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Showing posts from September, 2021

Ex-Goldman Sachs Compliance Analyst Charged With Insider Trading

The US Securities and Exchange Commission (SEC) has opened a case against a former compliance analyst at banking giant Goldman Sachs, accusing him of trading on insider information he obtained by the privilege of his position at the bank. The SEC has filed charges against  Jose Luis Casero Sanchez , a Spanish national and former Senior Compliance Analyst who worked in the Poland office of an " international investment bank" that the agency didn't name. However, Goldman Sachs confirmed that he was an employee during the relevant time period. According to the SEC, Sanchez had access to information on mergers and other transactions Goldman worked for clients. Ironically, he had access to sensitive information because of his role as a compliance analyst working to make sure employees kept the info confidential and didn't engage in insider trading. However, he's accused of being the lawbreaker his job had him on the look for. The SEC claims Sanchez leveraged insider

Deal: Eutelsat Snubs Takeover Bid From French Tycoon Patrick Drahi

It appears that Patrick Drahi , the French telecoms tycoon, is continuing his acquisition spree around the globe shortly after  buying a $3.1bn stake in British carrier BT . But this time, his latest acquisition attempt hit a wall by being rejected. Drahi's latest acquisition attempt is Eutelsat , a French satellite operator listed on the Euronext Paris exchange. It's among the top five global satellite operators in terms of revenue. Eutelsat just confirmed with a press statement  that it had received an offer from Drahi but rejected it. Though Drahi's proposed price tag for Eutelsat wasn't formally disclosed, a Bloomberg report  said it was for 2.8 billion euros ($3.2bn) . Drahi is known for shrewd dealmaking in the telecoms and cable industries, so it's not a surprise he pursued acquiring Eutelsat. He built up his telecoms empire primarily with highly-leveraged acquisitions through his Altice corporation, enough to give him a fortune estimated at $9bn by Forbe

Deal: PE Firm Vista Buys UK Software Firm Blue Prism For $1.5B

Vista , an American private equity firm, has sealed its latest buyout deal for a company based in the UK. It's agreed to buy Blue Prism , a firm that makes Robotic Process Automation (RPA) software, for £1.1bn ($1.5bn) . Under deal terms, Vista will pay £11.25 in cash per share of Blue Prism, which is listed on the London Stock Exchange (LON: PRSM). Once completed, the company will be taken off the public markets into Vista's hands. The $1.5bn deal value represents a 35% premium to Blue Prism's market cap just before it was announced. Notably, Vista says it plans to merge Blue Prism with one of its portfolio companies, Tibco Software , once it acquires it. The private equity firm bought Tibco for $4.3bn in 2014. As it shows, Vista wants to consolidate both companies into one bigger firm that it hopes to exit for a higher value than they were purchased in future time. Merging companies with similar businesses is not new for Vista as the firm has done that in the past with

Crypto Exchange Kraken Fined $1.3M For Offering Illegal Products

Kraken , a popular cryptocurrency exchange, has been fined by the US Commodity Futures Trading Commission (CFTC) after settling a case of offering crypto-based margin trading products without duly registering with the commission, thus making it illegal.  The CFTC brought a lawsuit against Kraken, accusing it of offering margined crypto products between June 2020 and June 2021 without getting the appropriate license(s) required to do so in the US. The required licenses are a Designated Contract Market (DCM) license and/or a Futures Commission Merchant (FCM) license. Kraken has agreed to pay a fine of $1.25mn to settle the case and cease and desist from further violations of the Commodities Exchange Act as charged. The crypto exchange has to stop offering margin products or get the due license(s) if it desires to continue offering them. To the uninitiated, margin trading refers to trading with debt provided by a third party, in this case, Kraken. Kraken allowed US residents signed up

Wells Fargo Just Got Fined, Again

Name one thing that occurs so often that you don't get surprised when you hear of it again? It could be Wells Fargo , the American bank, getting fined by regulators. The bank has been so habitually fined to the extent that it's paid nearly $22bn in total penalties since the year 2000. Barely three weeks ago, Wells Fargo was fined $250mn for a loan fraud case going back to 2018. Now, it's been fined again, this time for overcharging commercial foreign exchange clients. Wells Fargo has agreed to pay a $37.3mn penalty to settle a lawsuit from the US Justice Department (DOJ) accusing the bank of overcharging 771 commercial clients that used its foreign exchange services between 2010 and 2017.  Additionally, the bank will directly reimburse the clients with $35.3mn that it admitted to overcharging them. Wells Fargo admitted that many of its foreign exchange sales specialists overcharged clients by applying larger conversion margins or spreads than they said they would and t

