Weekly Investment News and Analysis

Last week, Dow Jones rose 1.3%, S&P 500 was up 1%, and Nasdaq gained 0.9%. Market indices have had a good November, approaching 2023 highs. The VIX is at lows, leading some investors to believe that the market is due for a healthy consolidation or pullback. In the most captivating story in tech last week, OpenAI said it had reached an agreement “in principle” for Sam Altman to return to the startup. Altman, who was fired just last Friday as CEO, had agreed to an internal investigation into alleged conduct that prompted the company’s board to oust him. The Board was reportedly concerned a new Q* breakthrough could threaten humanity, by enabling AI to “surpass humans in most economically valuable tasks”. An OpenAI employee share sale that values the firm at US$86 billion is back on track following Altman’s reinstatement as CEO. Nvidia forecasted US$20 billion revenue next quarter, expecting a negative impact from China, the stock fell 1.5% after hours. Regulators in Europe and China have questioned Nvidia how it allocates its supply of highly sought-after chips. Apple’s Vision Pro is still not quite ready for launch, and is likely to release around March. Binance’s CEO has stepped down, pleading guilty to federal crimes. The SEC is suing crypto exchange Kraken. In Canada, Sophic Client, Ionik acquired substantially all of the assets of S44 LLC (SHIFT44), for a total aggregate purchase price of ~US$40 million payable in cash, debt and stock. On November 23, 2023, Ocean Infinity Group Limited, sold all of its 21,280,000 shares in Sophic Client Kraken Robotics for ~$0.5011 per share, clearing an overhang on the stock. Sophic Client, Clear Blue partnered with Watt Renewable Partners for its scale up in Nigeria and across Africa. The companies plan to deploy 1000 solar hybrid powered systems for telecom towers across Nigeria and Africa over the next three years. Watt has purchased 160 systems from Clear Blue for a total purchase price of $1.58 million.

Last week, Dow Jones gained 1.9%, S&P 500 rose 2.2% and Nasdaq was up 2.4%. OpenAI ousted Sam Altman for misleading its Board, which could have far reach consequences for the AI ecosystem. Google has delayed the cloud release of its Gemini AI product. Microsoft will sell AI from Cohere as its business moves beyond OpenAI. The company also unveiled an AI chip as it seeks to catch up to Nvidia, Amazon. Nvidia also unveiled a new AI chip, upping ante with AMD. Nvidia stock is riding its longest winning streak in seven years, adding US$220 billion in market value just in November, even as the ‘Big Short’ investor Michael Burry revealed a bet against Nvidia and other microchip stocks. SpaceX is considering spinning off its Starlink satellite internet business through an IPO as soon as 2024. Alibaba decided to cancel its plan to spin off its cloud computing division, citing new challenges facing the business due to the U.S. government’s restrictions on semiconductor exports. Meta Platforms, Alphabet, ByteDance and Snap must face lawsuits alleging they designed their platforms to attract and be addictive to children, thereby harming their mental health, a federal judge ruled on Tuesday. In Canada, Q4 is going private at half its IPO valuation with a $257 million buyout by Sumeru Equity Partners, after being public for just over two years. Sophic Client Xcyte began trading on the TSXV after a recent oversubscribed financing. Sophic Client UGE closed an offering of project development Green Bonds for aggregate gross proceeds of $1,538,050 and US$74,100. Sophic Client OneSoft reported Q3 2023 revenue of $2.8 million, +33% y/y. Management reiterated its 2023 revenue and Gross Profit guidance. Montréal-based carbon-capture startup Deep Sky closed $57.5 million in Series A financing as it looks to make Canada the “carbon removal capital of the world.”

