After Hours Summary: BB +7%, KBH +0.5% higher on earnings; SCS -3.7% falls on earnings; EAR falls -51.1% as it discloses criminal investigation by DOJAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: BB +7% (also COO to step down), FUL +2.6%, KBH +0.5%
Companies trading higher in after hours in reaction to news: ARD +2.1% (declares special cash dividend of $1.25/sh), WLTW +0.7% (increases share buyback authorization by $4 bln), CHPT +0.7% (WEX and CHPT announce plans to expand relationship to ease integration of EVs into corporate fleets), FB +0.6% (CTO Mike Schroepfer to step down), YUMC +0.3% (outlines strategy; accelerating store network expansion to reach 20,000 stores; plans to accelerate the expansion of Lavazza cafés in China), VTNR +0.2% (deal to acquire Mobile refinery is currently expected to close during 1Q22), HEP +0.1% (HEP and HFC disclose receipt of request for additional information from the FTC in connection with Sinclair transaction)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: SCS -3.7%
Companies trading lower in after hours in reaction to news: EAR -51.1% (discloses criminal investigation by DOJ related to insurance reimbursement claims; withdraws guidance), SYBX -8.9% (stock offering), GRIN -2.7% (stock offering), REXR -2.6% (stock offering), AXNX -2.6% (provides additional update on inter partes review proceedings), FEYE -2.2% (to change name and ticker to Mandiant (MNDT)), GENI -2.1% (stock offering), MGM -0.4% (weighing options to control BetMGM in light of recent Entain buyout offer, according to Bloomberg), CTOS -0.3% (stock offering), ARCT -0.1% (CEO met with President of Vietnam and CEO of Vingroup to discuss ongoing collaboration for supply of COVID-19 vaccines), HFC -0.1% (HEP and HFC disclose receipt of request for additional information from the FTC in connection with Sinclair transaction)
Early premarket gappers
- Gapping up:
- SFIX +15.6%, BLUE +5.6%, ENLV +5%, RKLB +4.9%, AMWL +4.5%, XAIR +2.7%, VALE +2.6%, CRVS +2.1%, SWN +1.9%, EQR +1.6%, JBLU +1.6%, TUYA +1.6%, JPM +0.9%, RDN +0.6%, ETR +0.6%, MA +0.5%
- Gapping down:
- SMMT -19.8%, LPTX -12%, ABEO -5.8%, FDX -5.7%, NOTV -5.1%, BDSI -3.8%, TIXT -3.7%, ADBE -3.3%, H -3%, INNV -3%, JCOM -2.9%, SAFE -2.7%, INCY -2.5%, APTS -2.3%, PLAY -1.4%, CF -1.4%, WMG -1.2%, VTNR -1.2%
Gapping up
In reaction to earnings/guidance:
- SFIX +12.2% (also launches Stitch Fix Freestyle) GIS +2.6% GDEV +1.8% TUYA +1.6% BDSI +1.3% (guides Q3 revs below consensus)
Other news:
- ELMS +6.4% (has received a binding purchase order for 1000 units of its Urban Delivery vehicle from its strategic distribution partner Randy Marion Automotive Group)
- RKLB +4.6% (signs dedicated launch contract with Astroscale Japan)
- BLUE +3.9% (submits BLA to the FDA for beti-cel gene therapy)
- ENLV +3.8% (doses first patient in placebo-controlled Phase IIb Clinical Trial of Allocetra in severe and critical COVID-19 patients with ARDS)
- RYTM +3.7% (receives Marketing Authorization for IMCIVREE in Great Britain)
- ARCT +3.3% (receives approval from Vietnam Ministry of Health to proceed into Phase 2 and Phase 3a for ARCT-154)
- AMAL +2.9% (acquires Amalgamated Bank of Chicago)
- VALE +2.3% (appoints Gustavo Pimenta as Executive Vice President of Finance and Investor Relations)
- SAH +2% (adds $3.2 billion in annualized revenues with acquisition of RFJ Auto Partners)
- EQR +1.6% (provides operating update)
- SWN +1.3% (KMI and SWN announce responsibly sourced natural gas agreement)
- BSN +1.3% (merger partner Vertical Aerospace announces Marubeni Corporation's pre-order option for up to 200 aircraft and signs Mou to explore the introduction of eVTOL aircraft in Japan)
- AMWL +1.2% (names new CFO)
- KMI +1.1% (KMI and SWN announce responsibly sourced natural gas agreement)
- JPM +1% (increases dividend)
Analyst comments:
- CDTX +6.1% (upgraded to Strong Buy from Buy at WBB Securities)
- PMVP +5.5% (upgraded to Buy from Neutral at Goldman)
- TECK +3.9% (upgraded to Outperform from Market Perform at BMO Capital Markets)
- AMBA +3.3% (upgraded to Overweight from Sector Weight at KeyBanc Capital Markets)
- PEBO +1.7% (upgraded to Overweight from Neutral at Piper Sandler)
- SPG +1.4% (upgraded to Buy from Hold at Argus)
- ACN +1.1% (upgraded to Buy from Neutral at MoffettNathanson)
Vestiaire Collective Raises 178 Million Euros
The SoftBank Vision Fund 2 and Generation Investment Management backed this round alongside existing shareholders.
