This past week was notably busy in Canadian capital markets, witnessing lots of activity in VC and, public markets funding as well as M&A. Long time Canadian software behemoth, Open Text announced a US$1 billion debt financing, and a nearly half a billion US$ acquisition. Satellite communications company Telesat filed to go public on the TSX. Moving to small cap stocks, EMERGE (ECOM-TSXV) announced the refinancing of a term loan and upsizing of its credit facility to $25 million. Sophic Client UGE International (UGE-TSXV) announced the closing of a $2 million Convertible Debenture offering. SoftBank announces a US$8.8 billion share buyback after losses on Didi and Coupang. Sweetgreen’s IPO filing suggests tech enabled businesses could be valued at ~7-9x sales. Elon Musk sold US$5 billion in Tesla stock, but he made plans weeks before asking his Twitter followers whether he should sell 10% of his shares. Apple supplier Foxconn, forecast on Friday that a global chip shortage would run into the second half of 2022 and Sony cut its PlayStation 5 production on chips shortage. During an interview, Apple CEO Tim Cook said he owns cryptocurrency, and Apple ‘looking’ to add it for Apple Pay.
Canadian Technology Capital Markets & Company News
OpenText (OTEX-NASDAQ, OTEX-TSX) announces proposed offerings of senior unsecured fixed rate notes to redeem outstanding 2026 notes.
The company announced proposed offerings of $1.0 billion in total aggregate principal amount of senior unsecured fixed rate notes by OpenText and Open Text Holdings, Inc., a wholly-owned indirect U.S. subsidiary of OpenText (“OTHI”). OpenText intends to use the substantial portion of the net proceeds from the offerings to (i) redeem in full the outstanding $850 million aggregate principal amount of OpenText’s 5.875% notes due 2026 (the “2026 Notes”) and pay the make-whole premium of $25 million that will be paid in connection with such redemption of the 2026 Notes and (ii) pay related fees and expenses; and OpenText expects to use the balance of the net proceeds for general corporate purposes, including potential future acquisitions. https://bit.ly/3HcLAGy
OpenText to buy Zix at a price representing a 2.7% discount, that values Zix at nearly US$484 million.
OpenText Corp. announced Monday an agreement to buy email encryption company Zix Corp. in a deal valued at US$860 million, including debt. Zixi’s stock was halted for news, until 9 a.m. Eastern. Under terms of the deal, Open Text will pay US$8.50 in cash for each Zix share outstanding, which represents a 2.7% discount to Friday’s closing price of US$8.74, and implies a market capitalization for Zix of US$483.8 million. The deal is expected to close within 90 days of Monday’s announcement. “We intend to integrate Carbonite, Webroot and Zix products to create a powerhouse SMB platform for data protection, threat management, email security and compliance solutions. Acquisitions of cloud growth assets like Zix highlights our commitment to our Total Growth strategy and approach to cash-based returns,” said OpenText Chief Executive Mark Barrenechea. Zix’s stock has soared 28.0% over the past three months, while OpenText share have slipped 1.4% and the S&P 500 has gained 5.9%. https://on.mktw.net/3n5RW2J
Canadian Starlink competitor Telesat to go public on the TSX.
Satellite communications company Telesat filed to go public on the Toronto Stock Exchange (TSX) earlier this week. The company is working to launch a low-earth-orbit (LEO) satellite network (called Telesat Lightspeed), and is a notable Canadian competitor to Elon Musk’s Starlink and Jeff Bezos’s Project Kuiper. Telesat is already set to list on the Nasdaq at some point this year, and had announced its hope to list to a Canadian stock exchange as well. Telesat is not looking to raise any capital through going public the TSX, the listing is a formality that would set up the company for a future offering. Ottawa-headquartered Telesat is one of the largest global satellite operators, with its geostationary (GEO) satellites providing services to TV broadcasters, internet service providers, and government networks. The Government of Canada committed $1.44 billion in August to help the company build its LEO satellite network. The financing is in addition to a $600 million service provider agreement with the federal government that enables internet and mobility service providers to acquire Telesat LEO capacity at reduced rates. Telesat also has a $400 million commitment from Québec and $109 million from Ontario. Earlier this year, the company raised also US$500 million in a secured notes offering. https://bit.ly/3CklvSw
Quisitive (QUIS-TSXV) announces creation of a premier, global Microsoft digital transformation and cloud-based solutions leader with acquisition of Catapult Systems.
Quisitive announces that is has entered into an agreement pursuant to which Scotiabank, Canaccord Genuity and Eight Capital, as joint bookrunners, together with a syndicate of underwriters (collectively, the “Underwriters”), will purchase on a “bought deal” basis 33,340,000 common shares of the Company (the “Offered Shares”) at a price of $1.20 per Offered Share (the “Issue Price”) for aggregate gross proceeds to Quisitive of approximately $40 million (the “Offering”). The Company has granted the Underwriters an option, exercisable, in whole or in part, at any time not later than the 30th day following the closing of the Offering, to purchase up to an additional 15% of the Offering at the Issue Price for market stabilization purposes and to cover over-allotments, if any (the “Over-Allotment Option”). If the Over-Allotment Option is exercised in full, the total gross proceeds of the Offering will be approximately $46 million. https://bit.ly/2YOgC6s
EMERGE (ECOM-TSXV) announces refinancing of term loan and upsizing of credit facility to $25 million.
