The recent stock market rally could be at a turning point, following a strong week. While indexes’ gains were modest, they did find support, and broke key resistance. The Dow Jones was up 0.2%, S&P 500 gained 1.1%, and the Nasdaq was 2.1%. NYSE president says IPO proceeds fall more than 90%. “Our pipeline is tremendous — the reason companies aren’t coming to market is because all the volatility in the market,” said President Lynn Martin. Tech selloff catches up with private startups. People involved in the trades say they are seeing discounts from around 30% to 40% to as much as 80% off valuations from earlier fundraisings. Marvell stock falls after disappointing earnings and outlook, as CEO cites ‘inventory reductions’ by some customers. Shares of DraftKings Inc. jumped 2.3% in premarket trading Tuesday, after the online sports betting and fantasy sports company and Churchill Downs Inc. announced a multi-year agreement that will bring betting on horse racing to DraftKings. iPhone City lockdown ended; reportedly cost Apple US$1 billion/week. TSMC plans to make more advanced chips in US at urging of Apple. Airbnb wants to help renters list their apartments for short stays. Palantir Technologies Inc.’s raison d’etre is identifying patterns hidden within mountains of data. Yet somehow it didn’t spot the risks in its own investment strategy or the danger that startups might not be able to pay their bills. Google hit with multibillion-dollar class-action lawsuit over online ad dominance in the U.K. Cyber Monday online sales hit a record US$11.3 billion, driven by demand, not just inflation, says Adobe. Sophic Client UGE International announces closing of $7.379 million private placement of Green Bonds. Sophic Client LuckBox (LUCK-TSXV, LUKEF-OTC) signs LOI to acquire leading Asian-focused iGaming platform.
Canadian Technology Capital Markets & Company News
Sophic Client UGE International announces closing of $7.379 million private placement of Green Bonds.
The Company has closed the brokered “best efforts” private placement of green bonds of the Company (“Green Bonds”), previously announced in its October 25, 2022 press release, for aggregate gross proceeds of C$7,379,285 (the “Offering”). The Offering was led by Canaccord Genuity Corp., on behalf of a syndicate of agents including iA Private Wealth Inc. and PI Financial Corp. (collectively, the “Agents”) in accordance with the terms and conditions of an agency agreement (the “Agency Agreement”) entered on November 28, 2022 (the “Closing Date”) by the Company and the Agents. The Green Bonds were issued at a price of C$955 and have a face value of C$1,000. The Green Bonds mature four years from the Closing Date (the “Maturity Date”), and bear interest at a rate of 9% per annum, payable semi-annually in arrears calculated on the last calendar day of June and December, with the first interest payment to be made on December 31, 2023. At the Maturity Date, the Company will repay the Green Bonds in full, including any accrued and unpaid interest. Commencing on the date that is two years following the Closing Date, and ending on the Maturity Date, the Company will have the option, in its sole discretion, to repay all or any portion of the outstanding principal and accrued interest on the Green Bonds at the end of each calendar month by paying one additional months’ interest to the holder. https://tinyurl.com/3wcf25w8
Sophic Client LuckBox (LUCK-TSXV, LUKEF-OTC) signs LOI to acquire leading Asian-focused iGaming platform.
The Company has entered into an LOI to effect a share exchange, on a debt free basis and subject to TSXV approval, to acquire 100% of the shares of the Target, a leading Asian-focused iGaming platform. The Transaction will see Luckbox purchase the vendors’ proprietary platform and technology, with access to over 6,000 games from 50 game providers and 100 localized payment methods. This platform will now become an integral part of the growing Luckbox group and enhances the core Luckbox product offering. The acquisition should enable more efficient growth through combined operational synergies. The Transaction also brings additional highly credible expertise, via key members of the team that have previously built successful iGaming businesses. Pursuant to the LOI, the parties will enter into a share exchange agreement which will provide that Luckbox will acquire 100% of the issued and outstanding shares of the Target on a debt-free basis in exchange for up to 7 million common shares of Real Luck Group Ltd. Company shares issued as part of the Transaction will be subject to lockup or escrow conditions, and up to 6 million of which will only be paid to the vendors if certain milestones are attained by January 12, 2025 . The Transaction is also subject to customary closing conditions, including receipt of TSXV approval, and does not require shareholder approval. The vendors of the Target are each at arm’s length to the Company and the Transaction will not result in any person who was previously not an insider of the Company becoming a 10% or greater shareholder of the Company. The Transaction is expected to close in December 2022. https://tinyurl.com/2ck6twcp
Sanctuary secures $30 million from Canada’s SIF to build robots with human-like intelligence.
