TheChek News Flow

It's the third facility to open in as many months, with four others in the works.

PARIS — As it continues to increase production capacity to meet demand for its luxury goods, Hermès is expanding its Saint Junien handbag and glove facility in the New Aquitaine region of France.

The expanded facility will produce handbags in the ever-popular Birkin and the Kelly Danse styles, as well as small leather goods, including wallets from the Bearn and To Go lines.

It follows the opening of a factories in Louviers, focused on the Kelly bag, and Tournes earlier this spring.

A new 50,600-square-foot building will open next to the location of the company’s current facility in the New Aquitane region, which was built just six years ago. The new factory will eventually house 250 artisans, the majority being 210 leather artisans with the addition of 40 glove makers.

The facility repurposes an abandoned wool workshop building and was designed by the Bruhat & Bouchaudy architecture firm to adhere to bioclimatic properties using some of the original stone walls and additional stones sourced from old buildings on the site. Other exteriors were constructed of granite from a nearby quarry.

The facility is the third in the southwest area of France.

In April, Hermès inaugurated the Louviers facility in the northwest of France, a 66,700-square-foot space focused on increasing production of the in-demand Kelly bag, as well as additional saddle production. It followed with the opening of the Tournes-Cliron factory, near the border of Belgium, with a 61,400-square-foot facility with 260 artisans there in May.

The house reported a 23 percent increase in sales at constant exchange in the first quarter of 2023. It also opened new stores in Naples, Florida, and Nanjing, China, in the quarter, testifying to the company’s continued growth.

Since 2010, Hermès has opened 11 facilities in France, bringing the number of artisans to more than 4,700. Four additional facilities are under construction in Riom, Isle Espagnac, Loupes and Charleville-Mézières.

- Leader Wu Cheng-tien said his party has the courage to undertake "the mission of the times and advance the peaceful reunification" across the Taiwan Strait

Odey Asset Management, whose founder has been engulfed by sexual harassment claims, was the seller of a stake in AO bought by Frasers Group on Friday, Sky News learns.

The crisis-hit hedge fund Odey Asset Management has offloaded its stake in AO, the London-listed electrical goods retailer, suggesting that it may be unable to stall a fire-sale of assets amid a wave of sexual misconduct allegations against its founder.

Sky News has learnt that the firm set up by Crispin Odey was the seller of nearly 19% of AO to Frasers Group, the high street retailer founded by the billionaire tycoon Mike Ashley.

The transaction cost Mr Ashley's Frasers Group £75m, it said in a statement on Friday night.

Odey Asset Management's identity as the seller was confirmed by other shareholders.

One insider said that Odey had been a supportive investor in AO since its stock market debut in London in 2014, and had increased its holding as part of a capital-raise last year.

It is thought to have offloaded its entire stake, held in a fund managed by James Hanbury, one of its senior portfolio managers, to Frasers.

This weekend, it was unclear whether Mr Hanbury was in the process of liquidating other positions.

A spokesman for Odey declined to comment on the issue or on the level of client redemptions the firm was experiencing.

The crisis has been triggered by a torrent of sexual abuse and harassment allegations made in the Financial Times against its eponymous founder.

The claims, which Mr Odey told the newspaper he disputed, have prompted a number of investment banks which offer so-called prime broking services to his firm to sever ties with it.

The Financial Conduct Authority is also said to have broadened an existing investigation into the hedge fund.

In a statement this week, Odey Asset Management said it "cannot comment in detail on the various allegations which are being looked into by our lawyers".

"OAM has robust policies and procedures in place to ensure that the firm at all times complies with all of its legal and regulatory obligations.

"Staff wellbeing is central to the culture of OAM's business.

"We do not recognise the picture of the firm that has been painted by the Financial Times."

It added that it was "in active discussions with all service providers and we are confident that our service providers will continue to work with us to ensure that the interests of investors are protected".

For Mr Ashley, the swoop on AO represents the kind of opportunistic trade for which he has become renowned.

The former Newcastle United FC owner has long coveted a stake in the business, and his son-in-law, Michael Murray, who now runs Frasers, said in a statement: "We are delighted to have the opportunity to form a supportive, strategic partnership".

"AO is a fantastic business with a clear strategy which is leading the market in online-only electricals."

The purchase of its AO stake adds the company to a list of minority holdings for Frasers which includes ASOS, the struggling online fashion retailer, and Mulberry, the luxury handbag retailer.

Either Liberum and Numis, Frasers' brokers, are likely to have been involved in executing the trade on behalf of Mr Ashley's company.

AO and Frasers both declined to comment.

