This past week was relatively quiet in terms of new public markets funding, in fact, in the United States, Barrons observed — DLocal is the only IPO this week due to the Memorial Day holiday. Next week, several companies are scheduled to go public, including TaskUs, LifeStance Health Group, and monday.com. We hosted an investor presentation for Sophic Client, GameSquare Esports, in case you missed it, here is a replay. In Canada, Dye & Durham (DND-TSX), following an indication of interest from a shareholder group led by management to acquire the Company, its board of directors has commenced a process to explore and evaluate potential strategic alternatives focused on maximizing shareholder value. The indication of interest would result in Dye & Durham being taken private at an approximate 23% premium to the current market value, being a per share value of $50.50 — recall the company raised $200 million in equity at $50.50/sh (in addition to convertible debt), a few months ago.
Canadian Technology Capital Markets & Company News
Dye & Durham (DND-TSX) announces that following indication of interest from management to acquire the company it is commencing strategic process.
Following an indication of interest from a shareholder group led by management to acquire the Company, its board of directors has commenced a process to explore and evaluate potential strategic alternatives focused on maximizing shareholder value. The indication of interest would result in Dye & Durham being taken private at an approximate 23% premium to the current market value, being a per share value of $50.50. https://bit.ly/3z7pEc0
Bench secures $73 million, unveils new banking products.
Vancouver-based FinTech startup Bench has raised almost $73 million in Series C financing and announced the launch of Bench Core and Bench Flex, two new banking product offerings. The round was led by New York’s Contour Venture Partners, a previous Bench investor. It also saw participation from other existing Bench investors Altos Ventures, Inovia Capital, and BMO T&I, as well as new investors Shopify and Sage. Along with the funding, Bench has also unveiled two new banking products. This new capital more than doubles Bench’s total funding to date to over $100 million. The company plans to use the funding to invest in its growth in the United States (US) and support the launch of Bench Core and Bench Flex. Headquartered in Vancouver, Bench was co-founded out of New York in 2012. The startup touts itself as “the largest bookkeeping service in America for small business.” Bench’s software offering and live bookkeeping team serves thousands of small business, independent contractor, and entrepreneur clients across the US. https://bit.ly/3g7FdaS
Smart Skin Technologies raises $10.7 million to accelerate global growth.
Smart Skin supports 18 of the world’s 20 largest pharmaceutical companies and nearly every major bottling company in the world with their QuantifeelTM solutions, designed to improve production efficiency, yield and product quality. BDC Capital’s Industrial Innovation Venture Fund led the financing round. Existing investors including SCHOTT AG, Mariner’s East Valley Ventures and the New Brunswick Innovation Foundation also participated in the financing. https://bit.ly/3ppSWxR
Adeptmind raises $7.5 million to bridge gap between e-commerce and physical retail.
Toronto-based retail software startup Adeptmind, which leverages artificial intelligence (AI) to improve online search for retailers, has secured around $7.5 million in Series A financing to accelerate its go-to-market strategy and “double down” on its research and development (R&D) efforts. The equity funding round was led by Boston’s Innospark Ventures, and also involved support from London’s A/O PropTech and Pi Labs, and Illinois-based beauty retailer client Ulta Beauty. https://bit.ly/3gg6BU2
helloDarwin evolves B2B services platform, raises $2 million seed round.
Montréal-based B2BQuotes has rebranded to helloDarwin and closed $2 million in seed funding, as the startup looks to scale its online platform that aims to bring together businesses and B2B service providers. The round was led by Tactico Venture Capital and RBC, with participation from existing investor Real Ventures. https://bit.ly/3uU7ZRL
AQC Capital secures $64 million for second tech startup investment fund.
Montréal-based AQC Capital, formerly known as Anges Québec Capital, has created a new $64 million fund to fuel the growth of tech startups across the province. The fund, Anges Québec Capital II, is sponsored by Investissement Québec and Teralys Capital, in collaboration with the Caisse de dépôt et placement du Québec, the Fonds de solidarité FTQ, Fondaction, and Finalta. The fund aims to support innovative Québec startups. https://bit.ly/3g9XLY5
The ‘Warren Buffett of Canada’ could score a $1 billion return on BlackBerry as retail investors target the meme stock.
