WSJ : Crowd-Safety Company Evolv Going Public in $1.7 Billion SPAC Merger

Crowd-Safety Company Evolv Going Public in $1.7 Billion SPAC Merger
Microsoft co-founder Bill Gates and former Florida governor Jeb Bush are two of Evolv’s investors

Evolv Technology is combining with a special-purpose acquisition company to go public in a deal that values the crowd-safety firm at about $1.7 billion, the companies said.

Backed by investors including Microsoft Corp. co-founder Bill Gates and former Florida Gov. Jeb Bush, Evolv is merging with the SPAC NewHold Investment Corp. NHIC 0.70%

Based outside of Boston, Evolv uses artificial intelligence and data science to screen people for weapons and other threats. The company says its platform eliminates the need for devices like metal detectors and physical security checks. It is used at venues such as Six Flags Entertainment Corp. amusement parks, New York’s Lincoln Center and Gillette Stadium, home of the National Football League’s New England Patriots. Evolv says it has screened more than 50 million people in the past four years, second world-wide only to the Transportation Security Administration.

In 2020, Evolv also started using its technology to check people for elevated body temperatures, a feature that Chief Executive Peter George said is in high demand as businesses reopen following shutdowns designed to stop the spread of the coronavirus.

“We were built to solve this problem of making venues safe,” Mr. George said in an interview.

Founded in 2013, Evolv joins the growing pool of technology companies going public by merging with SPACs, also known as blank-check companies. SPACs like NewHold Investment are shell companies that list on an exchange with the sole purpose of acquiring a private firm such as Evolv to take it public. The private company then gets the SPAC’s place in the stock market.

NewHold raised $150 million when it went public last summer and was one of several blank-check firms competing to take Evolv public, NewHold CEO Kevin Charlton said.

Through the merger and an associated fundraising round called a private investment in public equity, or PIPE, Evolv is expected to generate proceeds of about $470 million. PIPE investors in the deal include famous athletes such as former NFL quarterback Peyton Manning and tennis players Andre Agassi and Steffi Graf.

Mr. Charlton said the SPAC will use some of its equity to launch a public-benefit corporation designed to make Evolv’s platform affordable to venues such as schools. Evolv executives also are expected to contribute to the PBC.

In addition to Messrs. Gates and Bush, Evolv counts venture-capital firms such as General Catalyst and Lux Capital among its existing investors. None of the existing investors are selling as part of the deal.

Combining with a SPAC has become a popular way for a company to go public because SPAC mergers let startups make rosy projections—something that isn’t allowed in a traditional initial public offering—and earn blank-check company creators several times their initial investment on average. Two-hundred twenty-eight blank-check firms have raised $73 billion this year, putting the market on track to shatter last year’s record of more than $80 billion, according to data provider SPAC Research.

Shares of SPACs and companies that have merged with them have struggled lately, with investors retreating from technology stocks and government-bond yields surging. NewHold shares fell back around their IPO price of $10 last week. Still, many new blank-check companies are entering the market and unveiling deals. Thirty-nine new SPACs raised money last week.

The Evolv deal is expected to close in the second quarter, and Evolv expects to trade on the Nasdaq under the ticker “EVLV”.

FT : GE nears deal to sell plane leasing unit to AerCap for more than $30bn

GE nears deal to sell plane leasing unit to AerCap for more than $30bn
US industrial group takes another step in restructuring of business under Larry Culp

General Electric is nearing a deal to sell its aircraft leasing business to Irish group AerCap for more than $30bn, the latest move by the US industrial group to restructure its business, said people briefed about the matter. 

A deal, which would combine GE Capital Aviation Services (Gecas) with leasing company AerCap, could be announced as early as Monday, according to multiple people informed about the transaction.

The merger would mark the latest attempt by Larry Culp, GE’s chief executive, to turn round the Boston-based group since being appointed in 2018, during which time the group has undergone a leadership shake-up, dividend cuts and a US Securities and Exchange Commission accounting investigation.

