TheChek News Flow

Dov Charney, founder of the formerly high-flying retailer American Apparel Inc., filed for bankruptcy along with his latest business venture, a vintage clothing store.

Charney was forced into bankruptcy court because he owed $30 million to a hedge fund involved with American Apparel, which shut down all of its outlets and became an online retailer after going through two of its own bankruptcies.

“They’ve been pressuring him,” Charney’s attorney, William N. Lobel, said Friday. “It looks like the best way to handle it at this point is with a bankruptcy.”

While in bankruptcy, Charney will be able to halt any debt-collection efforts while he works out a plan to repay as much as he can.

In the 1990s, Charney built American Apparel into a major retailer known for its made-in-USA marketing and racy advertising. The Los Angeles-based company became publicly traded in 2007 but within a few years, Charney was forced out as the company began losing money. It filed the first of two bankruptcies in 2015.

At its height, American Apparel had more $600 million in sales from hundreds of stores and employed thousands of people, including at a manufacturing plant in California.

Charney made a number of attempts to take back the company but was never able to get the financial backing he needed to close a deal.

In 2017, a Delaware judge ordered Charney to repay $20 million to hedge fund Standard General LP which he borrowed to increase his holdings in American Apparel so he could mount a proxy contest to replace the board that had fired him.

In his bankruptcy petition Friday, Charney listed assets and debts of as much as $50 million each.

His latest venture is Arya’s Vintage Closet, a clothing store in Costa Mesa, California. That company, too, filed for bankruptcy.

Charney plans to reorganise Arya’s while under court protection and arrange a loan to finance the company’s expansion, Lobel said.

The case is In re American Apparel Inc., 15-12055, U.S. Bankruptcy Court, District of Delaware (Wilmington).

For a long time, there was a tacit understanding among the major nations that peace would prevail as long as the world remained a flow chart for money and goods.

The ease with which major companies have exited Russia after it invaded Ukraine—and the speed at which governments have tried to economically isolate it—may usher in an increasingly rough style of economic realpolitik between countries.

If countries can be easily excluded from the world’s trading markets, any nation with global dominance in a major commodity that is critical to the world has extraordinary leverage and strength over others.

After the U.S. and Saudi Arabia, Russia is the third-largest oil producer, according to the U.S. Energy Information Administration. The U.S. this week announced it will ban the import of Russian oil, while the United Kingdom plans to phase out Russian oil and oil products by the end of 2022. And the European Union plans to cut the continent’s reliance on Russian natural gas by two-thirds by year’s end.

As a result of these moves, commodity prices spiked all over the world this week and bullied global financial markets as investors fretted about recession. This leads us back to an investment thesis we introduced in late January when the stock market was just beginning to behave erratically.

At the time, we suggested that investors focus on companies that might be in secular bull markets and thus perhaps insulated from the increasingly erratic behavior that the stock market was starting to demonstrate. We recommended electric-vehicle giant Tesla (ticker: TSLA) and NOV (NOV), which makes equipment for oil and gas drilling and exploration.

Since then, NOV’s price has increased from $16.21 to over $21. Tesla’s price has fallen from almost $1,000 to about $860.

Given the stressed state of the world—and the recent shunning of Russian oil—investors might want to once again consider both stocks, if for somewhat different reasons than before. This time around, the investment thesis is that natural resources could become even more important should nations essentially weaponize their commodities.

Playing both Tesla and NOV is a way to arbitrage the difference between the past and future and idealism and pragmatism. Tesla founder Elon Musk is dragging the world into a future of electric vehicles. NOV’s drill bits and equipment might be in even greater demand if nations try to become more energy independent.

To control each stock, aggressive investors could consider a risk-reversal strategy, which entails selling a put option and buying a call option with a higher strike price but the same expiration. The strategy reflects a willingness to buy the stocks at lower prices, while positioning for rallies.

With NOV stock at $21.14, investors could sell the July $19 put for about $2 and buy the July $24 call for about $2.25. With Tesla stock at $858.97, they could sell the July $750 put for about $76 and buy the July $1000 call for about $71.

During the past 52 weeks, NOV stock has ranged from $11.46 to $24.06. Tesla has ranged from $546.98 to $1,243.49.

The risk-reversal strategy takes advantage of the fear and greed that has warped options premiums as the stock market has declined.

