Beyond Mergers: A Diversified Approach To Event-Driven Investment
Summary
- Event-driven investing seeks to extract alpha by capitalizing on price anomalies in shares of companies that are undergoing or affected by a corporate, investor or liquidity event.
- Over the long run, merger arbitrage has generated high-quality returns - roughly defined as returns that are consistent, understandable and uncorrelated over time to the broad equity market.
- Many event-driven strategies tend to have a long bias, which we believe limits the opportunities to generate alpha.
For event-driven strategies, tie-ups and takeovers aren’t the only events that matter.
Event-driven investing seeks to extract alpha by capitalizing on price anomalies in shares of companies that are undergoing or affected by a corporate, investor or liquidity event. It’s one of the oldest and most well-researched hedge-fund strategies - the HFRI Event Driven Index dates to 1990. Over that period, it has delivered strong annualized risk-adjusted returns (Display) with just seven “down” years since inception.
Event-Driven: Steady Growth, Strong Risk-Adjusted Returns
Steady Growth, Strong Risk-Adjusted Returns
Past performance does not guarantee future results.The risk-free rate used in calculating the historical Sharpe ratio is the FTSE Treasury Bill 1 Mon USD Index. Performance data for the HFRI Event-Driven Index reflects the cumulative since inception performance from January 1990 through April 2025.Source: eVestment, HFR and AllianceBernstein (AB)
But some event-driven strategies have biases that may make them less effective. In many cases, we think it’s from leaning too heavily into one type of event: merger arbitrage, where managers seek to extract risk premia associated with merger transactions over a defined outcome and timeline. These biases are visible at the index level. Investors might be surprised to learn that the HFRI Event Driven Index had a high correlation of roughly 0.9 to the HFRI Merger Arbitrage index between February 2020 and August 2025.
Make no mistake: we consider the recent acceleration of corporate mergers and acquisitions (M&A) activity a welcome sign of renewed dealmaking after years of muted activity. But for strategies that seek to capitalize on event-driven price anomalies, tie-ups and takeovers aren’t the only events that matter.
Hidden Equity Correlation in Merger Arbitrage
At first glance, leaning heavily into merger arbitrage substrategies may seem prudent. Over the long run, merger arbitrage has generated high-quality returns - roughly defined as returns that are consistent, understandable and uncorrelated over time to the broad equity market. Of the 42 HFRI hedge-fund indices, merger arbitrage has the seventh-smallest maximum drawdown and has logged just two down years over the past 35 years.
But the strategy can be inherently cyclical, driven by the ups and downs of deal flow, which can create challenges. And while merger arbitrage strategies tend to have little correlation to traditional markets, they can exhibit higher sensitivity during periods of market stress.
For event-driven strategies heavily focused on merger announcements - so-called “hard” catalysts with a defined outcome and timeline - this can result in a “long” bias to equity markets. In our view, this may increase the risk of losses when the market struggles.
Embracing a More Systematic Approach
But mergers aren’t the only catalysts that managers can seek out. There are also systematic catalysts - sometimes referred to as “soft” or “diversified” catalysts. They’re often events initiated by corporations, regulatory agencies or constrained investors such as passive fund managers. Unlike mergers, these events typically have a less defined effect on security prices and timeline for monetization.
Many event-driven investors look to these types of catalysts to seek out diversified returns with little or no correlation to the broad equity market. This may also offset some of the “point-in-time” beta to equity markets that merger arbitrage can introduce into a broader event-driven strategy. The sheer diversity of event types, however, creates challenges for fundamental event-driven managers. In the corporate segment alone, there are dozens of systematic catalyst categories that can be applied globally.
A Closer Look at Systematic Catalysts
The multitude of systematic catalysts can be organized into two subcategories: those that are sentiment-driven and those that are more diversified.
Sentiment catalysts create opportunities to capitalize on directional moves caused by discrete events. For example, an investor might interpret a company’s plans to buy back shares as an expression of confidence in its forward earnings. Or the anticipated rebalancing of a widely followed equity index might provide an opportunity to capture stock price momentum, as passive investors buy or sell shares.