Last week, Dow Jones rose 0.65%, S&P 500 rose 1.3%, and Nasdaq composite was up 2.4%. Shein has told potential investors that it’s seeking a valuation of US$80 billion to US$90 billion in an eventual U.S. IPO, a big jump from the fast-fashion giant’s US$66 billion valuation when it raised money in May. WeWork, once valued at US$47 billion, filed for bankruptcy, which also impacted SoftBank’s Q3 results. Meta and Tencent signed a preliminary agreement to sell a budget-friendly version of Meta’s Quest mixed-reality headsets in China, marking the first time Meta has been able to offer a product or service in China since 2009. Shares of The Trade Desk dropped by as much as 30% in after-hours trading Thursday after the firm projected slower revenue growth in the current quarter. Disney reduced its streaming losses, and projected profits next year. Uber’s Free Cash Flow more than doubled as bookings growth picked up. Southeast Asian ride-hailing and delivery giant Grab on Thursday reported its first operating profit on an adjusted basis, as the company’s businesses continue to recover after the pandemic. Datadog stock surged 28% for its best day ever after a beat and raise quarter. Roblox the video-game platform popular among teenagers, surged by the most in almost nine months after reporting Q3 bookings and revenue that far exceeded Wall Street’s projections. Humane kicked off a marketing effort for its upcoming AI Pin, likely to be the first of many AI-centered hardware devices. In Canada, Sophic Client Xcyte Digital announced the closing of its Qualifying Transaction. The Company completed an oversubscribed private placement for aggregate gross proceeds of $4.4 million. Sophic Client Kraken Robotics delivered a mine hunting solution to the Australian Navy. This represented Kraken’s first KATFISH system sale in APAC, following a successful in-country demonstration for the Royal Australian Navy in Q1 2023.

Last week, Dow Jones was up 5.1%, its best week in a year. S&P 500 rose 5.85%, Nasdaq composite was up 6.6% — both had their best weeks since early November 2022. The Biden administration on Monday issued a far-reaching executive order, that requires Google, OpenAI and others to share data. Separately, the FTC said it would look closely at tech companies’ AI, and cloud deals. Amazon Web Services announced a new service aimed at helping developers access Nvidia’s hard-to-get graphics processing units—a potentially threatening move for the flurry of GPU rental startups that are attempting to compete with the cloud provider. Nvidia has US$5 billion of China orders that could also be in limbo after latest U.S. curbs. SpaceX’s Starlink has “achieved breakeven cash flow,” CEO Elon Musk said Thursday. Earnings season continued to roll on, Apple’s revenue fell, despite 16% services growth. AMD stock rose more than 8.5% on Wednesday, a day after CEO Lisa Su projected her company’s forthcoming graphics processing units for artificial intelligence would eat into Nvidia’s dominant market share. Qualcomm reported a 24% drop in revenue, a continuation in what has been a poor year for the mobile chip giant thanks to an 18-month long slump in smartphone sales. Airbnb said Q4 growth will be slower than expected. Pinterest jumped 14% in extended trading on better-than-expected Q3results. In Canada, Sophic Client UGE International announced an extension of maturity date debentures. Sophic Client Kraken Robotics receives another Synthetic Aperture Sonar Order from HII, this one worth $1 million. Sophic Client OneSoft presented at the AI and Big Data Virtual Investor Conference. Vancouver-based electric motorcycle company Damon Motors is looking to list on the Nasdaq through a reverse merger.

Major indices fell to multi month lows last week. So far, earnings have been a negative catalyst for stocks, coupled with heightened geo political risk going into the weekend. Dow Jones fell 2.1%, S&P 500 lost 2.5%, and Nasdaq composite was down 2.6% during the week. Google has committed US$2 billion to Anthropic, an OpenAI rival. Google has previously taken a roughly 10% stake in Anthropic. This follows Amazon’s US$1.25 billion investment into the company. Crusoe Energy, one of several emerging cloud providers that rent out Nvidia’s in-demand chips for artificial intelligence, raised US$200 million in debt usings Nvidia chips as collateral. Intel is expanding to the AI software business, and Apple is rumored to follow ChatGPT with generative AI features on iPhone as soon as iOS 18. Microsoft reported revenue growth of 13% as AI sales accelerated Azure cloud growth. Revenue growth at Alphabet parent Google accelerated for a third straight quarter. Amazon reported better-than-expected results, as revenue jumped 13%. The company’s ad growth driven mostly by search, not video, and the company launched AI tools for ad sellers. Amazon is considering offering veterinary telehealth as it looks to compete with Walmart. Meta reported a return to robust growth rates after nearly two years of weaker expansion caused by an anemic ad market, Apple’s ad targeting changes and competition from TikTok. A coalition of 41 states and the District of Columbia are filing lawsuits alleging that Meta Platforms has intentionally built its products with addictive features that harm young users of its Facebook and Instagram services. Ford delayed US$12 billion in EV investments as the automaker wrestles with demand. In Canada, Well Health acquired two cybersecurity businesses, for an undisclosed amount. Google and Nvidia-backed, Toronto based CentML secured $37 million to help companies deploy AI amid chip shortages.

