Last week, the stock market rebounded strongly due to mega-cap earnings even amid an alarming inflation report — Dow Jones rose 0.7%, S&P 500 gained 2.7%, Nasdaq advanced 4.2%. Rubrik rose 16% in its trading debut after the cloud and data security startup backed by Microsoft topped its fundraising goal with a US$752 million IPO. Vista Equity Partners-backed automotive data and software services provider Solera is weighing an IPO that may raise over US$1 billion. Traders who bet against the “Magnificent 7” group of big U.S. tech stocks booked their biggest-ever weekly profit of more than US$10 billion last week, with the biggest gains coming from their short position in shares of Nvidia and Tesla. Thoma Bravo will buy UK-listed Darktrace for £4.3 billion. IBM has agreed to buy Hashicorp, for US$6.4 billion in cash to strengthen its position in cloud computing and AI. Alphabet shares rose as much as 13% in after-hours trading after the company reported 15% higher revenues in the first quarter—stronger growth than analysts had anticipated—and announced it would begin paying a dividend. Meta plunged 16% on weak guidance even though Q1 results beat estimates. Tesla shares jumped 13% after Musk says the company aims to start production of an affordable new EV by early 2025. President Joe Biden signed into law a foreign aid package that includes a requirement that TikTok cut ties with its Chinese owner ByteDance or face a ban. TikTok has about a year to find a new owner, under the law. In Canada, Sophic Client Kraken Robotics gained access to over $100 million in liquidity via a bought deal equity offering and new expanded bank credit facilities in order to fund growth. Sophic Clients Xcyte Digital, OneSoft Solutions, UGE, ADM Endeavors will be presenting at the Planet MicroCap Showcase next week and will also host 1×1 investor meetings.

Canadian Technology Capital Markets & Company News

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) announces $17.5 million bought deal public offering.

Kraken Robotics Inc. announces that it has entered into an agreement with a syndicate of investment dealers led by Cormark Securities Inc. pursuant to which the Underwriters have agreed to purchase 18,422,000 common shares from the treasury of the Company, at a price of $0.95 per Common Share and offer them to the public by way of short form prospectus for total gross proceeds of $17,500,900. The Company has granted the Underwriters an option to purchase up to an additional 15.0% of the Common Shares of the Offering on the same terms exercisable at any time up to 30 days following the closing of the Offering, for market stabilization purposes and to cover over-allotments, if any. Kraken expects to use the net proceeds to facilitate its long term strategy, including potential investment in facilities, expanding manufacturing capacity, anticipated working capital for expansion of sole-source/single award programs and high probability pipeline opportunities, further strengthen the Company’s balance sheet in anticipation of upcoming customer and partners decisions and source selection on additional large, new program and contract opportunities, and for general corporate purposes. Closing of the Offering is expected to occur on or about May 16, 2024, and is subject to regulatory approval including that of the TSX Venture Exchange. https://bit.ly/3xVPHXt

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) enters into new credit agreement to support continued growth.

Kraken Robotics entered into a credit agreement with The Bank of Nova Scotia for credit facilities that are expected to provide added financial flexibility to support the Company’s continued growth. The Credit Facilities consist of: (i) a revolving 3-year term facility of up to $35 million (subject to meeting certain borrowing base requirements based on eligible receivables and inventory) (the “Revolver”); (ii) a $10 million revolving capital expenditure line of credit; (iii) a $10 million uncommitted letter of credit facility; and (iv) an uncommitted accordion facility of up to $30 million (the “Accordion”). The Credit Facilities replace in its entirety the Company’s existing credit facilities with Royal Bank of Canada which were paid out using funds drawn from the Credit Facilities effective April 19, 2024. Kraken expects to use the credit facility to facilitate its long-term strategy including to further strengthen the Company’s balance sheet in anticipation of the continued growth in Kraken’s business including upcoming customer and partner decisions on additional large, new program and contract opportunities, and to fund capital expenditures, for working capital, and for general corporate purposes. https://bit.ly/3xE041R

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) appoints Peter Hunter as Chairman of Board of Directors.

