>>> US Gapping up

Gapping up 

In reaction to earnings/guidance:

  • BKE +12.8%, FL +5.7%, KEYS +3.9%, DE +2.6%, ROST +0.6%, MMYT +0.6%

Other news:

  • SCPH +9.5% (enters into a supply agreement with WST)
  • MOBL +7.2% (co will explore potential sale, according to Bloomberg)
  • BNTX +6.2% (BioNTech and Pfizer share early results on lead mRNA vaccine candidate BNT162b2 against COVID-19)
  • XSPA +3.7% (opens XpresCheck COVID-19 testing facility)
  • XERS +3.5% (names new COO)
  • TLSA +3.4% (receives patent for use of milciclib in combination with tyrosine kinase inhibitors)
  • PSTX +3.2% (provides operational update)
  • SRNE +2.5% (to acquire SmartPharm)
  • MIK +1.2% (names new CFO)
  • CYRX +1.1% (to acquire CRYOPDP, a global provider of temperature-controlled logistics solutions to the clinical research, pharmaceutical and cell and gene therapy markets)
  • PFE +1% (BioNTech and Pfizer share early results on lead mRNA vaccine candidate BNT162b2 against COVID-19)

Analyst comments:

  • CXO +2.3% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • EL +1.7% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • PANW +0.9% (initiated with a Buy at Loop Capital)
  • SPLK +0.9% (initiated with a Buy at Loop Capital)
  • WSM +0.7% (upgraded to Buy from Accumulate at Gordon Haskett)

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • SCPH +11.8%, XERS +8.9%, BNTX +8.3%, TLSA +7.6%, MOBL +6.7%, DE +4.3%, KEYS +4.1%, PSTX +3.2%, XSPA +3%, SRNE +2.4%, PFE +1.5%, BKE +1.4%, BZUN +1.2%, GLDD +0.7%
  • Gapping down:
    • GAN -13.5%, PDD -9%, OSIS -2.7%, DKL -1.2%, UNM -1%, EFSC -0.6%, BDX -0.5%, WST -0.5%

FT : Williams F1 team sold to US investors to secure financial future

Williams F1 team sold to US investors to secure financial future
Acquisition by Dorilton Capital ends family-ownership of one of motor racing’s most successful teams

Williams, the Formula One team, has been acquired by US investment group Dorilton Capital in a deal that secures the British racing outfit’s future in the sport.

The last family-owned business in the global racing series, which was founded by Frank Williams in 1977 and run in recent years by his daughter Claire, put itself up for sale last month. The decision was a concession that Williams could no longer remain independent while competing against better funded teams such as Mercedes, Ferrari and Red Bull.

On Friday, Williams announced the sale to New York-based Dorilton Capital, an investor in industrial and healthcare companies, for an undisclosed sum. The team will continue to compete under the Williams brand and retain its UK headquarters and leadership.

“As a family we have always put our team first,” said Ms Williams, the team’s deputy team principal, in a statement. 

“Making the team successful again and protecting our people has been at the heart of this process from start. This may be the end of an era for Williams as a family-owned team, but we know it is in good hands.”

Matthew Savage, Dorilton Capital chairman, and Darren Fultz, chief executive, co-founded their investment firm in 2009 after previously working as executives at Rothschild, the investment bank.

Mr Savage said its “patient investment style” would “allow the [Williams] team to focus on its objective of returning to the front of the grid”. 

The sale comes just a day after Formula One agreed a crucial pact, called the “Concorde Agreement”, which ties teams to the competition for the next five years.

F1 chief executive Chase Carey said the deal would distribute a $1bn pot derived from television rights, promoter fees and advertising revenues, more fairly among the teams ensuring more even competition.

However, Williams has decided it needs further financial support to return to its historic position as one of the most successful outfits in F1.

The coronavirus pandemic, which stopped the season before it could start, has exacerbated the strain at Williams Grand Prix Holdings, which posted a £17m loss in 2019, down from an £8m profit a year before.

The group won 16 drivers’ and constructors’ championships in the 20 years to 1997 but no top title since, and has finished last on the grid for two consecutive seasons. 

Revenues fell to £95.4m last year, the first year turnover has dropped below £100m since 2014. The Frankfurt-listed company is worth roughly half the price of its initial public offering in 2011, when it was valued at €243m. 

>>> Deere beats by $1.32, beats on revs; provides FY20 guidance

Deere beats by $1.32, beats on revs; provides FY20 guidance (191.10)
  • Reports Q3 (Jul) earnings of $2.57 per share, excluding non-recurring items, $1.32 better than the S&P Capital IQ Consensus of $1.25; revenues (equipment operations) fell 12.4% year/year to $7.86 bln vs the $6.7 bln S&P Capital IQ Consensus.
  • Agriculture & Turf sales decreased for the quarter due to lower shipment volumes and the unfavorable effects of currency translation, partially offset by price realization. Operating profit increased primarily due to price realization, and lower selling, administrative, and general expenses.
  • Net income attributable to Deere & Company is forecast to be about $2.25 bln for the full year. However, many uncertainties remain regarding the effects of the global pandemic that could negatively affect the company's results and financial position in the future. In addition, the company has announced broad employee-separation programs that will be completed during the fourth quarter in support of its strategy to create a leaner, more agile organization. The programs' total pretax expense included in the forecast is about $175 mln with estimated annual savings of $175 mln.

