WSJ : Peter Thiel’s Founders Fund Makes Monster Bet on Bitcoin



From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 01/02/18 19:59:37
Subject: WSJ : Peter Thiel’s Founders Fund Makes Monster Bet on Bitcoin
Peter Thiel’s Founders Fund Makes Monster Bet on Bitcoin
Few mainstream investors have bought large sums of bitcoin, scared off by concerns about cybersecurity and liquidity

One of the biggest names in Silicon Valley is placing a moonshot bet on bitcoin.

Founders Fund, the venture-capital firm co-founded by Peter Thiel, has amassed hundreds of millions of dollars of the volatile cryptocurrency, people familiar with the matter said. The bet has been spread across several of the firm’s most recent funds, the people said, including one that began investing in mid-2017 and made bitcoin one of its first investments.

Founders and Mr. Thiel are well-known for early investments in companies like Facebook Inc. that sometimes take years to come to fruition. The bitcoin bet is quickly showing promise. Founders bought around $15 million to $20 million in bitcoin, and it has told investors the firm’s haul is now worth hundreds of millions of dollars after the digital currency’s ripping rise in the past year.

It isn’t clear if Founders has sold any of its holdings yet. The bet hasn’t been previously reported.

Bitcoin vaulted last year from a fringe area of Wall Street interest to the most talked-about asset in the financial world. The digital currency started 2017 trading around $1,000, then shot to near $20,000 as individual and institutional investors alike ramped up speculating on its rise. From its all-time high reached in November, the price chopped almost in half over the next month. The cryptocurrency traded at $14,292 on Friday, according to CoinDesk, up 1,375% on the year.

Relatively few mainstream investors have bought large sums of bitcoin, scared off by concerns about cybersecurity and liquidity, as well as more mundane fears of investment losses. Even some of those who do own it are cautious about speaking too publicly, lest they draw the attention of hackers.

The recent price plunge has also spooked some. On Dec. 22, the prominent investor Michael Novogratz said he was delaying launching a crypto-focused hedge fund for outside investors, stating “we didn’t like market conditions for new investors.” South Korea announced last week it would crack down on cryptocurrency trading, an ominous sign given that the country at one point accounted for as much as one-fourth of global bitcoin trading activity.

Founders began buying in for its investors before the recent volatility, the people familiar with the matter said.

The billionaire Mr. Thiel is an outspoken libertarian who co-founded digital payments service PayPal Holdings Inc. and made headlines as a prominent booster of President Donald Trump. He previously ran a multibillion-dollar hedge fund focused on global macroeconomic trends, and had some success navigating the financial crisis before racking up investment losses by investing in safe havens and missing out on the subsequent rebound.

As a venture capitalist, Mr. Thiel and Founders fund are among the most successful in Silicon Valley. Founders has more than $3 billion under management and has taken stakes in more-than 100 companies, including Facebook, Airbnb Inc., SpaceX and Lyft. More recent investments include the crypto-focused hedge funds Metastable Capital and Polychain Capital, which puts money into blockchain companies.

Mr. Thiel made the decision to buy up bitcoin together with Founders’ other investment partners, a person familiar with the matter said.

By buying bitcoin outright, as opposed to backing other companies doing business in the space, Founders would seem to be breaking with its investing tradition, an investor said. But in communications with investors, Founders representatives have sought to cast the investment as a high-risk, high-reward wager similar to its other venture bets, the people familiar with the matter said.


The representatives have told firm backers that a cascade of cash into technology companies has stretched their valuations to historic highs, making stakes in startups as dangerous a risk as ever. Bitcoin, on the other hand, could multiply several times over in the coming years.

Thanks to its rise, the bitcoin investment is already estimated as the most valuable in the Founders’ most recent, $1.3 billion venture fund. People close to the firm said that the fund hasn’t made many investments yet.

Founders has also warned investors that bitcoin does share one potentially perilous similarity with more traditional venture capital investments: The digital currency could be worth nothing, or close to it, in the end.

FT : CMA refers Refresco drinks merger to full investigation

The UK competition watchdog says it will refer the $1.25bn takeover of Cott of Canada by Netherlands-based drinks bottler Refresco to a full investigation after an initial probe established the deal could lead to higher prices for some supermarkets and household brands.