The compmany announced the refinancing of its $8 million term loan, and upsizing of its credit facility providing for a total facility limit of $25 million (the “Facility”) with primary use of funds expected to be future acquisition financing. “The upsized facility positions us well to act decisively on the acquisitions front, where we continue to advance a robust pipeline of profitable e-commerce opportunities,” said Ghassan Halazon, Founder and CEO of EMERGE. “This upsized credit facility provides EMERGE with important financial and operating flexibility at terms that we believe are favorable to the company, while minimizing dilution. The expanded facility is further recognition that we are executing on our strategic initiatives while maintaining a disciplined capital allocation strategy.” In consideration for refinancing and expanding the Facility, the lender was entitled to certain fees and expenses, including a commitment fee equal to $312,500, which was fully paid and satisfied by the issuance of 434,028 common shares of the Company. As of the closing of the Facility, $8 million of the $25 million has been advanced and remains outstanding. The Facility is primarily expected to be utilized by the Company to fund future M&A in the e-commerce space. https://bit.ly/30qvskg
ProStar Holdings (MAPS-TSXV) announces upsizing to previously announced private placement financing.
The company increased the size of its previously announced brokered and non-brokered private placements. The Company now intends to complete a brokered financing for gross proceeds of up to $5,000,000 (the “Brokered Offering”) and a non-brokered financing for gross proceeds of up to $3,500,000 (the “Non-Brokered Offering”, and together with the Brokered Offering, the “Offerings”). Echelon Wealth Partners Inc. (the “Agent”) will act as Agent and sole bookrunner for the Brokered Offering. https://bit.ly/31P2JWA
UGE International (Sophic Client, UGE-TSXV) announces closing of $2 million Convertible Debenture offering.
The company closed an offering (the “Offering”) of 6.5% convertible debentures (the “Debentures”). The Company issued Debentures in the aggregate principal amount of $2,000,000. The Debentures are unsecured, mature on October 31, 2023, and accrue interest at the rate of 6.5% per annum. The principal amount of the Debentures is convertible into common shares of the Company at the option of the holder at a conversion price of $1.80. Any accrued but unpaid interest on the principal amount may also be converted at the option of the holder and would be converted at the trading price of the Company’s common shares at the time a notice of conversion for such interest is provided to the Company. Furthermore, following 12 months from their date of issuance, the Debentures may be redeemed by the Company should its common shares have a 20-day volume weighted average trading price of $2.40 or higher. The Company’s average share price was approximately $1.40 when negotiations of the terms of the Offering commenced. https://bit.ly/3CeLI4T
Martello (MTLO-TSXV) announces $2 million non-brokered private placement and amendment to credit agreement.
The company announced its intention to complete a non-brokered private placement for aggregate gross proceeds of approximately $2,000,000 in conjunction with an amendment (the “Amendment”) to the Credit Agreement. The Private Placement will be subscribed entirely by certain directors, officers, and insiders of the Company, with a first tranche expected to close in November and a second tranche by January 31, 2022. https://bit.ly/3HviIK3
Quebecor launches venture capital fund, asterX, to back startups aligned with its key verticals.
Quebecor announced the launch of a new corporate venture capital arm that it’s dubbed asterX, and that will fund companies that align with Quebecor’s key verticals of media, sports, and entertainment. Going-forward, Quebecor’s investments in startups, from seed to growth stage, will be made through the asterX Capital fund. Beyond a capital injection, the companies backed by asterX Capital will also benefit from access to Quebecor’s operational expertise, wide-ranging resources and extensive network. Quebecor is not disclosing the size of the fund, which is fully financed by Quebecor. https://bit.ly/3wLp03e
Wrapbook claims US$1 billion valuation with US$100 million Series B raise.
Toronto and New York-based startup Wrapbook has raised 100 million USD in an all-equity Series B funding round led by Tiger Global Management. Wrapbook claims the financing brings its valuation to US$1 billion. The round also saw participation from Andreessen Horowitz, A* Capital, Jeffrey Katzenberg’s WndrCo, Uncork Capital, and Equal Ventures. When asked if the new capital includes secondary financing, Wrapbook refused to disclose. Wrapbook currently supports over 1,000 projects per month across North America. The company also said that it has seen the number of workers reusing their profile across more than two employers doubling to 23 percent in 2021 compared to 2020. https://bit.ly/30dPpdM
US private equity firms make $300 million strategic investment in fullscript.
HGGC and Snapdragon Capital Partners have assigned a definitive agreement to make a strategic growth investment into the Canadian firm, which offers a marketplace designed to power the supplements businesses of alternative health practitioners. Fullscript noted that the investment is designed to help it expand its platform across the patient treatment lifecycle, as well as make significant investments in people, technology, partnerships and acquisitions. https://bit.ly/3DqwRWt
McRock Capital leads US$57 million round for California’s Landing AI, created by former Google Brain lead.
