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Technology is being used to ‘clear the decks for human moments’

Speak to recruiters about what makes their job truly worthwhile, and many talk about the satisfaction of knowing they have paired the right candidate with the right job, leaving everyone happy.

But in the AI era, finding that perfect connection is proving challenging. Against the backdrop of a cooling labour market, the ease of making applications — from putting together a CV to optimising a cover letter to meet specific criteria — has fuelled what Daniel Chait, chief executive of hiring platform Greenhouse, calls an “AI doom loop”.

Companies are being inundated with applications — recent research from Greenhouse found applications per job have more than doubled since 2022 — but are constrained in their ability to distinguish between high-quality candidates and AI slop. “There’s less and less signal,” he says.

Candidates, meanwhile, face the challenge of trying to tailor their applications to meet the (often opaque) requirements of the AI-driven filtering tools being used by the recruiters.

Despite the difficulties, recruiters say the use of AI has several advantages. Bryan Ackermann, head of AI strategy at recruitment firm Korn Ferry, says automating the mechanics of recruitment is essential to “clear the decks for those human moments” — when the recruiter lands on the most promising candidate. However he adds that “we are not believers that AI is going to take [the whole process] from first touch to the first day”.

Scott McGuckin, vice-president of global talent acquisition at US tech group Cisco, claims AI has had a “transformative effect” on his team, “free[ing] up time for more strategic and creative work, and enabl[ing] recruiters to better support the business.”

While large language models have been used to match candidates with job openings for several years, generative AI has further enhanced the process for some recruiters. Korn Ferry uses the technology to gather industry information and create long lists of candidates. Recruitment agency Robert Half has developed its own tool called AI Recommended Talent to produce shortlists, which it says are very successful at highlighting promising candidates. Its other generative AI tool, AI Recommended Clients, is used to bring newly registered candidates to market.

Many organisations are using AI from the very start of the hiring process, often to write job descriptions or create assessments, according to a survey from BCG.

Recruiters at Cisco, for instance, use the company’s internal AI tool CircuIT to generate first drafts of job descriptions and receive recommendations on assessment processes based on the requirements of the role for which they are hiring.

Once the applications are in, hiring teams are using AI to filter the candidates. British supercar maker McLaren, for example, introduced Microsoft tools in September to support screening for its graduate scheme. “With more than 21,000 applications received, it was essential to adopt an efficient and consistent approach to streamline the initial selection,” the company says.

And after the initial application stage, AI is increasingly being used in interviews. Eightfold, which develops AI tools for recruiters, rolled out AI Interviewer last year, an agent that conducts technical interviews to supplement knockout-stage interviews conducted by humans.

Staffing company Randstad launched its own AI chatbots to conduct screening interviews last year — it runs one in India that can communicate with local talent in the country’s 30-plus languages.

There is a limit to the extent to which AI can feature in the recruitment process — the EU AI Act ensures the technology cannot be used to make hiring decisions, for example.

But legislation aside, many believe in the fundamental value of human judgement. “No AI model can find personality,” says Matt Weston, senior managing director for the UK and Ireland at Robert Half. “You’ve got to take the skill sets and qualifications and marry [them] up with the human aspect. That’s what defines a truly successful placement.”

Indeed, executive-level recruiters, who are less likely to face issues of volume, maintain a largely human process. Paul Blant, chief executive of London-based Finatal, which specialises in C-suite hiring across private equity-backed industries, describes recruitment for them as “a 95 per cent human judgement kind of process”.

Martin de Weerdt, chief information officer at Randstad, believes AI is an opportunity to “re-personalise” recruitment. The company uses AI to stay in touch with people on its database and facilitate meaningful conversation between recruiters and candidates. “Staffing companies can now show an interest again at a scale that would have been humanly impossible.”

Chait of Greenhouse, however, thinks the impact of AI over the long term could be far more radical. “With AI, [hiring] is open for total re-imagination,” he says. “What shows up at the front door of a company doesn’t have to be a résumé . . . but your job-seeking agent that knows you, where you’ve worked and what you’re interested in doing next.” Likewise, on the company side, “it’s an agent . . . it’ll know for this opening, what are the important criteria? Who’d be great at this job?”