Deal: Endeavor Buys Sports Gambling Firm OpenBet For $1.2B

Endeavor Group Holdings (NYSE: EDR), a media and sports conglomerate that owns the Ultimate Fighting Championship (UFC) league, is making a new big acquisition. It's agreed to buy OpenBet , a British company that makes software for sports gambling operators.  Endeavor will pay $1.2bn to buy OpenBet, split into $1bn in cash and $200mn of stock. It's buying OpenBet from  Scientific Games Corporation , a publicly-traded gambling company that bought it in 2017 as part of its $630mn acquisition of NYX Gaming . Divesting an asset bought as part of a $630mn deal in 2017 for $1.2bn four years later represents a very good return on investment for Scientific Games. The acquisition is strategic to strengthen Endeavor's position in the sports betting ecosystem. Right now, the company's main business in that area is IMG Arena , a provider of live-streamed sports video and data feeds to sportsbook operators around the globe. With OpenBet, the business will be complemented with sof

Deal: Hollywood Agency CAA To Buy Rival ICM

In a historic deal in the talent agency industry, two of the biggest entertainment and sports talent agencies operating in the US are about to merge to become one. It's so that Creative Artists Agency (CAA) , a powerhouse talent agency with a roster of stars, has reached a deal to buy ICM Partners , a rival powerhouse agency. CAA buying ICM is a blockbuster deal that'll see two of Hollywood's most powerful talent agencies merge into one more robust powerhouse. The combined agency would be a more formidable one for arch-rivals such as William Morris Endeavor (WME) and United Talent Agency (UTA) . Normally, CAA, ICM, WME, and UTA are considered the "big four" talent agencies in Hollywood and sports, representing the most significant share of A-list talent across both industries. Now, it appears that the "big four" would soon become the "big three."  CAA is the bigger of the two agencies, commanding a bigger roster of talent and business than IC

Deal: PE Firm EQT Bids $3.9B For German Pet Food E-Tailer Zooplus

EQT , a Swedish private equity firm, has bid to buy Zooplus , a German online retailer of pet food and supplies listed on the Frankfurt Stock Exchange. It's offered 470 euros of cash per Zooplus share, valuing the pet food e-tailer at  3.36 billion euros ($3.94bn) . The offer represents a 69% premium to Zooplus's closing price on the 12th of August, the last day before another private equity firm announced a bid for the company. US-based  Hellman & Friedman  first offered 3 billion euros ($3.5bn) then later raised its offer to 3.29 billion euros ($3.85bn). Now it's been outbid by EQT's higher bid. Zooplus also entered buyout talks with US-based KKR & Co. after Hellman & Friedman had penned its offer. But, the PE rival to Hellman later terminated the talks after Hellman raised its bid from 3 billion euros to 3.29 billion euros. With the competing bids, the final decision rests on a vote by Zooplus's shareholders, requiring majority acceptance for any b

Markets: Covid Testing Provider Cue Health Goes Public

A diagnostics startup that found treasures amid dirt from the Covid-19 pandemic has stamped its success with a successful initial public offering (IPO). It's Cue Health , a little-known startup from San Diego that rapidly switched its focus to making Covid-19 testing kits on the onset of the pandemic and has built a big business with that. Cue Health debuted on the Nasdaq exchange on Friday, the 24th of September, raising $200mn before commissions and other underwriting expenses. Its stock climbed 25% on that day to end trading at $20, giving it a market cap of $2.9bn . Cue Health is one of the significant startup success stories to emerge from the pandemic. Before it started providing Covid testing kits, its annual sales were numbered in the low-digit millions but shot up to $23mn in 2020  on the pandemic's onset and $202mn in the first half of 2021 . Because of its fast pivot to providing Covid testing kits, Cue Health was an early mover. Thus, it got lucrative testing contr