Kraken Robotics Inc. announces that effective April 23, Peter A. Hunter has been appointed Chairman of the Company’s Board of Directors. Mr. Hunter joined Kraken’s Board in November of 2023 and is the founder, Chairman, and Managing Partner of Artemis Capital Partners, L.P., a Boston-based specialized private equity firm focused on differentiated industrial technology manufacturers. An attorney and a CPA, Mr. Hunter has over 30 years of experience as both an investor and operator. His areas of expertise include strategic growth, structuring of multi-stakeholder strategies (including M&A, joint ventures and partnerships), corporate governance, and organizational planning. Mr. Hunter also has subsea technology expertise, having served 3 years as the Chairman of Hydroid, LLC, an industry leader in unmanned underwater vehicles (UUVs) with its REMUS UUV brand. Mr. Hunter was Chairman of Hydroid from its early days to its eventual acquisition by Kongsberg Maritime, AS in 2008. Hydroid was subsequently acquired from Kongsberg in 2020 by Huntington Ingalls, the US Navy’s largest shipbuilder and UUV provider (now known as HII). https://bit.ly/49MyPjf

Sophic Client Xcyte Digital (XCYT-TSXV) to present at the Planet MicroCap Showcase: VEGAS 2024 on May 1, 2024.

CEO Randy Selman will be presenting at the Planet MicroCap Showcase: VEGAS 2024 on May 1, 2024 at 11:30am PT / 2:30pm ET. Mr. Selman will also host 1×1 investor meetings through the day on May 2, 2024. “The broad adoption of Xcyte’s unique services, including by many Fortune 1000 companies, has allowed us to expand our service offerings to generate continued revenue growth and strong margins,” said Xcyte CEO Randy Selman. “Part of this growth is driven by our accretive acquisition strategy, which we just embarked on, as well as expanding our business organically. Our growth strategy positions us for expanding into the virtual and hybrid events market – industries that could quadruple into a US$1 trillion market by 2032. I look forward to introducing Xcyte Digital and our opportunities to investors at the upcoming Planet MicroCap Showcase: VEGAS 2024 event.” https://bit.ly/3JvHlrU Watch a short pre-conference video here: https://bit.ly/3Uv8lOO

Sophic Client OneSoft Solutions Inc. (OSS-TSXV, OSSIF-OTC) presenting at the Planet MicroCap Showcase: VEGAS 2024 on May 1, 2024.

Brandon Taylor, President and Chief Operating Officer, will host a corporate presentation at the Planet MicroCap Showcase: VEGAS 2024 on Wednesday, May 1, 2024 at 10am PT/ 1pm ET. Mr. Taylor will host 1×1 investor meetings on May 2, 2024. “OneSoft Solutions announced $10.4 million in 2023 revenue, increasing 51% over fiscal 2022, and management is guiding for $15 million to $16 million of revenue in 2024,” said OneSoft Solutions COO Brandon Taylor. “Although we anticipate that increased usage of our SaaS solutions from existing customers will drive most of our 2024 revenue, we are seeing increasing opportunities with prospects both in the United States and internationally. Operationally, a lot of positive developments have occurred since we attended Planet MicroCap in 2023, and we look forward to updating existing shareholders as well as interested investors at the upcoming 2024 event.” https://bit.ly/3Qf1RB5 Watch a short pre-conference video here: https://bit.ly/3w7WPPR

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) announces financial results release date and Webinar. UGE to present at Planet MicroCap next week.

UGE I plans to release its Q4 and fiscal year 2023 financial statements after market close on Monday, April 29, 2024. UGE International’s CEO Nick Blitterswyk and CFO Stephanie Bird will host a live webinar on Tuesday, April 30, 2024 at 11am EDT. CEO Nick Blitterswyk will be presenting at the Planet MicroCap Showcase: VEGAS 2024 on May 1, 2024 at 10:30am PT / 1:30pm ET. Throughout the following day (May 2, 2024), Mr. Blitterswyk and Sabrina Martin, UGE’s Managing Director of Investments, will host 1×1 investor meetings. https://bit.ly/49QBRTx Watch a short pre-conference video here: https://bit.ly/3xGvipf

Sophic Client ADM Endeavors (ADMQ-OTCQB) presenting at the Planet MicroCap Showcase: VEGAS 2024 on May 1, 2024.

CEO Marc Johnson and CFO Alex Archer will host an investor presentation at the Planet MicroCap Showcase: VEGAS 2024 on May 1, 2024, at 9:30am PT / 12:30pm ET. Mr. Johnson and Mr. Archer will then host 1×1 investor meetings throughout the following day (May 2, 2024). “Fiscal 2023 was a transformational year for ADM Endeavors,” said CEO Marc Johnson. “We remained profitable (US$5,188,930 Revenue, US$137,468 Net Income) and generated cash as we were able to replace a significant customer loss with stable, re-occurring government contracts. This strength is expected to increase into 2024, with more contract wins and the return of influencer sales. Furthermore, ADM has successfully closed, integrated, and scaled acquisitions and will continue to do so as new opportunities present themselves. We’re on track to open our new production facility by year-end, which will increase our capacity by up to five times. We look forward to introducing ADM Endeavors to Planet MicroCap investors and expanding upon our business and operational strategies during the event.” https://bit.ly/44igcm3

Global Markets: IPOs, Venture Capital, M&A

Microsoft-backed Rubrik leads debut trio setting steady IPO pace.

