ML
* XLMEDIA - Holders WebPals, Israeli VC Partners to sell 32% stake @ 110p/shr..
EDPR - EDP announce €6.8/sh tender offer for c22.5% of EDPR shares (6.8)....+9%
DUFRY - China's HNA Group said to be interested in potential stake acq (145)+4%
WOLSELEY - Nordics planned disposal.Solid Q2, trading profit 3% beat(5058)+3-4%
AA - Results inline with expectations. Sees positive start to FY2018 (260)..+2%
EDP - Announce €6.8/sh tender offer for c22.5% EDPR it doesn't own (2.99)...+2%
PEUGEOT - French state holding co to sell PSA shares for EU1.92bn (18.59)...+1%
LCL - Inline with revs £2.35bln and GOP after adj £282.7m a 3% miss (135.3).u/c
THOMAS COOK - Reit FY EBIT exp. Trading is also progressing inline (89.35)..u/c
TESCO - Two of its largest s/h's urge co to drop $4.7b bid for Booker(189)-0.5%
NAT GRID - Deferring £480mn of allowances in to the next reg period (1010)-0.5%
BOVIS - Redrow says that it doesn't intend to make an offer for Bovis (865).-1%
BOOKER - Shareholders urge Tesco to drop its $4.7b bid for Booker (197)...-2/3%
ERICSSON - Taking large restructuring hit now & further provision (55)....-5-7%
GENEL - Writing off Taq Taq reserves by more than exp 60% write off (63p)..-14%
MS
AA/ LN +1% FY TRADING EBITDA GBP403M VS BLOOMBERG EST GBP403.4M,,FY17 DIV/SHR 9.3P
AKZA NA +1% INVESTOR DAY ANNOUNCED FOR APRIL 19th; WILL OUTLINE PLANS FOR "2 FOCUSED BUSINESSES"
AV/ LN +1% LOOKING TO SELL FRIENDS PROVIDENT FOR $750M - HAS 2 INTERESTED PARTIES - INLINE WITH PREVIOUS PRESS REPORTS
BOK LN -4% PRESS REPORTS THAT 2 OF LARGEST SHAREHOLDERS OF TESCO WHO HOLD 9% COMBINED HAVE CONCERNS OVER DEAL PRICE
CARD LN +2% FY REV GBP398M VS BLOOMBERG EST GBP400M,FY ADJ EBITDA GBP98.5M VS BLOOMBERG EST GBP 95.9M,FY FINAL DIV/SHR 6.3P
COB LN -4% VIEWS FOR 17 REMAIN UNCH. TERMS OF RIGHTS ANNOUNCED
EDPR PL +8% EDP BIDS €6.8/SHR FOR 22.5% STAKE IT DOES NOT OWN
ERICB SS -5% ANNOUNCES RESTRUCTURING WITH LARGER THAN EXP CHARGES
ISAT LN +2% RAISED TO OUTOPERFORM AT RBC,PT RAISED TO 1,000P
LCL LN +2% LADBROKES CORAL FY REV GBP1.51B VS MS GBP 1.508B,FINA DIV 2P/SHR
ML FP +1% BRIDGESTONE RAISING PRICES IN JAPAN. ML (AND OTHERS) HAVE ALREADY PUT THROUGH RISES IN EU/US; JAPAN SMALL
RDW LN +1% REDROW SAYS DOES NOT INTEND TO MAKE OFFER FOR BOVIS,CONTINUJE TO FOCUS ON ORGANIC STRATEGY
TCG LN +2% THOMAS COOK SEES FY ADJ OP RESULTS IN LINE WITH MKT VIEWS,
TSCO LN -2% PRESS REPORTS THAT 2 OF LARGEST SHAREHOLDERS WHO HOLD 9% COMBINED HAVE CONCERNS OVER BOOKER DEAL PRICE
UU/ LN UNCH SEES TRADING IN LINE WITH EXPECTATIONS
WOS LN +4% H1 NUMBERS BEAT ACROSS THE BOARD. L4L SALES 4.8%vs CONS 2.3%
CS
Booker N/A Schroders/Artisan deal concerns, spd will go from 6p - 7/8p
Booker N/A Schroders/Artisan deal concerns, spd will go from 6p - 7/8p
Continental +1-2% Bridegstone to raise tyre prices for first time in 6 years
Dufry +3-4% HNA Seeks Stake in Airport Retailer Dufry (WSJ)
EDP +2-3% Accepts Offer for Naturgas, value of EU2.59b
EDPR +7-8% EDP bid 6.8 euros for minorities in EDPR
Ericsson -4-5% Sees Provisions of SEK7B-SEK9B in 1Q
Evotec +1% FY revs €164.5m vs cons €158.8m
