>>> Asian Update

Asia Mid-Session Market Update: Japan Q4 final GDP revised higher on stronger CAPEX; China Trade in deficit for the first time in 3 years

***US Session Highlights***
- (US) JAN TRADE BALANCE: -$48.5B V -$48.5BE (widest deficit since Mar 2012): China: -$31.3B v -$27.8B prior
- (US) JAN FACTORY ORDERS: 1.2% V 1.0%E
- (CA) CANADA JAN INT’L MERCHANDISE TRADE: C$0.8B V C$0.8BE (3rd straight surplus)
- (US) President Trump tweets: "I am working on a new system where there will be competition in the Drug Industry. Pricing for the American people will come way down!”
- (SA) Saudi Oil Min Al-Falih: Saudi output is now below 10M bpd after cuts; production cutting deal is working well - CERAweek conf comments
- (US) Atlanta Fed cuts Q1 GDP forecast to 1.3% from 1.8%
- (US) Commerce Sec Ross: US trade deficit data shows there is much work to be done

***US markets on close: Dow -0.1%, S&P500 -0.3%, Nasdaq -0.3%***
- Best Sector in S&P500: Technology
- Worst Sector in S&P500: Energy
- Biggest gainers: HUM +2.5%, VIAB +1.8%, ALB +1.7%, FFIV +1.6%, BBY +1.5%
- Biggest losers: FTR -5.1%, ENDP -4.4%, SWN -4.2%, ESRX -3.8%, SIG -3.6%
- At the close: VIX 11.5 (+0.2pts); Treasuries: 2-yr 1.33% (+2bps), 10-yr 2.51% (+2bps), 30-yr 3.11% (+1bps)

***US movers afterhours***
- HRB: Reports Q3 -$0.49 v -$0.46e, R$452M v $451Me; H&R Block return volume outperformed industry results compared to IRS data; +7.8% afterhours
- AVAV: Reports Q3 -$0.09 v -$0.34e, R$53.2M v $50.7Me; guides initial FY17 $0.20-0.35 v $0.50e, R$260-280M v $283Me; +7.0% afterhours
- CLNE: Reports Q4 -$0.02 v -$0.09e, R$101.8M v $96.5Me (2 est); +7.0% afterhours
- APC: Guides initial FY17 capex $4.5-4.7B v ~$2.9B y/y; -1.2% afterhours
- URBN: Reports Q4 $0.55 v $0.56e, R$1.03B v $1.04Be; -1.6% afterhours
- BOJA: Reports Q4 $0.28 v $0.21e, R$139.4M v $140Me; Guides initial FY17 $0.87-0.93 v $1.02e; R$560-569M v $592Me; -4.8% afterhours
- GEO: Files to sell 6M shares through JPM, SunTrust, BCS, Merrill (8% of shares outstanding); -5.0% afterhours

***Politics***
- (US) State of Hawaii to sue the Federal Govt to block implementation of the revised Executive Order on travel - press
- (US) Atlanta Fed said to be considering Raphael Bostic as the next President, replacing retiring (Feb 28th) Dennis Lockhart (moderate, non-voter) - financial press
- (US) CNBC's Kudlow: Sources say Commerce Sec Ross now opposes border adjustment tax
- (UK) Govt ministers said to call for PM May to call a snap election to give her a clear mandate for her Brexit plan - UK press

***Asia Key economic data:***
- (CN) CHINA FEB TRADE BALANCE (CNY-TERMS): -60.4B V +172.5BE; First deficit since Feb 2014
- (JP) JAPAN Q4 FINAL GDP Q/Q: 0.3% V 0.4%E; ANNUALIZED GDP: 1.2% V 1.5%E
- (JP) JAPAN JAN BOP CURRENT ACCOUNT TOTAL: ¥65.5B (2-year low) V ¥270BE; ADJ CURRENT ACCOUNT TOTAL: ¥1.26T V ¥1.46TE; TRADE BALANCE BOP BASIS: - ¥853B (first deficit in a year) V - ¥800BE
- (JP) JAPAN FEB BANK LENDING (INC TRUSTS) Y/Y: 2.8% V 2.5% PRIOR; BANK LENDING (EX- TRUSTS) Y/Y: 2.9% V 2.6% PRIOR
- (NZ) NEW ZEALAND Q4 MANUFACTURING ACTIVITY (SA) Q/Q: 0.8% V 0.4% PRIOR; VOLUME Q/Q: -1.8% (biggest decline since Q2 of 2013) V 2.1% PRIOR
- (NZ) New Zealand Feb ANZ Truckometer Heavy M/M:+2.3% v -1.0% prior