He adds: “You’ve got this future where you have agentic candidates and agentic hiring managers trying to find each other and tell each other a story with human beings at the centre of it.”

Investors are using the technology to analyse documents but are holding it back from more sensitive tasks

When a merger announcement hits the wires, Sand Grove Capital Management has to be ready to act quickly. The hedge fund makes money from investing around big, corporate events such as M&A deals and is competing with others who do the same. 

Traditionally, reading through the complex, lengthy deal documents — which often stretch to over 100 pages — would take an investment professional over an hour. Even a quick review would take 15 to 20 minutes. But the use of AI has now reduced the process to seconds. 

“We think of AI as a very fast, very thorough intern who is brilliant at analysing big datasets,” says Daniel Caplan, chief executive of London-based Sand Grove. 

“In the first minute, you can get a good breakdown of what’s in it,” adds Caplan, whose firm uses Anthropic’s Claude, Microsoft Copilot and OpenAI’s ChatGPT. It finds Claude particularly useful for legal documents.

Sand Grove is just one of the hedge funds that is increasingly keen to reap the potential speed and productivity benefits offered by AI. But many remain wary of the risks of giving the fast-emerging technology too much access to their trading systems, internal data or cyber security arrangements.

While many computer-driven hedge funds have been pushing the boundaries of quantitative techniques, including machine learning and artificial intelligence, for years, other firms are newer to this world.

Last year, the Alternative Investment Management Association (AIMA), an industry body, found in a survey of hedge funds managing a total of around $788bn that 95 per cent of respondents were using AI, with 75 per cent saying they were using it more than before. ChatGPT and Copilot were the most popular tools.

The most frequent uses of AI were for general research, analysing and summarising documents, and providing summaries and minutes of meetings.

“At the moment there’s a high level of European deal flow,” says Caplan. “AI has definitely helped compress the time between an announcement and us initiating a view.” 

The survey also found that 58 per cent of respondents expected to use AI more in their investment process over the coming year, up from 20 per cent in 2023.

“AI is increasingly being embedded across the internal value chain, particularly in areas like processing company filings, summarising complex legal documents and structuring large volumes of data,” says Wilson Chan, founder and chief executive of UK-based Permutable AI, which provides AI-driven financial market data.

“The most immediate gains have been in automating workflows typically handled by junior to mid-level staff, as well as enabling much broader scanning of potential alpha [returns in excess of a benchmark index] opportunities,” he adds. 

Pharo Management, an emerging markets-focused firm managing around $8.3bn in assets, is treating AI “as a strategic priority”, says Negar Laing, a director at the firm.

It is exploring ways to use the technology, for instance, to process information to help support portfolio managers, in software development or in its back office — the part of a hedge fund firm that performs tasks such as trade settlement and fund accounting, which proponents of AI believe can be automated.

Renaud Saleur, a former trader at Soros Fund Management who now runs Geneva-based hedge fund firm Anaconda Invest, says he uses Claude to write investment reports for clients and also to screen companies’ financial ratios.

But many funds remain wary of giving AI too much access or control of their internal systems or trading. The recent revelation that Anthropic’s new Mythos AI model broke out of a secure digital environment to contact a company researcher and publicly post details of software glitches online will only increase that caution.

AIMA’s survey found the top two risks that hedge funds saw from using generative AI were hallucinations — instances in which the system generates false content — cited by 64 per cent of respondents, and data security and privacy, cited by 83 per cent. Only 5 per cent of funds used AI for cyber security, while even fewer used it for finance and accounting or optimising their portfolios.

Odi Lahav, chief operating officer at consultancy Bfinance, sees potential for AI in accurately summarising documents. He says AI’s accuracy is getting “better and better” and that he has not seen a hallucination for a couple of months.

But he adds that nothing leaves his firm without being reviewed and signed off by an investment professional.

“You can ask the model to interpret [documents or data] and give its views, but [taking an investment decision] is best left to an experienced professional,” he says. “You can’t rely on it completely.”

Neither Anaconda nor Pharo use AI to select the securities the firm trades, for instance.

“Having a judgment layer that sits above AI is still very important,” says Sand Grove’s Caplan. “I can’t see how that human element will change, even in the long term.”

