Tesla shareholder Ark Invest opposes Elon Musk take-private bid; predicts USD 700-USD 4000 share price in five years
24 AUG 2018
Tesla Inc [NASDAQ:TSLA] shareholder Ark Invest has written to the Palo Alto, California-based electric car manufacturer’s board to register its opposition to the proposed take-private bid from Tesla Chief Executive Elon Musk. A report in The Times on Friday, 24 August, quoted Ark Invest’s Chief Executive Catherine Wood, who wrote to Tesla’s board in an attempt to dissuade Musk and the board from proceeding with Musk’s USD 420-per share proposed takeover.
Wood cautioned against allowing the “short-term” concerns of professional investors to persuade the board to take the company private. She further said that in about five years, Tesla shares could range from USD 700-USD 4000, a considerable increase than USD 320.62 being traded at yesterday.
A privately-owned Tesla would not be able to take advantage of its competitive strengths as quickly and to the same extent as would be possible as a listed company, Wood argued.
Wood went on to argue that taking Tesla private would mean it would no longer receive the “free publicity” that it receives due to Musk’s position as CEO and that doing so would deprive most individual Tesla shareholders of a key investment opportunity.
Approximately 12% of Tesla’s shareholders are private investors, the report said, citing data from Factset.
Ark holds a stake of about 0.26% in Tesla, according to the newspaper.
Tesla’s share price closed USD 1.54 down at USD 320.10 at the close of trading in New York on Thursday, 23 August, giving the company a market capitalisation of USD 54.60bn (EUR 47.21bn).
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Jean Paul Gaultier: ‘Not all men are like John Wayne’
The ‘enfant terrible’ of French fashion on haute couture, Madonna’s bra — and why his teddy bear is his ultimate muse
Jean Paul Gaultier bounds into the Ristorante National in Paris doing something distinctly British: complaining about the weather. “It’s so hot,” he says. “It’s quite humid, I think, it’s not a nice dry heat.” Casual in a denim shirt and camo-print jacket, he joins me at his usual table in a far corner of the trendy Italian restaurant in the Hôtel National des Arts et Métiers. “It’s a long time since you’ve been here,” says a waiter as he takes our drinks order (two “detox” juices, on Gaultier’s recommendation). “I know,” responds the designer with a shrug, “because work, work, work.”
Gaultier, 66, is the original enfant terrible of French fashion, with a 40-year career as provocateur. He made his name subverting the traditional concepts of masculinity and femininity through camp theatrics and outlandish inventions. In the 1980s he dressed men in skirts; a decade later, he designed a pink satin conical bra for Madonna that propelled him to international fame.
“I think at the time that it was quite nice appreciation, ‘l’enfant terrible’,” he says. “It showed that I was doing things that were maybe not in the rules, which is good for me. I wanted to show that women can be strong and feminine at the same time,” he says. “And men are not all like John Wayne. Men can also be seductive, they can also be beautiful and stupid.” (Gaultier’s first men’s collection, in 1984, was called “Man As Object”.) “I saw through clothes that it was a phallocracy. It was the men who had the power. And that shocked me.”
Old iconoclastic habits clearly die hard. While world health authorities rail against smoking, at Gaultier’s July couture show, the cigarette was centre stage. Models held pipes, cigarette-holders and electronic cigarettes; they wore cigarette-inspired jewellery; the floating organza dress that closed the show evoked a cloud of smoke.
Two small flagons bearing brightly coloured juices — one green, one orange — arrive at the table. With beach holidays looming, we decide to be virtuous and shun the delicious-sounding pasta selection in favour of two starters each. “To our health,” he says. We raise our vegetable juices.
In the past few years, commercial pressures have forced Gaultier into a partial retreat from designing collections. Almost four years ago, he and the brand’s majority shareholder, Spanish group Puig, announced he was stopping his lossmaking women’s and men’s ready-to-wear lines, citing “commercial constraints” and the “frenetic pace of collections”. It must have been a blow, but Gaultier, who still designs two haute couture collections a year, doesn’t seem bitter.
“I refuse the things that I am not into,” he says. “When I do it I am truly enthusiastic. I’ve always tried to be free.”
Puig, which also owns brands including Paco Rabanne and Carolina Herrera, preferred to focus on Gaultier’s main asset — the perfume business. Couture may be the zenith of creativity, but for many design houses, fragrances bring in the money. Gaultier is no different, and it’s scents such as Classique, introduced in 1993 and presented in a torso-shaped perfume bottle, that fund his couture activities. So is the couture part of Gaultier’s business profitable?