***Asia Session Notable Observations, Speakers and Press***
- Asia equity markets are mixed despite another day of modest declines on Wall St in both equity and bond markets. Investors look ahead to Wednesday's release of ADP and Friday's non-farm payrolls to confirm expectations of this month's Fed hike, as only a very weak print on the jobs front would derail that view. After yesterday's advance, the Energy sector lagged all others, and the soft patch may carry over as API petroleum saw a large build - its 6th in 7 weeks - despite the claims from Saudi Oil Min that demand is picking up. Regionally, Nikkei225 lagged as USD/JPY remained below ¥114 despite the uptick in US yields, weighed down by chip equipment stocks. JPY was also firmer as risk aversion was felt in US equity futures - S&P eminis hit 1-week lows of 2,360. Hang Seng outperformed with rallies in Geely Auto and China Unicom.
- In other FX majors, AUD was supported by a research note out of Goldman estimating 60% chance of an RBA rate hike as soon as November, but came in on release of disappointing China trade data. In CNY terms, trade fell into deficit for the first time in 3 years, with Exports undershooting at Y/Y 4.2% v 14.6%e and Imports surging 44.7% v 23.1%e. Some of the deviation will likely be attributed to the timing of Lunar New Year coming in late Jan this year vs early Feb last year. Also of note in China, Foreign Min Wang said Beijing is working to expand cooperation with US while also calling on Washington to back away from THAAD missile system in South Korea and for North Korea to stop its nuclear development.
- In other economic data, Japan Q4 Final GDP improved slightly from Prelim levels but missed expectations. Consumption growth remained flat, though the CAPEX component was revised sharply higher to 2.0% from 0.9% prelim, also beating 1.7% est.

China
- (CN) China Feb iron ore total inventory 12.1Mt, +44.3% m/m - Chinese press
- (CN) China Foreign Minister Wang Yi: One belt and One road initiative is critical amid protectionism
- (CN) PBoC Dep Gov Yi Gang: China to steadily promote global use of Yuan - press

Japan
- (JP) Japan investors sold net ¥1.69T of US sovereign debt during Jan (3rd consecutive sale, longest streak since June 2013)
- (JP) Japan PM Abe: Japan completely out of deflation
- (JP) Japan Fin Min Aso: easy cuts to corporate tax rates would harm trust in system

Australia/New Zealand
- (AU) CitiGroup Australia to limit its mortgage loans for overseas borrowers to high net worth clients with minimum deposits of A$250K amid concerns of capacity, as most other Australian banks withdrew from lending to foreign clients - AFR
- (AU) Hearing Goldman Sachs said to be calling for a RBA rate hike as soon as this Nov
- (NZ) Fonterra Global Dairy Trade Auction: Dairy Trade price index: -6.3% v -3.2% prior; 2nd straight decline, biggest decline since Feb 2nd (out in US session)
- (NZ) Westpac lowers FY16/17 milk payout target to NZ$5.90 from NZ$6.20 following today's auction price decline - NZ press
- (NZ) ANZ: New Zealand Feb non-tradable inflation 0.2% m/m, 2.2% y/y

Korea
- (KR) Korean press speculates Korea's currency swap total may be halved due to tensions with China on THAAD deployment
- (KR) South Korea Fin Min Yoo: Economy showing signs of recovery - press

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei -0.5%, Hang Seng +0.5%, Shanghai Composite +0.1%, ASX200 -0.1%, Kospi flat
- Equity Futures: S&P500 -0.2%; Nasdaq -0.2%; Dax -0.2%; FTSE100 flat

