>>> US Gapping down

Gapping down
In reaction to earnings/guidance:

  • CTXS -2.3%, IDT -0.7%

Other news:

  • OSMT -40.5% (prices offering of 14 mln ordinary shares of stock at $2.50 per share; co also priced warrants of up to 14 mln shares with exercise price of $3.10 per share), CRK -5.5% (announces the divestiture of Bakken shale assets)
  • CTXS -2.3% (appoints Bob Calderoni as interim CEO, effective immediately; expects to report Q3 revenue at the midpoint to high end of prior guidance)
  • VXX -2.2% (trading lower with strength in US futures)
  • BMY -2% (provides update on Phase 2 Study of Deucravacitinib for moderate to severe ulcerative colitis; study did not meet primary nor secondary endpoints)
  • DRIO -1.9% (to provide global company its integrated digital health management solution for diabetes, hypertension, and musculoskeletal health)
  • AVT -1.5% (disclosed update for distribution relationship with Maxim Integrated)

Analyst comments:

  • BOX -1% (downgraded to Equal-Weight from Overweight at Morgan Stanley)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:

  • LEVI +4.5% (also authorized $200 mln share repurchase program) RGP +3.5% HELE +1.8% GM +1.3% (investor day update) CAG +1%

Other news:

  • NURO +11.6% (submits Quell as De Novo request to FDA)
  • APP +10.1% (agreed to acquire Twitter's [TWTR] MoPub business)
  • LIQT +9.5% (received first oil and gas order through JV in the Middle East)
  • RKLB +8.6% (selected to launch NASA's Advanced Composite Solar Sail System)
  • MDP +6.3% (agreed to sell National Media Group to IAC's [IAC] Dotdash)
  • MGI +4.8% (announced partnership with Stellar Development Foundation)
  • IAC +4.3% (Dotdash unit agreed to purchase Meredith's [MDP] National Media Group)
  • SLCA +3.8% (announced strategic review for Industrial & Specialty Products segment)
  • GTLS +3.4% (awarded funding by the DoE for its Sustainable Energy Solutions Cryogenic Carbon Capture technology)
  • DPW +3% (provides update on installation of S19j pro antminers)
  • TWTR +2.6% (agreed to sell MoPub business to AppLovin [APP])
  • KULR +2.5% (provided update on safe battery transportation partnership with Heritage Battery recycling)
  • CYTK +2.3% (outlines go-to-market strategy for omecamtiv mecarbil and provides updates on cardiovascular pipeline at today's analyst & investor day)
  • SPNE +2.1% (completes first cases for the 7D Percutaneous Spine Module in the US and Australia)
  • WATT +2% (announced availability of 1W Active Energy Harvesting Developer Kit)
  • CMTL +1.5% (issues response to letter from Outerbridge Capital Management)
  • BHC +1.1% (provides one-year update for LuxSmart Intraocular Lenses)
  • EA +1% (Record-breaking FIFA 22 Launch)

Analyst comments:

  • LOOP +8.1% (upgraded to Buy from Neutral at H.C. Wainwright)
  • DBRG +4.4% (upgraded to Strong Buy from Outperform at Raymond James)
  • ALKS +4.2% (upgraded to Buy from Hold at Jefferies)
  • GOGO +4.1% (upgraded to Neutral from Underweight at JP Morgan)
  • FIVE +4% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • CAJ +2.3% (upgraded to Overweight from Neutral at JP Morgan)
  • FARO +2.3% (upgraded to Buy from Hold at Needham)
  • FIBK +1.4% (upgraded to Overweight from Equal Weight at Wells Fargo)
  • ESS +1.3% (upgraded to Overweight from Neutral at JP Morgan)

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • NURO +17.2%, LIQT +12%, APP +9.5%, RKLB +8.9%, MDP +6%, SLCA +5.5%, IAC +4.3%, MGI +4%, LEVI +3.9%, RGP +3.5%, IDT +2.5%, SPNE +2.1%, TWTR +1.9%, GM +1.8%, KULR +1.5%, CMTL +1.5%, BHC +1.1%, SAND +1%, EA +0.8%
  • Gapping down:
    • OSMT -32.4%, AVT -2.8%, ITAC -2%, VXX -1.6%, CTXS -1.5%