Rubrik rose 16% in its trading debut after the cloud and data security startup backed by Microsoft Corp. topped its fundraising goal with a US$752 million initial public offering, signaling with two other listings sustained demand for first-time share sales. Orders for Rubrik’s IPO were more than 20 times the 23.5 million shares on offer, said people familiar with the matter who asked not to be identified because the details weren’t public. Half of the shares were allocated to the top 10 long-only institutional investors, with another 20% of the shares going to 15 others, they said. https://tinyurl.com/4jh2zwj8

Vista-backed Solera seeking more than US$1 billion in IPO.

Vista Equity Partners-backed automotive data and software services provider Solera is weighing an initial public offering that may raise over US$1 billion, according to people familiar with the situation. Westlake, Texas-based Solera has picked banks including Goldman Sachs Group Inc., Morgan Stanley, Bank of America Corp. and Jefferies Financial Group Inc. to work on the offering, the people said, asking not to be identified as the information is private. Solera could launch an offering as soon as in July, the people said. Details such as the timing and the size of the IPO may still change, and more banks could be added to the lineup, the people said. Representatives for Goldman Sachs, Morgan Stanley, Bank of America and Vista declined to comment. Representatives for Jefferies and Solera didn’t respond to requests for comment. Solera is a global software-as-a-service provider of integrated vehicle life-cycle and fleet management, according to a statement in March. It helps clients such as insurers address vehicle claims, vehicle repairs, vehicle management and fleet management. Solera serves more than 300,000 customers. In 2016, Vista led a group of investors including a unit of Koch Industries Inc. taking Solera private, in a deal that valued the company at about US$6.5 billion, a statement at the time showed. https://archive.ph/8Odyj

Short sellers pocket record weekly profit from Big Tech selloff.

Traders who bet against the “Magnificent 7” group of big U.S. tech stocks booked their biggest-ever weekly profit of more than US$10 billion last week, with the biggest gains coming from their short position in shares of Nvidia and Tesla, Ortex data showed. The chip designer, opens new tab shed almost 14% last week to clock its worst weekly fall in over 19 months, helping short sellers rake in more than US$3 billion in profit. Tesla, whose shares have lagged peers in the coveted group this year, also tumbled by an equal margin, leading to US$3 billion in profits for short sellers. https://tinyurl.com/2h3va2wu

Thoma Bravo to buy UK-listed Darktrace for £4.3 billion.

US private equity firm Thoma Bravo has agreed to take UK cyber security company Darktrace private in a transaction valuing the company at £4.3 billion, marking the latest high-profile takeover of a London-listed group. The offer, which values the shares at 620 pence each, represents a 20% premium to Thursday’s closing share price and sent Darktrace’s shares up 19% in early trading in London on Friday. Darktrace floated in April 2021 at 250 pence per share. Darktrace’s board said it had previously reviewed and rejected unsolicited offers from Thoma Bravo on the basis that they did not fairly represent the value of its business. The agreement comes after the two parties held discussions about taking the company private in the summer of 2022, when Darktrace’s market capitalisation was £2.7 billion. The decision to go private will end a turbulent period on the London stock market for Darktrace. Thoma Bravo is buying the business to help it expand into the US, where it owns dozens of enterprise software businesses, a person familiar with the matter said. Founded more than 40 years ago, Thoma Bravo has nearly US$140 billion in assets under management and is renowned as one of the world’s leading software investment groups. The investment firm has been expanding its presence in Europe and announced in 2022 that it was opening an office in London. Thoma Bravo said earlier this year that it had completed a deal to buy German compliance software company EQS Group. https://archive.ph/4MWzD

IBM to buy Hashicorp for US$6.4 billion.

IBM said it has agreed to buy Hashicorp, a publicly traded software company, for US$6.4 billion in cash to strengthen its position in cloud computing and artificial intelligence. CEO Arvind Krishna said the generative AI boom has created an additional challenge for companies when it comes to managing their servers. Hashicorp, whose customers include J.P. Morgan and Starbucks, sells software that helps customers manage their servers across multiple clouds, expertise Krishna said is key to managing the explosion of AI workloads. HashiCorp went public in late 2021 at an IPO price of US$80, but lately it has traded as low as US$21, amid heavy losses. IBM is offering US$35 a share in cash. https://tinyurl.com/2uvrm2j5

Intel shares slump on lackluster outlook.