McRock Capital, a Canadian venture firm that invests exclusively in the Internet of Things (IoT), has led a US$57 million Series A funding round for Landing AI. Landing AI is a Palo Alto, California startup that provides tools to enable the easy deployment of artificial intelligence (AI) systems in manufacturing. Scott MacDonald, co-founder and managing partner of McRock, said what ultimately attracted the VC firm to Ng is his ability to unlock a software tool that’s going to help a huge number of industries do things better, and enable factories of all sizes in more traditional fields such as manufacturing to deploy AI. The round also saw participation from New York-based global private equity and venture capital firm Insight Partners, Taiwania Capital, Canadian Pension Plan Investment Board (CPP Investments), Intel Capital, Samsung Catalyst Fund, Far Eastern Group’s DRIVE Catalyst, Walsin Lihwa, and AI Fund. The financing closed in mid-October, and part of the funding includes a convertible note, the value of which is not being disclosed. https://bit.ly/3ogtL0L
Ottawa-founded Threekit raises $43.6 million to bolster product visualization tech.
Threekit, an Ottawa-founded SaaS startup, has raised $43.6 million (US$35 million) in an all-equity Series B funding round led by Leaders Fund. The financing also saw participation from strategic investors ServiceNow and Capgemini and existing investors Salesforce and Shasta Ventures. David Stein, co-founder and managing partner of Leaders Fund, a B2B software-focused venture capital firm, joins Threekit’s board of directors as part of the investment round. The startup is also backed by entrepreneurs and athletes, including Godard Abel (founder of G2, Steelbrick, and BigMachines), Carsten Thoma (founder of Hybris), Ray Grady (former general manager of Salesforce Commerce Cloud), and Steve Young—former quarterback for the San Francisco 49ers. https://bit.ly/3C3AiAB
Knak nabs $31 million to market its drag-and-drop, no code platform.
Formerly bootstrapped Knak has closed its first ever round of financing, a $31 million (US$25 million) Series A round from New York-based global private equity and venture capital firm Insight Partners. Knak will use the fresh funds to hire more people, and to create more awareness for its product, a codeless campaign creation platform for enterprise marketing teams. Currently the startup employs 42 people. Knak hopes to hire 50 more by July, 2022. Insight’s investment in Knak took the form of venture capital, and the company declined to share whether Insight has taken a majority ownership stake in Knak. https://bit.ly/3wDoDrb
Mimik Technology raises $17.9 million to make any computing device act like a cloud server.
In its all-equity Series A funding round led by Pier 88 Investment Partners, Mimik Technologies has raised $17.9 million. Cathie Wood, the founder and CEO of Ark Invest is also a participant in the round. Mimik was founded in 2009 with a mission to enable any computing device to act as a cloud server, helping app developers to expedite the process of bringing products to market. https://bit.ly/3qkv3dA
Sports and live audience engagement startup StellarAlgo secures $16.5 million Series A.
Calgary-based StellarAlgo has secured $16.5 million in Series A capital to further its SaaS customer data platform, which helps sports organizations better connect with their fans. The round was led by Toronto-based Carallas Holdings, the investment arm of Carfin Inc. and Orlando Corporation, a major Canadian landlord of industrial and commercial real estate with over 47 million square feet of industrial, office, and retail property. Other new investors in StellarAlgo’s Series A round include Newbound VC and Bleacher Report founder Dave Finocchio. The startup’s Series A round, which closed in October and consisted primarily of equity capital, included $3.5 million in debt from RBCx and $1 million in secondary funding. The raise brings StellarAlgo’s total funding to date to $19 million. https://bit.ly/3ktwNh9
EnPowered reveals $12.75 million in funding to become stripe of cleantech.
Kitchener-Waterloo based startup EnPowered has announced $12.75 million in seed financing to fuel the growth of its newly launched payments platform, which aims to boost the rate of cleantech project adoption. EnPowered, which has set their sights on becoming the Stripe of the cleantech sector, plans to use the funding to take its offering to more markets in the United States. https://bit.ly/3o7ezTw
Gradient MSP raises $12.7 million to launch automated billing solutions.
Calgary-based Gradient MSP has raised $12.7 million in its all-equity Series A funding round led by Anthos Capital. Gradient MSP was founded in 2020, and provides a business automation and integration platform for managed service providers. Backed by fresh financing, Gradient MSP intends to use its new capital to launch its automated billing reconciliation solution, hire 30 team members, and expand its partner resources. https://bit.ly/3wwMZD1
Enso Connect secures $2 million to tackle short-term rental market.
Toronto-based proptech startup Enso Connect has raised just under $2 million in seed financing to expand the reach of its platform, which aims to help short-term rental operators using platforms like Airbnb improve their guest experience using artificial intelligence (AI), Internet-of-Things (IoT) connectivity, and data analytics. Since its launch earlier this year, Enso Connect, which began as a class project following a particularly unfortunate Airbnb experience, has seen significant growth. https://bit.ly/3n5B6Rh
Calgary, the city that offered to fight a bear for Amazon HQ2, gets new Amazon data centre.
Amazon Web Services, the IT service management arm of tech giant Amazon Inc., is set to open an infrastructure region in Calgary along with the launch of a digital skills training program named AWS re/Start. The new AWS Canada West region is expected to open in late 2023 or early 2024, and brings more than 950 full-time equivalent jobs to Canada. he data centre will enable customers with data residency preferences to store data in the country while providing lower latency across Canada, as well as provide more flexibility to run applications across multiple regions. https://bit.ly/3bTw8AT
Toronto’s transit agency cyberattack exposes 25,000 employees’ data.