Vancouver-based artificial intelligence (AI) and robotics company Sanctuary Cognitive Systems has received a $30 million investment from the federal government through the Strategic Innovation Fund (SIF). The investment is aimed at supporting Sanctuary’s $120.8 million project to develop what the startup claims to be the “world’s first functioning human-like intelligence in general-purpose robots.” While Sanctuary’s founders bring expertise and have secured sizable funding rounds, some experts in the AI space have questioned the technology and characterized the startup’s vision as far-fetched. http://bit.ly/3VNbF5s
UgoWork closes $22.8 million Series B to help expand the use of lithium-ion batteries in Fortune 500.
Québec City-based Energy-as-a-Service (EaaS) solutions company UgoWork has raised $22.8 million in a Series B round. The funding was led by Fonds de solidarité FTQ with participation from Export Development Canada (EDC) and existing investors Desjardins Capital and Investissement Québec. The round closed on September 28th, bringing UgoWork’s total funding to date to $25.6 million. The all-equity, all-primary capital financing will go toward expanding UgoWork’s distribution footprint globally and with major Fortune 500 companies, as well as accelerating the development of its EaaS platform behind the company’s lithium-ion battery lineup. The federal government has also announced billions in clean energy sector investments over the past year. This includes $3.8 billion to implement Canada’s first Critical Minerals Strategy, $1.5 billion for the Strategic Innovation Fund and $15 billion over five years allotted to the Canada Growth Fund. http://bit.ly/3AZMRPM
Cross-border payments startup Buckzy takes the smart money in downscaled $19.5 million Series A.
Buckzy has opted to close a small—though still sizeable—$19.5 million (US$14.5 million) Series A round. Buckzy founder and CEO Abdul Naushad told BetaKit in an interview that this capital will extend the startup’s runway by 12 months and help it reach cash flow breakeven by this time next year. Come Q3 2023, if markets are more favourable, Buckzy intends to raise a much larger $40 to $50 million Series B round at a more appealing valuation to truly tackle the global opportunity it sees for its cross-border payments tech. Buckzy’s all-equity, all-primary round was co-led by existing investors, Ottawa-based Mistral Venture Partners and San Francisco’s Uncorrelated Ventures. The financing, which closed in early October, also saw follow-on participation from New York-based Revel Partners and support from new backers, FinTech-focused Luge Capital of Toronto and Blue 9 Capital of New York. This capital brings Buckzy’s total funding to around $23 million (over US$17 million). http://bit.ly/3OU5UAW
Produce8 lands $6 million in seed funding to improve digital-first team productivity.
Vancouver-based SaaS startup Produce8 announced that it has raised $6 million in seed-round funding. Produce8 declined to name the investors in the round, noting only that interest followed the launch of its early access platform funded via Top Down Ventures’ pre-seed accelerator. The round brings Produce8’s total funding to date to $6.1 million. http://bit.ly/3H24xyd
RailVision Analytics closes $5.5 million to cut train emissions by curbing fuel consumption.
RailVision Analytics has set out to help railway operators reduce diesel consumption—and by extension, train-related greenhouse gas (GHG) emissions—with its tablet-based app. RailVision’s all-equity round closed last month, led by Trucks Venture Capital with support from new investors MUUS Climate Partners, Blackhorn Ventures, Incie.org, and Measured Ventures, and follow-on participation from Active Impact Investments and Neil Murdoch. The capital brings RailVision’s total funding to over $6 million. http://bit.ly/3OX85DM
AgTech startup Ground Truth secures $4 million to improve grain analysis for farmers.
Ground Truth Agriculture has raised a $4 million ‘seed round’ to develop technology that will provide farmers with lab-quality grain analysis from their combines in real-time and with location precision. The Regina-based startup closed the all-new equity funding round on November 4, bringing the company’s total funding to just under $5 million. Conexus Venture Capital led the round, which includes $2 million from its AgTech-focused Emmertech fund. Additional investors include SaskWorks Venture Fund, Tall Grass Ventures, Golden Opportunities Fund, WTC Investments LP, private investors, and new commitments from undisclosed, existing shareholders. http://bit.ly/3umFzSl
Avatar Innovations targets $3 million for new decarbonization tech fund.