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.0570-1.0595; JPY 113.85-114.10; AUD 0.7575-0.7630; NZD 0.6980-0.7020
- Apr Gold flat at $1,225/oz; Apr Crude Oil flat at $53.20/brl; May Copper +0.1% at $2.66/lb
- (US) Weekly API Oil Inventories: Crude: +11.6M v +2.5M prior (6th build in the past 7 weeks; Highest build since Feb 7th)
- (SA) Saudi Oil Min: Global oil demand is picking up
- (US) DoubleLine's Gundlach: Reiterates 10-year yield to drop below 2.25% before rising again
- (CN) PBOC SETS YUAN MID POINT AT 6.9032 V 6.8957 PRIOR; weakest Yuan setting since Jan 12th
- (CN) China MoF sells CNY20B in 5-yr bonds; avg yield 3.0265% v 3.0387% prior; bid-to-cover 1.85x
- (CN) PBOC to inject combined CNY30B v CNY30B prior in 7-day, 14-day and 28-day reverse repos
- (AU) Australia MoF (AOFM) sells A$800M in 2.25% 2028 Bonds; avg yield: 2.9816%; bid-to-cover: 3.78x

***Asia equities / Notables / movers by sector***
- Consumer discretionary: SVW.AU Seven Group Holdings -0.2% (considers privatization); 3099.JP Isetan Mitsukoshi -4.2% (Mizuho cuts rating)
- Financials: 1375.HK Central China Securities Co -0.7%; 813.HK Shimao Property +6.0% (Feb result); 978.HK China Merchants Land +3.3% (FY16 result)
- Industrials: QUB.AU Qube +3.1% (Peer DP World raised charges at ports in Melbourne and Sydney)
- Technology: 6502.JP Toshiba Corporation +2.6% (no signs for Q3 earnings delay); 7741.JP Hoya Corp +2.2% (Morgan Stanley raises rating)
- Materials: 5406.JP Kobe Steel +0.9% (Mizuho raises rating)
- Healthcare: 570.HK China Traditional Chinese Medicine Co +1.0% (profit alert); MYX.AU Mayne Pharma -1.8% ( US President Trump tweeted about new system for lower drug prices in America); CAJ.AU Capitol Health +3.3% (Credit Suisse raises rating)
- Telecom:763.HK ZTE Corp +5.9% (FY16 result, US settlement)

(CS) Vinci : We raise our 2017-19E EPS f’casts c2-6% following FY-16 results

VINCI (OP, TP EUR84.0): We raise our 2017-19E EPS f’casts c2-6% following FY-16 results, on contribution from acquisitions in late 2016, and better growth in Concessions and Contracting. We see further upside in both segments on a 12-month view on the back of an improving contracting outlook and i margin improvements. We forecast over €1bn p.a. in cash-flow after dividends and growth CAPEX. We do not anticipate any change in Vinci's 50% dividend payout policy in the near term, but see DPS growth in-line with Vinci's c9% 2016-19E EPS CAGR, with upside to EPS from accretive.

>>> Wirecard to be selective acquirer as it looks to increase international scal

Wirecard to be selective acquirer as it looks to increase international scale, executive says

Wirecard AG [WDI:DE] will be selective as it scouts for tuck-in acquisitions across Europe, Southeast Asia, the Middle East, Latin America and North America, said Executive Vice President and Managing Director Susanne Steidl.

The Bavaria, Germany-based banking software company’s recent purchase of Citi’s [NYSE:C] prepaid card services unit marked its first foray into the US market and cemented its position as a global player, Steidl said. Now its strategy is to scale its business on all of the continents in which it operates through opportunistic acquisitions and the cross-selling of its end-to-end payment processing services, she said.

Electronic payment firms with customer portfolios and financials that improve Wirecard’s top and bottom lines are attractive, Steidl said. It may also look at businesses with financial technologies that enhance its e-commerce ecosystem for merchants, airlines, telecoms and service providers, she said.

The company reported EUR 1.2bn in cash and equivalents as of 30 September.

In the past, Wirecard has said it prefers deals under EUR 200m, according to this news service’s database. Last year, it bought Romania-based Provus for EUR 32m and Brazil-based MoIp Pagamentos for EUR 37m. Terms of its acquisition of Citi Prepaid Card Services, which was announced in June 2016, were not disclosed.