Last week was tough again for tech investors, as Treasury yields surged, and stocks exhibited poor reactions to earnings. Weakness was more pronounced in the second half of the week, Dow Jones fell 1.6%, S&P 500 was down 2.4%, and Nasdaq composite lost 3.2% during the week. The week ahead has risks, including GDP and inflation data, as well as big tech earnings. OpenAI is in talks to sell shares at a US$86 billion valuation. Stack Overflow, whose site helps software engineers get answers to technical questions, has laid off about 28% of its staff. The move may be the strongest indication yet of how OpenAI’s ChatGPT has upended digital businesses this year. The U.S. government announced new rules that restrict American firms such as Nvidia and Intel from selling advanced semiconductors, including artificial intelligence chips, to Chinese companies. Shares of critical chip firm ASML dropped 4% after these new U.S. curbs, and an outlook warning. Lockheed beat estimates on sustained weapons demand amid geopolitical tensions. Snap’s stock rose 12% after CEO Spiegel targeted 20% revenue growth. Okta’s stock fell 11% after it disclosed on Friday that hackers breached its systems and read some customers’ files. Amazon is rolling out expanded robotics operations at fulfillment centers built on updated sorting machines, robotic arms, and its Roomba-like mover bots. In Canada, Sophic Client UGE International announced Q3 2023 milestones and business updates, and announced commercial operation for its community solar project in Norway, Maine. Sophic Client Kraken announced a $3 million contract in Europe. GameSquare will acquire one of the biggest names in gaming, FaZe Clan and will complete a private placement to raise US$10 milion. BBTV Holdings announced its going private transaction.

Last week, Nasdaq fell 0.2% mostly due to Friday’s 1.2% fall, S&P 500 was up 0.45%, and Dow Jones rose 0.8%. Chinese ride-hailing app Didi Global, which delisted from New York last year, is planning to list its shares in Hong Kong next year, Bloomberg reported. The Company’s autonomous vehicle arm also raised US$149 million from state investors. ChatGPT’s mobile app hit a record US$4.58 million in revenue last month, but growth is slowing. Microsoft is contesting an IRS audit that found that the company owes US$28.9 billion in unpaid taxes dating back to 2004. Activist Nelson Peltz is planning a fresh push for board seats at Disney following a relentless slide in the entertainment giant’s shares, even as Comcast and Disney hired investment banks to value Hulu. Atlassian is acquiring video messaging service Loom for US$975 million, the same company that had a US$1.53 billion valuation in May 2021 when it announced a US$130 million Series C. PC shipments’ decline slowed in Q3 2023, but Apple plunged over 23%. Apple is reportedly already designing a lighter Vision Pro to fix “neck strain”, while Meta’s plans to beat Apple’s Vision Pro include cheaper headsets and no controllers. In Canada, Sophic Client UGE announced a Marketed Offering of up To US$5 million of project development Green Bonds and achieved a Notice to Proceed milestone for a 3.5-Megawatt community solar project in Oregon (its first in the state). In news that bodes well for Sophic Client, Kraken, US based HII was awarded a US$347 million U.S. Navy Lionfish small UUV contract.