Think of the calls as inexpensive upside proxies that could prove profitable if the realpolitik view of commodities prevails. Selling puts that are lower than the associated stock prices—even if just a little—can be an effective way for long-term investors to get paid by the options market to buy stocks.

Russia’s attack on Ukraine means Europe’s military capabilities are in focus, and as a consequence of President Vladimir Putin’s aggression, some defense stocks may be set to benefit.

Germany said last month that it will create a 100 billion euro ($110 billion) fund to ramp up military spending, going above the North Atlantic Treaty Organization’s commitment to a minimum of 2% of gross domestic product for defense spending. Cristophe Menard, an analyst at Deutsche Bank, has calculated that NATO members would spend an extra €75 billion.

“European budgets may witness greater upside versus the U.S. given their closer proximity to Russia and Ukraine and the relative underinvestment of European nations” for defense in recent years, says Ross Law, an analyst at Berenberg.

Two companies that derive the greatest share of their revenue in terms of weapons and ammunition—areas that traditionally benefit from increased demand during conflicts—are German arms manufacturer Rheinmetall (ticker: RHM: Germany), at 22%, and British defense giant BAE Systems (BA:U.K.), at 20%. Law also cites U.K. defense firm Chemring Group (CHG), a maker of flares that act as decoys for heat seeking missiles, as having indirect exposure to the conflict since it provides parts for weapons but not the actual weapons themselves.

Dusseldorf-based Rheinmetall employs 23,268 staff and has a market value of €7.1 billion. In addition to weapons, it makes defense equipment such as tanks, infantry equipment, and automotive parts such as pistons and ball bearings.

Rheinmetall fetches 14.4 times this year’s expected earnings and is valued at a 30% discount to its peers. While the shares have gained 83% so far this year to €151.95, Alexander Neuberger, an analyst at Metzler, predicts it could rise to €210.

A key indicator is its geographical breakdown of revenue. Berenberg’s Law says Rheinmetall derives 64% of revenue in Europe, making it well placed to benefit from any increase in military spending in the region.

But modern wars are also being fought away from the front lines. Law screened defense stocks that derived revenue in 2021 from both weapons and ammunition as well as cybersecurity divisions that battle the spread of disinformation and electronic warfare. The top three were BAE, with 34% combined revenue, Chemring, at 31%, and Rheinmetall, at 23%.

Rheinmetall says preliminary figures for 2021 show an operating profit of €595 million, up €149 million from the prior year, on sales of €5.65 billion, up by €253 million from the year before.

London-listed Chemring employs 2,300 workers and has a market value of £1.2 ($1.6 billion). Shares in the maker of missile components, and sensors able to detect explosive, biological, chemical, radio, or cyber threats, are up 20.6% on the year to £3.35. Investec rates the stock a Buy with a price target of £4.30. Chemring fetches 18 times this year’s expected earnings and is valued at a 10% premium to its peers.

CEO Michael Ord in a statement says that “the outlook for Chemring remains strong.” A BAE spokesperson tells Barron’s that “we’ve seen increased spending in Europe over recent years and expect to see that continuing.” Rheinmetall didn’t respond to requests for comment.

BAE, which helps make the F-35 combat aircraft, is one of Europe’s largest defense companies. It employs 81,000, and has a market value of £29 billion. The company fetches 13.7 times this year’s expected earnings and is valued at a 20% discount to its peers. Shares up 39% this year at £7.34.

U.S. to explore alternatives to deal without Russia if Moscow doesn’t back away over next week from demands for exemptions; Iranian missile attack on Iraq complicates diplomatic effort

The U.S. won’t negotiate exemptions to Ukraine-related sanctions on Russia to save the 2015 Iran nuclear deal and could try to strike a separate accord excluding Moscow, a senior U.S. official said, a diplomatic effort complicated by an Iranian missile attack on Iraq that sent American troops rushing for shelter.

With one of President Biden’s top foreign-policy goals imperiled, the U.S. official said Washington would start exploring alternatives to the deal over the next week if Russia didn’t back away from its demands for written guarantees exempting Russia from Ukraine-related sanctions that could curtail its future trade with Iran. Such guarantees could undercut the West’s punishing array of sanctions leveled at Russia over the Ukraine invasion.

“I don’t see the scope for going beyond what is within the confines of the JCPOA,” the U.S. official said, referring to the 2015 nuclear deal formally known as the Joint Comprehensive Plan of Action. “I think it’s pretty safe to say that there is no room for making exemptions beyond those.”