The Competition and Markets Authority said it had looked at all aspects of the merger and had “concerns that the merger would lead to reduced competition”.

Rachel Merelie, the CMA acting executive director, said:

These companies supply well-known UK shops and brands with soft drinks, who in turn sell to thousands of people daily. It is therefore important that we address any issues to ensure that shoppers do not lose out.

The CMA said it would now refer the merger to an in-depth investigation unless Refresco offers acceptable undertakings to address competition concerns.

Refresco announced in July last year it was buying Cott, a Canada-based company, which also has plants in the US, Mexico and the UK.

At the time, Refresco chief executive Hans Roelofs said the deal would create “the world’s largest independent bottler” with combined production of 12bn litres, a quarter of which would come from Cott.

However the CMA said the merger would lead to reduced competition in the manufacturing and packaging of certain juice drinks, which may result in higher prices or quality standards slipping for stores and brands, with potential knock-on effects to end-consumers.

WWD : Tapestry, Michael Kors: Destined to Be Competitors on M&A Front

Tapestry, Michael Kors: Destined to Be Competitors on M&A Front
Both firms are building out their brand portfolios.

First it was the handbag wars. Now the race is on in the U.S. to see who gets to build the better brand empire.

Such is the shift in business model for both Tapestry Inc. and Michael Kors Holdings Ltd. The two made acquisitions last year and each firm is expected to continue foraging for brand additions to their growing stables in 2018. Of immediate concern is the integration of the new acquisitions, as well as the pay down of debt. That could suggest no deals for at least the first half of the year, and likely not even the third quarter. But since quality brands come up for sale infrequently, and sometimes the smaller deal presents greater growth opportunities, their current mind-set of waiting a bit could change should the right opportunity present itself.

With an evolving model that now includes two acquisitions under its belt, the former Coach Inc. outgrew its monobrand moniker and transitioned to Tapestry Inc. in October. Its first acquisition was in 2015, paying $574 million for the Stuart Weitzman footwear brand. That was followed last year by the $2.4 billion deal for accessories competitor Kate Spade & Co. With Victor Luis heading up corporate, the company named Joshua Schulman president and ceo of the Coach brand in June. The brand itself has been undergoing a successful transformation as creative director Stuart Vevers has been working on the more design elevated, higher-end 1941 Collections line.

Luis, chief executive officer of Tapestry, said at the time of the name change that the company had already been considering the move a few years ago after it acquired Weitzman. Going ahead with it was indicative of the firm’s shift in business model mind-set, and that it was serious about transforming into an American holding conglomerate of accessible luxury brands — each with its own platform, as well as distinctive personality and positioning in the marketplace.

But in buying Kate Spade, Tapestry also signaled what it might be looking for in future deals. No surprise that high on the list is a brand that could take advantage of Tapestry’s now-extensive leather goods sourcing network on the backend.

What the group can learn from additional acquisitions also seems to be high on the agenda. The company learned much about designing and producing footwear from Weitzman, and eventually took back the Coach footwear license to produce in-house. Kate Spade has a number of licenses that Tapestry is likely reviewing, and these eventually could serve as a roadmap for select Coach brand licenses.

With the Kate Spade transaction, and given its aim to expand its portfolio, one can glean that Tapestry is likely looking at firms that can help further its new focus on lifestyle and modern luxury, as well as expand further into other regions.

Luis told WWD in an interview after the Kate Spade deal was disclosed, “Lifestyle is perhaps one of the most important [factors] because it speaks to our vision for [Tapestry Inc.] and what our group of companies represent.”

The ceo noted that also important is how the company defines modern luxury, adding that “how we define it for ourselves is about quality and great design, while at the same time offering the customer an emotional experience through great brands, its history and narratives. Modern for us is different from the traditional European groups. [For us] it’s about being inclusive, not exclusive based on price. It is not based on a country of origin, [nor] is it made in any specific market as traditional luxury brands are.”