U.S. VC investments fell 30% Q3 to US$32.7 billion, the sixth straight quarter investing has dropped from the year earlier period, and the lowest level since the second quarter of 2018. Intel plans to IPO programmable chip unit within three years. Anthropic is talking to investors about raising an additional US$2 billion in new funding. Meal kit service Blue Apron said Friday that it plans to sell itself to Wonder for US$103 million. Blue Apron went public in 2017 at a valuation of US$1.9 billion. SmileDirectClub files for bankruptcy, capping years of losses. Rivian shares fell over 20% after the EV maker said it plans to raise US$1.5 billion. Microsoft was willing to lose US$15 billion annually to win Apple search deal. Amazon plans an AI Chatbot for search. Meta launched generative AI products for advertisers. JPMorgan’s Dimon predicts 3.5-day work week for next generation thanks to AI. MGM resorts refused to pay ransom in cyberattack on casinos, costing the company US$100 million. Meta proposes US$14 subscription fee for ad-free Instagram and Facebook. TikTok is testing a US$5-per-month, ad-free version of its app. According to a new report, Apple has held early talks with the College Football Playoff tournament about a streaming deal, joining the sea of rumors relating to Apple’s interest in sports rights. Microsoft will debut its AI chip next month. OpenAI also discussed building its own AI chip. Hyundai and Kia announced they will soon adopt Tesla’s electric vehicle charging system, beginning in the fourth quarter of 2024 in the US. In Canada, Sophic Client Legend Power announced significant operational and sales progress. Sophic Client Clear Blue provides a positive corporate Q3 2023 update. Sophic Client UGE International CEO Nick Blitterswyck, presented and did a fireside chat at the MicroCap Club Leadership Summit, and was on the Planet MicroCap Due Dilligence Series Podcast.

While Nasdaq closed last week up fractionally higher, September was its worst month in the year, as the index was down nearly 6%. Dow Jones fell 1.2% and S&P 500 lost 0.4% last week. OpenAI is seeking a new valuation of between US$80 billion to US$90 billion, roughly triple its level earlier this year. The startup, which is 49% owned by Microsoft, has told investors that it expects to reach US$1 billion in revenue this year and generate many billions more in 2024. CoreWeave, a cloud computing provider that’s among the hottest startups in the artificial intelligence race, is finalizing a minority stake sale that values the company at US$7 billion. CoreWeave was an early adopter of Nvidia Corp. graphics chips for data centers, getting ahead of a wave of demand for powerful processors to run artificial intelligence applications. Amazon has agreed to invest up to US$4 billion in AI startup Anthropic. iPhone designer Jony Ive and OpenAI CEO Sam Altman are in advanced talks with SoftBank CEO Masayoshi Son to raise US$1 billion in capital to fund the creation of the “iPhone of artificial intelligence” that uses OpenAI’s artificial intelligence software, the Financial Times reported. In a complaint filed in federal court in Seattle Tuesday, the FTC and 17 states accused Amazon of engaging in a course of conduct to exclude rivals in online marketplace services and stifle competition. Nvidia’s France offices were raided by the country’s competition authority this week, according to a report from The Wall Street Journal. In Canada, HS GovTech will be acquired for an all-cash consideration of $0.54, a ~150% premium. Canadian small cap tech names are beat up, and investors are beginning to notice. Shopify has invested in wholesale site Faire. The companies did not disclose the size of Shopify’s stake or the value of the deal.

The share price Arm Holdings ended Thursday at US$63.59, up nearly 25% above the initial public offering price, a strong early sign for the tech listing market overall. Instacart is targeting a valuation of roughly US$8.6 billion to US$9.3 billion in its imminent IPO, a fraction of what the grocery-delivery company was previously worth. Although reports on Friday morning suggested this pricing could be revised up given ARM’s successful listing. Marketing automation software firm Klaviyo is targeting a valuation of as much as US$8.37 billion in its initial public offering, according to updated IPO paperwork on Monday, a slight drop from the more than US$9 billion valuation the company landed when it raised money in 2021. Google on Wednesday said it laid off hundreds of recruiting staff as the company slows hiring. SpaceX’s satellite internet business Starlink brought in US$1.4 billion in revenue in 2022, up from US$222 million in 2021. Apollo is among suitors for IGT’s global slot-machine unit, the unit could fetch US$4 billion to US$5 billion, or ~11x EBITDA. Faze Clan has fired its CEO as the esports industry struggles. The Biden administration has approved US$100 million to fix the nation’s broken EV chargers. Ford will double its F-150 hybrid pickup production as EV sales growth slows. Tesla is closing in on a new manufacturing process that could significantly reduce costs and increase production of its electric vehicles. Tesla is the most shorted stock in the market – and investors have bet against it more than any other name for 3 straight months, according to a recent report. Sophic Client Kraken Robotics CEO, Greg Reid recently presented to investors at the Planet MicroCap Showcase in Vancouver. The Company also recently reiterated guidance for strong revenue growth and are expecting to be Net Income positive this year.