A billionaire investor hailed as the “Warren Buffett of Canada” stands to make a fortune on BlackBerry after an agonizing seven-year wait, thanks to day traders pumping its stock price higher this week. Prem Watsa is the founder and CEO of Fairfax Financial, an insurance conglomerate he modeled on Buffett’s Berkshire Hathaway. Fairfax owns 46.7 million shares of BlackBerry as of March 31, giving it a 8% stake in the enterprise-software group. BlackBerry is its second-largest holding, accounting for 14% of its US stock portfolio. Fairfax also holds BlackBerry bonds that it can convert into 55 million shares at a cost of US$6 a share. If it converts all of those bonds, it would have 102 million shares or more than 16% of BlackBerry’s outstanding shares. The irony is that Watsa, a value investor who has stubbornly held BlackBerry for seven long years, might finally make some money on it because a bunch of day traders are wildly speculating on meme stocks for fun. https://bit.ly/2TBre5u
Canada invests over $960-million in renewable energy and grid modernization projects.
The Honourable Seamus O’Regan Jr., Minister of Natural Resources, launched a $964-million program to support smart renewable energy and grid modernization projects that will lower emissions by investing in clean energy technologies, like wind, solar, storage, hydro, geothermal and tidal. The Smart Renewables and Electrification Pathways Program (SREPs) supports building Canada’s low-emissions energy future and a renewable, electrified economy through projects that focus on non-emitting, cleaner energy technologies, such as storage, and modernizing electricity system operations. Investing in these technologies reduces greenhouse gas emissions by creating a cleaner, more connected electrical system that helps Canada reach net-zero emissions by 2050. https://bit.ly/3chFqXJ
An EV company is planning a crypto-mining car that will dig for bitcoin and dogecoin while parked.
Forget Tesla, there’s a new electric carmaker on the cryptocurrency block. Maybe. Canadian light-electric-vehicle manufacturer Daymak said on Tuesday that its new Avvenire Spiritus model will be able to mine cryptocurrencies, including bitcoin and dogecoin. However, the technology – which Daymak calls the Nebula Miner – is yet to secure a patent. And the Avvenire range is yet to begin production, although Daymak has received more than US$350 million of pre-orders, with the bitcoin-mining Spiritus three-wheeler set to launch in 2023. Daymak – which specializes in electric scooters but is planning a major move into cars – said the Nebula Miner will go to work whenever the vehicle is charging. https://bit.ly/3fSFTBV
Global Markets: IPOs, Venture Capital, M&A
DLocal, the week’s only IPO, makes its debut.
Shares of dLocal soared as much as 59% Thursday after the company completed an initial public offering that raised more than expected. The cross-border payments company collected US$617.6 million after selling 29,411,765 shares at US$21 each, above the range of US$16 to US$18 it had told investors to expect. DLocal is the only IPO this week due to the Memorial Day holiday. Next week, several companies are scheduled to go public, including TaskUs, LifeStance Health Group, and monday.com. Founded in 2016, dLocal provides a platform that helps over 330 merchants connect with billions of consumers in emerging markets. Customers include Microsoft, Amazon.com, Spotify Technology, and MailChimp. The Montevideo, Uruguay, company earns revenue from the fees it charges for processing cross-border and local payment transactions. DLocal is the latest payments company to go public. Flywire (FLYW) and Paymentus (PAY) listed their shares last week while Marqeta is making its public equities debut next week. https://bit.ly/3ckwm4K
AI cybersecurity provider SentinelOne files for US$100 million IPO.
SentinelOne, a late-stage security startup that helps organizations secure their data using AI and machine learning, has filed for an IPO on the New York Stock Exchange (NYSE). In an S-1 filing on Thursday, the security company revealed that for the three months ending April 30, its revenues increased by 108% year-on-year to US$37.4 million and its customer base grew to 4,700, up from 2,700 a year prior. Despite this pandemic-fueled growth, SentinelOne’s net losses more than doubled from US$26.6 million in 2020 to US$62.6 million. SentinelOne, which was founded in 2013 and has raised a total of US$696.5 million through eight rounds of funding, is looking to raise up to US$100 million in its IPO, and said it’s intending to use the net proceeds to increase its visibility in the cybersecurity marketplace and for product development and other “general corporate processes.” https://tcrn.ch/3ck4627
TaskUs Inc. has set terms for its initial public offering, in which the Texas-based next-generation customer experience company could be valued at up to US$2.33 billion.
The company, whose customers include Uber Technologies Inc. , Netflix Inc. and Coinbase Global Inc. , said the IPO is expected to price between US$22 and $US24 a share. The company is offering 5.55 million shares in the IPO, to raise up to US$133.3 million, and selling shareholders are offering 7.65 shares, for a total offering of 13.20 million shares. The stock is expected to trade on the Nasdaq under the ticker symbol “TASK.” There are 16 underwriters, led by Goldman Sachs and J.P. Morgan. The company recorded net income of US$34.5 million on service revenue of US$478.0 million in 2020, after income of US$33.9 million on revenue of US$359.7 million in 2019. The company is looking to go public at a time that the Renaissance IPO ETF has lost 9.2% over the past three months while the S&P 500 has gained 8.6%. https://on.mktw.net/3z3anZz
Rent the Runway is mulling plans to go public via an IPO as early as this year, report says.