Given that great premium brands take time to build the requisite emotional connection with consumers, expect Tapestry to scout around for brands that have a proven track record of connecting with their targeted consumer base, as well as those that fit the group’s definition of luxury, whether here or abroad.

Over at Kors, its number-one priority — the result of the $1.35 billion acquisition of Jimmy Choo, its first-ever — is to pay down the term loan “rapidly,” suggesting it is already on the hunt for more brands to grow its portfolio.


Kors ceo John Idol, at a Morgan Stanley Global Consumer and Retail Conference last month, admitted as much in explaining the goal of paying down the debt: “We’re going to do that very rapidly and then we will be in an incredible position again with the balance sheet that’s [got] very, very little leverage on it — and so we’re prepared to do something of size and scale, and we have the means and the wherewithal to do that.” The company produces cash flow of $1 billion annually, and has access to a $1 billion revolving credit facility.

Idol said of the credit facility, “It’s there for us to use so we can make sizable acquisitions even on our existing financing structure, not having to even go to the debt market if we don’t need to.”

When Kors revealed its deal for Jimmy Choo back in July, Idol told WWD that the company is “creating a global luxury fashion group,” with a focus on “international fashion luxury [brands] that are industry leaders.”

Wall Street analysts have noted that the Choo brand gave Kors an automatic “in” at the super high-end luxury level on a global scale. And Idol himself has noted on conference calls to Wall Street after posting quarterly earnings results that the company is not interested in brands in need of a turnaround.

Perhaps that’s because its core Michael Kors brand is still in need of some turning around. The company has followed the Coach brand’s lead in pulling back on department store promotions and — as Idol promised to Wall Street analysts in conference calls — it has begun to introduce some product innovations in its merchandise offerings. But its core business in handbags — similar to the same pressures faced by the Coach and Kate Spade brands — remains challenged due to issues in the North American market. Adding to the problem is the lackluster fashion watch sector.

For now, Idol and his management team are busy executing on their Runway 2020 plan, which is focused on increasing new offerings, and growing its digital and social media base. The early read on the Runway 2020 initiative — based on second quarter results in November — seems promising, helped in part by the continued pull back on promotions at the department store level.

So if Kors is looking for another Jimmy Choo at the global, high-end luxury category, and one that’s not in need of any fixing to boot, what’s really left for acquisition?

According to Idol at the Morgan Stanley presentation, “The bigger issue is going to be to be finding the target….We want to buy companies that have great quality and actually have high levels of recognition outside of the U.S. market. We don’t view the U.S. market as the high-growth engine for whatever brand we would acquire. We will actually probably say Asia first, Europe second and North America third.”

With both Tapestry and Kors looking for brands that are industry leaders, and each not limiting themselves solely to any one particular geographic market, the two are likely destined to be competitors in their quest for the next big deal.

FT : Next signals brighter profits after cold weather boosts Christmas sales


Next kicked off the UK high street’s Christmas reporting season on a relatively positive note on Wednesday, upgrading its profit guidance after cold weather led to unexpectedly strong sales in the run-up to the holidays.

The FTSE 100 group, often seen as a bellwether for the wider high street, said full price sales in the 54 days to December 24 increased 1.5 per cent year on year, significantly better than the 0.3 per cent decline it had predicted.

As a result, Next said its central forecast for pre-tax profits for the 12 months to the end of January is now £725m, compared to its earlier estimate of £717m. However, it also trimmed the top end of its guidance, and said exact profits will depend on the outcome of its January sales.

The company had previously warned that it was expecting a weak Christmas season after struggling with “extremely volatile” trading during much of the second half of 2017.

There were signs that that volatility continued despite the recent improvement, however, with Next attributing some of the sales improvement to the “much colder weather leading up to Christmas”.

The company said some of the “headwinds” it struggled against in 2017 – particularly cost price inflation – are likely to “ease” over the next 12 months. Next is expecting an improvement in full-price sales growth, with preliminary estimates of a 1 per cent increase compared to this year’s predicted 0.3 per cent growth. Nonetheless, the company said profits will continue to decline, albeit at a slower rate.