Avatar Innovations has secured an initial close on a newly launched fund for decarbonization tech for which it hopes to raise $3 million overall. The Calgary-based accelerator organization has raised $750,000 of its target from lead investor Cenovus Energy. The investment from the major oil and gas company comes in addition to an existing partnership between Avatar and Cenovus that began earlier this year and sees Cenovus support the accelerator portion of Avatar’s program. The newly launched fund extends Avatar’s accelerator and gives it the ability to invest in technologies that come out of its program. http://bit.ly/3gXLevm
Global Markets: IPOs, Venture Capital, M&A
NYSE president says IPO proceeds fall more than 90%.
Volatility and market uncertainty have taken a big hit on the number of companies going public, driving down initial public offering proceeds by 93% this year, Lynn Martin, president of the New York Stock Exchange said on Wednesday. “There is a lot of uncertainty and there’s a lot of different forces that are impacting markets,” said Martin during an interview at the Reuters NEXT conference. Last year was a record for IPOs at the NYSE, fueled in large part by the boom in special purpose acquisition companies (SPACs), but that activity has slowed to a trickle as high inflation and rising interest rates have soured market sentiment and SPACs have drawn regulatory scrutiny. “Our pipeline is tremendous — the reason companies aren’t coming to market is because all the volatility in the market,” said Martin, who worked for IBM as a computer coder before joining the NYSE in 2001. “They don’t know what they are entering into, either on their IPO day, or, importantly, the weeks and months that follow,” she said. Martin said companies “very much want to go public,” but they are just all waiting for the volatility in the market to calm down. Unlike the volatile IPO market, the Exchange Trade Funds’ issuance may witness another record this year, she said. https://tinyurl.com/y8crx3up
Tech selloff catches up with private startups.
Many startups held on to lofty valuations for months after the technology-heavy Nasdaq Composite began to sell off in November 2021. However, the market’s resilience started to wane this summer, as venture-capital firms and hedge funds began to unload to make up for losses in their public holdings. People involved in the trades say they are seeing discounts from around 30% to 40% to as much as 80% off valuations from earlier fundraisings. With many companies putting plans to raise new funds or go public on hold due to weak markets, secondary deals have become a key gauge of investor appetite. Secondaries trading was almost nonexistent from March to July, market participants say. Now, some prospective buyers are tiptoeing back into the market, looking for bargains as they bet the selloff has bottomed. Meantime, regular stock markets have staged a modest comeback, with the Nasdaq Composite ending Monday more than 7% above its mid-October closing low. The markdowns can be striking. Shares in ByteDance, the company behind TikTok, traded privately at a US$450 billion valuation last year, Mr. Miller at Unicorns Exchange said. Recent offers imply a valuation of US$220 billion to US$260 billion. Some similar pullbacks are evident in disclosures by large asset managers. Between September 2021 and June this year, a T. Rowe Price Group Inc. fund slashed the valuation of its Stripe shares by more than half. A Fidelity Investments fund valued its shares in Instacart Inc. this July at 55% less than it did in October 2021. Stripe and Instacart themselves earlier this year cut an internal valuation often used to price stock options for employees, The Wall Street Journal reported. Some investors are betting that recent markdowns were too steep. For instance, the buy-now, pay-later company Klarna tapped investors in July for new funds at a US$6.7 billion valuation, far less than it was worth last year. By September and October, secondary trades were valuing it at as much as US$9 billion, a 34% uplift. https://tinyurl.com/28k8fv7a
Crypto lender BlockFi files for bankruptcy.
Cryptocurrency lender BlockFi filed for Chapter 11 bankruptcy protection on Monday. It’s the latest domino to fall following the implosion of crypto exchange FTX. BlockFi froze customer withdrawals earlier in November, saying that it had significant exposure to FTX as well as the exchange’s trading arm, Alameda Research. Bankruptcy filings show that BlockFi’s top creditor is Ankura Trust Company, which has an unsecured claim of more than US$729 million. BlockFi’s website lists Ankura as a trustee of BlockFi’s interest-paying crypto deposit accounts. FTX’s US arm is listed as BlockFi’s second-biggest creditor, with a US$275 million loan. BlockFi also still owes the U.S. Securities and Exchange Commission US$30 million, the filings show. Earlier this year, the SEC fined BlockFi US$100 million for not registering its crypto lending product properly. https://tinyurl.com/2w5vruwv
Amazon to issue at least US$8 billion in bonds across five maturities.