Rent the Runway, the designer clothes rental business, could go public via an initial public offering (IPO) as early as this year, Bloomberg reported Thursday. People familiar with the matter told the publication that Rent the Runway was already interviewing banks in preparation for an IPO, though they noted that discussions were at an early stage and the company may still decide against an IPO. News of the potential IPO comes after a tumultuous year for the company. The pandemic ravaged its business and demand for renting one-off pieces or officewear dried up overnight, wiping US$250 million from the company’s valuation and forcing it to close its stores and lay off or furlough half of its staff. https://bit.ly/3imeObV
U.K. health startup Babylon to go public in U.S. in US$4.2 billion SPAC deal.
Babylon Health—maker of a popular telehealth app—has announced it plans to go public in the U.S. via a merger with a Tennessee-based special purpose acquisition at a valuation of US$4.2 billion. The British company said the planned merger with the SPAC called Alkuri Global Acquisition Corp., led by former Groupon executives Rich Williams and Steve Krenzer, would include US$525 million from the shell company and US$230 million from a group of private investors. It’s the latest homegrown British company to turn its back on the London public markets and seek a listing in the U.S. with the help of an American SPAC. In March, London-based used car website Cazoo announced plans to merge with a SPAC in a US$7 billion deal, while Hyundai-backed electric car maker Arrival made its New York debut in the same month after a SPAC deal. https://bit.ly/3wZlroL
WeTransfer plans IPO at 1 billion-Euro valuation.
File-sharing platform WeTransfer plans to seek a valuation of about 1 billion euros (US$1.2 billion) from a proposed initial public offering later this year, people familiar with the matter said. The company is preparing a listing on the Amsterdam stock exchange with advisers, the people said, asking not to be identified because the plans are private. The IPO could happen as early as this month, depending on market conditions, but could shift to the second half of the year, one of the people said. Discussions are ongoing and the timing and value could still change, they said. This year is on track to be the largest for European technology and internet IPOs in more than a decade, with companies raising more than US$11 billion from listings in 2021 so far, according to data compiled by Bloomberg. https://bloom.bg/3gbV8F7
Autonomous vehicle startup Aurora in final talks to merge with Reid Hoffman’s newest SPAC.
Autonomous vehicle startup Aurora is close to finalizing a deal to merge with Reinvent Technology Partners Y, the newest special purpose acquisition company launched by LinkedIn co-founder and investor Reid Hoffman, Zynga founder Mark Pincus and managing partner Michael Thompson, according to several sources familiar with the talks. One of the sticking points is the targeted valuation, which had been as high as US$20 billion. It is now closer to US$12 billion and the deal is expected to be announced as early as next week, said multiple sources who have asked not to be identified because they’re not authorized to discuss the deal. Aurora declined to comment. Reinvent also declined to comment. https://bit.ly/3z5AgIk
Electric truck startup Rivian is eyeing a US$70 billion valuation in upcoming IPO, report says.
Rivian Automotive, the electric truck startup that’s backed by Amazon, is targeting an IPO that could value the company at $70 billion, according to a Bloomberg report. Previous reports suggested Rivian could target a US$50 billion valuation in its public debut. The company was last valued at US$27.6 billion when it raised US$2.65 billion from T. Rowe Price Group, Fidelity Investments, and Amazon in January. Amazon’s investment in Rivian goes well beyond its January fundraise. The e-commerce giant committed to buying 100,000 electric delivery vans produced by Rivian in 2019, and some of those deliveries began to hit the road earlier this year. https://on.mktw.net/3fTQQ6o
Vivendi confirms talks with Ackman’s SPAC over 10% stake in Universal Music Group.
Hedge-fund billionaire William Ackman’s special purpose acquisition company (SPAC) is in talks with Vivendi to buy a 10% stake in Universal Music Group, the French media conglomerate said in a statement on Friday. Vivendi said it had entered discussions with Ackman’s Pershing Square Tontine Holdings and that the potential deal would give Universal Music an enterprise value of US$42.4 billion . The French company plans to distribute 60% of Universal Music’s share capital and list the company in Amsterdam, subject to shareholder approval next month. The Wall Street Journal reported late Thursday that the two sides were nearing a deal, citing sources. https://tcrn.ch/3ck4xth
SoftBank to back Flipkart.