Hiag Immo +1% CS UPGRADE to OUTPERFORM (Div growth + developments)
Ladbrokes +2-3% Cost synergy upgrade to £100m from £65m
Michelin +1-2% Bridegstone to raise tyre prices for first time in 6 years
Miners +2-3% Copper +2.00%, Brent +0.55%, Iron Ore +2.00%, China -0.20%
Prem Foods +2-3% Cash payments to schemes reduced by further £32m
SAP +1% US peer Red Hat +5% post good 1Q revenues
Tesco N/A Schroders/Artisan deal concerns, spd will go from 6p - 7/8p
Thom Cook M/P Stick to FY guidance, stronger demand on summer bookings
Wolseley +1-2% Trading profit ahead, revs 8.46bln cons 8.11bln
Shore
LADBROKES - revs +11% £2.35bn,op.profit +22%,cost synergy upgraded...........+2%
UTD UTILITIES - grp revs seen slightly lower than prev yr...................-1%
THOMAS COOK - summer bookings +10%,demand strong,FY performance seen in line.+1%
WOLSELEY - H1 trading pft 515m.Divi 36.67p.Expect further progress in H2....+2%
TESCO - reaches DPO with SFO,Final penalty of 129m,s/hlders against BOK deal.-1%
AA - Op pft 284m(Est333.8m)Divi 9.3p.Positive start to 2018.................-2%
REDROW - Says doesn't inetend to make offer for BOVIS(-2%)..................+2%
CARD FACTORY - Fy rev 398m(Est400m).Divi 6.3p.15p spec divi.................+1%
SEVERFIELD - Sees fy ahead of expectations.CEO taking temporary leave.......+2%
YU GROUP - Revs 16.3m.Gross margin +21.2%.Fy divi 2.25p.....................+2%
INLAND HOMES - profits weighted to H2,divi +25%,demand remains strong.......+2%
AG BARR - strong H2 performance,FY in line with our expec,£30m share bb......+3%
MOSS BROS - grp revs +5.7%,LfL +5.3%,PBT +20.3%,margins +1.5%, inline........+1%
PREMIER FOODS - agrees £32m reduction in pension scheme obligations.........+1%
COBHAM - confirms 2 for 5 rights issue to raise £512.4m.....................MKT
MainFirst Pre Mkt Indications
*DUFRY-HNA Group is said to be mulling buying Dufry stake-WSJ.....+4%
*EDP-Bids €6.8 for remaining stake in EDPR,sells Naturgas Spain...+1%
*PEUGEOT-Sogepa to sell all its Peugeot shares tp Bpifrance.......U/C
*EVOTEC-FY Rev 164.5m(158.8),Adj Ebitda 36.2m(33),o/l inline......+5%
*ERICSSON-Sees SK7b-SK9b provision in Q1 due to negative trends...-3%
*LAGARDERE-Sekks financial partner for its relay stores(sell 49%).+1%
*LVMH-Spec of possible alliance with Lagardere on Relay €1.8b.....U/C
*NORMA-Acquires majority stake in Fengfan Fastener(No fins).......+0.5%
*AKZO-To outline new strategy(19/4),focus on 2 business...........+1%
*CONTI/MICHELIN-Bridgestone to raise prices from 1/6 by 6%-10%....+1%
EDP launches voluntary offer on EDPR worth EUR 4.3bn
EDP [Eli:EDP], the Portuguese power group, has launched a EUR 6.80 per share voluntary offer on its clean energy unit, EDP Renovaveis [Eli:EDPR]. In a statement EDP said its offer values EDP Renovaveis at EUR 4.3bn
Genel admits flagship oil field has less crude than estimated
Genel Energy, the oil minnow chaired by former BP boss Tony Hayward, has admitted for a second time that its flagship field in the Kurdistan region of Iraq contains far less crude than originally thought.