>>> Europe : Brokers Upgrades & Downgrades - 7th of October 2021 V2(+)

>>> Up
* Borregaard Raised to Buy at Pareto Securities; PT 235 kroner (+)
* Centrica Raised to Overweight at Morgan Stanley; PT 75 pence
* CompuGroup Raised to Buy at LBBW; PT 80.50 euros
* Edenred Raised to Buy at HSBC
* Enter Air Raised to Buy at BDM; PT 41.80 zloty
* Gem Diamonds Raised to Buy at Berenberg; PT 80 pence
* Hermes International Raised to Hold at HSBC; PT 1,250 euros
* Hochschild Mining Raised to Buy at Berenberg; PT 200 pence
* Jupiter Raised to Buy at Panmure Gordon; PT 305 pence
* Nokia Raised to Buy at OP Corporate Bank; PT 5.90 euros
* Scout24 Raised to Buy at M.M. Warburg; PT 72 euros (+)
* Sulzer Raised to Buy at Stifel; PT 105 Swiss francs
* Valeo Raised to Neutral at Citi; PT 25 euros
* Wartsila Raised to Buy at Pareto Securities; PT 13.50 euros (+)

>>> Down
* Bpost Cut to Neutral at Oddo BHF; PT 8.70 euros (+)
* Cerved Cut to Hold at HSBC
* MARR SpA Cut to Neutral at Banca Akros (ESN); PT 21.40 euros (+)
* SwedenCare Cut to Hold at Pareto Securities; PT 150 kronor (+)
* TeamViewer Cut to Neutral at Oddo BHF; PT 21 euros (+)
* Wolters Kluwer Cut to Hold at HSBC

>>> Initiation
* Argenx ADRs Rated New Buy at Jefferies; PT $362
* BioNTech ADRs Rated New Hold at Jefferies; PT $230
* Dunelm Rated New Sell at Investec; PT 1,000 pence
* EasyJet Reinstated Outperform at Exane; PT 900 pence
* Global Blood Rated New Buy at Jefferies; PT $68
* Marshalls Rated New Buy at Deutsche Bank; PT 885 pence (+)

>>> Call
* Bernstein Sees Sectors With Pricing Power Weathering Inflation (+)
* Buy Diamond Stocks Ahead of Diwali, Valentine’s Day: Berenberg (+)
* CMC Markets Update Reassuringly In Line After Warning: Jefferies
* EasyJet Reinstated at Outperform by Exane on ‘Rosier’ Outlook (+)
* Nokia Upgraded to Buy at OP Following Share Retreat (+)
* Sika Confimation of Guidance Helpful Amid Market Fears: Baader (+)
* SMCP Scenarios a Positive Post Top Holder’s Default: Jefferies
* Valeo Raised to Neutral at Citi as Downside Risk More Limited (+)