PARIS – Vestiaire Collective, the platform selling pre-owned luxury goods, has raised 178 million euros in funding.
Tech investor SoftBank Vision Fund 2 and sustainability investors Generation Investment Management backed the round in which existing shareholders Bpifrance, Condé Nast, Eurazeo and certain funds managed by Fidelity International and Koreyla Capital reinvested.
“The additional funding will provide considerable financial flexibility to Vestiaire Collective, a certified B Corp, allowing the company to further accelerate towards its longterm objectives in a highly attractive segment within the circular economy,” the company said in a statement released Wednesday.
Fashion’s second-hand market has been heating up for some time, driven especially by young consumers favoring more sustainable practices.
Of the financing round’s investors, Maximilian Bittner, Vestiaire Collective’s chief executive officer, said: “Their respective experiences as preeminent global investors supporting high-growth business models will be highly valuable to us in our next phase of development.”
“Vestiaire Collective is a great consumer-tech company that we believe is transforming the timeless luxury fashion industry for the better,” said Marcelo Claure, CEO and chief operating officer of SoftBank Group. “Vestiaire operates at the intersection of multiple sector trends with growth in luxury retail, ongoing shift to online and a focus on sustainability. And it is doing so with a business model that is well-positioned to scale globally.”
The fundraising now values Vestiaire Collective at $1.7 billion. Claure joins the luxury reseller’s board, and Generation Investment Management takes an observer seat.
Vestiaire Collective’s business keeps accelerating. During the past 12 months, it increased its number of orders by more than 90 percent globally. In the U.S., the uptick was 100 percent, making the country the platform’s largest market today. Meanwhile, orders grew by 150 percent in Asia.
In March, Kering snagged a 5 percent stake and board representation in Vestiaire Collective.
>>> Up
* Ambarella Raised to Overweight at KeyBanc; PT $185
* Ambarella Raised to Overweight at KeyBanc; PT $185
* Bank of Georgia Group Raised to Buy at SOVA Capital
* Bollore PT Raised to 6.30 euros from 5.40 euros at Oddo BHF (+)
* Burberry Raised to Buy at SocGen; PT 2,270 pence
* Fine Foods & Pharma Raised to Buy at Banca Akros (ESN) (+)
* ForFarmers Raised to Accumulate at KBC Securities (+)
* Handelsbanken Raised to Buy at DNB Markets; PT 107 kronor (+)
* IDI SCA Raised to Outperform at Oddo BHF; PT 62 euros (+)
* Legrand Raised to Outperform at Exane; PT 135 euros
* Mowi Raised to Buy at SpareBank; PT 270 kroner
* Rio Tinto Raised to Neutral at Oddo BHF; PT 5,100 pence (+)
* TBC Bank Group Raised to Buy at SOVA Capital; PT 2,673 pence
* Vivendi Raised to Buy at Redburn; PT 14 euros
>>> Down
>>> Down
* Bechtle Cut to Hold at Bankhaus Metzler; PT 62 euros (+)
* Boliden Cut to Neutral at BofA; PT 300 kronor (+)
* Entain Cut to Hold at Peel Hunt; PT 2,300 pence
* Entain Cut to Hold at Peel Hunt; PT 2,300 pence
* Ferrexpo Cut to Underperform at BofA; PT 220 pence (+)
* Hutchmed China Cut to Neutral at Goldman; PT 650 pence (+)
* Hutchmed China ADRs Cut to Neutral at Goldman; PT $46 (+)
* Ignitis Group Cut to Neutral at Swedbank; PT 24 euros
* Vivendi Cut to Sell at AlphaValue/Baader
