FT : Vietnamese EV maker worth more than Ford or GM after US listing

Vietnamese EV maker worth more than Ford or GM after US listing
Lossmaking Vinfast’s market capitalisation tops $85bn following New York debut

Vietnamese electric vehicle start-up VinFast’s valuation has overtaken those of Detroit’s “big three” carmakers after shares of the lossmaking company soared on their first trading day.

VinFast closed at $37.06 in New York on Tuesday, well above the $10 price agreed upon when the carmaker merged with a special purpose acquisition company to secure a stock market listing. Its market capitalisation topped $85bn, at least $27bn higher than either Ford, General Motors or Fiat Chrysler owner Stellantis.

VinFast’s billionaire founder Pham Nhat Vuong owns about 99 per cent of its shares, leaving only a small amount available for trading. Only 1.3mn shares of the Spac were able to be traded after earlier redemptions and just $185mn in shares changed hands, according to analysts.

The six-year-old company’s market debut comes after other EV start-ups that listed through Spacs in the US, including Lordstown Motors and Faraday Future, have struggled to raise more cash and in some cases to deliver vehicles.

Many of these companies were “less ready”, VinFast chief executive Le Thi Thu Thuy said in an interview.

“We started manufacturing vehicles five years ago, we have 20,000 EVs on the road. We’ve got every step from product development to supply chain,” Thuy said.

VinFast would be profitable “in the next couple of years” and was “already break-even” in Vietnam, she added.

The carmaker, a unit of Vietnam’s largest private conglomerate Vingroup, has struggled to gain traction in the US, a crucial market for its international expansion.

VinFast stopped making petrol-powered cars to focus on electric vehicles as part of its global attempt to follow in the footsteps of US and Chinese peers including Tesla and BYD. It set up a network of showrooms on the US west coast and last month broke ground on a delayed factory in North Carolina.

But its ambitions have been hampered by problems including questions about vehicle safety and its ability to finance its breakneck expansion. Its founder injected $2.5bn in cash this year.

VinFast’s first shipment of cars to the US in December earned poor product reviews, and the company carried out a big recall after the National Highway Traffic Safety Administration warned of a software error that could increase the risk of a crash.

This year, a plan for an initial public offering was scuppered by what VinFast described as difficult international market conditions. Instead, the Vietnamese group opted to merge with the Hong Kong-based blank-cheque company Black Spade Acquisition and not raise outside money.

Net losses at VinFast in the first quarter were 14.1tn dong ($588mn) against 9.7tn dong in the same quarter the previous year.

>>> US After Hours Summary: DLO +33.5% on earnings and naming MELI exec as co-CE

After Hours Summary: DLO +33.5% on earnings and naming MELI exec as co-CEO; CAVA +7.8% higher in first earnings report since IPO; LRN +7.6%, HRB +5.9% higher on earnings; MRCY -10.7% lower on earnings

  • After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: DLO +33.5% (also names MELI exec as co-CEO, also momentum from Bloomberg report before close that co is considering a sale), CAVA +7.8%, LRN +7.6% (also announces content partnership with Doggyland), HRB +5.9% (also increases dividend by 10%), HOLI +1.7%, ALC +1.7%
Companies trading higher in after hours in reaction to news: ANGO +5.4% (receives FDA breakthrough device designation for AngioVac System), JMIA +1.6% (files for 20,227,736 ADS offering), IONQ +0.9% (enters into strategic alliance to benchmark generative AI techniques on quantum hardware), SQM +0.9% (Azure determined SQM's July offer of A$2.31/sh did not warrant further engagement), GVA +0.4% (awarded $215 mln Ohio contract for tunnel project), PBR +0.3% (says news re agreement with Federal Union is unfounded)

  • After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: MRCY -10.7% (also names new CEO), JKHY -6.1%, A -2.5%
Companies trading lower in after hours in reaction to news: ARHS -7.6% (stock offering by selling shareholders), HLLY -6.6% (Holley Parent to sell 5.5 mln shares), HESM -3.8% (selling shareholder commences 10 mln share offering), ACHR -2.4% (stock offering by selling shareholders), AWR -2.3% (awarded $349 mln U.S. Defense Logistics Agency contract), NEXT -0.2% (stock offering by selling shareholders), RETA -0.1% (BIIB beats out SNY to clinch its $7.3 bln purchase of RETA according to Bloomberg), RTX -0.1% (awarded $322 mln U.S. Army contract)

(ZH) Hindenburg Targets Brokerage Freedom, Alleging Commingled Customer Assets A

Hindenburg Targets Brokerage Freedom, Alleging Commingled Customer Assets And Signs Of Fake Revenue

