>>> Amazon target raised to $2225 at Aegis Capital -- History is on your side wi

Amazon target raised to $2225 at Aegis Capital -- History is on your side with Amazon; Buy into the shareprice weakness
Aegis Capital raises their AMZN tgt to $2225 from $2063 after rolling forward valuation to year-end 2019. Firm continues to see the retail business taking share from traditional retail and investments Amazon continues to make across advertising, logistics, fulfillment, digital content, devices, India, AWS, and physical stores, should drive faster top-line growth and continued margin expansion. They see a few reasons why investors should worry less and why retail fundamentals remain healthy: 1) comps were tough, with higher 1P contribution in the year-ago quarter; 2) the accounting shifts of digital media content from 1P to 3P and shift of Diwali sales into 4Q this year. 3) spend per Prime member continues to grow at a healthy pace; 4) acquisition of Prime memberships continues to grow; 5) Amazon is making significant headway in emerging markets such as India; and 6) after two years of significant capacity builds and hiring growth the slowdown in expense growth reflects efficiency of prior investments rather a slowdown in demand.

>>> Coinbase raises USD 300m in Series E led by Tiger Global Management

Coinbase raises USD 300m in Series E led by Tiger Global Management
30 OCT 2018
Coinbase, a San Francisco, California-based cryptocurrency digital wallet firm, has raised USD 300m in a Series E equity round led by Tiger Global Management.
Y Combinator Continuity, Wellington Management, Andreessen Horowitz and Polychain also took part.
Coinbase will use this financing for growth and development, to include the addition of features and crypto assets.
Coinbase is a digital currency wallet service that allows traders to buy and sell bitcoin.

Blog post:
At Coinbase, we believe that cryptocurrencies and the technologies that power them represent a breakthrough in computer science that will change both the internet and the global financial system for the better. We see tremendous promise in crypto to build the next great phase of the internet (often referred to as Web 3), which has the power to put control back in the hands of consumers, unleash a new era of innovation, and offer greater access to economic opportunities to more people around the world.
Today, we’re pleased to announce that Coinbase will add an additional $300 million of investment at a post-money valuation of over $8 billion to accelerate the adoption of cryptocurrencies and digital assets. The Series E equity round is led by Tiger Global Management, with participation from Y Combinator Continuity, Wellington Management, Andreessen Horowitz, Polychain and others.
Coinbase will use this financing to accelerate:
Global expansion–building the infrastructure between fiat and crypto in regulated markets around the world;
Offering more crypto assets, quickly — we see hundreds of cryptocurrencies that could be added to our platform today and we will lay the groundwork to support thousands in the future;
Utility applications for crypto — like the recently announced support for a stablecoin (USDC) on Coinbase and our continued development of Coinbase Wallet; and
Bringing institutions into crypto — adding features and crypto assets to our Custody offering to bring more institutional funds into the space.
Coinbase is, and will remain, a crypto-first company. More than anything, we’re proud of the millions of people that have turned to Coinbase as their entry-point into crypto. We take that responsibility very seriously. We strive to be the easy, trusted way for anyone to get started with cryptocurrencies. We see Coinbase’s growth as validation that the ecosystem will only continue to grow in size, influence and impact — ultimately ushering in a more open financial system for the world.