FT : Partying pushes Spain Covid-19 rate far above rest of Europe

Partying pushes Spain Covid-19 rate far above rest of Europe
Surge in cases may affect reopening of schools, officials warn

Coronavirus is spreading far faster in Spain than in the rest of Europe, confronting the country with a race against time to bring the outbreak under control before the return to school and work next month following the holiday season.

Figures published by the European Centre for Disease Prevention and Control, an EU agency, on Thursday indicated that in the previous 14 days Spain had reported about 139 new Covid-19 cases per 100,000 of population.

Apart from Malta, no other European country had a ratio above 100, and the Spanish figures compare with ratios of 46 in France and 21 in the UK.

In three districts of Madrid, the Spanish region with most cases, the equivalent ratio is above 400 and in one it is almost 600.

“No one should be confused: things are not going well,” Fernando Simón, the doctor leading the country’s effort against the pandemic, said on Thursday evening, as he acknowledged that in some areas of the country the spread of the virus was out of control.

National and regional officials largely blame the speed of the virus’s resurgence on uncontrolled groups of youths drinking and socialising — as well as gatherings of family members — and are beginning to warn that despite months of planning, pupils may not be able to return to classes in full.

Dr Simón pleaded for social media influencers to use their clout with young people to persuade them of the dangers of the virus. “We can’t allow this to go on,” he said. “I understand that people want to party, but there are lots of ways to party.”

Critics say that Madrid and Spain as a whole need to step up their effort to track and trace the virus spread. In Madrid, where more than 2,600 new cases were reported on Thursday, there are about 550 trackers.

“Unless citizens take responsibility, in terms of staying at home if they have been in contact [with someone infected], we could have the best tracking in the world and it won’t be enough,” Enrique Ruiz Escudero, the Madrid region’s top health official, told the Financial Times. “Most of the outbreaks we have detected have been family or social gatherings, when people relax and think they can’t be infected.”

With the disease resurgent in a city that has been largely deserted for the beach, the challenge is to avoid a disastrous further surge when people return to schools and work in around two weeks time, as well as during the autumn flu season.

As is the case in countries such as France and Germany, the number of daily cases recorded in Spain has already returned to levels not seen since spring. On Thursday, the health ministry reported more than 7,000 new cases and said that 122 people had died in the previous week. This compares with a death toll of 22 in the week up to August 6.

Mr Ruiz Escudero emphasised that current hospitalisations and intensive care cases are a fraction of the levels reached during the pandemic’s peak in March and April, and that those affected are on the whole much younger than before. About half of all Spain’s new cases are asymptomatic. 

He added that the high totals in Madrid were partly the result of large-scale random testing in the most affected areas, rejecting criticism that the region’s centre-right government was too quick to relax controls when Spain’s nationwide lockdown ended on June 21.

But Madrid, together with the rest of the country, is now reimposing some controls, issuing an order this week to close nightclubs and discos. Mr Ruiz Escudero said the region was looking at “all possible scenarios” for the return to school, including part-time attendance, and called for nationwide agreement on protocols for how schools should respond to Covid-19 cases.

“The phase-out of the lockdown accelerated too much in June,” said Miguel Otero, an analyst at the Elcano institute, a think-tank, who served on a government committee on the transition to a new normality. “People had the impression the virus was coming under control and there was huge pressure on the economy to reopen, particularly the tourism and entertainment sectors.”

Mr Otero also suggested that part of the reason why Covid-19 was now more prevalent in Spain than elsewhere was the country’s love of bar-hopping and of family gatherings.

WWD : Trustee Sounds Alarm Over Marble Ridge Conduct In Neiman’s Bankruptcy

Trustee Sounds Alarm Over Marble Ridge Conduct In Neiman’s Bankruptcy
The hedge fund, a loud critic of the Mytheresa transfer, interfered in the reorganization process, the U.S. trustee in the case said.

Marble Ridge, the hedge fund that took aim at Neiman Marcus’ handling of the Mytheresa web site, has set off alarms over its own conduct during the bankrupt retailer’s reorganization process.

Marble Ridge managing partner and principal Dan Kamensky had tried to block a potential competing bidder — the financial firm Jefferies Financial Group Inc. — from bidding in one of the transactions in the retailer’s ongoing reorganization efforts, according to the findings of an inquiry this month by the U.S. trustee in the case.

In a statement filed late Wednesday in Texas bankruptcy court, the trustee, whose role involves overseeing the integrity of bankruptcy proceedings, detailed Kamensky’s interactions in July with an unnamed Jefferies employee, citing transcripts of exchanges that took place between Kamensky and the employee over Bloomberg terminal chats.