Meanwhile, Iran’s top paramilitary force took responsibility for a missile attack early Sunday on what it claimed were Israeli targets. It said the strike was in response to recent Israeli actions in the region, which included an airstrike last week in Syria that killed two of the group’s commanders.

The Iranian attack is likely to create more regional resistance to American efforts to strike a new nuclear containment deal with Iran. The U.S. effort to resurrect the deal with Iran, which then-President Donald Trump withdrew from in 2018, has drawn criticism from Israeli and Persian Gulf leaders who worry that it will allow Tehran to continue to arm allies across the region and carry out its own missile strikes with impunity.

American, Iraqi and other world leaders condemned Sunday’s missile strike as a destabilizing act, as the Israeli military stepped up its defenses and U.S. officials considered how to respond. The French foreign ministry warned that the strike could imperil talks over the nuclear deal.

U.S. Deputy Secretary of State Wendy Sherman said U.S. officials are still seeking an agreement to curb Iran’s nuclear program despite the Iranian missile strike in Iraq.

“If Iran has a nuclear weapon, its ability to project power into the Middle East and to deter us, our allies, and partners, is enormous,” Ms. Sherman said on Fox News Sunday. “So President Biden believes very strongly, as does Secretary Blinken, as do I, that we need to make sure that Iran never obtains a nuclear weapon, and then we also need to deal with their malign behavior in the region.”

Time is pressing. U.S. and European officials say that Iran’s nuclear work has expanded close to a point that the deal’s main benefit to the West—keeping Iran months away from amassing enough nuclear fuel for a nuclear weapon—would be impossible. Iran is currently just a few weeks from that so-called breakout point.

The senior U.S. official said an agreement between Iran and the U.S. was “within reach,” saying only a few issues were holding up a deal when talks in Vienna were broken off Friday because of Russia’s demand. The official called Russia’s demands “the most serious stumbling block and obstacle to reaching a deal.”

There was no comment from Iran or Russia.

European officials say Russia had promised to respond with its precise demands for guarantees in the next few days. They have also started to explore among themselves options for pursuing a deal without Russia, two diplomats said.

“We would know within a week whether or not Russia is prepared to back down,” the U.S. official said.

Earlier this month, as Western diplomats were seeking to wrap up the talks, Russia requested guarantees that its work under the JCPOA would be exempted from Western sanctions over Ukraine. The U.S. had given sanctions waivers for the 2015 deal.

However after Russian Foreign Minister Sergei Lavrov told reporters Moscow wanted much broader guarantees, its chief negotiator in Vienna, Mikhail Ulyanov, presented a second paper to European negotiators on Tuesday seeking to protect all future trade and investment against Ukraine-related sanctions.

It couldn’t be determined whether Iran would be willing to negotiate an alternative deal without Russia, or whether China—which has grown closer to Russia—would participate.

Mr. Ulyanov on Friday said his country’s demands weren’t the only reason an agreement on reviving the nuclear deal hadn’t been reached. Since negotiations hadn’t concluded, it was his country’s right to raise its concerns, he said.

The U.S. push to salvage the deal also comes as the Biden administration is on the hunt for new oil supplies during the war in Ukraine, as it seeks to contain surging energy prices. Iran could supply up to a million barrels a day of new crude supplies eventually if sanctions are lifted.

One option for the U.S. and its partners would be to create an interim deal that could freeze some of Iran’s activities and wind back aspects of its nuclear program in return for some level of sanctions relief from the U.S. Iran has always rejected the idea of an interim deal.

Another option would be to create what the senior U.S. official called a “replica of the JCPOA,” without Russia, which would assign Moscow’s tasks in the agreement elsewhere.

“I do think we would be open to various alternatives. We are beginning to think about what those might be,” the official said. “We…at this point wouldn’t rule anything out.”

Further complicating any attempt to re-craft a deal with Iran: Tehran has refused to let its negotiators talk directly to the U.S. until Washington lifts its sanctions.

Any new deal would also trigger U.S. legislation giving Congress time for an in-depth review of the accord.

The negotiations in Vienna, which have dragged on for close to a year, aim to agree on the steps the U.S. and Iran would take to return into compliance with the nuclear deal. If Russia’s demands can be resolved, negotiators have said they could be back in Vienna within a few days to finish the talks.