At a Goldman Sachs Technology and Internet Conference in San Francisco last month, Steidl told investors Wirecard liked the Citi deal because it delivered customers with longstanding relationships and an experienced management team that can sell its e-commerce and payment processing products.

There is ample opportunity to target parts of the US market that Citi previously had not, she added.

Because Citi initially obtained its prepaid card assets from its acquisition of Ecount in 2007, the business unit came with an operational infrastructure that was easy to separate from Citi, Steidl said.

Entering international markets through acquisitions has been a successful strategy for Wirecard so far, said Steidl, explaining that once it enters a new region it identifies the customers it wishes to target and customizes its offerings. Brazil, for instance, is comprised of many small merchants so Wirecard takes a different approach there than in South Africa, where she said the needs of clients look much different.

Other times Wirecard has forged strategic partnerships to extend its geographic reach, such as the alliance it formed with Sydney-based Cuscal to bring Wirecard’s merchant acquiring services and payment processing platform to Australian and global merchants with an Australian footprint.

The company has generated organic revenue growth of more than 20% in recent quarters.

Steidl acknowledged Wirecard has previously attracted takeover interest but she declined to elaborate.

Wirecard’s shares closed at EUR 45.37 on Tuesday, giving it a market capitalization of EUR 5.61bn.

FT : Opec reverses its hedge fund condemnation

Opec reverses its hedge fund condemnation
Secretary-general calls fund managers ‘key participants’ in the oil market

Opec once decried hedge funds as a malign influence on the oil market. Now it is seeking their opinion. 

Mohammad Barkindo, secretary-general of the oil exporters’ cartel, said on Tuesday he was meeting fund managers while in Houston for an energy conference this week, giving them his time along with US shale executives and other senior figures in energy circles. 

The overtures are a change for Opec, which historically lashed out at “speculators” for distorting the price of crude. But financial participants have become too large a presence to ignore. 

“Times have changed; the industry has changed,” Mr Barkindo told reporters at the CERAWeek by IHS Markit conference. “We are more globalised, and the impact of the financial markets on oil continues to be magnified. And in this world we believe that we should adapt to these new changes and therefore reach out.” 

Hedge funds and other money managers have built a net bullish futures position worth nearly 1bn barrels of crude oil, recently the biggest on record. The position expanded after Opec reached an agreement to cut output on November 30. 

While Opec’s output decisions directly affect oil prices, its leaders have in the past blamed speculators when prices move too low or high for the comfort of producers or consumers. “Like puppeteers, they pull the strings from the wings, manipulating positions and unsettling what are already delicate and often precarious trading environments,” the official Opec Bulletin said in a commentary in 2015. 

That view contradicted experts who generally say speculators serve a purpose by making markets liquid, even if they occasionally push prices in a direction at odds with data on supply and demand. 

But Mr Barkindo, appointed last year, said fund managers were “key participants” in the oil market, adding that Opec, the International Energy Agency and the International Energy Forum planned to hold a workshop in Vienna next week to focus on the effects of financial players. 

After meeting with fund managers in Houston “we found that thin line that probably differentiated us was just probably fictitious”, said Mr Barkindo, a longtime Opec delegate from Nigeria. “We all belong to the same industry. We sail in the same boat.” 

Opec officials have recently met with hedge funds in London and New York, the Wall Street Journal reported this week. Saudi Arabia, the de facto leader of Opec, convened private talks with the world’s largest oil traders including Pierre Andurand, who runs a London-based hedge fund, before the pivotal November Opec meeting, the FT has reported. 

Despite hedge funds’ massive bets, the price of crude oil has been locked in a narrow range. ICE Brent crude oil for May delivery was $55.60 a barrel on Tuesday, down 0.7 per cent.

FT : SoftBank to sell $8bn stake in Arm to Vision Fund

SoftBank to sell $8bn stake in Arm to Vision Fund
Son places 25 per cent of UK’s largest tech company in $100bn Saudi-backed vehicle

Japan’s SoftBank is set to sell a roughly $8bn stake in Arm, the UK chip designer it purchased only six months ago, placing 25 per cent of Britain’s largest technology company into a new, Saudi-backed $100bn investment fund.

