FT : Robinhood to acquire UK crypto group Ziglu

Robinhood to acquire UK crypto group Ziglu
Acquisition by US retail brokerage comes almost 2 years after it abandoned a plan to expand into Britain

Robinhood has agreed to buy UK crypto company Ziglu, as the US retail brokerage steps up its expansion beyond share trading and makes a second attempt to push into Britain.

The Californian company said on Tuesday that London-based Ziglu’s “impressive team of deeply experienced financial services and crypto experts [will help] accelerate our global expansion efforts”.

Ziglu, founded in 2014 by entrepreneur Mark Hipperson who helped establish UK digital lender Starling Bank, allows retail investors to buy cryptocurrencies. Robinhood did not say how much it was paying for Ziglu.

The group, which was valued at £85mn last November when it raised £7mn, said its customer base grew fourfold last year as investor enthusiasm for crypto exploded and the sector attracted more investment from mainstream financial companies.

The acquisition by Robinhood comes just over two months after the brokerage warned that the pandemic-driven retail trading boom was cooling. Shares in Robinhood have fallen more than 30 per cent this year.

The Ziglu purchase also hands Robinhood one of the few crypto groups to have won approval from the UK’s financial regulator.

The Financial Conduct Authority’s registration regime, which focuses on an applicant’s money laundering controls and has been plagued by delays, has given the green light to just 33 of the more than 100 crypto companies that have applied since early last year. The regulator has put new applications on hold while it deals with the backlog.

Ziglu is the third UK crypto company with FCA approval to draw the interest of a potential buyer this year. In February, Austrian exchange Bitpanda bought Trustology. The following month, Binance announced a partnership with exchange Eqonex, which owns an FCA-registered unit, in a deal the companies said could lead to a tie-up.

The UK regulator has said that while it does not have the authority to investigate any change in ownership of registered crypto businesses before a deal is completed, it can “take steps to suspend or cancel the registration of a cryptoasset business if it is not satisfied the firm or its beneficial owner is fit and proper” following a transaction.

Robinhood said it eventually planned to integrate Ziglu and expand its operations into Europe. The deal is the first time the US brokerage has targeted the UK since it abandoned a plan to expand into the market in July 2020.

The UK government earlier this month laid out plans to become a “global hub” for crypto as competition among countries to grab a share of the fast-growing but controversial industry intensifies.

(ZeroHedge) 3 Factors Which Are About To Make The Coming Food Shortages Even Wor

3 Factors Which Are About To Make The Coming Food Shortages Even Worse

A confluence of circumstances has come together to create a “perfect storm” for global food production, and now that “perfect storm” is about to get even worse. For months I warned that this crisis was coming, and in recent weeks I have been documenting how dire conditions have already become all over the globe. The head of the UN World Food Program is warning that this is going to be the worst worldwide food crisis since World War II, and even Joe Biden is admitting that the approaching food shortages “are going to be real”. Unfortunately, there have been some new developments which threaten to significantly escalate things.