The group, which once had a market cap of more than £3bn in 2014 but is now worth just over £200m, said its key Taq Taq field is now estimated to hold a remaining 59.1m barrels, down from a previous assessment of 171.8m.
The field, in which Genel has a 44 per cent stake and is joint operator, has already produced 207.9m barrels.
The company’s shares plunged more than 40 per cent last year when it first cut its reserves estimate for Taq Taq, from 683m barrels of oil over the total life of the field, to 356m barrels.
As flagged by the Financial Times, today’s reserves downgrade had been anticipated by analysts. Kurdistan-focused explorers have had a rough time over the last few years.
In light of today’s downgrade, Genel has scrapped its guidance for Taq Taq gross average production this year of 24,000-31,000 barrels of oil per day and will in future announce figures on a monthly basis.
It will also book a $181m writedown against the field in its 2016 accounts, which will be published tomorrow.
Mr Hayward, who is shortly expected to depart the company he helped set up, had once described the semi-autonomous region of Iraq as “one of the last great frontiers in the oil and gas industry”.
But operators have struggled to secure vital, regular payments from the Kurdistan regional government in return for oil exports.
Several companies such as Genel have also discovered their fields contained less oil than believed at the outset.
Genel has also had other setbacks. It spent cash drilling in other countries such as Angola and Ivory Coast only to come up short.
Dow -0.22% S&P -0.10% Nasdaq +0.20% Russell +0.20%
US Market closed lower. Tax reform worry after failure of healthcare reform pushed mkt lower. White House Press Secretary Sean Spicer said that according to Treasury Secretary Steven Mnuchin, a tax reform package is expected in August. The technology (+0.1%), materials (+0.3%), and consumer discretionary (unch) groups also settled in positive territory. Large-cap tech names like Apple (AAPL 140.88, +0.24), Microsoft (MSFT 65.10, +0.12), Alphabet (GOOGL 838.51, +3.37), and Intel (INTC 35.39, +0.23) underpinned the top-weighted tech group's outperformance. real estate (-0.6%) and telecom services (-0.7%), consumer staples, and utilities--finished with losses between 0.1% and 0.5%. US After Hours
RHT +5.5%, DRI +4% following earnings, Weichai investment pushes PSIX +50% higher. Key Asian equity indices are higher with the exception of the mainland, as market takes note of the rebound on Wall St to much more benign losses relative to the tumble in the morning session. Investors are willing to test a bottom in hopes that the White House has learned its lesson from the healthcare debacle to seek a broader consensus as it moves forward to more economy sensitive tax reform, deregulation, and infrastructure investment. In FX, JPY was under some early pressure on risk-on flows, with USD/JPY rising about 25pips above 110.80. Other USD majors are consolidating recent greenback selling in narrow ranges with an eye on Tuesday's Consumer Confidence data. In China, CNY weakened after PBoC set its yuan fix lower for the first time in 5 days. PBoC also skipped its open market operations for the first time in 3 days pledging it will maintain relatively tight liquidity.