The Toronto Transit Commission has confirmed that the personal information of tens of thousands of employees may have been compromised as a result of a ransomware attack on its systems last month. The TTC, which operates Toronto’s bus, subway, streetcar and paratransit systems, said in a statement that the compromised data includes the names, addresses and Social Insurance Numbers of 25,000 past and present employees. The ransomware attack on October 29 resulted in problems with vehicle tracking and “next bus” systems, and the loss of the online Wheel-Trans booking system, said TTC chief executive Rick Leary. He added that the incident resulted in “a number of the TTC’s servers being encrypted and locked,” While most customer-facing systems have been restored already, the TTC’s internal email system remains offline. https://tcrn.ch/3DaHZGL
Global Markets: IPOs, Venture Capital, M&A
SoftBank announces US$8.8 billion share buyback after losses on Didi and Coupang.
SoftBank Group said it would buy back up to 1 trillion yen (US$8.8 billion) of its own shares within the next 12 months. The Japanese investment giant announced the buyback plans as it reported a quarterly net loss due to sharp declines in its shareholdings in Chinese ride-hailing giant Didi Global and South Korean e-commerce firm Coupang. The company said it would buy back as many as 250 million SoftBank shares, or 14.6% of its total outstanding shares. The move comes as SoftBank’s Tokyo-listed stock has declined about 40% over the past six months due to concerns about the performance of its investments. On Monday, SoftBank said it swung to a net loss of 397.9 billion yen (US$3.5 billion) in the quarter through September, as its Vision Fund suffered a loss of 825.1 billion yen. The investment loss came as Didi’s stock, which went public in New York in late June, plunged after China’ government in July launched a cybersecurity investigation into the company and removed its mobile app from Chinese app stores. SoftBank is Didi’s largest shareholder with about a 20% stake. “We are in the middle of a storm,” SoftBank founder Masayoshi Son said during a news conference Monday, referring to the challenges such as the impact from China’s regulatory crackdown. Still, Son said that SoftBank will keep making new investments in Chinese startups, saying that he believes that new technologies in areas such as artificial intelligence will continue to come out of China. https://bit.ly/3oksQMM
Indonesia’s GoTo raises over US$1.3 billion in pre-IPO funding round.
Indonesian internet startup GoTo said it had raised more than US$1.3 billion in its latest private funding round ahead of its highly anticipated initial public offering. GoTo, formed in May in a merger between ride-hailing app Gojek and e-commerce firm Tokopedia, is now valued at more than US$28 billion as a result of the fundraising, according to a person with knowledge of the matter. In the round, GoTo raised money from new investors such as Abu Dhabi’s sovereign wealth fund, Singapore’s Avanda Investment Management, Fidelity International, Malaysian state-owned investment firm Permodalan Nasional Berhad and Chinese private equity firm Primavera Capital Group. Existing investors including Google, Tencent and Singapore’s state investment firm Temasek also took part in the round. The size of this funding round and GoTo’s post-money valuation could increase, as there are still some other investors that are in talks to take part in the round, according to the person with knowledge of the matter. GoTo is aiming for an initial public offering in Indonesia in the first half of next year, and then later in New York, according to the person. The company previously hoped to go public in Indonesia by the end of this year, but the process has taken longer than expected as the Indonesian government continues to work on its new IPO guidelines. Meanwhile, Grab, GoTo’s Singaporean competitor, is trying to go public in New York by the end of this year through a merger with a special purpose acquisition company. Global investors’ interest in Southeast Asia has increased thanks to the rapid growth of the region’s market for online services. U.S.-listed Singaporean videogame and e-commerce giant Sea now has a market capitalization of about US$185 billion. https://bit.ly/3FbR0Qm
Sweetgreen’s IPO pricing guidance illuminates valuation range for tech-enabled companies.
But the company’s IPO is notable for a far more interesting reason than that some already-wealthy individuals and groups are going to have more money in short order. Sweetgreen’s IPO pricing is fascinating because it fits neatly into a thesis regarding the value of tech-enabled companies when they go public. When Rent the Runway priced its IPO, it earned a revenue multiple just over the 7x mark. It has since lost ground as a public company, but still set a recent benchmark for what a tech-enabled business might be worth in a public debut. Note that the Rent multiple is not bearish; non-SaaS unicorns today can earn old-fashioned SaaS multiples, which is rather bullish. Allbirds was next up. It priced at US$15 per share, giving it what was calculated to be around a roughly 9x multiple. https://tcrn.ch/3H9lWCG
McAfee to be acquired by group led by Advent, Permira, Crosspoint and CPPIB in deal with EV of more than US$14 billion.
Cybersecurity company McAfee Corp. said Monday it has agreed to be acquired by an investor group led by Advent International Corporation, Permira Advisers LLC, Crosspoint Capital Partners, Canada Pension Plan Investment Board , GIC Private Limited, and a wholly owned subsidiary of the Abu Dhabi Investment Authority in a deal with an enterprise value of more than $14 billion and an equity value basis of about US$12 billion. The news was first reported late Friday by the Wall Street Journal and sent McAfee shares up 20% in after-hours trade. The group will pay US$26 per McAfee share in cash, equal to a premium of about 2.6% over McAfee’s closing share price of US$21.21 on November 4, the last trading day prior to media reports regarding the deal. The deal is expected to close in the first half of 2022. The company now has a 45-day “go-shop” period when it can solicit and review other deals. Shares were down 3.4% premarket, but have gained 52.6% in the year to date, while the S&P 500 has gained 25%. https://on.mktw.net/3n0mceY
Telecommunications: Viasat stock sinks after agreeing to buy Inmarsat in a US$7.3 billion cash and stock deal, including US$3.4 billion in debt.