>>> Euronet continues to see MoneyGram deal as logical but no guarantee offer to

Euronet continues to see MoneyGram deal as logical but no guarantee offer to be made
03 JAN 2018
Euronet Worldwide, Inc. ("Euronet" or the “Company”) (NASDAQ:EEFT) today issued the following statement in response to numerous inquiries regarding Euronet’s intentions following the announcement by MoneyGram [NASDAQ:MGI] and Ant Financial of the termination of their Merger Agreement.
Euronet continues to believe there is compelling commercial logic to a combination between Euronet and MoneyGram. However, significant developments have been disclosed by MoneyGram since Euornet’s offer and Euronet has not conducted any evaluation of the business in that time. While we continue to view a transaction with MoneyGram as logical, there is no guarantee any offer will be made or any transaction will ultimately occur.

>>> What to look at today - 3rd of December 2018

Dow +1.42% S&P +0.83% Nasdaq +1.50%  Russell +0.94%
US Market closed higher for 1st day of 2018. Volume remain light, only 815mil shares traded.  Equities registered most of their gains at the opening bell and, outside an uptick in the final minutes, trended sideways for the rest of the day. consumer discretionary, technology, health care, energy, and materials sectors--which comprise around 60% of the broader market combined--climbed more than 1.0% apiece. consumer staples, utilities, telecom services, and real estate groups--which make up just 16% of the broader market combined--lost between 0.6% and 0.9%. The heavily-weighted financial sector also finished in the red, but its loss was modest at 0.1%. Chipmakers had a solid day, bouncing back from some profit taking at the end of 2017; the PHLX Semiconductor Index jumped 2.8%. Names like Advanced Micro (AMD 10.98, +0.70) and Micron Technology (MU 43.67, +2.55) were among the top performers, adding 6.8% and 6.2%, respectively. US After Hours MGI -6.3% lower on terminated merger news, TRVN +16.7% / TTPH +6.6% following FDA NDA updates. Asian equities extended gains after a rally in technology companies boosted U.S. stocks to record highs. Bonds fell in Australia and New Zealand following a drop in Treasuries, while crude oil held above $60 a barrel. Japanese markets remain closed. 

Nikkei Closed Hang Seng -0.05% CSI +0.44% Shanghai +0.45% Shenzen +0.68%

Eur$ 1.2044 CNH 6.5061 CNY 6.5101 JPY 112.37 GBP 1.3595 CHF 0.9728 RUB 57.46 WTI$ 60.38 +0.02%

S&P +0.13% EuroStoxx +0.32% FTSE +0.12% Dax +0.50% SMI +0.41%

Macro :
- ECB’s Nowotny Sees Risk of European Stock Market Bubble: SZ
- ECB’s Nowotny Says Asset-Buy End Within Sight: Macro Squawk Wrap
- Correction in S&P 500, Oil at $80 Top Byron Wien Surprises List
- Gelband to Start Hedge Fund After Dispute With Millennium Ends

Keep an eye on :
- AGN US : Owner of Allergan’s Restatis Patents Challenges Review Board
- AKZA NA : Arcadis CFO Renier Vree to Become Akzo Specialty Chemicals CFO
- BLT LN : Vale Is Said To Be Negotiating BHP’s Exit From Samarco Venture
- CLLN LN : Carillion Says FCA Probing Timeliness, Content of Some Releases
- DRO GY : Deutsche Rohstoff Sees U.S. Tax Reform Adding EU3.3M to 2017 Net
- DSM NA : DSM Eyes Acquisitions, Buyback Has Low Priority, CEO Tells FD
- ELIOR FP : Elior Wins 4-Yr Maintenance Contract From Cinémas Gaumont Pathé
- FDX US : FedEx Rises to Record High; Named 2018 Best Idea at Stephens
- FOXA US : Fox ‘Spinco’ Is Favorite Media Risk/Reward Idea of 2018: RBC
- GLPG NA : Galapagos: Flamingo Study Shows Positive Results in CF Patients
- GLJ GY : Grenke Full Year Leasing New Business Volume EU1.98 Bln
- MAERSkB DC : Maersk Drilling Gets Four-Year Contract With Tullow Ghana
- NXT LN : Next Reports Unexpected 4Q Total Brand Sales Change Rise
- COX FP : Nicox Says Appoints Tomas Navratil as Head of Development
- NOVN VX : Novartis’s Kisqali Gets FDA Breakthrough Therapy Designation
- RYA LN : Ryanair Applies for U.K. Operating Rights as Brexit Workaround
- SLIGR NA : Sligro Food Group FY Sales EU2.97 Bln, In Line With Estimates
- SPU NO : Spectrum Sees 4Q Net Revenue Rising to $46M Vs $35M Year Earlier
- DG FP : Vinci Energies Wins School-Facility Contract in Germany