SoftBank Group Corp. is in talks with Flipkart to invest US$700 million in the internet retailer, three years after it sold its entire stake in the company to Walmart Inc., two people aware of the development said. The proposed investment in Flipkart from SoftBank’s Vision Fund 2 is part of a US$1.2-1.5 billion funding round, the people said on condition of anonymity. The transaction is expected to value Flipkart at US$28 billion, one of the people said, adding that the deal is expected to close in 3-4 months. The transaction, the second person said, could value Flipkart at as much as US$30 billion, depending on the final set of investors. Prosus Ventures, the investment arm of South African conglomerate Naspers, and other existing investors could raise their stakes, the people said. The transaction will precede a proposed listing of the Indian e-commerce giant, slated to be in the next 12-18 months, the first person said. The investors signing up for the ongoing round expect Flipkart’s valuation to rise to around $35-40 billion by then, with online sales surging because of the pandemic, the second person said. Singapore’s sovereign wealth fund GIC and Canadian pension fund CPPIB are also in talks to invest in Flipkart, the second person said. This was first reported by The Economic Times on 11 May. https://bit.ly/2RrbDVr
Etsy buying fashion marketplace Depop for US$1.6 billion.
Online art seller Etsy says it’s buying London-based privately held fashion marketplace Depop for US$1.625 billion. Etsy said the price is subject to adjustments for working capital, transaction expenses, cash and indebtedness, and deferred and unvested equity for Depop management and employees. Depop recorded revenue of US$70 million in 2020, and its gross merchandise sales have grown at an annual rate of nearly 80% from 2017 to 2020. Depop is expected to add to Etsy’s top line growth rate and modestly dilute Etsy’s adjusted EBITDA margin, the company said. Goldman Sachs advised Etsy, and Credit Suisse advised Depop. https://on.mktw.net/3uW7WVm
Cloudera going private in US$5.3 billion acquisition.
Private equity firms KKR and Clayton, Dubilier & Rice are acquiring Cloudera, a provider of data management software, for about US$5.3 billion in cash. The deal, set to close in the second half of the year, will end Cloudera’s four-plus year run as a publicly-traded company. The writing has been on the wall for Cloudera for some time now. The company, which was reportedly seeking a buyer around this time last year, has struggled to build a healthy business around Hadoop–a type of open-source software for storing and analyzing massive amounts of data on cheap hardware–at a time when the overall data analytics market is booming. Cloudera has tried a variety of tactics to jumpstart growth, including a 2018 merger with main rival Hortonworks and a CEO change two years ago, which haven’t significantly improved its market position. While Hadoop is still widely used, it is losing ground to newer and better-performing technologies like Apache Spark, which can process data much faster and in real-time. This is one reason why Databricks, which is building a business around Spark, has become one of the most closely watched enterprise software companies ahead of an expected IPO. https://bit.ly/2RwhhG0
Take-Two to acquire Serbian mobile-gaming company Nordeus for up to US$378 million.
Take-Two Interactive Software Inc. has agreed to acquire Serbian mobile-gaming company Nordeus for up to US$378 million, the videogame company announced Wednesday. Take-Two says that the upfront price of US$225 million includes cash and newly issued Take-Two shares, while Nordeus also has the option for earn-out consideration if the company meets earnings thresholds during the first two years. Nordeus makes “Top Eleven,” a mobile soccer-management game that has more than 240 million registered users. The deal shows continued interest in mobile gaming from Take-Two, which acquired Social Point and Playdots over the past few years to strengthen its mobile positioning. Take-Two shares have declined 12% so far this year as the S&P 500 has risen 12%. https://on.mktw.net/2Sce2Uo
Dropbox soars on report that activist hedge fund Elliott Management has a 10% stake in the company.
Dropbox stock soared on Wednesday after a report out of the Wall Street Journal revealed the activist hedge fund Elliott Management holds a 10% stake in the company, worth well over US$800 million. Speculation about a potential activist investor stake in Dropbox has been swirling since mid-May when a 13-F filing from UBS showed that the bank had picked up 7.7 million shares of Dropbox in the second quarter. UBS is often associated with activist investors taking swap positions through banks. Now, unnamed sources speaking to the Wall Street journal confirmed Elliott Management has entered the fray. https://bit.ly/3gbbmhV
Uber and Lyft fares surge by up to 40% as the ride-hailing apps struggle to find enough drivers.
