services, said some private equity managers will “try to manipulate information and present the auditors with data . . . when the reality is that the underlying businesses are struggling in the market and may not be able to service their debt”.

The outcome of the UK’s review is not likely to become clear until the middle of next year, but regulators privately say they may act sooner on individual bad practices. 

Still, while private equity firms face their worst year for exiting their investments in a decade, the good news for them is that they are under no pressure to sell.

“The advantage of investment companies is that they don’t have a limited life, they are evergreen unless shareholders decide to wind up, so no pressure to sell investments at a disadvantageous time. Clearly it’s a long-term investment,” said Britton.  

“We’d say you’d look to hold this for 10 years at least. You’d expect these things to resolve themselves over time, rates normalise . . . but things can always get worse before they can get better.”

Christiane Benner, the first female head of IG Metall, warns against the country’s ‘creeping deindustrialisation’

Christiane Benner was running to become chair of Europe’s largest union IG Metall this spring when she decided to embark on a bold experiment.

As the employee representative on the supervisory board of Continental, she was locked in tough negotiations over the German automotive supplier’s planned closure of a provincial brake parts factory that was putting 600 jobs at risk.

Instead of blocking the plans, Benner contacted an IG Metall colleague on the board of local heat pumpmaker Stiebel Eltron, which has since agreed to consider at least 300 Continental staff for roles at its own expanding plant, with Continental picking up the bill to retrain them.

“This was a new way, and it needed a lot of courage both from her side and our side,” said Continental’s head of human resources Ariane Reinhart, who believes the creative fix could serve as a blueprint as Germany is forced to “phase out some industries that are no longer competitive”.

Benner, who on Monday became the first female leader of IG Metall with 96.4 per cent of members’ votes, will need courage and creativity as she steps into one of German industry’s most powerful positions at a time when it faces a crisis of historic proportions.

Energy-intensive businesses including the steel companies whose workers IG Metall represents are still grappling with the loss of cheap Russian gas. Meanwhile, the country’s carmakers are negotiating the phaseout of the combustion engine — the pinnacle of German engineering — while demand in the world’s largest car market, China, slows and Chinese electric vehicle companies begin to push into Europe.

In her maiden speech as IG Metall chair this week Benner warned against the “creeping deindustrialisation” of Germany, saying that while “there are enough jobs in green industries . . . not everything will stay the same as it is today; jobs and companies are changing”.

One consultant who has met her described Benner as a “future-oriented progressive professional”, adding that she was “somehow likeable”. He did not believe that Benner would diverge from the well-trodden path of German unions that “obviously represent the workers but also understand they have responsibility for the long-term success of the company”.

Benner, a 55-year-old sociology graduate who now speaks for more than 2mn workers, moved beyond industrial relations in Tuesday’s speech. In a full-hearted defence of Germany’s system of industrial Mitbestimmung — or co-determination, which is what gives union representatives seats on corporate supervisory boards — she attacked the rise of Germany’s far-right Alternative für Deutschland party.

“More democracy in the workplace leads to more democracy in our society. Those who experience democracy effectively in the company also have a more positive attitude towards democracy overall,” she said, as she argued that IG Metall’s job was to make Germans feel secure through their work.

Continental’s Reinhart agreed that Benner’s mission was important, saying “we need industry in Germany; it’s a base for social peace and democracy”. But she added that the balancing act would be difficult as the country’s industry fights to remain competitive, saying Benner “is in for a very challenging future — times are rough”.

Alongside her role at Continental, Benner has since 2014 held a seat on BMW’s supervisory board. She confirmed she would also join Volkswagen’s in line with IG Metall tradition, although no decision has been made on whether she will retain her existing supervisory board positions.

German companies have a two-tier leadership structure — the executive board is responsible for day-to-day management and strategy while the supervisory board oversees the hiring and firing of executives.

Daniel Friedrich, head of the north German regional office of IG Metall who has known Benner since they were both union youth representatives, described her as a “combative fighter . . . with a collaborative leadership style”.

Benner, who was born in the west German town of Aachen and raised by a single mother, will join Volkswagen at a time when it is still negotiating with its powerful works council over proposed job cuts that Europe’s largest car company has said will be necessary for the sake of competitiveness.

But Volkswagen is also a company that is making huge investments in new technologies, such as battery manufacturing — with Benner citing the enthusiasm of Daniela Cavallo, who has headed VW’s works council since last year.

“Anyone who simply destroys jobs instead of thinking about alternatives in a timely manner is driving people into a lack of prospects,” Benner said in the Frankfurt speech, in a nod to the high stakes at play in preserving German industry.

Reinhart, who said Continental had retrained 10,000 people for other careers in the past three years partly thanks to Benner, believes the “transformation of German industry is possible”. But she warned that the new union boss “needs partners like us”.

