Early premarket gappers
- Gapping up:
- CGNX +11.9%, SWAV +11.3%, APPN +11.1%, LTHM +10.5%, DLR +8.6%, ASPN +8%, QDEL +6.7%, HASI +6.1%, CNA +5.7%, AL +5.3%, AJRD +4.6%, RCEL +4%, AMN +4%, CE +3.8%, EFC +3.5%, FTV +3.2%, OBSV +3%, DD +2.8%, XOS +2.6%, MATX +2.4%, EXEL +2.3%, ATR +2.1%, CWST +2%, GLOB +1.9%, TSLX +1.7%, ONB +1.6%, HLTH +1.5%, NVS +1%, MHO +0.9%, SAND +0.9%, RLGY +0.8%, AAPL +0.7%, MPW +0.6%, DE +0.6%
- Gapping down:
- RDFN -26%, ROKU -24.9%, PPC -18.5%, DOMA -15.1%, SHAK -13.2%, DBX -6%, BJRI -5.3%, LASR -4.9%, MERC -3.7%, GMED -2.9%, SKT -2.8%, PK -2.7%, KEYS -2.7%, TDS -2.4%, BMRN -2.3%, NLOK -1.7%, OEC -1.6%, CHUY -1.6%, WIRE -1.4%, RUN -1.4%, NWG -1.4%, INTC -0.9%
After Hours Summary: Busy earnings night, but some big name lower: ROKU -20.7%, DOMA -19.3%, RDFN -14.8%, SHAK -10.3%; PPC -15.7% falls as JBS SA reportedly withdraws bid to acquireAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: APPN +11.7%, CGNX +11.4%, LTHM +10.3%, SWAV +9.2%, ASPN +8.4% (also announces $150 mln investment from Koch Strategic Platforms; also to construct an advanced manufacturing facility), QDEL +7.4%, EXEL +5.6%, AL +5.4%, AMN +3.8%, RLGY +3.6%, TDS +2.7% (also increases dividend), MATX +2.4%, ATR +2.1%, CWST +1.4%, CHUY +0.8%, GLOB +0.8%, MSA +0.3%, LBTYA +0.2%, AEE +0.1%, DRH +0.1%
Companies trading higher in after hours in reaction to news: RCEL +4.4% (FDA approves PMA supplement for RECELL, US product launch planned for Q2), HLTH +1.5% (HLTH partners with CAH expand distribution of HLTH's COVID-19 tests), ONB +1.4% (announces $200 mln stock repurchase authorization), SAND +0.9% (to sell certain non-royalty and non-stream assets to Royalty North), ERIC +0.9% (US ITC launches investigation based on ERIC's patent complaint against AAPL), WIRE +0.8% (approves 2 mln share repurchase program), ABT +0.6% (initiates voluntary recall of powder formulas manufactured at Sturgis facility), ACMR +0.4% (announces purchase orders for 13 Ultra ECP map and 8 Ultra ECP ap copper plating systems), MHO +0.2% (approves $100 mln increase to existing share repurchase authorization), MPW +0.1% (increases dividend), FTV +0.1% (approves 20 mln share repurchase program), CWEN +0.1% (increases dividend), AAPL +0.1% (US ITC launches investigation based on ERIC's patent complaint against AAPL)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: ROKU -20.7%, DOMA -19.3%, RDFN -14.8%, SHAK -10.3%, BJRI -8.1%, LASR -4.9%, DBX -4.5% (also approves new $1.2 bln share repurchase authorization), GMED -3.5%, RUN -3.1%, PK -2.6%, OEC -1.8%, AUY -1.7%, DLR -1.3%, KEYS -0.9%, AEL -0.8%, VTR -0.7%, SKT -0.5%, KNSL -0.1%, TSLX -0.1%, WRE -0.1%, INST -0.1%
Companies trading lower in after hours in reaction to news: PPC -15.7% (JBS SA withdraws proposal to acquire PPC, according to Reuters), NLOK -1.9% (expects to close merger with Avast plc on April 4), XOS -1.7% (enters into dealership agreements with MHC Xos), BMRN -1.2% (provides update on gene therapy programs), AN -0.9% (files mixed securities shelf offering), OBSV -0.7% (stock offering), MMI -0.2% (initiates semi-annual regular dividend of $0.25/sh and special dividend of $1.00/sh), NOC -0.2% (awarded $250 mln Navy contract), PSN -0.1% (enters into collaborative agreement with Battelle Memorial), CNA -0.1% (files mixed securities shelf offering), ETD -0.1% (purchases assets from Dimension Wood Products)
Chinese Developer Is In Fresh Trouble Months After Debt Swap
Yango Group didn’t pay $27 million before end of grace period
A Chinese developer failed to make overdue interest payments on two dollar bonds months after winning a reprieve from debt investors, the latest hit to the country’s deeply troubled offshore bond market.