Deal: Blackstone Buys Condor Hospitality's Hotel Assets For $305M

Blackstone , the private equity giant, is yet again adding to its massive commercial real estate portfolio with a big purchase. It's agreed to buy the hotel assets of the  Condor Hospitality Trust , a publicly traded real estate investment trust that's liquidating all its assets and winding down its business. Blackstone will pay $305mn in cash to buy Condor's entire hotel portfolio. The PE firm won't be assuming any debt from the purchase. Condor's portfolio includes 15 hotels in 8 American states, some franchised under prestigious brands like Hilton and Marriott . Hotels are the trust's only business from which it gets all its revenue, and now that it's selling them, the trust has instituted a plan to distribute the sale proceeds to shareholders and close down its operations. Notably, Condor is shutting down after a tumultuous year for hotel operators caused by the pandemic's restrictions on travel and recreation. It, in fact, saw annual sales slip f

Markets: Korea's Kakao Pay Delays $1.3B IPO To November

In South Korea, Kakao is one of the leading tech giants, best known for its  KakaoTalk messenger app. But like many tech companies, it's long branched out from messaging into other sectors such as gaming and fintech and made strides there. In fintech, Kakao has a separate digital bank ( KakaoBank ) and mobile payments and wallet app ( Kakao Pay ). The Korean tech giant took KakaoBank public this July with an IPO that raised $2.2bn and didn't just stop there. It then sought to take Kakao Pay public in a separate IPO but has hit some obstacles trying to do so. Just as it sought to take Kakao Pay public, the South Korean government toughened regulations on fintech apps. It made Kakao Pay suspend some services like insurance though the suspended services accounted for a minor part of its revenue. Then, Kakao Pay adjusted its IPO fundraising target to $1.3bn , 6% lower than it previously sought. But even with the hiccups, Kakao Pay still sought to go public by October this year

Earnings: Nike's Sales Falter, Shares Drop 6%

Sports apparel giant Nike has dropped its latest quarterly results , showing that its earnings still stand firm despite sales challenges intensified by the Covid pandemic. But though its earnings beat analyst expectations, Nike's stock fell by a significant percentage during trading on Friday due to its sales outlook. Nike posted $12.2bn in sales in the three months ended August 31, 2021, its fiscal 2022 first quarter. Sales were up 12% year-over-year and slightly unchanged from $12.3bn in the preceding quarter. Nike's sales have dropped significantly due to the Covid pandemic that led to widespread closures of its physical retail centers. Even as the pandemic effects gradually wear off, the company is still battling supply chain disruptions caused by it. As usual, most of Nike's quarterly sales came from the  Nike brand ( $11.6bn ), while a minority was from the Converse brand ( $630mn ). For the quarter, Nike's net profit was $1.9bn , up 23% year-over-year and 27%

Law: Ex-Quant Analyst Indicted For Front-Running Employer's Trades

Insider trading is like the most common crime on Wall Street or the crime most prosecuted. Every now and then, there's always a new insider trading case pursued by the appropriate American authorities; the Securities and Exchange Commission (SEC) and Justice Department (DOJ). To the unaware, insider trading is deemed as trading a public company's stock or other types of regulated securities based on material, nonpublic information about the company. The latest insider trading saga now making the rounds is that of a former quant analyst who has just been indicted for front-running his employer's trades and making a killing to the tune of over $8mn. Sergei Polevikov , the former quant analyst, allegedly bought securities he knew his employer ordered in large blocks on behalf of clients and then profited from little price bumps of the securities that typically occurred when the large orders were executed. He's said to have done this with a brokerage account opened in his

Markets: Dell Authorizes $5B Share Buyback, Dividend Plan

Dell Technologies (NYSE: DELL) is one of those tech giants that though not lustrous as in their prime, are still going strong with tens of billions of dollars of revenue annually. Others in that camp include IBM, HP, Oracle, et al. In today's news, Dell has announced a new share buyback program of up to $5bn beginning this November. The buyback will start at a projected time when Dell has completed its VMware spin-off that was announced this April, a deal that'll hand over nearly $10bn of cash as a special dividend to it that'll be used to pay down debt. Companies like Dell typically spend billions on share buybacks to stimulate stock growth, companies whose revenues are massive but growing merely in single-digit percentages over the years. Buybacks can be a remedy when revenue growth isn't enough to encourage investor interest. In fact, Dell bought back $562mn  worth of shares in the three months ended July 2021, its most recent fiscal quarter. It concluded the s