“Tell Geller to stand DOWN,” Kamensky is quoted as instructing the Jefferies employee, making a reference to Eric Geller, a senior analyst at Jefferies who had informed Neiman’s creditors committee in the case of Jefferies’ plan to bid in the transaction. Kamensky is also cited as telling the employee, “DO NOT SEND IN A BID.”

The report also cites a phone conversation between Kamensky and the Jefferies employee, which the employee had recorded, that shows Kamensky urge the employee not to tell the committee that he had asked them to pull the bid, claiming that he had only meant that the firm shouldn’t make a bid unless it had a serious offer. When the employee disagreed with this characterization, Kamensky was recorded as saying, “[I]f you’re going to continue to tell them what you just told me, I’m going to jail, OK? Because they’re going to say that I abused my position as a fiduciary, which I probably did, right? Maybe I should go to jail. But I’m asking you not to put me in jail.”

Marble Ridge was itself a member of the creditors committee, but left that role as of August. The trustee wrote that Kamensky appeared to acknowledge the severity of his purported actions.

“Mr. Kamensky admitted that contacting and trying to influence a potential rival bidder for property of the bankruptcy estate was wholly inappropriate and a grave mistake,” the trustee wrote in the report.

The transaction in question itself had involved a major settlement in the case to resolve the long-running dispute over the Mytheresa transactions. As part of that settlement, revealed ahead of a hearing in the case at the end of July, Neiman Marcus Group Inc. had agreed to put 140 million shares of series B preferred stock in Mytheresa into the retailer’s bankruptcy estates, meant to go toward the recovery pool for general unsecured claims.

Geller had informed the creditors’ committee that Jefferies had wanted to bid on those 140 million shares, which was what led to Kamensky’s alleged efforts to manipulate the process, according to the trustee’s report.

Neiman Marcus Group Inc. is the parent company controlled by its leveraged buyout sponsors Ares Management Corp. and Canada Pension Plan Investment Board, which purchased the retailer for $6 billion in 2013. The Neiman Marcus Group parent and Mytheresa are not part of the ongoing bankruptcy proceedings.

The trustee’s report noted also that the Kamensky’s efforts to deter the competing bid ultimately didn’t work. The new findings are not expected to affect the retailer’s planned reorganization, and the confirmation hearing on Sept. 4, is expected to proceed as scheduled. The court may also schedule a hearing on the trustee’s findings about Kamensky’s actions.

Representatives for Marble Ridge and Ares declined to comment.

FT : Lack of trading data hits ETF growth in Europe

Lack of trading data hits ETF growth in Europe
PwC report finds Mifid II has had only a limited effect on improving transparency

Exchange traded fund distribution in Europe is being hindered because market data providers have shown little interest in creating a shared database of equity prices and trading volumes, market participants say.

The comments come as a new report by PwC finds that the EU’s Mifid II regime introduced in 2018 has had only a limited effect on improving transparency in market data in the region. The authors conclude that flaws in the availability, quality and consistency of trading data are impeding the distribution of ETFs in Europe.

Improving trading data aggregation has been a major priority for EU policymakers, who have called for the creation of a consolidated tape — a type of electronic system in which data feeds from different exchanges are banded together to create a summary across all markets.

However, attempts to create the tape have so far failed to get off the ground.

Marie Coady, partner at PwC, said the lack of trading data standardisation meant retail investors did not have detailed insight into the overall liquidity of ETFs, making the products a less attractive proposition.

A 2018 industry initiative led by Bloomberg did introduce some aggregated trade reporting for ETFs, but the service is only available to institutional investors and still contains inconsistencies in data reporting, according to the PwC report.

“The tools available to institutional investors are much less available to retail investors,” said Jason Warr, head of ETFs and index investing for Europe, the Middle East and Africa at BlackRock.

Mr Warr said BlackRock would welcome more vendors sharing their data in a standardised format with asset managers as that could “accelerate retail adoption” of ETFs.

However, Ms Coady warned that standardisation risked “diluting” the commercial value of the data.

A spokesperson for the European Commission said it had been “consulting widely” to find commercial partners to help develop a consolidated tape.

People with knowledge of the discussions said the companies approached by Brussels include Nasdaq, IHS Markit, Appsbroker and Clarus Financial Technology.

An employee working for a large market data provider, who wished to remain anonymous, said: “All of the big data providers looked at creating a consolidated tape but the business case was just not really there.”

The data expert said a major challenge was the practicalities involved in aggregating data from more than 200 trading venues operating in Europe, which would create delays in the speed at which different clients were able to access the data.

“It might only be nanoseconds but that is important to our institutional customers so they will not pay a fee for this.”

While this so-called latency is unlikely to be an issue for retail investors, they lack the resources to fund a consolidated tape, leaving a question mark over “who is going to pay for all this infrastructure”, the expert added.

Some 71 per cent of European ETFs are listed on two or more exchanges, according to the PwC report.

The PwC report also said regulators should pursue alignment in trading venue rules and establish specific arrangements for the clearing and settlement of ETFs.

Nasdaq and IHS Markit declined to comment. Bloomberg, Appsbroker and Clarus Financial Technology did not respond to a request for comment.