“Profitable?” he responds. “No. Let’s say that I manage not to lose money. It’s a kind of advertising. And I like to still have clothes that are worn, even though I stopped my ready-to-wear and couture is not the same clientele.” Puig, which doesn’t break out the performance of individual brands, recorded sales of €1.9bn in 2017.
The waiter returns. Gaultier orders raw sardines followed by a caprese salad. I opt for sea bream, burrata and mullet roe and the tuna tartare.
Gaultier may be one of France’s best-known designers, but he says he prefers London to Paris. He loves the self-deprecating British sense of humour, “which we do not have at all”. He reminisces over visits to Loch Ness, Edinburgh and the red-brick streets of South Kensington, where he lived for a time. The tartan fabrics and kilts that have appeared in so many of his collections were inspired by the 1954 fantasy film Brigadoon, in which Gene Kelly plays an American who gets lost in the Scottish woods on a hunting trip. “I like the classical tartans,” says Gaultier. “I prefer the clichéd ones, which are most known and popular. It impressed me graphically and I think the sensation to be in a pleated skirt with nothing under . . . ”
He chuckles as he recalls his visit to the Highlands in 2000, in which he made this crucial discovery. It was for the wedding of Madonna to Guy Ritchie — and the groom was wearing a kilt. “I ask him: ‘Is it true that you have to wear nothing under it?’ And he says, ‘Of course.’ [Gaultier mimics Ritchie pulling up his kilt.] Voilà.”
It’s about the feeling of freedom, I suggest. “Exactement,” he says. “The wind breathing through. It’s something . . . it’s, you know, like to swim with no bathing suit is a fabulous sensation of freedom. I suppose for the woman to have the breasts floating is quite . . . it’s relaxing completely.” I nod earnestly. “And the balls the same. Perfect. Vive la liberté.”
Gaultier slips between French and English, his stories embellished with hand movements and peppered with a “voilà” here and an “exactement” there. At one point he calls out mid-conversation to the chefs opposite and compliments them on the way that their hats are perched on their heads.
While Hubert de Givenchy had Audrey Hepburn and Louis Vuitton’s Nicolas Ghesquière has Charlotte Gainsbourg, Gaultier’s muse is . . . his teddy bear. It may be Madonna who propelled the cone-shaped corset into the spotlight, but Nana was the unsuspecting early adopter for this and many other of Gaultier’s early creations. “It was my teddy bear, the first transgender teddy bear,” he says. “I think I was six years old. I wanted a doll but my parents didn’t want me to have a doll. So surgeon Gaultier did a little surgery on my teddy bear. In the newspaper they were advertising little bras that were pointed, so I cut paper and made one with pins. I wanted a doll — so it was a bear doll.”
The starters arrive. Gaultier admires the wild flowers that decorate his sardines: “Look at that, the flowers, magnificent. Thank you, c’est joli.” My dish is similarly festive, the sea bream sprinkled with pomegranate seeds, and the creaminess of the burrata contrasting with the thick, salty strips of mullet roe.
Uninterested in football, Gaultier never really fitted in with the other boys at school. It wasn’t until an incident in class that he caught their attention. His grandmother let him watch a Folies Bergère revue on television, an extravaganza of girls decorated with Swarovski crystals, ostrich feathers and fishnet tights. “I thought, my God, qu’est-ce que c’est que ça?” And at school the following day, he sketched what he had seen. His teacher was “furious”, Gaultier recalls. She pinned the sketch to his back and led him on a tour of the different classes to humiliate him. But Gaultier’s schoolmates admired his drawings and were intrigued by him. “It was after that, it made me realise that through my drawings I could be accepted — even if I was not the model of a very good boy who played very well football.”
Gaultier began sketching prolifically, and through the 1945 film Falbalas (“Paris Frills”) he found out what a fashion show was. He sent sketches to many different couturiers and was spotted by Pierre Cardin, who hired him as an assistant in his studio on Gaultier’s 18th birthday.
The waiter clears our plates only to return in no time at all with the second course of starters. Gaultier again delights in the colours of his caprese salad (three different varieties of tomatoes), and is similarly admiring of my tuna tartare, decorated with cherry tomatoes and avocado. “Oui, oui, oui, c’est magnifique.”
Cardin is of a generation of legendary couture houses that were built around the cult of the designer’s personality — a phenomenon perhaps best epitomised by Yves Saint Laurent and Christian Dior. These were the three names Gaultier admired as a teenager, and he has sought to model his brand in a similar vein — his name and brand synonymous with one another.
Gaultier muses on the current state of play in the fashion world. “There is too much of everything. We have too many people and there are too many clothes. When you look at the big brands like Dior and Chanel, people don’t buy any more the clothes because the ones that have the money to buy the expensive ones are offered them for free, or they have a contract to wear them. Can you imagine? I think it’s scandalous.”