Amazon.com Inc. is preparing to issue at least US$8 billion in bonds across five maturities to take advantage of an improvement in borrowing conditions for U.S. borrowers, the Wall Street Journal reported. The proceeds are earmarked for general corporate purposes. The deal is the second this year after the online and cloud services giant issued US$12.75 billion of bonds in April. That deal came just weeks after the company closed on its purchase of the MGM movie and television studio after agreeing to pay about US$8.5 billion in cash for the nearly century-old company behind the “Rocky” and James Bond franchises. Fitch Ratings assigned the new notes an AA-minus rating on Tuesday, to reflect the company’s leading positions in global e-commerce and cloud computing, close customer connections, significant scale with more than US$60 billion in 2021 EBITDA, good free cash flow generation and “reasonable adjusted leverage expected to trend near 2.0x.” Amazon stock was slightly higher premarket, but has fallen 45% in the year to date, while the S&P 500 has fallen 17%. http://bit.ly/3VIgahK
Disney buys MLB’s remaining stake in streaming firm BAMTech for US$900 million.
Disney acquired a majority stake in the tech company in 2017 and has used it to power its streaming services. The Walt Disney Co. has officially acquired 100 percent of BAMTech, the streaming video technology company that it acquired majority ownership of in 2017 from Major League Baseball. According to a footnote in the company’s annual report, which it filed Tuesday, Disney paid Major League Baseball US$900 million for its 15 percent stake in the company, now known as “Disney Streaming,” earlier in November. Disney and the sports league had the right to force a buyout of the stake based on its fair market value beginning earlier this year. Disney had bought the National Hockey League’s 10 percent stake in BAMTech for US$350 million last year. BAMTech technology powers Disney+, Hulu and Disney’s other offerings, and has become a critical part of the company’s streaming infrastructure. The league spun off its streaming video division as BAMTech in 2015, with Disney acquiring a minority stake a year later. Disney would go on to acquire its majority stake in 2017, buying out its remaining partners at the NHL and MLB in 2021 and 2022, respectively. http://bit.ly/3udPVnN
Marvell stock falls after disappointing earnings and outlook, as CEO cites ‘inventory reductions’ by some customers.
Shares of Marvell Technology Inc. were falling 7% in after-hours trading Thursday after the chip company fell short of expectations with its latest results and outlook. Marvell posted fiscal third-quarter net income of US$13.3 million, or 2 cents a share, whereas it lost US$62.6 million, or 8 cents a share, in the year-earlier period. On an adjusted basis, Marvell earned 57 cents a share, while analysts tracked by FactSet were anticipating 59 cents a share. Revenue rose to US$1.537 billion from $1.211 billion, whereas the FactSet consensus was for US$1.554 billion. “Inventory reductions, in particular at our storage customers, are impacting our near-term results and guidance, and we are working closely with them to manage their change in demand in an orderly fashion to clear the path to a resumption of growth,” Chief Executive Matt Murphy said in a release. For the fiscal fourth quarter, Marvell executives anticipate US$1.4 billion in net revenue at the midpoint, as well as adjusted earnings per share of 41 cents to 51 cents. The FactSet consensus was for US$1.6 billion in revenue and 62 cents in adjusted EPS. http://bit.ly/3VO4qKS
Wayfair stock climbs as company signals improving trends.