In recent days, the number of newly confirmed COVID cases in China has soared to record highs, and Chinese authorities have responded to this with unprecedented lockdowns.
As a result, almost 400 million Chinese are now “under full or partial lockdown”…
Nearly 400 million people across 45 cities in China are under full or partial lockdown as part of China’s strict zero-Covid policy. Together they represent 40%, or $7.2 trillion, of annual gross domestic product for the world’s second-largest economy, according to data from Nomura Holdings.
Analysts are ringing warning bells, but say investors aren’t properly assessing how serious the global economic fallout might be from these prolonged isolation orders.
Chinese lockdowns are a lot more brutal than lockdowns in the western world.
By now, you have probably seen video footage of Shanghai residents literally screaming from their apartment windows.
I have never seen anything like that before, and these lockdowns will continue as long as COVID keeps spreading.
To put this in perspective, the number of people that are currently locked down in China is greater than the total population of the United States.
Needless to say, these lockdowns are bringing the Chinese economy to a grinding halt, and that is going to affect the entire planet. At the Port of Shanghai, activity “is essentially at a standstill”…
The Port of Shanghai, which handled over 20% of Chinese freight traffic in 2021, is essentially at a standstill. Food supplies stuck in shipping containers without access to refrigeration are rotting.
This is an enormous problem for those of us in the western world, because our stores are normally filled with goods that have been made in China.
And this even extends to our food supply. For example, we send giant mountains of apples to China where they are processed and sent back to us as apple juice.
We need to hope that the lockdowns in China end soon, because if that does not happen it will likely create tremendous shortages all over the planet.
Meanwhile, the fertilizer crisis in the United States is about to get even worse.
Previously, I have written about how the skyrocketing cost of fertilizer is going to cause massive problems for many U.S. farmers, and now many of those farmers may not be able to get the fertilizer that they need at all due to “railroad-mandated shipping reductions”. The following comes directly from a notice released by CF Industries…
CF Industries Holdings, Inc. (NYSE: CF), a leading global manufacturer of hydrogen and nitrogen products, today informed customers it serves by Union Pacific rail lines that railroad-mandated shipping reductions would result in nitrogen fertilizer shipment delays during the spring application season and that it would be unable to accept new rail sales involving Union Pacific for the foreseeable future. The Company understands that it is one of only 30 companies to face these restrictions.
CF Industries ships to customers via Union Pacific rail lines primarily from its Donaldsonville Complex in Louisiana and its Port Neal Complex in Iowa. The rail lines serve key agricultural areas such as Iowa, Illinois, Kansas, Nebraska, Texas and California. Products that will be affected include nitrogen fertilizers such as urea and urea ammonium nitrate (UAN) as well as diesel exhaust fluid (DEF), an emissions control product required for diesel trucks. CF Industries is the largest producer of urea, UAN and DEF in North America, and its Donaldsonville Complex is the largest single production facility for the products in North America.
I was astounded to hear that 30 different companies will be affected by these reductions.
Someone at Union Pacific needs to give us some straight answers about what is really going on, because the CEO of CF Industries says that this change “could not come at a worse time for farmers”…
“The timing of this action by Union Pacific could not come at a worse time for farmers,” said Tony Will, president and chief executive officer, CF Industries Holdings, Inc. “Not only will fertilizer be delayed by these shipping restrictions, but additional fertilizer needed to complete spring applications may be unable to reach farmers at all. By placing this arbitrary restriction on just a handful of shippers, Union Pacific is jeopardizing farmers’ harvests and increasing the cost of food for consumers.”
Of course this comes in the aftermath of a disastrous winter wheat harvest in the United States, and the winter wheat harvest over in China is being called the worst in history.
So we desperately need a really good growing season in the months ahead, and now that is being jeopardized by more supply chain issues.
At the same time, the new bird flu pandemic in the U.S. just continues to intensify.
On Friday, we learned that Idaho has become the 27th U.S. state to have confirmed cases at a commercial facility…
On Friday, the U.S. Department of Agriculture announced yet another outbreak, this one in two flocks in Idaho, making that the 27th state in which the virus has been found since February.
According to the USDA, the price of a dozen eggs in November hovered around $1. Right now, that price is $2.95 and rising.
The cost of eggs has already gone completely nuts, and it is only going to go higher.
If you don’t eat eggs or anything that contains eggs, then this will not affect you.
Unfortunately, the vast majority of us will be affected by this, and we are being warned that this pandemic could get a lot worse in the months ahead.
Of course the cost of chicken meat and the cost of turkey meat will both continue to soar as well. In fact, one of my readers just wrote to let me know that the price of chicken breasts at his local store shot up 43 percent…
I thought I would give you a quick update on Inflation/Food Shortages.
I just got back from The Dollar General Store in Holden, MO. I was going to buy some Tyson Chicken Breasts to stock up for the future. They went from $6.95 to $9.95. That’s a 43% jump in price!!! There was plenty of them (6 packages) but I just felt like I couldn’t afford them so I didn’t buy any.
Michael have you heard anything about shortages of Crackers??? I had to wait 4 months for a certain type of Cracker to get restocked in The Dollar General Store. I also have been having a lot of trouble getting Saltine Crackers at our local Grocery Store. 2 weeks ago they finally had 1(!!!) box of the type I buy and I grabbed it up immediately. This week none again. Not sure what the problem is.
Gas here is $3.49. Diesel Fuel is $4.69. I feel sorry for the guys that have these big Diesel Pickups with 40 gallon fuel tanks. I have been combining shopping and errands in 1 trip plus letting my Pickup set in the driveway to conserve Gas.
A lot of the factors that are contributing to this growing global food crisis are outside of our control.
But if we could at least bring a halt to the shooting in Ukraine, that would give us a ray of hope.
Unfortunately, negotiations have totally broken down, and U.S. Secretary of State Antony Blinken just told CNN that the war could continue through the end of the year…
Secretary of State Antony Blinken told Washington’s European allies that the US believes the war in Ukraine could last through the end of 2022, CNN reported Friday, citing two European officials.
The report said that many Western officials have assessed there’s no short-term end in sight for the war, and public comments from US officials have reflected this. National Security Advisor Jake Sullivan has warned of a “protracted conflict” that he said could go on “for months or even longer.”
Ukraine and Russia usually account for approximately 30 percent of all global wheat exports, and so we desperately need that war to end.
Sadly, that isn’t going to happen.
These days, it seems as though almost everything that can go wrong for global food production is going wrong, and the stage is being set for the sort of horrific global famine that I have been relentlessly warning about.
Our leaders may be able to print money, but they can’t print food.
If you are waiting for them to wave their magic wands and conjure up a perfect solution to this crisis then I am afraid that you are going to be bitterly, bitterly disappointed