Shares in German group plunge as it also looks at ways of strengthening its balance sheet

Siemens Energy is in talks with the German government to secure billions of euros of guarantees for long-term projects after warning that losses at its troubled wind turbine business would be higher than forecast.

The Dax-listed company said on Thursday that it was in need of backstops for projects as the financial picture at its wind turbine business deteriorates. In June, the group said that overhauling the division, which has been beset by technical mishaps, would cost €1bn.

Without the guarantees, a €110bn portfolio of clean energy projects planned by the company will be in jeopardy, according to executives at the Munich-based company.

In a statement, Siemens Energy said that it was also evaluating measures to “strengthen its balance sheet”, without giving further details, and was in talks with both banks and the government.

Siemens Energy shares plunged 35 per cent, extending their steep decline since June, when the full scale of the technical problems affecting the bearings and rotors in the turbines were first disclosed.

“Their business in wind is in utter disarray,” said William Mackie, head of capital goods research at Kepler Cheuvreux. “Against that backdrop, the company’s opportunity set for financing is impaired due to a crisis of confidence in parts of the business outlook financially.” 

Siemens Energy’s disclosure that it is looking at fortifying its balance sheet “opens the door to the speculation they will seek multiple potential measures to strengthen capital, which naturally creates a violent response in the equity market,” Mackie added.

The crisis at the wind business, known as Siemens Gamesa and that Siemens Energy only took full ownership of in June, comes as the broader wind industry confronts the drag of higher interest rates and increased costs.

While Siemens Energy has disclosed few details of the technical flaws that have bedevilled the turbines, people familiar with the matter have said the problems were related to the company’s flagship 5.X turbine, along with its predecessor, the 4.X, that entered the market between 2017 and 2019.

In August, Siemens Energy warned that it expected to slump a loss of €4.5bn this year. The wind business has suspended taking orders for some onshore turbines and is being more selective in taking on offshore contracts, the company said.

Chief executive Christian Bruch described as a “bitter” moment the company’s June disclosure of the severity of the crisis.

A person familiar with the matter said on Thursday that the worsening picture at the wind business had concerned lenders. A spokesperson for the German ministry of economic affairs said the government was in “close discussions” with the company.

The group said on Thursday that its gas and power businesses were on track to meet targets this year, thanks to “excellent performance”. Siemens Energy also makes turbines for gas-fired power plants, electricity grid transformers and electrolysers.

But Siemens Gamesa has proved a calamitous inheritance. Siemens Energy was spun out of the German industrial conglomerate Siemens in 2020, a transaction that handed it a 67 per cent stake in Siemens Gamesa.

In May, Siemens Energy bought out the minority shareholders in the wind business, taking full control the next month. Siemens still has a 25 per cent stake in Siemens Energy.

The deepening crisis at Siemens Energy comes after EU president Ursula von der Leyen last month identified access to adequate financial guarantees as a major problem for the entire wind energy sector in her annual “state of the union” speech. 

Earlier this week, the EU commission unveiled its new “wind power package” of measures which includes measures to ease access to finance.

Anduril, the defense tech startup that says it’s trying to build the “Lockheed Martin of the 21st century,” laid out lofty goals to investors early last year. It would generate $200 million in revenue in 2022, up more than 50% from the previous year, on its way to $1 billion in 2026.

Achieving that ambition will be expensive. The six-year-old startup, valued last year at $8.5 billion by Founders Fund and others, told investors it expected to burn a total of $2 billion in cash between 2021 and 2026. And it expected to incur hundreds of millions of dollars in net losses each of those years as it develops and sells drones, missiles, submarines and border protection systems to U.S. agencies and allied governments.

THE TAKEAWAY

• Anduril targeted nearly $1 billion in revenue by 2026, $2 billion of cash burn from 2021 to 2026

• Shield AI expects 2023 revenue of about $165 million, up more than 90% from 2022

• Sequoia led $6 million investment in defense parts maker Senra Systems this year

Anduril is trying to reward investors’ faith with growth. In recent months, Anduril told investors it is on track to book $625 million in new government contracts this year, on an average annual basis, which would be more than triple what it generated two years ago, a person familiar with the matter said. Shield AI, an Andreessen Horowitz–backed developer of autonomous defense systems, is another defense tech firm that is growing quickly: Last month it told investors it expected revenue to grow more than 90% this year to about $165 million, even as it racks up significant losses, according to financial forecasts viewed by The Information.

Anduril’s and Shield AI’s financial forecasts and recent results, which haven’t previously been reported, explain why more venture capitalists have started to invest in defense technology startups—and why many have stayed away. Demand for high-tech defense systems is rising, thanks to increases in the U.S. defense budget and the outbreak of wars such as those in Ukraine and now Israel. Plus, SpaceX and Palantir have shown VC-backed firms can break into a sector long dominated by older government contractors.

