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After Hours Summary: MAT +19%, MXIM +8%, ENPH -14%, CHRW -6%, YUMC / SYK -5% among notable earnings/guidance moversAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: OSPN +19.8%, MAT +19.3%, UIS +13.7%, IPHI +11%, MXIM +8.3%, MGRC +7% (light volume), NBR +6.1%, PSMT +5.9%, AR +5.6%, CXO +5.5%, ZEN +5.4%, HLF +4.6% (also announces John Agwunobi as new CEO, effective March 2020), SAM +3.1% (light volume), RRD +2.7%
Companies trading higher in after hours in reaction to news: GDOT +14.6% (Green Dot and Walmart extend relationship through two agreements), PCG +4.4% (ongoing volatility; was up 32% on the day), JNJ +2.9% (announces that 15 new tests from the same bottle of Johnson's Baby Powder previously tested by the FDA found no asbestos), FIT +1.5% (continued strength), MAS +1.2% (ahead of earnings before the open), BIIB +0.7% (upgraded to Outperform from Mkt Perform at Bernstein), DESP +0.6% (signs 10-year exclusive co-brand agreement with ICBC for Argentina)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: QUAD -22.9%, ENPH -14.1%, AJRD -10.3%, EXAS -8.6%, LDL -7%, CHRW -6.1%, YUMC -5%, SYK -4.8%, CSII -4.2% (light volume), CYH -4.1% (light volume), FEYE -3.4%, EIX -2.9%, EA -2%, PAYC -2%, MDLZ -1.6%
Companies trading lower in after hours in reaction to news: SESN -9.2% (under pressure after modifying 2017 and 2018 common stock warrants to allow for future at-the-market programs), FBC -2.8% (commences public secondary offering of 6.1 mln shares of common stock by MP Thrift Investments), NWBI -2.4% (to acquire MutualFirst Financial [MFSF] in all-stock transaction valued at approx. $346 mln), SEDG -2.3% (following ENPH
Notable earnings/guidance movers
- Earnings/guidance gainers: OSPN +20%, MAT +19.6%, PSMT +10.1%, IPHI +7.7%, UIS +7.2%, HLF +4.6%, AR +3.2%, CXO +2.8%, RRD +2.7%, EA +1.2%
- Earnings/guidance losers: ENPH -12.7%, EXAS -7.8%, AJRD -6.6%, CYH -6.1%, LDL -5.2%, LSCC -3.8%, EIX -3.7%, ZEN -3.6%, SYK -3.4%, FEYE -2.8%, DLR -2%, MDLZ -1.2%, AMD -1.1%
Private backers set for Beyond Meat payday
Shares close down 22% on Wall Street as IPO lock-up expires
Early investors in plant-based food purveyor Beyond Meat were set for large paydays as the company’s shares became freely tradable on Tuesday, promising a test for one of this year’s most divisive stock offerings.
Up to 80 per cent of the company’s shares became eligible for trading, giving venture capital firms such as Kleiner Perkins and Obvious Ventures the ability to cut their positions and return money to investors.
Fears of significant sales by early investors sent shares down 22 per cent by Tuesday’s closing bell on Wall Street, despite the company announcing its first-ever quarterly profit late on Monday.
Many early investors are sitting on eye-watering gains. The company, valued at $1.3bn in private markets, rose to a market capitalisation of $12bn in July as investors bet its meat substitute products would steal business from traditional food producers.
KFC announced in August it would test “Beyond Fried Chicken” nuggets in partnership with Beyond Meat, the latest in a series of fast-food chains to try new meatless products with the company.
But some analysts and investors recently turned on Beyond Meat, sending its shares below $100 last week for the first time since June. The company has attracted the interest of short-sellers betting its shares will fall on Tuesday, when the lock-up period following its May initial public offering expired.
Beyond Meat’s slide has also drawn the attention of early investors anxious to cash out. Mark Yusko, chief executive of Morgan Creek Capital Management, said his fund’s initial investment in Beyond Meat had increased about 100 times and signalled he was preparing to sell.
“It’s going to go down 90 per cent and still be overvalued,” Mr Yusko said this month at the Sohn Investment Conference in San Francisco.
Mr Yusko did not respond to emails about his remarks, and Beyond Meat did not respond to a request for comment on the lock-up period’s expiration.
Among the investors being closely watched is Kleiner, which owned about 12.8 per cent of the company before its IPO. Kleiner has said its initial investments increased 80 times, based on the average closing price last week. One person close to the VC group’s decision-making said it was planning to sell shares.
Union Grove Venture Partners co-founder Gregory Bohlen said the group has made about 50 times its private investments in the company. Mr Bohlen, who serves on Beyond Meat’s board, said he has no influence over whether Union Grove sells any shares but hopes the firm will maintain its position.
“I’m a believer in the company, absolutely,” Mr Bohlen said. “Am I a believer in the stock? I don’t think you can separate the two.”
He added: “Just because 80 per cent of shares are in private hands doesn’t mean we all run to the market on Tuesday.”
The venture firm Obvious, which owned more than 9 per cent of the company before its IPO, declined to comment on its plans following the lock-up’s expiration.
Beyond Meat stock was the most expensive to borrow for shorting this week, according to data from S3 Partners, which said 43 per cent of the company’s available shares were out on loan.
The company earlier allowed some investors, including Kleiner and chief executive Ethan Brown, to sell upwards of 3m shares during a secondary transaction in July.
Alan Howard to step down as Brevan Howard CEO
Billionaire trader hands day-to-day management of hedge fund firm to risk chief Aron Landy
Billionaire trader Alan Howard is to step down as chief executive of Brevan Howard, handing day to day leadership of the hedge fund firm to a lieutenant as he concentrates on investing and overseeing a widening group of businesses.
Brevan, which manages $7.5bn in assets, said in a note to investors on Tuesday that Aron Landy, the firm’s chief risk officer, will become chief executive.
The management shake-up, which will take effect before the end of the year, will help Mr Howard “focus on his own trading activities”, the firm said, adding that he would remain closely involved with the firm’s investment strategies.
It has become common practice for the founders and owners of hedge fund firms to relinquish the chief executive role, which can involve anything from day-to-day decisions on the investment business to raising assets, in order to save time and focus on running money.
London-based credit specialist CQS, for instance, set up and controlled by Sir Michael Hintze, last year hired former London Stock Exchange chief Xavier Rolet as chief executive in a bid to drive asset growth.
The shake-up comes as Mr Howard is working to revive the firm, which was once considered the gold standard of macro hedge fund investing. Until 2014 its flagship fund boasted a record of never losing money in a calendar year.
A run of lacklustre returns and a client exodus reduced assets from around $40bn to single-digit billions of dollars.
But strong gains last year, helped by bets against Italian bonds, and a 7.5 per cent gain in its main fund this year, aided by bets on major bond yields falling, have contributed to a recovery for the firm, which has raised around $2bn this year.
Among Brevan’s other portfolios, its Alpha Strategies fund has gained 11.3 per cent this year, while its AS Macro Master fund, run by trader Alfredo Saitta, is up 8.8 per cent.
Mr Howard is also building a portfolio of other companies that he controls, even though day-to-day decisions are taken by the firms’ chief executives.
Brevan has spun out Coremont, its back office and technology platform, which is run by Jev Mehmet. Mr Howard also owns Elwood Asset Management, which manages his personal cryptocurrency assets and which is launching funds for external investors. The firm is headed by former Brevan staffer Bin Ren.
As part of the shake-up, Alexandre Assouline, Brevan’s deputy chief risk officer, will become chief risk officer.