Shares of Wayfair Inc. were up 7% in midday trading Wednesday after the online home-goods retailer provided information about its holiday-weekend performance and signaled that business trends have recently improved. Wayfair disclosed in a filing that it saw a low-single-digit increase in U.S. sales during the five-day span from Thanksgiving to Cyber Monday, relative to a year before. Chief Executive Niraj Shah added in the filing that “leading up to Cyber Five, our November year-over-year revenue trends strengthened relative to the down 10 percent quarter-to-date update we shared on our recent conference call, with the Cyber Five period itself comping flat for the company.” The November sales data come during a period when inflation has been up nearly 8%. William Blair analyst Phillip Blee wrote that “the better-than-expected sales trends could provide upside to the company’s fourth-quarter earnings expectations where Wayfair’s inventory-light supplier model is particularly beneficial, enabling promotion-led traffic and conversion growth while largely maintaining product margins.” Even with Wednesday’s rally, the stock is set to be down more than 10% for the month of November and log its 13th monthly decline in the past 15 months. http://bit.ly/3VpMAOd
DraftKings stock jumps after deal with Churchill Downs to launch horse race betting app ahead of the Kentucky Derby.
Shares of DraftKings Inc. jumped 2.3% in premarket trading Tuesday, after the online sports betting and fantasy sports company and Churchill Downs Inc. announced a multi-year agreement that will bring betting on horse racing to DraftKings. Churchhill Downs’ stock was inactive in the premarket. DraftKings said it will launch “DK HORSE” in the coming months, a standalone app that will require customers to sign up and deposit funds separate from their “one account, one wallet” that is tied to DraftKings Sportsbook, Casino and fantasy sports apps. DK HORSE, which is expected to be available in 21 states to start, is scheduled to launch before the Kentucky Derby in May 2023. “”We are excited to collaborate with Churchill Downs Incorporated, not only to give our existing customers an opportunity to engage with pari-mutuel horse wagering, but also to acquire new customers efficiently during marquee horse racing moments,” said DraftKings Chief Executive Jason Robins. DraftKings’ stock has tumbled 47.2% year to date through Monday and Churchill Downs shares have lost 8.1%, while the S&P 500 has shed 16.8%. https://on.mktw.net/3XSvkmj
iPhone City lockdown ended; reportedly cost Apple US$1 billion/week.
The iPhone City lockdown has ended, allowing free movement of residents and workers in Zhengzhou, China. The move will help relieve pressures at the Foxconn plant after a massive production disruption that is estimated to have cost Apple around a billion dollars a week in lost iPhone sales. The ending of COVID-19 restrictions in the city will allow Foxconn to exit the closed-loop production process, which has been a key factor in the plant’s recent troubles. In an attempt to reduce the economic impact of lockdowns, large factories are allowed to remain open by switching to closed-loop production, where workers remain in the campus 24/7 for up to a month at a time, sleeping in shared dormitories. This is obviously tough on workers, who are separated from their families and have very limited leisure opportunities. There have been varying estimates of lost iPhone production, ranging from around 6 million units to more than 20 million units. Worst hit has been the iPhone 14 Pro, where the gap between supply and demand is so great that became impossible to guarantee delivery in time for Christmas even for orders placed in mid-November. http://bit.ly/3UsK3S
Airbnb wants to help renters list their apartments for short stays.
Airbnb is launching a new service to showcase apartment buildings that allow renters to list their homes for short stays. The company has partnered with major landlords to provide the service as renters are typically prohibited from listing their apartments on Airbnb, per CNBC. Airbnb said in a news release the service would help renters make extra cash during a difficult economic period. “As the cost of living continues to rise, renters can use the extra income earned by hosting part-time on Airbnb to contribute to their rent, save for a home, or pay for other living expenses,” Nathan Blecharczyk, Airbnb’s co-founder and chief strategy officer, said. The potential income varies on location and apartment, but Airbnb says renters who hosted in the apartment buildings did so for an average of nine nights and earned an average of US$900 per month. Airbnb is showcasing 175 apartment buildings in 25 cities across the US, including San Francisco, Los Angeles, Atlanta, Dallas, and Seattle, per the news release. http://bit.ly/3EWsnZw
Palantir failed to spot pattern in SPAC debacle.
Palantir Technologies Inc.’s raison d’etre is identifying patterns hidden within mountains of data. Yet somehow it didn’t spot the risks in its own investment strategy or the danger that startups might not be able to pay their bills. Palantir’s losses from a portfolio of businesses that went public via special purpose acquisition companies, show the dangers of correlated stock investments and an unsustainable growth strategy. http://bit.ly/3FmpaE3
Elon Musk claims Neuralink is about ‘six months’ away from first human trial.