>>> Initiation
>>> Initiation
* AO World Rated New Neutral at Davy; PT 200 pence (+)
* Boohoo Rated New Outperform at Davy; PT 399 pence (+)
* Burberry Rated New Equal-Weight at Barclays
* Burberry Reinstated Underperform at Oddo BHF; PT 1,848 pence
* Deutsche Post Reinstated Overweight at Morgan Stanley
* Deutsche Post Reinstated Overweight at Morgan Stanley
* Hermes International Rated New Equal-Weight at Barclays
* In The Style Group Rated New Outperform at Davy; PT 255 pence (+)
* Kering Rated New Overweight at Barclays
* LVMH Rated New Overweight at Barclays
* Moncler Rated New Equal-Weight at Barclays
* Prada Rated New Overweight at Barclays
* Reply Rated New Buy at Stifel; PT 210 euros
* Richemont Rated New Overweight at Barclays
* Salvatore Ferragamo Rated New Underweight at Barclays
* Sopra Steria Rated New Sell at Stifel; PT 155 euros
* Swatch Reinstated Overweight at Barclays; PT 363 Swiss francs
* Tod's Rated New Underweight at Barclays
* Universal Music Group Rated New Neutral at Oddo BHF; PT 26 euros (+)
* Vonovia Rated New Buy at M.M. Warburg; PT 66 euros (+)
* Vow Green Metals Rated New Buy at SpareBank; PT 11 kroner
>>> Call
>>> Call
* Morgan Stanley Sees Upside EPS Risks Over Higher Energy Prices (+)
* Barclays ‘Less Bearish’ on China Luxury Risk, Sees Opportunity (+)
* Burberry 2Q Prospects Reassure, Valuation Low, SocGen Upgrades (+)
* Deutsche Post Can Re-Rate More on Express Unit: Morgan Stanley
* Heineken, Reckitt, Beiersdorf Underinvest in Brand Equity: RBC
* Oxford Biomedica’s New Outlook, Capex Plans Positive: Peel Hunt (+)
* Wind Installation Forecasts May Be Significantly Too Low: Citi
* Wind Installation Forecasts May Be Significantly Too Low: Citi
LSE to abandon lossmaking derivatives exchange
CurveGlobal Markets has failed to win enough business and will cease trading in January
London Stock Exchange Group is to shut its lossmaking derivatives exchange CurveGlobal Markets after the five-year project failed to win enough business.
CurveGlobal will cease trading at the end of January 2022, the LSE said in a notice posted on its website late on Monday. Some contracts, including futures on German government debt and long-dated UK gilts, will cease trading with immediate effect because there were no open positions, the exchange added.
The closure marks an end to the LSE’s long-held ambitions to challenge the dominance of Deutsche Börse and the US’s Intercontinental Exchange in the European fixed income derivatives market, used by traders and investors as key indicators of changing sentiment in money markets.
It was launched in 2016 by seven of the world’s biggest investment banks, the LSE and Cboe Global Markets with an initial injection of £30m but has repeatedly required funding. A second round of funding in 2018 raised £20m while the LSE had to pump in another £11m in 2019, taking its equity stake to 44 per cent.
Yet CurveGlobal lost £4m last year and the LSE, under a new management team, switched its attention from derivatives trading to data with the $27bn purchase of Refinitiv.
Any open positions after January 28 will be settled with cash at LCH, CurveGlobal’s clearing house. An incentive scheme, in which traders were given monthly cash awards in return for trading on the venue, was due to end on September 30 but will be terminated early. It will also shorten the trading hours of some CurveGlobal contracts.