MOSCOW, June 9 (Reuters) - Russian state-owned lender VTB (VTBR.MM) may pull out of the running to acquire a stake in internet giant Yandex (YNDX.O), the bank's CEO, Andrei Kostin, told Reuters, as discussions are now centered around higher prices than the bank's initial offer.

Often dubbed "Russia's Google", Yandex is making progress on a corporate restructuring plan that should see it divest ownership and control of core, Russia-based businesses, in what could be one of Russia's most significant corporate deals this year.

Kostin said he was not sure VTB would continue with its bid. The bank already holds a 1.5% portfolio investment in Yandex.

"I am not sure that we will go into Yandex," Kostin told Reuters when asked about plans. "We have never had the desire to steer Yandex, and for a portfolio investment it is important to correctly determine the entry price."

"There are many factors in the deal now, one of them is the price increase compared to the original one. We offered on a different level. Therefore, now we are in the so-called stand by: we are not actively negotiating."

"It was announced at $7 billion recently, we submitted our application at a different price level, lower," Kostin said.

"Yandex, we believe, has good prospects – on the one hand, on the other – the company has its own peculiarities," Kostin said, pointing to the departure of founder Arkady Volozh.

"In general, there is the uncertainty factor, there is always the risk of sanctions and so on."

VTB was hit hard with Western sanctions over Russia's actions in Ukraine, something that limits its ability to front a consortium bid, Kostin said. VTB's initial offer had envisaged acquiring a stake of around 15%, which then dropped to 10%. Kostin expects more changes.

"I do not know how many contenders will eventually remain. Maybe their number will narrow in the new conditions, because, as far as I know, we were not the only ones who found these conditions not very comfortable," he said.

"I know that several names that were originally in the applicants there have already dropped out of the list. Therefore, the situation has not been resolved there yet."

Russian billionaires including Vladimir Potanin, CEO and the largest shareholder of metals giant Nornickel (GMKN.MM), and Vagit Alekperov, co-founder and a major shareholder in oil major Lukoil (LKOH.MM), are among the bidders for assets ultimately valued around $14 billion, three people familiar with the matter told Reuters last month.

Given Kremlin measures that oblige foreign companies leaving Russia to sell their assets at a 50% discount, shareholders in Yandex's Dutch-registered holding company Yandex NV, most of whom are Western investment funds, could ultimately make about $7 billion from a full divestment.

This past week, Apple AAPL +0.22% did something that has me completely baffled.

No, I’m not referring to the debut of the Vision Pro, the company’s $3,499 virtual-reality headset, which won’t actually be available until sometime next year. (Though there are some baffling elements of that launch as well, which I’ll get to in a bit.)

What I don’t understand is how Apple (ticker: AAPL) managed to deliver a more than two-hour keynote and not say the words “generative AI.”

As someone who writes about this stuff every day, I can barely have a five-minute conversation with anyone in the technology business

without it turning into a discussion of artificial intelligence

and how it’s going to change the world.

In just the past week alone, Intuit (INTU) announced a potentially game-changing AI strategy, Cisco Systems

(CSCO) unveiled new AI features in its WebEx communications software, and

Adobe (ADBE) disclosed plans to start charging companies who use Firefly, the company’s growing suite of generative AI tools.

Now, to be clear, Apple has no need to aggressively promote its stock with overly excited predictions about AI.

It’s the largest U.S. company by market value, at close to $3 trillion.

The stock is up 37% year to date, and has recently traded at all-time highs. Also, Apple already uses artificial intelligence for some things, like predictive typing and auto-correct features, both of which got a brief mention at this past week’s keynote address. But what’s Apple’s larger AI strategy? Don’t they need one?

Apple didn’t answer my request for comment on that topic.

If you count other tech leaders in order of their market value, the next 15 or so have all laid out detailed plans to play the AI trend in one way or another: Microsoft MSFT +0.47% (MSFT) and Alphabet GOOGL +0.07%

(GOOGL) have chatbots and have unveiled plans to integrate AI features into most of their application software.

Amazon.com AMZN –0.66%

(AMZN) is building AI tools for Amazon Web Services.

Nvidia NVDA +0.68% ’s (NVDA) AI-friendly chips have propelled the stock to a 160% gain this year and a recent visit to the $1 trillion market-cap club. Then you’ve got Tesla (TSLA), Meta Platforms (META), Taiwan Semiconductor Manufacturing (TSM), Broadcom (AVGO), and Oracle (ORCL)—AI plays, one and all.

Meanwhile, it has been nearly 12 years since Apple launched Siri, the company’s virtual assistant.

But its growth seems stunted.

Since Siri is integrated into my phone, I can ask it to do some useful things while I drive, like “call Steve” or “text Tim.”

