*STEINHOFF EX-CEO ADVISED FRIENDS TO SELL STOCK BEFORE COLLAPSE
Early premarket gappersGapping up:
- IDT +26.7%, IGC +15.4%, NIO +10.3%, NBEV +7.7%, XXII +5.1%, QTT +4.6%, PPG +3.5%, CPB +3.1%, ISRG +2.6%, TTWO +2%, YGYI +1.9%, SGMO +1.7%, PEIX +1.4%, TSLA +1.2%, MDB +0.5%, ONCE +0.5%
Gapping down:
- STNG -11.8%, TSE -7.7%, PYX -5.3%, ICD -3.3%, VIPS -2.2%, IP -1.2%, FAST -1.2%, SYMC -0.5%, KPTI -0.5%
President Trump to sign bill that prohibits a prescription drug plan under Medicare or Medicare Advantage from restricting a pharmacy from informing an enrollee of any difference between the price
Bill will be signed at 2pm ET, per President's schedule
SoftBank Discusses Taking Majority Stake in WeWork
Investment could total between $15 billion and $20 billion and would likely come from SoftBank’s Vision Fund
SoftBank Group Corp. 9984 -5.37% is in discussions to take a majority stake in WeWork Cos., in what would be a giant bet on the eight-year-old provider of shared office space, according to people familiar with the talks.
The investment could total between $15 billion and $20 billion and would likely come from SoftBank’s Vision Fund, some of the people said. The $92 billion Vision Fund, which is backed largely by Saudi Arabia and Abu Dhabi wealth funds as well as by SoftBank, already owns nearly 20% of WeWork after last year committing $4.4 billion in equity funding at a $20 billion valuation.
Talks are fluid and there is no guarantee there will be a deal, some of the people said.
SoftBank and WeWork this summer were discussing a smaller investment that would value WeWork at up to $40 billion, The Wall Street Journal reported in June.
If a deal is completed, it would be one of the largest and more momentous deals of the past decade’s startup boom. SoftBank in January completed the biggest investment in a venture-backed startup, paying $7.7 billion for a 15% stake in Uber Technologies Inc. More than 160 private companies backed by venture capital have valuations of more than $1 billion, up from just a handful in 2010.
In eight years, New York-based WeWork has grown from a single office in Lower Manhattan to a workspace giant that rents more than 265,000 desks in 287 buildings, as of midyear. WeWork now occupies more Manhattan office space than any other company, renting 5.3 million feet there, according to real-estate-services firm Cushman & Wakefield.
That growth has been enabled by more than $6 billion in investment. Aside from SoftBank, investors include venture-capital firm Benchmark, China-based Hony Capital and JPMorgan Chase & Co.’s asset-management arm.
WeWork’s core business is office leasing: It takes on long-term leases for raw office space and builds out the interior with flexible spaces and modern design that it then subleases for terms as short as a month.
Despite the real estate focus, it has always marketed itself more like a tech company, as Chief Executive Adam Neumann has promised a lofty vision of connecting people and building community.
Mr. Neumann has recently described office space for WeWork as books were for Amazon.com Inc. —just a sliver of what it will become. His grand ambitions include developing entire neighborhoods full of not just its offices, but also WeWork-run apartments, gyms and even schools. Last month, it launched an elementary school, and it has bought a search engine optimization company, a software-coding school and even a stake in a wave-pool business.
WeWork’s valuation has long baffled real estate landlords as well as veterans of the serviced-office business, which offers a similar product—rental offices—though generally with a less-hip vibe. The leading company in that business, IWG PLC, had nearly twice as many desks for rent as WeWork as of June, but roughly one-fifth its valuation.
WeWork has also been racking up losses amid its investment in rapid growth, and recently those losses have begun to accelerate. In the first six months of the year, it posted losses of $723 million, wider than $154 million in the same period last year, according to numbers it provided to debt investors. In the same period, revenue more than doubled to $763 million.
WeWork has said its losses reflect its investment in growth, and its locations have healthy profit margins once they are open and fully leased. Fueling the growth are midsize and large companies that put divisions or groups of workers in offices for one to three years. Many of these companies like the flexibility of short-term leases, while WeWork absorbs the risk of paying the rent long-term, for 10 to 15 years.
Skeptics say WeWork’s investors who have given WeWork its billions don’t fully appreciate the risks of the business. Its client list still includes a big share of startups that may not be around for long, as well as larger companies that could leave in a recession. WeWork is on the hook for the long-term leases.
“They’re spending a lot of other people’s money very rapidly,” said Frank Cottle, who runs a network of serviced-office companies and sold a large portfolio of serviced offices to IWG’s predecessor, Regus, two decades ago. “The people investing in WeWork are looking at its story,” he said. “They’re ignoring its profitability.”
The potential deal also speaks to how SoftBank is shaking up the norms of startup investing. Its monstrous Vision Fund, which has focused mostly on startups, boasts a pool of money that is larger than the entire sum deployed by the venture-capital industry in U.S. companies last year.
Since it launched in 2017, the Vision Fund has showered its billions on companies ranging from younger startups like delivery company DoorDash Inc. and home-flipping firm Opendoor Labs Inc. to publicly traded companies such as chip designer ARM Holdings and auto maker General Motors Co.
SoftBank’s chairman Masayoshi Son has become a fixture of the Valley. He told investors in August that “most advanced” large startups will “join us as our family,” according to a transcript.
