Weekly Investment News and Analysis

In the US holiday shortened week, the Dow Jones Industrial was up 1.7%, S&P 500 index climbed 1.5%, and the Nasdaq was up 0.8%. In the third quarter, Canada saw $896 million invested across 144 VC deals, according to the Canadian Venture Capital and Private Equity Association’s latest report. On both fronts, these numbers represent a steep year-over-year decline compared to what was an especially hot Q3 2021 and Q3 2019 for Canadian VC funding. WorkJam closed a US$50 million round. Shopify saw bigger Black Friday orders, and more in-store sales versus last year. Converge Technology announces commencement of strategic review process to maximize shareholder value. Coupa Software shares surged on a report of interest from Vista. Activision stock falls after report says watchdog will block Microsoft deal. Berkshire has cut it BYD stake by 22%, made US$1.2 billion profit. DraftKings stock falls after report cites cases of unauthorized account withdrawals. More than 20,000 employees at Apple Inc supplier Foxconn’s huge Chinese plant, mostly new hires not yet working on production lines, have left, a Foxconn source familiar with the matter told Reuters on Friday. Google has a secret new project that is teaching artificial intelligence to write and fix code. Amazon plans to invest US$1 billion a year in movies for theaters. Bob Iger is returning to head Disney as Bob Chapek steps down. Thanksgiving 2022 online sales pip past forecasts at US$5.3 billion, up 2.8% on last year, mobile accounted for 55% of all purchases. Domino’s is rolling out over 800 Chevy Bolt pizza delivery EVs.

After the previous week’s gain, the Dow Jones was up very modestly last week, S&P fell 0.7%, and the Nasdaq was down 0.7%. Global venture funding plateaued in October, with valuations likely to blame. Masayoshi Son owes US$4.7 billion to SoftBank following tech rout. Ant’s consumer-lending unit to raise US$1.5 billion in scaled-down capital plan. BYD Co Ltd said on Tuesday it had scrapped plans to list its semiconductor unit in China, saying a move to increase investments in wafer production would significantly affect the unit’s asset structure. Shares of Alibaba inched about 1% higher in premarket action Thursday after the company topped adjusted earnings expectations for the latest quarter and said it was upsizing its buyback program. Taiwan Semi stock surges toward best day since 2008 after Buffett’s Berkshire reveals stake. Micron stock falls as chip maker cuts supply forecast, citing market conditions. Shares of Coinbase slipped 6% Thursday as the fallout from FTX’s collapse continues to hit the broader cryptocurrency market. Microsoft and Nvidia announced plans to work together to build a cloud-based supercomputer capable of training large-scale language models like OpenAI’s DALL-E 2, which translates text to images, and GPT-3, which can generate realistic-sounding news articles. Apple plans a 3D world and video service for its mixed-reality headset. Nike Inc. is opening an online store and trading platform for virtual sneakers as management pumps investment into the metaverse. Twitter may be in big trouble when it comes to generating advertising revenue: GroupM, part of WPP, the world’s biggest ad company — and Twitter’s biggest spender — is reportedly telling its clients that buying ads on the platform is “high-risk”. Epic says more than half of all announced next-gen games are made on Unreal Engine. Federal Bureau of Investigation Director Chris Wray told lawmakers during a hearing that the FBI has national security concerns about TikTok, the popular video app owned by Chinese internet giant ByteDance. Democratic senators urge FTC to investigate Twitter.

Last week, the Dow Jones gained 4.15%, S&P 500 was up 5.9%, and the Nasdaq rose 8.1%, in its best weekly gain since March, aided by a cooler-than-expected inflation report. The rest of week was defined by seemingly never ending FTX and Twitter headlines. Crypto exchange FTX has filed for Chapter 11 bankruptcy in the U.S. and founder Sam Bankman-Fried has resigned as CEO on Friday. Alameda Research, the trading company founded by Bankman-Fried, has also filed for bankruptcy. Crypto lender BlockFi freezes withdrawals, cites ‘Lack of Clarity’ on FTX. Elon Musk sells at least US$3.95 billion worth of Tesla shares after Twitter deal. Some laid off Twitter employees say they’re being asked to come back to Twitter after mass layoffs. Twitter pauses Twitter Blue as trolls overtake platform. Boosted by Twitter drama, Mastodon reaches 1 million active monthly users. Disney warns on economic impact on Disney+ profit target, and is likely to announce layoffs. TikTok slashes global revenue targets by at least US$2 billion. Netflix is interested in carrying live sports. Meta to lay off more than 11,000 employees, or 13% of staff. Apple warns iPhone 14 Pro availability is limited as COVID-19 restrictions close supply chain factories in China. Roblox stock drops on widening losses in Q3, but other growth metrics remain strong. The U.S.-listed shares of ASML shot up 12.8% toward the biggest one-day gain in 20 years in midday trading Thursday, after the Netherlands-based semiconductor equipment maker set a new 12 billion euro (US$12.2 billion) stock buyback program. MicroStrategy stock tumbles, as bitcoin prices fall well below ‘low watermark’ for carrying value in Q3. In Canada, Xanadu closed US$100 million Series C as the quantum computing firm becomes Canada’s latest unicorn. Hopper closed a US$96 million round from Capital One at more than US$5 billion valuation.