Moves: Facebook CTO Mike Schroepfer To Step Down

There's a major leadership change at the social media giant Facebook, Inc . The company's long-time Chief Technology Officer (CTO), in the person of  Mike Schroepfer, is stepping down from his role. His departure plans were made known in a recent SEC filing . Schroepfer will leave the CTO role by next year but won't leave Facebook entirely. He'll be transitioning to the role of " Senior Fellow " at the company, a position that seems to have been created just for him as he'll be the first to adopt it.  When he steps down, Schroepfer will be replaced by a star engineer at Facebook named  Andrew Bosworth , the company's current vice president of augmented and virtual reality. Bosworth is a crucial leader for Facebook's hardware development and R&D efforts and a known close confidant of CEO Mark Zuckerberg. As Bosworth takes up the CTO role, he'll be switching from leading just Facebook's hardware team of 10,000+ employees to both the hard

Deal: DraftKings Bids $22B For UK Betting Giant Entain

A certain American company has been on a tear ever since going public last year. It's DraftKings , a sports betting company that's riding the high waves of increased legalization of mobile sports betting in the US and tearing its way into more business as time goes. In the US where DraftKings is based, there's been a wave of legalization of sports betting spurred by the Supreme Court striking down a federal ban on it in 2018. It's such that sports betting is now legalized in more than two dozen US states and more states are considering it. The wave has vaulted DraftKings to high growth thanks to the company being an early mover and working hard to build this growth, DraftKings has spent big money on acquisitions to expand. For example, just last month, the company bought online casino Golden Nugget in a $1.6bn all-stock deal that marked its biggest acquisition to date. Right now and shortly after making its biggest acquisition, it appears that DraftKings is even push

Antitrust: US Sues To Block JetBlue-American Airlines Alliance

American antitrust actions against big companies have been brewing under President Biden, particularly against big tech companies like Faceboo k and Google . But the latest one from the government is targeting an industry far away from tech, the airline industry; The US Justice Department (DOJ) has filed a lawsuit  seeking to block an alliance between American Airlines , a major transnational and domestic airline, and JetBlue , a low-cost domestic airline. The alliance was for JetBlue to handle domestic flights between  Boston and New York City  on behalf of American Airlines with ticket sharing between both airlines. Now, the DOJ appears to be very opposed to the alliance along with the Attorneys General of six US states plus Washington, D.C. that followed it to file the lawsuit. The suit's core allegation is that such an alliance discourages airline competition and may cause fare hikes for everyday flyers. Given its statement, the DOJ actually has a point to make as an alliance

US Sanctions First Crypto Exchange For Alleged Ransomware Ties

The US government has moved to blacklist a Russian crypto exchange in what seems to be the first time the government is taking such an action against a crypto exchange; The US Treasury Department has announced sanctions against a crypto exchange named  Suex  for allegations of facilitating transactions for ransomware operators based in Russia. The department therein claims that over 40% of Suex's known transaction history was associated with illicit and criminal operations. The US has faced a wave of ransomware attacks over the past year with victims including a major oil pipeline company ( Colonial Pipeline ) that paid a $5mn ransom and a major food supplier ( JBS ) that paid an $11mn ransom . Both attacks are suspected to have been carried out by Russian criminal groups, making it a major point of concern that US President Joe Biden pressed Putin to address  in a July phone call; Out of many, the most infamous ransomware group globally appears to be a Russian organization name

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Pokémon Go Creator Niantic Raises $300M, Valued At $9B

Niantic , an augmented reality (AR) company whose products include the famous  Pokémon Go game, has raised a big new round of funding. It's raised $300mn in funding at a valuation of $9bn. All the funding came from just one investor; Coatue , a New York-based hedge fund famous for investing in many blue-chip tech startups. With its new funding, Niantic says it'll invest in current games and new apps and expand its AR developer platform called Lightship . The company says it's set on building the "real-world metaverse," jumping on the bandwagon popularized by Facebook's parent firm, Meta.  The base for Niantic's metaverse vision is the Lightship developer platform which it launched this month. It's a platform for developers to build augmented reality apps and experiences, drawing from Niantic's tools that helped create its hit  Pokémon Go game. To draw creators to Lightship, Niantic has also set up a $20mn venture fund to invest in AR startups