>>> Nestle taps Credit Suisse, Evercore for skincare review, sources say

Nestle taps Credit Suisse, Evercore for skincare review, sources say
30 OCT 2018
Nestle [VTX:NESN] has engaged Credit Suisse and Evercore to advise on a review of Nestle Skin Health, said three sources familiar with the situation.
The global business generates around USD 500m in EBITDA, said two additional sources familiar. Several sources said Nestle Skin Health could command a valuation from USD 5bn to USD 6bn and potentially up to USD 8bn.
Nestle, the Swiss food and drinks group, said in September that it was reviewing a sale or spinoff of Nestle Skin Care, which accounts for roughly 3% of Nestle’s overall revenue at CHF 2.7bn (USD 2.8bn). Approximately 40% of revenue comes from the US and Canada, and Nestle is likely to market the business as a North America company, one of the sources said.
The business operates as three units: Epiduo and Soolantra in prescription, Restylane and Azzalure in aesthetics and Cetaphil and Proactiv in consumer care. Each unit makes up roughly one-third of revenue, according to two of the sources.
Some of the sources and a sector advisor said potential suitors may only be interested in parts of the business. Large consumer product groups, for instance, may not want to buy the prescription and aesthetics units, one of the sources said. Financial sponsors would likely have to team up to make a bid for the entire business, two sources added.
One of the sources said some of the dermatology assets may be valued at 20x EBITDA, while other assets will fetch a lower valuation.
Nestle formed Nestle Skin Health in 2014 when it bought out its joint venture partner, French cosmetics group L’Oréal [OR:EN], in dermatological group Galderma for EUR 6.5bn. Credit Suisse advised Nestle on that deal.
In a spinoff, Nestle could market the business as Galderma, which remains a strong global brand name, a second sector advisor said. He pointed towards Novartis’s [NYSE:NVS] plan to spin off its eye care business Alcon as a potential comp.
Nestle uses the Galderma name for its medical skincare products, according to its website.
US activist Third Point has been pressuring Nestle to shake up its portfolio. Evercore has been advising Nestle on its response to Third Point after beating Credit Suisse for the mandate, this news service has reported.
This news service also reported on 16 October that Nestle had held a bake off to engage a financial advisor for the skincare review. No public mandate has been announced. Bloomberg News previously reported on the Credit Suisse mandate.
Nestlé and Credit Suisse declined to comment. Evercore did not respond to requests for comment.

(ZeroHedge) Hedge Fund Meltdown Accelerates, And There Is No End In Sight

Hedge Fund Meltdown Accelerates, And There Is No End In Sight - http://bit.ly/2JpOzy3

It's already been an abysmal month for hedge funds, as the Goldman Hedge Fund VIP Index clearly demonstrates...
... having just suffered its worst month on record...
... and with every passing day, it's only getting worse as hedge funds, forced to deleverage in this chaotic market, are unable to pick a correct side of the market and stay on it.
Consider that according to Nomura's Charlie McElligott, Monday was fifth worst one-day drawdown for his U.S. Equities Long-Short Hedge Fund model year-to-date, as the now daily shakeout continued in the form of accelerated deleveraging of legacy status quo positioning, i.e., popular shorts/underweights in “Value” and “Quality” ripping higher, while consensual longs overweights in “Growth” and “Momentum” were once again violently reduced.
Commenting on the "extreme and much-discussed" - not to mention 10 years overdue - outperformance of U.S. Equities “Value” over “Growth” yesterday, McEllgiott notes that optically it looked just as much about forced “grossing-down” (selling longs, covering shorts as higher realized volatility dictates VaR-based exposure reduction) as it did about ongoing “end-of-cycle” factor rotation catalysts or macro inputs (i.e. steeper curves benefiting “Value”)
Of note, and what to McElligott was "pretty interesting" was this: even when SPX was +1.4% and at the highs….broad “Value” factor metrics were meaningfully outperforming their “Growth” counterparts (while “1Y Momentum” was outright lower all session); or as he explains "it has been a VERY RARE occurrence to see “Value” to outperform the multi-year leadership regime of “Growth” and “Momentum” in a “gap higher” Equities tape."
What does this mean according to the Nomura strategist:
“Value” over both “Growth” and “1Y Momentum” has obviously been a feature of the month-to-date landscape, especially as investors were very clearly been re-pricing LOWER their expectations for U.S. economic growth, in conjunction with the “pulling forward” their “end of cycle” timing into 2019
More ominously, and in keeping with what Goldman noted when looking at the VIX curve, this “Value” outperformance over “Growth” is in-line with historical factor leadership data across late-cycle transitions, as investor mentality seemingly pivots from “pre-recession” towards outright “end-of-cycle” / “recession” style rebalancing.
in a recession, outside of “Low Volatility” and “Dividend,” it is “Value” which is the next-best performing factor; conversely, investors do not want to be stuck long “expensive” stocks into the eventual slowdown.
All of the above is bad news for hedge funds: as shown in the chart below, equity hedge fund performance continues to suffer due to legacy positioning effectively being "long high beta" vs "short low beta", which means that despite cutting net exposure to lows, they still bleed on high "market" exposure:
That said, McElligott believes that "THIS current freak-out is not “the one”—instead, it will be the early-to-mid 2019 event where after the 2nd hike the market “sniffs the slowdown,” the curve powerfully steepens, and we see the “ultimate” risk-off trade (and the “sustainable” Value over Growth” move)." Instead, the current market in my eyes remains a “de-leveraging cleanse” off the back of a Fed “policy error” scare.
Unfortunately, for battered hedge funds - who just saw a spike in redemption requests in September - it doesn't matter: once their LPs see the latest disastrous performance, the outflows will accelerate forcing even more derisking, deleveraging and debuying.