Iran has avoided calling out Russia and has continued to blame the failure to complete the talks on Washington. However there have been hints of irritation from Iranian officials, who have said they wouldn’t let external factors get in the way of their interests.

The senior U.S. official declined to say whether an agreement would have been concluded by now without the Russian intervention. Among the issues still on the table is whether Iran’s Revolutionary Guards would have their Foreign Terrorist Organizations listing removed and what any conditions might be around that, Western diplomats say.

Sunday’s missile attack, which the Revolutionary Guards claimed, could make any immediate attempt to remove them from the FTO listing more politically explosive.

The missile strikes injured at least two people, blasted holes in nearby homes, and sent U.S. forces rushing for cover at the American military base in Erbil. At least one missile hit within about a mile of a new U.S. consulate under construction. Erbil is the capital of the semiautonomous Kurdish region in Iraq.

State Department spokesman Ned Price said no U.S. facilities were damaged or personnel injured, adding the White House has no indications the attack was directed at the U.S. “The strikes were an outrageous violation of Iraq’s sovereignty.”

Iran claimed that it was targeting Israelis in the strike. Israel has strong relations with the Kurdish region, but Israeli officials declined to comment on reports that Sunday’s strike was aimed at Israeli spies working in northern Iraq.

Israel has been carrying out airstrikes against Iranian-backed militias and Iranian personnel in Syria as it seeks to prevent Iran from transferring weapons to Hezbollah, the Lebanese militia group. The campaign includes placing mines on ships carrying oil and other goods that are bound for Syria.

The Iranians, in turn, have often sought to pressure the U.S. to constrain its Israeli ally.

In October, Iran directed five drones at the al-Tanf garrison in southern Syria, which is defended by a small contingent of U.S. forces and American-trained Syrian fighters. The Iranians said in a confidential message to the U.S. at that time that the attack was in response to an Israeli airstrike that killed two Iranian officers in Syria, U.S. officials said.

In January, the massive U.S. Embassy complex in Baghdad was struck by four rocket attacks that injured at least two individuals but no U.S. personnel were hurt. That attack originated from inside Baghdad and was believed to have been carried out by an Iranian-backed militia group.

Banks told to provide information on sanctioned oligarchs

UK financial regulators want details of how wealthy Russians shift their money around the world

UK financial regulators have ordered banks to contribute to a crackdown by western governments on oligarchs and companies with links to Russian president Vladimir Putin, by sharing information about how sanctioned individuals and businesses move their money around the world.

The British government on Thursday added seven oligarchs, including Chelsea Football Club owner Roman Abramovich, to its list of sanctioned individuals and companies which banks are banned from doing business with because of alleged links to Putin.

People briefed on the situation said the Financial Conduct Authority has told banks it is not enough for them to sever ties with sanctioned oligarchs and companies, and the financial institutions were being asked to inform on their former clients, including any moves by them to dodge restrictions.

The British government has said it is freezing the UK assets of sanctioned individuals, as well as banning them from coming to the country, following Russia’s invasion of Ukraine. The restrictions are meant to cut off wealthy Russians’ access to British banks.

The US and the EU have also imposed sanctions on oligarchs and businesses with alleged ties to Putin. The lists of people and companies targeted by the US, EU and UK are not identical.

A spokesperson for the FCA confirmed the banks had been asked to play a wider role than just refusing to do business with sanctioned individuals and companies.

“We want [the banks] to feed into the . . . UK response,” she added. “It’s incredibly important for us to see from banks how those subject to sanctions are behaving.”

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Banks have a special view of the complex web of companies and other structures used by wealthy Russians to hold their assets and move money across the world.

The FCA spokesperson said banks’ contribution to the wider efforts by the UK would include them helping the authorities to understand how those subject to sanctions were behaving.

Banks have been supplying information to the FCA and National Economic Crime Centre, a body involving the financial regulator, the National Crime Agency and the Home Office, since the UK government first imposed sanctions on oligarchs and companies with alleged links to Putin last month, she added.

She said any banks that withheld information on matters including attempts to avoid sanctions would be judged as not having the “open and transparent relationship” they are required to have with their regulators.

Asked about the consequences of any such behaviour, the FCA said it had a “full toolkit” it can use for banks that do not keep to the terms of their operating licences.

Several bankers said their companies would abide by the request for information from the FCA.

“It would be a brave bank in this environment not to comply,” said one banker.

