Weekly Investment News and Analysis

After a wild week, which saw sharp losses, a bounce back and more losses, Dow Jones was down 0.2%, S&P 500 rose 1.4%, and Nasdaq was up 4.4%. The 10-year Treasury saw huge daily swings as well, and the two-year yield fell ~75 basis points to 3.85%, in its biggest weekly drop since 1987. Bitcoin notched a 9-month high after inflation data bolsters speculation of smaller rate hike. Silicon Valley Bank’s parent company filed for bankruptcy after worry spread among its long-established customer base of tech startups, prompting regulators to seize the firm’s banking unit. Hedge fund Tiger Global marked down the value of its venture capital funds in 2022 by 33%, or US$23 billion. China’s robotaxi upstart WeRide confidentially filed for an IPO. Amazon and Rivian are considering ending their exclusivity agreement. Google unveils new AI tools for Cloud, Workspace. Microsoft announced Copilot: the AI-powered future of Office documents. OpenAI on Tuesday began selling access to GPT-4, the newest version of its machine-learning model. Baidu debuted China’s answer to ChatGPT via a recorded video, disappointing investors. Meta will cut another 10,000 jobs and cancel ‘low priority projects’. Amazon plans to offer first satellite internet service next year. YouTube TV is raising its prices by US$8 per month, citing in part rising content costs. Tesla relaunches Powerwall sales. In Canada, Last week’s sudden collapse of Silicon Valley Bank (SVB) could choke funding for Canada’s technology start-ups and place them in the hands of domestic lenders who may be more selective in financing new ventures. Sophic Client Swarmio received an interest-free loan of $1 million from a strategic shareholder. Sophic client UGE achieves a Notice to Proceed Milestone for 2.7MW community solar project in Maryland.

Last week, the market suffered big losses last week as SVB Financial collapsed, which along with crypto bank Silvergate Financial sparked intense losses for bank stocks. Dow Jones lost 4.4%, S&P 500 fell 4.55%, and Nasdaq lost 4.7%. Silicon Valley Bank failed on Friday morning, as the Federal Deposit Insurance Corp took control of the bank, deepening uncertainty for startups and venture capital firms that rely on the bank for financial services. Several public companies disclosed they had money on deposit at failed Silicon Valley Bank, including Roku and Roblox, a sign of how widespread SVB’s tentacles reached. Stripe’s fundraise to reach US$6 billion, at a US$50 billion valuation, as the company faces a US$3.5 billion tax on employees’ shares expiration. Chinese online fashion retailer SHEIN is set to raise around US$2 billion in a new funding round this month and is aiming for a U.S. listing in the second half of this year. Uber is considering spinning off freight logistics division. Meta plans new layoffs that could match last year’s in scope. Microsoft Bing hits 100 million active users in bid to grab share from Google. In Canada, Toronto-based startup Cohere is among the first four companies to receive funding from Salesforce Ventures’ newly-launched US$250 million fund. As the battle to stop Magnet Forensics’ $1.8 billion sale rages on, an independent advisor has recommended shareholders vote for the deal. The Waterloo startup released a statement on Wednesday noting that Egan-Jones Proxy Services has recommended it gets approved. Sophic Client UGE announces placement of up to US$3 million of project development green bonds. Sophic Client Kraken Robotics received nearly $3 million in orders for its Synthetic Aperture Sonar for NATO and US defence customers. Sophic Client LuckBox announces triple digit growth across core KPI’s, as Global betting handle in February reached a record $2.8 million, as the player base now stands at 350,000.

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

Last week, Dow Jones Industrial dropped 3% in its fourth straight weekly loss, S&P 500 lost 2.7%, and Nasdaq fell 3.3%. The US 10-year Treasury yield was up 12 basis points to 3.95%, its highest level since Nov. 10, and up 62 basis points from the recent stock market peak on Feb. 2. Venture capital firms raised US$20.6 billion for new funds in the fourth quarter, a 65% drop from the same period the year prior and the lowest fourth quarter capital raise since 2013, The Wall Street Journal reported. KKR-backed BMC plans IPO valuing it at up to US$15 billion. Shared micromobility giant Lime reports first profitable year, tests the waters for IPO. DOJ preps antitrust suit to block Adobe’s US$20 billion Figma deal. Nvidia shares rose nearly 9% despite precipitous declines in revenue and earnings per share compared to last year, as investors seemed relieved that the results weren’t worse. Block’s Cash app grows to 51 million users. Coinbase revenue falls 75% as trading slumps. Tesla rival Lucid’s stock slides 10% after it says it’ll make fewer electric cars than expected this year. After cutting 11,000 jobs last fall, Meta is reportedly set to execute what could be another major round of layoffs as it tries to trim expenses. Tencent is in talks with Meta to sell its Quest 2 virtual-reality headset in China. Microsoft limits Bing chat to five replies to stop the AI from getting real weird. Netflix cuts subscription prices in over 30 countries. In Canada, NowVertical announced the terms of its $5 million marketed public offering of units. Lighthouse Labs, TechNL each secure over $20 million in federal funding for tech upskilling programs. Vancouver-based Web3 company Dapper Labs is facing a lawsuit claiming that its NBA Top Shot Moments NFTs constitute unregistered securities. TELUS investigating leak of stolen source code, employee data.