FT : Iranian intelligence planned an attack in Denmark — Danish officials

Iranian intelligence planned an attack in Denmark that was foiled at the end of September, according to Denmark’s security services.

Denmark’s foreign minister called the allegations “totally unacceptable” and said that the government in Copenhagen would react to Iran as well as talk to other European countries about further action.

Bridges between Denmark and both Sweden and Germany were suddenly closed on September 28 while local police said they were searching for a Swedish-registered Volvo and three people “involved in a serious crime”.

“It is, in short, a case of an Iranian intelligence unit that in our view has planned an attack in Denmark,” Finn Borch Andersen, head of the Danish security and intelligence service, said on Tuesday.

The targets of the planned attack were three Iranians living in Ringsted – a town about 60kn south-west of Copenhagen — who are believed to belong to a separatist group Al-Ahvaziya, which is regarded by Tehran as a terrorist organisation.

A Norwegian citizen of Iranian origin was arrested on October 21 for having helped Iranian intelligence in Denmark and is still in custody.

The planned attack in Denmark appears to have parallels with a foiled bombing on an Iranian opposition rally in the suburbs of Paris at the end of June. France earlier this month froze the assets of two Iranian nationals and the country’s intelligence services over alleged links to the foiled attack.

Axios : Exclusive: Trump targeting birthright citizenship with executive order

Exclusive: Trump targeting birthright citizenship with executive order - http://bit.ly/2OfST3u

President Trump plans to sign an executive order that would remove the right to citizenship for babies of non-citizens and unauthorized immigrants born on U.S. soil, he said yesterday in an exclusive interview for "Axios on HBO," a new four-part documentary news series debuting on HBO this Sunday at 6:30 p.m. ET/PT.

Why it matters: This would be the most dramatic move yet in Trump's hardline immigration campaign, this time targeting "anchor babies" and "chain migration." And it will set off another stand-off with the courts, as Trump’s power to do this through executive action is debatable to say the least.

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Trump told "Axios on HBO" that he has run the idea of ending birthright citizenship by his counsel and plans to proceed with the highly controversial move, which certainly will face legal challenges.

"It was always told to me that you needed a constitutional amendment. Guess what? You don't," Trump said, declaring he can do it by executive order.
When told that's very much in dispute, Trump replied: "You can definitely do it with an Act of Congress. But now they're saying I can do it just with an executive order."
"We're the only country in the world where a person comes in and has a baby, and the baby is essentially a citizen of the United States ... with all of those benefits," Trump continued. "It's ridiculous. It's ridiculous. And it has to end." (More than 30 countries, most in the Western Hemisphere, provide birthright citizenship.)
"It's in the process. It'll happen ... with an executive order."
The president expressed surprise that "Axios on HBO" knew about his secret plan: "I didn't think anybody knew that but me. I thought I was the only one. "

Behind the scenes: "Axios on HBO" had been working for weeks on a story on Trump’s plans for birthright citizenship, based on conversations with several sources, including one close to the White House Counsel’s office.
The legal challenges would force the courts to decide on a constitutional debate over the 14th Amendment, which says:

"All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside."
Be smart: Few immigration and constitutional scholars believe it is within the president's power to change birthright citizenship, former U.S. Citizenship and Immigration Services chief counsel Lynden Melmed tells Axios.