Nikkei +1.14% Hang Seng +0.42% CSI -0.24% Shanghai -0.45%
Eur$ 1.0852 CNH 6.8674 CNY 6.8852 JPY 110.73 GBP 1.2553 CHF 0.9686 RUB 56.9581 WTI$ 47.92 (+0.40%)
S&P +0.15% EuroStoxx +0.36% FTSE +0.34% DAX +0.53% SMI +0.57%
Macro :
- Fed's Evans Sees Only Two 2017 Hikes If Uncertainty Lingers
- ECB’s Praet Says Deposit Rate Is Key Signal of Policy Stance
- Kushner to Testify to Senate Intelligence Panel on Russia
- Equities Are Least Expensive Asset Class, Credit Suisse Says
Keep an eye on :
- AIR FP : Qatar Air Could Seek to Order Planes for New Indian Arm This Yr
- AAG GY : Aumann: Greenshoe Option Fully Exercised After IPO
- BCVN SW : Vaudoise to Acquire Berninvest AG and Meyer Asset Mgmt AG
- BLVN LN : BowLeven Returns to Profit, Considers Crown Ocean Strategy
- COB LN : Cobham Plc to Raise GBP512M in 2-for-5 Rights Issue
- CBK GY : Commerzbank Weighs Outsourcing Securities Settlement: SZ
- CSGN VX : Commerzbank Weighs Outsourcing Securities Settlement: SZ
- EDP PL : EDP Accepts Offer for Naturgas, Will Post EU700m Capital Gain
- EOAN GY : EON Seeks to Raise Up to EU3b in Debt Market: FAZ
- ERICB SS : Ericsson to Name Ulf Ewaldsson Head of Networks: DI
- ERICB SS : Ericsson Sees 1Q Provisions of SEK7b-9b Due to Negative Trends
- GWI1 GY : Gerry Weber: Buyback of Up to 500,000 Shares to Start March 28
- HBH GY : Hornbach Family Places 1 Mln Ordinary Shares on Capital Market, Hornbach Holding Shares Placed at EU65.50/Share, Terms Show
- IBE SM : Iberdrola Bids for Isolux Brazilian Power Lines: Expansion
- MMB FP : Lagardere Seeks Financial Partner for Its Relay Stores: BFMTV
- EGL PL : Mota-Engil Full-Year 2016 Net Income EU50m vs EU19m Y/y
- NRE1V FH : Nokian Renkaat Names Hille Korhonen as CEO
- UG FP : France Says It’s Reorganizing Ownership of PSA Stake
- SNAP US : Snap Rises as Much as 7%, Options Trading Surges
- TSRO US : Tesaro Wins Earlier-Than-Expected FDA Approval for Niraparib
- TSCO US : Two Tesco Shareholders Come Out Against Booker Takeover: FT
- TSCO LN : Tesco to Take GBP235m Charge; Buyers Entitled to Compensation
- UU/ LN : United Utilities Says Trading in Line With Expectations
- VNA GY : Vonovia: 93.09% of Conwert Shareholders Accept Takeover Offer
- VOW3 GY : VW Says JV With Jianghuai Approved by Chinese Provincial Govt
- WOS LN : Wolseley 2Q LFL Revenue Growth 4.8%; Will Exit Nordic Region
After Hours Summary: RHT +5.5%, DRI +4% following earnings, Weichai investment pushes PSIX +50% higherAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: SELB +16.3%, FNJN +14.1%, RHT +5.5%, DRI +3.9% (also to acquire Cheddar's Scratch Kitchen for $780 mln in an all-cash transaction)
Companies trading higher in after hours in reaction to news: PSIX +50% (Weichai America will invest $60 mln in the co through a combination of newly issued common equity at $8.00/share and preferred shares) VSTM +14% (continued strength), OCN +10.2% (entered into 2017 consent order with the New York Department of Financial Services), ASPS +7.6% (still checking - possibly OCN sympathy), TSRO +5.7% (confirms FDA approval of ZEJULA, says implementing plans to initiate registration strategies in the settings of metastatic ovarian, breast and lung cancers), OSIR +3.5% (thinly traded; completes restatement of 2014 financial statements; also reports preliminary estimated 2015 and 2016 revs), EDIT +3.2% (initiated with Buy at Chardan)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: DGLY -10.9% (light volume)
