March 05, 2023: Positive End To The Week

Last week, the stock market performed better in the latter half, as S&P 500 and Nasdaq rebounded from key tests Thursday morning, and went on to top resistance on Friday. Dow Jones ened the week up 1.75%, S&P 500 was up 1.9%, and Nasdaq was up 2.6%, 10-year US Treasury yield rose to 3.96%, after falling by 11 basis points Friday. Chip designer Arm intends to list in New York. Instacart’s revenue and profit climbed ahead of a potential public listing. Twitter’s revenue, adjusted earnings fell about 40% in month of December. Tesla wants to grow car sales from 1.3 million in 2022 to 20 million. Fisker shares rocketed up 30% as the EV maker sees potential for profit and strikes a ‘game changer’ deal for charging stations. Salesforce shares jumped 15% despite a weak revenue forecast. Meta unveiled a new large language model that can run on a single GPU, the Company also plans four new AR/VR devices in next four years. Elon Musk’s bid to implant brain chip into humans was reportedly rejected by the feds over safety risks. U.S. House panel approved a bill giving Biden power to ban TikTok. Amazon is letting employees use their stock to finance home purchases and even second homes. Visa and Mastercard are reportedly pressing pause on new crypto partnerships in the wake of stunning industry collapses. In Canada, CGI announced its intent to repurchase 3.34 million of its shares held by CDPQ. Northleaf Capital Partners has held the final close of its latest private equity fund, pulling in US$675 million. Shopify built Indigo’s new website in three days following ransomware attack. Canada is removing TikTok from government-issued devices. Sophic Client UGE achieves notice to proceed milestone for rooftop community solar project in Queens, New York. Sophic Client LuckBox’s CEO, Thomas Rosander did a short interview on innovation in esports betting.

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) achieves notice to proceed milestone for rooftop community solar project in Queens, New York.

Sophic Capital client UGE International Ltd., announces that it has reached the Notice to Proceed milestone for a 376kW rooftop community solar project in Queens, New York. As part of an ongoing partnership announced in November 2021, wireless provider T-Mobile will serve as the project’s anchor energy off-taker, supporting T-Mobile’s commitment to power its business using 100% renewable energy. http://bit.ly/3KWO5kQ

Sophic Client LuckBox (LUCK-TSXV, LUKEF-OTC): Short interview with CEO Thomas Rosander on innovation in esports betting. https://bit.ly/3mpdOrP

HS GovTech Solutions Inc. (HS-CSE) announces closing of prospectus offering and non-brokered private placement.

The Company has closed its previously announced overnight marketed public offering (the “Prospectus Offering”) through the issuance of 5,613,800 units of the Company, and an additional 1,044,424 units pursuant to a non-brokered private placement (the “Private Placement Offering”), in each case at a price of $0.37 per unit (the “Units”), for gross proceeds of approximately $2,463,543. The closing of each of the Prospectus Offering and the Private Placement Offering is anticipated to be the closing of all financings previously announced by the Company pursuant to its news release of February 16, 2023. https://bit.ly/3kQ0tIz

CGI (GIB’A-TSX, GIB-NYSE) announces intent to repurchase 3.34 million of its shares held by CDPQ.

CGI announced that it intends to enter into a private agreement with CDPQ for the purchase for cancellation of 3,344,996 of its Class A subordinate voting shares (“Class A Shares”) held by CDPQ for a price of $119.58 per Class A Share, which represents a discount to the closing price on February 24, 2023 of the Class A Shares on the Toronto Stock Exchange. Once completed, CDPQ will continue to hold approximately 19.18 million Class A Shares, representing approximately 8.16% of CGI’s total outstanding shares. http://bit.ly/3ZAdPHE

AssistIQ raises $2.5 million to cut down on medical waste in hospitals.