Many of GE’s troubles stemmed from its GE Capital division, the financial unit that was badly hit in the aftermath of the 2008 recession. The company has sold a series of large assets over the past five years, including its biotech business to Danaher for $21bn and its stake in Baker Hughes, the oil services company. 

Gecas is among the world’s largest leasing companies, buying aircraft and leasing them to airlines. 

GE had been exploring opportunities to sell its operations with a competitor for several years, as the company has been trying to dispose of assets it does not deem core to its business model.

In 2019, Bloomberg reported that private equity group Apollo Global Management was exploring buying Gecas for up to $40bn.

GE had been struggling under a heavy debt load after years of aggressive dealmaking under its former CEO Jack Welch. The company’s share price is trading at a fraction of where it was when Welch left the company in 2001 as Jeff Immelt, John Flannery and Culp, his three successors, faced the challenge of dismantling the empire. 

GE declined to comment and AerCap could not be immediately reached for comment.

The aviation industry was among the worst affected by the pandemic over the past year. However, the production of multiple vaccines to combat Covid-19 has lifted the prospects of recovery for the sector, as travellers are expected to start flying again more regularly.

Aircraft leasing companies have seen renewed interest from investors, raising a combined $14.9bn in debt at the start of the year.

AerCap has been expanding its business, last year becoming a major holder in Norwegian Air Shuttle, the embattled government-owned airline, with a 15.9 per cent stake. In 2013, the Irish company agreed to buy International Lease Finance Corporation for $7.6bn. 

News of the GE-AerCap transaction was first reported by the Wall Street Journal.

FT : Oil price jumps above $70 after attacks aimed at Saudi oil facilities

Oil price jumps above $70 after attacks aimed at Saudi oil facilities
Markets unsettled despite no loss of life or production in strikes claimed by Houthis

Oil prices jumped above $70 a barrel for the first time in 14 months after Saudi Arabia, the world’s top oil exporter, said its energy facilities had been attacked on Sunday, targeting “the security and stability” of global supplies.

A drone attack from the sea on a petroleum storage tank at Ras Tanura, one of the largest oil shipping ports in the world, took place on Sunday morning, the kingdom said.

In the evening, shrapnel from a ballistic missile fell in Dhahran, where state oil company Saudi Aramco has its headquarters and near where thousands of employees and their families live.

While Saudi Arabia’s ministry of energy said the attacks “did not result in any injury or loss of life or property”, and a person familiar with the matter said no production had been affected, the attacks have still unsettled oil markets that have rebounded strongly in recent months.

Brent crude, the international benchmark, rose as much as 2.9 per cent to $71.38 a barrel on Monday morning in Asia while West Texas Intermediate, the US benchmark, rose by a similar amount to a high of $67.98 a barrel.

Yemen’s Iran-allied Houthi fighters claimed responsibility for the attacks and said they had also focused on military targets in the Saudi cities of Dammam, Asir and Jazan.

A Houthi military spokesperson said the group had fired 14 bomb-laden drones and eight ballistic missiles in a “wide operation in the heart of Saudi Arabia”.

Amrita Sen at Energy Aspects emphasised that while a direct hit on oil supplies appeared to have been avoided, the threat to the market would still be taken seriously by oil traders.

“The oil price was already on a strong footing after Saudi Arabia and Opec’s decision last week to keep restricting production,” she said.

Brent crude, the international oil benchmark, has risen close to $70 a barrel since the cartel and allies outside the group, including Russia, decided not to unleash a flood of crude on to the market.

Amid uncertainty about the oil market outlook as the coronavirus crisis continues to have an impact on crude demand, the group decided against raising production by 1.5m barrels a day from April.

Given the supply curbs, while the kingdom has the extra production capacity to tap into, “geopolitical threats to supply will add a premium to the price”, Sen added.