Intel said revenue rose 9% in the first quarter revenue of US$12.7 billion, in line with its forecast and the second quarter in a row in which the aging chip maker has shown growth after several quarters of decline. Its loss narrowed. But shares fell nearly 8% in late trading after predicted slower revenue growth for the current quarter. The Santa Clara, Calif., company forecast it would generate US$12.5 billion to US$13.5 billion in the second quarter. At the midpoint, growth would barely rise from a year. The results and outlook contrasted with chipmaker Nvidia, which forecast 233% growth for its quarter ending in April. Intel, a leader in chips used in personal computers, has been trying to reposition its business as demand for graphics processing units—the chips used to power artificial intelligence models—has surged. Sales of chips for data centers and AI rose 5% to US$3 billion. Still, these were overshadowed by chips for PCs and laptops, which rose 31% to US$7.5 billion. It also said sales at its chip manufacturing unit, Intel Foundry, fell 10% to US$4.4 billion. https://tinyurl.com/3r69ryv5

Alphabet shares soar after dividend announcement, strong revenue.

Google parent Alphabet shares rose as much as 13% in after-hours trading after the company reported 15% higher revenues in the first quarter—stronger growth than analysts had anticipated—and announced it would begin paying a dividend. At the same time, however, Alphabet reported a massive increase in capital expenditures, which nearly doubled to US$12 billion compared with a year earlier. Google executives had warned investors that the company’s expenses on technical infrastructure including data centers would increase amid competition in computing-intensive artificial intelligence applications. Notably, revenue growth at Google Cloud accelerated to 28.4%, compared with 25.6% in the fourth quarter of 2023. Google Cloud generated US$900 million in operating income on US$9.6 billion in revenue, a small fraction of Alphabet’s US$25.5 billion in operating income. https://tinyurl.com/29uu2cyy

Meta plunges 16% on weak revenue guidance even as first-quarter results top estimates.

Meta shares plunged 16% in extended trading on Wednesday after the company issued a light forecast, which overshadowed better-than-expected first-quarter results. One reason for the pop in net income is that, while revenue growth accelerated, sales and marketing costs dropped 16% from the year-earlier period. Meta said it expects sales in the second quarter of US$36.5 billion to US$39 billion. The midpoint of the range, US$37.75 billion, would represent 18% year-over-year growth and is below analysts’ average estimate of US$38.3 billion. The stock sell-off accelerated early in the earnings call after CEO Mark Zuckerberg jumped into his discussion about investments, namely in areas like glasses and mixed reality, where the company doesn’t currently make money. And he said investments in artificial intelligence are increasing. “On the upside, once our new AI services reach scale, we have a strong track record of monetizing them effectively,” Zuckerberg said. Capital expenditures for 2024 are anticipated to be in the US$35 billion to US$40 billion range, an increase from a prior forecast of US$30 billion to US$37 billion “as we continue to accelerate our infrastructure investments to support our artificial intelligence (AI) roadmap,” Meta said. https://tinyurl.com/4mz3mhj4

Tesla shares jump 13% after Musk says company aims to start production of affordable new EV by early 2025.

Tesla reported a 9% drop in first-quarter revenue on Tuesday, the biggest decline since 2012, and missed analysts’ estimates, as the electric vehicle company weathers the effect of ongoing price cuts. The stock jumped in extended trading after CEO Elon Musk told investors that production of new affordable EV models could begin sooner than expected. Revenue declined from US$23.33 billion a year earlier and from US$25.17 billion in the fourth quarter. The drop in sales was even steeper than the company’s last decline in 2020, which was due to disrupted production during the Covid-19 pandemic. Tesla’s automotive revenue declined 13% year over year to US$17.38 billion in the first three months of 2024. Musk said on the call that the company plans to start production of new models in “early 2025, if not late this year,” after previously expecting to begin in the second half of 2025. Musk also touted Tesla’s investments in artificial intelligence infrastructure, and said the company is in talks with “one major automaker” to license its driver assistance system, which is marketed in the U.S. as the Full Self-Driving, or FSD, option. https://tinyurl.com/53fty9f9

Tesla cuts FSD and car prices.