Last week, the Dow Jones Industrial fell 1.4%, S&P 500 was down 3.3%. Nasdaq fell 5.7%, its worst loss since the week ended Jan. 21. Numerous tech companies announced hiring freezes and/or reductions in force; Amazon has paused corporate hiring for ‘next few months’, Lyft will lay off 13% or 683 employees from its workforce, Stripe will lay off 14% or ~1k people from workforce, Chime will lay off 12% of its workforce, Opendoor laid off ~550 employees or 18% of its workforce. In Canada, Dapper Labs lays off 22% of its staff. Snowflake opens a Toronto HQ, engineering hub to expand investment in Canada. A Financial Times piece pointed out investors are questioning Big Tech’s capex plans as their businesses now raise serious questions about whether the returns from the latest spending binge will be as predictable as those of the past. Venture capital investments in China are falling sharply this year, making it one of the worst-performing countries globally. Gartner pointed out that worldwide spending on public cloud services will grow 20.7% in 2023, to US$591.8 billion. Stocks of Twilio, Atlassian, Roku, DraftKings had big moves down following earnings report. Robinhood reported a steep drop in users.Qualcomm is predicting a ‘double-digit’ drop in phone sales. Banks prepare to hold US$12.7 billion Twitter debt on books until early 2023. The Council on Foreign Investment in the U.S. (CFIUS) should take action to ban TikTok, Brendan Carr, one of five commissioners at the Federal Communications Commission, told Axios in an interview. Uber app may get worse as company experiments with push notification ads. Disney+ subscribers now have early access to Disney merchandise, including Marvel and Star Wars products. Fidelity Investments is gearing up to launch crypto trading for small investors, announcing on Thursday that it had opened up a waitlist for customers.

Last week, the Dow Jones was up 5.7%, its fourth straight weekly gain, S&P 500 was up almost 4%, the Nasdaq was up 2.2%, including a 2.9% Friday move. Mega tech had a rough earnings season, and the five mega-caps were down an average of 12% post earnings. Apple, was exception and rose 5.75% last week, including a 7.6% move on Friday. Mobileye pops more than 37% in IPO after spinning out of Intel. Alphabet posts 6% revenue growth as ad downturn worsens. Microsoft’s 11% revenue growth is slowest in five years. Amazon’s stock tanks on grim holiday forecast. Meta shares drop 19% on weak fourth-quarter forecast and earnings miss and a big tech investor writes to Zuckerberg: Meta’s ‘lost confidence of investors’. Twitter shares to be delisted following Musk takeover. Tesla faces U.S. criminal probe over self-driving claims. Alibaba falls to 6-year low as Chinese President Xi secures 3rd term. VC-funded China-based companies with recent US IPOs down over 90%. Microsoft says more than 20 million people have used Xbox Cloud Gaming, and Xbox Game Pass is profitable as it sees subscription growth slow. TikTok gaming push will be an “enormous” one; post Nov 2 launch. GM is delaying its plan to build 400,000 EVs in North America. Tesla cuts China prices by up to 9% as analysts warn of ‘price war. Shopify shares surged as revenue growth ticks higher. Telus will acquire product development shop WillowTree for US$1.2 billion. Toronto venture funding plunged to a two-year low in third quarter of 2022. While total investment in Toronto during Q3 2022 looked very different from 2021 levels, it was in line with the pre-bull market levels of 2020 (investment totalled roughly between $200 million and $300 million in each quarter of that year). Several local investors have noted this recent venture funding decline is a reversion to the mean and more reflective of a normalized capital deployment cycle than a catastrophic crash.