Amazon, Apple Fined $230M For Reseller Collusion In Italy

Tech giants Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) have been handed sizeable fines by the Italian government following an investigation into alleged reseller collusion between both companies. Amazon was fined €135mn ($151mn) and Apple  €69mn ($78mn), totaling $229mn .  The fine was levied by the  Italian Competition Authority . According to the agency, Apple and Amazon had a contractual agreement to allow  select resellers to sell Apple and Beats products on Amazon's Italian marketplace. The agency said that the selection was applied in a "discriminatory" way that violated European Union rules and affected price competition. According to the  Italian Competition Authority, at least 70% of local consumer electronics purchases are made on Amazon, making it a dominant retailer. This dominance, therefore, demands a "level playing field" for retailers that sell on Amazon's marketplace, the agency said. This is the nth time Amazon is getting in the cr

Deal: Workday Buys Ohio Startup Vndly For $510M

Workday (NASDAQ: WDAY), the famous HR/finance software vendor, has made a big new acquisition to support its platform. The company will acquire Vndly , a software platform for companies to manage contract workers. Vndly fits in well in Workday's overall software suite, and the rationale behind the purchase is clear. Vndly is an Ohio-based startup. Workday will pay $510mn to buy it, marking one of Ohio's biggest startup exits this year. Vndly has raised roughly $60mn from VCs, so a $510mn exit is very lucrative and more so for a startup founded just four years ago .  Before now, Vndly and Workday were already close allies. Vndly's platform is integrated with Workday's, with official certification to go. The Mason, Ohio-based startup is part of Workday's global network of endorsed software partners, so Workday didn't even have to look far to snatch its latest acquisition.  Vndly was founded in 2017 by two entrepreneurs,  Shashank Saxena and Narayana Surabhi .

Alt-Meat Maker Impossible Foods Raises $500M In Fresh Funding

A leading maker of plant-based meat substitutes, Impossible Foods , has obtained a fresh cash infusion from VCs. It has  raised $500mn in new funding, bringing the total amount of funding it has raised since inception to $2bn.  The latest round was provided entirely by existing investors doubling down on Impossible Foods.  Mirae Asset Global , a Korean investment firm, led the round and was joined by other unnamed existing investors.  It's evident that investors are longing for Impossible Foods, a leading brand in the nascent market for plant-based meat substitutes. There's clearly huge potential for plant-based meat substitutes, driven by an increasing vegan population and the appeal to lower the carbon footprint that spurs from meat consumption. To that end, Impossible Foods is growing rapidly. Its products can now be found in more than 20,000 retail stores, compared to 150 as of March 2020, and 40,000 restaurants globally. Over the past year, Impossible has launched in ne

Antitrust: US DOJ Sues To Block Major Sugar Industry Merger

The U.S. Department of Justice (DOJ) is freshly on the antitrust circuit, seeking to block a merger it deems detrimental to consumers. The agency has filed a lawsuit to block the sale of  Imperial Sugar , a leading American sugar producer, to rival  U.S. Sugar . The DOJ says the proposed deal will make just two sugar producers account for an "overwhelming majority" of refined sugar sales in the U.S. Southeast, U.S. Sugar being one of the two producers. This concentration of power would make consumers pay more for refined sugar, the DOJ says.  Imperial Sugar is owned by Louis Dreyfus Company, a privately-held agricultural giant based in the Netherlands. The company agreed to sell Imperial to rival U.S. Sugar for the sum of $315mn this March.  U.S. Sugar is another privately-held agricultural giant headquartered in Florida. It can produce up to 850,000 tons of sugar annually at its refinery plant in Florida, and buying Imperial would give it two more sugar plants in Kentuc