(ZH) "Keyword Warrants" - Feds Secretly Ordered Google To Identify Anyone Search

"Keyword Warrants" - Feds Secretly Ordered Google To Identify Anyone Searching Certain Information
BY TYLER DURDEN
WEDNESDAY, OCT 06, 2021 - 03:03 PM
An accidentally unsealed court document reveals that the federal government secretly ordered Google to provide data on people searching specific search words or phrases, otherwise known as "keyword warrants," according to Forbes.
According to the report, the Justice Department inadvertently unsealed the documents in September (which were promptly re-sealed), which were reviewed by Forbes. In several instances, law enforcement investigators asked Google to identify anyone searching for specific keywords.
The first case was in 2019 when federal investigators were on the hunt for men they believed sex-trafficked a minor. According to a search warrant, the minor went missing but reappeared a year later and claimed to have been kidnapped and sexually assaulted. Investigators asked Google if anyone had searched the minor's name. The tech giant responded and provided law enforcement agents with Google accounts and IP addresses of those who made the searches.
There have been other rare examples of so-called keyword warrants, such as in 2020 when police asked Google if anyone searched for the address of an arson victim in the government's racketeering case against singer R Kelly. Then in 2017, a Minnesota judge requested Google to provide information on anyone who searched for a fraud victim's name.
Forbes also added this update post-publication:
After publication, Jennifer Lynch, surveillance litigation director at the Electronic Frontier Foundation (EFF), highlighted three other Google keyword warrants that were used in the investigation into serial Austin bombings in 2018, which resulted in the deaths of two people.
Not widely discussed at the time, the orders appear even broader than the one above, asking for IP addresses and Google account information of individuals who searched for various addresses and some terms associated with bomb making, such as “low explosives” and “pipe bomb.” Similar orders were served on Microsoft and Yahoo for their respective search engines.
As for what data the tech companies gave to investigators, that information remains under seal.
You can read the orders on Google here, here and here. The Microsoft and Yahoo orders can be found here and here.
Every year, Google responds to thousands of warrant orders, but the latest keyword warrant is an entirely new strategy by government investigators and is becoming increasingly controversial.
"Trawling through Google's search history database enables police to identify people merely based on what they might have been thinking about, for whatever reason, at some point in the past," Jennifer Granick, surveillance and cybersecurity counsel at the American Civil Liberties Union, told Forbes. "This never-before-possible technique threatens First Amendment interests and will inevitably sweep up innocent people, especially if the keyword terms are not unique and the time frame not precise. To make matters worse, police are currently doing this in secret, which insulates the practice from public debate and regulation," she added.
Google responded news about secret keyword warrants and defended its decision:
"As with all law enforcement requests, we have a rigorous process that is designed to protect the privacy of our users while supporting the important work of law enforcement," a Google spokesperson said.
Court records reviewed by Forbes show Google has given away data on people who searched for specific keywords, which is more evidence the US is transforming into an authoritarian state of monitoring and surveillance of online activities just like China's.

FT : Blank cheque vehicle lists on Nasdaq to target fibre and tower deals

Blank cheque vehicle lists on Nasdaq to target fibre and tower deals
IX Acquisition one of the first special purpose acquisition companies to focus on communications assets

A team of European data centre veterans has raised $200m through a blank cheque company, which aims to scoop up infrastructure including towers and fibre networks as investor interest in the sector booms.

IX Acquisition has completed a listing on Nasdaq, becoming one of the first special purpose acquisition companies, or Spacs, to target communications assets.

Its goal is to become a substantial player in digital infrastructure in high-growth emerging markets or Europe and follows a move this week by IHS Towers, Africa’s largest tower company, to list in the US at a potential value of more than $7bn.

Fibre networks and telecoms towers have become key assets for private equity and infrastructure funds looking for stable returns while a number of specialist players, such as Spain’s Cellnex, have emerged as telecoms groups hive off their internet infrastructure assets and service companies.

Guy Willner and Karen Bach, were originally the executive team behind IXEurope, the London-listed data centre company that was sold to US rival Equinix for almost $500m in 2007. They have teamed up with a Noah Aptekar, a former SpaceX manager, and other veterans of the UK technology sector to run the new ‘blank cheque’ company.

A further $30m could be raised because of an overallotment option.

IX Acquisition has selected pink flamingos as its logo to highlight the “long-term relationships” that it intends to build, according to Bach, who is chief executive.

She told the Financial Times that Nasdaq was the right home for IX Acquisition. “There are hundreds of businesses growing and investing in this area and they need access to capital. Nasdaq has deep access to that capital and gives us the ability to give paper to a target company,” she said.

The Spac would be open minded about where target companies would be located but she said the strict governance rules of Nasdaq meant it would likely look to stable regions in Europe, Asia and Africa.

Willner, who will be executive chair, has founded three previous data centre companies under the ‘IX’ — or interconnection — banner including businesses in Africa and Russia.

Sir Richard Branson is the most high-profile British business figure to list a business via a Spac, merging Virgin Galactic with a blank cheque entity in 2019. Satellite security company Arqit also raised money via a Spac earlier this year.

However, the vehicles have started to fall out of favour with investors. Redemption rates have risen sharply since the first quarter when there was a frenzy of Spac deals.

FT : Battery technology gives China an opening in electric vehicles

Battery technology gives China an opening in electric vehicles
Backed by Warren Buffet, BYD is pushing into overseas markets. It hopes its cheap and powerful batteries will help it sell cars

This summer the Chinese electric vehicle maker BYD shipped its red Tang sport utility vehicles to Norway, the country which has seen the quickest uptake of battery-powered cars.