America’s top-selling vehicle, the Ford F-150, bears the brunt of metal-supply-chain woes

For Texas Ford dealer Sam Pack, the F-150 and Super Duty trucks aren’t just important vehicles—he says they are the “foundation” of his business. That is why Pack, who owns four stores in the Dallas-Fort Worth area, is a little nervous right now.

Pack’s truck supply is limited because of a shortage of aluminum that is roiling the entire auto industry. He has about 42 days’ worth of F-150 inventory, down from the 60 days he normally maintains. “We’d love to have more,” he said.

Pack worries about having enough trucks for the busy summer season. “The real critical period is going to be the next 90 days,” he said.

The trucks are in short supply because aluminum, the metal used to make their bodies, is in short supply—and sharply more expensive than in years past. Aluminum has become a key commodity for automakers looking to boost the fuel economy and efficiency of their vehicles with a metal that is lighter than steel and doesn’t sacrifice strength.

The auto industry in North America consumed 3.7 million metric tons of aluminum last year, nearly 30% more than in 2020, according to metals-market consulting firm CRU.

Lately, however, higher aluminum prices from the Iran war, a 50% U.S. tariff and a production outage by a major supplier have strained automakers.

“The cost of metals, specifically aluminum, has been a big focus for us,” RJ Scaringe, chief executive of electric-vehicle maker Rivian Automotive, said on an earnings call last week.

The U.S. cost of primary aluminum from smelters is nearly 90% higher than a year ago. The war in Iran is driving up prices by effectively choking off shipments from the Persian Gulf countries, which supply about one-fifth of the aluminum consumed in the U.S.

The U.S. aluminum industry is also heavily dependent on imported primary aluminum, mostly from Canada, but automakers and other buyers pay the tariff no matter where the metal comes from. With the global aluminum price at about $3,500 a metric ton, the tariff and delivery-related charges raise the U.S. price to $6,100, compared with $3,220 paid a year ago, according to S&P Global Energy.

The pain is especially acute at Ford. The Dearborn, Mich.-based automaker switched the F-150—America’s bestselling vehicle—to an aluminum exterior body from steel in 2014.

At the time, Ford Motor F -1.66%decrease; red down pointing triangle and other automakers faced ever-stricter federal fuel-economy regulations. Coupled with smaller, more efficient engines, the aluminum F-150 delivered between 5% and 29% better fuel economy than the previous model. In the process, Ford became the auto industry’s biggest aluminum buyer.

A decade later, that has become a liability for Ford, compounded by multiple fires last fall at its main aluminum supplier in upstate New York. Shutdowns at the plant, which is operated by Atlanta-based Novelis, hit Ford’s bottom line hard, reducing adjusted profit last year by $2 billion.

Ford executives said on an earnings call this past week that the company has doubled its expected commodity costs from $1 billion this year to $2 billion, largely because of rising aluminum costs.

Ford sold about 160,000 F-Series trucks in the first quarter of this year, down from 190,000 the same period last year, according to Motor Intelligence.

The company said it expects to build an additional 150,000 trucks this year over 2025’s reduced volume to make up for the aluminum plant outage.

“Ford has a much larger exposure to aluminum costs than anybody else,” said Sam Fiorani, vice president of consulting firm AutoForecast Solutions.

Ford said last week that it expects the aluminum rolling line at the Oswego, N.Y., plant to restart this month, although Novelis had earlier set a late June target. Whenever production resumes, it will be gradual and won’t replenish supplies right away.

“If we have any hiccups, we have contingency plans,” Ford’s Chief Operating Officer Kumar Galhotra told industry analysts last week. “We have additional aluminum supply to ensure our plant production schedules aren’t interrupted.”

Ford recently asked the Trump administration to waive the 50% tariff on imported aluminum until the Oswego plant returns to full service, according to people with knowledge of the conversations. So far, administration officials haven’t budged.

The head of the U.S.’s largest supplier of automotive steel suggested in April that the situation is causing automakers to rethink their dependence on aluminum. “I have never seen so much momentum in substituting aluminum for steel,” said Lourenco Goncalves, chief executive of steelmaker Cleveland-Cliffs.