Last week, major indices ended mixed as the Dow Jones fell 0.1%, S&P 500 was down 0.3% and Nasdaq rose 0.6%. After a record Super Bowl, FanDuel parent Flutter Entertainment said it is considering listing on a U.S. stock exchange. Warren Buffett’s Berkshire Hathaway buys even more AAPL stock, ditches most of its TSMC. Airbnb posts a record Q4 as travel recovers post-pandemic. Roblox shares soar 27% as gains in users and virtual currency purchases lift quarterly results. Robinhood sees pop in crypto trading in January. Cathie Wood’s Ark Invest snatches up US$9.2 million of Coinbase stock after the crypto exchange’s massive January rally. George Soros’ fund reveals it’s betting against Silvergate as the crypto-friendly bank is probed over its ties to FTX. Bakkt to shutter consumer-facing app, focus on B2B crypto services. Meta Platforms may do more layoffs. Twilio cuts 17% of its workforce just months after previous round of layoffs. Tesla recalls 363,000 cars over full self-driving software. Ford’s EVs are getting faster charging and more affordable batteries thanks to new chemistry. Apple delays AR/VR headset launch again, now expects to unveil the device at WWDC. TikTok’s parent takes on Meta in battle for virtual-reality market with its two year old Pico acquisition. In Canada, Descartes acquired GroundCloud for US$138 million, as despite recent market volatility, its stock price has remained consistent in its growth trajectory. BBTV secured a $21.6 million loan to pay off an overdraft facility. Sophic Capital client Jasper Commerce, closed a first tranche of convertible debenture unit financing of $636,500 (full offering size of $500,000 plus a partial exercise of the over-allotment option). The Company may close further tranches of the over-allotment up to $113,500.

Last week, the Dow Jones ended down 0.2%,S&P 500 fell 1.1%, and Nasdaq composite was 2.4%. At the same time, the 10-year Treasury yield was up 21 basis points to 3.74%. SoftBank Group reported a net loss of nearly US$6 billion for the three months through December, largely because of the Japanese company’s Vision Fund investments, which tumbled for a fourth straight quarter. Retail investors are piling into small-cap firms that employ artificial intelligence amid intensifying competition between tech titans. Alphabet slides 9% after a report the tech titan’s ad for its new Google AI chatbot Bard had inaccurate information. C3.ai extends its year-to-date rally to 176% after buzz around ChatGPT drives investor interest in artificial intelligence. Microsoft Activision acquisition provisionally blocked; might be forced to sell Call of Duty. Sumo Logic to be taken private by Francisco Partners in US$1.7 billion deal. Ford sells majority stake in Rivian after reporting US$7.3 billion write-down. Robinhood took a US$57 million hit after a glitch allowed its customers to short a surging meme stock. Amazon is adding a round-the-clock sports gambling channel to its ad-supported streaming service, FreeVee. Newly returned Disney CEO Bob Iger is cutting 7,000 jobs and reorganizing the company. In Canada, Edmonton-based Jobber, which provides operations management software for home service businesses, has secured US$100 million in Series D funding led by New York growth equity investor General Atlantic. A fight brews over Magnet Forensics’ proposed $1.8 billion acquisition by Thoma Bravo. Hut 8 Mining Corp will merge with rival US Bitcoin Corp. Converge increased its global revolving credit facility by $100 million to $600 million. Sophic Client Real Luck Group announces continued growth in 2023 as its registered player base now exceeds 250,000.

Last week, the Dow Jones dipped 0.2%, S&P 500 rose 1.6%, and Nasdaq composite was up 3.3%. The small-cap Russell 2000 sprinted 3.9% higher. According to the WSJ, The Nasdaq has been a star performer, gaining 15% over the past five weeks in its best such stretch since May 2020. Sophic Client Clear Blue Technologies hosted a Corporate Update Webinar. Shopify made an investment into United States-based Triple Whale’s Series B round as the e-commerce giant continues to fund companies that support the Shopify merchant system. Meta CEO Mark Zuckerberg makes a U-turn on metaverse spending as Reality Labs is hit with a new ‘efficiency’ mantra, sending the stock up 23% for the week. Google invests US$300 million in OpenAI rival Anthropic. ChatGPT may be the fastest-growing consumer app in internet history, reaching 100 million users in just over 2 months, UBS report says. China’s Baidu to launch ChatGPT-style bot in March. Berkshire Hathaway has cashed in at least US$300 million in Tesla rival BYD stock in the past month. Crypto-linked stocks are on a tear, with Coinbase, MicroStrategy, Marathon Digital and Riot Platforms up more than 100% in a month as risk appetite returns. Amazon sees AWS slowdown lasting for several quarters. Apple and Google face mounting pressure to remove TikTok from app stores. The European Union is weighing a proposal to make technology companies that use the most bandwidth, like Netflix Inc. and Alphabet Inc., to help pay for the next generation of internet infrastructure, according to a draft document seen by Bloomberg. A plan by China to restrict exports of key solar manufacturing technology could delay attempts to build up a domestic solar supply chain in the U.S., industry experts say. China currently accounts for nearly all of solar ingot and wafer production globally, as well as much of the equipment used in the manufacturing process—especially for the large-scale solar panels that increasingly dominate the market.