The decision was made as the SoftBank-led fund looks to hit its fundraising goals and secure the backing of Mubadala, the Abu Dhabi state-backed investment group, which wanted the fund to own a portion of Arm, said two people close to the situation. The two sides are closing in on an agreement that would see Mubadala commit $15bn to the fund, these people said, and help the Japanese company get closer to its stated $100bn target for the SoftBank Vision Fund.

The transaction would be the first significant move by the Vision Fund, which is intended to give Masayoshi Son, the deal-hungry billionaire who made SoftBank into a global internet and telecoms powerhouse, the firepower to pursue his blend of investing on behalf of his company and a small group of outside backers.

The biggest investor in the Vision Fund is Saudi Arabia’s Public Investment Fund, which said last year it would contribute up to $45bn after protracted talks between Mr Son and Mohammed bin Salman, Saudi Arabia’s deputy crown prince.

SoftBank is putting about $25bn into the fund — though a portion of that will be covered by the Arm stake. Others planning to invest at a smaller scale include Apple, Qualcomm and Oracle founder Larry Ellison, as well as Foxconn, the Taiwanese electronics manufacturer.

Downing Street was notified of SoftBank’s intentions but is understood to have raised no concerns. Number 10 and SoftBank declined to comment.

Mubadala said: “We’re having ongoing, fruitful discussions over our participation in the fund.” It added: “Arm is certainly a strong technology company with great, continued potential. The Abu Dhabi group has been focused on growing its technology investments over the past decade, including in the semiconductor sector.”

SoftBank agreed to buy Arm for $32.4bn in July of last year, just weeks after the UK voted to leave the EU, fulfilling Mr Son’s desire to own a chip designer that he believes will be at the heart of the internet of things and connected devices.

The transaction, which completed in September, was announced just days after Theresa May replaced David Cameron as UK prime minister. Mrs May spoke to SoftBank before completion of the Arm deal last year and Downing Street said at the time: “This is clearly a vote of confidence in Britain.”

As part of the deal, SoftBank made a series of binding agreements to signify its commitment to the UK, including one to double Arm’s UK-based workforce over five years.

However, some questioned whether the UK was selling the crown jewels of its tech sector to a foreign investor at a low price. Hermann Hauser, Arm’s founder, described the deal as one of the “sad and unintended consequences” of Brexit.

By selling a portion of Arm to the fund, Mr Son is likely to invite closer scrutiny of his burgeoning role as a global dealmaker, especially now that his investments are made through a fund with a diverse array of investors.

Late last year, Mr Son met Donald Trump at Trump Tower in New York and pledged, without offering details, to invest $50bn in the US and to create 50,000 jobs.

The $100bn target for the fund, and the speed with which it is being assembled, represents a new frontier for venture capital and private equity.

In anticipation of the fund’s first closing, Mr Son has been striking deals. SoftBank is in talks to invest $3bn in WeWork, a shared office-space company, at a valuation of about $17bn, which would also be offered to the fund if it is agreed, according to one person close to the matter.

SoftBank invested $1bn last year in OneWeb, a satellite start-up seeking to provide internet access to remote parts of the world. In February, SoftBank said it planned to invest a further $1.7bn to merge OneWeb with Intelsat, another satellite company, if it persuades Intelsat bondholders to sign up to the deal. Those deals are set to be offered to the Vision Fund.

However, a recent $3.3bn deal by SoftBank to acquire Fortress Investment Group, the US alternative asset manager, will not be offered to the fund.

Les Echos : Free : cette mystérieuse offre mobile que pourrait lancer Xavier Nie

Le patron d'Iliad pourrait bientôt sortir de son chapeau une offre chez Free Mobile qui «  ne devrait pas plaire à [ses] concurrents  », selon lui.

Suspense. Lors de la présentation des résultats aux analystes, Xavier Niel leur a fait une confidence : une nouveauté sera dévoilée mardi chez Free Mobile, et « elle ne devrait pas plaire à [ses] concurrents ». S'agit-il d'un nouveau forfait, d'une nouvelle offre de contenus, de nouveaux services ? Impossible d'en savoir plus à ce stade.