Yet even as automakers no longer face the strict fuel-economy rules they did in the Biden years, others say there is no evidence of a widespread move back to steel. “I don’t believe you’re going to see it,” said Mark Millett, chief executive of Steel Dynamics, which also supplies the auto industry with aluminum.

Millett said the cost of engineering and retooling the equipment that makes aluminum components to produce steel parts instead would be expensive and time-consuming.

Analyst Fiorani agreed, especially in Ford’s case. “They built that vehicle around aluminum. It’s going to be very difficult to change its body structure,” he said.

CEO Ryan Cohen tells The Wall Street Journal he wants to make eBay a ‘legit competitor to Amazon’

GameStop GME 6.33%increase; green up pointing triangle Chief Executive Ryan Cohen made an unsolicited offer to buy eBay EBAY 0.57%increase; green up pointing triangle for about $56 billion and said he saw a path to make the e-commerce company a much bigger competitor to Amazon.com AMZN 1.21%increase; green up pointing triangle.

Cohen told The Wall Street Journal on Sunday that GameStop built a roughly 5% stake in eBay and was offering $125 a share in cash and stock, a roughly 20% premium to its closing price on Friday.

“EBay should be worth—and will be worth—a lot more money,” Cohen said in an interview. “I’m thinking about turning eBay into something worth hundreds of billions of dollars.”

Cohen said GameStop has a commitment letter from TD Bank to provide up to $20 billion in debt financing to help make a deal possible.

GameStop delivered an offer letter to eBay on Sunday and released a copy of it following the Journal’s report on the details of the bid. Cohen wrote in the letter to eBay Chairman Paul Pressler that GameStop started building its eBay position on Feb. 4. It said its offer consists of 50% cash and 50% GameStop shares.

If eBay isn’t receptive to the proposal, Cohen said he was prepared to run a proxy fight and take the offer directly to its shareholders. The window for shareholders to nominate director candidates at eBay ahead of an annual meeting scheduled for this June has already closed, according to the company’s proxy materials.

Cohen told the Journal that putting his videogame retailer and eBay under one roof could create opportunities to cut costs and improve earnings. The two companies have some overlap already, including a focus on selling collectibles such as trading cards.

“There is nobody who is more qualified, based on my experience, to run the eBay business,” Cohen said, referencing his time at GameStop and previously Chewy, the online pet-products marketplace he co-founded.

The Journal reported Friday evening that GameStop had been building an undisclosed stake in eBay and was preparing an offer.

EBay was valued at around $46 billion ahead of that report. Its shares shot up around 12% in after-hours trading on the news.

GameStop is a much smaller company than eBay, valued at around $12 billion. That makes pulling off this sort of deal no easy feat.

GameStop has around $9 billion in cash on its balance sheet to put toward a deal. It wasn’t immediately clear how it would come up with the rest of the money needed for a $56 billion acquisition. It is possible Cohen could tap outside investors, such as Middle Eastern sovereign-wealth funds, to back the deal, people familiar with the matter said.

Some Wall Street analysts are already skeptical that Cohen could pull off an acquisition. Investors have embraced eBay’s focus on collectibles and other niche categories. “Why disrupt things? The turnaround is working,” Bernstein analysts said about eBay in a note to clients.

Cohen built a big stake in GameStop in 2020 and criticized the company for moving too slowly toward e-commerce. He started gaining a cultlike following among retail traders online and proceeded to make a number of other activist bets, including at Bed Bath & Beyond.

GameStop gained even greater fame during the meme-stock craze of 2021, in which individual traders bid up the retailer’s stock. In 2023, the company named Cohen, who was already serving as chairman, as its new CEO.

Under Cohen’s watch, GameStop has closed hundreds of stores and exited much of its international business. It has pivoted toward higher-margin items such as trading cards, retro games and consoles that strike a nostalgic chord with shoppers.

Cohen said he saw ways to integrate GameStop’s bricks-and-mortar stores with eBay’s online operations to help scale both companies.

The stores could become locations to collect and authenticate items from eBay sellers, for example, he said. He also said he believed eBay should be doing more around live commerce, where brands sell directly to shoppers via real-time video streams.

“It could be a legit competitor to Amazon,” Cohen said about eBay.

