Gapping down
In reaction to earnings/guidance:
- IRNT -25%, BLBD -7.4% (also announces $75 mln private placement), LEN -5.8%, WOR -5.1%, NDSN -3%
Other news:
- DNMR -14.8% (proposes offering of $175 mln of convertible senior notes due 2026)
- SNDX -8.3% (prices offering of 3,157,144 shares of its common stock at $17.50 per share)
- FOCS -5.9% (stock offering)
- VSH -3.2% (to acquire Barry Industries for $21 mln)
Analyst comments:
- CDK -1.6% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
Gapping up
In reaction to earnings/guidance:
- ACN +8.7%, APG +7.9% (raises FY21 revenue guidance), HEI +4.2%, JBL +3.4%, TCOM +3%, FLXS +1.6% (raises revenue guidance, but lowers margin guidance)
Other news:
- CALT +36.7% (FDA approves TARPEYO)
- FREY +14.5% (executed inaugural offtake agreement for at least 31 GWh of low-carbon battery cells with an undisclosed leading global publicly listed manufacturer)
- VRCA +11.5% (FDA accepts NDA for VP-102 for molluscum contagiosum)
- MESO +11.3% (FDA's OTAT in Agreement With 12-Month Reduction in Pain as Primary Endpoint for Chronic Low Back Pain Program)
- GOEV +6.2% (to accelerate and shift production of EVs from Europe to US; increases production guidance and targets; also to explore partnership opportunities with VDL Groep)
- PLUG +5.5% (Plug Power and Edison Motors sign agreement for mass-production of hydrogen-powered city buses)
- MAXR +4.3% (reserves May 15 - Jun 13 window for WorldView Legion launch)
- NVS +4.2% (initiates new $15 bln share buyback)
- MTNB +4% (receives unanimous DSMB approval to progress into fourth and final cohort of patients in the EnACT Trial of MAT2203 )
- STEM +3.8% (acquires Also Energy Holdings for $695 mln)
- ZLAB +3.7% (receives approval for NUZYRA as a Category 1 Innovative Drug)
- AFCG +2.8% (increases dividend)
- HOFV +2.8% (closes on financing for Constellation Center for Excellence)
- ATRS +2.8% (divests Otrexup)
- SAND +2% (declares inaugural dividend of C$0.02/sh)
- MARA +2% (Exec Chairman to retire)
- DAL +2% (announces three-year financial targets and outlook details customer-centric approach at Capital Markets Day)
- APRN +1.8% (plans for co-branded credit card with Aspiration)
- RGLD +1.8% (provides details on fiscal year end change)
- NVAX +1.4% (submits NDA for approval of COVID-19 vaccine in Japan)
- AZO +1% (authorizes additional $1.5 bln in share repurchases)
- V +0.9% (approves $12 bln share repurchase program)
Analyst comments:
- BK +1.4% (upgraded to Overweight from Neutral at JP Morgan)
- BKNG +1.4% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)
Early premarket gappers
- Gapping up:
- CALT +38.8%, VRCA +11.5%, APG +7.9%, MESO +7.8%, GOEV +6.4%, AFCG +5.5%, FREY +5.5%, PLUG +5.3%, APRN +5%, HEI +4.2%, NVS +3.9%, ZLAB +3.6%, MAXR +3.4%, TCOM +3.4%, HOFV +2.8%, ATRS +2.8%, NVAX +2.5%, MARA +2.3%, RGLD +1.8%, SYF +1.7%, FLXS +1.6%, SAND +1.5%, V +1.2%
- Gapping down:
- IRNT -19.7%, SNDX -7.8%, DNMR -7.4%, LEN -7%, BLBD -6.7%, FOCS -4.1%, VSH -3.2%, NDSN -2.8%, ABM -0.6%, ETD -0.5%
Waste and Recycling Platform Rubicon Going Public in $2 Billion SPAC Merger
Investors in software company include actor Leonardo DiCaprio, KKR co-founder Henry Kravis and billionaire investor Paul Tudor Jones
Waste and recycling platform Rubicon Technologies LLC is merging with a special-purpose acquisition company to go public at a valuation of roughly $2 billion, the companies said.
Rubicon, backed by a high-profile roster including actor Leonardo DiCaprio, is combining with the technology-focused Founder SPAC in a deal that is expected to be unveiled Thursday.