Named after the Chinese dynasty, the cars are powered by BYD’s homemade lithium batteries, a technology it hopes will become a key platform for the global car industry.

BYD’s first Norwegian customer, Per Lian, a salesman at a building ventilation company, says Norwegians would have no qualms buying Chinese cars given the cheaper cost and decent range.

“We understand the Chinese will come and take a big part of the cars in Norway,” says Lian, who drives around 4,000 kilometres a year for his job “I feel the quality is good. Most important are the prices — if you want to buy a Tesla it is maybe double.”

Founded in 1995 to make lithium batteries for consumer electronics, BYD has developed into one of the biggest producers of batteries for electric vehicles. In recent years, it has also developed its own vehicles which have prospered in the Chinese market. BYD is now the world’s second-largest producer of electric buses and the fourth-largest maker of electric vehicles.

Key to BYD’s success has been the company’s battery technology, which is pushing the cost of electric cars below their fossil-fuel powered peers, hastening a turning point in the global car industry. Known as the “blade” due to its long thin shape, BYD’s batteries use some of the most abundant materials in the world such as lithium and iron while avoiding controversial metals such as cobalt and nickel that are used by many of its rivals. For the same space, the blade battery holds 50 per cent more energy than similar battery chemistries, according to BYD.

BYD’s push into overseas markets is a fascinating test of how the new EV industry will develop — one that could hold big advantages for China.

For much of the last century, the biggest auto companies depended on the prowess of their combustion engines. Mercedes-Benz and Daimler grew out of their early engine designs, while Volkswagen spent years using the slogan “the power of German engineering”.

Chinese companies are now dominant in the production of batteries used in electric vehicles — with BYD being one of the most prominent. The question is whether they can translate their position in batteries into a significant share of the global car market.

“It’s easier for Chinese EVs to be successful than Chinese internal combustion cars because European and American automakers have a long history in making engines, it’s hard for Chinese automakers to catch up overnight,” says Ji Shi, an analyst at Haitong International Securities in Hong Kong. “But EVs are different because they are simpler in terms of their structure and Chinese automakers have better supply chains in terms of batteries.”

BYD’s journey so far has already generated a fortune for BYD’s founder Wang Chuanfu and early backer Warren Buffett. Since Buffett’s Berkshire Hathaway bought 10 per cent of BYD for $232m in 2008 its shares have risen by over 3,000 per cent, making Buffett’s stake now worth $6.9bn and one of his most successful investments after Apple.

In addition to its plans to export cars, BYD has held talks to supply its batteries to Tesla, according to two people familiar with the matter, and has created a joint venture with Toyota. That could make it one of the most valuable battery suppliers, and further entrench Chinese dominance of the electric car industry.

“We’re just in the early stages of China becoming an export car market, selling cars overseas, especially electric cars,” says Sam Jaffe, managing director of Cairn Energy Research Advisors. “And BYD is in a very good position. These batteries bring mass market EVs much closer to fruition more quickly.”

Faith in the founder
A decade ago, it was far from certain that China or BYD would be successful in batteries and electric cars. The Toyota Prius hybrid was going from strength to strength and Japan’s Panasonic dominated the global battery industry. The hundreds of Chinese battery makers across the country were considered only capable of providing low-grade batteries for mobile phones and laptop computers.

Yet Buffett was among the few who believed in the potential of the company, based on belief in Wang, the BYD founder who Buffett’s right-hand man Charlie Munger described as a mix between Thomas Edison and former General Electric chair Jack Welch.

Munger was first alerted to BYD by Li Lu, a Chinese-born hedge fund manager. Li was a former student leader of the 1989 student demonstrations in Tiananmen Square, who was named to Beijing’s most-wanted list after the military crackdown. He fled to France and then the US, and ended up studying at Columbia University.

Li became a committed value investor after listening to a class Buffett gave at Columbia and became friends with Munger before setting up his own fund. Munger first invested in BYD via Li’s fund, which still owns 6 per cent of BYD’s Hong Kong-listed shares, according to Refinitiv.

