FT : Bioethanol plant owner says US-UK trade deal will force closure without gov

Bioethanol plant owner says US-UK trade deal will force closure without government help
ABF Sugar, which owns the Vivergo plant in Saltend, Hull has given ministers two weeks to come up with a rescue package

The owner of the UK’s biggest bioethanol plant has given the government two weeks to come up with a rescue package for the industry after the trade agreement with Donald Trump threatened to swamp the British market with 1.4bn litres of tariff-free ethanol.

The ultimatum by ABF Sugar, which owns the £450mn Vivergo plant in Saltend, Hull, was issued following an emergency meeting this week with the UK business secretary Jonathan Reynolds and transport secretary Heidi Alexander.

The owners said unless the government tabled a package to save the industry within two weeks, they would open consultations about making the plant’s 160 workers redundant. Vivergo supports a further 5,000 jobs in downstream supply chains.

Sir Keir Starmer’s government is under political pressure from Labour MPs in the area to save the plant. Nigel Farage’s Reform UK party has enjoyed a surge in popularity in the area; Reform won the Hull and East Yorkshire mayoral election last month.

Paul Kenward, chief executive of ABF Sugar, told the Financial Times that investors would no longer support continued losses at the plant, which was already struggling before the US-UK trade pact was announced on May 8.

“Our investors have had enough. We cannot continue to lose £3mn a month to support a government agenda when the government isn’t supporting us,” he said.

“I can’t go to my board and suggest they spend another £50mn unless I have a copper-bottomed guarantee that the regulatory regime will change, and there is short-term funding to get us through to the point those changes take effect,” he said.

Reynolds and his US counterpart Howard Lutnick said this week they expected key parts of the US-UK pact to be implemented “within days”, removing the UK’s current de facto 19 per cent tariff on US ethanol. 

Officials at the UK Department of Business and Trade admitted in calls to industry leaders that they had been blindsided by the decision to offer a 1.4bn litre tariff-free quota to US producers — equivalent to the entire annual demand in the UK. 

Since then, the industry has been in talks with the government over potential support and regulatory changes needed to expand the UK bioethanol market, but so far nothing has been agreed.

Reynolds said on May 14 that the government “acknowledged the significance” of the sector, whose product is used in UK “E10” petrol to reduce emission from cars.

The Vivergo plant, which opened in 2012, has only made a profit for six months since the E10 mandate was introduced in 2021, which the industry blames on the way the UK bioethanol market is regulated.

Producers argue that changes to regulations in 2022 that offered double subsidies to ethanol produced from waste products, not crops, opened the door to a flood of ethanol made as a byproduct of US corn production, which is already subsidised. 

Kenward said that plants in Europe identical to those in the UK — which produce about 750mn litres of ethanol a year — were profitable because they were shielded from US imports.

“The Department for Transport was perpetuating our demise and the Department for Business and Trade is now accelerating it,” said Vivergo managing director Ben Hackett. “They’re pushing us towards the precipice. It’s like the government is decarbonising by deindustrialising,” he said.

Even before the trade pact with Washington was signed, frustration has been growing over the government’s failure to take steps to improve the viability of the UK industry, which also includes a plant owned by Ensus in Wilton on Teesside.

The industry is asking the government to increase the size of the market by moving to the “E15” petrol blend used by many other countries, revising regulations to keep out unfair competition and provide short-term subsidies of up to £75mn a year to tide the industry over until the growth-enhancing measures take effect.

Reynolds told MPs this week that the government recognised the “competitive pressures” that the US deal would bring and that he was working with the transport department to deliver regulatory changes.

Meanwhile pressure continues to build on the government from local MPs and industry groups that rely on byproducts from the plants, including high protein animal feed and carbon dioxide gas used in the drinks and meat packing industries. 

William Bain, the head of trade policy at the British Chambers of Commerce, said the US deal had caused “a huge headache” for the domestic industry, adding that clarity on government support to the sector was “urgently needed”.  

Tom Reid, chief executive of the Renewable Transport Fuel Association lobby group, said the growing popularity of hybrid cars meant that demand for petrol was increasing in the UK and bioethanol was a vital part of the transition to fully electric vehicles.