After training with Pierre Cardin, Gaultier worked for French designers Jacques Esterel and Jean Patou. Then in 1996 he got his hopes up when he received a call from luxury tycoon Bernard Arnault, chairman of LVMH. The chief designer had just left Christian Dior and Gaultier assumed he was being tapped for the job. In fact Arnault planned to move designer John Galliano from Givenchy to Dior, and was thinking of Gaultier for Givenchy. Gaultier recalls: “So I was disappointed when Bernard Arnault told me it was for Givenchy . . . I said that if I do something, it has to be a name that I truly admire.” Givenchy, he felt, was too polished and bourgeois for his tastes. “So I say no,” he recalls.
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Gaultier decided instead to launch his first haute couture collection in 1997, without the backing of a big group. “To start without money is very good because it makes you more imaginative,” he says. “When you succeed, you feel stronger because you know that if something happened, you can do with nothing. And creatively I think it’s the best thing.”
Gaultier’s haute couture creations caught the eye of French luxury group Hermès, which hired him as creative director in 2003, having bought a minority stake in his company in 1999 (which it sold in 2011 to Puig). While Gaultier’s distinctive style has served him well, critics say that his inability to thrive as an artistic director who animates an entire team of designers (in the vein of Karl Lagerfeld) has inhibited his growth potential.
Gaultier’s grown-up life seems to split into two halves: the years he spent with his late boyfriend and business partner, Francis Menuge, and those without him. The pair met in 1975, when Gaultier was 23, and were together until Menuge died in 1990. It was Menuge who emboldened Gaultier to launch his first ready-to-wear collection in 1976. “I know if I didn’t meet him, I wouldn’t have started like we did — alone, with no money,” says Gaultier. “He had complete confidence in me, and me, too, complete confidence in him. So it was good because I was feeling stronger.”
Yves Saint Laurent’s creative talent was famously bolstered by the commercial nous of his boyfriend and business partner, Pierre Bergé. I wonder aloud whether Gaultier might have gone on to greater commercial success were it not for Menuge’s untimely death. “He wanted to make an empire, which, me, I didn’t care at all,” says Gaultier. “I don’t even think about it, you know, honestly.”
Before I can press him further on this, the waiter returns with the dessert menus and this moment of pensive nostalgia evaporates as quickly as it arrived. “Dessert, dessert,” chants Gaultier like an enthusiastic child.
He confesses to having a sweet tooth, which, like, many important things in his life, comes from his grandmother. “She always wanted to please me, and so she made lots of desserts and I loved that. It was absolutely necessary to finish with sugar, that was the supreme reward. For me it was better than to smoke a cigarette. And I didn’t like the fact that, as a boy, you have to smoke. So it was like, no, me, I am not obliged to smoke. I prefer cake. A little rebellion,” he laughs with an impish smile.
We agree we’ll share both — he picks the apricot tart from the list of specials, and I can’t resist the classic tiramisu.
Gaultier is amid rehearsals for an autobiographical revue he has written and directed, Fashion Freak Show, which will open in October at the Folies Bergère, Paris’s cabaret music hall. It’s a romp through Gaultier’s life that will pay tribute to those who have inspired him in film (Pedro Almodóvar, Luc Besson), music (Madonna, Kylie Minogue and Mylène Farmer) and dance (Régine Chopinot and Angelin Preljocaj).
There will, of course, be a London chapter to the show. Antoine de Caunes, his co-presenter on the cult 1990s television show Eurotrash, “will play the Queen of England, but shhh, don’t say that, it will be funny,” says Gaultier. The show will also tackle subjects such as plastic surgery and the vanity of social media — and has inspired a number of new costumes.
Gaultier makes a pig’s ear of cutting the apricot tart in two and a crumbled mess arrives on my plate. “I completely destroyed it, oh my God, it’s a nightmare,” he says. Rather more deftly, I slide a slice of tiramisu on to his.
Between mouthfuls, conversation turns to politics, namely Brexit (“quite sad”, he says) and French president Emmanuel Macron. So what does Gaultier think of Macron? Here his anti-establishment perspective again shines through. Gaultier says: “The first thing about Macron that is very good is that he’s married with an older woman” — Brigitte, his former drama teacher, 25 years his senior. “I love that because 20 years ago this would not have been possible at all. And she’s clever and people love her.” He goes on to praise Macron’s energy and vision, which he says are “giving hope” to France.