>>> Europe : Brokers Upgrades & Downgrades - 3rd of December 2018 (V2)

>>> Up
* Bunzl Upgraded to Outperform at Credit Suisse; PT 24 Pounds
* DKSH Upgraded to Outperform at Credit Suisse; PT 100 Francs
* Experian Upgraded to Outperform at Credit Suisse; PT 19 Pounds
* General Mills Upgraded to Neutral at Piper Jaffray; PT $63
* Oracle Upgraded to Overweight at Morgan Stanley; PT $57
* Randstad Upgraded to Outperform at Credit Suisse; PT 63 Euros
* Terna Upgraded to Hold at Kepler Cheuvreux; PT 4.90 Euros

>>> Down
* Brenntag Cut to Underperform at Credit Suisse; PT 47 Euros
* Hays Downgraded to Neutral at Credit Suisse; PT 2 Pounds
* Logista Cut to Underperform at Credit Suisse; PT 18.90 Euros
* Pagegroup Cut to Underperform at Credit Suisse; PT 4.30 Pounds
* Rentokil Downgraded to Neutral at Credit Suisse; PT 3.40 Pounds
* Serco Group Cut to Underperform at Credit Suisse; PT 85 Pence

>>> Initiation
* Adecco Reinstated Neutral at Intermonte Securities; PT 78 Francs
* Alstom Reinstated Neutral at Intermonte Securities
* AMS Reinstated at Intermonte Securities With Buy; PT 105 Francs
* Bakkavor Group Rated New Buy at HSBC; PT 2.20 Pounds
* BMW Reinstated Outperform at Intermonte Securities; PT 94 Euros
* Burberry Reinstated at Intermonte Securities With Underperform
* Christian Dior Reinstated at Intermonte Securities With Neutral
* Electro Power Systems Reinstated Buy at Intermonte Securities
* ElringKlinger Reinstated Neutral at Intermonte Securities
* Ence Reinstated at Intermonte Securities With Buy; PT 4 Euros
* Faurecia Reinstated Neutral at Intermonte Securities
* Ferrari Reinstated at Intermonte Securities With Neutral
* Gemalto Reinstated at Intermonte Securities With Neutral
* Hella Reinstated Neutral at Intermonte Securities; PT 47 Euros
* Hugo Boss Reinstated Outperform at Intermonte Securities
* Intertek Reinstated Neutral at Intermonte Securities
* Kering Reinstated Neutral at Intermonte Securities; PT 400 Euros
* Peugeot Reinstated Buy at Intermonte Securities; PT 27.50 Euros
* Publicis Reinstated Outperform at Intermonte Securities
* Randstad Reinstated at Intermonte Securities With Outperform
* Richemont Reinstated Neutral at Intermonte Securities
* Saint-Gobain Reinstated Buy at Intermonte Securities
* Smurfit Kappa Reinstated Outperform at Intermonte Securities
* Teleperformance Reinstated Outperform at Intermonte Securities
* Valeo Reinstated Outperform at Intermonte Securities
* VW Reinstated at Intermonte Securities With Buy; PT 205 Euros
*
>>> Call

>>> Europe : Brokers Upgrades & Downgrades - 3rd of December 2018

>>> Up
* General Mills Upgraded to Neutral at Piper Jaffray; PT $63
* Oracle Upgraded to Overweight at Morgan Stanley; PT $57
* Terna Upgraded to Hold at Kepler Cheuvreux; PT 4.90 Euros