The kingdom’s state media outlet said earlier in the day that the Saudi-led military coalition confronting the Houthis had intercepted missiles and drones aimed at “civilian targets” without indicating their location.

The Eastern Province, where Dhahran is located, is where much of Saudi Aramco’s oil facilities are located. The attack is the most severe since September 2019.

At that time the kingdom was rocked by missile and drone fire that hit an important processing facility and two oilfields, temporarily shutting off more than half of the country’s crude output.

The Houthis have ramped up assaults on Saudi Arabia through airborne attacks and explosive-laden boats and mines in the Red Sea, laying bare the vulnerability of the country’s energy infrastructure despite the kingdom’s production prowess and its hold over the oil market.

“The frequency of these attacks is rising, even if the impact on energy infrastructure appears limited,” said Bill Farren-Price, a director at research company Enverus. “We know the capacity to cause serious damage exists, so this will boost the risk premium for oil.”

WSJ : GameStop Frenzy Emboldens Supporters of Stock-Trading Tax

GameStop Frenzy Emboldens Supporters of Stock-Trading Tax
Proponents say tax could help fund infrastructure programs, while Wall Street groups contend it would hurt investors

The wild volatility in GameStop Corp. shares this year has emboldened Democrats who support a tax on stock trades.

A financial-transaction tax, or FTT, would raise money by collecting a fraction of the value of securities trades. Proponents say such a tax could help fund programs like President Biden’s $2 trillion infrastructure plan, while reining in high-frequency trading and excessive speculation. Critics, including Wall Street lobbying groups, say it is a flawed policy that would hurt investors.

Left-leaning politicians such as Vermont Sen. Bernie Sanders have long advocated a transaction tax, with little success. Now, with Democrats holding the White House and narrow majorities in Congress, progressives have their best chance in years of enacting an FTT. Potentially, such a tax could be passed without Republican support, using the budget-reconciliation process that allows tax and spending bills to pass the Senate on a simple majority vote.

To be sure, the odds are still against an FTT passing Congress. There is broader support among Democrats for other ways to raise revenues, such as lifting the top individual tax rate or corporate tax rate, both of which were lowered under former President Donald Trump. Still, the idea of taxing trades has gained traction among more centrist Democrats in recent years, raising the hopes of FTT advocates.

“There’s much broader support and interest in the concept among members of Congress than there was a decade ago,” said Antonio Weiss, a Treasury Department official in the Obama administration who proposed his own version of a transaction tax last year.

Mr. Weiss’s plan calls for a 0.1% tax on stock, bond and derivative trades that would be phased in over a multiyear period. Such a tax could raise $60 billion a year, he estimates. Some lobbyists and tax-policy advisers see his plan as a basis for a bill that could win over Democratic moderates.

Lately, the FTT issue has gained fresh visibility from an unlikely source: GameStop. After the furious rally and subsequent crash of the videogame retailer’s stock in January, politicians and pundits have stepped up scrutiny of high-speed trading and questioned whether the stock market is fair to small investors. Some progressives have seized the opportunity to promote an FTT.

“One way to ensure that this enormous wealth generated on Wall Street actually reaches the real economy...is to enact and look at proposals like a financial transaction tax,” Rep. Rashida Tlaib (D., Mich.) said at a hearing of the House Financial Services Committee last month devoted to the GameStop episode.

A bill sponsored by Rep. Peter DeFazio (D., Ore.) to impose a financial-transaction tax has attracted House Majority Whip James Clyburn, a South Carolina Democrat, as a co-sponsor. The bill has 27 co-sponsors in all, including five who added their names after the Feb. 18 hearing. Further hearings on GameStop are planned later this month in the House and Senate.

In Albany, N.Y., some lawmakers are pushing to revive a New York tax on stock trades that the state hasn’t collected since 1981. Supporters say it would shore up a state budget battered by the coronavirus pandemic, but business groups and the New York Stock Exchange say it could prompt an exodus of financial firms, hurting the state economy. Similar pushback from Wall Street helped scuttle a bill to tax trades in New Jersey last year.