Last week, the Dow Jones closed up 4.9%, the S&P 500 was up 4.75%, and the Nasdaq composite closed up 5.2%. Google is reportedly in talks to invest US$200 million into Toronto AI startup, Cohere. Grocery delivery app Instacart has decided to push its highly anticipated IPO into 2023, believing the current stock market is too volatile, as first reported by The New York Times and confirmed by Axios. Only 65 companies have gone public on U.S. exchanges this year, which represents an 80.7% decline from last year, per Renaissance Capital. U.S. IPO proceeds are down a whopping 94.1%. Intel eyes a significantly lower valuation in the IPO of its Mobileye unit. Activist investor Starboard reveals stake in Salesforce. Meta says it will sell off Giphy following order from UK competition watchdog. US weighs security reviews for Elon Musk deals, including Twitter buy, and Elon Musk’s Twitter deal could tank the leveraged buyout market, according to the WSJ. Netflix stock jumped 16% on Q3 earnings beat, return to subscriber growth. Snap’s shares were down 27% after third-quarter sales missed expectations. Roblox stock popped 19% on September user growth. Strong EV sales in China boosted profit for BYD. iPhone 14 Plus production halted, Apple to reassess demand, iPhone 15 Plus still planned. Netflix to expand into cloud gaming, opens new studio in Southern California. Microsoft is building an Xbox mobile gaming store to take on Apple and Google. Uber rolls out ad business to reach more riders. Mastercard will help banks offer cryptocurrency trading. Redditors have created millions of crypto wallets to buy NFT avatars. Biden administration approves US$2.8 billion for EV battery production in the US. Sophic Client, Kraken Robotics (PNG-TSXV, KRKNF-OTC): Recent geopolitical events have accelerated Unmanned Underwater Vehicles’ adoption by several navies, and several companies such as Kraken continue to evolve their products and services to meet growing demand.

Last week, the Dow Jones Industrial Average rose 1.2%, the S&P 500 fell 1.5% and the Nasdaq composite tumbled 3.1%. Major indexes reversed after a higher open on Friday giving up most of Thursday’s surprise upside. Instacart cut its internal valuation a third time, to US$13 billion. Patreon’s internal valuation fell 70% over the past year, according to a memo sent to staff in September. Vista Equity Partners has struck a deal to purchase cybersecurity provider KnowBe4 for US$4.6 billion in an increasingly rare leveraged buyout as financing for such deals has become harder to secure. ForgeRock Inc., a maker of identity-verification software, said it will be acquired by Thoma Bravo in an all-cash deal valued at about US$2.3 billion. Volkswagen will take a 60% stake in US$2 billion tech JV with China’s Horizon Robotics. Renault and Nissan said Monday they were discussing ways to reinforce their partnership, including the possibility of an investment by Nissan in Renault’s new electric-vehicle unit. Nutanix stock rockets toward a 5-month high after WSJ report of buyout interest. TSMC earnings topped estimates as chip industry braces for slowdown, and Asia’s top chip stocks tumbled Tuesday, ensnared in an escalating US-China tech race that has erased more than US$240 billion from the sector’s global market value. Apple’s new mixed reality headset is expected to include an iris scanning feature that allows people wearing it to login to the device and make payments from it. Sophic Client Jasper Commerce Inc. (JPIM-CA) will acquire Cartika, expanding into managed Infrastructure as a Service (IaaS) for mid-market businesses. This accretive and shareholder friendly acquisition should nearly double Jasper’s Fiscal 2023 (Jul 2023) revenue to $3.5-4 million, YoY from the Company’s ~$1.7 million F2022 guidance and accelerate EBTIDA break-even by nearly a quarter. The transaction is to be funded with Jasper’s existing balance sheet. Sophic Client Edge Total Intelligence (CTRL-TSXV, UNFYF-OTCQB, Q5I-FRA) announced its U.S. listing on the OTCQB under symbol “UNFYF”.

