The Wirecard share price dropped as much as 8.5 per cent on Thursday:
We had heard from multiple sources that some form of short report was circulating, from an outfit called Third Bridge. The problem with this rumour is that Third Bridge doesn't write short reports, or even stock recommendations for that matter.
A corporate intelligence consultancy, it provides information on companies to a variety of clients, which include hedge funds. Its three main products are Intelligence, such as corporate case studies, Connections, where it puts clients in touch with experts, and Forum, where it conducts an interview and circulates the transcript. There was an innocuous transcript which mentioned Wirecard published in early August, according one Third Bridge client.
We spoke to Joshua Maxey, chief marketing officer and a Third Bridge founder. He had received multiple inquires about the supposed report, and was baffled. “Someone has got their wires crossed”, he said.
It is course possible there is some other form of new sell note, thesis, or critique circulating, which has produced the rumours. If so, please let us know, we haven't seen it.
Gapping down
In reaction to disappointing earnings/guidance:
- THO -9.1%, RHT -5.7%
Select THO related names showing weakness:
- WGO -3.5%, CWH -2.7%, PATK -0.5%
Other news:
- MTEM -12.8% (commences $30 mln common stock offering)
- CRSP -4.5% (announces proposed public offering of $200 mln of its common shares; files mixed securities shelf offering)
- DM -3.9% (Dominion Energy announced that it has made an offer to Dominion Energy Midstream Partners to acquire all outstanding common units not owned by Dominion Energy in exchange for Dominion Energy common shares)
- KOS -3.8% (indicated lower on block trade pricing)
Analyst comments:
- GDS -5.3% (initiated with a Sell at Berenberg; tgt $16 (stock closed at 33.99 yesterday))
- BRKR -3.2% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
- SKX -3.1% (downgraded to Market Perform from Outperform at Cowen)
- SFIX -2.8% (downgraded to Neutral from Overweight at Piper Jaffray)
- FTNT -1.6% (downgraded to Neutral from Buy at BofA/Merrill)
- SLCA -1.2% (downgraded to Sector Perform from Outperform at RBC Capital Mkts)
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Gapping up
In reaction to strong earnings/guidance:
- MLHR +7.9%, DRI +4.7%, UAA +2.7% (sees FY18 $0.16-0.19 vs $0.17 S&P Capital IQ Consensus Estimate; sees adj. operating loss at high end of guidance as it increases restructuring charges, lays off 3% of workdforce), DEO +1.5% (issues trading update; FY19 net sales growth expectations in line with medium-term guidance of mid-single digit growth)
M&A news:
- FOLD +8% (to acquire gene therapy portfolio of ten clinical and pre-clinical stage AAV programs in neurologic lysosomal storage disorders for $100 mln upfront)
- VG +0.7% (to acquire privately-held NewVoiceMedia, a Contact Center-as-a-Service provider, for an equity price of $350 million paid in cash)
Other news:
- TLRY +14.5% (ongoing volatility)
- ADVM +12.8% (receives Fast Track Designation from FDA for ADVM-022 Gene Therapy)
- CRON +7.6% (ongoing volatility)
- GALT +7.4% (announces 'positive' preliminary results from Phase 1b Clinical Trial of GR-MD-02 and KEYTRUDA in advanced melanoma and expansion of the trial)
- LCI +5.2% (MintBroker discloses 5.12% passive stake)
- TXMD +3.7% (announces that Annovera has been granted marketing exclusivity as a new chemical entity from the FDA)
- CGC +3.5% (ongoing volatility)
- RIO +3.3% (unveils details of $3.2 bln new share buy-back program)
- SOGO +1.3% (Sogou and Tencent Holdings (TCEHY) agree to extend until September 2023 the period during which Sogou Search will be the default general search engine for Tencent's products that provide general search offerings)
Analyst comments:
- ARGX +4.3% (added to Best Ideas List at Wedbush)
- TNDM +3.1% (initiated with a Buy at Craig Hallum)
- FBP +2.7% (upgraded to Buy from Neutral at BofA/Merrill)
- RIG +2.6% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)
- AMD +1.8% (tgt raised to $38 from $21 at Stifel)
- CAT +1.5% (upgraded to Outperform from Neutral at Robert W. Baird)
- RL +1.4% (upgraded to Neutral from Underweight at Piper Jaffray)
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HOW THE HTC EXODUS BLOCKCHAIN PHONE PLANS TO SECURE YOUR CRYPTOCURRENCY
CASEY CHIN
BLOCKCHAIN PHONES ARE coming, that much is certain. The Sirin Labs Finney and the HTC Exodus are both expected by the end of the year, each with its own, sometimes vaguely defined sense of what exactly that term means. HTC’s Phil Chen, who spearheaded Exodus development, has at least started to fill in the blanks of how the Exodus will pull off its most important trick: keeping your cryptocurrency safe.