Luke Campbell, the recently elected Reform mayor of the Hull and East Yorkshire Combined Authority, has campaigned locally on the issue, writing an open letter to Starmer warning that his US trade deal is a “bad deal for British industry and jobs”.

Local Labour MP Karl Turner — who held his seat at the July 2024 election ahead of a Reform candidate — led a delegation of workers to London this month to protest outside the Houses of Parliament.

Workers at the plant said they were aware that their jobs were hanging by a thread and urged the government to step in.

“It’s not great when you have your own government throwing you under the bus,” said Paul Snuggs, 60, an operations technician. “It’s not just 160 jobs on the site, it’s four to five thousand in the supply chain.”

Andy Gardner, 53, a systems control engineer, who has worked 12 years on the site, said: “I understand the [US-UK] deal is there to save British jobs — but if they’re sacrificing so many British jobs in the process, you have to ask whether they’ve thought it through.”

FT : Sex, love or money? What art collecting is really about

FT : Sex, love or money? What art collecting is really about

The question of why people collect was first formally explored by the 19th-century founder of psychoanalysis, Sigmund Freud. Today the answers remain elusive, and often contradictory. “Things get turned on their head, we change our minds about it,” says the historian James Delbourgo, whose forthcoming book, A Noble Madness, unearths some of the darker sides associated with the collecting habit.

In ancient Rome, he says, the statesman and orator Cicero pointed to the voracious looting carried out by the Sicilian magistrate Gaius Verres to exemplify his misgovernance. “For Cicero, Verres’s desire for objects is an extension of his lascivious drives,” Delbourgo says. Later in time, “the quintessential imaginary collector becomes this desexed loser,” he says, citing Honoré de Balzac’s 1840s novel, Cousin Pons, which features one of the first collectors in fiction. Here, the titular Pons “cannot deal with real life”, Delbourgo says, an idea that prefigures the motivations that Freud identified that are anchored in personal anxieties, notably over sex.

These days, collectors don’t tend to mention sex as a drive or otherwise in their pursuits, although there is still a sense that the ideal collector controls their passions to create some order out of chaos. The difference between the acts of buying and collecting often comes down simply to having a theme. “I started out very impulsive, emotional, for about 10 years, I think everyone goes through that,” says the London and Chicago-based collector Ralph Segreti. “Then, about 20 years ago, I began to focus and now my collection makes more sense.” Segreti buys American abstract and conceptual pieces by emerging and mid-career artists, including Theaster Gates and Lauren Halsey. His collection is relatively small — he owns, he says, about 150 works in total.

At the same time, passion is also de rigueur, particularly when set against the profit motive, which is less approved of in the fine art world (despite art being touted as investment grade for the best part of the 21st century). In the latest Art Basel & UBS Survey of Global Collecting, which questioned more than 3,660 collectors last year, the highest-ranked consideration when buying a work of art was found to be “self-focused motivations”, such as self-identity and personal pleasure. This was the primary motivation for 40 per cent of respondents, whereas financial considerations were a priority for 24 per cent, on a par with the social aspects of collecting. “I wonder though, do people buy art and then, because they know it might go down in value, say that they bought primarily for pleasure, as a way to cover their bases,” says Dr Clare McAndrew, the founder of the research and consulting firm Arts Economics and author of the report. 

Confessing to a compulsive addiction is rare — only 8 per cent defined their main driver as such. “I guess I have a shopping addiction,” says Segreti, “but I have steered it into something more meaningful.” This is, he admits, something of a justification. “You could easily say that collectors are hoarders with money.” The hoarder instinct is not helped by the prevailing art market ideal that a good collector should not sell their works.

Some collectors go further and open their own museums. Patrizia Sandretto Re Rebaudengo, whose public-facing foundation marks its 30th anniversary this year, opened a dedicated space in Turin in 2002, partly to house her collection of more than 1,500 pieces of contemporary art. She also owns about 3,000 historical photographs and a vast collection of American costume jewellery. 

Her urge to collect seems ingrained. “It is my life,” she says. “My mother collected antiques and I grew up seeing her passion. When I was young, about 12 years old, I started to collect small pillboxes, from simple ones from a market to beautiful silver ones.” These number about 1,000. “I still have the exercise books where I described what they looked like, their colour, what they cost.” 