A medtech startup that has developed a new artificial intelligence (AI) supply intelligence platform to reduce medical waste has raised $2.5 million in “early-stage” funding. Even as it prepares to use the fresh funds for product development and expansion to new hospitals, AssistIQ also announced a partnership with the Centre Hospitalier de l’Université de Montréal (CHUM) Research Centre in Montréal. AssistIQ closed the raise, its first, in November. StandUp Ventures led the round with participation from N49P, The Kale Fund, along with several individual investors, including Kerry Liu, founder of Rubikloud and an investor at Horizon Ventures. When asked about the classification of its round, AssistIQ told BetaKit the company views it as between a pre-seed and seed stage, referring to it only as “early-stage.” http://bit.ly/3ZBOTzp

Northleaf closes US$675 million for latest private equity fund.

Northleaf Capital Partners has held the final close of its latest private equity fund, pulling in US$675 million. The total surpasses Northleaf’s original target of US$600 million. Northleaf’s total capital commitments raised to date exceed US$22 billion. Northleaf Private Equity Investors VIII (NPE VIII), as it’s called, marks just the latest fund the firm has raised after it recently closed US$1.3 billion for its latest secondaries fund. Northleaf did not disclose its investors for either fund. Northleaf stated that its private equity program currently serves more than 130 institutional and family office investors across North America, the United Kingdom, and the Europe, the Middle East and Africa region. The latest fund marks Northleaf’s third federal government-backed venture fund, having also received capital from the Venture Capital Action Plan (VCAP) program for its first Northleaf Venture Catalyst Fund in 2014. For its second Catalyst fund in 2017, Northleaf raised $300 million, of which $85.7 million came from the Government of Canada. http://bit.ly/3ZzwTX7

Shopify (SHOP-NYSE, SHOP-TSX) built Indigo’s new website in three days following ransomware attack.

Earlier this month, Indigo was hit by ransomware that wiped out the Canadian bookseller’s e-commerce and in-store sales, shutting down its website for over a week. Indigo reached out Shopify for assistance, according to Shopify president Harley Finkelstein. And, in a matter of days, Indigo was back online with a new, temporary, Shopify-powered website. http://bit.ly/3Yl1tCn

Canada removes TikTok from government-issued devices.

Canada has banned TikTok from government-issued mobile devices citing security concerns, following similar moves earlier by the U.S. government and the European Union’s executive branch. “Following a review of TikTok, the Chief Information Officer of Canada determined that it presents an unacceptable level of risk to privacy and security,” Canada’s government said in a statement, adding that there is no evidence that government information has been compromised. TikTok, owned by Chinese internet giant ByteDance, has come under intense scrutiny from Western governments. In Washington, some lawmakers have introduced bills to ban TikTok in the U.S., saying China’s Communist Party could influence the video app’s content and gain access to American users’ data. TikTok has repeatedly denied such allegations. While TikTok continues to grapple with growing pressure from its critics in Washington, the app has found some allies. The American Civil Liberties Union, a U.S. civil rights advocacy group, issued a statement on Monday urging Congress not to ban TikTok in the country, saying such a move would violate the free speech rights of Americans using the popular video app. https://bit.ly/3EUznGU

Chip designer Arm intends to list in New York.

Arm Ltd., the British chip designer that SoftBank Group tried unsuccessfully to sell to Nvidia Corp., NVDA 2.71%increase; green up pointing triangle said it intends to list its shares in New York, a move that comes amid a race between the U.S., Europe and China to build out their semiconductor ecosystems. SoftBank last year abandoned plans to sell Arm outright amid growing global regulatory centered on Arm’s dominance in designing the chip technology that powers much of the world’s mobile devices. SoftBank initially agreed to a US$40 billion price tag, but SoftBank Chief Executive Masayoshi Son had at one point valued the cash-and-stock deal closer to US$80 billion after a sharp rise in Nvidia shares. https://on.wsj.com/3ye1LA4

Instacart’s revenue and profit climb ahead of public listing.