Shares of Viasat Inc. sank 3.0% in premarket trading Monday, after the communications network company announced an agreement to buy mobile satellite communications services company Inmarsat in a deal valued at US$7.3 billion, including US$3.4 billion in debt. Under terms of the deal, Viasat will pay US$850 million in cash and 46.36 million shares of Viasat common stock, which is valued at US$3.11 billion based on Friday’s closing price of $67.00. According to Viasat’s last quarterly filing, the shares offered represent about 63% of the shares outstanding as of July 23. The deal is expected to drive value creation of US$1.5 billion through cross-selling and operating and capital expenditure synergies. The deal is expected to close in the second half of 2022. ViaSat’s stock has soared 105.2% year to date through Friday, while the S&P 500 has gained 25.1%. https://on.mktw.net/306m05B
‘The Big Short’ investor Michael Burry says Tesla stock could plunge 90% – and notes Elon Musk said it was overpriced at US$160 last year.
Michael Burry suggested Tesla stock could plummet 90% in a now-deleted tweet on Tuesday. The investor of “The Big Short” fame drew a parallel to Amazon shares plunging when the dot-com bubble burst, and only soaring years later once the e-commerce giant transformed its business. The Scion Asset Management boss noted Elon Musk himself said Tesla was overvalued last year, when the clean-energy company’s stock was trading at less than a sixth of its current price (adjusted for Tesla’s five-for-one stock split in August 2020). https://bit.ly/3c4oaoo
Elon Musk just sold US$5 billion in Tesla stock, but he made plans weeks before asking his Twitter followers whether he should sell 10% of his shares.
Tesla CEO Elon Musk sold around US$5 billion in shares in the electric-car maker, according to regulatory filings on Wednesday. On Monday, Musk exercised 2.15 million stock options at a price of US$6.24 each, for a total cost of US$13.4 billion. He then sold 934,000 shares at varying prices, ultimately collecting more than US$1.1 billion from the sales. Over the next two days, his trust dumped almost 3.6 million shares, totaling about US$4 billion. Musk’s moves come just days after he asked his Twitter followers in a poll whether he should sell 10% of his shares in Tesla amid a swirling debate among policymakers about whether to increase taxes on the ultra-wealthy. However, Musk’s own actual stock sales this week were part of a pre-scheduled plan that had been put in place on September 14, – weeks before he posted the Twitter poll – according to the regulatory filings. https://bit.ly/3Fesnmh
Apple supplier Foxconn cautions on 2022 revenue outlook.
Apple supplier Foxconn, forecast on Friday that a global chip shortage would run into the second half of 2022 and its fourth quarter revenue for electronics, including smartphones, would fall more than 15%. Earlier Foxconn, the world’s largest contract electronic maker, reported a 20% jump in third-quarter profit. https://reut.rs/3c6bddP
Gatik’s self-driving trucks are now making driverless deliveries for Walmart in Arkansas.
Autonomous vehicle startup Gatik has reached a new milestone in its partnership with Walmart and within the industry. Gatik said Monday it has pulled the safety operator from behind the wheel of two self-driving box trucks that operate in Walmart’s home turf of Bentonville, Arkansas. This means the startup’s box trucks are driverless on a commercial route — a first for the industry, according to Gatik CEO and co-founder Gautam Narang. Gatik has taken a different approach from other competitors in the autonomous vehicle sector. Gatik uses its autonomous trucks to shuttle groceries and other goods from large distribution centers to retail locations. Gatik, which came out of stealth in 2019, has been shuttling goods for Walmart in Arkansas and Louisiana, and for Loblaw Companies Limited in Ontario, Canada. More recently, Gatik expanded into Texas following a Series B fundraising round of US$85 million. Gatik has 25 self-driving trucks in its total fleet, which are spread out among Arkansas, Louisiana, Texas, California and Canada. https://tcrn.ch/3D2rPin
Phone charging times will fall to 20 minutes with GaN chargers.
The CEO of third-party charger and accessory company Anker has said that phone charging times will fall to as little as 20 minutes thanks to new-generation Gallium nitride (GaN) chargers, which are already being adopted by Apple. The time cited is for a full charge from empty to full. Steven Yang said that Apple’s decision to exclude chargers from iPhone boxes has been extremely good news for companies like his. https://bit.ly/3ojAhDT
A drone tried to disrupt the power grid.
It won’t be the last. In July of last year, a DJI Mavic 2 drone approached a Pennsylvania power substation. Two 4-foot nylon ropes dangled from its rotors, a thick copper wire connected to the ends with electrical tape. The device had been stripped of any identifiable markings, as well as its onboard camera and memory card, in an apparent effort by its owner to avoid detection. Its likely goal, according to a joint security bulletin released by DHS, the FBI, and the National Counterterrorism Center, was to “disrupt operations by creating a short circuit.” According to the bulletin, the incident, which was first reported by ABC, constitutes the first known instance of a modified, unmanned aircraft system being used to “specifically target” US energy infrastructure. It seems unlikely to be the last, however. But the Pennsylvania incident represents an alarming escalation in drone use stateside. The US has had incidents before: A drone landed on the White House lawn in 2015, and a recent surge in drone sightings near airports and other critical sites has sent the FAA scrambling. Until now, those intrusions could be written off as accidental. No longer. https://bit.ly/3D7mBCk
Media, Streaming, Gaming & Sports Betting
Disney+ to cost US$2 for one month for new and returning subscribers.