Shares of Freedom Holding Corp. were down as much as 18% in pre-market trading before paring some of their losses after short seller Hindenburg Research announced they were short the company in a new report called "Freedom Holding Corp: Brazen Sanctions Evasion, Hallmarks Of Fabricated Revenue and Risky Bets with Commingled Customer Funds".
"Our research has unveiled a laundry list of red flags including evidence that Freedom (i) brazenly skirts sanctions (ii) shows hallmark signs of fake revenue (iii) commingles customer funds then gambles assets in highly levered, illiquid, risky market bets (iv) and displays signs of market manipulation in both its investments and its publicly traded shares," the firm wrote Tuesday morning.
Taking a page out of the FTX storyline, Hindenburg accused the brokerage of commingling customer assets and then taking on risky leveraged bets with them:
All the while, Freedom has used funds to take on high leverage and market risk. While it claims it has “conservative risk management” and “limits the amount of credit exposure to any one issuer”, SEC filings show Freedom invested 35% of its gross principal trading balance, or $835 million, in the debt of just one Kazakh issuer. The position is larger than Freedom’s shareholder equity balance of $777 million.

It also accused the company of signs of fake revenue, "openly admitting" to providing brokerage services to sanctioned individuals and asked questions about potential market manipulation in the company's investments and its own publicly traded stock.

"The U.S. government has enforced sanctions through an intensive global campaign. Overall, we find it surprising that a publicly-traded company in our own backyard has worked to brazenly undermine those efforts for years," the firm wrote.
Nathan Anderson, Hindenburg Research
“This is violating almost every country’s anti-money and anti-terrorist financing laws…I’ve personally seen suitcases with $2.5 million brought in cash by a client”, Hindenburg says that a former Freedom executive told them.
The report also calls into question a Belize-based related party controlled by the CEO that "seems to be engaged in a broad variety of corporate malfeasance".

"FFIN Belize’s lone set of published financials reported $2.5 billion in both trade receivables and payables, but just $5.4 million in cash, a hallmark of circular or fake revenue transactions," the report says.
Hindenburg also touched on claims previously reported by Bloomberg about how Freedom allocates shares of popular U.S. IPOs to its clients through a "mystery hedge fund".

Adding to Bloomberg's revelations on the topic, Hindenburg writes: "One selling point for Freedom’s customers has been Turlov’s claim that its clients have access to hot IPO allocations through FFIN Belize, which obtains the stakes from an unnamed hedge fund. 'No one knows' who the hedge fund is, one former told us. 'My suspicion is there is no actual IPO [allocation].'"

Finally, the report called into question whether Freedom's public stock was being manipulated, with Hindenburg writing: "We also uncovered hallmarks of market manipulation in Freedom’s own stock, including inexplicably steady trading volume and price, seemingly impervious to both market-wide events and company specific negative news."

"All told, Freedom Holding has exhibited a startling array of red flags relating to virtually every category of financial malfeasance worthy of investigation," the report concludes.

WSJ : Movie Financier TSG Accuses Disney of Depriving It of Millions of Dollars

Movie Financier TSG Accuses Disney of Depriving It of Millions of Dollars
TSG’s lawsuit, which also names Disney unit Twentieth Century Fox, is similar to Scarlett Johansson’s 2021 suit against company

TSG Entertainment, which helped co-finance hits including “Avatar: The Way of Water” and the “Deadpool” franchise for Twentieth Century Fox, is suing the studio and its parent company Disney DIS -1.78%decrease; red down pointing triangle for breach of contract.

A suit filed Tuesday in Los Angeles Superior Court by TSG alleges that the Disney-owned movie studio intentionally withheld profits and cut sweetheart deals to boost its own streaming platforms Hulu and Disney+, as well as its stock price, at the expense of its partners.

TSG also claims that the actions deprived it of cash the financier needed to exercise options to invest more in individual films and that TSG’s efforts to sell its stakes in other movies to fund more investments were hindered.

TSG said it spent $3.3 billion over the past decade co-funding more than 140 movies, including critical darlings such as “Hidden Figures,” “JoJo Rabbit,” “The Shape of Water” and “The Banshees of Inisherin.”

In the lawsuit, TSG said Disney and the studio “have tried to use nearly every trick in the Hollywood accounting book” to deprive it “of hundreds of millions of dollars.”

Representatives for Disney weren’t immediately available to comment.

Public battles between entertainment companies and actors and writers over profits are fairly common, but it is rare for a fight between a film financier and a studio to end up in court, as such disputes are normally resolved behind closed doors.

Under the terms of a deal between TSG and the movie studio, any dispute gets filed in court first before the two sides agree on a private judge. By filing in court, both sides will then have the ability to appeal that ruling if they desire.

Headed by brothers Chip and Robert Seelig, both Wall Street veterans, TSG has longstanding relations with several Hollywood studios, including Warner Bros. and Sony Pictures. Its partnership with the Fox movie studio was struck in 2012 and it has been amended several times since then.