When it comes to her adult thirst for contemporary art, Sandretto Re Rebaudengo talks about using it “to understand the world better, to talk a bit less and to listen to what artists have to say”. It is important in this context, she says, “to meet the artists, visit their studios, establish a relationship”.

Segreti also mostly buys works by living artists, though he has a work by Keith Haring in his bedroom and says that “there are some 20th-century works I would love to have in the collection, but prices are often prohibitive.” 

Female collectors such as Sandretto Re Rebaudengo are still in the minority. But while it might be tempting to identify a male mindset in the thrill of the chase, Delbourgo and others put the discrepancy down primarily to a societal reality — men have historically had more money. The dynamic is changing, notes Paul Donovan, chief economist of UBS Global Wealth Management, as women are increasingly part of the High Net Worth Individual set, as well as the likely first recipients of the Great Wealth Transfer, an expected $84tr that will change hands over the next 20 to 25 years. 

Other changes are afoot as collectors define themselves less as buyers of discrete objects and more as philanthropic forces. For Sandretto Re Rebaudengo, commissioning new art has become increasingly important, including a dramatic sculpture by Marguerite Humeau and a glass-tile mural by Tauba Auerbach. “My role is to be more than a buyer and to participate in artists’ lives, support their careers,” she says. Segreti has slowed down his purchasing for a higher cause — “I am buying less and sponsoring more,” he says. Sigmund Freud, himself an antiquities collector, might still have the answer. As he supposedly said: “All giving is asking, and all asking is an asking for love.”

FT : Germany breaks taboo with first celebration of veterans since second world

Germany breaks taboo with first celebration of veterans since second world war
Russian aggression in Ukraine has helped drive a historic shift in attitudes towards military

Germany will hold its first celebration of veterans since the second world war on Sunday, as the nation recalibrates its complex relationship with the armed forces in the wake of Russia’s invasion of Ukraine.

Defence minister Boris Pistorius will join current and former soldiers and members of the public taking part in a day of events across the country — including at a “veterans’ village” constructed in front of the Reichstag in Berlin.

It marks a historic shift in a nation where anything that could be viewed as a display of militarism was for years seen as taboo.

“There won’t be tanks and there won’t be fighter jets,” said Lieutenant Colonel Michael Krause, head of a newly formed national veterans’ office, who drew a contrast with big military events in other countries. “We’re not there yet. But we’re really taking a really good first step.”

Russian President Vladimir Putin’s full-scale invasion of Ukraine in 2022 has helped to change the political backdrop for military commemorations in Europe’s largest nation, analysts say. Germany has been pouring money and resources into the armed forces in response to Nato fears of Russian aggression. New chancellor Friedrich Merz has promised to make Germany’s military “the strongest conventional army in Europe.”

Sarah Brockmeier-Large, of the Peace Research Institute Frankfurt, said the fact that politicians had finally agreed to hold a veterans day was “emblematic of a growing appreciation in German society that we need a functioning armed forces — and that soldiers provide a vital public service”.

Berlin’s role in two world wars led to a deep scepticism of military force after 1945, especially in West Germany, and fed into the emergence of a strong pacifist movement. 

For decades, the term veteran was mostly associated with those who had fought in Adolf Hitler’s Wehrmacht rather than the Bundeswehr, which was established in 1955 and put under tight parliamentary control. 

“We couldn’t be proud of our former wars,” said Patrick Sensburg, head of the German reservists’ association. “So in the 50s, 60s and 70s, there was no veterans’ culture in the German Bundeswehr.”

During the cold war, when Germany was divided, the Bundeswehr only took part in operations outside Nato territory to help with natural disasters. After reunification in 1990, the East German National People’s Army was disbanded and a small number of troops absorbed into the Bundeswehr.

The new combined army soon tentatively began undertaking foreign combat operations. German warplanes helped bomb the former Yugoslavia in 1999 during the Nato-led Kosovo mission.

But most significant for the veterans’ movement was the participation of 93,000 German soldiers in the US-led war in Afghanistan over a span of almost 20 years.