Diversification catalysts focus on persistent market themes. An analyst’s rating change on a particular security, which may create an opening to take a long or short position, fits into this category.
With dozens of event-driven strategies and hundreds of substrategy event categories, we believe a rules-based, systematic approach is an essential ingredient to capture the returns associated with these catalysts. It enables investors to leverage hundreds of quantitative inputs to inform investment decisions and may prevent portfolios from becoming too concentrated in a smaller number of catalysts.
The alternative - conducting fundamental research and analysis on each and every transaction - would require resources that few investors have at their fingertips today.
It’s also important, in our view, to focus on opportunities to profit from catalysts via short positions. Many event-driven strategies tend to have a long bias, which we believe limits the opportunities to generate alpha. Adding short positions in event-driven strategies may also help keep them uncorrelated to the broader market in periods of stress.
Advances in machine learning are also enhancing the appeal of systematic strategies, allowing for a quantitative and AI-driven decision-making process that can interpret vast data sets and help identify and incorporate a wider range of catalysts with the potential to affect prices.
None of this suggests M&A activity won’t continue to anchor event-driven investing. But we think a broader and more diverse event-driven approach with the ability to go long and short has the potential to reduce correlations and make portfolios more durable across market environments.
After Hours Summary: INTC +7.7% higher on earnings; MOFG +34.7% to be acquired; DECK -12.5%, MHK -4.7% lower on earnings
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: FIX +17.4% (also increases dividend), NXT +10.6% (also to form Nextracker Arabia, a new joint venture), INTC +7.7%, SLM +6.5%, CYH +5.1%, UVE +5.1%, PECO +4.6%, WU +4.2%, SSNC +3.9%, F +3.7% (also plans to significantly increase F-150 and F-Series Super Duty truck production), CUBI +2.5%, MXL +2.2%, SAM +2.1%, DOC +1.4%, EBC +0.8% (also authorizes new 5% share repurchase program), ENVA +0.1%
Companies trading higher in after hours in reaction to news: INBX +75.9% (topline results from the registrational ChonDRAgon study), MOFG +34.7% (NIC to acquire MOFG, also reports earnings), ULH +23.2% (postpones Q3 earnings release), BBAI +4.4% (deploys veriScan at Chicago O'Hare), INV +2.3% (stock offering by selling shareholders), BBOT +2.2% (new preclinical data on BBO-11818), FHI +1.9% (to acquire a majority interest in FCP Fund Manager), TDOC +1.8% (CFO to step down, reaffirms guidance), VSTM +1.5% (preliminary data from Phase 1/2a trial of VS-7375), SAIC +0.7% (CEO steps down, reaffirms FY26 guidance), GOOG +0.7% (Anthropic announces expansion of its use of Google Cloud's TPU chips), EQT +0.7% (requests FERC authorization to construct MVP Boost), SMCI +0.6% (announces new 6U 20-Node MicroBlade), VAL +0.2% (issues fleet status report), COP +0.2% (plans November job cuts in Canada— Reuters), KO +0.1% (files mixed securities shelf offering), TGT +0.1% (announces layoffs of roughly 1,800 corporate jobs, per WSJ)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: DECK -12.5%, MHK -4.7%, FFBC -4.3%, WKC -4.2%, BYD -4%, MRTN -3.4%, MGRC -3.2%, KN -2.9%, WSFS -2.1%, HTH -2%, KNSL -1.7%, MTX -1.7%, NEM -1.6%, ELME -1.1%, BKR -0.9%, COUR -0.9%, VRSN -0.6%, ASB -0.4%, NSC -0.3%, FFIN -0.3%, DLR -0.2%, ALK -0.1%
Companies trading lower in after hours in reaction to news: COYA -12.6% (stock offering), GSK -6.5% (FDA approves Blenrep for multiple myeloma), VTOL -1.6% (files mixed securities shelf offering), STSS -1.4% (stock offering by selling shareholders), BRBR -1.4% (discloses Joint Juice litigation updates), AMAT -1.2% (4% workforce reduction), DMLP -1% (increases dividend), NIC -0.2% (NIC to acquire MOFG, also reports earnings)
Trump Administration in Talks to Take Equity Stakes in Quantum-Computing Firms
Discussions signal Washington’s wider involvement in key parts of the economy
Several quantum-computing companies are negotiating with the Commerce Department for federal funding in exchange for equity stakes.
