Tesla stock worth just $10 in worst case - Morgan Stanley - Reuters News
21-May-2019 11:46:21
May 21 (Reuters) - Further falls in Tesla Inc's TSLA.O share price increase its chances of being sold in the years ahead, Morgan Stanley analysts said on Tuesday, as they slashed their worse-case scenario for the electric car producer to just $10.
The latest of a round of critical notes from Wall Street analysts follows a dive in Tesla's stock and bonds on Monday, as investors worried about its spending and problems with an Autopilot system that CEO Elon Musk has held out as key to the future of the Silicon Valley firm. (Full Story)
Analyst Adam Jonas said Tesla's rising debt pile and geopolitical exposure, including the risk that Chinese demand for the company's cars could suffer, had driven him to slash his "bear-case" valuation to $10 from a previous $97.
Tesla's stock, which has almost halved in value since last August, closed at $205.36 on Monday. Jonas kept his main price target for the stock at $230 and also has a bull-case valuation of $391.
"We believe as Tesla's share price declines, the likelihood of the company potentially seeking alternatives from strategic/industrial/financial partners rises," the brokerage said in a note.
"Based on our discussions with auto companies, suppliers, and technology firms, Tesla's strategic value and technical competency in both hardware and software remains extremely high if not in a league of its own."
The brokerage retained its "equal-weight" rating on the stock.
Another house, Baird, cut its main price target on Tesla to $340 from $400, but retained an "outperform" rating.
While 10 Wall Street analysts who cover the stock now recommend buying the electric carmaker's shares, nine are neutral and 12 recommend selling, according to Refinitiv Eikon data. The median price target is $250.19
The deemed-export issue is one of the sticky issues to emerge against a monthslong backdrop of often heated trade and technology talks between the U.S. and China.
In those talks, the Trump administration is seeking more protections for U.S. intellectual property, a goal many in the industry share. But the standoff also has been problematic for chip makers that have had to cope with higher tariffs on imports and a White House push for more sales to China, which they say would only further intertwine the global supply chain with the country.
Talks toward a deal have stalled. The Trump administration last week imposed higher tariffs on $200 billion of Chinese goods and added Huawei Technologies Co. to a trade blacklist, making it harder for U.S. companies to deal with the Chinese telecom giant.
Foreign-born engineers have been important to chip-company staffing over the years, said Linley Gwennap, president of the Linley Group, a Silicon Valley semiconductor research outfit. “The people from these countries have gone on to start companies in the U.S.,” he said. For example, Charles Liang, the chief executive Super Micro Computer Inc., of San Jose, Calif., co-founded the company after emigrating from Taiwan in the early 1990s and studying in the U.S.U.S. Slows Hiring of Chinese Nationals by Chip Makers
Hundreds of jobs affected across the industry at companies such as Intel and Qualcomm
The U.S. has sharply slowed approvals for the nation’s semiconductor companies to hire Chinese nationals for advanced engineering jobs, according to industry insiders, who say the delays are limiting access to vital talent.
The disruption, which started last year, has affected hundreds of jobs across the industry at companies including Intel Corp. INTC -2.96% , Qualcomm Inc. QCOM -5.99% and Globalfoundries Inc., impeding their ability to hire Chinese employees or move existing employees to key projects in the U.S., these people said. It is significant in part because Chinese nationals account for a large share of non-U.S. citizens hired for such technical roles, where the talent supply domestically is often scarce.
Under rules in place for decades, companies must get licenses before assigning workers with foreign nationalities—Chinese, Iranian, Russian among others—to work on a list of sensitive technologies. Because companies are giving foreigners knowledge about technology they could eventually take home, the Commerce Department considers such assignments the equivalent of an export.
Approvals for so-called deemed-export licenses once took a matter of weeks, whereas a wait of six to eight months isn’t unusual today, a person familiar with the process said.
Companies need them for existing and prospective foreign-citizen employees working on advanced semiconductors, telecommunication systems, encryption and other technologies. The level of scrutiny varies depending on the technology and the perceived risk that it could fall into the hands of U.S. adversaries. The licenses are separate from work visas that employers also need to hire foreigners who aren’t permanent U.S. residents.
The slowdown cuts across industries but is especially troublesome for chip makers, as the pool of people capable of doing highly technical engineering work is shallow, industry insiders say.
While there hasn’t been a complete halt to the hiring of Chinese nationals, the slowdown in license approvals has affected who could be hired and who could be assigned to important engineering projects, an industry insider said. “There have been longer delays that have led us to lose candidates we thought were critical,” the person said.
From 2013 through 2017, Chinese nationals accounted for more than 60% of approved licenses, according to the Commerce Department. The Nos. 1 and 3 most commonly requested categories for deemed exports in 2017 related to chips. The second-most-common category covered telecommunications technology. The department hasn’t released 2018 statistics.
