AnalytixInsight

Markets and investors are feeling a bit optimistic, with the Dow Jones up 1.8% last week, S&P 500 up 2.5%, and Nasdaq composite up 4.3%, while indices may be due for some consolidation here, deal-flow is likely not far behind after a very muted 2022. Sophic Clients, Clear Blue Technologies closed the final tranche of an oversubscribed $2.5 million private placement and Jasper Commerce announced a $500K unit financing. Sophic Clients Legend Power Systems, OneSoft Solutions and Real Luck Group announced a positive end to 2022, which bodes well for 2023. Shopify shares surged more than 12% on Wednesday after the e-commerce software provider raised prices for its subscription plans. Victoria-based holding company WeCommerce is set to consolidate with its parent company, Tiny Capital. Stripe reportedly approached investors about raising more capital — at least US$2 billion — at a valuation of US$55 billion to US$60 billion. According to The Wall Street Journal, Stripe would not use the money toward operating expenses but rather to cover a large annual tax bill associated with employee stock units. It is not clear if any discussions are ongoing. Activist investor Elliott Management has reportedly snapped up a multibillion-dollar stake in Salesforce. Buzzfeed soars 200% on plans to use OpenAI to help write stories. Shares of Intel dropped nearly 10% in after-hours trading after the chip giant reported weak earnings, sales forecast. Amazon launches RxPass, a US$5/month Prime add-on for all-you-need generic drugs covering 80 conditions. Japan and the Netherlands are poised to join the US in limiting China’s access to advanced semiconductor machinery. The Netherlands will expand restrictions on ASML Holding NV. After years of bumbling along, investment in the energy transition appears to be taking off. Businesses, financial institutions, governments and end users around the world sunk US$1.11 trillion into low-carbon technologies, according to a new report from BloombergNEF.

Last week, major indexes closed near session highs: Dow Jones was up 2%, S&P 500 rose 2.7%, and Nasdaq composite gained 4.8%. Canadian tech M&A will likely remain a theme, as we pointed out last week, as Nuvei entered a $1.7 billion deal to acquire US payments tech firm Paya. TMX Group has taken a 21% stake in data analytics company VettaFi for US$175 million as it looks to expand its information services unit. BMO Global Asset Management has teamed up with Georgian to launch a fund that allows Canadian accredited investors to invest in a US$1 billion fund Georgian is in the process of raising. Sophic Client Kraken Robotics expects to report $40 million in 2022 revenue, up 56% year-over-year. Sophic Client UGE International announced Q4 2022 project backlog (stages 3.1-5) increased over 13% quarter-over-quarter and now totals 260MW, surpassing the Company’s 2022 backlog goal of 250MW. Sophic Client LuckBox CEO Thomas Rosander provides corporate update, as the company went from a virtual ‘standing start’ in Q3 2022 to over $3 million in Global Betting Handle by the end of Q4, as over two million bets were accepted and placed on the platform. In the USA, Microsoft is reportedly in talks to pump in US$10 billion into OpenAI — the owner of ChatGPT — valuing the company at US$29 billion. Stripe’s internal valuation gets cut to US$63 billion, down 40% from its peak. Vista Equity Partners to acquire insurance software company Duck Creek for US$2.6 billion. Coinbase lays off a fifth of staff as crypto downturn continues. Tesla drops prices as much as 20% in US and Europe. China’s government takes stake in Alibaba’s domestic unit. China to allow Didi apps back online, in latest sign of regulatory thaw. the US needs to quadruple its charging infrastructure by 2025, and grow it more than eight times by 2030, given the influx of electric cars.

After a tumultuous 2022 in the markets, we hope you had a refreshing break with family and friends. While the first trading week of 2023 started off somewhat shakily, major indices closed up for the week after a strong Friday — Dow Jones closed the week up 1.5% around the same as the S&P 500, Nasdaq closed up 1%. Some market participants expect M&A to pick up in 2023, and Sophic Client Smart Employee Benefits (SEB-TSXV, SEBFF-OTCQB) is being at a 75%+ cash premium. Unsurprisingly, Canadian VC investments in 2022 are projected to lag behind 2021 figures, but will still likely top 2020 funding. Similarly, annual global venture funding fell 35% in 2022. Startups raised US$445 billion in 2022, down 35% from a record US$681 billion in 2021, according to new data from Crunchbase. OpenAI, the research lab behind the viral ChatGPT chatbot, is in talks to sell existing shares in a tender offer that would value the company at around US$29 billion, making it one of the most valuable U.S. startups on paper despite generating little revenue. In related news, Microsoft, OpenAI prep ChatGPT-powered Bing to challenge Google. SpaceX raising US$750 million at US$137 billion valuation, investors include Andreessen-Horowitz. Amazon to cut 18,000 jobs as tech layoffs continue. Data from layoff-tracking website Layoffs.fyi suggests that tech companies cut more than 150,000 positions in 2022. Apple’s AR/VR headset development is reportedly behind schedule, expect late fall release. Meta fined more than US$400 million in EU for serving ads based on online activity. Coinbase to pay US$100 million settlement for violating anti-money-laundering laws. Silvergate raced to cover US$8.1 billion in withdrawals during crypto meltdown. Mercedes-Benz and ChargePoint are going to install thousands of EV fast chargers in the US.

As 2022 fast draws to a close, and we write our final column for the year, the Dow Jones fell 2.8% last week, S&P 500 fell 3.4%, Nasdaq fell 4%. Market indices continue their now familiar trend of fading back bear market rallies. In light of this market volatility, it’s no surprise last week saw a few more terminated public listings – Stablecoin issuer Circle terminated a US$9 billion SPAC deal, India’s Snapdeal shelved a US$152 million IPO. “There is no appetite for tech stocks right now,” said a source close to the plans. That said many companies continue to execute, which we expect will be rewarded by the market. For example, Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) was just awarded a $50+ million Navy contract by the Royal Canadian Navy. Kraken’s revenue for 2019, 2020, and 2021 was $15.1 million, $12.3 million, and $25.6 million respectively. Kraken’s current market cap is ~$108 million; these recent orders cumulatively represent nearly 2.5x Kraken’s high watermark 2021 revenue and over 60% of its market capitalization. Kraken also plays into the recent trend of defence tech, as Anduril raised a massive US$1.5 billion round at US$8.5 billion valuation (almost 2x its 2021 valuation). Anduril works with the U.S. and its allies to create drones, underwater vehicles and different operating and control systems. Sophic Clients Legend Power, UGE and OneSoft presented at the Planet MicroCap Showcase conference, replays can be found on our website. The FTC is suing to block Microsoft’s acquisition of Activision. Coinbase revenue will plunge at least 50% in 2022, CEO Armstrong says. Apple accelerates plans to move production out of China amid protests. Apple’s long-awaited AR/VR headset might be facing another round of software delays, as is its speculated self driving car launch. ChatGPT should worry Google and Alphabet, according to industry experts. Meta cannot run ads based on personal data, EU privacy watchdog rules. Amazon announces TikTok-like social feed of shoppable videos, photos.