At a ‘show and tell’ event on Wednesday, Elon Musk said that his brain-computer interface company, Neuralink, could implant one of its devices in someone’s head within the next six months — meaning it’s not happening this year. He also claimed that he would get the device implanted in his own head at some point in the future. During the presentation, Musk said that the company had submitted most of the paperwork needed for a human clinical trial to the Food and Drug Administration, which regulates medical devices in the United States. Previously, Musk had said that he’d hoped for human trials to begin in 2020, and then 2022. Now, that’s slipped to at least 2023. Neuralink’s goal is to create a device that can be implanted in the brain, and use it to control a computer with brain activity. Back in 2019, Musk revealed that the company was testing its device in monkeys. In 2020, it trotted out pigs with the implants. And last year, Neuralink released a video showing a monkey playing Pong with its brain. This year, the monkeys are back. In a video demonstration, one of them helped “type” the phrase ‘welcome to show and tell’ using their implant by focusing on highlighted words and letters. Another video showed how the monkeys were trained to charge the devices by sitting under a wireless charger. http://bit.ly/3uhs9XW
Apple mixed-reality headset rivaling Meta set to tun ‘xrOS’ operating system.
Apple Inc. is ramping up work on a mixed-reality headset, its first major new product category since the Apple Watch, and has renamed the accompanying software in the latest sign of an approaching debut. The company plans to introduce the headset as early as next year, along with a dedicated operating system and app store for third-party software, according to people with knowledge of the matter. Internally, the company recently changed the name of the operating system to “xrOS” from “realityOS,” said the people, who asked not to be identified because the project is still under wraps. http://bit.ly/3EOEvM4
Monarch’s first MK-V smart tractors powered by Nvidia are being delivered.
Monarch Tractor, an electric smart tractor company, says its first AI-powered farming vehicles, dubbed the MK-V, are rolling off the production line. It’s the Livermore, California-based startup’s first product, and it uses Nvidia’s Jetson edge AI platform to perform agricultural tasks with or without a driver behind the wheel. The tractor collects and analyzes crop data daily and can process data from current and next-generation implements equipped with sensors and imaging. This data can be used for real-time implement adjustments, long-term yield estimates, current growth stages and other plant and crop health metrics. Many tractors out in farming fields have semiautonomous modes but largely require a driver to be seated. They also mostly run on diesel gas, so the MK-V, with its fully electric design and driver-optional smarts, is claiming it’s the first production model of its kind. Monarch Tractor raised US$61 million during a Series B investment round in 2021 and has since raised over US$110 million. It partnered with Foxconn, the company that produces most of Apple’s iPhones; together, the companies are building the MK-V at the former GM plant in Lordstown, Ohio. http://bit.ly/3XSd2lu
San Francisco supervisors vote to allow police to use robots to kill.
The San Francisco Board of Supervisors voted 8-3 Tuesday night to approve a controversial policy that would allow police to deploy robots capable of using lethal force in extraordinary circumstances, according to multiple reports. The Washington Post reports the vote came after a heated debate on a policy that would allow officers to use ground-based robots to kill “when risk of loss of life to members of the public or officers is imminent and officers cannot subdue the threat after using alternative force options or de-escalation tactics.” The Post says the measure still requires a second vote next week and the mayor’s approval. “There could be an extraordinary circumstance where, in a virtually unimaginable emergency, they might want to deploy lethal force to render, in some horrific situation, somebody from being able to cause further harm,” Supervisor Aaron Peskin said at the board meeting, according to the San Francisco Chronicle. https://tinyurl.com/mryavs72
FCC authorizes SpaceX Gen2 Starlink: Up to 7,500 satellites.
The Federal Communications Commission issued a key authorization to Elon Musk’s SpaceX on Thursday, granting approval for the company to move forward with launching up to 7,500 next-generation satellites in its Starlink internet network. “Our action will allow SpaceX to begin deployment of Gen 2 Starlink,” the FCC wrote in the order. The FCC did not grant SpaceX’s full application, which included deployment of nearly 30,000 satellites in low Earth orbit, and it placed some conditions on the company’s plan to deploy the satellites. It deferred decision on the application to launch the full number. The FCC imposed a limit on the number of satellites in SpaceX’s second-generation of the Starlink constellation, also known as Gen2, in order “to address concerns about orbital debris and space safety.” SpaceX is also required to coordinate with other satellite operators, as well as with NASA and the National Science Foundation to protect science missions and radioastronomy, respectively. The FCC’s decision is crucial to SpaceX’s plans to expand its satellite network, which have been hotly contested in filings with the regulator from companies including Viasat, DISH and Amazon. To date SpaceX has launched about 3,500 first-generation Starlink satellites into orbit. The service had about 500,000 subscribers as of June. http://bit.ly/3XM00G9
Adtech, Privacy & Regulatory
Twitter keeps missing its advertising targets as woes mount.