Tesla has cut prices on its vehicles and Full Self-Driving software as the electric car maker struggles with declining sales ahead of its first quarter earnings report on Tuesday. Over the weekend, Tesla dropped the cost of a lifetime license of its FSD driver assist technology to US$8,000, down from US$12,000, according to its website. The company earlier dropped the price of another pricing option for FSD, a monthly subscription plan, to US$99 a month, from US$199. The company also recently announced a free month of FSD software for Tesla drivers, to boost up demand for the software. Tesla also dropped the price of cars in the U.S., China and Europe, the latest in months of price adjustments the company has made in response to soft consumer demand. In the U.S., it dropped prices US$2,000 on base models for its Models S, X and Y, its website shows. The Model X, Tesla’s luxury SUV, now costs US$77,990, around US$20,000 less than it cost in May 2023. https://tinyurl.com/mu6yefbt

iPhone sales spiral 25% in China as Apple drops from first place to fifth.

Apple’s struggles in China continue, according to new data from research firm Canalys. This data indicates that not only did Apple fall out of first place in China for smartphone shipments in Q1 2024, it fell all the way to fifth place. According to Canalys, Apple saw its shipments in China hit 10 million units in Q1 2024, a decrease of 25% year-over-year. This gives Apple a 15% share of the Chinese smartphone market, down from the 20% share it held at the same time last year. https://tinyurl.com/3xmf2z2v

Emerging Technologies

Apple reportedly developing its own custom silicon for AI servers.

According to a post by the Weibo user known as “Phone Chip Expert,” Apple has ambitious plans to design its own artificial intelligence server processor. The user, who claims to have 25 years of experience in the integrated circuit industry, including work on Intel’s Pentium processors, suggests this processor will be manufactured using TSMC’s 3nm node. TSMC is a vital partner for Apple, manufacturing all of its custom silicon chips. The chipmaker’s 3nm technology is one of the most advanced semiconductor processes available, offering significant improvements in performance and energy efficiency over the previous 5nm and 7nm nodes. Apple’s purported move toward developing a specialist AI server processor is reflective of the company’s ongoing strategy to vertically integrate its supply chain. By designing its own server chips, Apple can tailor hardware specifically to its software needs, potentially leading to more powerful and efficient technologies. Apple could use its own AI processors to enhance the performance of its data centers and future AI tools that rely on the cloud. While Apple is rumored to be prioritizing on-device processing for many of its upcoming AI tools, it is inevitable that some operations will have to occur in the cloud. By the time the custom processor could be integrated into operational servers in late 2025, Apple’s new AI strategy should be well underway. The Weibo user has a number of accurate previous claims, including that the iPhone 7 would be water-resistant and that the standard iPhone 14 models would continue using the A15 Bionic chip, with the more advanced A16 chip being exclusive to the iPhone 14 Pro models. These predictions were later corroborated by multiple credible sources and proved correct upon the products’ release. https://tinyurl.com/nhaejsp7

Apple releases small, open-source AI models for on-device applications.

Apple released a new family of small, open-source language models, dubbed OpenELM, on the model repository Hugging Face on Wednesday, signaling the iPhone maker’s intentions to develop artificial intelligence software that can run on small devices. OpenELM includes four models with 270 million, 450 million, 1.1 billion and 3 billion parameters. (Parameters are the “settings” that determine how AI models respond to questions.) That’s significantly smaller than other open-source AI releases of late, such as Meta Platforms’ 8-billion and 70-billion Llama 3 models released last week. The smaller size makes them more suitable for on-device applications. Apple has lagged other big tech companies such as Google and Microsoft in offering AI-fueled services. Its OpenELM release follows similar open-source AI announcements from Meta, Google and Microsoft and represents a departure from the norm for a company that has historically thrived on a closed ecosystem. Apple has reportedly held talks with Google and OpenAI to potentially license their AI models for use on the iPhone, hinting at doubts around Apple’s ability to build its own proprietary AI technology. https://tinyurl.com/2uea98da

Microsoft debuts new open-source small AI model.