Disney is offering new and some returning subscribers a month of its Disney+ streaming video service for just US$2, a big discount from its regular price of US$8 per month, according to The Verge. The promotion is one of a number of perks Disney is offering to celebrate the two-year anniversary of Disney+ this week, including early entry to its parks and free shipping on some of its Disney merchandise. Disney also is partnering with AMC theaters to offer customers who sign up for Disney+ US$5 tickets to surprise screenings of Disney movies this week. Disney+ had signed 116 million global subscribers at the beginning of July, although the pace of growth in North America has slowed sharply. At the same time, the average revenue per subscriber is declining as the majority of its growth is coming from overseas markets, like India, where the price is lower. While such promotions may help Disney+ gain subscribers quickly, the question is whether it can keep these customers long-term. https://bit.ly/3Di7vtM
Netflix introduces Kids Clips.
Netflix is adding short clips of children’s shows and movies to its streaming service, according to Bloomberg. The new offering, called “Kids Clips,” appears to be the streaming giant’s attempt to compete more directly with YouTube. While YouTube fans have primarily accessed the service through mobile devices in the past, that is starting to change. More people are watching YouTube on Internet-connected TVs, which makes it more of a threat to Netflix. By highlighting kids content on the service, Netflix may also be looking to attract more families, which have proven to churn less often than subscribers without children. One question going forward is whether Netflix may go the way of YouTube and try out advertising in these clips. Netflix CEO Reed Hastings has long said that was not the plan, but as the company’s growth slows, it’s possible the company will rethink that strategy. https://bit.ly/2YHN1LK
Netflix Games has officially arrived on iOS.
Netflix just brought its new gaming service to all subscribers on Android, but now it has officially come to iOS. The service gives users access to a limited selection of mobile games without ads or in-app purchases. There’s been some concern about Netflix Games’ rollout on iOS, particularly because of Apple’s App Store policies that have gotten in the way of other gaming platforms and services. The policy typically prevents third-party apps from acting as storefronts for apps. Other cloud gaming platforms, like Microsoft xCloud, Nvidia Geforce Now, Google Stadia, and Facebook Gaming, have struggled to find footing on iOS due to Apple’s demanding App Store restrictions. All of these platforms have attempted to sidestep Apple’s policies by launching as web apps, but this obviously doesn’t provide the best gaming experience. https://bit.ly/3H5SE7Q
Adtech, Privacy & Regulatory
Robinhood security breach exposes data on millions of users.
Robinhood Markets Inc. said personal information of about 7 million people — or roughly a third of its customers — was compromised in a data breach last week and that the culprit demanded payment. The intruder obtained email addresses of about 5 million people as well as full names for a separate group of about 2 million, Robinhood said Monday in a statement. For some customers, even more personal data was exposed, including names, birth dates and ZIP codes of about 310 people, and more extensive information belonging to a group of about 10. https://bloom.bg/3BYGvOm
Google loses appeal against landmark antitrust fine in Europe.
Google has lost an appeal against a US$2.6 billion fine for breaking Europe’s antitrust laws related to how the company integrated shopping items into search results, boosting the continent’s effort to curtail the power of U.S. tech giants Europe’s General Court in Luxembourg upheld the massive fine in a decision delivered on Wednesday morning. Google had been found to have broken laws in 2017 for redirecting users to its own shopping comparison tools at the expense of competitors. The ruling is one of a trio of fines levied against the search engine in Europe, which the company had hoped to overturn on appeal. It can lodge an appeal against today’s decision to Europe’s top court. But the decision will be an important win for antitrust official Margareth Vestager, who had used the enforcement actions against Google as a springboard for investigations into the likes of Apple and Amazon. https://bit.ly/3wN2pTU
Didi prepares to relaunch apps amid expectations government probe will end soon.
Didi Global is preparing to relaunch its apps in anticipation of the end of a government cybersecurity review that hobbled the company shortly after it listed shares in New York this summer, Reuters said. In addition, the company has set aside $1.6 billion for a potential fine, the report said. Didi called the Reuters report “pure hearsay with no grounds in fact.” In July, China’s regulators launched a cybersecurity investigation into Didi’s data collection on national security grounds, stopped the company from registering new users and pulled its apps from app stores. Reuters said that the company had been redesigning the apps to comply with data privacy and cybersecurity laws. https://bit.ly/3qv9t6q
Alibaba’s annual shopping event records slowest-ever growth.
Chinese e-commerce giant Alibaba’s annual Nov. 11 Singles’ Day shopping festival, the world’s biggest retail bonanza, recorded its slowest year-on-year growth in total transactions. This year, the event’s gross merchandise volume—the value of all transactions on the company’s marketplace—increased 8.5% to US$84.5 billion. Last year, the event’s GMV grew 26%. The slower growth reflects a big change in the political environment. This year, Alibaba and Chinese internet companies have been grappling with Beijing’s escalating regulatory crackdown through anti-monopoly penalties and other measures. In April, China’s market regulator slapped Alibaba with a US$2.8 billion antitrust fine, saying that the company had abused its market dominance. During this year’s Singles’ Day event, Alibaba carefully played down the importance of sales growth. Instead, the company highlighted all kinds of charity initiatives for the Chinese society and promoted its donation programs—in line with Chinese President Xi Jinping’s “common prosperity” slogan. https://bit.ly/3wKEgx3
Fintech, Blockchain & Cryptocurrency
Tim Cook says he owns cryptocurrency, Apple ‘looking’ to add it for Apple Pay.
