June 11, 2023: It Doesn’t Feel Like A New Bull Market…Yet

Last week, Dow Jones rose 0.3%, S&P 500 was up 0.4%, and Nasdaq composite was up 0.1%, the small-cap Russell 2000 rose 1.65%. As the S&P was just above the 20% rise threshold, it’s technically a new “bull market”. According to market watchers, it’s taken longer to get here than any other Bull market since the 1950s. While market leadership has remained very narrow and AI focused, the move up in the Russell 2000 is encouraging. Apple on Monday unveiled a headset that blends virtual reality with augmented reality—digital content and apps overlaid on the real world. Shares of Unity Software popped more than 11% Monday after Apple announced that it was working with the company on its new headset. The SEC is cracking down on crypto and sued Coinbase, Binance and its CEO, Changpeng Zhao. Elon Musk’s Neuralink saw its valuation soar to US$5 billion after private stock trades. Intel will raise about US$1.5 billion from Mobileye stake sale. GitLab shares surged 18% on 2Q, FY24 outlook. Shares of Stitch Fix surged more than 25% on Wednesday, after company laid out plans to further cut costs and focus on the U.S. Billionaire investor Stanley Druckenmiller plans to hold on to Nvidia stock for at least the near future as the chipmaker is exposed to an artificial intelligence trend could be as “transformative as the internet.” General Motors will make its electric vehicles compatible with Tesla’s supercharger network, the series of 12,000 chargers across the country for recharging the batteries of EVs, the company said Thursday. In Canada, Toronto based OpenAI rival, Cohere was in the news last week, as it raised US$270 million from Oracle, and Nvidia, bringing its total funding to US$435 million, and the Company is also preparing to work closely with Oracle. Sophic Clients UGE International and Clear Blue presented at the inaugural Canadian Climate Investor Conference in Toronto last week.

Sophic Clients UGE International (UGE-TSXV, UGEIF-OTC) and Clear Blue Technologies (CBLU-TSXV, CBUTF-OTC, 0YA-FRA) presented at the inaugural Canadian Climate Investor Conference in Toronto last week. https://tinyurl.com/mr35pd63 & https://tinyurl.com/hkt38wck

OpenAI rival Cohere raises US$270 million, including from Oracle and Nvidia.

Toronto-based artificial intelligence startup Cohere raised US$270 million in a funding round led by Inovia Capital and including tech companies Oracle and Nvidia. Oracle’s participation reflects a growing desire among some cloud providers to invest in AI startups, similar to how Microsoft has invested billions into OpenAI, which has been a boon for its cloud business. Cohere, founded by former Google researchers, builds AI software for businesses so they can create applications for tasks such as search and summarization. The funding round brings Cohere’s total capital raised to about US$435 million. Google has been an active investor in AI startups, including Anthropic and Runway, deals that typically result in the startups using Google Cloud services. Nvidia has also been becoming a more active investor in its customers, which all want access to its highly in-demand graphics processing units. In April, the chipmaker invested in CoreWeave, a cloud startup that buys Nvidia GPUs and rents them to customers. https://shorturl.at/twJ08

Oracle preps cloud AI pact with Toronto based OpenAI rival.

Oracle is prepping a slew of artificial intelligence announcements with Toronto startup Cohere as an answer to Microsoft’s artificial intelligence alliance with OpenAI, The Information reported Friday. Like OpenAI, Cohere develops large-language models that can automate tasks involving writing or coding. Oracle not only plans to sell Cohere software to its cloud customers, it also wants to use the software to create AI features for its commercial apps, similar to what Microsoft is doing with OpenAI software, the report said. The pacts are different from one another: Microsoft is OpenAI’s exclusive cloud partner whereas Cohere says it wants to be “cloud agnostic.” https://tinyurl.com/3t4bs9v5

GSoft announces $125 million investment from CDPQ to accelerate growth strategy.