Une chose est certaine : la spéculation va enfler dans les jours à venir. Le lancement d'un nouveau forfait semblait peu plausible selon les analystes, alors que les résultats financiers plaident pour un maintien de la stratégie tarifaire actuelle.
Free Mobile compte 12,7 millions d'abonnés et a généré un revenu supérieur à 2 milliards d'euros en 2016. De son côté, la maison mère du groupe, Illiad, a augmenté son bénéfice de 20%, et la marge opérationnelle a rebondi. Une première depuis 2012 et le lancement de l'offre mobile .
Les dirigeants de l'opérateur ont par ailleurs toujours vanté la simplicité et la clarté de leurs offres dans le mobile. Depuis cinq ans, Free en propose deux : une à 2 euros (gratuite pour les abonnés Freebox), qui offre essentiellement de la voix et des SMS, et une autre à 19,99 euros (15,99 euros pour les abonnés Freebox), qui offre 50 Go de data en 4G.
"Un coup de communication magistral comme Free en a le secret"
Mais méfiance. Xavier Niel est coutumier du fait. En mars 2015 déjà, un buzz savamment entretenu n'avait cessé d'enfler les semaines précédant de nouvelles annonces de Free. Au point même d'inquiéter les marchés financiers et de faire chuter les titres de Numericable-SFR (-9,7%), Orange (-5,7%), Bouygues telecom (-3,5%) et même d'Iliad (-4 %), sur une seule séance boursière !
"Xavier Niel est capable de tout ", confiait alors un bon connaisseur du secteur aux "Echos" tandis que les rumeurs allaient bon train. Faisant monter le suspense progressivement, le groupe avait ensuite lancé une invitation mystère à une kyrielle de journalistes pour une conférence "surprise".


« Du calme, tout va bien se passer », avait commencé, grand sourire, le patron de l'opérateur avant de lever finalement le voile sur... une nouvelle box : la Free Box mini 4K - qui embarquait Android (le système d'exploitation mobile de Google) -, un modèle remplaçant sa box d'entrée de gamme d'alors : la Freebox Crystal.

Une opération marketing à très bas coût. "Un coup de communication magistral comme Free en a le secret", avait reconnu, le jour-même de la keynote, un bon connaisseur du secteur. Rien ne dit donc que le milliardaire n'est pas en train de préparer un coup semblable. A suivre.

FT : Uber employees lose faith and explore exit

Uber employees lose faith and explore exit
Competitors and recruiters find more job applications from car-booking app’s workers

Recruiters in the Bay Area and executives at rival companies say they have seen an uptick in job applications from Uber employees, as its workers lose faith in the company’s leadership and start to doubt the value of their stock options.

Uber has gone from crisis to crisis over the past five weeks, prompting increasing numbers of employees to explore the idea of leaving a start-up that was once considered one of Silicon Valley’s most prestigious and lucrative workplaces.

“I have seen quite a few people who have been looking to leave Uber,” said one recruiter, who previously worked at the car-booking service. “One of the main reasons is lack of faith in senior leadership.”

He said the number of unsolicited résumés from Uber employees coming across his desk spiked last week, a time when two former employees published personal accounts alleging harassment and sexism at the company. He received more résumés from Uber in one week than he had the previous month.

For employees at Uber, quitting the company often means walking away from restricted stock units or stock options worth hundreds of thousands, if not millions, of dollars in Silicon Valley’s most highly valued private company. With Uber currently worth about $70bn, a typical middle manager position comes with RSUs worth hundreds of thousands of dollars that vest over a four-year period.

“Historically, it has been incredibly difficult to recruit from Uber, which partly has to do with people being unwilling to leave their stock options on the table,” says Guillaume Champagne, president at SCGC Executive Search. “From a purely financial perspective, Uber would need to become an awful place for them to leave.”

Nevertheless, in the past few weeks, Mr Champagne has seen an increase of about 5-10 per cent in the number of people interested in leaving, particularly those who are “a bit less of a culture fit”, he says. “To be fair, people typically know what they are getting into when they join Uber. They know it is a very male-dominated, high-octane, investment banking type of culture,” he adds.