During an interview, Apple CEO Tim Cook addressed a variety of his usual talking points, including being bullish on the future of AR, however, he also focused his thoughts on cryptocurrencies like bitcoin. Cook explained that Apple is ‘looking at’ crypto, but has no immediate plan to make any announcements. He also said that, unlike Tesla, Apple does not plan to invest in cryptocurrency as a company because he believes shareholders do not buy stock to get exposed to crypto. Cook also revealed that he does in fact own crypto on his own, saying it is reasonable to own it as a part of a diversified portfolio. https://bit.ly/3C6nYjm
Zimbabwe is looking at adopting cryptocurrency as legal payment, top government official says.
The Zimbabwean government is looking into how cryptocurrencies could be used in legal payment services, a top official has said. The country has begun gathering views from businesses and will talk to citizens as part of its research. Charles Wekwete, a permanent secretary and head of the e-governement technology unit said that they are still trying to develop policies for crypto assets, but the implications of adopting digital currency is still not clear. https://bit.ly/3HcXpfM
Twitter announces new dedicated crypto team.
In an unexpected and surprising move, Twitter announced on Wednesday a new team dedicated to working with crypto and blockchain. The company says it wants to “figure out what crypto can do for Twitter” and that it will invest even more in decentralized technology. The announcement was first made on the social network by Tess Rinearson, who was recently hired by Twitter to lead the new team. Rinearson explains that while cryptocurrencies such as bitcoin and NFTs are becoming more relevant to Twitter, the company wants to go far beyond when it comes to decentralized technologies. https://bit.ly/3wHEJ31
Discord pushes pause on exploring crypto and NFTs amidst user backlash.
Discord founder and CEO Jason Citron sought to reassure users Wednesday that the company doesn’t have impending plans to shift its business toward NFTs. In a tweet earlier this week, Citron shared an image of crypto wallet MetaMask integrated into Discord’s user interface with the text “probably nothing” — shorthand language in the NFT space for something that’s about to be a big deal. He contextualized the previous tweet Wednesday evening, noting that Discord has “no current plans” to integrate crypto wallets into its app. https://tcrn.ch/3Dofh5r
Luxury brands are creating NFTs to cash in on singles’ day in China.
Luxury brands have entered China’s shopping metaverse with NFT offerings ahead of the Singles’ Day shopping festival on Thursday. Riding on the trend is ecommerce giant Alibaba’s Tmall shopping platform, which launched a “Double 11 Metaverse Art Exhibition” in its mobile app last month. It’s working with brands including Burberry, Coach, and Swiss watchmaker Longines, all of which have created NFTs for the event, Tmall wrote on its Weibo microblog account. The NFTs — called “digital collectibles” in China — are generally packaged along with a physical item, with the digital offering being a limited edition item. The Singles’ Day NFT offerings were slated to run from October 20 to November 11, but many of them sold out days before the event. Burberry, for one, already sold out of 1,000 special edition scarves that came with an interactive deer NFT and were listed for 2,900 Chinese yuan (US$453) each. The scarves were launched on October 20 and cost 12% less than the next-cheapest Burberry scarf still listed on Tmall. Most buyer reviews centered on the physical products, but some comments showed interest in the NFT part of the deal, too. https://bit.ly/3qmGFwE
The world’s largest record company is creating an NFT super group.
The world’s largest music company has created a band of four virtual apes. If that sentence makes you question your sanity — or the state of western civilization — you aren’t alone. Universal Music Group NV is combining two hot digital concepts that you’ve likely read about in the past year: nonfungible tokens (NFTs) and the metaverse, Thanks to the appreciation of cryptocurrencies and some very famous boosters, like Elon Musk and Mark Zuckerberg, they have gone from esoteric to ubiquitous in just a few months. https://bloom.bg/3wDayKx
TSMC is partnering with Sony on its new US$7 billion chip factory in Japan.
TSMC is teaming up with Sony on its new US$7 billion chip factory in Japan, the companies announced on Tuesday. The new plant will focus not on cutting edge chips but rather older 22nm and 28nm processes in an effort to meet supply shortfalls for older chips. Sony’s semiconductor group will invest approximately US$500 million in the new subsidiary for less than 20% of equity in Japan Advanced Semiconductor Manufacturing. https://bit.ly/3ojuxKs
Sony cuts PlayStation 5 production on chips shortage.
Sony Group Corp. has reduced its PlayStation 5 production outlook for this fiscal year due to component and logistics constraints, according to people familiar with its operations. The Tokyo-based entertainment giant had previously targeted more than 16 million units assembled in the year ending March, setting it up to achieve its sales goal for the period and also get a head start on the subsequent year’s production. The company has now cut that number down to about 15 million, making its aim of 14.8 million PS5 sales by March difficult, the people said, asking not to be named as the information is not public. https://bloom.bg/3D8u1VN
Solar power is a huge success story.