The Trump administration is expanding its strategy of taking equity in companies receiving taxpayer funds, following a nearly 10% stake in Intel.
The funding, potentially $10 million minimum per company, would support quantum computing, a critical next-generation technology.
WASHINGTON—Several quantum-computing companies are in talks to give the Commerce Department equity stakes in exchange for federal funding, a signal that the Trump administration is expanding its interventions in what it sees as critical segments of the economy.
Companies including IonQ, Rigetti Computing and D-Wave Quantum are discussing the government becoming a shareholder as part of agreements to get funding earmarked for promising technology companies, according to people familiar with the matter. Other companies such as Quantum Computing and Atom Computing are considering similar arrangements.
The companies are discussing minimum funding awards from Washington of $10 million each, some of the people said. Other technology companies are also expected to vie for the funding.
Shares of companies in the space rose in early trading. D-Wave was up 20%, and IonQ, Rigetti and Quantum Computing were all up over 10%. The stocks have risen this year due to investor excitement about the technology.
The discussions are the latest example of administration moves to become a shareholder in some companies. President Trump and Commerce Secretary Howard Lutnick have said the government should share in a company’s upside since taxpayer money provides financial support and a stamp of approval.
In August, the government agreed to take a nearly 10% stake in chip company Intel in exchange for converting almost $9 billion in previously awarded grants to equity. The arrangement would make the government Intel’s largest shareholder and followed a similar deal with one of the few U.S. producers of rare-earth materials. The Energy Department received warrants giving it the right to buy shares of a lithium startup at a set price in exchange for a government loan.
The funding for quantum companies would be one of the first significant signs of support for the sector from Washington. Quantum computers are seen as a critical next-generation technology because they can quickly perform computations that would take today’s computers eons. That sort of advance could make it easier to find new drugs, materials and chemicals while making every segment of the economy more efficient, experts say.
Companies from International Business Machines to Microsoft are investing in quantum computing, as is China. Google said on Wednesday that it showed a quantum computer can run 13,000 times faster than classic supercomputers and potentially speed drug discovery and materials science.
Deputy Commerce Secretary Paul Dabbar, a former quantum-computing executive and Energy Department official, is leading the funding discussions with companies in the industry, the people said. Bohr Quantum Technology, the company Dabbar co-founded and led as chief executive for four years, isn’t a candidate to receive funding, a Commerce Department official said.
Quantum Computing Chief Executive Yuping Huang said the government’s potential equity stakes in companies in the industry are exciting. A Rigetti spokeswoman said the company is continuously engaging with the government on funding opportunities. Allison Schwartz, head of government relations for D-Wave, said the company wants to sell systems that can solve the government’s hard problems and get a return on investment. Atom Computing and IonQ declined to comment.
The funding the companies are seeking comes from the Chips Research and Development Office, which Lutnick has reorganized under his overhaul of how the agency manages 2022 Chips Act funding. He recently clawed back several billion dollars from a tech research initiative funded by the Biden administration.
The deals with the quantum companies haven’t been completed and might change. A Commerce document soliciting funding applications says the deals might include warrants, licenses to intellectual property, royalties or revenue sharing in addition to equity stakes.
Trump Pardons Convicted Binance Founder
Pardon follows months of efforts by Changpeng Zhao to boost Trump crypto company
President Trump has pardoned Changpeng Zhao, the convicted founder of the crypto exchange Binance, according to people familiar with the matter, following months of efforts by Zhao to boost the Trump family’s own crypto company.
The president signed the pardon on Wednesday, the people said. Trump recently indicated to advisers that he was sympathetic to arguments of political persecution related to Zhao and others, one of the people said.
White House press secretary Karoline Leavitt said that Trump had “exercised his constitutional authority by issuing a pardon for Mr. Zhao, who was prosecuted by the Biden Administration in their war on cryptocurrency.” She added: “The Biden Administration’s war on crypto is over.”