The speed with which Yango Group Co. 000671 2.28% has run into trouble again shows that bond exchanges—a popular tool for developers seeking to avert default and a broader debt restructuring—won’t necessarily be enough to tide over all of these companies through a brutal industry downturn.
Some of the industry’s biggest players and largest international borrowers, such as China Evergrande Group and Kaisa Group Holdings Ltd., have already been judged in default on international debt collectively running into the tens of billions of dollars.
Because of factors “including the macroeconomic environment, the regulations on real estate and financial industry and the Covid-19 pandemic, the company is facing a temporary cash-flow issue,” Yango Group said in a filing late Thursday.
A Chinese developer failed to make overdue interest payments on two dollar bonds months after winning a reprieve from debt investors, the latest hit to the country’s deeply troubled offshore bond market.
The speed with which Yango Group Co. 000671 2.28% has run into trouble again shows that bond exchanges—a popular tool for developers seeking to avert default and a broader debt restructuring—won’t necessarily be enough to tide over all of these companies through a brutal industry downturn.
Some of the industry’s biggest players and largest international borrowers, such as China Evergrande Group and Kaisa Group Holdings Ltd., have already been judged in default on international debt collectively running into the tens of billions of dollars.
Because of factors “including the macroeconomic environment, the regulations on real estate and financial industry and the Covid-19 pandemic, the company is facing a temporary cash-flow issue,” Yango Group said in a filing late Thursday.
From spyware to landmine clearance: how Novalpina Capital fell apart
Rift between Stephen Peel and co-founders worsened after argument over potential acquisition of SafeLane Global
The private equity firm behind Israeli spyware maker NSO Group held talks to buy a landmine clearance company that works for Saudi Arabia in Yemen — a divisive deal that contributed to the group’s unravelling.
Novalpina executives considered acquiring UK-based SafeLane Global in late 2019 and early 2020, according to six people familiar with the matter and emails between the co-founders.
At the time, Novalpina was coming under criticism from human rights groups for its fund’s investment in NSO, whose software has been used by nation states to spy on political opponents, activists and journalists. NSO has since been sued by Apple and WhatsApp, while the US has added it to a trade blacklist.
The acquisition of SafeLane was pushed by Novalpina’s co-founder Stephen Peel, a former British Olympic rower who had previously worked at Goldman Sachs and TPG.
But he met stiff resistance from his two co-founders Bastian Lueken and Stefan Kowski, widening a rift between the men which ultimately led to investors seizing control of the private equity firm last year.
Kowski and Lueken believed using some of Novalpina’s €1bn fund, whose investors include the pension pots of Yorkshire public sector workers and British Gas employees, would add to the embattled firm’s reputational risk.
In an email to 18 colleagues in February 2020, later submitted to a Luxembourg court as part of a legal dispute, Lueken said the proposed SafeLane deal, known as Project Matisse, did not appear “quite right”.
He expressed concern that SafeLane could be criticised for “making money in war zones” and “putting locals in harms [sic] way”. That “may be a harsh way of articulating the story but given the flak were [sic] already getting this may well be how this comes out in the media”, Lueken said in the email.
Peel told Kowski he did not want to work at a firm where colleagues stopped him from doing deals.
In an email, Peel told Kowski he was “quite upset that you somehow believe your investment judgment trumps mine” and that “if you and I cannot agree on this, we should face up to it that there is not a future for the firm”. Novalpina ultimately did not make a binding bid for SafeLane.
Rather than further jeopardise the public perception of Novalpina, Peel appeared to believe the investment would help the firm. He had a “romantic picture” of SafeLane and associated it “with the image of Lady Diana” walking through an active minefield in Angola, in the view of one person close to the matter. After the criticism over NSO, the person said, “the association with a humanitarian cause was seen as a really good thing”.