GSoft, a leading software company behind products that improve the employee experience for 16,000 companies in more than 100 countries, announced an investment of CA$125 million from CDPQ, a global investment group. Bootstrapped and profitable since its foundation 17 years ago, this external funding is an important milestone for GSoft. Headquartered in Montreal, Canada, GSoft has created highly successful software products that make work simpler, kinder and faster. https://bit.ly/45SzK0A

EvenUp raises $50.5 million in Clio-backed round for AI that turns raw files into legal documents for personal injury lawyers. EvenUp, a startup established by three founders who finished their studies in Canada, aims to even the playing field in personal injury settlements. The startup offers a generative AI product that can turn raw files such as medical records, bills, and police reports, into legal documents for injury lawyers. The San Francisco-based company recently closed a $50.5 million Series B round led by Bessemer Venture Partners. According to EvenUp, this round brings its total funding raised to $65 million with valuation of $325 million. Other new investors that participated include the investment arm of Burnaby-based legaltech startup Clio, Bain Capital Ventures. https://tinyurl.com/2p8xaccf

Vive Crop Protection adds $11.2 million extension to Series C to improve efficiency of agricultural chemicals. Vive Crop Protection has raised $11.2 million (US$8.4 million) in an extension to its Series C financing round. The Mississauga-based AgTech startup secured nearly $34 million (US$26 million) in the first close of its Series C funding round in August 2022. This extension brings the round’s total to $45.9 million (US$34.4 million). Current investors in Vive who contributed to the extension include the Business Development Bank of Canada (BDC), Export Development Canada (EDC), Urbana Corporation, Co-operators, Emmertech, Lex Capital, and iSelect. Vive did not disclose who led the round or when it closed. The $11.2 million that Vive secured in this extension falls short of its previous plans to add another $18 million to its Series C financing. https://bit.ly/3J5wDIO

Sequoia Capital’s Chinese arm to split from U.S. firm.

Sequoia Capital said Tuesday that its Chinese affiliate, Sequoia Capital China, will split from the U.S. venture capital giant and be wholly independent by early next year. As part of the separation, a profit-sharing arrangement between the two firms’ employees will end, according to a person with knowledge of the matter, though U.S.-based Sequoia investment personnel will continue to hold personal stakes in existing Sequoia China funds, said two other people. Sequoia said its Indian affiliate Sequoia Capital India will also become a separate firm and change its name to Peak XV Partners. The split, which The Information initially predicted would happen last year, comes at a time when the relationship between Sequoia Capital and Sequoia China is under intense scrutiny in Washington, where the Biden administration has been discussing possible restrictions on U.S. investment in China’s tech sector. Read more about the Sequoia split and its implications here. https://tinyurl.com/bdcv4nfh

Apple unveils US$3,500 ‘spatial computing’ headset.

Apple on Monday unveiled a headset that blends virtual reality with augmented reality—digital content and apps overlaid on the real world. The device, known as Vision Pro, resembles ski goggles and will be the company’s first new personal computer device in nine years when it becomes available early next year. At US$3,499, the device’s price tag is even higher than supply chain sources and analysts had anticipated. In a video to unveil the device, CEO Tim Cook and other executives showed how people might use it. Some of the examples looked awkward — for instance, a dad playing at home with his kids while wearing the device and an office worker using Vision Pro to scroll through web pages or write emails. Other cases seemed more logical, including a person using the device to watch a movie while on an airplane. A key question is how long a wearer will be able to use the device before it puts too much pressure on the bridge of their nose—a problem with existing VR devices. Importantly, Apple executives said people will be able to control the device by using their hands as well as voice and eyes (cameras track a person’s eye movements) rather than needing “clumsy” controllers. The comment was a dig at Facebook, whose Quest VR devices generally require controllers. Noticably absent from Vision Pro were fitness experiences—a key type of app for Quest customers. Disney said it was designing experiences for the Apple device. Apple also said it was working with game software development platform Unity so that app makers could more easily make content for Vision Pro. And the company said some developers had already created Vision Pro apps that would help wearers view a “personal planetarium” of deep space imagery and help designers collaborate on Formula 1 vehicles. https://tinyurl.com/yeyhcn49

Virtual reality start-ups pin hopes on Apple to lure back funding.