Mr. Son often makes gut-instinct decisions on investments at lofty valuations. At the company’s shareholder meeting in June, he said: “Feeling is more important than just looking at the numbers. You have to feel the force, like Star Wars.”
He has also made a strategy out of playing matchmaker to boost the prospects of SoftBank’s portfolio companies. A large share of WeWork desks in Tokyo, for instance, are occupied by SoftBank and its investment companies.
WeWork was a controversial investment within Softbank from the start, as multiple executives at the firm objected to it, saying it was an overvalued real-estate company, people familiar with those discussions have said. Mr. Son overruled them.
Solvay SA will not do takeovers in next two to three years - report (translated)
10 OCT 2018
Chemical company Solvay SA [EBR:SOLB] will not do takeovers in the next two to three years, Belgian daily De Tijd reported based on analysts at the appointment of Ilham Kadri as new CEO.
Kadri's predecessor Jean-Pierre Clamadieu and the board have already set out the way the company will develop in the coming years. Financially, Solvay aims for a yearly 6% to 9% growth of the EBITDA.
Previous deal, the takeovers of French Rhodia and US Cytec are still playing out but more growth and synergy are still expected. Solvay will also grow in the area of ‘specialty polymers’.
Growth by doing acquisitions is not needed, the report analyses.
After Hours Summary: IDT +28%, TSE -6% following earnings/guidance, PPG +4.9% on Nelson Peltz/Trian stake disclosureAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings: IDT +27.8% (also has discontinued its quarterly dividend, to repurchase shares and invest in growth business initiatives)
Companies trading higher in after hours in reaction to news: IGC +8.1% (has filed provisional method and composition patent application (IGC-509) with the USPTO for the treatment of fatigue and energy restoration), NIO +7% (after late surge higher on Bloomberg report that top Tesla [TSLA] investor took an 11% stake QTT +6% (recent IPO, still checking), PPG +4.9% (Trian Fund [Nelson Peltz] amends prior quarterly filing -- includes 2.59 mln shares of PPG), XXII +4.5% (continued momentum - up 17% in past two sessions), IP +2.3% (announces $2 bln share repurchase program, increases dividend), PEIX +2.1% (following 55% move higher over the past two trading days on positive ethanol developments), NBIX +1.7% (enters into strategic collaboration with Jnana Therapeutics to discover novel medicines for treatment of central nervous system disorders), TTWO +1.6% (initiated with Outperform rating and $175 tgt at Bernstein), YGYI +1.5% (after closing at multiyear highs -- more than 60% on the day), SGMO +1.4% / ONCE +1.2% (initiated with Buy at Guggenheim), CPB +1.3% (light volume; Third Point increases active stake to 6.98% -- reflecting the purchase of more than 4 mln shares since 9/28), SYMC +1.3% (ticking higher as AMZN AWS memo circulates regarding SYMC / SAP contracts)
After Hours Losers:
Companies trading lower in after hours in reaction to guidance: TSE -6.1% (expects Q3 to be below previously issued guidance citing auto industry slowdown and continuation of tire market weakness)
Companies trading lower in after hours in reaction to news: PYX -4.4% (extending this afternoon's pullback), ICD -3.3% (files for 36,752,657 share common stock offering by selling stockholders), VIPS -2.6% (downgraded to Neutral from Overweight at JP Morgan)
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>>> Up
* Austevoll Seafood Raised to Buy at Kepler Cheuvreux
* Bakkafrost Upgraded to Hold at Kepler Cheuvreux; PT 520 Kroner
* Dixons Carphone Raised to Buy at HSBC; Price Target 1.95 Pounds
* KBC Group Upgraded to Buy at Santander; PT 80.10 Euros
* Neste Upgraded to Buy at Kepler Cheuvreux; PT 82 Euros
* Ocado Upgraded to Equal-weight at Barclays; PT 8.75 Pounds
* Rightmove Upgraded to Buy at Liberum; PT 50 Pounds
* Rio Tinto Raised to Buy at Goldman on Margin Rise, Cost Drop
* Soco Upgraded to Outperform at RBC; PT 1.25 Pounds
>>> Down
* Ceconomy Downgraded to Hold at Baader Helvea; PT 6 Euros
* Ceconomy Downgraded to Reduce at HSBC; PT 4.20 Euros
* Ceconomy Cut to Sell at Independent Research; PT 4.50 Euros
* Enagas Downgraded to Sell at Berenberg
* Hella Downgraded to Hold at Berenberg
* Hunting Downgraded to Equal-weight at Barclays; PT 10 Pounds
* IPCO SS Cut to Underweight at Barclays
* Leroy Downgraded to Hold at Kepler Cheuvreux; PT 75 Kroner
* Tecnicas Reunidas Cut to Equal-weight at Barclays; PT 36 Euros
* Terna Downgraded to Hold at Berenberg
* TGS Downgraded to Underweight at Barclays; PT 360 Kroner
>>> Initiation
* Applus Reinstated Overweight at Morgan Stanley; PT 15.20 Euros
* Bureau Veritas Reinstated Overweight at Morgan Stanley
* Fjord1 Rated New Buy at DNB Markets; PT 55 Kroner
* Niiio Finance Group Rated New Hold at GSC Research
* ROVI SM Reinstated at Kepler Cheuvreux With Buy; PT 18.60 Euros
>>> Call
* Volvo, Alfa Laval Among Citi Top Picks in Capital Goods in 3Q