EBay has already been taking steps to cut costs, with a strategy that includes embracing artificial-intelligence tools to help streamline its buying and selling processes. In February, the company said it would be culling about 6.5% of its global workforce, or roughly 800 employees.

Late last month, eBay reported strong first-quarter results and said that its gross merchandise volume—or the total value of all paid transactions between users on its marketplace—climbed 18% versus the prior-year period.

Smaller companies have pulled off much larger deals before. Paramount Skydance earlier this year emerged victorious in a bidding war for media Warner Bros. Discovery. Charter Communications struck a debt-fueled merger with the much bigger Time Warner Cable in 2015.

Cohen also has a potentially massive payday at stake if he can pull it all off. GameStop adjusted Cohen’s compensation package at the beginning of the year to give him extra incentive to boost the company’s market value and profitability. He stands to make as much as $35 billion in stock if certain criteria are met, including if its market value hits $100 billion, the Journal previously reported.

Cohen said in the letter to eBay that he would serve as CEO of the combined company after a deal closes. He said he wouldn’t receive a salary and would be compensated solely based on the performance of the combined business.

“I’m going to be as focused on eBay and as personally involved as I have been in the GameStop turnaround for the next few years,” Cohen told the Journal.

GameStop is being advised by the law firm White & Case and bankers at TD Securities.

Anthropic, Blackstone and Hellman & Friedman each expected to invest around $300 million; Goldman Sachs also an investor

Anthropic is finalizing a deal to create a new joint venture with Blackstone BX 0.61%increase; green up pointing triangle, Goldman Sachs GS -0.01%decrease; red down pointing triangle and a handful of other Wall Street firms that aims to sell artificial-intelligence tools to private-equity backed companies, according to people familiar with the matter.

The details

An announcement is expected as soon as Monday, the people said.

Anthropic, Blackstone and Hellman & Friedman are anchoring the deal and are each expected to invest roughly $300 million, the people added.

Goldman Sachs GS -0.01%decrease; red down pointing triangle is also set to be a founding investor, putting in around $150 million, the people said. General Atlantic and other firms are also involved in the deal. All told, about $1.5 billion is expected to be committed, the people said.

The Wall Street Journal reported last month that Anthropic was planning its own investment to back the project.

The investors aim to create a company that acts as a consulting arm for Anthropic and helps teach businesses—including the private-equity firms’ portfolio companies—how to incorporate AI across their operations.

The context

OpenAI has also been in talks to form a rival joint venture with private-equity firms that spreads adoption of its own AI tools.

Both AI juggernauts are focusing their efforts on selling AI tools to businesses and see those backed by private-equity firms as a prime target, given that many are already focused on improving efficiency and cutting costs. Anthropic is widely seen as the industry leader in the enterprise market, though OpenAI is working hard to catch up.

Anthropic is eyeing a public listing that could take place as soon as this year. The company’s revenue skyrocketed in recent months thanks to the success of its coding tool, Claude Code.

News Corp, owner of The Wall Street Journal, has a content-licensing partnership with OpenAI.

Opera houses, museums and Venice Biennale roiled by rightwing government’s bid to control the arts

As culture wars go, little beats Venice’s opera house La Fenice, where the orchestra rebelled for months against a new musical director seemingly chosen for her political affinity with Prime Minister Giorgia Meloni.

The dispute recently came to a head when Beatrice Venezi told an Argentine newspaper that the orchestra itself was a hotbed of nepotism “where positions are practically passed down from father to son”. Within days, she was sacked for denigrating the prestigious theatre.

While the termination of Venezi’s contract brought curtains down on that drama, the conflict was just one in a series of controversies that have blighted Meloni’s right-wing government quest to put its stamp on Italy’s cultural life.

“They seem to be stumbling from one error to another,” said Marianna Griffini, author of The Politics of Memory in the Italian Populist Radical Right. “What they refer to in terms of culture is Lord of the Rings. How do you then translate that obsession with Lord of the Rings into policymaking?”  

Since taking power in late 2022, Meloni has pushed for the government to exert stronger influence over prestigious cultural institutions such as theatres and museums, which she had complained had been dominated by “the left”.