Markets and investors are feeling a bit optimistic, with the Dow Jones up 1.8% last week, S&P 500 up 2.5%, and Nasdaq composite up 4.3%, while indices may be due for some consolidation here, deal-flow is likely not far behind after a very muted 2022. Sophic Clients, Clear Blue Technologies closed the final tranche of an oversubscribed $2.5 million private placement and Jasper Commerce announced a $500K unit financing. Sophic Clients Legend Power Systems, OneSoft Solutions and Real Luck Group announced a positive end to 2022, which bodes well for 2023. Shopify shares surged more than 12% on Wednesday after the e-commerce software provider raised prices for its subscription plans. Victoria-based holding company WeCommerce is set to consolidate with its parent company, Tiny Capital. Stripe reportedly approached investors about raising more capital — at least US$2 billion — at a valuation of US$55 billion to US$60 billion. According to The Wall Street Journal, Stripe would not use the money toward operating expenses but rather to cover a large annual tax bill associated with employee stock units. It is not clear if any discussions are ongoing. Activist investor Elliott Management has reportedly snapped up a multibillion-dollar stake in Salesforce. Buzzfeed soars 200% on plans to use OpenAI to help write stories. Shares of Intel dropped nearly 10% in after-hours trading after the chip giant reported weak earnings, sales forecast. Amazon launches RxPass, a US$5/month Prime add-on for all-you-need generic drugs covering 80 conditions. Japan and the Netherlands are poised to join the US in limiting China’s access to advanced semiconductor machinery. The Netherlands will expand restrictions on ASML Holding NV. After years of bumbling along, investment in the energy transition appears to be taking off. Businesses, financial institutions, governments and end users around the world sunk US$1.11 trillion into low-carbon technologies, according to a new report from BloombergNEF.

Last week, major indexes closed near session highs: Dow Jones was up 2%, S&P 500 rose 2.7%, and Nasdaq composite gained 4.8%. Canadian tech M&A will likely remain a theme, as we pointed out last week, as Nuvei entered a $1.7 billion deal to acquire US payments tech firm Paya. TMX Group has taken a 21% stake in data analytics company VettaFi for US$175 million as it looks to expand its information services unit. BMO Global Asset Management has teamed up with Georgian to launch a fund that allows Canadian accredited investors to invest in a US$1 billion fund Georgian is in the process of raising. Sophic Client Kraken Robotics expects to report $40 million in 2022 revenue, up 56% year-over-year. Sophic Client UGE International announced Q4 2022 project backlog (stages 3.1-5) increased over 13% quarter-over-quarter and now totals 260MW, surpassing the Company’s 2022 backlog goal of 250MW. Sophic Client LuckBox CEO Thomas Rosander provides corporate update, as the company went from a virtual ‘standing start’ in Q3 2022 to over $3 million in Global Betting Handle by the end of Q4, as over two million bets were accepted and placed on the platform. In the USA, Microsoft is reportedly in talks to pump in US$10 billion into OpenAI — the owner of ChatGPT — valuing the company at US$29 billion. Stripe’s internal valuation gets cut to US$63 billion, down 40% from its peak. Vista Equity Partners to acquire insurance software company Duck Creek for US$2.6 billion. Coinbase lays off a fifth of staff as crypto downturn continues. Tesla drops prices as much as 20% in US and Europe. China’s government takes stake in Alibaba’s domestic unit. China to allow Didi apps back online, in latest sign of regulatory thaw. the US needs to quadruple its charging infrastructure by 2025, and grow it more than eight times by 2030, given the influx of electric cars.