At the federal level, it is unclear whether Mr. Biden would back a transaction tax. The White House has made no formal FTT proposal, and taxing trades wasn’t part of Mr. Biden’s campaign plan. As a candidate, he made contradictory comments on the issue, at one point saying an FTT would hurt the middle class, but later giving an interview where he appeared to endorse the tax.

The president’s team includes some vocal FTT supporters, such as Jared Bernstein, a member of the White House Council of Economic Advisers, and others who have criticized the idea, including Treasury Secretary Janet Yellen. Asked about a transaction tax last month, Ms. Yellen said: “It could deter speculation, but it might also have negative impacts.”

Wall Street and its congressional allies say a transaction tax would make U.S. capital markets less competitive and spur trading activity to shift overseas. They also accuse FTT proponents of making overly optimistic projections of how much revenue such taxes would raise.

“Wherever this has been tried in the past, it has ended up having negative consequences with respect to market liquidity, and it has never raised anywhere near the amount of revenue that was advertised,” Kenneth E. Bentsen Jr. , president of the Securities Industry and Financial Markets Association, said in an interview.

Groups like Sifma warn that brokerages would pass the cost of the tax to investors, and mutual funds would incur the cost of the tax each time they rebalanced. Even though the rate paid on each trade might seem tiny, it could add up to hefty costs over time, industry groups say.

In June, Vanguard Group released an analysis of how various types of transaction taxes would affect an investor putting away $10,000 annually for 40 years. For a portfolio with a mix of stock and bond index funds, Vanguard estimated that a 0.1% tax on purchases would ultimately cost the investor $25,705—or between 2% and 3% of his or her savings, which under Vanguard’s assumptions would grow to $1.2 million at the end of 40 years.

Proponents of a transaction tax say such industry studies are distorted to overstate the impact on Main Street investors. “Financial transaction taxes fall overwhelmingly on the rich,” said Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center.

It wouldn’t be unprecedented for the U.S. to tax stock trades. The government levied a similar tax from 1914 to 1965. Today, the Securities and Exchange Commission’s budget is supported by a small fee on trades, which brought the agency nearly $2.6 billion in the 2020 fiscal year.

Overseas, dozens of countries have FTTs, including France, Singapore, South Korea and the U.K. The global experience has been mixed: One tax imposed by Sweden in the 1980s led much of the country’s trading volume to migrate elsewhere, while Hong Kong has remained a global financial center despite charging a type of transaction tax called a stamp duty.

Last month, Hong Kong said it would increase its stamp duty to 0.13% from 0.1%, the first increase since 1993, as it confronts a record budget deficit.

NY Post : Manchin defends delaying $1.9T COVID package, wants $11 minimum wage

Manchin defends delaying $1.9T COVID package, wants $11 minimum wage

Sen. Joe Manchin on Sunday defended holding up debate for hours on President Biden’s $1.9 trillion coronavirus relief bill over his opposition to a $15 minimum wage and certain unemployment benefits — saying the negotiations led to a more targeted stimulus package.

The moderate Democrat from red-state West Virginia said members of his caucus and Republicans worked together to “make significant changes.”

“We targeted where help is needed. We were able to target, basically the people that need help, the children that need help, the schools that need help, the people on the front line, all of America,” Manchin told CNN’s “State of the Union.”

“That’s what we were able to do and a lot of that was by talking with my colleagues and negotiating back and forth, and I was able to channel that through I think, and hopefully make a bill is a much more encompassing deal,” added Manchin, whose vote was crucial in a 50-50 divided Senate to pass the legislation.

He supported cutting a weekly federal supplement in unemployment to $300 from $400 and came out against raising the federal minimum wage to $15, suggesting it be set at $11.

After negotiations, the expanded benefits were dropped to $300 and the minimum wage provision was not included.

But the supplement, which had been set in the bill to expire in July, was extended to September.