Binance didn’t immediately respond to a request for comment.
A pardon will likely pave the way for Binance, the world’s largest crypto exchange, to return to the U.S., after the company pleaded guilty in 2023 to violating U.S. anti-money-laundering requirements and was barred from operating there.
The company has spent nearly a year pursuing a pardon for Zhao, who left prison in September 2024 after serving a four-month sentence for related charges. Earlier this year, the company hired lobbyist Ches McDowell to help pursue a pardon, the Journal previously reported.
Since Trump’s election, Binance has also been a key supporter of his family’s World Liberty Financial crypto venture, a business that has driven a huge leap in the president’s personal wealth.
Novo Nordisk’s new ‘king’ tightens his grip at obesity drug giant
Boardroom shake-up at European drugmaker grants Lars Rebien Sørensen wide-ranging powers
A board shake-up at Novo Nordisk has blindsided the market and concentrated power in the hands of one man at the top of one of Europe’s biggest companies.
Lars Rebien Sørensen, a former CEO of the drugmaker, was this week announced as its chair, as the incumbent and six other directors said they were stepping down.
He is already chair of Novo’s majority owner, the Novo Nordisk Foundation, consolidating his influence over the maker of blockbuster drugs Ozempic and Wegovy. The foundation has also put forward five new candidates to join Novo’s board.
The aim is to accelerate change at a company that has fallen behind its main rival Eli Lilly in the crucial US obesity market.
But Kurt Jacobsen, a Copenhagen Business School professor who has written a history of Novo Nordisk, said the board shake-up was “unbelievable”. Sørensen is now “king of the Novo Nordisk kingdom,” he said. “This is a power concentration I have not seen in Danish business.”
Novo Nordisk and the foundation, which owns 28.1 per cent of Novo’s share capital and 77.1 per cent of its voting rights, declined to comment.
Sørensen has said he intends to be chair of Novo for only two to three years and he is resigning his seat on another related board, Novo Holdings, which manages the foundation’s investments. Novo Holdings will take on responsibility for monitoring Novo’s performance.
Jacobsen points out that there are nonetheless major potential downsides to Sørensen’s wide-ranging role. “He is taking an enormous risk personally because if this fails, or the company doesn’t manage to improve its results and the price of the shares, it all goes back to him,” he said.
The overhaul comes after the foundation ousted former chief executive Lars Fruergaard Jørgensen in May, blaming him for an almost 60 per cent share price fall in the past year as profit growth has slowed and investors worried about Novo’s pipeline of new obesity drugs.
One top 10 shareholder said Sørensen, who was chief executive of Novo Nordisk before Jørgensen, had been influential in his departure. He joined the board as an observer when Jørgensen’s exit was announced. “The board probably should have resigned when they kicked the chief executive out,” the shareholder said.
Sørensen said this week that he acted because the board was moving too slowly to update its composition with directors with more relevant experience to help it navigate the US market.
Another person close to the company said it looked like incumbent chair — energy sector veteran Helge Lund — and the six independent directors had announced their departure this week because they had found they could not work with the foundation. “This is the second time [the foundation] has done things abruptly and in conflict mode,” the person said.
The new chief executive, Mike Doustdar, did not push for the board changes, according to two people close to the discussions.
One of these people said Sørensen was “a temperamental person who often acts before he does any planning . . . He sees himself as a saviour”.
A former executive at Novo said the changes had been “very much in character” for Sørensen who “believes he is right and likes to be seen as a firm and decisive leader”.
But Paul Major, a healthcare-focused fund manager at Bellevue Asset Management, who has previously held Novo shares but would not buy now, said the foundation was also responsible for failing to adapt to changes in Novo’s most lucrative market.
In the US, the company has been slower to focus on the growth in direct-to-consumer sales, a crucial development as more consumers opt to pay for obesity drugs themselves.
“I think the foundation and Sørensen have to take some of the blame for Novo’s problems,” Major said.
He added that Sørensen was a “great man in his day” but “in my mind, he’s as guilty as he is a visionary”.