License approvals are slowing, as the White House engages in efforts to protect American know-how against what government officials have said is a concerted effort by China to obtain U.S. technologies to build up its own capabilities, industry executives said. U.S. authorities have blocked numerous tech-company acquisitions involving China, including Broadcom Inc.’s hostile takeover bid for Qualcomm Inc.
The Commerce Department reviews deemed-export applications carefully in cooperation with other government agencies, such as the state, defense and energy departments, a spokesman said. “This review often includes requesting additional information from the companies seeking to release controlled technology to foreign nationals in the U.S.,” he said.
Kevin Wolf, a lawyer at Akin Gump in Washington who was the assistant secretary of the Commerce Department’s export body during the Obama administration, said the differences in the pace of deemed-export approvals could reflect changed political circumstances, though changing technology could also be playing a role. If more applications involve especially sensitive technologies, the time it takes to process them could be longer.
The deemed-export issue is one of the sticky issues to emerge against a monthslong backdrop of often heated trade and technology talks between the U.S. and China.
In those talks, the Trump administration is seeking more protections for U.S. intellectual property, a goal many in the industry share. But the standoff also has been problematic for chip makers that have had to cope with higher tariffs on imports and a White House push for more sales to China, which they say would only further intertwine the global supply chain with the country.
Talks toward a deal have stalled. The Trump administration last week imposed higher tariffs on $200 billion of Chinese goods and added Huawei Technologies Co. to a trade blacklist, making it harder for U.S. companies to deal with the Chinese telecom giant.
Foreign-born engineers have been important to chip-company staffing over the years, said Linley Gwennap, president of the Linley Group, a Silicon Valley semiconductor research outfit. “The people from these countries have gone on to start companies in the U.S.,” he said. For example, Charles Liang, the chief executive Super Micro Computer Inc., of San Jose, Calif., co-founded the company after emigrating from Taiwan in the early 1990s and studying in the U.S.
n addition to semiconductors, the restrictions cover certain telecom-equipment, nuclear and military technologies.
Further restrictions on deemed exports to China could be on the way next year, when the Commerce Department is to decide on definitions of new technologies subject to export controls. Those definitions could hit areas such as artificial intelligence, a huge focus for chip makers and tech companies but also a major area of U.S.-China technological competition.
Statutes suggest the definitions should avoid stifling innovation and focus on technologies that could endanger national security if they fell into the wrong hands.
Chip makers worry that the definitions will be too broad. The Semiconductor Industry Association in January sent a letter asking the Commerce Department to fully consider the economic impact of the definitions and limit them to technologies with national-security concerns, not trade-policy concerns.
Tikehau Capital planning EUR 700m capital increase at EUR 22 per share
21 MAY 2019
Tikehau Capital [EPA: TKO] announced it is contemplating, subject to market conditions, launching a capital increase for a minimum amount of EUR 700m, at a minimum price of EUR 22 per share. This potential capital increase, which would be open to both new and existing investors, could be launched before the end of the third quarter of 2019.
Tikehau Capital Advisors and the Group’s management have confirmed that, if such a transaction is launched, they intend to invest at least EUR 400m, subject to obtaining from the French financial markets authority (the Autorité des Marchés Financiers, or “AMF”) an exemption from the obligation to launch a mandatory tender offer. In the event that the capital increase is launched, its terms and the manner of its implementation would be communicated at a later stage in a prospectus subject to an AMF visa.
As of March 31, 2019, Tikehau Capital assets under management amounted to EUR 22.4bn, up +EUR 0.4bn in the first quarter of 2019, a comparable increase to the one recorded in Q1 2018. They comprise EUR 20.8bn for the Group’s asset management business and EUR 1.6bn for its investment business.
Link to original source
--> More Downside to come,
--> Have a look to Eramet (ERA FP) & AMG (AMG NA) - 2 ways of getting some exposure on that sector/ Stock pretty low.
Chinese leader visits magnet maker as trade war with US heats up
A highly publicised visit by Chinese president Xi Jinping to a rare earths magnet maker this week sent a strong message in the country’s escalating trade war with the US: China still holds a few important cards if things get worse.
Among those cards are rare earths, a group of 17 metals with a variety of high-tech applications. China sits on most of the world’s deposits of the ores for these metals.
More importantly, as Mr Xi demonstrated with his visit to magnet producer JL Mag Rare-Earth in Jiangxi province in south-eastern China on Monday, the country is also a major player in the downstream industrial supply chains that depend on those minerals.
The symbolic visit by Mr Xi follows the US decision last week to blacklist Chinese telecoms firm Huawei, which threatened to send such shockwaves through the global tech industry that Washington was forced on Monday to allow a three-month grace period before the move takes full effect.
Relations between the two countries have deteriorated quickly this month after hopes for a trade deal were dashed.
“China has a strong hand in this battle. They know supply chains better than we do, and how these materials power our smartphones, Teslas and fighter planes,” said David Abraham, senior fellow at New America, a think-tank, and author of The Elements of Power: Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age.
Rare earths drew international attention in 2010, when lower Chinese export quotas sparked heated accusations that it was punishing Japan over a maritime dispute. At that time, ores mined in China were usually processed in Japan.