A software company that manages waste and recycling for customers, Rubicon partners with thousands of recycling and hauling firms to help businesses such as Apple Inc., Walmart Inc. and Starbucks Corp. save money and limit their emissions. The company also works with local governments in cities including Kansas City, Mo., and Baltimore.
The Lexington, Ky., company markets itself as a technology-driven alternative to traditional waste management. Rubicon aggregates large amounts of data to match a customer’s trash and recycling to the appropriate outlet, its founder and chief executive, Nate Morris, said in an interview.
“That data is what I think has been so powerful,” he said. “We’re running a play that we’ve seen work in every other industry.”
Rubicon investors include Mr. DiCaprio, Salesforce.com Inc. co-Chief Executive Marc Benioff, KKR & Co. co-founder Henry Kravis and billionaire investor Paul Tudor Jones.
The deal adds to the flurry of startups that are using SPAC mergers to inject cash into their businesses, allowing investors across Wall Street and Silicon Valley to make bets on companies that work to reduce carbon emissions.
SPAC mergers have exploded in the past few years, in part because they allow companies going public to make business projections that aren’t allowed in traditional initial public offerings. Also called a blank-check company, a SPAC is a shell entity that raises money and trades on a stock exchange with the sole purpose of merging with a private firm to take it public. After the private firm files detailed financial statements with regulators and the deal is approved, it replaces the SPAC in the stock market.
Despite heightened regulatory scrutiny of SPACs and recent share-price declines, new blank-check companies continue to rake in money. Nearly 600 SPACs have raised roughly $160 billion this year, eclipsing the total combined amount raised by blank-check companies through 2020, according to SPAC Research.
Rubicon, which was founded in 2008, is raising a $111 million PIPE, or private investment in public equity, as part of the SPAC merger. The PIPE investors include data-mining software firm Palantir Technologies Inc. and the government-backed New Zealand Super Fund.
That money and the roughly $320 million held by Founder SPAC, which went public in October, is to be used in an effort to accelerate the company’s growth, though SPAC investors can withdraw their money before the merger goes through. Such withdrawals have skyrocketed recently, with shares of many SPACs slumping.
Rubicon expects to post roughly $575 million in sales this year, a figure the company projects will rise steadily in the years ahead.
France to block entry to UK tourists as Omicron surges
Country will tighten border curbs from midnight on Friday to combat coronavirus variant
France will block entry to UK tourists, tightening its border restrictions in an effort to slow the spread of the Omicron coronavirus variant.
Travel from the UK will be largely limited to French nationals, residents and their families, although there are exceptions for students and some professions such as doctors who have a work-related reason to come.
The prime minister’s office said the new curbs would apply from midnight on Friday.
The emergence of Omicron, which was first identified by South African scientists in November, has led many countries to impose travel restrictions. Omicron has dozens of mutations that scientists expect make it more transmissible than earlier variants and more likely to evade the immune protection provided by vaccines or previous infection.
France has now clamped down ahead of the Christmas travel season. “The challenge is to slow the spread of Omicron to allow as much time as possible to do booster shots,” said government spokesman Gabriel Attal on BFM TV.
Covid-19 tests must be taken less than 24 hours before departure, rather than 48 as at present, and those who arrive from the UK must self-isolate for seven days, reduced to two days if they test negative in France. An online registration system will be used to track those arriving and submit test results.
In the UK, Omicron has been spreading rapidly and could be infecting 200,000 people a day, according to an estimate from the UK Health Security Agency, dwarfing the number of confirmed cases identified by sequencing.
France, which does much less genetic sequencing of variants than Britain, has only identified roughly 240 cases of Omicron, although health experts expect the number is probably higher. More than 95 per cent of infections in the country are still with the Delta variant, according to public health officials, but that is expected to change in coming weeks.
Even without the impact of Omicron, France has been experiencing a surge of infections in the past six weeks to reach about 45,000 per day, on a seven-day rolling average, although the rise has stabilised. Hospitals and health workers are stretched, with more than 1,000 Covid-19 patients being admitted daily, and predictions for intensive care beds to be near-capacity by the end of the month unless more are added.