Instacart Inc. generated sharply higher sales and profit in the fourth quarter, according to people familiar with the matter and an internal memo, as the company prepares for its highly anticipated initial public offering of stock. The grocery-delivery company told employees on Tuesday that its revenue increased more than 50% in the fourth quarter, compared with the same period a year earlier, while gross profit rose more than 80%, according to a memo viewed by The Wall Street Journal. Instacart’s full-year revenue increased 39% to about US$2.5 billion for 2022, people familiar with the matter said, as the company reaped the benefits of a push into advertising while it has struggled to increase order volume at the same pace it did during the height of the Covid-19 pandemic. Instacart in 2022 processed US$29 billion in overall sales across the platform, a measure known as gross transaction volume, up about 16% from the previous year, the people said. The company in the fourth quarter reported positive net income and generated more than US$100 million in adjusted earnings before interest, taxes, depreciation and amortization, the people said. Instacart shared those numbers Tuesday during a call with investors. During the call, executives said the company was waiting for more cooperative markets to go public. https://on.wsj.com/3JdKOwc

Twitter’s revenue, adjusted earnings fell about 40% in month of December.

Twitter Inc. reported a drop in revenue and adjusted earnings for the month of December, after many advertisers ditched the social-media platform following Elon Musk’s takeover, according to people familiar with the matter. In an update to investors, Twitter reported a decline of about 40% year-over-year in both revenue and adjusted earnings for the month, the people said. The company recently made a first interest payment to a group of banks that lent the US$13 billion, the people said. Shortly after Mr. Musk took over Twitter, many advertisers paused spending on the platform—a source of concern as advertising represented almost 90% of Twitter’s revenue in 2021. As it has sought to buttress its most critical revenue stream, the company has made several overtures to advertisers to woo them back on the platform. More than 70 of Twitter’s top 100 advertisers from before Mr. Musk’s takeover weren’t spending on the platform as of the week ended Feb. 25, according to an analysis from research firm Pathmatics, which is part of Sensor Tower. https://on.wsj.com/3msmeyp

Tesla wants to grow car sales from 1.3 million in 2022 to 20 million.

Tesla intends to sell 20 million electric vehicles and enough industrial and residential batteries to store one terawatt of energy annually, Tesla executive Drew Baglino told investors in a presentation on Wednesday evening. That’s a dramatic increase from 2022, when Tesla sold just 1.3 million vehicles and deployed 6.5 gigawatt hours of energy storage, less than 1% of its one terawatt goal. Baglino did not say when it intends to reach these goals. Baglino, who shared the stage with CEO Elon Musk, was one of the many Tesla executives who walked investors through the future of Tesla in the three-hour presentation, which Musk dubbed the third “master plan” in Tesla’s history. Musk, who spoke about big picture issues facing the planet as well as Tesla’s AI driven robot Optimus, was less front and center than he usually is at company presentations. Among the executives who presented was Tom Zhu, head of global Giga factories and rumored second in command to Musk, who outlined Tesla’s plans to expand the number of factories to help reach its car sale goals. On Wednesday, Tesla reached a major milestone by building its 4 millionth Tesla, Zhu said. Executives said Tesla’s next factory would be smaller and more efficient than its Giga Texas factory in Austin, where the presentation was held, and promised to reduce the cost of its next generation vehicle by 50%, though the company did not share any details about what that vehicle would look like. The company also teased potential products, including a heat pump for the home and a diner next to its charging stations. In the short term, investors can look forward to Tesla’s new refinery for lithium, which it uses in batteries, to launch at the end of 2023, as well as the long-awaited release of the Tesla Cybertruck later this year. https://bit.ly/3kMW7C0

Tesla shares slide 7% after Elon Musk fails to meet hopes for a budget EV model at underwhelming investor day.