Uber and Lyft are hiking up fares on their apps as demand for rides outstrips the number of available drivers. Ride-hailing apps are struggling to find enough drivers amid the current labor shortage — but demand for travel is rebounding. Lyft cofounder John Zimmer said in an earnings call in May that rising rideshare prices hadn’t deterred customers from using Lyft because it was an industry-wide trend — but a report by The New York Times shows that some people are now shunning ride-hailing apps in favor of public transit, or even flights. https://bit.ly/3fUXglS
Apple asks staff to return to office three days a week starting in early September.
Apple employees are being asked to return to the office three days a week starting in early September. Tim Cook sent out an email Wednesday informing staff of the change. “For all that we’ve been able to achieve while many of us have been separated, the truth is that there has been something essential missing from this past year: each other,” he said. “Video conference calling has narrowed the distance between us, to be sure, but there are things it simply cannot replicate.” Cook said that most employees will be asked to come in to the office on Mondays, Tuesdays, and Thursdays, with the option of working remotely on Wednesdays and Fridays. Teams that need to work in-person will return four to five days a week. https://bit.ly/3gcHUIb
Facebook’s adding multiplayer AR to video calls in Messenger and Instagram.
Facebook’s augmented reality efforts are pushing a little further into the territory of video calls. A deeper support for shared AR effects and games in video calls are being supported across Facebook’s mobile apps, including Messenger and Instagram, the company announced at its virtual F8 developer conference Wednesday. These shared effects aren’t new: Facebook’s dedicated video-chat device, Portal, has AR effects for chats, plus AR-enhanced games and storytelling modes. The features crossing over into Messenger and Instagram look similar to those features, but for phones. AR effects have previously been available on Messenger and Instagram, but support for multiplayer will allow for people in one chat or game to share common effects or experiences. https://cnet.co/3ckyZ6t
A self-driving truck got a shipment cross-country 10 hours faster than a human driver.
Last month TuSimple, a transportation company focused on self-driving technology for heavy-duty trucks, shipped a truckload of watermelons from Arizona to Oklahoma using the truck’s autonomous system for over 80 percent of the journey. The starting point was Nogales, at Arizona’s southern end right on the border with Mexico. A human driver took the wheel for the first 60 miles or so, from Nogales to Tucson—but from there the truck went on auto-pilot, and not just for a little while. It drove itself all the way to Dallas, 950 miles to the east (there was a human safety driver on board the whole time, but not controlling the truck). https://bit.ly/2T3vB9m
A rogue killer drone ‘hunted down’ a human target without being instructed to, UN report says.
A “lethal” weaponized drone “hunted down a human target” without being told to for the first time, according to a UN report seen by the New Scientist. The drone, which can be directed to detonate on impact, was operating in a “highly effective” autonomous mode that required no human controller, the New York Post said. ” This is likely the first time drones have attacked humans without instructions to do so, Zak Kellenborn, a national security consultant who specializes in unmanned systems and drones, confirmed in the report. Jack Watling, a researcher on land warfare at the Royal United Services Institute (RUSI), told the New Scientist that this incident demonstrates the “urgent and important” need to discuss the potential regulation of autonomous weapons. Human Rights Watch has called for an end to so-called “killer robots” and is campaigning for a “preemptive ban on the development, production, and use of fully autonomous weapons,” according to a report by the charity. https://bit.ly/3x3dWgq
Media, Streaming, Gaming & Sports Betting
HBO Max debuts ad-supported US$9.99/month tier, no theatrical releases, downloads, or 4K.
After teasing it for a few months, HBO Max has just debuted its more affordable, ad-supported streaming tier that costs US$9.99 per month. If you head to the HBO Max website today, you’ll be greeted with a new message that mentions “plans start at US$9.99/month.” Under that, the site breaks down the differences between the US$9.99/month and US$14.99/month plans, and the differences add up quickly. With the new ad-supported HBO Max tier, users get access to the entire HBO Max catalog, just with advertising throughout the programming. No more than four minutes of advertising are shown per one hour of content played. https://bit.ly/3w8JwK1
YouTube says it paid out US$4 billion to music industry over past 12 months.
YouTube paid out more than US$4 billion in royalties to artists, songwriters, and rights-holders, according to a new blog post from the streaming giant’s global head of music Lyor Cohen. While the post was short on detail, Cohen did say that “YouTube has paid over US$4 billion to the music industry in the last 12 months alone and has added more paid members in Q1 ’21 than in any other quarter since launch.” He also added that the money was derived from ads and premium subscriptions, and that more than 30% of that $4 billion came from user-generated content. YouTube — the world’s largest streaming service by far — has long been criticized by executives and artists for its low royalty rates, particularly compared with other streaming services. https://bit.ly/3wXqeHm
Downloads of TikTok slow down from last year.