Last week was tough in the markets, as Dow Jones fell 0.75%, S&P 500 lost 1.35, and Nasdaq was down 1.9% — these major indices fell below their 50 day moving averages. China has banned iPhone use for government officials at work. China Mobile reportedly won’t sell the iPhone 15 amid local government ban. Arm is seeking a valuation topping US$50 billion, according to a Tuesday morning filing. The IPO of Renault’s Ampere electric vehicle division could get a valuation of up to 10 billion euros. Midjourney, a generative artificial intelligence startup that charges users between US$10 and US$120 for a monthly subscription, is on pace to surpass US$200 million in revenue this year. Private equity firm Thoma Bravo has agreed to acquire health-records software company NextGen. Business software company Alteryx is exploring a sale. An FTC Antitrust suit against Amazon is set for later this month after a meeting failed to resolve an impasse. Venture-backed defense giant Anduril is acquiring Blue Force Technologies, the advanced design and engineering firm behind the “Fury” unmanned fighter jet, as the company looks to build out its suite of autonomous systems for national security customers. The Pentagon intends to field a vast network of AI-powered technology, drones and autonomous systems within the next two years to counter threats from China and other adversaries. To meet the challenge of a rising China, the Australian Navy is taking two very different deep dives into advanced submarine technology, including unmanned subs, powered by artificial intelligence, called Ghost Sharks. These geopolitical considerations, could be a tailwind for Sophic Client Kraken Robotics. Rockwell Automation signed an agreement to acquire Waterloo-based Clearpath Robotics, terms were not disclosed. Sophic Client LuckBox signed an LOI for potential merger or acquisition. Sophic Client Renoworks has partnered with ROOFLE to offer combined solution for roofing professionals.

Growth stocks performed well last week, Nasdaq was up 3.25%, S&P 500 rose 2.5%, and Dow Jones gained 1.4%. Arm will start conversations with potential IPO investors with a US$50 billion to US$55 billion valuation in mind, for at least a 56% increase from the price at which SoftBank bought Arm seven years ago. OpenAI is on pace to generate more than US$1 billion in revenue, up more than 35 times compared to last year. Nvidia-backed CoreWeave is seeking stake sale at up to a US$8 billion valuation, even as some employees are looking to cash out an astonishing US$500 million worth of shares, according to The Information. In Canada, Sophic Client Kraken announced a $2.7 million sonar & subsea battery order, and reiterated financial guidance for 2023 with Q2 results. The Company expects revenue to be in the $66 – $78 million range and adjusted EBITDA in the $12 – $17 million range. Mid-point of guidance range implies revenue growth of 76% over 2022 and adjusted EBITDA growth of 275%. Sophic Client, Clear Blue Technologies announced Q2 results, and is focused on revenue growth in H2 2023, net-zero cash burn and positive EBITDA. Private equity firm Veritas Capital made an offer to buy BlackBerry, months after the Company began a strategic review, its U.S-listed shares rose about 17% on the news. Amazon and Shopify announced a partnership Wednesday to allow Shopify sellers to offer Amazon’s Buy With Prime service on their e-commerce sites, Shopify also began quietly rolling out a TikTok integration. Toronto-based Cohere is being advised by JPMorgan and Goldman Sachs on a potential financing round. Cohere, a competitor to OpenAI, raised US$270 million in June at a valuation of up US$2.2 billion, recently Tiger Global was close to selling a stake in Cohere in a deal that would have valued the company at about US$3 billion.