Initially billed as a German peacekeeping mission, it morphed into a combat operation as Bundeswehr troops battled a Taliban insurgency. The conflict, which in total killed about 3,000 American and allied troops and more than 100,000 Afghan civilians, claimed the lives of 59 German soldiers.

Grassroots pressure from those who served in Afghanistan — including many who came home bearing physical and mental scars — created a drive for a veterans day inspired by the likes of Australia and New Zealand’s Anzac day, the UK’s armed forces day or veterans day in the US.

In 2012, then-defence minister Thomas de Maizière’s attempt to win approval for the idea failed amid widespread political opposition.

“I think it was too early,” said military historian Sönke Neitzel, who said German combat operations in Afghanistan were still seen at that time as something that “should never have happened”.

But the pressure continued from former soldiers and the associations that sprang up to take care of them.

Last year, German MPs approved a new plan to celebrate veterans “publicly and visibly” every year on June 15. Defence minister Pistorius described it as a “strong, important and, yes, an overdue signal of recognition and appreciation”.

Opposition to the idea has not disappeared. Die Linke, the far-left party that won 9 per cent of the vote in February’s parliamentary elections, will host a rival event in Berlin on Sunday entitled “We won’t celebrate your wars”.

It said the new veterans day — which comes as military leaders warn they must recruit tens of thousands of extra soldiers in the coming years — is an attempt to “make war palatable” and create “cannon fodder” for the German armed forces. 

Feelings are complex in the eastern states that were part of the communist German Democratic Republic, where there is widespread opposition to Germany’s role as one of Ukraine’s biggest arms suppliers, partly due to the region’s historic ties to Russia.

But Katja Hoyer, a historian and author of Beyond the Wall: East Germany 1949-1990, said there was still broad support for the military and those who have served in it, with east Germans disproportionately represented in the lower ranks of the Bundeswehr.

“The idea of re-arming and building up the Bundeswehr is not a problem for a lot of east Germans,” she said. “There’s a difference between attitudes towards the military in general and this conflict [in Ukraine] in particular.”

The creation of an annual event has been welcomed by veterans themselves, even if some are still cautious.

Thorsten Gärtner, a Bundeswehr master sergeant who served five stints in Afghanistan and has suffered from post-traumatic stress disorder, said he still did not always feel comfortable wearing his uniform on public transport in Berlin. 

“I hope that at some point we will get it right like in other countries, such as the US, where there is a veterans’ ID and a 10 per cent discount everywhere,” he said. “I have my doubts about that. Acceptance is not yet there. It takes a lot of time.”

Barrons : Google Search Is Fading. The Whole Internet Could Go With It.

Google Search Is Fading. The Whole Internet Could Go With It.
The lifeblood of the internet is drying up. What the decline of search means for users, companies, and stocks.

Experience a random pain in the 21st century and an internet search usually comes before a call to the doctor. Googling “chest pain,” “high fever,” or “skin rash” calls up a series of blue links followed by a frenzied trip across the web. A similar pattern plays out, minus some anxiety, for “today’s weather,” “restaurants near me,” and “high-yielding dividend stocks.”

Roughly one in five visits to the world’s top internet sites begin on search engines, according to data from analytics firm Semrush. At Wikipedia, search generates 63% of global visits. For travel site Tripadvisor, it’s 58%; for local review site Yelp, it’s 51%.

But internet search traffic has been falling for much of the past year as web surfers experiment with artificial-intelligence-powered search from OpenAI’s ChatGPT and AI start-up Perplexity AI. So far, referrals from AI search engines have replaced about 10% of the traditional search losses, according to Similarweb data.

Google is pushing back by adding AI-powered summaries to the top of its search results, de-emphasizing its traditional blue links and thereby further reducing search traffic. May could prove to be a tipping point.

Last month, search referrals to top U.S. travel and tourism sites tumbled 20% year over year, according to the latest data from Similarweb. E-commerce companies saw their referrals fall 9%. For news and media sites, search traffic dropped 17%. The finance, lifestyle, and food-and-drink categories all saw similar types of declines on the month.