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:

  • NTGR -11.9%, HAL -2.9%, LMT -2.9%, PNFP -1.3%, ELS -0.8%, FNB -0.7%, JNJ -0.4%

Other news:

  • ACAD -7.6% (provided top-line results for Phase 2 study of ACP-044)
  • ACHR -2.8% (named Adam Goldstein as sole CEO)
  • RVP -1.7% (terminated buyback plan)

Analyst comments:

  • FOUR -4.5% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
  • NXPI -2.4% (downgraded to Neutral from Buy at Citigroup)
  • EMN -1.5% (downgraded to Neutral from Buy at BofA Securities)
  • EA -1.4% (downgraded to Neutral from Buy at Goldman)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:

  • SMCI +14.3%, FLGT +5.4%, SBNY +5.4%, SI +5.1%, CFG +2.4%, JBHT +2.1%, HOPE +1.4%, NHI +1.2%, FITB +1.1%

Other news:

  • CMPI +325.7% (Regeneron Pharma (REGN) to acquire CMPI for $10.50/share in cash)
  • AXSM +27.9% (received and agreed to Postmarketing Requirements/Commitments proposed by the FDA with respect to the New Drug Application for its AXS-05 product candidate for the treatment of major depressive disorder)
  • GFF +8.8% (agreed to sell Telephonics Corporation to TTM Technologies [TTMI])
  • BTAI +7.8% (strategic financing agreements by Oaktree Capital Management L.P. and Qatar Investment Authority)
  • ZEN +6.4% (chatter circulates suggesting co has tapped an adviser for a sale process)
  • PLUG +5.8% (to supply Walmart with green hydrogen to fuel retailer's fleet of material handling lift trucks)
  • AVD +3.9% (files preliminary proxy statement; discloses receipt of director nominations from Cruiser Capital)
  • GMAB +1.9% (Q1 net sales of DARZALEX (daratumumab))
  • USAS +1.9% (reports Q1 consolidated attributable production totaled approximately 300000 silver ounces and 1274000 silver equivalent ounces)
  • BGNE +1.7% (presents updated results from Phase 3 RATIONALE-309 Trial of PD-1 inhibitor tislelizumab in first-line RM-NPC; secondary survival endpoint findings were consistent with interim analysis)

Analyst comments:

  • NWE +2% (upgraded to Equal Weight from Underweight at Barclays)
  • LULU +1.7% (upgraded to Buy from Hold at Truist)
  • CRH +1% (upgraded to Overweight from Equal Weight at Barclays)

FT : Stellantis halts operations in Russia as it suspends remaining production

Stellantis halts operations in Russia as it suspends remaining production
Carmaker’s move shows increasing difficulties maintaining operations in country as shipments are disrupted

Stellantis has halted operations in Russia as the car and truck manufacturer suspended remaining production at a plant south of Moscow because of problems obtaining parts.