Microsoft on Tuesday released its latest homegrown open-source AI model, which it said could achieve results roughly on par with OpenAI’s GPT-3.5 model while using much less compute power. The model is part of the Phi-3 family, the latest generation of an open source model family trained by Microsoft Research, which previously debuted Phi-2 in December. In a technical paper, Microsoft researchers said that Phi-3 achieved higher quality because it was trained with carefully-selected data scraped from the internet as well as so-called synthetic data, or text generated by other large-scale AI models such as OpenAI’s GPT-4. The model released on Tuesday, dubbed Phi-3 mini, can run on roughly 1.8 GB of memory, meaning most smartphones could run the model locally. That could make it appealing for developers building AI applications that are meant to run on smartphones, as well as customers seeking to cut down on the costs of running AI apps. Microsoft has also trained slightly larger versions of the model, called Phi-3 small and Phi-3 medium, which have not yet been released. Microsoft said the open source models would be available on Azure, as well as other platforms such as Nvidia’s new NIM cloud service. https://tinyurl.com/bdhrwdbb

Meta says Lenovo, Asus will use Its VR software to build headsets.

Meta Platforms said Monday it had struck deals with Asus, Lenovo and Xbox to develop new headsets that use Meta’s virtual reality operating system. In a blog post, Meta said Asus would use the software, dubbed Horizon, to develop a new gaming headset, and Lenovo would use Horizon to develop mixed reality headsets for productivity. Meta and Microsoft’s Xbox console gaming unit, meanwhile, are developing a limited edition version of Quest, the Meta-branded VR headset, which Meta said would be “inspired by Xbox.” Meta didn’t disclose terms of the deals, including whether the hardware makers would get a cut of revenue from games and other apps that run on the devices. Meta CEO Mark Zuckerberg has said he wants to build the dominant “open” operating system for AR and VR devices as a counter to Apple, which does not license its mixed-reality OS to other companies. But Meta could face competition from Google, which has developed its own operating system for such devices and has been pitching it to hardware makers, The Information previously reported. https://tinyurl.com/yfbdtdnn

Apple cuts Vision Pro shipments, now ‘reviewing and adjusting’ headset strategy.

Apple has slashed its shipping estimates for Vision Pro, according to a new Ming-Chi Kuo analyst report. Kuo says that Apple is now targeting shipments between 400,000 and 450,000 units for Vision Pro this year. This is down from the initial market consensus of between 700,000 and 800,000 units. The changes have reportedly prompted Apple to revisit its overall strategy for the headset market. Kuo writes that Vision Pro demand has “fallen sharply beyond expectations” in the United States, leading Apple to take a tepid approach to the international launch. Kuo previously reported that Apple would release Vision Pro in additional countries prior to WWDC in June. Apple has cut its 2024 Vision Pro shipments to 400–450k units (vs. market consensus of 700–800k units or more). Apple cut orders before launching Vision Pro in non-US markets, which means that demand in the US market has fallen sharply beyond expectations, making Apple take a conservative view of demand in non-US markets. Previous reporting had suggested a second-generation Vision Pro could launch in 2025, but Kuo now suggests this may no longer be the case. https://tinyurl.com/bdfv2nj8

Media, Streaming, Gaming & Sports Betting

Amazon and the NBA reportedly agree to a streaming rights deal.

Amazon and the National Basketball Association have agreed on the framework of a deal that would give the tech behemoth the rights to broadcast live regular season and playoff games starting in 2025, according to a report from The Athletic. Final details on the number of games Amazon will get and how much it’s agreed to pay the NBA are still unclear. NBA rights have been a major topic in the TV and streaming industries as tech giants including Amazon, Google and Apple compete with traditional TV players to broadcast live games. Live sports remain the most important piece of programming on TV and the rights to license those games, especially from top leagues such as the NFL and the NBA, are getting more expensive. The NBA has hoped to triple the amount of money it received from broadcast partners, as The Information previously reported. In an interview last October, Amazon CEO Andy Jassy expressed interest in the company bidding on NBA rights. Along with Amazon, Disney’s ESPN is also expected to renew its rights deal with the NBA, according to The Athletic. This leaves Warner Bros. Discovery, one of the NBA’s two current broadcast partners, to duke it out with Comcast’s NBCUniversal for a third package of games. https://tinyurl.com/58kb5fty

Apple is working to secure an exclusive TV deal with soccer governing organization FIFA, reports.