Hype that AR/VR technology spells the “next big thing” in the industry has over the past six months been deflated by the release of artificial intelligence tools led by ChatGPT, the OpenAI-backed chatbot that provides humanlike answers to queries. The frenzy over AR/VR technology was so great in late 2021 that Facebook changed its name to Meta, signalling confidence in an avatar-filled “metaverse” that the company is spending $10bn a year to develop. The fanfare accompanying Apple’s expected launch prompted Meta this week to step in with a show of Quest 3, its latest virtual reality device. Chief executive Mark Zuckerberg called it Meta’s “most powerful headset yet”. It will go on sale in the autumn for US$499. But interest has dwindled as focus has shifted away from AR/VR and towards generative AI. Venture capital investment in AR and VR companies plummeted 74 per cent to US$800 million over the six months to March, compared with the same period a year earlier, PitchBook data has shown. “Metaverse isn’t really a term anyone wants to use anymore to get funding,” said Tuong Nguyen, an analyst at Gartner. “But there’s this idea that Apple can raise the tide for all boats.” Apple’s App Store for mobile devices, launched in 2008, generated US$30 million in sales in the first month. The technology company’s late founder Steve Jobs said: “Who knows, maybe it will be a US$1 billion marketplace at some point in time.” Today, annual App Store sales are at least US$70 billion, and advertising-related revenues are even bigger. https://tinyurl.com/3p6mhtjp

SEC sues Coinbase.

The Securities and Exchange Commission today filed suit against Coinbase, charging it with operating its crypto trading platform as an unregistered securities exchange. The suit had been expected since Coinbase disclosed in early March that it had received a Wells notice from the SEC that signals it had “identified potential violations of securities laws,” Coinbase said at the time. Coinbase said in April that the SEC had “not complied with the law by providing companies like Coinbase with a way to register” to list securities. On Monday, the SEC sued Binance, also alleging it sold unregistered securities, and alleging that popular crypto tokens such as solana are securities. The suit sets up a legal battle over whether crypto are securities or not. In its suit, the SEC alleged that since 2019 Coinbase had “made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities.” https://tinyurl.com/4523rz76

SEC sues Binance and CEO Zhao for breaking securities rules.

The US Securities and Exchange Commission accused Binance Holdings Ltd. and its Chief Executive Officer Changpeng Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules. In a 136-page complaint filed Monday in US federal court in Washington, the SEC laid out a range of alleged violations against the world’s biggest crypto exchange and its leader. For years, they flouted basic know-your-customer rules by letting Americans improperly open accounts and trade, the watchdog said. It’s just the latest legal headache for Zhao and Binance. “We allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” SEC Chair Gary Gensler said in a statement. “The public should beware of investing any of their hard-earned assets with or on these unlawful platforms.” The regulator asked that the court freeze Binance assets and appoint a receiver, a request typically reserved for cases in which the SEC fears company property may be lost or concealed. https://archive.is/WUJT3

SEC alleges Solana, Polygon are securities in lawsuit against Binance.

The Securities and Exchange Commission alleged on Monday that popular crypto tokens solana, cardano and polygon are securities. That implies crypto exchanges which list the tokens, including Coinbase, need to be registered. The SEC named the tokens in a lawsuit that it filed against Binance and the crypto exchange’s CEO Changpeng Zhao, which alleged that they violated U.S. securities laws. The lawsuit also alleged that Binance Coin and Binance USD, two tokens that are affiliated with Binance, were offered and sold as securities. The SEC has called out specific tokens in previous lawsuits, but today’s lawsuit went further by identifying as securities some of the most popular tokens by market capitalization. In doing so, the SEC is sending a signal to traders and crypto companies that dealing with those tokens are high-risk, noted Marc Fagel, a former director of the SEC’s San Francisco office. https://tinyurl.com/bdft34zt

Elon Musk’s Neuralink sees valuation soar to US$5 billion after private stock trades, report says.

Despite being years away from a commercial clearance, the worth of Elon Musk’s Neuralink has more than doubled to around US$5 billion. Secondary trades of the privately held brain implant startup boosted its worth in recent months, Reuters said, citing privately executed stock trades described by several sources. Two years ago, Neuralink was valued at about US$2 billion following its last known fundraising round, which raised US$205 million. The secondary trades that put Neuralink at US$5 billion took place before it secured FDA approval for a human trial. Neuralink’s valuation climb goes against the grain of most startups. Currently, 85% of pre-IPO companies are undergoing a 47% discount in secondary trades. Neuralink aims to introduce neural-interface technology that may stimulate brain activity, such as in paralyzed patients. https://bit.ly/43FKcGS

Intel to raise about US$1.5 billion from Mobileye stake sale.

Intel Corp., the largest US chipmaker by revenue, will sell part of its holdings in Mobileye Global Inc., raising about US$1.48 billion for its ambitious spending plans. The US company is offering 35 million shares with an option to sell a further 5.25 million shares of the Israeli automated driving technology maker, Mobileye said Monday in a regulatory filing. Mobileye stock has more than doubled since its initial public offering last October. Goldman Sachs Group Inc. and Morgan Stanley will underwrite the sale. https://bit.ly/43NmWXu

Unity stock jumps over 10% on Apple Vision Pro partnership.