Tesla shares fell 7% Thursday, after the automaker’s much-anticipated investor day failed to live up to hopes for details of its next generation of cars and a rumored sub-US$30,000 model. Plans for robotaxis and a budget-friendly Tesla were some items investors hoped to see on the agenda. However, the Tesla CEO remained tight-lipped about the prospects for a US$25,000 model, which would be one of the cheapest EVs on the market. He also declined to elaborate on the need to double the number of models offered by Tesla to 10 by 2030. Its fifth, the Cybertruck pickup, is expected later this year. During the presentation, Tesla laid out broad plans aimed at making it the world’s largest car company. It gave more background to its goal of selling 20 million cars a year by 2030, compared with the 1.3 million delivered last year. That would involve cutting production costs by 50%, Tesla’s chief financial officer, Zach Kirkhorn, said. http://bit.ly/3SOyBRI

Fisker shares rocket up 30% as the EV maker sees potential for profit and strikes a ‘game changer’ deal for charging stations.

Fisker shares shot up by a third Monday as a profitability call by the electric vehicle maker and an agreement for charging stations appeared to take precedence over a quarterly loss that missed expectations. The stock jumped as much as 36% to US$7.75, a more than two-week high, then pared the advance to close by a still-hefty 30% at US$7.41. The surge came after the release of the company’s fourth-quarter financial results. In it, Fisker reiterated its 2023 production target of up to 42,400 units and said it had about 65,000 reservations for its Ocean SUV, up from 62,000 at the end of October. In addition, management forecast “potentially positive” EBITDA for 2023. The company also said Monday it has a deal with ChargePoint under which Fisker EV owners will have access to more than 210,000 active ports and more than 400,000 roaming ports in North America.  http://bit.ly/3ZHRWq1

Waymo cuts 200 employees after second round of layoffs.

Alphabet’s Waymo has issued its second round of layoffs this year, the company confirmed to TechCrunch. Combined with the initial cuts in January, the self-driving technology company has let go of 8%, or 209 employees, of its workforce. Waymo’s layoffs follow a surge of cuts at Alphabet and Google. http://bit.ly/3ZqB8nO

After losing billions of dollars on the metaverse, Mark Zuckerberg’s launching a ‘top-level’ team at Meta to develop AI products for WhatsApp, Messenger, and Instagram.

After chasing the metaverse, Meta is now buying into the AI hype. The tech giant will be creating a new “top-level product group” focused on generative AI – AI that can create content – to focus on “building delightful experiences around this technology into all of our different products,” CEO Mark Zuckerberg said in a Facebook post on Monday. Zuckerberg didn’t specify in the post what top-level meant. Big tech rivals Google, Microsoft, and Snapchat all launched their versions of AI bots. But Zuckerberg’s push into AI comes on the heel of its foray into another product – the metaverse, a version of virtual connectivity which Zuckerberg envisions as the future of the internet. His relentless pursuit into the metaverse cost Meta US$13.7 billion in 2022. Meta’s shares closed 0.5% higher at $169.54 on Monday and are up nearly 41% so far this year.  http://bit.ly/3Yk8SSb

Salesforce shares jump 15% despite weak revenue forecast.

Salesforce shares soared more than 15% in after-hours trading after its fourth-quarter earnings, as investors seemed to be more focused on the cloud software provider’s improving profitability and cash flow than on its projections of a continuing slowdown in revenue growth. On an earnings call, Chairman and CEO Marc Benioff said “improving our profitability is our highest priority” and noted that its operating margin, excluding certain items, was 29.2% last quarter, up from 22.7% in the previous one. Salesforce had around US$2.6 billion in free cash flow for the quarter, up 42% from last year. Benioff also gave a shout-out to his mentor, Oracle co-founder and CTO Larry Ellison, for providing advice on how to improve Salesforce’s profitability. Salesforce, which is facing pressure to make changes from six different activist investors, is now running more efficiently after more than a decade of prioritizing revenue growth, Benioff said on the call. Salesforce in January said it would lay off 10% of its global staff and consolidate its real estate and office space usage. Salesforce’s revenue grew 14% to nearly US$8.4 billion compared to last year in the three months to Jan. 31, and 18% to US$31.4 billion for the 12 months to Jan. 31. Salesforce is forecasting around 10% annual revenue growth for its current quarter and fiscal year. https://bit.ly/3mtYtWL

Meta unveils a new large language model that can run on a single GPU.