The company, the latest to stop operations in Russia, said “the rapid daily increase in cross sanctions and logistical difficulties” prompted the move.

The group, formed last year through the merger of Peugeot owner PSA and Fiat Chrysler, had already suspended some of its business with Russia after the invasion of Ukraine.

This included imports and exports of vans and people carriers built at the Russian Kaluga plant for brands such as Fiat and Opel. Some of that production shifted to factories in Britain and France.

For Stellantis, hitting pause on the Kaluga operations, where it produced some 11,000 vans last year, only affects a small part of its overall operations.

But its latest step, affecting the remaining rump of its business for the Russian market, shows the increasing difficulties in maintaining operations in the country, even locally, as shipments of components are disrupted and western suppliers back away.

Car manufacturers globally had already run into problems sourcing semiconductors because of the coronavirus pandemic, which disrupted manufacturing and pushed up demand from industries competing for parts, such as electronics makers.

High-quality chips for cars will be particularly hard to source from within Russia, industry executives say, even if metal parts and other elements can be made locally.

France’s Renault, one of the carmakers most exposed to Russia through its local Avtovaz unit that makes Lada cars, has had to temporarily halt production at that division as it tries to build up stocks of electronic parts.

Renault has also indicated that it was prepared to walk away from its investment in Avtovaz, Russia’s biggest carmaker, although it has yet to outline concrete exit plans. Russia was previously responsible for 10 per cent of Renault’s entire sales,

A number of carmakers including Volkswagen and Ford said they were suspending operations or joint ventures right after Russia invaded Ukraine at the end of February, although few have outlined longer-term plans over how they will deal with those businesses.

Many are still paying employees in Russia, while activity is frozen, ratcheting up costs.

Stellantis said in a statement that it condemned violence and supported “all actions capable of restoring peace”.

It said it had it had suspended its manufacturing operations in Kaluga “to ensure full compliance with all cross sanctions” imposed by the EU, US and other countries, and to protect its employees.

Chief executive Carlos Tavares had played down the expected impact of a war on the company’s operations before the invasion. The company sold 2mn light commercial vehicles globally in 2021.

FT : LG Energy signs $9bn EV supply chain deal in Indonesia

LG Energy signs $9bn EV supply chain deal in Indonesia
Electric vehicle battery maker leads consortium in mining-to-manufacturing push to reduce reliance on China

A South Korean consortium will invest $9bn in Indonesia to build a mines-to-manufacturing electric vehicle supply chain, as battery makers look to reduce their reliance on Chinese suppliers and mitigate commodity price rises following Russia’s invasion of Ukraine.

The group led by LG Energy Solution, the world’s second-biggest EV battery maker, has signed an agreement with local mining company PT Aneka Tamban (Antam) and Indonesia Battery Corporation.

The project will handle the entire battery production process including smelting and refining nickel, manufacturing precursors, cathode materials and cells, and assembling finished products in the south-east Asian country.

Indonesia is the world’s largest producer of nickel, with about 21mn tonnes of reserves, according to US Geological Survey data.

The deal comes as South Korean battery makers have increased investment in the chemicals and materials used in EV batteries to reduce their dependence on China, the world’s biggest processor of most of the minerals needed for production.

The war in Ukraine has added to the pressure to improve supply chain security. Russia accounts for 11 per cent of the world’s nickel production and prices of crucial commodities have increased significantly since the invasion.

The London Metal Exchange’s three-month nickel price has risen about 60 per cent this year to $33,175 a tonne as of April 14, increasing concern about the growing cost burden of battery makers.

The auto industry’s plans to pivot away from fossil fuel-powered vehicles has been complicated by its heavy reliance on refineries and factories in China, where about 80 per cent of battery materials are processed.

“The stable supply of raw materials has become much more important for battery producers amid the deepening crisis in Ukraine,” said Yoon Hyuk-jin, an analyst at SK Securities. “Korean battery makers need more of these upstream investments for their long-term competitiveness in order to reduce their reliance on Chinese materials.”