Across the web economy, the trend is clear: Search is drying up, and Google is no longer the clear-cut way to drive audiences to websites. The changes have begun to force a reckoning across various industries.

Late last month, Business Insider, a leading digital news publication, cut 21% of its staff, citing traffic drops that were “outside of its control.”

“Business models are under pressure, distribution is unstable, and competition for attention is fiercer than ever,” Business Insider CEO Barbara Peng wrote to employees.

Reddit RDDT , the social-media site and source of answers to many random questions, which gets 57% of its visits from search, is making deals with AI firms and rolling out its own AI-driven search engine.

Chegg, a homework-help company, worth $15.1 billion at its peak in 2021, said earlier this year that traffic declines had given it no choice but to explore strategic alternatives, including a possible sale.

On Wall Street, no company has faced greater worries about the future of search than Google itself. Shares of parent Alphabet
GOOGLare down 7% on the year; the company now gets counted as a value stock in some investor benchmarks.

But Google has countermeasures. For one, it has diversified itself into a cloud-computing giant, and it’s a winner in the nascent category of autonomous driving. Google itself is also no slouch in the generative-AI world, with massive resources to build and improve its Gemini large-language models.

Instead, as traditional search fades in importance, it’s the rest of the internet that will suffer.

In May, monthly U.S. search traffic to Schwab.com fell for the first time in at least two years, according to Similarweb, down 14%. A year ago, search referrals to Schwab were up 179%. TripAdvisor’s search tumbled 34% on the month, while Starbucks saw a 41% decline to its website. Search to Netflix, a pioneer in digital strategies, was down 23%.

The traffic conversation has the feel of the 1990s and early aughts before Google arrived and companies were still trying to figure out how to attract audiences across the World Wide Web.

Executives are talking up deals with OpenAI’s ChatGPT, Perplexity, and other AI-driven search tools. “We’re partnering with AI search companies to ensure our brands show up well across customer queries,” said Expedia CEO Ariane Gorin in May, “and building new experiences to connect with travelers outside our ecosystem.”

There’s a long way to go. Based on Similarweb’s U.S. estimates, Expedia got 88,000 referrals from AI search engines in May. It got 34 million referrals from search.

The Google Effect
ChatGPT was something of a novelty when the model made its public debut in November 2022, generating a wave of songs, poems, and essays across the web. But the latest models, which are more sophisticated and promise humanlike reasoning, have spurred a surge of new use. ChatGPT had 500 million weekly active users in March, rising from 300 million in December. Many of them pay $20 a month for service; parent company OpenAI says it reached an annualized revenue run rate of $10 billion this month, up from $5.5 billion at year end.

Another start-up, Perplexity, has taken on Google more directly. “A direct line to the world’s knowledge—compressed, cited, and made clear,” Perplexity says on its about page. “No gimmicks. No fluff. Just answers that make sense.”

As AI pressure mounts on Google, the company has moved to defend its 89% U.S. market share in search. A year ago, it launched so-called AI Overviews atop Google search results, promising condensed AI-generated answers to search queries.

Those overviews, which initially appeared on a small number of searches, have been appearing more frequently. An analysis by research firm Ahrefs said that the prevalence of AI Overviews have more than doubled from March 12 to May 6.

The AI summaries have spurred debate across the internet, with publishers worried about a search query that delivers answers in a few paragraphs, with no need to click for more info. According to Similarweb data from March, searches with AI Overviews resulted in a click 23% of the time. For searches without the overviews, the click rate was 36%.

“Looking at search results that do show an AI answer, comparing that with search results that do not show an answer, we found a crazy drop-off,” said Kevin Indig, a search-engine optimization, or SEO, consultant and author of the Growth Memo blog. “This is a click killer.”

Google told Barron’s that third-party data offer an incomplete picture of search trends.

In February, online education platform Chegg said search trends had crushed its business. CEO Nathan Schultz told investors: “We would not need to review strategic alternatives if Google hadn’t launched AI Overviews, retaining traffic that historically had come to Chegg, materially impacting our acquisitions, revenue, and employees.”

Asked for comment, the company directed Barron’s to a lawsuit it filed in February against Google. It alleges that Google is using its search dominance to “coerce online publishers like Chegg to supply content that Google republishes without permission in AI-generated answers that unfairly compete for the attention of users on the internet.”