>>> Down


>>> Initiation
* Adecco Reinstated Neutral at Intermonte Securities; PT 78 Francs
* Alstom Reinstated Neutral at Intermonte Securities
* AMS Reinstated at Intermonte Securities With Buy; PT 105 Francs
* Bakkavor Group Rated New Buy at HSBC; PT 2.20 Pounds
* BMW Reinstated Outperform at Intermonte Securities; PT 94 Euros
* Burberry Reinstated at Intermonte Securities With Underperform
* Christian Dior Reinstated at Intermonte Securities With Neutral
* Electro Power Systems Reinstated Buy at Intermonte Securities
* ElringKlinger Reinstated Neutral at Intermonte Securities
* Ence Reinstated at Intermonte Securities With Buy; PT 4 Euros
* Faurecia Reinstated Neutral at Intermonte Securities
* Ferrari Reinstated at Intermonte Securities With Neutral
* Gemalto Reinstated at Intermonte Securities With Neutral
* Hella Reinstated Neutral at Intermonte Securities; PT 47 Euros
* Hugo Boss Reinstated Outperform at Intermonte Securities
* Intertek Reinstated Neutral at Intermonte Securities
* Kering Reinstated Neutral at Intermonte Securities; PT 400 Euros
* Peugeot Reinstated Buy at Intermonte Securities; PT 27.50 Euros
* Publicis Reinstated Outperform at Intermonte Securities
* Randstad Reinstated at Intermonte Securities With Outperform
* Richemont Reinstated Neutral at Intermonte Securities
* Saint-Gobain Reinstated Buy at Intermonte Securities
* Smurfit Kappa Reinstated Outperform at Intermonte Securities
* Teleperformance Reinstated Outperform at Intermonte Securities
* Valeo Reinstated Outperform at Intermonte Securities
* VW Reinstated at Intermonte Securities With Buy; PT 205 Euros

>>> Call

>>> US After Hours

After Hours Summary: MGI -6.3% lower on terminated merger news, TRVN +16.7% / TTPH +6.6% following FDA NDA updates
After Hours Gainers:
Companies trading higher in after hours in reaction to news: TRVN +16.7% (announces FDA acceptance for review of New Drug Application for Olinvo injection), MTP +10.9% (after 75% jump in stock price today), TTPH +6.6% (submitted New Drug Application for intravenous eravacycline for the treatment of complicated intra-abdominal infections and promotes Larry Tsai, M.D. to Chief Medical Officer), SSKN +5.6% (ticking higher after Sabby Management discloses increased active stake and letter expressing dissatisfaction with recent actions), EEFT +3.9% (following MGI / BABA's Ant news), JCP +1.4% (following 10% move higher on the day), GLPG +1.1% (Galapagos NV updates progress with cystic fibrosis programs; started three new clinical studies, concluded the FLAMINGO study in CF patients, and expects to report patient data with a first proprietary investigational triple combination therapy in mid-2018; start of Phase 1 study triggers $10 mln milestone payment from AbbVie), KTOS +0.7% (awarded $14 mln Air Force contract - expected completion date Sept. 30, 2018), PAH +0.7% (slightly higher after Elliott Associates discloses increased passive stake), STAY +0.5% (light volume - extended the maturity of the combined Paired Share repurchase program through December 31, 2018, each effective January 1, 2018)

A few semiconductor/chip names are higher in after hours trade (etf SMH +0.1%): NVDA +1.5%, INTC +0.8%, AMD +0.6%, MU +0.2%
After Hours Losers:
Companies trading lower in after hours in reaction to news: MGI -6.3% (Moneygram and Alibaba's [BABA] Ant Financial Services Group mutually agreed to terminate merger), ATRA -4.4% (commences underwritten offering of $100 mln of common stock), HHC -3.3% (Howard Hughes announces that Pershing intends to offer for sale in underwritten public secondary offering 2.5 mln shares of common stock), CCIH -2.9% and INSY -2.9% (modestly pulling back), AQB -2.1% (seeing slight pullback after closing up 150% higher), GNW -2% (weakness on CFIUS news), SRE -1.3% (announced proposed public offerings of common stock and mandatory convertible; details recent U.S. tax legislation that may materially adversely affect financial condition), INXN -0.4% (indicated lower on block trade pricing)