The Exodus has loftier ambitions than mere storage, of course. “A few years down the road, we see a world where people own their own identities and data, where everyone understands the concept and economics of digital property,” says Chen, HTC's decentralized chief officer. For the moment, though, the primary concern for the Exodus’s intended audience is how well it works as a hardware wallet.
That had, until now, been a bit of a question mark. After all, a smartphone seems like an inopportune place to stash digital currency. Android phones, in particular, present inherent security risks, subject to a wide assortment of malware and other targeted threats. Smartphones also, as you may be personally and painfully aware, tend to get lost or stolen, at least more than is ideal for what aspires to be a digital bank vault.
"We see a world where people own their own identities and data, where everyone understands the concept and economics of digital property."
PHIL CHEN, HTC
In fact, even the mere act of connecting to the internet goes too far for protective cryptocurrency investors, who prefer to keep their assets in so-called cold storage wallets, which remain entirely offline. If anything, cryptocurrency storage has trended toward that extreme, with some deep-pocketed enthusiasts opting for physical vaults with Faraday cage surrounds.
By contrast, putting your cryptocurrency—more specifically, the private keys required to access it—in an Android phone might seem the equivalent to stashing your money not under the mattress but neatly on top of it, and then placing that mattress on a fairly busy street corner.
“Phones are very promiscuous in the sense that they transfer a lot of data, they connect to a lot of networks, we install third-party apps on them. They can be made relatively secure, but they’re not the safest thing to carry around a lot of money,” says Matthew Green, a cryptographer at Johns Hopkins University who is affiliated with a privacy-focused cryptocurrency called Zcash. “And if you’re not carrying a lot of money, you don’t need a special phone.”
And yet tens of millions of people already use software wallets, Chen says, tied to centralized exchanges like Coinbase. “What’s obvious in the old internet model, is centralized cloud systems are very hackable,” says Chen. “Centralized honeypots are continually hacked. The concentration of data in walled gardens increases the cost of security.”
The HTC Exodus aims instead for something of a compromise. It isn’t quite cold storage, but at least it empowers users by allowing them to hold their own keys. It does so by placing them in a so-called trusted execution environment, a part of an ARM chip called TrustZone. The secure enclave sits apart from the operating system, designed to inoculate precious cargo even in the event of a broader breach. Think of it as a smartphone’s panic room.
The concept of a secure enclave isn’t new; Intel has offered one for PCs for some time, and Apple uses one to protect the biometric data—your fingerprint and face—that it uses to unlock the iPhone. Even TrustZone has been around for years, commonly used by studios and such to lock down DRM-protected content.
It’s as good an answer as any right now, and preferable to HTC attempting to built its own solution from the ground up. But TrustZone isn’t a security panacea. “If somebody claims something is secure, a lot of people try to poke into it,” says Simha Sethumadhavan, a computer scientist at Columbia University. “Over the years there have been several attacks on TrustZone.”
That includes one from Sethumadhavan, who along with coauthors Adrian Tang and Salvatore Stolfo published research last year detailing how to not just break TrustZone security but alter the code that’s running in the secure environment.
To be absolutely clear: These attacks are difficult to pull off, and TrustZone generally works as advertised. “It does significantly raise the bar for the attacker,” says Sethumadhavan. “It’s better than putting it in the insecure world, for sure,” he adds, referring to the broader Android operating system.
Even Chen, refreshingly, recognizes the trade-offs involved. “There’s no such thing as 100 percent security. It’s always a balance between security and usability,” he says. “We’re still at the very early stages of educating users that this is not a 100 percent secure solution, but as of right now it’s the best so far. It’s our attempt to do something that’s best from the market.”