Chegg shares have tumbled 99% since 2021.

Google says its AI Overviews have improved the search experience and are being embraced by users. A Google spokesperson says that AI Overviews show more links to a wider range of sources on results pages.

“More than any other company, Google prioritizes sending traffic to the web, and we continue to send billions of clicks to websites every day,” the Google spokesperson told Barron’s.

In April, during Google’s earnings call, an analyst asked company executives about the impact that AI Overviews was having on click-through rates. “I don’t think this is the moment to go into the details of click-through rates and conversion and so on,” said Philipp Schindler, Google’s chief business officer. “But overall, we’re happy with what we’re seeing.”

‘Heavy Construction’
Reddit has become a battle ground and flashpoint in the argument about search’s future. The stock is down 28% so far this year as investors worry about slowing user growth on the social-media site.

It’s a trend the company has attributed to an evolution in search. The company remains a standout in search, and it points out that “Reddit” is the No. 6 searched term on Google. Still, traffic trends have notably shifted in recent months. In May 2024, Reddit’s search referrals soared 78%, according to Similarweb. This past May, searches to the site were up 14%.

Reddit’s daily user growth, meanwhile, has gone from 37% in the first quarter of 2024 to 31% in 2025.

Reddit Chief Operating Officer Jennifer Wong said in an interview with Barron’s that search is under “heavy construction.” Wong is confident about the long-term opportunity for Reddit, noting that its human-generated content will be especially sought after to train the large language models that run AI. Reddit has a deal with OpenAI. For now, that kind of licensing is a small part of the business, accounting for less than 9% of revenue in the most recent quarter.

“Nobody knows how Google is going to cross this canyon and the kind of ripple effects that they’ll have across the internet,” Wong says. “What I do know is that I think human intelligence is still going to be worth a lot, and it’s going to go up and up in value, and I think Reddit is the place for that.”

Wall Street generally agrees. Across 29 analysts covering Reddit, the average price target is $152, 31% above its recent close.

Going forward, investors should pay attention to a company’s search exposure. Across the categories, certain brands are far less dependent on Google’s referrals. Airbnb, for instance, got 14% of referrals from search in March, versus the 58% for travel firm Tripadvisor, according to Semrush. DoorDash and Uber Technologies were 13%. Social-media apps like Pinterest PINS and Meta META Platform’s Instagram also tend to be far less search-dependent than much of the internet. Their sites drew 23% and 17% of referrals from search, respectively.

In May, Pinterest’s CEO told investors that 85% of users come directly to the company’s mobile app.

Hedging Against Search
Meta Platforms, which essentially shares the online advertising pie with Google, is in an enviable position. As search traffic falls and traditional search advertising wanes, businesses will be compelled to advertise on Instagram and Facebook, Meta’s social networks that are insulated from search disruption.

Meanwhile, Meta can use AI to improve ad effectiveness and personalization. As Google defends itself against AI, Meta is free to fully embrace it.

Ultimately, the best hedge against AI disruption is the company empowering it all: Nvidia NVDA. As AI explodes, Nvidia will sell more AI chips and the infrastructure to power data centers. Newer reasoning-focused AI models are particularly profitable for Nvidia because they require 100 times the computing resources compared with prior AI chatbots, Nvidia CEO Jensen Huang told investors on Nvidia’s recent earnings call. “Reasoning models are driving a step-function surge in inference demand,” he said.

From Disrupter to Disrupted
As Google Search comes under threat for the first time in two decades, a U.S. district judge is determining the company’s fate. Judge Amit Mehta ruled in August 2024 that Google was a monopoly in general search services and general text advertising.

Alphabet and its investors are now waiting for the judge to determine potential remedies. A penalty phase of the trial concluded last month, and Mehta is expected to issue a final decision in August.

The timing is notable. Alphabet was ruled a monopoly around the same time that it was pushing out AI Overviews. Less than a year later, search is facing a massive competitive shift as users increasingly embrace chatbots.