Times have changed. Now much of the processing is done in China, where the rare earths are made into complex downstream components, such as magnets, sensors or instrument panels. Any new tussle over rare earths will centre on these products rather than basic ores.
“The optics are as they appear. The fact it’s [the facility Mr Xi visited] a magnet plant is not a coincidence,” said Ryan Castilloux, managing director of Adamas, a rare earths consultancy. “It's signalling they know it's not only important to US high-tech industries — electric vehicles, wind — but also defence. That's the message they're trying to get out.”
The latest round of posturing could turn international attention to the manufacturing chains that incorporate rare earths.
“The weakness for the US is not the mined rare earths . . . but processed rare earths or the products like magnets and batteries further down the supply line,” Mr Abraham said. “Here China has the undisputed advantage.”
Years of industrial policies, including export quotas and investment incentives, enticed the rare earths downstream processing industry to relocate to China from a traditional base in Japan.
Mr Xi’s visit “is absolutely a suggestive move and the timing of it puts the US between a rock and a hard place”, said Adamas’ Mr Castilloux, noting that companies outside China that are starting alternative rare earths processing facilities are not fully operational.
Those include Australia’s Lynas, which is in a protracted dispute with Malaysia over radioactive waste, and the Mountain Pass mine in California, which is being revived after the bankruptcy of its previous owner Molycorp in 2015.
“The question is: Can refining and recycling capacity be increased faster than shortages or price hikes appear in goods China might limit?” said Derek Scissors, of the American Enterprise Institute, a think-tank.
So far, the posturing is entirely symbolic. China could restrict exports of any material or gadget containing rare earths to the US but it has not yet done so. In 2015, it dropped its export quota regime after a World Trade Organization challenge by the US.
The downside is that any new restrictions would badly damage its recently developed industrial supply chains, which depend on foreign customers not only in the US but also in Europe and Japan. Such a move would reinforce the idea that China is a risky source of supply.
JL Mag makes a type of magnets used in power steering, brakes and windmills, with most of its export market in Europe. Globally, production is dominated by Hitachi of Japan but competitors such as JL Mag are gaining market share. After Mr Xi's visit, its stock surged by 10 per cent, the daily limit.
The company has an “ownership relation” with Ganzhou Rare-Earth Mineral Industry Co., a loose grouping of dozens of local miners in Jiangxi province.
That made it a safer choice to highlight than any subsidiaries of state-owned rival Jiangxi Rare Earth & Rare Metals Tungsten Corp Group, in which Mr Xi’s brother-in-law once held a substantial indirect stake.
Lars Windhorst attracts finance heavyweights to revamped board
Martin Gilbert and Marc Lasry join advisory team of German financier’s company
Flamboyant German financier Lars Windhorst has attracted fund management heavyweights Martin Gilbert and Marc Lasry to sit on a new advisory board for his rebranded investment company.
Mr Windhorst has relaunched his investment company in a bid to turn the page on several difficult years, which saw him and his firm Sapinda engaged in legal battles involving at least €220m with several investors — including Ukraine-born billionaire Len Blavatnik.
Mr Windhorst has renamed his group Tennor Holding, while taking the role of chairman of its advisory board. This board also includes Mr Lasry, co-founder of US hedge fund Avenue Capital, and Mr Gilbert, vice-chairman of UK asset manager Standard Life Aberdeen, Tennor said in a statement on its website on Monday.
A one-time teenage prodigy and poster boy for entrepreneurship in his native Germany, Mr Windhorst presided over several company insolvencies, a personal bankruptcy and received a suspended jail sentence in 2009. He then reformed his business around holding company Sapinda, setting up an office on Savile Row in the heart of London’s Mayfair district.
Tennor’s new advisory board also includes Bruno Crastes, the chief executive of France’s H2O Asset Management. The Natixis-backed investment group’s funds have invested in illiquid bonds from several companies linked to Mr Windhorst, supporting him in a crucial 2017 bond sale that helped the entrepreneur settle outstanding lawsuits and repay existing debts.
Mr Windhorst declined to comment; Mr Lasry confirmed he was joining the board of Tennor but declined to comment further. A spokesperson for Standard Life Aberdeen did not immediately respond to a request for comment.
Tennor has a separate management board, headed up by chief executive Robin Bagchi.
The group holds stakes in businesses such as medical devices maker Avatera Medical and film distribution company Wild Bunch. It last year acquired luxury fashion house La Perla from Silvio Scaglia, after the Italian entrepreneur settled a lawsuit he had filed against Mr Windhorst over amounts owed under financing agreements.
Mr Windhorst has previously denied being a subject of a whistleblower complaint against Goldman Sachs last year, after a former senior manager of the US investment bank claimed he was fired in 2017 as part of an effort to avoid a compliance scandal. An exhibit in the lawsuit referred to a 2015 Financial Times profile of the German entrepreneur and detailed several deals he was involved in.