However, some investors and analysts are pleased that the board is changing, even if they wish it had been a more orderly process.
Mikael Bak, director of the Danish Shareholder’s Association, said it had raised at the AGM in spring whether Lund had the right skills and experience to support the chief executive.
“It is not surprising that something had to happen,” he said. “But of course this is dramatic, and we would have preferred a normal situation where changes come at an ordinary AGM . . . [and] we want a clear and normal governance model as soon as possible.”
Novo’s board has called an extraordinary general meeting on November 14 to elect the new chair and directors. The foundation has also said it intends to appoint a further two directors next year.
Eugen Uretzki, a healthcare analyst at German asset manager Flossbach von Storch, is in favour of the board changes. “This stresses the urgency with which Novo has to transform itself,” he said.
The shake-up has also prompted questions about the roles of foundations that control companies, a Danish model also used by businesses including Lego, Carlsberg, and Maersk.
The Novo Nordisk Foundation’s website says the companies it owns are governed by independent boards of directors “ensuring an arm’s length relationship”.
“The foundation is particularly mindful of observing and respecting the rights of other shareholders,” it says.
Kasper Meisner Nielsen, director at Copenhagen Business School’s centre for corporate governance said the changes were “drastic” and of a type that tend to happen only at companies in “deep crisis”.
He added that the board could become less independent with the former chief executive as chair. “On the one hand we like the board to be independent of owners, but on the other side we like to have active owners,” he said, noting that if the majority shareholder is pursuing value creation, minority shareholders can benefit.
But Niels Lunde, editor of the Danish financial newspaper Børsen, was clear about the potential pitfalls of the concentration of power.
“The most important and valuable company in Denmark is in effect controlled by one person who claims to know better than the highly respected leaders who are leaving the board,” he said.
“At the top of Danish business, everyone is shaking their heads at this tragicomic farce, but no one dares to challenge Lars Rebien Sørensen, so they remain silent.”
Crusoe raises $1.4bn as investors pile in to AI data centres
Infrastructure provider to OpenAI triples its valuation to $10bn in a year
Data centre start-up Crusoe has raised $1.4bn, more than tripling its valuation to over $10bn in one year, as investors pile cash into a booming market for artificial intelligence infrastructure.
The oversubscribed equity fundraising round was led by Mubadala Capital and Valor Equity Partners. Crusoe, which is building OpenAI’s first big data centre in the US, has raised about $3.9bn since it was founded in 2018.
Huge spending on the infrastructure needed to run AI models is leading to record deals and valuations. Investments in data centres, chips and computing power has become a significant driver of US GDP growth this year.
“We are seeing tremendous and accelerating demand for compute infrastructure, unlike anything I’ve ever witnessed in my career,” Crusoe chief executive Chase Lochmiller told the Financial Times.
“OpenAI has been the most public with [its] large announcements, but this is not a trend that’s isolated to them. We are seeing it across the ecosystem,” he added.
Tech companies’ annual spending on AI is forecast to top $500bn by 2026, according to UBS. However, the AI building frenzy is leading to concerns about inflated valuations and speculative investments.
Data centres vast energy consumption is also straining US power resources and has threatened to slow down construction, as well as exacerbate environmental issues.
“Power is very scarce right now,” Lochmiller said. “There have been a lot of commitments made in the space where I can’t vouch for the reality they will happen.”
He added Crusoe’s current development pipeline amounts to 45 gigawatts of capacity. “That’s about eight to 10 New York Cities of power,” Lochmiller said.
OpenAI has signed as much as $1.5tn of deals to buy computing chips and build data centres in recent months. Crusoe is building a sprawling 1.2GW campus for OpenAI in Abilene, Texas, that is due to be completed by mid-2026 and will cost about $12bn.
Crusoe is separately building a 1.8GW campus for an unknown tech company in Wyoming, which it is planning to expand to 10GW in future.
Crusoe is one of a handful of so-called “neocloud” start-ups, fledgling groups that provide cloud computing and data centre hardware for tech companies’ AI models.