TikTok, the global breakthrough app from Chinese owner ByteDance, is still the world’s most popular app but growth is slowing from last year. According to data from Sensor Tower, there were a combined 80 million app installs of the international app TikTok and its domestic Chinese version Douyin in May. That’s a decline from last year when there were 112 million downloads. On the bright side, May’s figures were up 35% month-on-month from April. https://bit.ly/3uVN14P
Adtech, Privacy & Regulatory
Biden believes ransomware attacks are ‘rising national security concern,’ White House says.
President Joe Biden believes ransomware attacks are a “rising national security concern,” the White House said Friday. White House press secretary Jen Psaki told reporters that the U.S. needs to keep its focus on attacks like the one on the world’s largest meat processing company, “and what we can do to address it.” “Certainly this is a priority to him and an area where we will be spending a significant amount of time in the coming months,” Psaki said, noting the U.S. is reviewing issues including how it works on such threats with private companies. https://on.mktw.net/2Sb6AJ2
The world’s largest meat supplier says it was hit by a cyberattack.
The largest meat supplier in the world said it was hit by a cyberattack that affected some of its systems. JBS USA said in a statement on Monday that it realized on Sunday that it was the target of an “organized cybersecurity attack, affecting some of the servers supporting its North American and Australian IT systems.” It was not immediately clear if consumers would be affected by the cyberattack, but the company said it was not aware of any data leak so far. “The company took immediate action, suspending all affected systems, notifying authorities and activating the company’s global network of IT professionals and third-party experts to resolve the situation,” JBS said. https://bit.ly/34NARk2
European Commission and U.K. announce formal probe into Facebook advertising practices.
The European Commission and the U.K. Competition and Markets Authority each said they were opening competition inquiries into social-media giant Facebook’s advertising services. The European Union said it’s looking to see whether Facebook violated EU competition rules by using advertising data gathered from advertisers in order to compete with them in markets where Facebook is active such as classified ads. The formal investigation will also assess whether Facebook ties its online classified ads service “Facebook Marketplace” to its social network. The U.K. probe also mentioned Facebook Dating, a dating profile service launched in Europe in 2020. The two agencies said they would work closely with each other. Facebook shares have climbed 19% this year, topping the 12% rise for the S&P 500. https://on.mktw.net/3v1A6i4
Tesla failed to oversee Elon Musk’s tweets, SEC argued in letters.
Securities regulators told Tesla Inc. last year that Chief Executive Elon Musk’s use of Twitter had twice violated a court-ordered policy requiring his tweets to be preapproved by company lawyers, according to records obtained by The Wall Street Journal. Tesla and the Securities and Exchange Commission settled an enforcement action in 2018 alleging that Mr. Musk had committed fraud by tweeting about a potential buyout of his company. Mr. Musk paid US$20 million to settle that case—Tesla also paid US$20 million—and agreed to have his public statements on social media overseen by Tesla lawyers. In correspondence sent to Tesla in 2019 and 2020, the SEC said tweets Mr. Musk wrote about Tesla’s solar roof production volumes and its stock price hadn’t undergone the required preapproval by Tesla’s lawyers. The communications, which haven’t been previously reported, spotlight the running tension between the nation’s top corporate regulator and Mr. Musk, who publicly mocked the SEC even after settling fraud claims with the agency. https://on.wsj.com/34Ye19b
Fintech, Blockchain & Cryptocurrency
eToro added 3.1 million users in the 1st quarter, a 210% rise driven by retail investors and crypto bulls.
Online trading platform eToro saw 3.1 million new users who registered in the first quarter of 2021 – a significant uptick compared to the 1 million gained in the same period last year – driven by rising demand for stocks and cryptocurrencies, the company said Thursday. The figure represents more than half of the 5.2 million new users who registered for the full year of 2020. In total, eToro boasts more than 20 million registered users. “The crypto bull run at the end of 2020 and beginning of 2021 also highlighted a growing trend towards diversification of cryptoassets within retail investor portfolios, with some altcoins increasing in popularity,” Yoni Assia, cofounder and CEO, said in a statement. The company also revealed that the total number of trades executed on the platform jumped 233% increase to 210 million for the quarter, compared to the first quarter of 2020. Further aiming to capture the zeitgeist, eToro plans to launch the eToro Money app and debit card in Europe this year. The company said the app will connect directly to eToro investment accounts and enable instant deposits and withdrawals. In March, eToro announced plans of going public through a US$10.4 billion merger with Betsy Cohen’s FinTech Acquisition SPAC to compete with its rivals, including Robinhood, which has plans to expand in the US. https://bit.ly/3geoWkA
Square CEO Jack Dorsey says the company is considering a new hardware bitcoin wallet.