Companies trading lower in after hours in reaction to news: CYRX -33.4% (to offer shares of common stock in an underwritten public offering), STAF -5.4% (ticking lower after rejecting buy-out offer from Jackson Investment Group of $1.10 per share), INAP -4% (filed for ~27.2 mln share common stock offering by holders), STOR -1.9% (commences 7.6 mln common stock offering), ATH -1.4% (announces secondary offering of 25 mln Class A common shares by certain shareholders)
>>> Up
*Adidas Raised to Buy at Baader-Helvea, PT EU210
*Bucher Raised to Buy at UBS, PT CHF325
*Constellium Raised to Buy at SocGen
*Continental Raised to Buy at Citi, PT EU226
*Costain Raised to Buy at Jefferies, PT 500p
*Credit Agricole Raised to Overweight at Barclays, PT EU15
*DSM Raised to Buy at Liberum, PT EU72
*EDP Raised to Buy at Banco Sabadell, PT EU3.40
*Gemalto Raised to Neutral at Goldman, PT EU53
*Golden Ocean Raised to Overweight at Morgan Stanley
*Hiag Immobilien Holding Raised to Outperform at Credit Suisse
*Lonmin Raised to Hold at Peel Hunt
*Meggitt Raised to Buy at Investec, PT 500p
*Munich Re Raised to Buy at SocGen, PT EU205
*Pfeiffer Vacuum Raised to Buy at HSBC, PT EU129
*Tarkett Raised to Add at AlphaValue
>>> Down
*Balfour Beatty Cut to Hold at Jefferies, PT 280p
*Carillion Cut to Hold at Jefferies, PT 230p
*GERDAU Cut to Sell at UBS
*Hermes International Cut to Hold at HSBC, PT EU460
*Interroll Cut to Hold at Bank Vontobel
*Jimmy Choo Cut to Hold at HSBC, PT GBP1.70
*Kimco Cut to Hold at Edward Jones
*Leoni Cut to Hold at HSBC, PT EU46
*Recordati Cut to Sell at Goldman
*SocGen Cut to Equal-Weight at Barclays
>>> Initiation
*SCA Rated New Buy at Pareto Securities, PT SEK330
>>> Call
>> Sector
*Overweight European Banks as Earnings Will Rise, Citigroup Says
Asia Mid-Session Market Update: Markets recover as selling on failed US healthcare bill subsides
***US Session Highlights***
- (RU) Senate Intel Committee reportedly requests White House aide Jared Kushner to be interviewed regarding prior Russia meeting - press
- (MX) Mexico Central Bank Gov Carstens: if bilateral relations go well, peso could strengthen to levels seen before the US election or even more - press interview
- (QA) Qatar Energy Min: OPEC supply cut deal must be judged over the agreement's full cycle
- (US) MAR DALLAS FED MANUFACTURING ACTIVITY: 16.9 V 22.0E
***US markets on close: Dow -0.2, S&P500 -0.1%, Nasdaq +0.2%***
- Best Sector in S&P500: Healthcare
- Worst Sector in S&P500: Telecom
- Biggest gainers: HCA +5.2%, UHS +3.4%, BBY +3.0%, VIAB +2.9%, FLS +2.9%
- Biggest losers: FCX -4.7%, FTR -3.4%, HAL -3.3%, KIM -2.6%, SEE -2.5%
- At the close: VIX 12.5 (-0.5 pts); Treasuries: 2-yr 1.27% (+2bps), 10-yr 2.37% (-3bps), 30-yr 2.98% (-2bps)