Shares of Unity Software popped more than 11% Monday after Apple announced that it was working with the game-development company on its new Vision Pro headset. An Apple executive said that the consumer-electronics company will “deeply support their tools.” The announcement came during Apple’s WWDC keynote address Monday, as Apple previewed its first major new product since 2015. Tim Cook called Vision Pro “a new dimension to powerful personal technology.” https://bit.ly/43IqHxG

GitLab shares surge 18% on 2Q, FY24 outlook.

GitLab shares surged 18% to US$41.90 in post-market trading Monday after the company forecast revenue and adjusted earnings per-share in the current quarter and fiscal year above analysts’ estimates. The stock closed up 5% to US$35.40 in regular trading. The code hosting and collaboration platform services provider forecast revenue between US$129 million and US$130 million as well as adjusted losses in the range of 2 cents to 3 cents in the second quarter. Analysts polled by FactSet expected US$127.1 million in revenue and an adjusted loss of 8 cents a share in the quarter. For fiscal 2024, the company guided for revenue between US$541 million to US$543 million and adjusted losses in the range of 14 cents and 18 cents. Analysts polled by FactSet expected revenue of US$532.7 million and an adjusted loss of 26 cents a share in the fiscal year. The guidance came following higher revenue and a wider loss in the latest quarter. Chief Executive Sid Sijbrandij said customers look to the company’s artificial intelligence-powered platform to drive efficiencies and increase productivity given ongoing macroeconomic uncertainty. https://tinyurl.com/2vr4xrt5

Stitch Fix shares jump over 25% on cost-cutting plans.

Shares of Stitch Fix surged more than 25% on Wednesday, after the online clothing styling service laid out plans to further cut costs and focus on the U.S. as its main market. The cost-cutting measures come amid slowing consumer spending on non-essential purchases like clothing and after Stitch Fix fumbled an effort to revive revenue growth by selling more apparel directly instead of in stylist-curated shipments. The company said Tuesday it plans to close two fulfillment centers in Dallas and Bethlehem, Penn., and would evaluate exiting the U.K. in its next fiscal year. Stitch Fix already cut 20% of its salaried workforce and shuttered a distribution center earlier this year. The company on Tuesday reported US$394.9 million in revenue for the quarter ended April 29, a 20% decline from the same period last year but on the high end of the range it had estimated for the quarter. The company also said it generated US$21.9 million in free cash flow and ended the quarter with US$244 million of cash and investments on its balance sheet. https://tinyurl.com/3xc66v3k

Stanley Druckenmiller says Nvidia stock is worth holding for the next few years amid AI bullishness.

Billionaire investor Stanley Druckenmiller plans to hold on to Nvidia stock for at least the near future as the chipmaker is exposed to an artificial intelligence trend could be as “transformative as the internet.” Speaking at the Bloomberg Invest conference on Wednesday, the Duquesne Family Office founder said that he’d hold the firm’s stock for the next few years. Nvidia has emerged as a critical enabler of the AI boom. Bank of America has called it the “picks and shovels leader in the AI gold rush” as the company virtually controls the market for graphics-processing chips that power generative AI chatbots like ChatGPT and Bard. During the Bloomberg interview, Druckenmiller also noted that even if a hard landing for the economy affects some AI development, he expects Nvidia to thrive in the long run. The investor has already placed a bet on Nvidia. In the first quarter, his family office snapped up US$220 million worth of the chipmaker’s stock. That’s alongside US$210 million in shares of Microsoft. AI adoption throughout the economy may propel the S&P 500 by up to 14%, Goldman Sachs wrote in a Monday forecast. https://bit.ly/3qyUoTl

Zoom can now give you AI summaries of the meetings you’ve missed.

Zoom now lets users use AI to catch up on missed meetings. The feature, which Zoom first announced in March, has finally arrived as a trial for users in “select plans,” according to a post on Zoom’s website. With Zoom IQ — the app’s AI-powered assistant — hosts can now generate summaries of meetings and send them to users through Zoom Team Chat or email, all without actually recording the meetings. https://bit.ly/42wbPkK

An internal Twitter document reportedly shows ad revenue down 59%, casting doubt on Elon Musk’s statement that ‘almost all advertisers have come back’.