But some conservatives have argued that the 14th Amendment was only intended to provide citizenship to children born in the U.S. to lawful permanent residents — not to unauthorized immigrants or those on temporary visas.
John Eastman, a constitutional scholar and director of Chapman University's Center for Constitutional Jurisprudence, told "Axios on HBO" that the Constitution has been misapplied over the past 40 or so years. He says the line "subject to the jurisdiction thereof" originally referred to people with full, political allegiance to the U.S. — green card holders and citizens.
Michael Anton, a former national security official in the Trump administration, recently took up this argument in the Washington Post.

Anton said that Trump could, via executive order, "specify to federal agencies that the children of noncitizens are not citizens" simply because they were born on U.S. soil. (It’s not yet clear whether Trump will take this maximalist argument, though his previous rhetoric suggests there’s a good chance.)
But others — such as Judge James C. Ho, who was appointed by Trump to Fifth Circuit Court of Appeals, in New Orleans — say the line in the amendment refers to the legal obligation to follow U.S. laws, which applies to all foreign visitors (except diplomats) and immigrants. He has written that changing how the 14th Amendment is applied would be "unconstitutional."
Between the lines: Until the 1960s, the 14th Amendment was never applied to undocumented or temporary immigrants, Eastman said.

Between 1980 and 2006, the number of births to unauthorized immigrants — which opponents of birthright citizenship call "anchor babies" — skyrocketed to a peak of 370,000, according to a 2016 study by Pew Research. It then declined slightly during and following the Great Recession.
The Supreme Court has already ruled that children born to immigrants who are legal permanent residents have citizenship. But those who claim the 14th Amendment should not apply to everyone point to the fact that there has been no ruling on a case specifically involving undocumented immigrants or those with temporary legal status.
The bottom line: If Trump follows through on the executive order, "the courts would have to weigh in in a way they haven't," Eastman said.

The full interview will air on "Axios on HBO" this Sunday, Nov. 4, at 6:30 p.m. ET/PT.

REuters : Exclusive: Short-seller Left to seek investor money for fund

Exclusive: Short-seller Left to seek investor money for fund

(Reuters) - Andrew Left, the founder of Citron Research whose bets against companies from electric car maker Tesla Inc to drug maker Valeant Pharmaceuticals made him one of Wall Street’s most prominent short-sellers, is ready to put investors’ money where his mouth is.

After investing only his own wealth for roughly two decades, Left is speaking to potential investors about launching Citron Capital, his first-ever hedge fund, that will begin trading in weeks, he told Reuters in an interview. The move could give Left more firepower to go after some of the biggest U.S. companies.

While Left will continue to bet against companies, he said he will use the new fund to also bet that some companies’ shares will rise.

“If you find the right thing, it is always the right time for short activism,” Left said. “Fads, frauds and fading businesses are a constant even in rising markets,” he added.

Left, whose scathing reports on companies routinely send stock prices reeling, said he plans to raise “a few hundred million of dollars” from investors. He is expected to put in $10 million of his own money toward the fund, according to an investor presentation reviewed by Reuters.

Potential investors will be required to invest a minimum of $2 million, leave their money locked up for one year, and pay standard hedge fund industry fees of a 1.5 percent management fee plus a 20 percent cut of the profits to Left, according to the investor prevention.

Left is launching his fund as the stock market has sold off and investors are worrying about frothy valuations of many companies. He is also starting up just as some other prominent long-short equity hedge fund managers are going out of business.

The S&P 500 ended trading on Monday just shy of confirming its second correction of 2018, hurt by fresh worries of an escalation of U.S.-China trade tensions and a sharp drop in big tech and internet names.

Left has started meeting with wealthy investors such as family offices, and said he wished he had launched his new fund six weeks ago, before the stock market began tanking.