But it’s not a great option if you need to generate code or draft documents—all things now offered by ChatGPT, Bing, and Bard.

Maybe this is complicated by Apple’s longstanding search relationship with Google, which pays billions to Apple every year to remain as the iPhone’s default search provider.

Or maybe the company has been too distracted by the Vision Pro launch. Or maybe Apple has something brilliant coming that has yet to launch or leak.

But if Apple doesn’t lay out an AI strategy soon, investors are going to get nervous that Apple is missing out on the greatest technological advance since...the iPhone.

OK, let’s come back to the Vision Pro for a moment. As has been widely discussed, the price was higher than Wall Street expected, and the launch date further out than anticipated. Even Wedbush Securities’ Dan Ives, maybe the Street’s biggest Apple bull, thinks the company will sell only 150,000 units in the first year, and then one million in the second year once it lowers the price.

Either way, it’s not enough.

Apple is generating about $400 billion in annual revenue.

To be material—let’s say a 5% revenue boost—it would need to sell $20 billion a year in Vision Pro hardware. At the current price, that would be a little under six million units.

The 2022 market for virtual- and augmented-reality headsets was a little under $8 billion.

Even if the market doubled and Apple took all of it—driving market leader Meta’s Quest unit out of business—it still wouldn’t be enough to move the needle in the long term. Apple is playing a long, long game here.

Many people who had a chance to try out the device—and I have not—seemed wowed by the experience. But as others have noted, there is simply no “killer app” for the Vision Pro. And you have to wonder if developers might be better off creating new apps for the iPhone, where more than 200 million units will likely be sold in the current fiscal year. Also, why didn’t we see Tim Cook try it on?

One final observation: This doesn’t feel like an all-day device. As I sit here typing on my MacBook Air, my iPhone is next to me and my Apple Watch is on my wrist. Aside from when I’m sleeping, at least two, and generally three, Apple devices are always nearby. They are indispensable for me and many others. But the Vision Pro just feels like a beautifully engineered solution in search of a problem. Aside from Meta’s far cheaper Quest headsets, there are few success stories in this space.

And Apple has failed to overcome the most obvious problem: The requirement to wear what are essentially ski goggles.

Would you ever wear this thing outside? That would be a bad idea—do you remember what happened to people who wore Google Glass in public? Bars banned them; they tended to spur fights. I am reminded of the 3-D television era, which promised a slew of new experiences. But they never caught on. Anyone need a pair of 3-D glasses? Didn’t think so.

Japan is a target-rich environment for activist investors. Half the country’s listed companies trade below book value.

Two large, bellwether U.S. institutions, California Public Employees’ Retirement System and the Office of the New York City Comptroller, are training their guns at the heart of Japan Inc. They’re voting to oust the chairman of Toyota Motor 7203 +1.36% (ticker: 7203.Japan), Akio Toyoda, at a June 14 shareholders meeting.

The world’s top auto maker isn’t the worst-run firm in Japan. But the broader impulse to challenge well-insulated boards and managements looks like a good one, and may boost a long-awaited rally in Japanese stocks. The iShares MSCI JapanEWJ +1.14% exchange-traded fund (ticker: EWJ) has gained 12% this year, matching the S&P 500SPX +0.11% .

The business case against Toyoda centers on his slow pivot to electric vehicles, even as sales of Toyota Prius hybrids fell by more than half over the past decade.

“A silent majority in the auto industry is wondering whether EVs are really OK to have as a single option,” he said in December.

On Toyoda’s watch, between 2014-16, Toyota sold a 3% stake in Tesla TSLA +4.06% (TSLA), a $21 billion mistake at the EV pioneer’s current valuation.

Toyoda, 67, already stepped down as chief executive in April, though. Successor Koji Sato lost no time proposing 10 new EV models, with projected annual production of 1.5 million cars by 2026. Executing on these ambitions may be tough, but the direction looks right. “Toyota needs to restore BEV [battery electric vehicle] business competitiveness to drive a full-fledged rebound,” says Jefferies analyst Takaki Nakanishi.

Toyoda, whose grandfather founded Toyota in 1937, also typifies a form of Japanese corporate governance that is under increasing pressure. While owning just 1% of the stock, the founding family retains decisive influence through cross-holdings in a web of affiliates like parts maker Denso 6902 +2.53% (6902.Japan), and a tradition of deference. The New York City Comptroller’s office is voting against the whole slate of Toyota directors, finding they “lack adequate independence.”

“Managements have been protected for decades by a moat of cross-shareholdings and the complacency of other shareholders,” says Seth Fischer, chief investment officer at Oasis Management, which is pushing change at several Japanese companies (though not at Toyota).