The New York Times. FIFA will launch a revamped version of Club World Cup in 2025, and Apple wants the TV rights. Club World Cup 2025 will feature 32 teams from each of the six confederation. An agreement between Apple and FIFA could be announced as soon as this month, and the first tournament will take place in the United States next summer. Apple could be paying around US$1 billion, and The New York Times says it is not yet clear if there will be any free-to-air rights. If not, the entire tournament could be available only to Apple TV+ subscribers. Apple has already shelled out US$2.5 billion to secure global broadcasting rights to Major League Soccer. MLS and League Cup games are streamed on Apple TV+, with access priced at US$14.99 per month or US$99 per season for non-subscribers and US$12.99 per month or US$79 per season for those who subscribe to Apple TV+. Apple sees live sports as a way to lure new customers to the Apple TV+ streaming service. In addition to the MLS deal, it has also secured a deal with Major League Baseball. Apple negotiated for NFL Sunday Ticket access, and while that didn’t work out, a report from The Athletic suggests that Apple is still in the running to secure some streaming access to NBA games. Earlier this year, Apple introduced a dedicated Apple Sports app that allows users to get real-time scores and stats for their favorite teams. The app is able to sync with the My Sports experience in the Apple TV app. https://tinyurl.com/32se4wyp

Adtech, Privacy & Regulatory

President Biden signs TikTok ban or sell bill.

President Joe Biden signed into law a foreign aid package that includes a requirement that TikTok cut its ties with its Chinese owner ByteDance or face a ban. TikTok has about a year to find a new owner, under the law. TikTok responded saying it would fight the law in court. “This unconstitutional law is a TikTok ban, and we will challenge it in court. We believe the facts and the law are clearly on our side, and we will ultimately prevail,” a TikTok spokesperson said in a statement. TikTok CEO Shou Zi Chew also posted a video on TikTok, encouraging users to share stories of how TikTok has affected their life. “Make no mistake, this is a ban on TikTok, and a ban on you and your voice,” Chew said in the video. “It’s obviously a disappointing moment, but it does not need to be a defining one … Rest assured, we aren’t going anywhere. We are confident and we will keep fighting for your rights in the courts.” https://tinyurl.com/2nurd6aw

EU probing new TikTok app over ‘addictive’ rewards program.

The European Union opened a probe into a new rewards program part of TikTok’s new TikTok Lite app in France and Spain, which offers points that can be redeemed for gift cards when users watch videos, invite friends or complete other actions. The European Commission said it’s concerned that TikTok Lite’s “Task and Reward Program” has “been launched without prior diligent assessment of the risks it entails, in particular those related to the addictive effect of the platforms, and without taking effective risk mitigating measures.” TikTok has until Tuesday to provide a risk assessment report or face fines. The probe comes after The Information was first to report about the app’s roll out in Europe earlier this month, following launches in Korea and Japan last year as it looks to address “stagnant growth” in the EU. https://tinyurl.com/5ey37fzb

FTC bans noncompetes nationwide.

The Federal Trade Commission voted to ban noncompete clauses in employment contracts more than a year after proposing the plan, the agency said Tuesday. Noncompete clauses, which prevent workers from working for rival companies or starting similar businesses, “keep wages low, suppress new ideas, and rob the American economy of dynamism,” said FTC Chair Lina Khan. Although controversial, noncompetes are widely used in the tech industry by employers who say they are trying to protect trade secrets. The practice affects not just senior executives with exposure to corporate strategy and intellectual property but often also applies to contract workers and low-level employees. For a time, Amazon used them in job contracts for warehouse workers. Noncompete clauses are already unenforceable in California and several other states, and restricted in others. The FTC estimates that banning noncompetes will spur innovation by creating more than 8,500 new startups a year and increasing workers’ earnings by almost US$500 billion. The U.S. Chamber of Commerce, the largest pro-business lobbying group in the country, has said it will sue to block the rule. Chamber President and CEO Suzanne Clark called the FTC vote to ban noncompetes “a blatant power grab that will undermine American businesses’ ability to remain competitive.” https://tinyurl.com/5af966bu


Amazon to add drone delivery in Arizona, end service in California.

Amazon said Monday that it will start making drone deliveries to customers in Arizona starting later this year. At the same time, the company is closing one of its two existing drone sites, in California, that had been making deliveries since late 2022. The new drone facility will be located next to an Amazon warehouse in the town of Tolleson outside Phoenix. Amazon didn’t say exactly when the drone site will open or how many customers it will reach. Amazon’s drone delivery program, which dates back to at least 2013, has been slow to expand due in part to restrictions from the Federal Aviation Administration. In Lockeford, Calif., FAA rules initially meant that Amazon employees had to work as spotters to make sure the drones weren’t flying over cars when traveling to customers’ houses, The Information previously reported. Amazon is closing the Lockeford site but said its other drone delivery station, in College Station, Tex., will keep operating. https://tinyurl.com/4f7vmzz9

Amazon changes grocery fees again with US$10 monthly delivery subscription.