UK Finance, the trade body that represents most of the banks doing business in the country, said the industry “fully supports the government’s sanctions activity and is swiftly enacting and abiding by any measures introduced”.

“The sector is committed to tackling economic crime and already goes well beyond its legal and regulatory obligations,” it added.

White House fears move is sign of increasingly close ties between Beijing and Moscow

Russia has asked China for military ​equipment to ​support its invasion of Ukraine, ​sparking concern in ​the White House that Beijing ​may undermine western efforts to help Ukrainian forces defend their country.

US officials told the Financial Times that Russia had requested military equipment and other assistance since the start of the invasion. They declined to give details about what materiel Russia had requested.

Another person familiar with the situation said the US was preparing to warn allies about the situation amid some indications that China may be preparing to help Russia. Other US officials have also said there were signs that Russia was running out of some kinds of weaponry as the war in Ukraine approaches the start of its third week.

The White House did not comment. The Chinese embassy in Washington did not respond to a request for a comment.

The revelation comes as Jake Sullivan, US national security adviser, heads to Rome for talks on Monday with Yang Jiechi, China’s top foreign policy official. People familiar with the situation said Sullivan would sternly warn China that any efforts to help Russia prosecute the invasion or avoid western sanctions would have consequences.

Before leaving Washington on Sunday, Sullivan warned China not to try to “bail out” Russia by helping Moscow to circumvent the sanctions that the US and its allies have imposed on Putin and his regime.

“We will ensure that neither China, nor anyone else, can compensate Russia for these losses,” Sullivan told NBC television on Sunday. “In terms of the specific means of doing that, again, I’m not going to lay all of that out in public, but we will communicate that privately to China, as we have already done and will continue to do.”

The request for equipment and other kinds of unspecified military assistance comes as the Russian military struggles to make as much progress in Ukraine as western intelligence believe they expected.

It also raises fresh questions about the China-Russia relationship, which has grown increasingly strong as both countries express their opposition to the US over everything from Nato to sanctions.

China has portrayed itself as a neutral actor in the Ukraine crisis and has refused to condemn Russia for invading the country. The US has also seen no sign that Chinese president Xi Jinping is willing to put any pressure on Vladimir Putin, his Russian counterpart.

The two leaders signed a joint statement in Beijing last month describing the Beijing-Moscow partnership as having “no limits”, in another sign that the two capitals were drawing even closer together.

Bloc discusses asset freezes and travel bans against 15 more individuals

The EU is preparing a fresh round of restrictions on Russian business people, with Roman Abramovich among the intended targets, in the wake of Moscow’s invasion of Ukraine.

Ambassadors from EU member states met in Brussels on Sunday to go through the proposed list, with Abramovich one of the 15 individuals being considered, according to a draft legal text seen by the Financial Times. Ambassadors are expected to reconvene on Monday to finalise the measures and convert them into law, assuming no changes are requested.

The deliberations in Brussels come after Abramovich, a prominent Russian businessman who became well known in the UK after buying Premier League football club Chelsea, was first sanctioned with a full asset freeze and travel ban by the UK last Thursday. In addition to his Russian nationality, Abramovich also holds Portuguese and Israeli citizenship.

Abramovich is to be listed in the EU because of his “long and close ties” to Russian president Vladimir Putin which have “helped him maintain his considerable wealth”, including his holdings in the steel group Evraz, according to the draft legal text. He is described as “one of the leading Russian business persons . . . providing a substantial source of revenue to the [Russian] government”.

Of the 15 listed individuals, four are described as oligarchs, including Abramovich, seven as businesspeople with links to the Kremlin and four are linked to Russia’s disinformation campaign.

The final text is expected to be adopted on Monday, with no objections raised by ambassadors on Sunday to the 15 names. A spokesman for the European Commission declined to comment.

Also under consideration are further economic sanctions against state-owned Russian enterprises that have not yet been listed, for instance in the field of aviation and shipbuilding. A rating ban targeting Russian banks, an import bar on Russian iron and steel products and a prohibition on new investments in the Russian energy sector and the export of luxury goods to Russia are also being considered, according to two diplomats familiar with the discussions. One of the issues still to be ironed out by ambassadors reconvening on Monday is the cut-off amount for luxury goods — €300 proposed in the EU compared with $1,000 under the US regime, one diplomat said.