***US movers afterhours***
- PSIX: Announces strategic investment and collaboration agreement with Weichai America Corp; +47.7% afterhours
- RHT: Reports Q4 $0.61 v $0.61e, R$629M v $619Me; +5.3% afterhours
- DRI: Reports Q3 $1.32 v $1.27e, R$1.88B v $1.86Be (earnings released a day early); Raises FY17 $3.95-4.00 v $3.93e, guides SSS ~1.5%; +3.9% afterhours
- SNX: Reports Q1 $1.82 v $1.66e, R$3.52B v $3.50Be; +2.2% afterhours
- DECK: Red Mountain (3.3% stake) calls on Deckers to explore sale of the company; +1.8% afterhours
- HUN: Guides Q1 adj EBITDA to exceed $274M; provides restart time-line for Pori, Finland Pigment Facility; +0.7% afterhours
***Politics***
- (US) US White House press secretary Spicer: August is potential target date for tax reform, depends on consensus on 'big issues'
- (US) Seven Democratic Senators ask Carl Icahn to explain role in the Trump administration - press
- (US) House Ways & Means Chair Brady (R-TX): not looking to repeal Obamacare taxes via upcoming tax reform legislation
- (US) White House said to consider infrastructure and tax reform as a package deal; Prepared to work with Democrats after feeling burned by Freedom Caucus - Axios
***Asia Key economic data:***
- (KR) SOUTH KOREA Q4 FINAL GDP Q/Q: 0.5% V 0.4%E; Y/Y: 2.4% V 2.3%E
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 113.8 v 112.0 prior
***Asia Session Notable Observations, Speakers and Press***
- Key Asian equity indices are higher with the exception of the mainland, as market takes note of the rebound on Wall St to much more benign losses relative to the tumble in the morning session. Investors are willing to test a bottom in hopes that the White House has learned its lesson from the healthcare debacle to seek a broader consensus as it moves forward to more economy sensitive tax reform, deregulation, and infrastructure investment. Indeed, an Axios report notes that Trump is prepared to work more with the Democrats after feeling burned by Freedom Caucus while combining tax reform with an infrastructure investment initiative that may be an easier sell to the left. However, POTUS was also active on Twitter late on Monday, claiming that Democrats will come to him to fix healthcare once Obamacare fails
- In FX, JPY was under some early pressure on risk-on flows, with USD/JPY rising about 25pips above 110.80. Other USD majors are consolidating recent greenback selling in narrow ranges with an eye on Tuesday's Consumer Confidence data.
- Asia economic calendar is very light until Friday of this week. Today's only notable data were Q4 GDP figures from South Korea, where final prints rose slightly from prelim levels on smaller decline in construction investment and CAPEX.
- In China, CNY weakened after PBoC set its yuan fix lower for the first time in 5 days. PBoC also skipped its open market operations for the first time in 3 days pledging it will maintain relatively tight liquidity. On that note, Hong Kong earnings season is entering its final stretch with China's top banks on tap for FY16 results.