Asked about criticism from progressives like Rep. Alexandria Ocasio-Cortez of New York, who argued that Manchin was holding back much-needed financial help for working Americans with his opposition, the Mountain State lawmaker said Congress will eventually get to $15.

He argued the minimum wage proposal never belonged in the stimulus bill because of Senate rules.

“They made a big issue about this, and I understand everyone has the right. I respect where she’s coming from, I respect her input. We have a little different approach. We come from two different areas of the country that have different social and cultural needs,” he said.

Manchin said he believes members of Congress will collaborate on a minimum wage bill, saying “there’s not one senator out of 100 who does not want to raise the minimum wage.”

He said he backs an $11 minimum wage that is indexed to inflation “so it never becomes a political football game.”

“It should be the respect of the dignity of work, always being about the minimum wage of what the guidelines for poverty is, and being able to lift yourself way far above that, by your skill sets and your determination,” he said.

The Senate passed Biden’s stimulus package on Saturday on a party-line vote.

WWD : The Rise of Makeup for Men

The Rise of Makeup for Men
New brands, such as Tribe Cosmetics and Faculty, have hit the market, while more established labels like War Paint and MMUK are noting a swell in demand.


A male model on Fendi’s couture runway for spring 2021 sported vivid red lips. That same season, for Charles de Vilmorin, a guy’s peepers were underlined with a swathe of makeup. While for Céline men’s fall 2021 ready-to-wear presentation, male models’ eyes were winged.
Men’s makeup is becoming a real thing — in fashion circles, but also on the street and with new brand offerings, such as the recent launch of Tribe Cosmetics.
Products from Tribe Cosmetics. Courtesy of Tribe Cosmetics
“Male beauty has come a long way and continues to gain a wider acceptance, more recently from the middleman market,” said Livvy Houghton, senior creative researcher at The Future Laboratory, a London-based strategic foresight consultancy. “The disruption we’ve seen in grooming and skin care has progressed to color cosmetics. The category [cosmetics] is being stripped of its gender constraints and outdated ideals around perfection, and is instead championing a more inclusive approach, focused entirely on freedom and self-expression.”
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Alex Dalley, founder of the 10-year-old men’s makeup brand MMUK, noted that especially over the past 18 months, “the volume of orders coming through from distributors and direct from customers is just phenomenal.”

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Brow and Beard product from MMUK. Courtesy of MMUK
He attributed the surge to a confluence of factors, including men largely on screen due to the coronavirus wanting to look better and the rise of social media, including male beauty vloggers and men’s makeup parties.


“That’s just created this cult following. It’s now acceptable for men to wear makeup,” Dalley said.
One recent entrant on the market is Tribe Cosmetics, a direct-to-consumer brand, launched in January with two stockkeeping units of men’s makeup. The Skin Fix acts as a concealer and Beard Fix can be used to fill in beards or eyebrows. Those products, priced at $18 and $12, respectively, are organic, natural and cruelty-free.
Tribe Cosmetics caters to men with little knowledge of makeup or who want natural results from color cosmetics.
“We were after the user that’s new to using makeup or exploring using makeup,” explained Pergrin Pervez, cofounder of Tribe Cosmetics, adding the brand’s products don’t need brush applications. “They would want something that’s simple, something they can understand really quickly.”
He asserted that repackaging traditional cosmetics wouldn’t sufficiently capture the male audience.
“We asked people: ‘Would you use makeup for men?’ and they said ‘no,’” Pervez said. “When you change the questions around to ask: ‘Would you use something that could cover up some blemishes or fix some skin discoloration?’ the overwhelming answer was ‘yes.’”
The founders see most opportunity with generations X and Z, the latter for its embrace of gender fluidity.
“Sixty-five percent of our consumers are aged 40-plus,” said Matt Rodrigues, a Tribe Cosmetics cofounder.
Industry sources estimate the brand will generate $300,000 in retail sales during its first year.
The men’s makeup market remains niche overall, but it’s expected to expand quickly.
Toward the end of last year, it was estimated at 1.2 billion pound, said Matt Lumb, chief executive officer of three-year-old men’s makeup brand War Paint, adding the market is projected to grow about 20-times bigger over the next five years.