These groups have attracted huge investor enthusiasm as a way to access the AI infrastructure boom. Rival CoreWeave carried out an initial public offering this year and has reached a market value of more than $65bn.
Lochmiller started Crusoe, then called Crusoe Energy, to capture energy from natural gas flaring and use it to power data centres for mining bitcoin. The company later pivoted to AI infrastructure.
Crusoe’s other investors include chipmaker Nvidia, Peter Thiel’s Founders Fund, Fidelity and Franklin Templeton.
Some analysts have warned investors’ enthusiasm for AI and data centre deals is reminiscent of the dotcom bubble in the early 2000s.
Large tech companies have traditionally funded spending on infrastructure with their balance sheets. But the elevated levels of spending are attracting huge investments from private capital and increasing levels of debt.
Morgan Stanley estimated $1.5tn of financing from private capital and debt markets will be required to fund commitments made to build AI data centres over the next five years.
Crusoe and Blue Owl Capital, its construction partner on the Abilene site, raised $10bn in debt from JPMorgan to help fund its construction earlier this year. The debt was secured against the data centre and its 15-year lease with Oracle, which will supply the computing power to OpenAI. Crusoe also has smaller loans secured against its stash of Nvidia’s AI chips.
This week, Blue Owl formed a separate joint venture with Meta as part of a $27bn debt deal by the Facebook parent company to fund and develop its massive “Hyperion” data centre in Louisiana.
Last week, an investor consortium including BlackRock, Global Infrastructure Partners and Abu Dhabi fund MGX struck a $40bn deal to buy Aligned Data Centers, one of the world’s largest data centre operators.
Lochmiller said: “The amount of capital that will be required to stand up the infrastructure of intelligence is immense.”
“We feel good about the participants taking on these debts as they range from the best private companies to governments to leading start-ups generating billions of dollars of revenue.”
Patti Smith for JMM Shades Let You Resemble a Rock Legend
As she marks the 50th anniversary of the "Horses" album, Smith collaborated with Jacques Marie Mage on a limited-edition collection.
DARK HORSES: The sunglasses Bob Dylan wore for a tour of England in 1965 live on, thanks partly to Patti Smith, who said she wore roughly the same ones when her “Horses” album came out in 1975.
Now Los Angeles-based eyewear brand Jacques Marie Mage is introducting a limited-edition Patti Smith for JMM collection hinged on its popular Delean model, which was loosely inspired by Dylan’s cat-eye model.
“When I look back at photos from around the time that ‘Horses’ came out, when we were on tour, I was almost always in shades,” according to Smith, who was in Paris earlier this week for two concerts at L’Olympia to celebrate the anniversary. “Of course, they were the same as the ones Bob Dylan wore, whom I admired so much.”
In press materials distributed Thursday, Jacques Marie Mage said the collection “pays tribute to her lifelong devotion to art, poetry and music.”
To wit: Each pair of shades comes in a black linen box, the inner case reprising the Robert Mapplethorpe-lensed portrait used for the original album art. Also included is an oversize cleaning cloth, and a book featuring a selection of photos and handwritten lyrics curated by Smith.
Meanwhile, the lenses come in three colors that in name reference the 19th-century French poet Arthur Rimbaud, an enduring inspiration and touchstone for Smith. In addition, the core wire comes engraved with lyrics from “Land” while the inner temples are foil-stamped with Smith’s signature.
In an interview with Smith on JMM’s website, she was asked about the rock-star connotations of wearing sunglasses.
Her reply? “To be honest, I hadn’t thought about it like that. It’s all about the fact I love dark glasses. When I was young, it was so normal — they made you look very European. I remember film stars like Marcello Mastroianni with his dark glasses — he was so cool. But they also allowed you to mix with people and keep a certain amount of anonymity and intimacy. You can be shy, or sad. At a funeral, they hide your tears. For me, all the symbolism of dark glasses is positive.”
China state oil majors suspend Russian oil buys due to sanctions, sources say - Reuters News
Sentiment:
Mostly Negative23 Oct 2025 02:59:04 PM
- US sanctions hit Moscow's two largest oil companies
- India poised to sharply cut Russian oil imports
Russia faces demand drop from two biggest customersSINGAPORE, Oct 23 (Reuters) - Chinese state oil majors have suspended purchases of seaborne Russian oil after the United States imposed sanctions on Rosneft and Lukoil, Moscow's two biggest oil companies, multiple trade sources said on Thursday.