The consortium includes LG Chem, the parent group of LGES, steelmaker Posco, LX International, the commodity trader and miner, and Chinese company Zhejiang Huayou Cobalt.

“We expect the project to improve our battery business capability and profitability by securing competitive raw materials in a stable manner,” LGES said.

The company is also building a $1.1bn battery cell plant in Karawang Regency, 65km south-east of Jakarta, as part of a joint venture with Hyundai Motor group.

The consortium’s investment was announced days after China’s Contemporary Amperex Technology (CATL), the world’s biggest EV battery maker, signed a $6bn deal with Indonesian companies including Antam to produce a similar project.

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • SMCI +12.4%, GFF +8.8%, FLGT +7.6%, ZEN +5.6%, PLUG +3.8%, HOPE +2.9%, CFG +2%, PL +1.9%, EE +1.7%, BGNE +1.7%, APO +1.6%, SBNY +1.5%, EFC +0.5%
  • Gapping down:
    • NTGR -11.4%, ACAD -7.7%, PNFP -6.3%, NHI -2.9%, ACHR -2.8%, FNB -1.8%, RVP -1.7%, GSK -1%, ELS -0.8%, TWTR -0.6%, AMGN -0.5%

FT : Has private market rulemaking backfired?

Has private market rulemaking backfired?
SEC commissioner Crenshaw thinks the boom is not helping companies, and might be hurting investors

Private markets are hot. Really hot. That’s raising a host of thorny questions, as SEC commissioner Caroline Crenshaw highlighted in a speech last week.

It’s worth skimming for the array of eye-catching factoids that Crenshaw presented to the University of Chicago’s Booth School of Business on April 14; such as how private market fundraising has trebled over the past decade to a record of almost $1.2tn last year, or how public markets have atrophied to the extent that the Wilshire 5000 index now only has about 3,500 members.

But for the US Securities and Exchange Commission, the big questions are whether this private market boom is really “facilitating capital formation” — to use its favourite phrase — and whether the interests of American investors are truly being served. As Crenshaw said:

My ever-present fear is that the capital formation rules that we put in place pay lip-service to the needs of everyday American entrepreneurs, but really serve another master. And because of the less stringent disclosure requirements in private markets, they do that at the expense of actual, substantive, meaningful disclosure to investors, stakeholders and regulators.

There’s an inescapable conflict between broadening smaller businesses’ access to capital and protecting investors from dodginess. In recent years, regulators have been mostly concerned about the dearth of companies going public, so they have attempted to ease the burden of being listed, while also broadening access to private markets.

In August 2020 the SEC expanded its definition of an “accredited investor”, and three months later passed another rule nattily named “Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets.”

The understandable concern was that many of the juicy gains that private companies have made in recent years are primarily accruing to venture capitalists and their well-connected wealthy investors.

But Crenshaw is sceptical whether these efforts have actually done much to improve access to capital OR protect investors in private markets. In particular, she fears that lighter disclosure and compliance enjoyed by private companies is just shifting costs and risks on to investors and markets. Two excerpts from her April 14 speech:

. . . The influx of capital to the private side of the industry, coupled with the severity and frequency of misconduct that our agency is uncovering (even with the limited information we are able to collect) suggests to me that our recent rulemaking may not have been the right approach to serve our goals. The incomplete visibility that we have into the private markets tells me that we need more information to regulate and to ensure every American can adequately save for their children’s education and their own retirement. Quite simply, we need more insight, more education, indeed more data, to be able to effectively protect investors, before the big frauds occur.

. . . Unicorns may prefer not to provide the kind of insights into their businesses that publicly traded companies have to disclose, but the result is less public data about what is actually working and what is, instead, just shifting burdens to those less able to bear them. So I am concerned that not only are we not advancing access to capital for the businesses that could most benefit, but also that the present system does not provide standardised disclosure that all investors can rely on for decision-making, reporting frameworks that form the basis of corporate accountability, and the industry data we need as regulators to inform our decisions.