A longtime solar champion explains how it happened. There aren’t a lot of positive, hopeful stories competing for attention in the U.S. these days, but one ray of light — if you’ll pardon the pun — comes in the form of solar power. During the 21st century, it has plunged in price, to the point that it is the cheapest available source of power in most big energy markets. Though it provides just 3 percent of U.S. electricity today, analysts say it could provide close to half by midcentury. https://bit.ly/3qiO4gv
2020 was the worst year yet for power outages in the US. 2020 was a record-breaking year for power outages in the United States, according to an Energy Information Administration (EIA) analysis published today.
Extreme weather is leaving Americans in the dark for longer than it has in the past, a problem that is bound to get worse as climate change fuels even more violent weather. On average, a person in the US went over eight hours without electricity in 2020. That’s more than twice as long the average American went without power in 2013, the year that the EIA started keeping track. Across the US, outage times varied considerably. Residents of Louisiana, the state with the longest outages, went a full 60 hours, on average, without electricity last year. https://bit.ly/3c5EJk4
Electric vehicle charging stocks surge as Congress clears infrastructure bill with US$7.5 billion for EV sector.
The infrastructure package boosted electric-vehicle charging stocks Monday after Congress over the weekend passed the US$1 trillion infrastructure bill, which includes US$7.5 billion for the EV sector. EVgo was up 17%, Volta climbed over 11%, while ChargePoint and Blink Charging also jumped nearly 10% after the announcement. The bill includes upwards of US$550 billion in new funding for transportation, broadband, and utilities, which legislators say will address a broad range of issues. It also aims to build a national network of electric-vehicle chargers over the next five years. https://bit.ly/3H9la8K
The information and recommendations made available through our emails, newsletters, website and press releases (collectively referred to as the “Material”) by Sophic Capital Inc. (“Sophic” or “Company”) is for informational purposes only and shall not be used or construed as an offer to sell or be used as a solicitation of an offer to buy any services or securities. In accessing or consuming the Materials, you hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the information provided in our monthly newsletter and emails or any other Material should be viewed as an invite, and/or induce or encourage any person to make any kind of investment decision. The recommendations and information provided in our Material are not tailored to the needs of particular persons and may not be appropriate for you depending on your financial position or investment goals or needs. You should apply your own judgment in making any use of the information provided in the Company’s Material, especially as the basis for any investment decisions. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a qualified and registered investment advisor. You further agree that neither Sophic, its, directors, officers, shareholders, employees, affiliates consultants, and/or clients will be liable for any losses or liabilities that may be occasioned as a result of the information provided in any of the Material. By accessing Sophic’s website and signing up to receive the Company’s monthly newsletter or any other Material, you accept and agree to be bound by and comply with the terms and conditions set out herein. If you do not accept and agree to the terms, you should not use the Company’s website or accept the terms and conditions associated to the newsletter signup. Sophic is not registered as an adviser or dealer under the securities legislation of any jurisdiction of Canada or elsewhere and provides Material on behalf of its clients pursuant to an exemption from the registration requirements that is available in respect of generic advice. In no event will Sophic be responsible or liable to you or any other party for any damages of any kind arising out of or relating to the use of, misuse of and/or inability to use the Company’s website or Material. The information is directed only at persons resident in Canada. The Company’s Material or the information provided in the Material shall not in any form constitute as an offer or solicitation to anyone in the United States of America or any jurisdiction where such offer or solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation. If you choose to access Sophic’s website and/or have signed up to receive the Company’s monthly newsletter or any other Material, you acknowledge that the information in the Material is intended for use by persons resident in Canada only. Sophic is not an investment advisor nor does it maintain any registrations as such, and Material provided by Sophic shall not be used to make investment decisions. Information provided in the Company’s Material is often opinionated and should be considered for information purposes only. No stock exchange or securities regulatory authority anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. Sophic and/or its principals and employees may have positions in the stocks mentioned in the Company’s Material and may trade in the stocks mentioned in the Material. Do not consider buying or selling any stock without conducting your own due diligence and/or without obtaining independent investment advice from a qualified and registered investment advisor. The Company has not independently verified any of the data from third party sources referred to in the Material, including information provided by Sophic clients that are the subject of the report, or ascertained the underlying assumptions relied upon by such sources. The Company does not assume any responsibility for the accuracy or completeness of this information or for any failure by any such other persons to disclose events which may have occurred or may affect the significance or accuracy of any such information. The Material may contain forward looking information. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “projects,” “plans,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved or their negatives or other comparable words and include, without limitation, statements regarding, projected revenue, income or earnings or other results of operations, strategy, plans, objectives, goals and targets, plans to increase market share or with respect to anticipated performance compared to competitors, product development and adoption by potential customers. These statements relate to future events and future performance. Forward-looking statements are based on opinions and assumptions as of the date made, and are subject to a variety of risks and other factors that could cause actual events/results to differ materially from these forward looking statements. There can be no assurance that such expectations will prove to be correct; these statements are no guarantee of future performance and involve known and unknown risks, uncertainties and other factors. Sophic provides no assurance as to future results, performance, or achievements and no representations are made that actual results achieved will be as indicated in the forward looking information. Nothing herein can be assumed or predicted, and you are strongly encouraged to learn more and seek independent advice before relying on any information presented.