Advertising accounted for more than 90 percent of Twitter’s US$5.1 billion in revenue last year. The World Cup has historically been a boon for Twitter, bringing in record traffic and an influx of advertising dollars. But this time, when the global soccer tournament started on Nov. 20, Twitter’s U.S. ad revenue was running at 80 percent below internal expectations for that week, three people with knowledge of the figures said. In tandem, Twitter was rapidly cutting its revenue projections. The company previously forecast that it would generate US$1.4 billion in the last three months of the year, down from US$1.6 billion a year ago because of the global economic downturn. But as Twitter kept missing its weekly advertising targets, that number slid to US$1.3 billion, then to US$1.1 billion, two people said. Many of the company’s troubles can be traced to Mr. Musk’s takeover in late October. Since then, advertisers — which provide 90 percent of Twitter’s revenue — have paused some spending on the platform, citing concerns about how Mr. Musk might change the service. The billionaire, a self-described “free speech absolutist,” has reinstated banned accounts and dropped at least one misinformation policy. Hate speech on Twitter has soared in recent weeks, researchers found. At the same time, Mr. Musk has alternated between wooing advertisers and blasting them. Last month, he threatened a “thermonuclear name & shame” of brands that halted their spending on Twitter. This week, he briefly picked a fight with Apple, which was on track to spend more than US$180 million on Twitter ads this year, three people said. Twitter’s advertising business has become so fraught that it has started offering brands additional incentives. Some brands are committing only to promotions for events, like the Super Bowl, with heavy discounts or clauses that allow them to back out for any reason, according to internal documents and three people familiar with the efforts. Automakers are among the most concerned advertisers, with General Motors raising questions about whether Twitter’s data would be shared with Mr. Musk’s car company, Tesla, three people said. https://tinyurl.com/mr3pjrsu
Google hit with multibillion-dollar class-action lawsuit over online ad dominance in the U.K.
Alphabet Inc.’s Google has been sued for £13.6 billion (US$16.3 billion) over claims its dominance of the digital-advertising market has amassed “super profits” at the expense of hundreds of thousands of websites and mobile apps in the U.K. The class-action lawsuit, filed Wednesday in the Competition Appeals Tribunal in London, is being brought on behalf of 130,000 businesses that carry online banner ads. A Google spokesman said the company “works constructively with publishers across Europe — our advertising tools, and those of our many adtech competitors, help millions of websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers. These services adapt and evolve in partnership with those same publishers. This lawsuit is speculative and opportunistic.” http://bit.ly/3XOLWvt
Cyber Monday online sales hit a record US$11.3 billion, driven by demand, not just inflation, says Adobe.
Expectations for this year’s holiday spend online were lukewarm, but initial activity — driven by deep discounts — has bucked predictions. Cyber Monday pulled in US$11.3 billion in sales online according to figures from Adobe Analytics, which tracks seasonal e-commerce activity. This is 5.8% more than consumers spent on the same day last year (when US$10.7 billion was recorded in sales, a drop on 2020’s US$10.8 billion), and sets a record both for the day and the year so far. Thanksgiving saw US$5.29 billion in sales and Black Friday had US$9.12 billion in sales — both also up on earlier forecasts. The weekend between had US$9.55 billion in sales. Altogether, “Cyber Week” — the period including those holidays and the days back at work as people continue to shop online — will reach US$35.27 billion in sales online, up 4% over last year and accounting for 16.7% of all sales in the months of November and December. Salesforce separately released its own preliminary figures of US$6 billion for Cyber Monday in the evening Monday. We’ll update these as we get more complete results. http://bit.ly/3H2Kv6H
Winging It: Inside Amazon’s quest to seize the skies.