For some investors, those factors are overshadowing the reasons many VC firms have avoided investing, including the high, multiyear cost of developing sophisticated defense systems and long timelines of winning contracts that can cloud financial forecasts.

With defense tech startups, “there has been nervousness in the venture community about the ability to successfully go to market with products into the government,” said Ross Fubini, managing partner at early-stage venture firm XYZ Venture Capital, an early investor in Anduril. “What all of these companies are showing is that there are paths to do that.”

Sequoia Capital this year joined Andreessen Horowitz and General Catalyst in investing in the sector. The firm led a $6 million investment in military parts manufacturer Senra Systems, which hasn’t been previously reported, as well as a $5.7 million investment for hydrogen-powered military hardware maker Mach Industries. Partner Shaun Maguire, who has previously led AI and crypto deals, among other sectors, and was deployed in Afghanistan while working for the Department of Defense, is leading Sequoia’s foray into defense, according to people with direct knowledge of the matter.

The mini-boom in defense tech venture capital funding began in 2021, the year after Anduril surpassed a $1 billion valuation. In 2021, firms poured more than $40 billion across more than 900 deals for such firms, more than they had invested in the previous two years combined, according to PitchBook. The number and value of deals slumped slightly last year, as venture capital funding dried up overall. But likely new funding rounds from Shield AI and Anduril this year should lift this year’s numbers.

Many VC firms are still grappling with limited partner agreements that bar them from investing in weaponry. And some investors in VC funds may not want to back startups that develop weapons for ethical reasons.

‘Abyss of Doom’

Defense tech startups may also test investors’ appetite for big losses in an era of Silicon Valley belt-tightening. Shield AI, an 8-year-old startup building software systems that serve as AI pilots to fly vehicles such as drones and fighter jets autonomously, has told investors in recent months it expects to lose nearly $70 million this year, excluding some expenses like interest, taxes and share-based compensation, according to financial statements and forecasts viewed by The Information.

“Defense tech is a very hard place to operate. I have to tell investors, ‘I have stared into the abyss of doom, death and despair many, many times,’” said Brandon Tseng, Shield’s co-founder and president. The startup, last valued at $2.3 billion, has been seeking to raise hundreds of millions in new cash in recent months.

Tseng said the company expected to turn a profit by 2025 when measured before interest, taxes, depreciation and amortization. “We’re executing the plan to get there just because we believe there has been a fundamental shift in how the markets think about these businesses,” Tseng said, referring to a focus on profits.

Anduril’s road hasn’t been smooth, either. It missed its annual contract goals by about 11% in 2021, the company told investors. One of the multimillion-dollar contracts it won in 2021, which came from the military operations unit of the United Arab Emirates, finally got done after months of negotiations. “To say this was a slog would be an understatement,” the company wrote in a regular update to investors that year.

“The vagaries of contracting timelines, bureaucratic snafus and government budgets are part and parcel of the industry we have entered, so we expect to get it wrong some of the time,” the company wrote in another update to investors last year.

The Costa Mesa, Calif.–based startup won big deals in 2022 from the U.S. Department of Defense to counter drone threats and with the Australian Navy to build autonomous submarines.

Last year it booked about $450 million of new government contracts by average annual value, according to an investor document. That beat an internal goal for the year by about 29%. Now, the company expects to surpass the financial targets it gave investors last year, a person familiar with the company said.

Existing investors have sought to grab bigger stakes in Anduril, jostling to put more money into the firm that would help it pay for more acquisitions, according to people familiar with the matter. The company has been in talks to raise $400 million to $500 million in a convertible note that would essentially value the company at $10 billion, Bloomberg reported. Founders Fund is by far the largest outside backer of Anduril, owning nearly 20% of the startup, a person familiar with the matter said.

One of Anduril’s earliest backers, Lux Capital, is now “underwriting with high confidence” that the company’s value will reach at least $20 billion in the coming years, “with the potential to be multiples of that,” Josh Wolfe, a Lux co-founder and managing partner, said.

Still, investors are valuing Anduril many multiples higher than traditional defense contractors, at more than 12 times its expected 2025 revenue. Raytheon, Northrop Grumman and General Dynamics—which are all profitable and growing more slowly than Anduril—are valued between 1.2 and 1.7 times forecast 2025 revenue.

Palmer Luckey, who founded Anduril after selling virtual reality firm Oculus to Meta, told online publication Breaking Defense that the company was better suited to taking money from venture investors than from public shareholders.

“Wall Street would look at our company and say, ‘This is still a very high-risk venture they have; they’re making these large investments in programs that may or may not pan out,’” he said, adding that Anduril was trying to change that perception.

Becky