The EU has already sanctioned a number of oligarchs who are considered to be in Putin’s inner circle. Among them are Mikhail Fridman, the founder of Alfa Group, and fellow shareholder Petr Aven; Igor Sechin and Nikolai Tokarev, the chief executives of oil companies Rosneft and Transneft; Mikhail Poluboyarinov, the chief executive of Russian airline Aeroflot; and financier Alisher Usmanov.

Emmanuel Macron, the French president, stressed at the end of a summit in Versailles on Friday that the EU was prepared to go beyond the penalties it has already imposed on Russia. Standing alongside him, Ursula von der Leyen, the commission president, said Brussels was already working on a fourth package of sanctions.

Abramovich, who made his fortune after the tumultuous collapse of the Soviet Union in the 1990s as Russia privatised its oil industry, has in recent weeks put properties in Kensington and Chelsea up for sale. Pointing to estimates, the UK said the tycoon is worth £9.4bn. The UK government on Friday said it would loosen some restrictions on Chelsea to free cash allowing it to keep operating.

Earlier in the war Abramovich flew into Belarus to help broker a truce between Russia and Ukraine. The move comes after the UK last week described him as a “pro-Kremlin oligarch” and slapped sanctions on him, among seven oligarchs.

Some large investors in Instacart have marked down the value of their stakes in the privately held grocery-delivery company by as much as 18% since it raised funds a year ago at a $39 billion post-investment valuation, previously unreported figures show. The moves indicate that the recent sell-off in technology stocks may be starting to affect investor perceptions of startups that raised at high prices last year, particularly in competitive sectors like online delivery.

Fidelity’s Growth Company Fund, which holds stock in both private and public companies, on November 30 valued Instacart shares at $102 apiece, an 18% decline from the $125 share price it paid when it invested in the startup’s Series I round in February 2021, according to public filings. The move implied the investor believed Instacart’s valuation had dropped on paper to a little under $32 billion.

THE TAKEAWAY

• Mutual funds invested in round that valued Instacart at $39 billion

• Fidelity, T. Rowe markdowns follow drop in stocks of DoorDash

• Instacart revenue growth slowed to 20% last year

Meanwhile, mutual fund T. Rowe Price’s Communications and Technology Fund, which first backed Instacart in a July 2020 Series G round, marked down the value of its stake in Instacart by 5% to $119 on December 31 from $125 in the February 2021 fundraising. Hedge fund D1 Capital Partners and venture firms Andreessen Horowitz and Sequoia Capital also participated in that round, though it’s unclear whether they adjusted the value of their stake.

The mutual funds’ lowered valuations follow a drop in the share prices of similar businesses like restaurant-delivery app DoorDash and Grubhub owner Just Eat Takeaway. These stocks fell 22% to 39% from mid-November to year-end. They have both fallen another 40% since the start of the year, broadly in line with a wide range of other tech stocks, although more than the 10%-15% drop in most of the big tech giants. That suggests investors in private delivery firms such as Instacart could further lower their valuations in the months to come.

The mutual funds’ lowered expectations marks a reversal from a year ago, when nine-year old Instacart had become a pandemic darling amid a surge in consumer demand for online delivery. It raised nearly $800 million in three rounds of funding between 2020 and 2021 from a who’s who of big Silicon Valley VC firms and financial giants, vaulting its valuation five-fold from $7.9 billion in 2018. At one point Instacart was the second most valuable private startup in the U.S. after SpaceX, on a path to a late-2021 IPO.

The fundraising outlook for mature startups like Instacart has worsened since then, as a retreat in tech stocks has halted most initial public offerings this year and led some large private investors, such as D1 and Tiger Global, to indicate they would invest less in late-stage startups and instead focus on younger startups or beaten down tech stocks.

It’s not clear if the market downgrade of fast-growing tech stocks over the past few months triggered Fidelity and T. Rowe to mark down their valuations or whether the moves also reflect insight into Instacart’s business. Investors vary in how they value their holdings. For instance, VC firms often keep startups marked at the last private valuation instead of adjusting share prices on a regular basis like mutual funds do. And between them, mutual funds and private equity firms differ in their methods.

In November, in fact, Fidelity did not mark down its investment in Gopuff, the $15 billion valuation instant delivery firm, which provides grocery and convenience item delivery to consumers from a network of warehouses, and which investors frequently compare to Instacart. It also did not mark down the share price of other startups nearing a public listing including Stripe, Databricks, Discord, or Reddit, according to the filings.