“I so rarely hold a company like BYD that goes to a nosebleed price, that I don’t think I’ve got a system yet. I’m just learning as I go along,” Munger said in February.

Most electric car batteries outside China use cobalt and nickel in their cells, which is increasing concerns about a shortage of raw materials. Over 60 per cent of the world’s cobalt comes from the Democratic Republic of Congo, while nickel is mostly mined in Indonesia, where mines destroy biodiverse rainforest and processing plants run on coal-fired power.

Nickel prices have risen 25 per cent over the past year while cobalt prices are up 59 per cent, adding further cost pressures to carmakers.


BYD’s batteries overcome one of the sourcing issues that is causing problems for many of its rivals. It has mastered a type of lithium-ion technology that was invented based on concepts discovered by the Nobel Prize winner John Goodenough and Indian-born scientist Arumugam Manthiram at Oxford and Texas universities in the late 1980s. Crucially, these so-called LFP batteries use only lithium, iron and phosphate, materials that are all abundant in the earth’s crust; they do not require nickel or cobalt.

When the chemistry behind these batteries was discovered, Manthiram says the practical applications for the material were thought to be low, due to its low conductivity and limited ability to store energy. The first lithium-ion battery that was commercialised by Sony in 1991 for use in its camcorders used a lithium and cobalt chemistry. Later nickel was added to lithium-ion batteries to increase the battery’s power, especially for use in cars.

But BYD has increased the amount of energy that the batteries can hold by overhauling the engineering. While most car batteries contain cells placed together into a module and then a pack, BYD has built simple, long thin battery cells and placed them directly into a battery pack.

At 96cm long and nine centimetres wide, BYD can pack 50 per cent more cells into the battery pack compared to conventional LFP batteries, according to the company. As a result, BYD says its Tang EV in Norway can reach a range of 400km on one charge - similar to a standard range Tesla Model 3 car.

The batteries can also be easily recycled and can last for over 1m kilometres of driving, according to BYD.

“It’s the same material. What BYD have done well is optimising that material, making it into very big cells, which you can do because it’s a safer material,” says Jerry Barker, co-founder and chief scientist at the UK battery company Faradion. “Even though you have lower energy density cathode material you can end up with a pack that can be competitive. You are getting a bigger bang for your buck if you can have a bigger cell.”

It’s also safer, which is critical for carmakers since any failures can lead to expensive recalls. This year General Motors has had to recall more than 140,000 of the Chevrolet Bolts it has sold since 2016 due to the risk of battery fires. Last month it urged owners of vehicles that have yet to be recalled to not park within 50 metres from other cars.

During a standard test where a nail was driven into the battery, the Blade battery did not emit any smoke or fire, reaching a temperature between 30 to 60C, whereas the temperature of other electric car batteries rose to 500C and burnt, the company said.

“Safety is the biggest luxury for an electric car,” Wang, who once publicly drank battery fluid to prove how safe it was, said last month.

BYD is preparing to list its battery business on the stock market as a separate company and analysts at Bank of America expect BYD’s EV battery revenue to grow by a compound annual growth rate of 66 per cent between 2020 and 2023. BYD has a target to produce 100 gigawatt-hours of batteries by 2025 and produce 1.5m vehicles.

“The blade battery is set to be successively installed on EV models of mainstream brands in and outside China,” BYD said in an emailed response to questions. “Currently, almost every car brand you can think of is talking with us about co-operation concerning the blade battery technology.”

Manthiram says that as charging infrastructure develops globally, drivers in India, Europe and even the US will not need to drive such long distances on one charge, and so-called “range anxiety” will be reduced. That could speed up the adoption of the more environmentally-friendly LFP batteries used by BYD.

“I think it will be used in other parts of the world and in America also. The cost is lower and there are people who may drive shorter distances,” Manthiram says.

BYD’s rise has contributed to China’s dominance of electric car batteries. Its bigger rival CATL, based in the coastal city of Ningde, is the world’s largest battery maker and supplies batteries to almost all of the global car industry, including Tesla, Daimler and Volkswagen. It also produces LFP batteries.

A total of 77 per cent of global lithium ion production capacity will be located in China by the end of this year, according to Benchmark Mineral Intelligence.