After a tumultuous 2022 in the markets, we hope you had a refreshing break with family and friends. While the first trading week of 2023 started off somewhat shakily, major indices closed up for the week after a strong Friday — Dow Jones closed the week up 1.5% around the same as the S&P 500, Nasdaq closed up 1%. Some market participants expect M&A to pick up in 2023, and Sophic Client Smart Employee Benefits (SEB-TSXV, SEBFF-OTCQB) is being at a 75%+ cash premium. Unsurprisingly, Canadian VC investments in 2022 are projected to lag behind 2021 figures, but will still likely top 2020 funding. Similarly, annual global venture funding fell 35% in 2022. Startups raised US$445 billion in 2022, down 35% from a record US$681 billion in 2021, according to new data from Crunchbase. OpenAI, the research lab behind the viral ChatGPT chatbot, is in talks to sell existing shares in a tender offer that would value the company at around US$29 billion, making it one of the most valuable U.S. startups on paper despite generating little revenue. In related news, Microsoft, OpenAI prep ChatGPT-powered Bing to challenge Google. SpaceX raising US$750 million at US$137 billion valuation, investors include Andreessen-Horowitz. Amazon to cut 18,000 jobs as tech layoffs continue. Data from layoff-tracking website Layoffs.fyi suggests that tech companies cut more than 150,000 positions in 2022. Apple’s AR/VR headset development is reportedly behind schedule, expect late fall release. Meta fined more than US$400 million in EU for serving ads based on online activity. Coinbase to pay US$100 million settlement for violating anti-money-laundering laws. Silvergate raced to cover US$8.1 billion in withdrawals during crypto meltdown. Mercedes-Benz and ChargePoint are going to install thousands of EV fast chargers in the US.

As 2022 fast draws to a close, and we write our final column for the year, the Dow Jones fell 2.8% last week, S&P 500 fell 3.4%, Nasdaq fell 4%. Market indices continue their now familiar trend of fading back bear market rallies. In light of this market volatility, it’s no surprise last week saw a few more terminated public listings – Stablecoin issuer Circle terminated a US$9 billion SPAC deal, India’s Snapdeal shelved a US$152 million IPO. “There is no appetite for tech stocks right now,” said a source close to the plans. That said many companies continue to execute, which we expect will be rewarded by the market. For example, Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) was just awarded a $50+ million Navy contract by the Royal Canadian Navy. Kraken’s revenue for 2019, 2020, and 2021 was $15.1 million, $12.3 million, and $25.6 million respectively. Kraken’s current market cap is ~$108 million; these recent orders cumulatively represent nearly 2.5x Kraken’s high watermark 2021 revenue and over 60% of its market capitalization. Kraken also plays into the recent trend of defence tech, as Anduril raised a massive US$1.5 billion round at US$8.5 billion valuation (almost 2x its 2021 valuation). Anduril works with the U.S. and its allies to create drones, underwater vehicles and different operating and control systems. Sophic Clients Legend Power, UGE and OneSoft presented at the Planet MicroCap Showcase conference, replays can be found on our website. The FTC is suing to block Microsoft’s acquisition of Activision. Coinbase revenue will plunge at least 50% in 2022, CEO Armstrong says. Apple accelerates plans to move production out of China amid protests. Apple’s long-awaited AR/VR headset might be facing another round of software delays, as is its speculated self driving car launch. ChatGPT should worry Google and Alphabet, according to industry experts. Meta cannot run ads based on personal data, EU privacy watchdog rules. Amazon announces TikTok-like social feed of shoppable videos, photos.

The recent stock market rally could be at a turning point, following a strong week. While indexes’ gains were modest, they did find support, and broke key resistance. The Dow Jones was up 0.2%, S&P 500 gained 1.1%, and the Nasdaq was 2.1%. NYSE president says IPO proceeds fall more than 90%. “Our pipeline is tremendous — the reason companies aren’t coming to market is because all the volatility in the market,” said President Lynn Martin. Tech selloff catches up with private startups. People involved in the trades say they are seeing discounts from around 30% to 40% to as much as 80% off valuations from earlier fundraisings. Marvell stock falls after disappointing earnings and outlook, as CEO cites ‘inventory reductions’ by some customers. Shares of DraftKings Inc. jumped 2.3% in premarket trading Tuesday, after the online sports betting and fantasy sports company and Churchill Downs Inc. announced a multi-year agreement that will bring betting on horse racing to DraftKings. iPhone City lockdown ended; reportedly cost Apple US$1 billion/week. TSMC plans to make more advanced chips in US at urging of Apple. Airbnb wants to help renters list their apartments for short stays. Palantir Technologies Inc.’s raison d’etre is identifying patterns hidden within mountains of data. Yet somehow it didn’t spot the risks in its own investment strategy or the danger that startups might not be able to pay their bills. Google hit with multibillion-dollar class-action lawsuit over online ad dominance in the U.K. Cyber Monday online sales hit a record US$11.3 billion, driven by demand, not just inflation, says Adobe. Sophic Client UGE International announces closing of $7.379 million private placement of Green Bonds. Sophic Client LuckBox (LUCK-TSXV, LUKEF-OTC) signs LOI to acquire leading Asian-focused iGaming platform.