Amazon has managed to build its own sizable cargo service in just a few years, helping it to dramatically decrease its reliance on UPS and FedEx. (FedEx eventually terminated its Amazon contracts in 2019.) The company now owns 11 planes and leases about 100 others, flown by seven air carriers that make more than 200 flights a day out of 71 airports, including a European hub near Leipzig, Germany. This fleet, known as Amazon Air, flies orders from fulfillment centers to customers when items are stored too far away to transport by truck, the company says. Last year, Amazon opened a US$1.5 billion air hub at Cincinnati/Northern Kentucky International Airport (CVG)—among the largest capital investments in the company’s history. As a result, nearly three-quarters of Americans in the continental US live within 100 miles of an Amazon airport, according to a September report by DePaul University. The story of Amazon Air demonstrates the lengths the company will go to keep its promise to customers and maintain its retail dominance. It’s a side of the company that most shoppers rarely even see, unless they happen to glance up in the sky as an Amazon jet roars above. But as the program continues to expand, some former employees say these costly, emissions-spewing airplanes are often under-filled or are used to ship goods that could be carried more cheaply and efficiently by road. https://archive.ph/XEuP8
Fintech, Blockchain & Cryptocurrency
India to pilot retail digital currency on December 1.
India will undertake the first pilot for retail digital currency on December 1, the central bank said Tuesday, extending the test to evaluate the creation and distribution of the digital currency in the South Asian market with a closed group of customers and merchants a month after it began evaluating the CBDC for the wholesale segment. Four local banks — State Bank of India, ICICI Bank, Yes Bank and IDFC — will participate in the initial phase of the pilot in four cities (Mumbai, New Delhi, Bengaluru and Bhubaneswar). Bank of Baroda, Union Bank of India, HDFC Bank and Kotak Mahindra Bank will join the pilot “subsequently,” the Reserve Bank of India said. The pilot will eventually be expanded to cover the cities of Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna and Shimla. The central bank hopes to lower the economy’s reliance on cash, enable cheaper and smoother international settlements, and protect people from the volatility of private cryptocurrencies, RBI officials have said in recent quarters. Based on the test results, the central bank will experiment with additional features and applications of the digital rupee in future pilots, it said. The limited roll-out of e-rupee comes at a time when several governments across the globe are trialing digital versions of their currencies. But some have expressed concerns about the unchecked proliferation of digital currencies. http://bit.ly/3XOLXiL
Apple blocked Coinbase Wallet update on iOS for offering NFTs.
Non-fungible tokens, also known as NFTs, are becoming increasingly popular. Yet Apple still doesn’t seem very open to this idea, at least not when these NFTs are sold inside iOS apps without using the App Store’s in-app purchases system. And this is what happened with Coinbase Wallet, which allegedly had its latest update denied in the App Store because of the NFTs feature. In a Twitter thread, the official Coinbase Wallet account reported that Apple has blocked its latest iOS app release until the developers disabled the feature that lets users send NFTs through the app. The platform claims that Apple has required that the fees charged to transfer NFTs must be paid through the App Store’s in-app purchases system so that the company can collect its 30% commission. Earlier this year, Coinbase CEO Brian Armstrong had already complained about the App Store not being crypto-friendly. According to Armstrong, there are “potential antitrust issues there” in reference to the App Store guidelines. Now Coinbase expects to have talks with Apple in order to resolve this situation, but it’s unclear whether Apple will be flexible with its new guideline on apps with NFTs. http://bit.ly/3UGHlJ7
TSMC plans to make more advanced chips in US at urging of Apple.
Taiwan Semiconductor Manufacturing Co. will offer advanced 4-nanometer chips when its new US$12 billion plant in Arizona opens in 2024, an upgrade from its previous public statements, after US customers such as Apple Inc. pushed the company to do so, according to people familiar with the matter. TSMC is expected to announce the new plan when President Joe Biden and Commerce Secretary Gina Raimondo visit Phoenix for a ceremony next Tuesday, said the people, who asked not to be identified because the matter is private. The TSMC factory had been slated to make 5-nanometer semiconductors, a standard that will be far from the cutting edge by 2024. The Taiwanese company also will commit to adding a second nearby plant, which will make even more advanced, 3-nanometer chips, they said. TSMC previously said it would make 20,000 wafers per month at the Arizona facility, although production may increase from those original plans, the people said. Apple will use about a third of the output as production gets underway. https://tinyurl.com/mr3shm5d
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.