While at a more modest scale, her moves echo the culture wars waged by Donald Trump, as the US president seeks to reshape arts institutions such as the Kennedy Centre to fit his taste.

The Meloni government is in “a fight to appoint their own people — to show that they have good right-wing intellectuals or artists”, said Andrea Mammone, a professor of politics at La Sapienza University.

Andrea Estero, president of Italy’s National Association of Music Critics and editor of the monthly journal Classic Voice, said the prime minister and her allies “think culture is strategic”, and have an impulse to “centralise control of culture in general”.

Yet many appointments have backfired, generating controversy, even legal battles, leaving opera houses and museums in turmoil and creating major embarrassments for Meloni. 

“It’s obvious there is a fundamental lack of professional expertise in these politically motivated appointments,” said one arts professional, who asked not to be identified. “If you put somebody with no experience in charge of a major cultural institution, things go wrong.”  

The Venice Biennale, the prestigious international art fair, opens this week amid fury in the EU over the decision to allow Russia back despite its ongoing war in Ukraine. The pavilion is curated by two daughters of top lieutenants of Russian President Vladimir Putin.

The biennale’s president, Pietrangelo Buttafuoco — appointed by Meloni’s government in 2024 — has defied pressure, including from Rome, to reverse course on Russia’s participation.

Brussels has cut €2mn in funding to the biennale organisers over Moscow’s participation. But Buttafuoco dug in his heels, citing a desire to oppose “exclusion or censorship in any form” and billing the fair as a “place of openness, dialogue and artistic freedom”. 

Such is the embarrassment for Meloni, who strongly supports Ukraine, that her culture minister, Alessandro Giuli, is skipping the opening. The international jury appointed to select the winners of the fair’s art prizes resigned on Friday.

“It’s an internal culture war,” Griffini said of the stand-off. “They are facing tensions between their own far-right intellectuals and the more pragmatic necessities imposed when you are in government.” 

When it comes to their own aesthetic tastes, Meloni and her political allies veer distinctively towards popular culture — with strong emphasis on pop. 

In 2023, the government held an exhibition at the National Gallery of Modern and Contemporary Art dedicated to British writer JRR Tolkien and his Lord of the Rings fantasy epic — a longtime inspiration for Italy’s far-right. Displayed items included a pinball machine, costumes from the film, book covers and fan art.   

Opera is another strong focus, as it is a genre born in Italy that spread across Europe. But Estero said Rome wants Italy’s opera houses to prioritise a handful of popular “best-sellers” from the “Italian traditional repertoire”, rather than to experiment and evolve as a living culture.

“They focus heavily on tradition — traditional composers — Verdi, Bellini, Puccini and so on,” he said. “Their strategy is to focus on a sort of museum of this legacy: these great composers of these great operas.”

Shortly after coming to power, the government imposed a new maximum age of 70 years for any foreign citizens directing one of Italy’s 13 state-run opera companies. It used the new age rule as a pretext to remove famed French director Stéphane Lissner from Naples’ Teatro San Carlo, where he had won accolades for his innovative stagings and recruitment of major stars.

Lissner — who previously directed Milan’s La Scala and the Paris Opera — successfully challenged his ousting in court. When he finally bowed out last year at the end of his five-year contract, he complained of “too much politics in the theatre”.

Prosecutors are now investigating Lissner, his team and opera stars they hired over allegations that singers were overpaid in violation of Italian rules. Lissner and his team said they could not comment while the probe is ongoing.

German opera tenor Jonas Kaufmann said he was “surprised” to learn from Italian media that he was under investigation. “It is only correct that the allocation of public funds is carefully scrutinised,” he said in a statement, adding: “I have met my contractual obligations in full.” 

In Venice, La Fenice will be seeking a new musical director while Venezi describes herself as a victim of a “hate campaign”.

Estero says her appointment process was so unusual that it was impossible for musicians to accept: “It was a political appointment for a job that cannot tolerate political appointments,” he said. “Artistic choices must be made for musical reasons.”

UAE fertiliser giant resorts to trucks to shift product out of Gulf

Abu Dhabi’s Fertiglobe switches to land cargo to avoid Strait of Hormuz as soaring prices allow it to shoulder extra costs

One of the world’s leading fertiliser companies is trucking cargoes out of the Gulf as surging prices outweigh the steep costs of bypassing the Strait of Hormuz, which remains virtually blocked two months after the US and Israel launched their war on Iran.