Apple’s senior vice president of services, Eddy Cue, testified that searches in Apple browsers fell for the first time in April as people increasingly turned to AI for search queries. Google pays billions of dollars to Apple annually to make its search engine the default option on Apple browsers.

But don’t expect Google’s recent weakness to affect Mehta’s decision.

Antony Haynes, partner at Dorf Nelson & Zauderer, told Barron’s that even though these new competitive threats have become more prevalent since the judge made his ruling, it’s unlikely those threats will affect his decisions regarding remedies.

“We’re not thinking about a remedy for potential future technology changes. We’re looking at what they did in the past,” Haynes said.

That past includes one of the best business models ever created. Last year, Alphabet’s operating margin was 32% versus an aggregate 14% for S&P 500 index companies. Meanwhile, since Alphabet went public in 2004, the stock has returned an annualized 23.7%, versus 10.6% for the S&P 500.

A post-search world will probably weigh on those margins, but Alphabet stock already reflects the next phase. It trades at 17.8 times expected earnings for the next 12 months, below the S&P 500’s 22.5 multiple.

Barron’s has remained bullish on the stock, including in a November 2024 cover story and a follow-up last month.

Google will be fine. It’s the rest of the internet that should be worried.

Barrons : MicroStrategy Insiders Buy $1.3 Million of Preferred Stock

MicroStrategy Insiders Buy $1.3 Million of Preferred Stock

Four MicroStrategy MSTR insiders paid a total of $1.3 million to buy into the company’s latest offering of preferred stock on June 6.

A big holder of Bitcoin BTC00, MicroStrategy offered an 11.75% dividend yield on its new junior preferred shares, priced at $85 each, below the face value of $100. There was strong investor demand at the discounted price, and MicroStrategy sold about 11.8 million shares, raising $980 million after underwriting expenses and other deal fees. The deal had been originally set at 2.5 million shares.

Among insiders, the buying was led by director Jarrod Patten, who paid $425,000 for 5,000 of preferred MicroStrategy shares, according to a form that he filed with the Securities and Exchange Commission. Patten is the CEO of a consulting firm, RRG, and has been on MicroStrategy’s board since 2004.

MicroStrategy didn’t respond to a request to make the insiders available for comment.

President and CEO Phong Le paid $382,500 for 4,500 of the preferred MicroStrategy shares. Le also sold 5,295 common shares on June 6 through a so-called Rule 10b5-1 trading plan for $2 million, or $374.54 each. Insiders use such plans to remove the appearance of bias from the knowledge of nonpublic information. The plans automatically execute trades when preset conditions, such as price, volume, and timing, are met.

General Counsel Wei-Ming Shao paid $299,795 for 3,527 preferred MicroStrategy shares, and his trading plan sold 1,701 common shares for $637,100, an average price of $374.54 each.

Chief Financial Officer Andrew Kang paid $191,250 for 2,250 preferred MicroStrategy shares, and his trading plan sold 1,877 common shares for $703,000, or $374.54 each.

Barrons : These Are the Hottest Bond ETFs This Year—and for Good Reason

These Are the Hottest Bond ETFs This Year—and for Good Reason
Treasury-bill ETFs are rapidly gaining in popularity and challenging money-market funds and bank deposits as a place for retail investors to park cash.

Treasury bills have rarely been more attractive, and exchange-traded funds make owning them easier than ever.

Investors have been warming to Treasury bills—government bonds maturing in less than a year—which offer security and ample yields now above 4%. That yield is roughly double the current 2% inflation rate, one of the wider gaps of the past 20 years. They also yield nearly as much as 10-year Treasuries, at 4.35%, and don’t carry the price risk of the 10-year notes.

Berkshire Hathaway CEO Warren Buffett has long stashed the bulk of the company’s ample cash reserves in Treasury bills because they’re the safest short-term bond investments. Berkshire now holds over $300 billion of Treasury bills, or about 5% of the entire $6 trillion market. Retail investors are also getting in on the act: Noncompetitive bids at Treasury auctions, a reflection of retail demand, are running at about $15 billion a month.

Reflecting the boom in fixed-income exchange-traded funds, Treasury-bill ETFs are rapidly gaining in popularity and challenging money-market funds and bank deposits as a place for retail investors to park cash. T-bill ETFs now hold over $100 billion in assets, but are dwarfed by money-market funds, which have $7 trillion in assets.