The moats are under assault from multiple directions. The Tokyo Stock Exchange lately demanded that below-book-value companies submit plans to boost their share prices; it’s threatening eviction from the coveted TSE Prime Market Index for noncompliance. The powerful Ministry of Economy, Trade, and Industry is working on new merger-and-acquisition guidelines that would ease takeovers and consolidation.

Managers are getting the memo, says Adrian Gornall, head of investment advisory at Astris Advisory Japan. “There’s been a sea change in the attitude toward shareholder returns: buybacks, dividend payouts,” he says.

Toyota won’t be the hottest battleground in this Japanese annual general meeting, or AGM, season. Canon ’s (7751.Japan) 87-year-old chief executive, Fujio Mitarai, barely kept his job, with 50.59% shareholder approval. Seven & i Holdings (3382.Japan), parent of the U.S. 7-Eleven convenience chain, is fending off demands to shutter unprofitable stores.

Nor is governance the key factor in Japan’s market revival. “A return of controlled inflation and relative political stability are driving the rally,” says Hidekazu Ishida, an advisor to FinCity.Tokyo, which aims to boost Japan as a financial hub.

A governance revolution won’t hurt either, though. “No one wants to be the next activist target,” Ishida says. And watch out for those new Toyota EVs.

Doomsayers have called the death of cryptocurrency many times since Bitcoin launched 14 years ago. This week provided another opportunity after the Securities and Exchange Commission accused two leading exchanges of violating a slew of U.S. laws.

The crackdown against Binance and Coinbase Global COIN –2.95% (ticker: COIN) darkens long-term prospects for crypto exchanges. More broadly, the cases raise critical questions about whether tokens aside from BitcoinBTCUSD –3.13% should be regulated as securities, and whether any crypto platforms should be allowed to operate in the U.S. without radical overhauls. If the SEC ultimately prevails in court—which could take years—the industry would face much stricter oversight, forced to play by the same rules as the New York Stock Exchange, brokerages like Morgan Stanley (MS), and the thousands of companies that trade publicly.

The crypto industry, with its libertarian ethos, has long claimed it should be treated differently; Coinbase has even sued the SEC to try to push it to establish crypto-specific rules. The SEC may now press courts to decide the issue with its cases against Coinbase and Binance, though other cases, including one involving the company Ripple, could provide some clarity in the near-term.

For now, the market seems to be

betting that crypto will adapt and move forth

.

The price of Bitcoin has stabilized, along with other tokens and crypto stocks.

The SEC’s moves weren’t a surprise—partly because the agency had warned Coinbase back in March that it would be sued. After a year-long bear market, selling pressure appears to have dissipated. “There just aren’t that many sellers left, especially after the wipeouts that occurred in 2022,” says Bob Ras, co-founder of trading platform Sologenic.

Other signs of crypto resilience include relatively small withdrawals from Binance, the world’s largest crypto exchange with more than $59 billion of tokens on its platform. Traders appeared to yank more than $1 billion from Binance in recent days, far less than the exchange lost after the FTX crisis last November.

Binance, in a blog post, said “we intend to defend our platform vigorously.” It said it had “actively cooperated with the SEC’s investigations and have worked hard to answer their questions and address their concerns.”

Coinbase has fans on Wall Street. While traders are betting heavily against it, with 22% of its shares outstanding sold short, it has stabilized in the low $50s.

Cathie Wood’s ARK Investment Management, among Coinbase’s biggest investors,

bought the dip

.

“For investors who can stomach the uncertainty in Coinbase’s business, we view the pullback…as an attractive entry point,” said MoffettNathanson analyst Lisa Ellis in a note. In a worst-case scenario, Coinbase would have to delist most non-Bitcoin and Ether tokens and end its fast-growing “staking” service, costing the brokerage 25% to 30% of revenue, she estimates. But the exchange would survive, focused on allowable tokens and other services, and expanding offshore.

Still, it’s hard to sugarcoat the industry’s mounting legal problems. In both the Binance and Coinbase complaints, the SEC is essentially arguing that the companies’ core businesses and structures are illegal under U.S. securities laws.

In Coinbase’s case, the violations, according to the SEC, include failures to separate the exchange from brokerage and clearing activities—all standard practices under securities laws to help protect investors.

The SEC also claims that Coinbase facilitates trading in legions of smaller tokens or “altcoins,” many of which the agency views as unregistered securities.

And the SEC says Coinbase’s staking business,

which offers high yields on tokens

, is illegal and should be regulated like any other registered investment contract or service.

Coinbase has “a demonstrated commitment to compliance,” said Paul Grewal, general counsel of Coinbase, in a statement. The company will “continue to operate our business as usual,” he added.