Amazon will offer unlimited grocery deliveries of orders worth at least US$35 to shoppers who pay a US$10 monthly fee on top of the standard US$139-a-year Prime fee, the company said Tuesday. It’s the latest in a series of changes Amazon has made to its grocery fees over the past few years. As recently as the beginning of 2021, Amazon offered unlimited Whole Foods and Amazon Fresh deliveries to Prime members at no additional cost on orders over US$35. Amazon then added a US$10 fee on all Whole Foods deliveries in 2021 and fees of up to US$10 on Fresh orders worth less than US$100 in 2022. Amazon Prime subscribers who choose to pay the additional US$10 monthly fee will no longer pay a la carte charges on orders over US$35 from Whole Foods, Amazon Fresh and some outside retailers that have partnerships with Amazon. The change comes as Amazon’s grocery chief Tony Hoggett looks to more closely integrate the two brands, including by preparing orders for both out of the same facilities. https://tinyurl.com/yzum63a2


The information and recommendations made available through our emails, newsletters, website and press releases (collectively referred to as the “Material”) by Sophic Capital Inc. (“Sophic” or “Company”) is for informational purposes only and shall not be used or construed as an offer to sell or be used as a solicitation of an offer to buy any services or securities. In accessing or consuming the Materials, you hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the information provided in our monthly newsletter and emails or any other Material should be viewed as an invite, and/or induce or encourage any person to make any kind of investment decision. The recommendations and information provided in our Material are not tailored to the needs of particular persons and may not be appropriate for you depending on your financial position or investment goals or needs. You should apply your own judgment in making any use of the information provided in the Company’s Material, especially as the basis for any investment decisions. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a qualified and registered investment advisor. You further agree that neither Sophic, its, directors, officers, shareholders, employees, affiliates consultants, and/or clients will be liable for any losses or liabilities that may be occasioned as a result of the information provided in any of the Material. By accessing Sophic’s website and signing up to receive the Company’s monthly newsletter or any other Material, you accept and agree to be bound by and comply with the terms and conditions set out herein. If you do not accept and agree to the terms, you should not use the Company’s website or accept the terms and conditions associated to the newsletter signup. Sophic is not registered as an adviser or dealer under the securities legislation of any jurisdiction of Canada or elsewhere and provides Material on behalf of its clients pursuant to an exemption from the registration requirements that is available in respect of generic advice. In no event will Sophic be responsible or liable to you or any other party for any damages of any kind arising out of or relating to the use of, misuse of and/or inability to use the Company’s website or Material. The information is directed only at persons resident in Canada. The Company’s Material or the information provided in the Material shall not in any form constitute as an offer or solicitation to anyone in the United States of America or any jurisdiction where such offer or solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation. If you choose to access Sophic’s website and/or have signed up to receive the Company’s monthly newsletter or any other Material, you acknowledge that the information in the Material is intended for use by persons resident in Canada only. Sophic is not an investment advisor nor does it maintain any registrations as such, and Material provided by Sophic shall not be used to make investment decisions. Information provided in the Company’s Material is often opinionated and should be considered for information purposes only. No stock exchange or securities regulatory authority anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. Sophic and/or its principals and employees may have positions in the stocks mentioned in the Company’s Material and may trade in the stocks mentioned in the Material. Do not consider buying or selling any stock without conducting your own due diligence and/or without obtaining independent investment advice from a qualified and registered investment advisor. The Company has not independently verified any of the data from third party sources referred to in the Material, including information provided by Sophic clients that are the subject of the report, or ascertained the underlying assumptions relied upon by such sources. The Company does not assume any responsibility for the accuracy or completeness of this information or for any failure by any such other persons to disclose events which may have occurred or may affect the significance or accuracy of any such information. The Material may contain forward looking information. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “projects,” “plans,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved or their negatives or other comparable words and include, without limitation, statements regarding, projected revenue, income or earnings or other results of operations, strategy, plans, objectives, goals and targets, plans to increase market share or with respect to anticipated performance compared to competitors, product development and adoption by potential customers. These statements relate to future events and future performance. Forward-looking statements are based on opinions and assumptions as of the date made, and are subject to a variety of risks and other factors that could cause actual events/results to differ materially from these forward looking statements. There can be no assurance that such expectations will prove to be correct; these statements are no guarantee of future performance and involve known and unknown risks, uncertainties and other factors. Sophic provides no assurance as to future results, performance, or achievements and no representations are made that actual results achieved will be as indicated in the forward looking information. Nothing herein can be assumed or predicted, and you are strongly encouraged to learn more and seek independent advice before relying on any information presented.