The government has responded by accelerating the booster programme, closing nightclubs, and tightening protocols in schools. But it has stopped short of imposing curfews or lockdowns. In a TV interview on Wednesday night, President Emmanuel Macron predicted that there would be “very strong pressure on our hospitals” between Christmas and new year.
Intel thinks the metaverse will need a thousand-fold increase in computing capability
A reality check for computing’s next big leap
Intel made its first statement on the metaverse on Tuesday — its first public acknowledgement of that sometimes-nebulous future of computing which promises an always connected virtual world that exists in parallel with our physical one. But while the chip company is bullish on the possibilities of the metaverse in abstract, Intel raises a key issue with realizing any metaverse ambitions: there’s not nearly enough processing power to go around.
“The metaverse may be the next major platform in computing after the world wide web and mobile,” an editorial begins from Raja Koduri, a senior vice president and head of Intel’s Accelerated Computing Systems and Graphics Group. But Koduri quickly pours cold water on the idea that the metaverse is right around the corner: “our computing, storage and networking infrastructure today is simply not enough to enable this vision,” he writes. Crucially, Koduri doesn’t even think we’re close. He says that a 1,000x increase in power is needed over our current collective computing capacity.
A lot of the metaverse hype has been built around what you’ll do there, be it virtual reality meetings, digital concerts, and of course, blockchain and NFT-based integrations. And there’s plenty of excitement about the future of virtual and augmented reality headsets, too, whether it be Meta’s Quest products (formerly known as Oculus) or Apple’s long-rumored headset.
But the actual building blocks of the metaverse aren’t just going to be software and virtual spaces (which, of course, is its own fight, given that today’s digital worlds are extremely self-contained) or even the headsets and gadgets people wear to “get” there. It’ll be in the computers and servers that run the vast shared virtual worlds the metaverse posits as the future of technology. And it’s there that Intel has the biggest reality check: today’s computers are just simply not powerful enough to make those dreams a reality. They’re not even close.
On the one hand, the statement here is almost laughably obvious. Meta’s flagship VR space, Horizon Worlds, maxes out at 20 participants for a space, and that’s for basic, Roblox-style animated worlds. The state of the art in VR still requires thousands of dollars of PC gaming hardware, with plenty of drawbacks (like requiring a tethered headset and graphics that still don’t measure up to what 2021’s best flatscreen games can offer). And even the biggest traditional video games that aren’t dealing with the added demands of VR like Fortnite or Battlefield 2042 can only handle up to 100 to 128 players at a time.
As Koduri notes in his editorial, we can’t even put two people in a truly detailed virtual environment with today’s technology. “Consider what is required to put two individuals in a social setting in an entirely virtual environment: convincing and detailed avatars with realistic clothing, hair and skin tones – all rendered in real time and based on sensor data capturing real world 3D objects, gestures, audio and much more; data transfer at super high bandwidths and extremely low latencies; and a persistent model of the environment, which may contain both real and simulated elements.”
And that’s just for two people — scaling up to the hundreds of millions of users that a Ready Player One, Snow Crash, or Matrix-style metaverse concept would require much, much more computing infrastructure.
Of course, Intel also has a vested interest in saying that we need more and better computers and servers. After all, Intel makes CPUs (and soon, GPUs) for consumer devices and data centers alike. And if the metaverse — the hottest buzzword technology of the future — needs a literal 1,000x increase in computing capacity, well that’s just good for business. It’s no coincidence that Intel explicitly called out both its client compute and cloud processors and graphics products in its metaverse brief.
The problem, though, is that even Intel doesn’t think that the hardware alone is going to get us to 1,000x. As Koduri explained in an interview with Quartz, “We believe that a standard kind of Moore’s Law curve is only going to get us to about eight or 10x growth over the next five years.” (Moore’s Law generally is defined as computational capacity doubling every two years, which tracks with the eight to 10x growth that Koduri predicts.)
Instead, Koduri is optimistically forecasting that algorithms and software improvements will make up the gap. Things like machine learning-powered neural nets, or AI-enhanced computational techniques of the sort that Intel already is using for things like its Deep Link technology or the upcoming XeSS super sampling it’s planning to debut with its Arc GPUs early next year. It’s a big ask, though — Intel is counting on algorithms or AI to offer a hundredfold (or more) improvement in computing capacity, all on top of the growth offered by its existing hardware roadmap.