True to his sweet teeth, Gaultier polishes off the rest of the tiramisu while I’m left defeated by my share of apricot tart. There’s just time for a quick cup of coffee before he must go to the airport. I ask whether the enfant terrible label that Gaultier has held since the 1980s still applies. “Still now?” asks Gaultier. “I am the ‘vieillard terrible’,” he laughs, “the bad old one”.
AKRX-FRE GR – Initial comments on oral argument 8-23-18
AKRX/FRE GR – Initial comments on oral argument, in our opinion: (1) the Judge asked more questions and/or pushed back on AKRX more than FRE GR; that in isolation does not tell you much of anything (remember the ODP trial); we will say that AKRX did not do a very good job of responding to the Judge’s questions which we see as more of a lost opportunity like their poor briefing; the Judge seems frustrated that the parties did not do a better job of laying out the deep contract analysis here; in fact the Judge went to lengths to explain he has not decided yet and has to do a lot of thinking before he does; the Judge then basically asked the parties to settle the case because it is very close; (2) despite the Court’s strong suggestion that the parties settle we do not think the parties are likely to settle because as we explained before FRE GR CEO is likely to be fired unless FRE GR wins outright; perhaps with the Judge’s strong comments at the end of the hearing the supervisory board will come in and force settlement but that is also likely a low probability event; (3) all things being equal given the Judge’s questions and comments it appears the MAC argument has more legs than we think it should have; we still think once the Judge thinks it through the Judge is likely to conclude FRE GR has not established a MAC; and (4) the ordinary course argument did not seem to move much overall; FRE GR did a better job on Silverberg but not a good job on materiality; AKRX did well on the delay argument not being material and defining material but did not spend enough time developing its new argument; we note that much of the argument on the ordinary course issue on both sides was entirely new and should have been in the briefs; the Judge cannot be happy with the sandbagging by the parties.
OG Risk Arb is decreasing our probability of close to 60% from 70% because the Judge seems more concerned with MAC than we believed he would be and AKRX yet again did a poor job. We still think the right legal conclusion is for the Judge to conclude there is no MAC and no “material” ordinary course violation. With little clear guidance from the parties, we think this Judge will probably get to the right outcome but AKRX has made this a much closer
case than it should be. We also note that given his comments on needing to do a lot of work and doing his best to get a decision out quicker than 90 days this Court is very unlikely to rule in August, most likely to rule by the end of September and it is now more likely his decision could come out in October. If you want to discuss this further, please call me at 914-441-1629.
#BREAKING: 7.1M Earthquake Peru-Brazil border region
Liverpool FC owners received GBP 2bn takeover bid from Sheik Khaled Bin Zayed Al Nehayan earlier this year - report
24 AUG 2018
Liverpool FC’s (LFC) owners Fenway Sports Group (FSG) received a GBP 2bn (EUR 2.21bn) takeover bid from Sheik Khaled Bin Zayed Al Nehayan earlier this year, The Daily Mail reported. The newspaper's sports section cited documents relating to the proposed offer, which would have seen an unnamed Chinese party take a minority stake in the English Premier League club.
Liverpool said on Thursday evening, 23 August that discussions with Sheik Khaled’s bid team eventually collapsed. The club said that although chairman Tom Werner held a meeting with Midhat Kidwai, managing director of Sheik Khaled’s Bin Zayed Internationalinvestment vehicle in New York, the negotiations never got as far as a meeting with LFC’s major shareholders Michael Gordon or John W Henry.
Kidwai did not reply when asked for comment, the report said.
Sheikh Khaled had sought GBP 750m of external investment for his potential offer from the Switzerland-based hedge fund Alternative Advisors, the item said, citing a document seen by the newspaper.
The document said Bin Zayed International had confirmed to Alternative Advisors that the owners of a “British football club” had agreed to sell at a valuation of GBP 2bn.
LFC categorically denied agreeing any deal, the article said. However, emails cited by the report indicate that FSG’s managing director Stephen D Greenberg, who had conducted the talks with Bin Zayed, had repeatedlly requested proof of financing for the bid. No proof was forthcoming and a GBP 25m downpayment, scheduled for late December 2017, was not made, the item said.
LFC says all discussions were terminated at the end of January, according to the newspaper.
Separately, the report said FSG has mandated the investment bank Allan & Co to seek investment.
The report cited a statement from LFC, which said FSG has consistently maintained that they are not looking to sell the club. However, LFC added that its owners have also previously stated that they would consider selling a minority stake if doing so could help the club’s commercial interests.
Background:
A Liverpool Echo report on 26 October said Werner had dismissed speculation that FSG had rejected a GBP 1.5bn bid for LFC. Werner said reports that FSG had been in discussions for a year with a consortium headed by Amanda Staveley were untrue.