In the past two weeks a series of public embarrassments, including a video in which chief executive Travis Kalanick berates an Uber driver, have left the company struggling to recover its image. Mr Kalanick issued an unusual apology after the video was published, saying: “I must fundamentally change as a leader and grow up.”

Two senior executives quit the company last week, adding to employees’ sense of uncertainty. Ed Baker, who was vice-president of product and oversaw Uber’s rapid expansion over the past three years, resigned on Friday, attributing his departure to an interest in going into public service. Uber did not comment. Amit Singhal, vice-president of engineering, left the company on Monday.

A spokesman for Uber said the company had not seen attrition rates above normal.

Adding to Uber’s woes, the company was sued last week by Alphabet’s self-driving car unit, Waymo, which alleges that its rival stole trade secrets and infringed on patents relating to autonomous vehicles. Uber called the allegations “a baseless attempt to slow down a competitor” and said it would defend itself in court.

However, the lawsuit, and the extreme shortage of technical talent in the autonomous vehicle sector, has made the self-driving research unit particularly susceptible to poaching.

“There are definitely more people thinking about leaving,” says Alex Rodrigues, who co-founded Embark, a rival driverless trucking start-up, last year. Several employees in Uber’s advanced technology group, which is based in Pittsburgh, have left to join rivals in the past month.

More than anything, Uber’s recent stumbles have taken the shine off a company that many in Silicon Valley once saw as being invincible, and employees who had planned to stay with Uber through its eventual initial public offering are reconsidering.

While a public offering typically offers an attractive financial prize to employees with equity, Mr Kalanick has said publicly that he wants to delay an IPO as long as possible, meaning that employees’ shares will remain illiquid.

“People were lured in with the promise of equity . . . but now they are realising that they won’t see a return on that for a long time,” says the recruiter who previously worked at Uber. “There is a lot of resistance in upper management to doing an IPO.”

Others say that doubt is starting to sink in. “Previously it was difficult to get them [Uber employees] because of their stock. Now they don’t seem so confident about what that’s worth,” says an executive at one of the largest tech companies in the Valley.

>>> US After Hours Summary: AVAV +8%, HRB +7%, CLNE +6% following earni


After Hours Summary: AVAV +8%, HRB +7%, CLNE +6% following earnings/guidance, RH +1.9% on WSM M&A speculation ... URBN -5%, BOJA -4.6%, AERI -2.6% following earnings/guidance, several names lower following offerings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: MFIN +29.8%, BIOC +21.2%, REXX +11.3%, AVAV +7.8%, HRB +7.3%, CLNE +6.2%, ZAGG +5.1%, NCS +3.4%, TLGT +3.1%

Companies trading higher in after hours in reaction to news: PRKR +32.8% (continued strength following favorable patent ruling), SHIP +15.8% (enters into a definitive agreement with one of its senior lenders for the early termination of a credit facility, which is expected to result into a material gain and equity accretion), EXTR +6.6% (to acquire Avaya's networking business for ~$100 million), TSL +5.4% (still checking), RH +1.9% (UK Betaville blogger suggests Williams-Sonoma [WSM] is 'stalking Restoration Hardware')

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: ALQA -6.4% (thinly traded; also initiated a process of identifying strategic alternatives for the contract manufacturing business), EDIT -5.3%, URBN -4.8%, BOJA -4.6%

Companies trading lower in after hours in reaction to news: HIIQ -11% (launches a secondary underwritten public offering of shares of its Class A common stock), GEO -5.1% (commences offering of 6,000,000 shares of its common stock), FOXF -3.7% (announces secondary offering of 5,108,718 shares by one of its existing stockholders), LAND -3.4% (ticking lower - to sell ~1.4 mln shares of common stock in an underwritten public offering), LADR -2.9% (announces secondary public offering of 3 mln shares of Class A common stock by certain affiliates of Alberta Investment Management, GI Partners, Northgate Capital and TowerBrook Capital Partners), FCSC -1.9% (Fibrocell Science entered into securities purchase agreement with existing investors for sale of $8.0 mln Series A Convertible Preferred Stock and accompanying warrants), APC -1.2% (announces 2017 initial capital program of $4.5-4.7 bln)