Last Friday, Meta announced a new AI-powered large language model (LLM) called LLaMA-13B that it claims can outperform OpenAI’s GPT-3 model despite being “10x smaller.” Smaller-sized AI models could lead to running ChatGPT-style language assistants locally on devices such as PCs and smartphones. It’s part of a new family of language models called “Large Language Model Meta AI,” or LLAMA for short. The LLaMA collection of language models range from 7 billion to 65 billion parameters in size. By comparison, OpenAI’s GPT-3 model—the foundational model behind ChatGPT—has 175 billion parameters. Meta trained its LLaMA models using publicly available datasets, such as Common Crawl, Wikipedia, and C4, which means the firm can potentially release the model and the weights open source. That’s a dramatic new development in an industry where, up until now, the Big Tech players in the AI race have kept their most powerful AI technology to themselves. https://bit.ly/3YlZXzy

Meta plans four new AR/VR devices in next four years.

Meta plans to release four new augmented reality and virtual reality products in the next four years, The Verge reported, citing an internal company meeting. The report is the most complete picture yet of Meta’s technical roadmap for AR/VR devices. Its first new product is the Quest 3, a third-generation version of its popular Quest headset, which will be two times thinner and at least twice as powerful as the Quest 2, The Verge said. The device will be released later in 2023. The second product is a cheaper headset that will be released in 2024 to encourage mass adoption. Meta also plans to release a third-generation version of its Ray-Ban camera-equipped glasses in 2025 with a viewfinder that will allow users to see limited information including text messages and real-time translation. Finally, Meta plans to launch a pair of AR glasses with a full transparent display in 2027, The Verge said. However, the company will begin internally testing the product as early as 2024, it said. https://bit.ly/3JcHEc1

Elon Musk’s bid to implant brain chip into humans was reportedly rejected by feds over safety risks.

Neuralink’s attempt to receive approval from the US Food and Drug Administration was rejected last year. Reuters said the FDA identified “dozens of issues” Neuralink must remedy before it could begin human testing in the US. The FDA said there were a number of safety concerns, per Reuters, including that the brain chip’s wires could move into other areas in the test subject’s brain and that the chip could overheat and damage tissue. There were also concerns around how the implant would be removed without damaging the brain. To date, Neuralink has yet to test on humans and has instead experimented with the device on animals, including pigs and monkeys. Elon Musk has been promising the company will soon begin testing on humans since 2019. http://bit.ly/3KYRLSW

TikTok will limit teens to 60 minutes of screen time a day (but you can turn the limit off).

TikTok has announced a batch of new features intended to reduce screen time and improve the well-being of its younger users. In the coming weeks, a daily screen time limit of 60 minutes will be automatically applied to every TikTok user under 18 years old. Teens that hit this limit will be asked to enter a passcode to continue watching. They can disable the feature entirely, but if they do so and spend more than 100 minutes on TikTok a day, they’ll be prompted to set a new limit. TikTok claims these prompts increased the use of its screen time management tools by 234 percent during the feature’s first month of testing. Teens will also be sent an inbox notification each week that recaps their screen time, allowing younger users to be aware of how much time they spend on the app and requiring that they make active decisions to extend the recommended screen time. These weekly updates are available now, alongside prompts to encourage teens to use screen time tools. https://bit.ly/3IPzVzh

Microsoft expands game pass as regulators fret over Activision deal.

The Xbox console has been the key to Microsoft Corp.’s clout in the gaming industry since its release more than two decades ago. As gaming continues to expand far beyond bulky devices that people plug into their television sets, the company is evolving to keep pace with gamers. But its transformation is beginning to raise hackles among regulators who say Microsoft could be even more dominant in the industry’s next era, especially if it completes its proposed US$69 billion acquisition of gaming giant Activision Blizzard Inc. A key to Microsoft’s strategy is Game Pass, a six-year-old service that charges users US$10 to $15 a month to play a collection of more than 400 games on the Xbox, Microsoft’s Windows PC operating system, smart TVs, smartphones and tablets. As of January, the number of users who accessed the service on three or more devices had grown 20% compared with the same period the year before. On Feb. 28 the company will expand Game Pass to dozens of new markets, including in Latin America, the Middle East and Eastern Europe, almost doubling the number of countries where it’s available to 86. http://bit.ly/3ZBA6F5

U.S. House panel approves bill giving Biden power to ban TikTok.