The private capital boom is clearly a big topic at the SEC. Fellow commissioner Alison Herren Lee last year raised some pertinent issues in a big speech on the subject. Earlier this year the SEC’s Division of Examinations put out a “Risk Alert” highlighting worries around private fund managers, such as misleading track records. Dodgy valuations and outright frauds are another worry. Chair Gary Gensler also has private markets in his sights.

Here are, for reference, the questions that Crenshaw posed to the academics at Chicago:

  • Where are retail investors putting their funds and are there adequate protections in place?

  • What are the full, systematic implications of the increasing size of our private markets, and of having so many so-called Unicorns? Are there unforeseen implications when Unicorns do go public, including how they might utilise their privately accumulated capital to influence the IPO process and their governance structure?

  • What are the barriers to accessing public markets today, and how can we alleviate such barriers without eroding investor protections and increasing the already large information asymmetry?

  • Should we be taking immediate steps to better protect employee-investors of private companies, who are particularly vulnerable to liquidity and valuation challenges accompanying private companies?

  • Are there minimum corporate governance and code of ethics standards that should apply to all companies, public and private?

  • Are there other areas of our exempt offering framework that could be improved or better calibrated? For example, Regulation D and the Accredited Investor definition?

  • Should we revisit the rules under Section 12(g) of the Exchange Act?

Like Crenshaw, Alphaville has more questions than answers. But we know this is going to be a wildly important debate to follow in the coming years. If you have any good responses to the above then leave them in the comments below.

>>> What to look at today - 19th of April 2022

Stocks in Asia were mixed Tuesday with investors weighing Chinese measures to support the economy and the prospect for faster Federal Reserve policy tightening to fight inflation.
Equities were modestly higher in Japan, aided by a sinking yen. Hong Kong technology names declined on ongoing concerns over regulation. China dropped as investors assessed measures to tackle economic headwinds from Covid-led lockdowns. U.S. futures gained after stocks ended little changed Monday. European contracts fell.
Treasury yields steadied after the long end declined Monday. St. Louis Fed President James Bullard said that rate increases of 75 basis points -- while not the base case -- shouldn’t be ruled out as the central bank needs to move quickly to combat inflation. 
The yen extended its longest losing streak in at least half a century, falling past 128 per dollar, as the comments underscored a widening gap between U.S. and Japan rates. Australian bond yields jumped. The central bank hinted rates may rise sooner due to quicker inflation and a pickup in wages growth. The dollar extended an advance. 


Macro :
- Banks Pile Up Big Misses on Underwriting Revenue: ECM Watch
- Altcoin Monero Surges as Owners Set Withdrawal From Exchanges

Keep an eye on :
- AMBUB DC : Ambu Expands Access to Over 1 Mln Procedures in ENT Segment
- AZN LN : Amoydx, AstraZeneca Sign Pact for Programs in China, EU, Japan
- BAMI IM : Cred Agricole Made Bid for Banco BPM Insur. Business: Repubblica
- BN FP : Danone 1Q Sales Growth Seen Boosted by Bottled Water: Preview
- EDP PL : EDP Renovaveis 1Q Electricity Generation Rises 14% Y/y
- GBLB BB : GBL Agrees to Buy Majority Stake in Affidea From B-FLEXION (1)
- IDEA LN : Software Company Ideagen Awaits Cinven Approach: The London Rush
- I2PO FP : Pinault, Partners Set to Buy Deezer in a $1.1 Billion Deal
- LHA GY : MSC-Lufthansa Favored Bidder for ITA Airways: Corriere
- MAP SM : Mapfre Says Total Premiums Grew 10.9% in the First Quarter
- TL5 SM : Mediaset Espana Hires Citi to Assess MFE’s Bid: El Confidencial
- RFAST SS : Stenhus Offers to Buy Randviken for SEK2.71b in Cash and Shares
- GLE FP : SocGen Unveils New Domestic Retail Branding Strategy
- STLA IM : Stellantis Suspends Production in Russia
- TIT IM : Telecom Italia Sells Inwit Stake: EMEA TMT Premarket
- TSLA US : Tesla Investor Trial Over 2018 Go-Private Tweet Set for Jan. 17
- TWTR US : An Apollo-Musk Twitter Offer Is Cold Water on Higher Bids: React