Until and unless the industry open sources everything, Chen says, HTC has to take as an article of faith that ARM and chipmaker Qualcomm will deliver the security they promise. He acknowledges that hardening the HTC Exodus will also require input from cryptographers and the broader cryptocurrency community. “It’s really a beta,” he says. “We’re still targeting the 30-35 million people that have software wallets, and this is a much better solution than that.”
And while Chen wouldn’t argue that the Exodus is more secure than cold storage, he does stress that it offers much better usability. There’s no dusting off a hard drive and connecting it with USB to your laptop and struggling through a clumsy interface.
The HTC Exodus will also offer a novel way to recover your keys, which are often a series of words that need to be entered in the event that you lose access to your wallet. If you lose both your wallet and your recovery keys, you’ve officially lost everything.
That dynamic comes into especially sharp relief with smartphones, which, when you aren't losing or breaking them periodically, you're actively replacing every two or three years.
HTC’s proposed failsafe: You can split your key among three to five people you trust, all of whom will need to download an app for this to work. You won’t need their help to assign transactions, but you will if you lose your phone. “It revolves around this fundamental principle of users owning their keys. I do want to stress that this is a very, very difficult problem. People aren’t used to owning their keys. People are used to calling up Apple or Google,” says Chen.
Putting that power in the hands of users and their friends is certainly in line with the HTC Exodus philosophy. But it also raises several immediate flags: What if you have a falling out with one of those friends, or they get a new phone, or delete the app, or die? Does the backup have a backup?
Not yet. “This is the 1.0 version,” Chen says. “There are other backup plans that we’ve thought of, but they’re not part of the solution yet.”
That sounds dire, but it’s at least something. If you find yourself in a comparable situation with a cold storage wallet—or the Sirin Labs Finney blockchain phone—you generally have no options at all.
Plenty of questions remain about the HTC Exodus, especially regarding the company's long-term vision of revolutionizing how people relate not just to their cryptocurrencies, but their data and identity. HTC may still be figuring out how the blockchain smartphone will change the world. But at least it has some answers as to how to make it safe.
Japan hit by another cryptocurrency heist, $60 million stolen
TOKYO (Reuters) - Japanese cryptocurrency firm Tech Bureau Corp said about $60 million in digital currencies were stolen from its exchange, highlighting the industry’s vulnerability despite recent efforts by authorities to make it more secure.
Tech Bureau, which had already been slapped with two business improvement orders by regulators this year, said its Zaif exchange was hacked over a two-hour period on Sept. 14. It detected server problems on Sept. 17, confirmed the hack the following day, and notified authorities, the exchange said on Thursday.
Following the hack, Tech Bureau said it had agreed with JASDAQ-listed Fisco Ltd to receive a 5 billion yen ($44.59 million) investment in exchange for majority ownership. The proceeds from the investment would be used to replace the digital currencies stolen from client accounts.
However, Fisco said in a statement the 5 billion yen in “financial assistance” may change in value if the amount affected by the heist changes upon further investigation.
Documents seen by Reuters on Thursday showed Japan’s Financial Services Agency would conduct emergency checks on cryptocurrency exchange operators’ management of customer assets, following the theft. FSA officials were not immediately available for comment.
Japan’s crypto exchanges have been under close regulatory scrutiny after the theft of $530 million in digital coins at Tokyo-based cryptocurrency exchange Coincheck Inc. in January. Coincheck has since been acquired by Japanese online brokerage Monex Group Inc.
In the industry-wide check that followed the Coincheck theft, FSA said it found sloppy management at many exchanges, including the lack of proper safeguards for client assets and basic anti-money laundering measures.
In the Tech Bureau theft, virtual currencies worth about 6.7 billion yen ($59.67 million), including Bitcoin, Monacoin and Bitcoin Cash, were stolen from the exchange’s “hot wallet”. About 2.2 billion yen worth of the stolen currency was its own while the remaining 4.5 billion yen belonged to customers, it said.
Hot wallets are connected to the internet. Industry experts consider them to be more vulnerable to hacks than “cold wallets”, which are not connected to the internet.