Ahmed El-Hoshy, chief executive of Abu Dhabi-listed Fertiglobe, said the state-backed group was running its plants in the United Arab Emirates at full capacity and transporting fertiliser by land to ports outside the strait, bypassing the chokepoint before loading it on to ships.

The workaround involved “double handling” of cargo and higher transport costs, he added, but remained economically viable because of the soaring price.

“As long as we can get through the logistical bottlenecks, the pricing more than compensates,” El-Hoshy said. “The market is screaming for product.”

The virtual closure of the Strait of Hormuz, which before the conflict handled up to a third of global nitrogen fertiliser exports, has squeezed supply, while reduced gas flows have curtailed production elsewhere.

Prices of urea, the world’s most widely used nitrogen fertiliser, have almost doubled since the start of the war, according to CRU, a research and data group focused on commodities.

The measures adopted by Fertiglobe, which is majority owned by Abu Dhabi’s state energy group Adnoc, underline how companies are improvising to cope with disruption to one of the world’s most important shipping routes.

Saudi Aramco, the world’s biggest oil producer, has rerouted some of its output via pipeline to the Red Sea so it can be exported without having to transit the Strait of Hormuz, while some Middle Eastern retailers are resorting to air freight to keep their shelves stocked.

While production has remained strong, logistics has become the main constraint, according to El-Hoshy. With shipments moving “nowhere close” to normal levels and some sales deferred, the company is closely monitoring its storage capacity.

“We have storage on site, we have storage at other ports that are outside of the Strait of Hormuz, we have floating storage,” El-Hoshy said, adding that Fertiglobe had “more than one” cargo vessel loaded and waiting in the water, ready to sail once routes reopen.

He said Fertiglobe was “looking several weeks ahead” and, for now, saw no impediment to running plants at full rates, as storage and alternative export routes were still absorbing output and giving it “a bit more of a runway”.

But he warned that this buffer would shrink if bottlenecks persisted.

The company’s geographically diversified footprint has helped cushion the impact of the crisis. Only about 30-35 per cent of its production is based in the UAE, with the remainder in north Africa, including Egypt and Algeria, a structure that was proving advantageous compared with Gulf-only producers, El-Hoshy said.

Fertiglobe last week reported strong first-quarter results, with earnings boosted by higher prices and improved operational performance. Adjusted earnings before interest, tax, depreciation and amortisation were up 31 per cent on a year earlier to $342mn, while adjusted net profit rose 98 per cent to $145mn.

Roughly two-thirds of the first‑quarter uplift came before the recent surge in prices, according to El-Hoshy, while some of the gains from higher prices may only be reflected in coming quarters, as sales are deferred and pricing effects flow through with a lag. “You don’t get the full benefit immediately,” he said.

The company is also benefiting from a reduction in its UAE tax rate from a flat rate of 25 per cent to 15 per cent on the first $100mn of profits and 20 per cent above that, bringing it more in line with regional peers and supporting cash generation.

However, El-Hoshy cautioned that the current dynamics may not be sustainable if disruption persisted, saying prolonged disruption could have broader knock-on effects across supply chains.

He also noted that while companies such as Fertiglobe were benefiting from high prices, the same dynamics were “highly concerning” for farmers and could ultimately feed through into higher food prices if disruption persisted.

Fund managers are planning strategies for raising cash to grab shares of Elon Musk’s space company when they debut.

A jet painted with SpaceX logos ferried nearly 200 investors from the largest Wall Street funds from Newark, N.J., to the southern tip of Texas a week and a half ago for a multiday presentation from executives. The airplane was so full it couldn’t fit everyone who wanted to get on, said an investor on the trip.

The massive initial public offering for Elon Musk’s rocket-and-AI company, still more than a month away, has investors debating what to sell to make room for SpaceX shares. While they think about data centers in space, model a potential $1.5 trillion valuation and gawk at SpaceX’s enormous financial losses after it bought xAI, they are also making plans to raise cash to buy into the offering. Investors at some of the world’s largest mutual funds have said they are considering trimming stakes in other tech stocks to free up cash to buy SpaceX shares.