Deal: KKR Makes $37B Buyout Offer For Telecom Italia

Private equity giant KKR (NYSE: KKR) has ventured into Italy for its latest buyout deal. The firm has offered to buy Telecom Italia (BIT: TIT), the largest telecom provider in Italy, in a deal worth  €33bn ($37bn), including debt. KKR offered 0.505 Euros in cash for each outstanding  Telecom Italia share, a 46% premium to the last closing share price before the offer. That sums up to  €10.7bn ($12bn) in cash to be paid for Telecom Italia, and including the telecom firm's large net debt of €22.5bn ($25bn) sums up to $37bn in total.  KKR's offer is non-binding and must be approved by Telecom Italia's board members and majority shareholders before the deal goes through. Approval must also come from the Italian government, which was veto power over the takeover of the formerly state-owned telecoms firm.  Telecom Italia gave no indication that it'll approve the deal. If approval is given, it'll mark one of the biggest buyout deals of a European company by an America

Cyber: Apple Sues NSO Group Over Spyware Hacks

Tech giant Apple (NASDAQ: AAPL) has filed a lawsuit against NSO Group , a controversial Israeli company that sells smartphone hacking tools and has been  implicated in the hacks and surveillance of many notable persons, including journalists, activists, and business executives, by state-sponsored actors. Apple has sued NSO Group for infecting iPhones with spyware to track users of interest. As part of the suit, the tech giant seeks a permanent injunction to ban NSO Group from using any Apple products. NSO Group is best known for its Pegasus spyware that can be covertly installed on mobile phones running most versions of iOS and Android. The company exploits vulnerabilities in both operating systems to introduce spyware into a phone without the user's knowledge. Pegasus was the center of a Washington Post investigation called "The Pegasus Project," revealing that the spyware was used to surveil over 1,000 identified notable individuals across countries with shoddy hu

Markets: Retail Giant Authentic Brands Scraps IPO Plans

Authentic Brands Group , a New York-based retail conglomerate, has suspended its plans for an initial public offering (IPO) after already filing an S-1 document with the US SEC. The company has instead opted to raise private funding to fund expansion in the main time. Authentic Brands Group's portfolio retail brands include apparel retailer Forever21 , men's suit maker Brooks Brothers , and department store chain Barneys New York . The company is akin to an old people's home where once-vibrant retail brands go to stay after they've gone past their peak. Authentic buys these befallen retail companies and makes money from what's left of them through licensing deals.  Over the years, Authentic has relied on hefty venture funding to assemble its constellation of old-guard brands. An IPO was supposed to raise even more money for expansion but has been set aside in favor of private funding.  Authentic is  rather selling  equity stakes to private equity firm CVC Capital

Markets: IoT Startup Samsara Files For IPO

The latest tech startup to board the IPO train is Samsara , a VC-backed startup that makes internet-of-things (IoT)-based fleet monitoring hardware and software for logistical operators. It has unveiled an S-1 filing with the US SEC, showing its intention to list on the New York Stock Exchange (NYSE). Samsara has raised nearly $1bn from VCs including Andreessen Horowitz, Tiger Global, and General Catalyst, with a valuation of $5.4bn from its last funding round. The company's co-founders sold a previous startup named Meraki to Cisco for $1.2bn . As expected, Samsara's S-1 filing gives a deep glimpse into the company's business with information not publicly disclosed before. The company has been rather secretive over the years, making this long-awaited information. We've extracted some important information so you don't have to, mostly the financial stuff. Samsara brought in $303mn in revenue in the nine months ended October 2021, compared to $174mn in the same

Earnings: Nvidia Is On A Tear

Chipmaking giant Nvidia (NASDAQ: NVDA) has unveiled the financial results for its latest fiscal quarter ended October 31, 2021. The company reported a sharp rise in sales that can only be described as being on a tear. Nvidia posted $7.1bn in revenue in the quarter, up 50% year-over-year . The large growth was driven mostly by the company's data center sales, which increased 55% year-over-year to $2.9bn. Similarly, Nvidia's gaming revenue rose 42% year-over-year to $3.2bn. Net income for the quarter was $2.5bn , up 4% from the same period last year. It was an outstanding quarter all-around for Nvidia, a beneficiary of the recent massive growth of the gaming industry and data center boom. Nvidia's GeForce graphics cards are very popular with gamers, and data center operators patronize Nvidia's high-performance graphics processors for artificial intelligence applications.  Save for data centers and gaming, Nvidia has other minor product lines, including automotive chip