In response to a summary of the FT’s reporting and a request for comment, Peel said: “These fictions do not merit comment.”
Kowski and Lueken declined to comment.
Lueken’s concerns about SafeLane “making money in war zones” were rejected by the company’s chief executive Adam Ainsworth, a former officer in the British Army.
“It seems counter-intuitive for Bastian Lueken to express a view such as this given the nature of NSO’s work,” Ainsworth told the FT.
NSO declined to comment.
SafeLane “is just doing humanitarian work”, Ainsworth said. “We’re just picking up ordnance.”
He added: “If you’ve, god forbid, ever been somewhere where you’ve seen some kids playing catch with a cluster bomb and see what happens when they drop it — if you can make sure that cluster bomb isn’t there for them to play catch with, you genuinely can make lives better.”
In a February 2020 email about the SafeLane deal submitted in the court dispute between the three men, Peel told Kowski, “I blame myself for trying to set up a governance that was egalitarian” and added, “I am saddened but now accept that is where we are”.
One person with knowledge of the dispute said that one of Peel’s colleagues was satisfied with the company’s safety record and compliance and corporate conduct policies, and believed Lueken and Kowski were opposing too many deals with insufficient reason.
Peel seemed to take “criticism of the deal . . . as an effort to undermine him personally”, one person close to the matter said. “That’s where the consequences [for] the relationship between the founders began to show.”
After the SafeLane deal was abandoned, Novalpina continued to pursue other deals, buying the French pharmaceuticals business Laboratoire XO and Romanian gambling operator MaxBet, using its fund.
But the rift between the co-founders proved irreparable. Lueken and Kowski wrote to Novalpina’s investors last June, shortly before the trio were stripped of control, saying Peel had proposed to wind up the firm unless decisions were taken that they thought were “inappropriate for our fund”.
SafeLane, which has worked in more than 60 countries and counts Denmark’s former prime minister Helle Thorning-Schmidt as a board member, is working on Project Masam, a Saudi project to clear landmines in Yemen.
The Yemen project was SafeLane’s largest and most profitable contract at the time Novalpina considered the deal, two people with knowledge of the matter said.
The project has cleared more than 300,000 mines, improvised explosive devices and other items of unexploded ordnance in its first four years, the company said.
Twenty-eight people working on the Yemen project for SafeLane have died in that time, according to the company, of which 10 died in demining incidents and 18 in security incidents.
The research group Mine Action Review said in a report in October that the project “has not undergone independent investigation and verification to inform the sector on circumstances surrounding its casualties, thought to be among the highest recorded by single project”.
Ainsworth said Mine Action Review’s comments were “anecdotal” and the organisation had not visited the project.
Yemen is contaminated with mines from a series of conflicts since the 1960s. Saudi Arabia intervened militarily in Yemen’s civil war in 2015 when it led an Arab coalition against Iranian-aligned Houthi rebels. The UN says the conflict has triggered the world’s worst man-made humanitarian crisis.
“A big part of the conflict has been the use by all sides, but by the Houthis in particular, of landmines,” said Peter Salisbury, a senior analyst on Yemen at the International Crisis Group.
Saudi Arabia funds humanitarian work including clearing mines in Yemen at least partly because it “clearly sees value” in bolstering local support for the military campaign and for Yemen’s internationally recognised government which it backs, he said.
SafeLane is “an apolitical organisation” that does not “partner or collaborate with any national militaries in the pursuit of their aims”, Ainsworth said.
Kowski had suggested more questions should be asked about the arrangements behind Project Masam if talks on the deal were to proceed, and Lueken had said he was concerned that the contract for the project could end if there was political change in Saudi Arabia.
A lack of transparency and oversight in state finances are “major problems” in Saudi Arabia, according to a 2020 report by Transparency International.
Ainsworth told the FT that while Saudi Arabia ultimately controlled Project Masam in Yemen, his company had a contract with a Dubai-based company, Dynasafe Middle East Project Management, to work on it.
“I invoice them,” he said. “They pay me . . . Where their money comes from, what they do, that’s their business, that’s not part of my contract.”
He said SafeLane “conducts extensive compliance checks on its counterparties” and noted Saudi Arabia was a large humanitarian aid donor to Yemen. “I believe Project Masam was a small part of that programme,” he said.