Square CEO Jack Dorsey said the company is considering building a hardware bitcoin wallet. Shares of Square closed up about 1% on Friday. While Square offers a digital wallet, Dorsey is proposing a product that would give users more control over the cryptocurrency. Dorsey is proposing a new way for users to store their bitcoin so that it’s not controlled by Square or any other company. A bitcoin wallet could allow users to store the cryptocurrency in a secure gadget and let them choose to spend it later. “Square is considering making a hardware wallet for bitcoin,” Dorsey said. “If we do it, we would build it entirely in the open, from software to hardware design, and in collaboration with the community.”′ https://cnb.cx/3vV49cs
Bitcoin miners: China’s cryptocurrency crackdown pushes companies overseas.
Bitcoin miners are looking for workarounds to Beijing’s new cryptocurrency crackdown in China, which accounts for two-thirds of global bitcoin mining, with some going underground or looking at moving operations overseas, possibly to places with much more expensive electricity. A few big operators have halted China operations and are relocating mining projects to North America or Central Asia. Small miners, sometimes just individuals who keep a few computers humming at home, may choose to keep operating while hoping regulators do not go after them. Chinese provinces like Inner Mongolia, Xinjiang and Sichuan are no longer the havens they once were for mining operations, which set up shop in these locations because of the relatively low electricity costs. Inner Mongolia has already issued orders to shut down all mining sites, and Sichuan is expected to soon follow suit. Xinjiang alone accounts for nearly 36 per cent of the global bitcoin hash rate, a measure of the total computational power on the global bitcoin network, according to Cambridge University’s Bitcoin Electricity Consumption Index. Sichuan and Inner Mongolia come in second and third, respectively, giving China a 65 per cent share of the global hash rate. https://bit.ly/3ppptEh
Dogecoin leaps 41% as Coinbase Pro network begins to accept transfers of the meme currency.
Dogecoin jumped as much as 41% in the last 24 hour period to US$0.4446, the highest point in nearly two weeks, as Coinbase Pro opened up to the meme cryptocurrency. The cryptocurrency exchange announced on Tuesday it is allowing its Pro users to transfer dogecoin into their accounts. Pro users will be able to trade dogecoin on or after 9 a.m. PT on Thursday if liquidity conditions are met, according to a Coinbase blog post. The Coinbase Pro account is a free account designed for more experienced traders and offers advanced charting and analytical tools. Dogecoin is not yet available on Coinbase.com or via the consumer mobile apps. The exchange said it would make a separate announcement if and when that support was added. https://bit.ly/3is6BD4
China is giving away digital yuan worth US$6.2 million in a Beijing lottery as it tests out its CBDC, reports say.
China is handing out free “red packets” of its digital yuan, worth a total of US$6.2 million, in a Beijing lottery designed to test the central bank digital currency, according to reports. Residents in China’s capital city can apply to win one of the 200,000 packets, which each contain 200 digital yuan (US$31.33), Reuters reported. The digital cash, delivered via apps, can be spent at selected local retailers. The e-wallet is inspired by the Chinese tradition of giving red envelopes of money at milestone events or celebrations. The lottery is part of the People’s Bank of China’s ongoing CBDC trials, in which the digital yuan is being tested and evaluated locally before being rolled out across the country. China is the first major economy to progress its CBDC initiative to the trial stage, with the US and the EU central banks still in the research stages of their respective digital currencies. https://bit.ly/3x17Jle
NFT sales plummet nearly 90% from their peak as collectibles market cools.
On March 11, the digital artist Beeple sold a non-fungible token of his magnum opus, titled “Everydays: The First 5000 Days,” for a record US$69 million at a Christie’s auction. The sale sparked a new wave of interest in collectible digital assets that peaked on May 3, when US$102 million worth of NFT sales went through in a single day. In the seven days surrounding NFTs’ May 3 peak, the market saw US$170 million in NFT transactions, according to data from Protos. This past week, that number fell to just US$19.4 million, a nearly 90% drop from May’s record high. The number of NFT wallets showing signs of daily activity is also down 70% since early May, falling from 12,000 to 3,900. Not only have sales and interest in NFTs declined but according to Protos, there’s been a shift in the type of NFTs buyers are demanding. Sales of digital art have fallen dramatically since Beeple’s record sale in March, while sales of digital real estate and other collectibles in the so-called metaverse have risen. US$3.3 million worth of metaverse NFTs have sold this past week, while just US$3 million worth of crypto-art sold, Protos data shows. https://bit.ly/3uYnbgy
Intel reiterates chip supply shortages could last several years.