China
- (CN) China Govt: China continues to face serious challenges in cutting steel overcapacity
- (CN) PBoC said to maintain relatively tight liquidity - Chinese press
- (CN) China Finance Ministry: Jan-Feb profit for China SOEs rose 40.3% y/y to CNY301.9B; Rate of growth rose from 1.7% in 2016 and 14.2% y/y - Chinese press
Japan
- (JP) Former BOJ Chief Economist Momma: BOJ should adopt rate guidance to improve its communication with the market and give clearer signals on the direction of borrowing costs
- (JP) Japan Fin Min Aso: Japan Cabinet asks for smooth enactment of FY17 budget
Korea
- (KR) North Korea said to have conducted another missile engine test last Friday - financial press
***Asian Equity Indices/Futures (00:30ET)***
- Nikkei +1.0%, Hang Seng +0.5%, Shanghai Composite -0.3%, ASX200 +1.2%, Kospi +0.2%
- Equity Futures: S&P500 +0.2%; Nasdaq +0.2%; Dax +0.1%; FTSE100 +0.1%
***FX ranges/Commodities/Fixed Income (00:30ET)***
- EUR 1.0855-1.0870; JPY 110.50-110.80; AUD 0.7610-0.7635; NZD 0.7035-0.7050
- Apr Gold -0.1% at $1,255/oz; May Crude Oil +0.5% at $47.98/brl; May Copper -0.3% at $2.63/lb
- SPDR Gold Trust ETF daily holdings rise 2.7 tonnes to 835.3 tonnes
- (CN) PBOC SETS YUAN MID POINT AT 6.8782 V 6.8701 PRIOR; First weaker setting in 5 days
- (CN) PBoC skips open market operations for 3rd straight session; Said to drain ¥70B
- (AU) Australia MoF (AOFM) sells A$150M in 2.0% 2035 inflation-indexed Bonds; avg yield: 1.0930%; bid-to-cover: 5.63x
***Asia equities / Notables / movers by sector***
- Consumer discretionary: 493.HK Gome Electrical Appliances +1.0% (FY16 result); 1055.HK China Southern Airlines -2.2% (cooperation with American Airlines); 3197.JP Skylark Co -4.4% (Bain Capital may sell partial stake); MTR.AU Mantra Group +11.9% (buyout speculation); MYR.AU Myer Holdings -5.0% (block trade)
- Consumer staples: 1610.HK COFCO Meat Holdings +1.7% (FY16 result)
- Financials: 1112.HK Biostime International Holdings +5.2%, 1918.HK Sunac China Holdings +9.4% (annual result)
- Industrials: 822.HK Kai Shui International Holdings +3.3%, 3969.HK China Railway Signal & Communication Corporation -3.0% (FY16 result)
- Technology: 110.HK China Fortune -2.9% (profit warning); 6899.HK Ourgame International Holding -6.0%, 981.HK Semiconductor Manufacturing International Corp +3.6% (FY16 result); 2039.HK China International Marine Containers Group +3.2% (FY16 result)
- Materials: 893.HK China Vanadium Titano-Magnetite Mining -4.6% (FY16 result); SYR.AU Syrah Resources +5.4% (signs MOU)
Serial entrepreneur Elon Musk has a new company – yes, another one – focused on developing the capabilities of the brain through technological augmentation. Neuralink, the new venture, officially broke cover thanks to a Wall Street Journal article today, though it’s been know for some time that Musk was working on brain-computer interface tech as a means to help ensure humans can keep pace with the accelerating development of artificial intelligence.
Musk at Code Conference last year brought up the prospect of a “neural lace” that would be surgically connected to a human brain and allow a use to interact with a computer without the bandwidth challenges that come with current input methods, including keyboards, mice and trackpads. He’s since tweeted that he has made progress on his own exploration of the tech, and more recently rumours emerged that he was planning to found another company with this project as its focus.
Neuralink isn’t going to be focused on upgrading ordinary human brainpower at first however, according to the WSJ report. Instead, it’ll explore how brain interfaces might alleviate the symptoms of dangerous and chronic medical conditions.
These could include epilepsy and severe depressive disorder, according to the report. These efforts could build on existing therapies that use electrodes in the brain to treat symptoms of Parkinson’s, giving Neuralink a starting point with established science and an easier path to approval for human use. Clearing that lower hurdle would then set the company up for its longer-term goal of human augmentation.
It may sound far-fetched, but In fact this is a basically the Musk standard playbook for building new companies base on big ideas. Both SpaceX and Tesla used the same model, starting with near-term products that weren’t nearly as ambitious as later efforts in order to crest a sustainable path to grand designs, like landing on Mars or affordable, mass-produced long range EVs.
Musk will definitely have a full plate with Neuralink on top of Tesla and SpaceX, as well as his side venture The Boring Company, which is looking into solving urban transportation issues via tunnels. But the CEO sees AI as a risk that could potentially affect humanity at large, and his decision to pursue this potential solution likely seems as imperative to him as does the necessity of expanding our intergalactic colonial footprint, or weaning ourselves off of fossil fuels.