The move comes as refiners in India, the largest buyer of seaborne Russian oil, are set to sharply cut their crude imports from Moscow, to comply with the U.S. sanctions imposed over the Kremlin's invasion of Ukraine.
A sharp drop in oil demand from Russia’s two largest customers will put a strain on Moscow’s oil revenues and force the world’s top importers to seek alternative supplies and push up global prices.
Chinese national oil companies PetroChina 601857.SS, Sinopec, CNOOC and Zhenhua Oil will refrain from dealing in seaborne Russian oil at least in the short-term due to concern over sanctions, the sources said.
The four companies did not immediately respond to requests for comment.
While China imports roughly 1.4 million barrels of Russian oil per day by sea, most of that is bought by independent refiners, including small operators known as teapots, although estimates of purchases by state refiners vary widely.
Vortexa Analytics pegged Russian oil purchases by Chinese state firms at under 250,000 bpd for the first nine months of 2025, while consultancy Energy Aspects put it at 500,000 bpd.
Unipec, the trading arm of Sinopec 600028.SS, stopped Russian oil buying last week after Britain designated Rosneft and Lukoil, as well as shadow fleet ships and Chinese entities including a major Chinese refiner, two trade sources said.
Rosneft and Lukoil sell most of their oil to China through intermediaries instead of directly dealing with buyers, traders said.
Independent refiners, meanwhile, are likely to pause buying to assess the impact of sanctions but would still look to continue Russian oil purchases, several traders said.
Prior to Wednesday's sanctions announcement, offers for November-loading ESPO crude slid to a premium of $1 per barrel to ICE Brent, versus previous trades done in early October at a $1.70 premium.
China also imports approximately 900,000 bpd of Russian oil by pipeline, all of it going to PetroChina, which several traders said was likely to be little affected by sanctions.
India and China are expected to turn to other supplies, pushing up prices for non-sanctioned oil from the Middle East, Africa and Latin America, traders said.
Could Apple and Musk’s SpaceX Finally Do a Satellite Deal?
Talk of a Globalstar sale. Starlink satellite changes. These are among the tea leaves that could presage an Apple-SpaceX satellite partnership.
The Takeaway
- SpaceX has tweaked its new satellite design to support Apple’s iPhone radio spectrum.
- Globalstar chair discussed selling the company for over $10 billion.
- Apple plans to add 5G satellite support for iPhones as early as next year.
A few years ago, Elon Musk pitched Apple unsuccessfully on the idea of his company, SpaceX, providing satellite connectivity to iPhones. There are tantalizing hints that such a deal could be back on the table.
In recent months, in anticipation of a possible future arrangement with Apple, SpaceX has added support in its new satellite designs for the same radio spectrum Apple uses for the iPhone’s current satellite features, which Globalstar provides, according to a person with direct knowledge of the matter. That could allow SpaceX’s Starlink unit to deliver satellite communications capabilities to existing Apple devices when Starlink’s next-generation satellite constellation begins operating in the coming years.
At the same time, the chair of Globalstar, James Monroe, has talked to associates about the possibility of selling his satellite company for more than $10 billion, said people who heard him make the remarks (Globalstar’s current market capitalization is $5.3 billion). Such a deal could signal that Globalstar and Apple are seeking more independence from each other.
A deal between Apple and SpaceX would significantly boost Musk’s aspirations for SpaceX to become a significant provider of wireless services directly to phones. Starlink is currently the leading provider of satellite internet service, mostly to customers who use it via antennas atop their homes or vehicles. But connecting ordinary smartphones to satellites—to keep those devices online when they’re out of reach of conventional cellular networks—could greatly expand the reach of Starlink’s services.