Intel Corp’s CEO said on Monday it could take several years for a global shortage of semiconductors to be resolved, a problem that has shuttered some auto production lines and is also being felt in other areas, including consumer electronics. https://reut.rs/3fW9T04
Chip shortage will worsen without vaccines, says Taiwanese Apple supplier.
A Taiwanese Apple supplier has warned that the global chip shortage will worsen without a massive increase in COVID-19 vaccinations on the island. The comment was made as the world’s leading chip testing company was forced to suspend production following a COVID-19 outbreak. Taiwan was initially hardly touched by the pandemic, thanks to tight travel restrictions and a world-beating contact-tracing system. However, infections are now rising exponentially in the country. “If the majority of the population in Taiwan do not receive COVID vaccines soon, I fear it is only a matter of time until more and more companies will be forced to halt production due to the spread of the virus,” an Apple supplier executive told Nikkei Asia. Apple was recently reported to be helping TSMC vaccinate its workforce. https://bit.ly/2TF7aPD
China ousts Taiwan as Apple’s biggest source of suppliers.
China now boasts more Apple suppliers than any other country, a sign that Washington’s attempt to untangle U.S. and Chinese supply chains has had little impact on the world’s most valuable tech company. Of Apple’s top 200 suppliers in 2020, 51 were based in China, including Hong Kong, according to a Nikkei Asia analysis of the Apple Supplier List released last week, up from 42 in 2018 and knocking Taiwan out of the top spot for the first time. Apple did not release data for 2019. Chinese suppliers have also helped Apple build production capacity in other Asian countries as part of the company’s strategy to diversify its supply chain. The Apple Supplier List covers 98% of the company’s spending on materials, manufacturing and assembly for the preceding fiscal year. Though it does not disclose procurement values for each company, the report serves as a barometer of Apple’s reliance on suppliers from different parts of the world. The report has been released almost every year since 2013. https://s.nikkei.com/3vVqYwp
Carbon neutrality goal: China is leading global surge in green bond financing this year.
China has led a surge in green bond financing this year, with global issuances growing threefold to about US$194 billion in the first five months of 2021, and was on target to easily pass record issuance levels seen in 2020, according to a new report. Through May 27, China accounted for 13.4 per cent of all green bonds issued globally, raising US$26.1 billion, according to data provider Refinitiv. That is more than double the US$10.1 billion raised in the first five months of 2020 and nearly as much as the US$27 billion raised in all of last year. The pace of green bond issuance globally is its fastest in five years, with more than double the number of bonds issued at this point in 2020, according to Refinitiv. Last year, companies and governments collectively raised US$242.8 billion in green bonds. The increase in China was driven by the swift recovery of China’s economy from the coronavirus pandemic and a push by Beijing to reach carbon neutrality by 2060, Refinitiv said. Under Chinese regulations, up to half of the proceeds raised by green bonds can be used to repay bank loans or to bolster a company’s general working capital. International standards restrict that to no more than 5 per cent of the proceeds. “Chinese financial market regulators need to take a serious look at how the country’s state-owned enterprises are using the proceeds of their green bonds,” said Christina Ng, the research and stakeholder engagement leader of Australia-based Institute for Energy Economics and Financial Analysis. https://bit.ly/2TBsnKk
Bill Gates and Warren Buffett are building a US$1 billion next-generation nuclear reactor in Wyoming.
The billionaire friends Bill Gates and Warren Buffett are set to build a US$1 billion next-generation nuclear reactor in Wyoming, Gov. Mark Gordon said on Wednesday. Gates’ company TerraPower and Buffett’s power company, PacifiCorp, said in a press release that they had selected Wyoming for their first reactor project, called Natrium, at the site of an old coal plant. The nuclear reactor would be able to produce 500 megawatts of power during peak demand, TerraPower and PacifiCorp said, adding that this would be enough energy to power about 400,000 homes. Advanced nuclear reactors such as Natrium are carbon-free power sources that could supplement wind and solar sources. They’re considered more eco-friendly than traditional nuclear reactors. Advanced nuclear reactors have simpler designs that are easier to build, more fuel-efficient, cheaper, and safer than regular reactors, according to the World Nuclear Association. Gates said in a press briefing that the plant, which would feature a sodium reactor and a molten-salt energy-storage system, would be safer, perform better, and cost less than traditional nuclear power. “We think Natrium will be a game-changer for the energy industry,” he said. https://bit.ly/3pnFY3G
Sophic Capital Client Insights
GameSquare Esports (GSQ-CSE, Sophic Client) investor presentation. In case you missed it, here is a replay. https://bit.ly/3clms2t
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