The U.S. House Foreign Affairs Committee voted on Wednesday along party lines to give President Joe Biden the power to ban Chinese-owned TikTok, in what would be the most far-reaching U.S. restriction on any social media app. Lawmakers voted 24 to 16 to approve the measure to grant the administration new powers to ban the ByteDance-owned app – which is used by over 100 million Americans – as well as other apps considered security risks. TikTok has come under increasing fire in recent weeks over fears that user data could end up in the hands of the Chinese government, undermining Western security interests. The White House this week gave government agencies 30 days to ensure that TikTok is not on any federal devices and systems. More than 30 U.S. states, Canada and European Union policy institutions have also banned TikTok from being loaded onto state-owned devices. https://reut.rs/3EYh9nY

Warby Parker warns revenue growth will slow.

Warby Parker warned revenue growth would continue to slow in the coming year, likely coming in at between 7% and 9% for the current quarter, and between 8% and 10% for all of 2023. The direct-to-consumer eyewear company said revenue grew 10.2% in the fourth quarter compared with the same period a year earlier and 10.6% for the full year 2022—a dramatic slowdown from the 37.4% full-year growth it saw in 2021. Its average revenue per customer rose 6.9% in the fourth quarter from the year before, as it looks to sell existing customers on additional services including eye exams. But while the company is squeezing more revenue out of existing customers, its number of new active customers only increased by 3.6% to 2.28 million in 2022 versus growth of 21.5% the prior year. The company added 40 stores last year, bringing its total to 200, and said it expects to open 40 more stores in the coming year. But that approach comes with added costs. The company’s gross margin shrank to 55.1% in the quarter compared to 57.4% a year ago, which executives attributed to the costs of hiring optometrists that perform eye exams in Warby Parker stores, as well as the growth of contact lens sales, which have lower margins than glasses. Warby Parker shares were down 3.4% in morning trading on Tuesday. https://bit.ly/3kNXBMm

Amazon is letting employees use their stock to finance home purchases and even second homes.

Amazon has struck a deal with embattled online mortgage lender Better.com to offer up a new benefit to employees. Better.com is launching Equity Unlocker, a program that allows employees to use their vested equity as collateral for a down payment when trying to buy homes. Amazon employees in Florida, New York and Washington State will be the first to try the tool. Unique about the program, according to Better.com, is that employees will have the ability to finance their homes without actually selling their shares, only needing to pledge vested equity. There is a catch, however.  As reported earlier today by the WSJ: “To protect itself from a continued slide in Amazon’s stock price, Better.com will charge a higher rate on the mortgages of employees pledging stock -between 0.25 and 2.5 percentage points above the market rate, depending on how the down payment is structured.”. http://bit.ly/3ZIzWvL

Visa and Mastercard are reportedly pressing pause on new crypto partnerships in the wake of stunning industry collapses. 

Visa and Mastercard are holding off on forging new partnerships with crypto firms after a run of major collapses rattled faith in the industry. The payment giants have each decided to delay the launch of certain crypto-related products and services until there’s been an improvement in market conditions and the regulatory environment, the report said, citing unnamed sources familiar with the matter. The crypto industry in 2022 experienced an eruption of breakdowns, including the implosion of exchange FTX and the subsequent bankruptcy of lender BlockFi. Crypto hedge fund Three Arrows Capital also filed for bankruptcy last year after defaulting on a multimillion-dollar loan. Last week, FTX’s founder Sam Bankman-Fried was hit with four more criminal charges, bringing the total to 12. http://bit.ly/3mq8owH