SpaceX is investing heavily to realize that goal. Last month, it reached an agreement to acquire EchoStar’s wireless spectrum for $17 billion. That spectrum will help SpaceX deliver faster internet service to phones globally. It already has partnerships with traditional telecom players like T-Mobile to connect its satellites directly to phones. Last month, SpaceX President Gwynne Shotwell said the company is working with chipmakers to get them to integrate Starlink connectivity into phones.
There are potential obstacles to a SpaceX-Apple partnership. The two companies have a tempestuous relationship. Musk has blasted Apple for its App Store fees because of the financial impact they have had on his X social network. And in August, xAI—Musk’s artificial intelligence startup, which he merged with X—sued Apple, accusing it of manipulating its App Store rankings to hurt xAI’s Grok chatbot and favor OpenAI’s ChatGPT.
Past efforts between the companies to partner on satellites have gone nowhere. In 2022, before Apple launched its first satellite features in the iPhone 14, Musk pitched Apple on the idea of SpaceX becoming the exclusive satellite provider for iPhones for 18 months, The Information previously reported. He proposed that Apple pay $5 billion up front and then $1 billion a year after the end of the exclusivity period. Apple rejected his offer.
Still, Apple—which prides itself on partnering with companies that provide the best experiences for users—has incentives to make peace with Musk. For starters, Globalstar’s network is regarded as slower and outdated compared to that of Starlink.
As a result, the first satellite feature Apple launched with Globalstar gave iPhone users the ability to send only text messages to emergency services in areas without cellular reception. Since then, the companies have added location sharing and the ability to send messages to personal contacts and to roadside assistance.
Globalstar has struggled against SpaceX’s growing dominance in satellite communications and remains highly dependent on Apple, which has invested around $2 billion into Globalstar over the past three years. In Globalstar’s most recent quarterly earnings filing, it included a warning for the first time about Apple, its most important customer: “The loss of the Customer would likely have a material adverse impact on our financial condition, results of operations and cash flows.”
SpaceX, in contrast, is an ambitious, well-capitalized juggernaut that recently launched its 10,000th Starlink satellite and accounts for more than 60% of all active satellites orbiting Earth, by some estimates. One of Starlink’s biggest advantages is the fact that SpaceX rockets launch more payloads into space than any other company or government in the world.
Inside Apple, some executives have long been skeptical of the Globalstar partnership, believing Apple should instead partner with SpaceX, The Information previously reported.
‘Almost Unchallengeable’
While Apple has prominently promoted satellite connectivity in iPhones for its potentially life-saving safety benefits, the company has been careful to avoid taking steps that could in effect make it into a telecommunications carrier itself.
For example, Apple still hasn’t started charging consumers for satellite services as it doesn’t want to be regulated as a carrier, according to people who worked on the features. Last month, it announced it was extending free satellite services for iPhone users for another year, after having announced a similar extension last year.
For the same reason, Apple is unlikely to buy Globalstar itself, even though its agreement with the satellite company gives Apple the right to buy Globalstar before it sells itself to another suitor.
If Apple and SpaceX become partners, consumers who buy new iPhones and other Apple devices in the coming years are likely to be the biggest beneficiaries of the faster satellite connections that Starlink’s next generation of satellites will make possible.
Apple plans to add support in upcoming iPhones as early as next year for 5G networks that aren’t tethered to Earth’s surface, which includes satellites, a person with direct knowledge of its plans said. That would give the iPhone full internet access over satellite rather than restricting the device to the small set of messaging features available on Globalstar’s network or the limited number of iPhone apps that work on T-Mobile’s satellite partnership with SpaceX, which operates at slow 4G speeds.
In the near future, it’s unlikely SpaceX will be able to fully replace the traditional cellular carriers who operate on the ground. Satellite connectivity to phones only works well when users are outdoors with uninterrupted views of the sky, ruling out the service for use inside buildings.
Some analysts say it’s becoming increasingly difficult for a company like Apple to maneuver around SpaceX now that Musk’s company has strengthened its position by acquiring EchoStar’s spectrum.
“If Apple gives up on trying to compete with SpaceX, then Starlink becomes almost unchallengeable in this market,” said Tim Farrar, president at satellite consulting firm Telecom, Media and Finance Associates. “It cements their dominance.”