Left, 48, who has spent the last 17 years running Citron Research, has earned millions by putting money behind his calls on companies. He earned an average annualized return of 89.98 percent between 2007 and 2017, according to the investor presentation seen by Reuters.

Calling himself a contrarian who is not afraid to speak up or change his mind, Left made news last week when he changed his tune on Tesla. Left said in a research note that the company’s Model 3 sedan is a “proven hit,” and that serious competition from other automakers for the plug-in car market had not materialized. He attributed his change of heart to a better understanding of the electric car industry and said he believed Tesla had turned the corner.

THE SHORTS SHINE
So-called activist shareholders such as William Ackman and Nelson Peltz publish research to pressure companies to improve shareholder value, by taking actions such as boosting profits or putting a company up for sale. “Short” activist shareholders like Left, on the other hand, seek to persuade other shareholders to dump their stock on the basis that a company’s flaws have not been priced in by the market.

The average activist hedge fund’s returns are roughly flat through the end of September, Hedge Fund Research data show. Several short activist hedge funds, on the other hand, have thrived.

Eiad Asbahi’s Prescience Point Capital Management is boasting gains of roughly 47 percent in the first nine months of this year after it alleged accounting fraud at trucking company Celadon, which is currently being investigated by the U.S. Justice Department. Sahm Adrangi’s Kerrisdale Capital, which made its reputation by betting against Chinese internet companies, was up 45 percent through the end of September. Ben Axler’s Spruce Point Capital and Carson Block’s Muddy Waters, which specialize in spotting corporate frauds, are delivering double-digit returns of roughly 18 percent, investors said.

Now that investors are looking for assets uncorrelated to the stock market, short activists are beginning to pull in fresh money. “By publishing our research (against a company) we lay out a more differentiated case and we find that to be more productive,” Axler said.

Left said he had several investment ideas for his fund and not all will be shorts.

“I think Wayfair Inc is way over-valued. I would be long on China,” Left said, adding that stocks like Alibaba Group Holding Ltd and JD.com have bright futures.

“For me, this is in my blood and I feel like I have another good 15 years left,” Left said.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

  • ELVT -29.8%, TREX -12.3%, FTSI -12.2%, TXRH -11.7%, APTI -11%, CGNX -9.7% (also authorized the purchase of up to $200 million of common stock; increases quarterly cash dividend to $0.05 per share from $0.045 per share), RMBS -9.5% (also appoints Luc Seraphin as President, CEO), ALSN -9.3%, CYH -8.8%, VNOM -8.1%, CHK -6.5%, IRMD -6.3%, AEIS -6.2%, MAS -5.3%, CTSH -4.7%, CBL -4.5%, PFE -3.8%, APPF -2.8%, ACCO -2.2%, AOS -2.2%, TPR -2%, ERJ -1.9%, HIIQ -1.8%, SCI -1.6%, BBVA -1.6%, ETN -1.5%, OLN -0.8%, MKSI -0.7%, AMKR -0.5%, INCY -0.5%

M&A news:

  • LEN -1.5% ( agrees to sell Rialto Investment and Asset Management business to investment funds managed by Stone Point Capital for $340 mln)

Other news:

  • EGRX -6.4% (Eagle Pharma's fulvestrant formulation has not met the primary bioequivalence endpoints evaluating Eagle's formulation compared to FASLODEX; also provides guidance)
  • ASRT -5.6% (appoints Daniel A. Peisert CFO, effective upon the retirement of current CFO Phil B. Donenberg on November 30)
  • CMTA -3.6% (prices offering of 5.3 mln shares of common stock at $13.25 per share)
  • ALKS -2.8% (FDA release briefing documents ahead of November 1 AdCom covering Buprenorphine and Samidorphan (ALKS 5461) in MDD)
  • ACAD -2.7% (announces departure of CFO Todd S. Young, effective October 31, and names Elena Ridloff Interim CFO)

Analyst comments:

  • LUV -1.4% (downgraded to to Underweight from Neutral at JP Morgan)
  • SNH -0.8% (Underweight from Equal-Weight at Morgan Stanley)