The two largest are the $48 billion iShares 0-3 Month Treasury Bond ETF, which launched in 2020, and the $44 billion SPDR Bloomberg 1-3 Month T-Bill (Bill) ETF, which has been around since 2007. Vanguard entered the market in early 2025 with the Vanguard Ultra-Short Treasury
VGUS ETF, which has an annual fee of just 0.07%, against 0.09% for the iShares ETF and 0.14% for the SPDR ETF. They yield in the 4.2% to 4.3% range. The iShares ETF has attracted $18 billion of inflows so far this year, the most of any bond ETF.

Unlike Treasury notes and bonds, which pay semiannual interest and principal at maturity, T-bills are sold at a discount to their face value of $100, or 100 cents on the dollar, and the interest payment is the difference between the purchase price and face value. If an investor buys a three-month T-bill paying 4%, the purchase price would be around $99, with the investor getting $100 at maturity.

Investors can buy Treasury bills directly through the Treasury.gov website. The government sells four-week, eight-week, 13-week, 17-week, and 26-week Treasury bills at the weekly auctions. The 52-week bill is auctioned every month. With a noncompetitive bid, investors agree to accept the average yield set by institutional holders. There is a limit of $10 million of noncompetitive bids per auction—enough to cover nearly all investors.

Investors can also participate in T-bill and other Treasury debt auctions through banks and brokers. At Fidelity, there is no charge for retail investors to place noncompetitive bids online, and the firm offers an “auto roll” feature that allows investors to automatically reinvest the proceeds of maturing T-bills in new securities.

The T-bill ETFs, however, offer advantages over buying direct, including simplicity, a diversified pool of securities, monthly income, and ready liquidity on the NYSE or Nasdaq. One benefit over money-market funds is taxes. Interest on T-bills is exempt from state and local taxes, a nice plus for investors in states like New York and California where income-tax rates can top 10%. CD interest is subject to state and local taxes, as is much or all income from money funds, including many popular “government” funds.

In fact, some big government money-market funds, including the $399 billion Fidelity Government Money Market fund and $354 billion Vanguard Federal Money Market fund, don’t hold a lot of actual U.S. Treasuries. The Fidelity money fund, for instance, has over half its assets in repurchase agreements, which are short-term loans secured by Treasuries or federal agency securities. Repos, as they are known, are very safe, but they’re not Treasuries and interest on them isn’t exempt from state and local taxes.

And then there are fees. While the T-bill ETFs have fees of about 0.1% annually, the Fidelity Government Money Market fund charges 0.42% for the largest class shares, while the $369 billion Schwab Prime Advantage Money fund charges 0.34%. The Vanguard Federal Money Market fund charges only 0.11% annually.

The fee gap can be significant. For someone with $1 million, a T-bill ETF would offer $2,000 to $3,000 in added income a year plus tax benefits for those in high-tax states depending on the money fund share class.

Unlike money-market funds, which are sold at a fixed price of $1, T-bill ETFs trade like stocks on an exchange. Their prices rise each month as the underlying T-bills accrete interest and then drop when they pay monthly dividends. This can result in small gains or losses when they are sold. Still, they are very liquid—the iShares and SPDR ETFs trade with penny spreads between bid and ask prices and have $1 billion of average daily volume. “You can do huge trades of $200 million to $300 million with tight execution,” says Dhruv Nagrath, director of fixed-income strategy at BlackRock.

The biggest risk might be one that every T-bill owner faces, regardless of whether they use money-market funds, the ETFs, or actual securities: lower interest rates. That would force investors to reinvest their money at lower rates. T-bill rates are already down a percentage point in the past year, and the markets are now anticipating another half-point cut by year-end.

That would still leave T-bill rates at nearly 4%, and Matthew Bartolini, head of ETF research at State Street Advisors, which manages the SPDR fund, doesn’t expect them to fall dramatically. And with the Federal Reserve in wait-and-see mode, they could be higher for longer.

It’s a great time for “T-bill and chill,” and ETFs are an ideal way to do it.