The way such arrangements typically work is that the financier invests in a slate of films and subsequently can invest more in individual titles within a time frame determined by the terms of the deal.

TSG recently requested an audit after noticing a decline in its profits. After examining the books for three undisclosed films, TSG alleges it found “rampant self-dealing” and “accounting tricks” that showed it had been underpaid by $40 million.

TSG also claims it wasn’t credited with revenue it should have received. Additionally, it said it was charged tens of millions of dollars for distribution fees that weren’t part of its revenue-participation agreement.

The suit is similar in some respects to one that was filed in 2021 by the actress Scarlett Johansson against Disney over the company’s decision to put her Marvel movie “Black Widow” on Disney+ at the same time as its theatrical release.

Johansson argued that the move breached her contract, which guaranteed an exclusive theatrical release that factored heavily into her potential salary. That suit was eventually settled.

TSG is represented by Bird Marella partner John Berlinski, the same lawyer who represented Johansson.

In this case, TSG alleges that a recent renegotiation of the Fox movie studio’s deal with Warner Bros. Discovery’s HBO channel and Max streaming service had a similar effect on its potential profits.

Under the terms of the original agreement, HBO paid a premium for an exclusive window to carry its movies on its service.

In 2021, about two years after Disney acquired the Fox studio along with other entertainment assets, the deal was changed to give Disney the right to put films on Disney+ and Hulu at the same time as HBO. In return for HBO giving up exclusivity, the license fees it pays for the movies were reduced.

The suit alleges that the revised HBO deal cost the Fox movie studio “many millions of dollars,” a portion of which TSG would otherwise have received.

TSG also said it tried to exercise a right to sell its stake in other films it had funded back to the movie studio or to a third party. Disney refused to engage and challenged what films TSG believed it had the rights to sell off, the suit said.

As a result, TSG claims it didn’t have the resources to invest more in certain films, including the massive hit “Avatar: The Way of the Water,” the suit said.

WWD : Selfridges Enters Consultation Period, Looking to Save Cash and Reorganize

Selfridges Enters Consultation Period, Looking to Save Cash and Reorganize Head Office
The business has more than 1.7 billion pounds in debt as a result of rising interest rates.

LONDON — Staff at Selfridges are undergoing a summer reshuffle as the luxury department store tries to reduce costs.

Its new owners, Thailand’s Central Group and the Austrian property company Signa, bought Selfridges in 2021 for 4 billion pounds from the Weston family, but have since loaded up the business with more than 1.7 billion pounds in debt as a result of rising interest rates.

“We are in the process of reviewing how best to structure our head office to best deliver for customers. We will work through the details of this with our teams through the consultation process,” a spokesperson from Selfridges told WWD over email.

“Specifically, we’ve been reviewing how [our] head office, including some small teams in retail who support our stores, are organized to best deliver for our customers. Our store and restaurant team members are not part of this review,” the spokesperson added.

Store staff are understood to be unaffected by the consultation period, which is expected to run for 45 days. Jobs cuts are expected to happen in the coming weeks. Usdaw, a trade union, said it would be getting in touch with Selfridges.

At the end of 2022, the business had filled around 2,800 jobs across its office and stores.

According to figures filed on Companies House in August last year, Selfridges was provided with a 1.7 billion pound loan from the London branch of Bangkok Bank.

The department store also received another loan from EFG Bank, a Swiss-registered bank, for an undisclosed amount.

For the year ending in January 2022, Selfridges revenue sat at 653.4 million pounds, an increase of 28 percent from 2021, which was at 508.5 million pounds despite the stores being closed at the beginning of 2021.

The operating loss was 38.1 million pounds, lower than the previous year. The company cited the closure of stores for the loss.

Central and Signa have a 50-50 partnership.

As part of the deal, they purchased Selfridges’ Oxford Street flagship and its stores in Manchester and Birmingham, England; de Bijenkorf in the Netherlands; Brown Thomas and Arnotts in Ireland, and their associated e-commerce platforms and the properties in London, Manchester and Ireland.

Central and Signa’s combined existing portfolio includes 22 luxury department stores and two stores under construction in Düsseldorf and Vienna. They are the owners of KaDeWe, Oberpollinger, and Alsterhaus in Germany, and Globus in Switzerland. Central wholly owns Rinascente in Italy, and Illum in Denmark.

As reported, by 2030 the partners are targeting 9 billion euros in total sales from their overall retail portfolio. Over the past 10 years they’ve plugged 1 billion euros into the stores in their portfolio, and will invest a similar amount in the next few years.

Selfridges may be the biggest group in the joint portfolio, but the partners’ plan is to treat it like the rest of the properties in its portfolio, as the pride of the city.