“What we’ve set out to do is just give guys a choice,” he said, adding the brand keeps its offer relatively simple, with a bit more than 20 skus. Bestsellers today are the concealer, tinted moisturizer and full product set.
For War Paint, customer demographics are split rather evenly among men aged 18 to 35, 35 to 50 and 50-plus.
“There is a global audience for these kind of products,” Lumb said.
War Paint is primarily sold d-to-c but is also in brick-and-mortar stores. The U.K., the U.S., Canada, Australia and Germany are its largest markets.
The brand closed a round of seed funding of about 1.2 million pounds led by True private equity group in May 2020 to help build out the team and marketing efforts.
On March 1, War Paint released its first makeup manual.
War Paint’s makeup manual. Courtesy of War Paint
In 2011, MMUK’s debut offer was 12 products, but now it encompasses more than 100 skus, after Dalley noted consumer demand.
Top sellers include the “clear” — or neutral — options, such as brow gel or mascara.
MMUK, which has been global for just over two years, is going through product registration in Japan. Among its other geographic focuses are on launching in Dubai and China, alongside the rest of the Asia Pacific region.
In China, the men’s color cosmetics market is small. In 2020, it made just 2.3 percent of total e-commerce beauty sales and 0.3 percent of overall beauty revenues there. However, the category is developing quickly. Between May and December 2020, men’s makeup sales grew 75 percent versus the same prior-year period, according to Samuel Yan, an analyst at NPD China.
He said there are limited prestige men-specific offerings, causing most males to seek out mass-market items.
Forty-two percent of men’s makeup sales in China came from foundations, followed by face primers and eyebrow products.
“Brands need to increase their marketing campaigns and interactions on social media with regards to men’s beauty products, to let male consumers know which product to choose and how to effectively use them,” Yan said.
In MMUK’s home market of the U.K., it’s about to open a new warehouse and expects to sign a lease for a first brick-and-mortar location, in Brighton.
“We’re using that as a kind of template flagship store before potentially going into bigger cities,” Dalley said.
Other brands leading the men’s market revolution include the likes of Faculty, a new grooming label launching first with colored nail polish and nail stickers, tapping into streetwear culture, said Future Laboratory’s Houghton.
“The company plans to leverage idols in our culture who are already using beauty products, showing others that they can, too,” she explained.
Some mavericks tried dipping into the men’s makeup market decades ago, with limited success. Jean Paul Gaultier was one. He famously plunged into the category in 2003, with Le Mal Tout Beau Tout Propre line, which included eyeliner, bronzing powder and roll-on lip gloss.
Four years later, that was discontinued and replaced with a range called Monsieur, which had color cosmetics and skin care for men. But the plug was pulled on that, too.
Marc Jacobs entered the category, as did Tom Ford, in late 2013, as part of its grooming collection. That includes a concealer in three shades, a bronzing gel, a brow gelcomb and brow definer.
Ford’s bestseller is the concealer, then the bronzing gel, considered the brand’s cult product. And the range keeps growing. Later this year, the number of its concealer shades will reach 10.
Three years ago, Chanel dove into the swelling men’s makeup market, with its first line of color cosmetics for guys, Boy de Chanel, encompassing a trio of products, launching first in South Korea. The collection had a tinted fluid, coming in four shades; a matte moisturizing lip balm, and an eyebrow pencil in four colors.
From the Boy de Chanel line. Courtesy of Chanel
Last year, that collection grew to include also a gel moisturizer, a concealer, a 3-in-1 eye pencil and a nail varnish.
“The category will no doubt continue to grow,” said Houghton, of men’s makeup. “But how it stays relevant to the modern, evolving male will be the bigger question.”