The platform’s revenue from April 1 to the first week of May was US$88 million, down 59% compared to the same time last year, according to internal documents obtained by The New York Times. The same document outlined that Twitter routinely fell short of its weekly US sales projections. The Times spoke to seven current and former Twitter employees who said they don’t expect things to turn around soon. An internal document forecasted that revenue for each week in June will be down at least 56% compared to last year. The news come less than two months after the platform’s owner and then-CEO Musk said that ad revenue was on the upswing following a dip when he took over. “Almost all advertisers have come back or said they are going to come back,” he told BBC in April. https://bit.ly/45M684Z

Microsoft fined US$20 million by FTC over storage of Xbox data.

Microsoft will pay US$20 million to settle charges by the Federal Trade Commission that it improperly stored personal information from children who signed up for Xbox accounts, the commission announced on Monday evening. Regulators charged Microsoft with breaking the Children’s Online Privacy Protection Act by storing personal data, such as names and profile pictures, of children who signed up to create Xbox accounts but didn’t finish the signup process. Microsoft held onto that personal data for years in violation of the law, according to the charges. In a statement, Microsoft CVP of Xbox player services Dave McCarthy said the personal data wasn’t deleted due to a “data retention glitch” and that Microsoft leaders “believe that we can and should do more” to protect user privacy. Microsoft will implement new policies to notify parents about how childrens’ data is stored and about parental controls on Xbox, McCarthy said. The settlement is the latest example of the FTC hitting gaming companies with hefty fines for failing to comply with COPPA. Epic Games, the game studio behind Fortnite, paid a $520 million settlement in December for a similar data privacy violation. https://tinyurl.com/37v463ut

Amazon plans ad tier for Prime video streaming service.

Amazon is planning to launch an advertising-supported tier of its Prime Video streaming service as it looks to further build its ad business and generate more revenue from entertainment. Advertising has been an area of continued growth for Amazon despite macroeconomic challenges. The company’s ad revenue was US$9.5 billion in the first quarter, up 21% year over year. The company is the third-biggest player in terms of digital ad revenue in the U.S. after Google and Meta, according to Insider Intelligence. Advertisers say they are eager to have Amazon offer an ad tier for Prime Video service, which would follow similar moves by other streaming platforms including Netflix and Disney. https://bit.ly/3CiLj3N

TikTok seeks US$20 billion e-commerce business despite US setback.

ByteDance Ltd.’s TikTok aims to more than quadruple the size of its global e-commerce business to as much as US$20 billion in merchandise sales this year, banking on rapid growth in Southeast Asia, according to people familiar with the matter. That would be a speedy increase from last year’s US$4.4 billion in gross merchandise value, which represents the total worth of goods sold through its TikTok Shop offering, said the people, who asked not be identified discussing internal data. TikTok is betting on markets such as Indonesia, where influencers sell products from denim jeans to lipstick by showing them off in live-streamed videos. https://bit.ly/43UJaqN

SEC’s regulatory net now covers US$120 billion of crypto after Coinbase, Binance action.

The list of digital tokens deemed as unregistered securities by the Securities and Exchange Commission now spans over US$115 billion of crypto after the US agency’s lawsuit against Binance Holdings Ltd. The regulator in the complaint on Monday cited a dozen coins as assets that fall under its purview. Such a designation comes with strict investor protection rules and could make the tokens harder to trade if exchanges shy away from listing them for fear of falling foul of the SEC. https://bit.ly/3P1XMAj

General Motors to join the Tesla supercharger network.

General Motors will make its electric vehicles compatible with Tesla’s supercharger network, the series of 12,000 chargers across the country for recharging the batteries of EVs, the company said Thursday. The deal makes GM the second major automaker to agree to use Tesla’s charging standard in North America—the plug vehicle owners use to connect their cars to Tesla chargers—after Ford announced a similar agreement with Tesla last month. Tesla will open the network to GM drivers in 2024. Initially, GM owners will need to use an adapter to recharge at Tesla’s locations. But starting in 2025, GM will change its design so that drivers don’t need an adapter, GM said in a statement. Tesla announced in February that it would open up its network to non-Tesla EVs, making it eligible for a piece of the US$7.5 billion in federal funding earmarked to expand EV charging as part of President Joe Biden’s Bipartisan infrastructure law. https://tinyurl.com/4kr36txk