Some investors say the most likely stocks to sell are the Magnificent 7—Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. The group struggled this year but several of the stocks have rebounded strongly. The Bloomberg Magnificent 7 Total Return Index, an equity benchmark that tracks the stocks, rose 14% in April and is up 2% this year, while the broader S&P 500 is up 5.4%, bolstered by strong gains in energy and industrial sectors.

SpaceX would likely enter the public markets as one of the top 10 most valuable companies in the world, creating a cascade of proactive decisions for fund managers. First they need to decide how much of SpaceX they want, and then how much they think they will be able to buy in the offering. Whatever the number, they’ll need to use their available cash or sell stocks to raise the cash. Finally, they’ll need to balance their portfolios once the new stock is added.

The decision about what to sell is significant: Nearly all of the largest tech stocks print mounds of cash, with steady growth trajectories. SpaceX, meanwhile, amassed a $4.9 billion net loss and burned cash last year, with its growth tied largely to developing the world’s most powerful rocket—a project that isn’t yet commercially viable.

T. Rowe Price’s Tony Wang, who runs the mutual fund giant’s $12 billion science and technology fund, said he thinks about the choice of what to buy and sell in the SpaceX IPO “in the context of the Mag 7” and “what has the biggest risk-adjusted return.”

Wang, whose largest holdings are Apple, Nvidia and Broadcom, didn’t want to show his cards on what he’ll buy and sell in the coming weeks. But he said other managers would likely cut from large companies like those because they are so liquid.

Other managers have also discussed trimming small stakes in industries SpaceX directly competes with, such as traditional aerospace and defense names, according to some of them. They say selling of tech stocks could be limited, insulating the market from a big downturn.

Another reason for portfolio managers to trim Magnificent 7 stocks to buy SpaceX is rules about how concentrated funds are in specific sectors. Tech stocks account for about two-thirds of the holdings of large-company growth funds, for example, and SpaceX would push that number higher. Some funds will have to choose which existing holding to sell down if they want to add SpaceX. Potential early entry by SpaceX into major stock indexes means that index funds, and the funds that closely track the indexes, will also be buying the stock and might have to adjust their holdings of other stocks.

Fund managers that are seeing new money come in from investors will have an easier time accumulating cash to buy SpaceX. But investors have been shunning actively managed funds and instead pouring cash into index funds, which won’t buy SpaceX until it is admitted into the indexes they track. Active managers of funds that are losing assets are already selling stock to meet investor redemptions. If they want to buy SpaceX, they’ll be under even more pressure to sell.

And then there’s the overlap between Musk’s other company, Tesla, which is owned heavily by both retail investors and Wall Street funds. Ross Gerber, who manages a $4 billion fund at Gerber Kawasaki Wealth & Investment Management, said the SpaceX IPO would cause people to sell their Tesla stock. Shares in Musk’s electric vehicle company have already fallen 11% this year due to disappointment over EV sales.

“Many of the Tesla investors want to own SpaceX, and they’re going to sell their Tesla stock or some of their Tesla stock to buy SpaceX,” Gerber said on The Information’s TITV last month.

Such sales aren’t likely to happen until a couple weeks before the IPO. A Goldman Sachs report last week said U.S. mutual funds have held more of their money in cash ahead of major IPOs in the past, but they hadn’t done so yet this year. But the bank cautioned that large IPOs don’t usually affect the performance of big company stocks.

Another criteria for selling is tax-loss harvesting, where funds sell their losers to offset gains for tax purposes. Big tech stocks that have fallen recently, such as Microsoft, would be prime targets for selling. Stock in the software giant has fallen about 25% since an October high.

Strong demand from public market investors could benefit existing SpaceX shareholders, who are expected to get some early opportunities to sell shares, ahead of a typical six-month lockup period, although it is not clear when and how much investors will be allowed to sell.

Gerber added in an email that he already owns some SpaceX shares and plans to sell some as soon as he is allowed after the IPO. He thinks the company should be valued lower than its current $1.25 trillion private valuation. “I’ll let the market figure that out. For now I’d love to get out some of the money that I have in SpaceX that’s been locked up for five years or so,” he said.