The latest hack is likely to affect the FSA’s ongoing regulatory review of the industry. Other countries are also grappling with how to regulate crypto market.
Japan last year became the first country to regulate cryptocurrency exchanges, as it encourages technological innovation while ensuring consumer protection. Exchanges have to register with FSA and required reporting and other responsibilities.
FSA said last week more than 160 entities have expressed interest in entering the cryptocurrency exchange business but FSA has not issued any approval since December last year.
Toshihide Endo, FSA commissioner told Reuters in an interview last month that the agency is trying to strike a balance between safeguarding clients and technological innovation.
“We have no intention to curb (the crypto industry) excessively,” he said. “We would like to see it grow under appropriate regulation.”
Bird and Lime hit 20m rides as e-scooter market heats up
Bird and Lime have together racked up more than 20m rides to date, demonstrating consumers’ rapid adoption of new bike- and scooter-sharing services.
Lime’s customers have taken 11.5m bike and electric scooter rides since it launched 14 months ago, the San Francisco-based company said.
Its biggest rival Bird, which focuses only on e-scooters, topped 10m rides in its first 12 months on the streets.
The two companies announced the milestones in almost simultaneous press releases on Thursday morning.
Each service is also now available in 100 markets, they both said. After racing across North America, they are now expanding into European cities such as Paris and Brussels too. Lime said that it was planning to launch in another 50 more cities around the world before the end of the year.
Together, Bird and Lime have raised almost $1bn in venture funding in little more than a year, ranking them among the fastest-growing “unicorn” start-ups.
Bird also revealed that it has 2.1m unique “riders” who travel an average of 1.4 miles with each scooter trip.
Bird chief executive Travis VanderZanden, who previously worked at both Uber and Lyft, said that car-hailing apps facilitated about 1m rides in their first year. Bird hit the 1m rides point in April.
Scooters’ more accelerated expansion has rattled lawmakers in some cities, with critics arguing that they present a safety hazard.
“In our second year, we’re doubling down on our efforts to collaborate and partner with cities so that they can knit e-scooters into their transportation infrastructure,” Mr VanderZanden said in a letter on Thursday.
While Lime and Bird have a sizeable head start, competition is looming on all sides.
Uber and Lyft are launching their own scooter rental services, while rival start-ups are popping up around the world too. Last week, Brazil-based Yellow raised $63m to expand its bike and scooter rentals service around Latin America.
Activity tracker like iPhone or Apple Watch now mandatory for John Hancock life insurance
It will no longer be possible to buy a life insurance policy from John Hancock – one of the largest insurers in the US – without agreeing to use an activity tracker. This can be either a wearable device like an Apple Watch or Fitbit, or a smartphone capable of logging activity, like an iPhone.
The firm announced the change today for new policies, with existing policies also adopting the requirement from next year …
Reuters reports that the company made the decision three years after making so-called ‘interactive’ policies optional.
The move by the 156-year-old insurer, owned by Canada’s Manulife, marks a major shift for the company, which unveiled its first interactive life insurance policy in 2015. It is now applying the model across all of its life coverage.
Interactive life insurance, pioneered by John Hancock’s partner the Vitality Group, is already well-established in South Africa and Britain and is becoming more widespread in the United States […]
The insurer will begin converting existing life insurance policies to Vitality in 2019.
The firm has so far relied on rewards to tempt people to opt for the policies
Policyholders score premium discounts for hitting exercise targets tracked on wearable devices such as a Fitbit or Apple Watch and get gift cards for retail stores and other perks by logging their workouts and healthy food purchases in an app.
As Reuters notes, the move could have disturbing implications.
Privacy and consumer advocates have raised questions about whether insurers may eventually use data to select the most profitable customers, while hiking rates for those who do not participate.
The insurance industry says that the law means it can only hike premiums if it can show an increased risk, but it does raise the question of how far this type of approach could go. Will policyholders be penalised for walking through a sketchy area, logged by the GPS in their device? What about an activity tracker logging a strenuous hike as a risk factor? Or deciding that someone is cycling or skiing dangerously fast? This could be the beginning of an incredibly slippery slope.
What’s your view? Does it make sense to align policies to risk factors? Or is this all too big brother-ish? Let us know your thoughts in the comments.