- Entain (6GI TH) +7.1%
- DraftKings Bids $22.4 Billion for U.K. Gambling Firm Entain
- Rio Tinto (RIO1 TH) +3.4%
- Watch European Mining Stocks as Metals Rally; Iron Ore Gains
- BHP Group PLC (BIL TH) +3.4%
- Lufthansa (LHA TH) +3.1%
- Glencore (8GC TH) +1.6%
- BAT (BMT TH) +1.4%
- Deutsche Bank (DBK TH) +1.4%
- ArcelorMittal (ARRD TH) +1.4%
- Commerzbank (CBK TH) +1.3%
- ING (INN1 TH) +0.9%
- EQT (6EQ TH) -0.5%
- Vivendi (VVU TH) -0.6%
- Vivendi Raised to Buy at Redburn; PT 14 euros
- Bechtle (BC8 TH) -0.6%
- Deutsche Post (DPW TH) -0.7%
- Watch European Delivery Stocks as Costs Hit FedEx’s Forecast
- Nokia (NOA3 TH) -0.8%
- Vestas (VWSB TH) -1.5%
- Wind Installation Forecasts May Be Significantly Too Low: Citi
- IAG (INR TH) -1.8%
DAX:
- Deutsche Bank (DBK TH) +1.4%
- Symrise (SY1 TH) +1.1%
- Merck KGaA (MRK TH) +0.9%
- Porsche SE (PAH3 TH) +0.8%
- BASF (BAS TH) +0.8%
- Deutsche Post (DPW TH) -0.8%
- Watch European Delivery Stocks as Costs Hit FedEx’s Forecast
MDAX:
- Varta (VAR1 TH) +1.8%
- Bechtle (BC8 TH) +1.7%
- Bechtle Cut to Hold at Bankhaus Metzler; PT 62 euros
- Commerzbank (CBK TH) +1.2%
SDAX:
- Eckert & Ziegler (EUZ TH) +2%
- Kloeckner (KCO TH) +1.2%
- Schaeffler (SHA TH) +1.2%
- Deutz (DEZ TH) +1%
- SMA Solar (S92 TH) +0.8%
- SUSE (SUSE TH) -0.6%
- VERBIO Vereinigte (VBK TH) -2.8%
- Traton (8TRA TH) -4.8%
- Traton Sees 3Q Unit Sales Significantly Lower on Chip Shortage
US bond lobbies warn SEC of severe disruption under rule change
Regulator’s application of 50-year-old statute would have ‘significant, deleterious effect’, trade groups say
Lobby groups are warning that activity in the world’s biggest bond market could grind to a halt at the end of this month without last-minute exemptions to an obscure 50-year-old rule in the US that has previously taken aim only at stocks.
Bond trade associations have written to regulators to say amended rules will have a “significant, deleterious effect” on government and corporate bond markets, and pleaded for an explicit reprieve, or more time to comply. The amendments were first proposed last year, but market participants assumed until recent months that the rules would continue to pertain to the stock market alone.
“We believe that such an application of the rule is overbroad and unnecessary”, wrote the Bond Dealers of America and the Securities Industry and Financial Markets Association.
The SEC’s 1971 statute, known as ‘rule 15c2-11’, governs the “publication or submission” of prices to buy and sell securities away from exchanges. Market participants have largely considered it an attempt to guard retail investors from predatory schemes and fraudulent activity in penny stocks.
The rule requires broker dealers such as JPMorgan Chase and Citi to check a wide range of information on issuers, including quarterly and annual reports. Last year the SEC, then led by Jay Clayton, tweaked the rules for the first time in almost three decades, and included a requirement for the information to be publicly available.
“These retail investor-focused improvements to Rule 15c2-11 are long overdue,” said Clayton at the time, adding that advances in technology meant investors could be privy to more up-to-date information before trading.
The statute has never explicitly excluded bonds but, in practice, it has never applied to them in its 50-year existence. This has long suited a market where many corporate issuers are not listed on stock markets and do not routinely produce regular earnings reports. It is unclear what disclosures would be required for government bonds, such as those issued by the US Treasury.
But Michael Decker, vice-president of policy and research at BDA, said the SEC, led by new chief Gary Gensler, has confirmed the rules will also affect government and corporate bonds under the amendments outlined last year. Only municipal securities have an explicit exemption.
“Here we are a matter of days away and very little work has been done. It is pretty clear to me that the SEC hasn’t really thought this through,” said Decker.
The SEC declined to comment.
Rising awareness of the new requirements has sown confusion in the bond market as bankers, trading platforms and investors now face intense compliance demands ahead of an unforeseen month-end deadline.
The concern is that without guidance or amendment from the SEC, trading in part of the bond market will cease when the rule comes into force at the end of this month, as broker dealers back away for fear of attracting an enforcement action from securities regulators.
The SEC’s move comes at a time of increasing regulatory scrutiny of fixed income trading, with Gensler noting this month that he intends to bring greater efficiency and transparency to the market.
Broker dealers are scrambling to understand how to gather, review and publish information on the companies whose bonds they trade. They are also questioning what counts as publication or submission of a quote on a bond — terms left undefined in the rule.
Bond trading has increasingly transitioned to trading on electronic venues, with prices streamed on screens. In an attempt to avoid publishing quotes, some market participants could shift trading back to phones until clearer guidance is available.
“The risk is that if the broker dealers feel they can’t be in compliance based on the interpretation of their internal teams then they might be forced to stop quoting certain bonds to ensure they aren’t out of compliance,” said Kevin McPartland, head of research, market structure and technology at Greenwich Associates.