Mizuho analyst Dan Dolev, a longtime bear on Coinbase, doesn’t buy that. “They’re saying that to pretend that everything’s OK,” he says, adding that “cash flow constraints” come with trying to maintain position in a competitive market while fighting an existential lawsuit from the SEC.

Dolev also sees this as a crushing blow to digital assets at large. “The whole gospel of institutional adoption is getting thrown out the window because no CFO or CEO of a major bank is going to get their hands dirty with something that they know is under the gun.”

The SEC isn’t the only one cracking down. Binance is facing a lawsuit from the Commodity Futures Trading Commission. Financial regulators in California have told Coinbase to stop offering securities in the state and nine other state authorities issued similar orders this week.

“The SEC lawsuits could pose a major threat to trading,” says Clara Medalie, head of research at crypto data provider Kaiko, noting that Binance entities and Coinbase have a combined trading market share of 60%.

The remarkable thing about crypto, however, is that it’s never hard to find hope. Stéphane Ouellette, CEO of crypto advisor and capital markets platform FRNT Financial , points out the SEC’s charges against Binance and Coinbase came as another U.S. regulator delivered a victory to the industry. The CFTC on Monday gave the green light for the crypto arm of the Chicago Board Options Exchange , or Cboe, to offer futures for Bitcoin and Ether to traders with leverage, or borrowed money.

“This is the playbook: they wipe out certain companies and then rebuild with businesses that they feel more comfortable with and trust,” says Ouellette. “The industry has reinvented itself in almost every one of these bear market cycles,” he adds.

The winner in all this may be Bitcoin and perhaps Ether, the second-largest token. Ultimately, these are the digital assets that institutional investors primarily want to trade, much more than the smaller tokens, many of which the SEC calls unregistered securities.

“In the long run, this doesn’t really matter one way or another for Bitcoin,” says Cory Klippsten, CEO of Swan Bitcoin, a crypto firm focused solely on the largest token. “There was always going to be a scam phase.”

Bitcoin has so far dodged the token/security debate. SEC Chair Gary Gensler has indicated support for regulating Bitcoin as a commodity, not a security. Ether also has some regulators, notably the CFTC, saying it’s a commodity. Combined, the tokens account for more than $700 million of crypto market value, out of $1.1 trillion in total. Both are likely to continue being traded globally while the debate goes on about which other tokens qualify as securities.

Clarity on the question may arrive soon in a case involving Ripple, the issuer of the XRP token

that the SEC sued in 2020

for selling unregistered securities. A ruling in that case is likely due in the coming weeks or months.

There are ways for crypto to coexist peacefully with regulators.

The SEC and Coinbase could settle out of court, though that seems a remote possibility near term. Congress could intervene with legislation; several bills are floating around, including one that was recently introduced in the House of Representatives on digital asset market structure.

“We believe that this legislation will likely provide a path for the SEC and Coinbase to settle the lawsuit,” Ellis said, describing how Coinbase could agree to delist tokens that meet the standard of securities defined in the legislation.

If the U.S. ultimately proves too hostile, the industry could move offshore, with some precedents for success. The stablecoin issuer Tether, based offshore, has built a highly profitable enterprise with an $83 billion market cap for its tokens, without issuing standard U.S. audits of its finances or business practices.

While the U.S. regulates crypto through enforcement, other jurisdictions are plowing ahead with rules.

The European Union was early in adopting rules covering exchanges, digital wallets, and stablecoins, though it hasn’t ruled on the token/security issue. Business hubs like Dubai, Singapore, and Hong Kong are now home to flourishing crypto ecosystems, thanks to friendlier policies.

“The space got here without the U.S., it’ll continue to grow without the U.S.,” says Ouellette. “Are people in Indonesia not going to buy the next hot altcoin because the SEC says they can’t? No.”

But running away from the U.S. poses both practical and economic problems.

On the practical side, companies that run afoul of U.S. rules could be shut out of the banking system, pushing crypto even further from mainstream investment.

Avoiding the largest capital market in the world doesn’t help crypto’s long-term aspirations to be a mainstream asset class.

“The charges against Binance and Coinbase do not make crypto uninvestible,” says Kate Laurence, co-founder and general partner at Bloccelerate, a Web3-focused venture fund. But some crypto companies “have already adjusted their strategies and moved their operations overseas,” she adds, and the more that happens, the harder it may be for crypto to attract institutional capital.

The SEC wants to send a message to crypto that there’s no place to hide. It will take more time to find out if the agency will ultimately pursue crypto into extinction.

The case for optimism as a resilient market continues to disappoint the bears.