Proponents of the SafeLane deal within Novalpina argued that the company’s work in conflict zones was high-margin and a good source of cash flow, and that it could expand its work on building projects in the UK and Germany, clearing unexploded ordnance from the second world war, one of the people said.
SafeLane made pre-tax profits of $7.7mn in 2020, down from $15.4mn in 2019, its latest published accounts show.
Asked about the workers’ deaths, the company said its “thoughts and prayers are with all our lost friends and colleagues”.
“The project is operating in an ongoing armed conflict, with everchanging frontlines and terrorist activity, and has not been without incident,” SafeLane said.
Fidelity launches physical bitcoin ETP in Europe
The fund is listed on Frankfurt’s Xetra and is set to start trading on Zurich’s Six in the coming weeks
Fidelity International has launched a physical bitcoin exchange traded product in response to a growing demand for digital assets among European investors.
The product launch comes three months after Invesco brought its own bitcoin ETP to the market amid a growing willingness by large asset managers to enter the cryptocurrency arena.
Fidelity’s Physical Bitcoin ETP, which will be available to professional and institutional investors in Europe, is domiciled in Germany and listed on Xetra in Frankfurt. The product will start trading on Zurich’s Six in the coming weeks.
Fidelity Digital Assets, the digital assets arm of US-based Fidelity Investments, will act as custodian for the ETP.
Nick King, head of exchange traded funds at the $813bn asset manager, said the launch was an “important evolution” in his company’s ETP offering and the first step in its “digital assets product capability”.
This article was previously published by Ignites Europe, a title owned by the FT Group.
The ETP has an ongoing charges figure of 0.75 per cent and launched with about $6mn of assets.
Christian Staub, managing director for Europe at Fidelity, said the ETP’s “underlying distributed ledger technology has the potential to revolutionise the financial system over time and disrupt many parts of the financial world with profound implications for investors”.
A recent survey conducted by Fidelity Digital Assets showed that 70 per cent of institutional investors expected to buy or invest in digital assets “in the near future”.
More than 90 per cent of respondents who said they were interested in digital assets expected to have an allocation to the asset class within the next five years.
The launch comes after Fidelity Digital Assets was granted official registration status with the UK regulator, the Financial Conduct Authority, for its digital assets custody and trade execution business late last year.
The digital assets arm of Fidelity Investments was previously listed as a temporary member on the register of the FCA but it has now been moved to the watchdog’s permanent register.
Fidelity Digital Assets initially launched its digital assets services for institutional investors in the US but established a European outpost in London in late 2019.
In early December, Fidelity Investments launched a Canadian-domiciled physical bitcoin ETF, which has $30mn in assets.
France to pump €2bn into EDF as energy group grapples with production snags
State-controlled company plans €2.5bn rights issue to redress finances
The French government is set to pump €2.1bn into EDF as the state-controlled power group struggles with drops in production and shoulders the cost of France’s bid to cap energy bill prices.
The company said on Friday it would resort to a €2.5bn rights issue to redress its finances. Outages at several French nuclear power plants, which have forced it to slice its production outlook, amounted to a €11bn hit to core profits for 2022, EDF added.
That comes on top of an estimated €8bn in core profits wiped out by the French state’s move to cap energy bills for households and businesses at 4 per cent this year. The government said in January it would make EDF shoulder the cost of that measure in the face of soaring wholesale prices, pushing the group to sell more of its nuclear power at reduced rates to other rivals in France.
The state’s move rattled EDF’s top ranks, just as the group is set to embark on the construction of new nuclear power plants in France for an estimated €50bn — its biggest French order in decades and which also comes alongside a costly maintenance programme for older reactors.
EDF said on Friday it would embark on another round of asset sales over the next two years, aiming to raise €3bn. It plans to offer an option for shareholders to receive dividends in shares rather than solely in cash this year and next.
The group’s profit in 2021 rose almost eightfold to €5.1bn, while core profit, helped by higher nuclear power production last year and its trading business, climbed 11.3 per cent to €18bn. EDF said hits to its core profit in 2022 would still be offset in part by a positive €6bn boost from higher energy prices.
Bruno Le Maire, French finance minister, told RTL radio on Friday that he did not rule out more government measures to help consumers and businesses with high energy prices in 2023.