Koduri notes in the same Quartz interview that improved software and algorithms won’t just be necessary to close the gap in the ambitious five-year timeframe he lays out; they’ll be crucial to helping mitigate the increased energy consumption that trying to brute force the problem would create, something that he compares to the current problems with cryptocurrency mining today.
It’s easy to just wave a hand and say that software will fill in any gaps hardware leaves behind (especially for a company like Intel, which primarily makes the hardware). Plenty of major tech companies have flocked to the idea that AI and machine learning will solve their computation issues, for everything from making smartphone cameras better to offering upscaled gaming visuals, and it’s appealing to think that they might. But it still seems like a tall order to rely on them to 100x tomorrow’s computing, which is forecast to only see a 10x jump based on hardware improvements alone.
The fact that Intel is thinking about all this now — and stating the problem — is an encouraging sign, though. It’s easy to ride the hype and start pitching fantastical ideas of selling NFTs that will follow you from place to place in different games and virtual settings. Beefing up server infrastructure and working to reduce latency is less sexy; but as Intel’s presentation shows, if the metaverse is ever going to reach its sci-fi ambitions, there’s a lot more foundational work that needs to be done in the coming years to pave the road.
>>> Up
* Carl Zeiss Meditec Raised to Hold at HSBC; PT 184 euros
* CFE Raised to Buy at Berenberg; PT 130 euros
* Euronext Raised to Buy at HSBC; PT 104 euros
* Pirelli Raised to Add at AlphaValue/Baader
* Sodexo Raised to Sector Perform at RBC; PT 84 euros
* Solaria Energia Raised to Sector Perform at RBC; PT 18 euros
>>> Down
* abrdn plc Cut to Hold at Deutsche Bank; PT 275 pence
* Bunzl Cut to Add at Peel Hunt; PT 3,200 pence (+)
* NOS Cut to Underweight at Morgan Stanley; PT 3 euros
>>> Initiation
* Aalberts Rated New Buy at Berenberg; PT 80 euros
* Allfunds Rated New Buy at Jefferies; PT 19 euros
* Bahnhof Rated New Buy at Handelsbanken; PT 42 kronor
* Bavarian Nordic Resumed Buy at Nordea; PT 547 kroner (+)
* BioNTech ADRs Rated New Equal-Weight at Morgan Stanley; PT $294
* Ceres Power Rated New Outperform at Credit Suisse
* Claranova SE Rated New Buy at Bryan Garnier; PT 12 euros (+)
* Cordiant Digital Infrastructure/Fund Rated New Hold at Jefferies
* Daimler Truck Holding Rated New Overweight at Barclays (+)
* Digital 9 Infrastructure/Fund Rated New Hold at Jefferies
* EDP Renovaveis Rated New Neutral at Credit Suisse; PT 22 euros
* Ferguson Rated New Outperform at Baird; PT 15,137.75 pence
* Fresenius SE Rated New Buy at Bankhaus Metzler; PT 45 euros (+)
* ITM Power Rated New Underperform at Credit Suisse; PT 340 pence
* Lululemon Reinstated Hold at Truist Secs; PT $435
* Nel Rated New Neutral at Credit Suisse; PT 19.30 kroner
* Nike Rated New Buy at Truist Secs; PT $190
* Pfeiffer Vacuum Rated New Hold at Stifel; PT 207 euros
* Ralph Lauren Rated New Buy at Truist Secs; PT $141
* Scatec Resumed Buy at Kepler Cheuvreux; PT 185 kroner (+)
* Solaria Energia Rated New Outperform at Credit Suisse
* Tobii Dynavox Re-Initiated Buy at Handelsbanken; PT 40 kronor
* Under Armour Reinstated Hold at Truist Secs; PT $24
* Wilh Wilhelmsen Holding Rated New Buy at Pareto Securities (+)
>>> Call
* CFE Has Clean Sweep of Buys as Berenberg Raises on Planned Split
* Contrarians Now Bearish on Luxury, Tech After Strong 2021: Citi
* Heineken Risk/Reward Skewed to Upside, Brewer is a Top Citi Pick (+)
* Sodexo Raised at RBC on Imminent CEO Appointment, Likely Reboot (+)