Reports in August and September 2016 said Staveley's investment firm PCP Capital Partners and China Everbright Limited were seriously interested in jointly pursuing a takeover offer for Liverpool FC.
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The "Doom Loop" Exodus: Foreigners Liquidate Record Amounts Of Italian Bonds
Commenting on the June plunge, David Owen, chief European economist at Jefferies said that "we had suspected that net foreign selling of Italian debt securities had continued into June, but the June figure was still significantly more than we had expected."
One month ago, we reported that in the aftermath of Italy's political fireworks in May, which saw a record spike in Italian government bond yields, ECB data showed record buying of BTPs by Italian banks in May amounting to €28.4bn (chart below), a higher inflow than anything seen during the European sovereign debt crisis in 2012.
And since local banks buying (to avoid a market crash with the backstop of the ECB), it meant foreign holders of Italian bonds were liquidating a record amount of bonds in the same period, and that Europe's "doom loop" had just made a thunderous return.
Or so we thought until we saw the June numbers.
Because just one month later, we find that the exodus of foreign investors from Italy’s bond market accelerated, with net sales of Italian government debt climbing to a record level for the second month in a row. Specifically, holdings of Italian debt by foreign investors declined by a net €38bn in June, according to the latest ECB data, eclipsing the previous month’s net fall of €34bn, which was itself a record as the FT confirms.
During this period, Italian bond yields remained elevated, with 10-year debt lingering near the peak it hit in May when the country’s two populist Eurosceptic political parties formed a coalition government. Incidentally, the selloff of Italian 10Y bonds has accelerated in recent weeks, with the 10Y reaching the May highs.
Commenting on the June plunge, David Owen, chief European economist at Jefferies said that "we had suspected that net foreign selling of Italian debt securities had continued into June, but the June figure was still significantly more than we had expected."
Who bought this record amount of bonds sold in June? The same entity that stepped up in May: Italy's banks. As the FT notes:
"Italian banks were, to a large extent, on the other side of the deal: in the second quarter of 2018, domestic financial institutions increased their net holdings of the government’s debt by more than €40bn, the largest amount since the height of the eurozone debt crisis."
More narrowly as the following Citi excerpt reveals, Italy saw a record capital outflow of €76bn in the two months of May and June, larger than previous 2-month outflow record of €51bn hit in Jun-Jul 2011 and €56bn in Feb-Mar2012. These flows are shown in the charts below.
#Italy saw record-high capital outflow of €76bn in May-Jun, larger than €51bn outflow in Jun-Jul2011 and €56bn in Feb-Mar2012, Citi has calculated. Foreigners sold €33bn of Italian govt debt & €9.4bn of private sector assets in June. Adds to €33bn sold in May.
What happens next and will the paniced liquidation continue?
According to the FT, investors are currently mostly focused on the fiscal outlook for the eurozone’s third-largest economy, and the coalition’s debut budget, a draft of which is expected to be published by mid-October. The new government’s inclination to step up public spending could threaten to bust through Italy’s fiscal targets
"Italy’s [economic] fundamentals are actually OK,” said Nick Gartside, international fixed income chief investment officer at JPMorgan Asset Management. “The budget flashpoint is what markets will focus on and when we are through that things should settle down a bit. A fair bit of volatility is now priced in.”
Seaparetly, Allianz chief investment officer for fixed income, Mauro Vittorangeli, said Italian yields had “settled into” a “new range” and added that if the volatility of Italian yields steadies once the budget discussions are completed, then Italian retail investors and the nation’s banks will buy back into the market, which could help prices to bounce back somewhat.
Of course, if the budget discussions disappoint and Italian bonds take another step lower, well then there's always Italian banks to buy even more debt, knowing that they have the ECB to backstop them. The problem is that the ECB's QE backstop runs out at the the end of the year.
There are two more immediate threats: according to Vittorangeli, two key factors that markets would be watching are the eurozone’s growth outlook — because “Italian debt needs positive nominal growth” to be sustainable — and the continued presence in government of Giovanni Tria as finance minister.
If Mr Tria departs, this could be read by investors as a confrontational move by the populist coalition, Mr Vittorangeli warned.
The silver lining is that Italy’s woes, and the Italian sovereign bond liquidation have not spread to other eurozone markets, according to Mr Owen of Jefferies.
“Net foreign buying of euro area equities resumed in June, after two consecutive months of declines, following what had been 17 straight months of purchases,” he said. “Arguably, this is because economic surprises for the region have turned positive again.”
All that would take for that to change, however, is a few more month of record selling of Italian bonds before investors bail on Italy and - with the ECB set to end its QE in just over 4 months - reignite the European sovereign debt crisis.