Spokespeople for Fidelity and T. Rowe declined to comment.

20% Revenue Growth

Instacart’s business slowed dramatically last year as vaccines became widely available in the U.S. and consumers returned to in-store grocery shopping. Instacart’s net revenue rose last year to around $1.8 billion, said a person with direct knowledge of the matter, roughly 20% higher than the $1.5 billion in net revenue it generated in 2020 but a slower rate than the tripling in revenue it achieved during the first year of the pandemic. Last year’s net revenue excludes fulfillment and service costs like the money paid out to gig economy workers who pick and deliver the groceries, as well as discounts and coupons given to customers.

By contrast, DoorDash’s net revenue grew 69% to $4.9 billion in 2021 thanks to continued high demand for restaurant delivery even after the end of U.S. lockdowns. The number similarly excludes money paid out to restaurant merchants and delivery workers and various customer promotions.

Instacart is also facing growing competition from rivals like DoorDash and Uber’s UberEats, which are expected to grow their own market share in the online grocery market and have already begun to work with retailers that were once exclusive to Instacart. Albertsons last year struck a partnership with DoorDash to offer grocery delivery from around 2,000 stores. And Costco, one of Instacart’s largest customers, began piloting grocery delivery services with Uber in Texas in July.

Instacart last year also pushed off plans to go public to focus instead on developing new services for retailers like smart check-out carts amid the heightened competition, The Information previously reported. The startup also suffered executive turnover, including a CEO switch in August from founder Apoorva Mehta to ex-Meta Platforms executive Fidji Simo and the departure of president Carolyn Everson in December, who left after just three months on the job.

Instacart also engaged in merger talks with DoorDash over the summer for a price that would have likely been between $40 billion and $50 billion, The Information first reported. Those talks fell apart in part due to concerns that the deal wouldn’t get past antitrust regulators.

It’s unlikely Instacart would be able to fetch a price anywhere near that range if it were to seek a new round of private funding or go public in the current fundraising environment. The firm currently has no plans to do either and is sitting on at least $1 billion in cash, said a separate person with direct knowledge.

BERGAMO, Italy, March 12 (Reuters) - Italian police have seized a superyacht owned by Russian billionaire Andrey Igorevich Melnichenko, the prime minister's office said on Saturday, a few days after the businessman was placed on an EU sanctions list following Russia's invasion of Ukraine.

The 143-metre (470-foot) Sailing Yacht A, which has a price tag of 530 million euros ($578 million), has been sequestered at the northern port of Trieste, the government said.

Designed by Philippe Starck and built by Nobiskrug in Germany, the vessel is the world's biggest sailing yacht, the government said.

Melnichenko owned major fertiliser producer EuroChem Group and coal company SUEK. The companies said in statements on Thursday that he had resigned as a member of the board in both companies and withdrawn as their beneficiary, effective Wednesday.

A spokesperson for Melnichenko, Alex Andreev, said the businessman had "no relation to the tragic events in Ukraine. He has no political affiliations".

"There is no justification whatsoever for placing him on the EU sanctions list," Andreev said. "We will be disputing these baseless and unjustified sanctions, and believe that the rule of law and common sense will prevail.

Since last week Italian police have seized villas and yachts worth more than 700 million euros ($763.63 million) from high-profile Russians who have been placed on the EU sanctions list, Economy Minister Daniele Franco said on Saturday.

"So far we have hit what was visible, now we have to hit the rest such as shareholdings. We are doing a great job to bring out what is shielded by trusts and front names," Giuseppe Zafarana, head of the Italian tax police, told journalists in Bergamo on Saturday.

The police operations were part of a coordinated drive by Western states to penalise wealthy Russians they say are linked to President Vladimir Putin. read more

Separately, a superyacht reported to be owned by Russian businessman Roman Abramovich arrived in Montenegro's territorial waters on Saturday morning, according to a Reuters photographer.

The Solaris is one of a string of yachts owned by Chelsea Football Club owner Abramovich, according to reports in luxury goods publications SuperYachtFan, SuperYacht Times and Forbes.

The 140-metre (460-foot) vessel is moored off the luxury resort Porto Montenegro in the town of Tivat. The boat left Barcelona on Tuesday. read more

Britain imposed sanctions on Abramovich on Thursday, freezing his assets and citing what it called his close relationship with Putin. Abramovich has denied having such ties.