Even though Friday was brutal for tech stocks, major indices ended up last week. The Dow Jones rose 2%, S&P 500 was up 1.5%, and the Nasdaq eked out a 0.7% gain despite falling 3.8% on Friday. Twitter and Elon Musk will not be seeing each other in court—yet. The parties, who were scheduled to go to trial in Delaware on October 17, have until October 28 to close Musk’s acquisition of Twitter for US$54.20 per share. Meanwhile, Carl Icahn scored an estimated US$250 million gain on Twitter stock. South Korea’s internet giant Naver is buying ecommerce firm Poshmark for US$1.2 billion, taking advantage of the big drop in Poshmark’s stock price. Amazon freezes corporate hiring in retail and operations businesses. Peloton cuts 500 more jobs; CEO Barry McCarthy, said he is giving the company about another six months to significantly turn itself around. DraftKings stock jumps on report of partnership with ESPN. Rivian stock price jumps after EV maker backs 2022 production guidance even as the company recalled nearly almost all of its vehicles. TSMC sales top estimates as clout helps chip giant during slowdown. TikTok parent ByteDance Ltd. saw its operating losses more than triple last year to above US$7 billion as it spent heavily to continue its torrid growth. Fast-fashion retailer Shein has shed up to one-third of its value in private markets in recent months after reaching a valuation of more than US$100 billion earlier this year. Horizon Worlds metaverse app so bad that Meta has to force employees to use it. The US Supreme Court agrees to hear case on tech companies’ legal immunity. Around US$100 million of Binance Coin was stolen Friday. Visa partners with FTX in a bet that shoppers still want to spend cryptocurrencies in a bear market. Sophic Client UGE International (UGE-TSXV) acquired 3.5MW community solar project and closed a US$15 million credit facility.

Markets fell yet again last week, ending a terrible September, and Q3 — the longest stretch of down quarters since 2008. The Dow Jones was down 2.9%, S&P 500 fell 2.9%, and the Nasdaq composite was down 2.7%. The Vision Fund, a venture capital arm of SoftBank, has launched a sweeping layoff process, cutting at least 30% of its workforce globally, or approximately 150 of the 500 employees. Mark Zuckerberg says Meta will freeze hiring and cut costs. DocuSign to cut workforce by 9% as part of restructuring plan. Peloton added Dicks Sporting Goods to the retail outlets that will sell its exercise bike. Shares of Peloton dived 15% on the news to just below US$7, its lowest point yet. Intel’s self-driving unit Mobileye on Friday unveiled its IPO filing. The tech IPO market globally is in the middle of its worst drought in nearly two decades. U.S. listings have raised a little over US$7 billion so far this year, according to data from Dealogic. Last year traditional IPOs, excluding special purpose acquisition companies, had raised a record US$154 billion. Mobileye’s IPO, coming on the heels of Porsche’s blockbuster debut in Europe, could, however, be an early sign of improving investor sentiment. TripActions reportedly files to go public at US$12 billion valuation. Stripe revenue rises 66% to US$2.255 billion. Uniswap Labs eyes over US$100 million in new funding, as the parent firm of the world’s largest decentralized exchange gears up to broaden its offerings. In Canada, Sophic Client, Clear Blue Technologies (CBLU-TSXV) received $5 million grant funding from SDTC. This grant combined with a June $4 million non dilutive funding from the Government of Canada, supports the $10 million market cap company’s 2023 growth. BuildDirect announced the upsizing of a private placement. Kitchener-Waterloo startup Avidbots secured US$70 million in a Series C funding round to expand its fleet of floor scrubbing robots.

Last week, the Dow Jones fell 4%, the S&P 500 fell 4.6%, and the Nasdaq fell 5.1%, as a hawkish Federal Reserve sent US Treasury yields soaring. Instacart plans to focus its IPO on selling employee shares. Chinese EV maker Leapmotor aims to raise US$1 billion in a Hong Kong IPO. Tencent considers more stake sales to fund share buybacks, future growth. FTX is in talks to raise up to US$1 billion at valuation of about US$32 billion, in-line with its prior round. Meta, and Google to cut costs and staff. Home-flipper Opendoor hit with losses in echo of Zillow collapse. Accenture stock fell after profit and revenue beat expectations but outlook was downbeat. Take-Two stock fell as company says leaked ‘Grand Theft Auto’ footage the result of ‘network intrusion’. Amazon said it had ‘biggest three hours of signups’ for Prime during first exclusive NFL stream. 25% of Netflix subscribers planning to leave service. In 2021, investors poured more than US$12 billion into a new breed of start-ups focused on buying Amazon marketplace sellers. This year, the funding has mostly dried up. Nasdaq moves into crypto with custodying services. Affirm stock heads higher as company notches BNPL deal with Amazon in Canada. Coinsquare to acquire CoinSmart as consolidation of Canadian crypto traders continues. Sophic Client, Swarmio Media (SWRM-CSE, SWMIF-OTC) and Globe Telecom Partner with PUBG MOBILE to Promote the Globe Gamer Grounds Platform in the Philippines. PUBG MOBILE is one of the most popular mobile games in the Philippines, with over one million monthly active users. Sophic Client Reklaim (MYID-TSXV, MYIDF-OTC): This report demonstrates how shifts in regulation and company compliance relates to Reklaim, which allows consumers to confirm their identity and unveil data that businesses have collected and sold without the consumer’s explicit consent for years.