It’s an achievement that has been driven by supportive government policies, large amounts of capital and engineering improvements. Carmakers were effectively banned for part of the last decade from using foreign batteries in the Chinese market, allowing homegrown champions to emerge.

“When you start to use a battery maker, usually you don’t change frequently,” says Haitong’s Ji.


Norwegian dream
Having a competitive battery is one thing: using that to launch a top-selling vehicle is another proposition altogether.

For more than a decade, China’s carmakers have tried to export their vehicles outside the country, mostly with limited success. Having a relatively cheap car only gets a company so far in markets that value reliability and customer service and where Chinese brands are barely-known.

“They still have the heavy lifting to gain the trust from European consumers, American consumers,” says Tu Le, founder of consultancy Sino Auto Insights. “They still need to take the time — the BYD branding is still unfamiliar to the average US and European or UK consumer. They need to invest that time, capital and education, create awareness and build trust.”

BYD is starting in Norway, where sales of EVs have exploded: around three quarters of new car sales last year were for battery-powered cars. But it is not only competing against Tesla and the new models from the legacy carmakers, it is also up against a group of other Chinese companies.

These Chinese rivals include Nio, which began sales of its electric cars in the country last month. Even Chairman Mao’s favourite car brand, Hongqi or Red Flag, is beginning to export its electric SUVs to Norway, while MG, which is owned by China’s SAIC, is already selling cars in the country.

Nio, which has pioneered a system allowing owners to swap their batteries rather than recharge them, aims to build 20 battery swapping stations in Norway by the end of next year.

“There is real competition in Norway now, Norway is the country with the most variety of EV models available,” says Christina Bu, secretary-general of the Norwegian EV Association. “Traditionally the German brands have been very popular in Norway . . . but it seems that consumers are sticking less to the model and it’s more about the range of the car.”

Tsinghua University professor Ouyang Minggao, a prominent expert on electric vehicles, sounded a note of caution last month at an electric vehicle conference.

“Their [BYD] battery technology is also in the global lead. But we still need to be cautious, especially when you have revolutionary and disruptive innovative companies such as Tesla,” says Prof Ouyang.


Still, BYD could become a seller of electric cars within China and dominate battery supply outside the country, according to Taylor Ogan, chief executive of Snow Bull Capital, a US hedge fund. BYD’s battery is “by far the cheapest on the market”, at a cost of around $80 a kilowatt-hour at the pack level, or even lower, compared with average prices of $137/kWh last year, he said. BYD declined to comment on costs.

BYD says it is preparing to build a battery factory in Europe to “provide supporting facilities for European auto customers”, as part of its global expansion drive. CATL is also building a European battery factory in Germany.

Says Michael Dunne, chief executive of industry advisory group ZoZoGo who used to live in China: “BYD is the prototype of where [President] Xi Jinping wants to take China.”

>>> TradeGate Pre-Market Indications

DAX:
  • HelloFresh (HFG TH) +2.2%
  • Porsche SE (PAH3 TH) +2%
  • Siemens Energy (ENR TH) +1.8%
  • BASF (BAS TH) +1.7%
  • Siemens Healthineers (SHL TH) +1.6%
  • Deutsche Telekom (DTE TH) +1%
  • Continental (CON TH) +0.9%
  • Allianz (ALV TH) +0.9%
MDAX:
  • Varta (VAR1 TH) +3.9%
  • Thyssenkrupp (TKA TH) +2.8%
    • Steel Stocks Slide, Arkema Cost Pressure: EMEA Industrials Wrap
  • K+S (SDF TH) +2.2%
  • Bechtle (BC8 TH) +2.1%
  • Lufthansa (LHA TH) +1.8%
  • Telefonica Deutschland (O2D TH) +0.7%
SDAX:
  • Home24 (H24 TH) +2.7%
  • Nordex (NDX1 TH) +2.4%
    • Nordex Gets Order From Ukraine for 10 N149/5.X Turbines
  • PVA TePla (TPE TH) +1.6%
  • Deutz (DEZ TH) +0.9%
  • Adler Group (ADJ TH) -1.2%
    • NOTE: Stock closed 26% lower on Xetra Wednesday
    • Adler Plunges as Short Seller Targets Real Estate Company (2)