The market had another rough week as the Dow Jones Industrial Average fell 4.1%, the S&P 500 index fell 4.8%, and the Nasdaq composite fell 5.5%. Billionaire investor, Stanley Druckenmiller warned there’s a high probability of the stock market being flat for a decade. SoftBank considers launching a third vision fund, despite massive losses. TikTok parent ByteDance to buy back US$3 billion worth of shares; the buyback would value ByteDance at about US$300 billion, Reuters reported. Adobe’s US$20 billion deal for Figma is more than 50 times the startup’s revenue and is the biggest acquisition of a private technology company ever. Intel cuts expectations for Mobileye, aiming for US$30 billion IPO. Tencent Music Entertainment Group is pressing ahead with its Hong Kong listing plans with a goal to start trading in the Asian financial hub as soon as next week, according to people familiar with the matter. Twilio lays off 11% of its staff as it aims for profitability in 2023. Wix’s stock rose after activist investor Starboard disclosed a 9% stake. Deere invests billions in self-driving tractors, smart crop sprayers. Cruise, the autonomous vehicle company owned by General Motors, will launch a robotaxi service in Phoenix, Arizona, and Austin, Texas, before the end of 2022. Netflix estimates ad-supported tier will reach 40 million viewers by late 2023. Roblox announces new ad revenue stream. Uber investigates hack. California files Antitrust complaint against Amazon. Google loses appeal over illegal Android app bundling, EU reduces fine to €4.1 billion. Citadel Securities, Fidelity and Charles Schwab to launch new crypto exchange. In Canada, CubicFarm Systems announced a $6.25 million senior secured term loan. Converge Technology Solutions acquires Newcomp Analytics. Stack Capital increases its exposure to Prove Identity via a share swap. WELL Health announces inclusion in the 2022 TSX30. Sophic Client, Swarmio Media announced an initial strategic investment of a US$1 million convertible note from Apelby Communications at a US$30 million market capitalization. Sophic Client, LuckBox announced triple digit growth in key operational metrics. Sophic also published three reports on Sophic Client Reklaim.

While headlines haven’t turned positive yet, Dow Jones was up 2.7% last week, the S&P 500 rose 3.65%, and the Nasdaq composite was up 4.1%. In Canada, Bragg Gaming secured U.S.$8.7 million funding for Company’s further execution on its growth initiatives. Shopify announced a pair of leadership changes Thursday, with a new chief operating officer set to take over immediately and a new chief financial officer slated to begin in October. U.S.-listed Chinese stocks fell Monday amid lockdown restrictions on 65 million people. Shares of Getty Images shot up 13.4% in premarket trading Wednesday, after the visual content company said it signed a “multi-year” renewal agreement with Amazon. GameStop reported wider loss, and announced a partnership with crypto exchange FTX. Netflix is trying to better control rising cloud computing costs with longtime cloud partner Amazon Web Services as part of its efforts to reduce total expenses, the Wall Street Journal reported. Former Disney CEO Bob Iger said on Wednesday that the company estimated a “substantial portion” of Twitter users were “not real” back in 2016 when the entertainment giant was considering buying the social media platform. Apple picks Globalstar for emergency satellite service on iPhone 14. While people are hyped up about the Apple September event, Bloomberg‘s Mark Gurman is back with more information regarding the upcoming Mixed Reality headset. According to him, Apple is developing three new headsets code-named N301, N602, and N421. Uber partners with Nuro on food deliveries using autonomous EVs starting in the fall. Rocket Lab’s recycled booster engine fired flawlessly after an ocean landing. Amazon’s ‘Lord of the Rings’ TV series got a record 25 million viewers. Apple TV+ global market share surpasses 6%. Mercedes-Benz and Rivian partner to jointly build electric vans in Europe.