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Showing posts with the label Crypto

Alert: Crypto Exchange FTX Raises $900M, Valued At $18B

FTX , a famous online exchange for crypto derivatives, has closed a big new round of funding with a big valuation to match. The funding round is a major validation for the exchange which was founded barely two years ago and has seen huge success. FTX has raised $900mn in funding at a valuation of $18bn, the company said . The funding came from a group of many investors, including SoftBank, Coinbase Ventures, Insight Partners, Mary Meeker's Bond, and hedge fund tycoons Alan Howard and Paul Tudor Jones. Since launching in May 2019, FTX has grown rapidly as a hub for people to buy and sell derivatives based on cryptocurrency instruments. Such derivatives include stuff like futures or stock tokens, some of which are controversial and their legalities questioned in a handful of countries, including the US where FTX doesn't allow residents to trade directly on its platform. FTX says it has over 1 million registered users averaging $10bn of daily trading volume. The company serves ev

SPAC: Crypto Exchange Bullish To Go Public In $9B Deal

It's an interesting day in the world of SPACs and cryptocurrency, two worlds that are much driven by hype with fundamentals notwithstanding in many cases. You know when they say bullish like I'm bullish (aggressively confident) on a stock.  It turns out that there's a new crypto exchange bearing the name Bullish and that exchange has secured one of the biggest SPAC merger deals on the block. Here's the thing, Bullish has not even fully launched but has agreed to go public via a SPAC merger at a valuation of $9bn (?!). More so, it's merging with a SPAC launched by Thomas Farley, an ex-President of the New York Stock Exchange who'll then become Bullish's CEO after the merger. I may not know much but that seems to signal some conflict of interest. Bullish has agreed to merge with  Far Peak Acquisition Corporation (NYSE: FPAC) to become a public company. The terms of the merger value the crypto exchange at $9bn Pro-forma, a very high valuation for an exchange

Alert: Robinhood Expects $15M Fine For Crypto Business

If you've been following tech and business news lately, you should be aware that Robinhood, the popular app for trading stocks and cryptocurrency, filed for an IPO  barely a week ago. The company filed for that shortly after it agreed to pay a $70mn fine  to settle allegations of improper conduct, a fine levied by the  US Financial Industry Regulatory Authority (FINRA) . The $70mn fine followed a $65mn fine levied by the SEC on Robinhood several months before. As it is, Robinhood has been caught up in major litigation for sidestepping usual regulations for brokers of its kind as the company grew at breakneck speed. Now, it appears that Robinhood isn't even done paying fines in the short term. Buried in the trove of text in the company's S-1 filing (which we analyzed earlier ) indicates that it has set aside $15mn as a penalty it expects to pay for an unspecified probe into its crypto business. Robinhood set aside $15mn for a settlement with the New York State Department

Crypto: Thai SEC Files Criminal Complaint Against Binance

Binance, the world's biggest crypto exchange by volume, appears to be facing even more regulatory scrutiny after its recent woes in the UK where it was restricted from operating in the country. This time, it's from Thailand , whose Securities and Exchange Commission (SEC) has filed a criminal complaint against the company. Thailand's SEC has lodged a criminal complaint  claiming Binance is operating in the country without the required license and thus is violating its laws and subject to criminal sanction. The complaint was lodged with the Economic Crime Suppression Division (ECD) of the Royal Thai Police. According to Thailand's SEC, Binance had failed to meet a deadline for responding to an earlier warning from the agency that it was operating a digital asset exchange without a license and needed to get one. At that, a criminal complaint could cause troubles for Binance in the country. According to Thailand's constitution, Binance's violation makes it liable

Crypto: Cathie Wood's ARK Invest To Co-Launch Bitcoin ETF

Ark Invest, the famous 'contrarian' investment firm founded by Cathie Wood, has proposed to co-launch a Bitcoin exchange-traded fund (ETF). The proposal was made known with a recent filing to the US SEC. Ark Invest is teaming up with  21Shares , a Swiss-based crypto company, to launch an ETF that will track the performance of Bitcoin. As it's structured, 21Shares is the one launching the ETF while Ark is assisting with marketing and validation.  To note, the US SEC hasn't approved any Bitcoin ETF despite 8 filings to it before Ark's own. It's uncertain if Ark's own will get approval. The new ETF proposed by Ark and 21Shares is named "ARK 21Shares Bitcoin ETF". As an exchange-traded fund, it won't be buying or selling any bitcoin directly but will make investments in assets tied to the performance of the cryptocurrency, such as Coinbase and the  Grayscale Bitcoin Trust which are two of Ark's current major holdings. Ark's Cathie Wood i

Crypto Exchange Binance Restricted From Operating In UK

Regulators in the UK have warned that Binance, the popular crypto exchange, isn't allowed to legally operate in the country, shortly after regulators in Japan did the same. The warning came from the country's  Financial Conduct Authority (FCA) which contests that Binance isn't permitted to undertake any regulated activities in the country. According to the FCA's statement , Binance is offering UK users trading services via its website despite not being permitted to undertake any regulated activities in the country without the agency's approval. The FCA said that no entity as part of the wider Binance Group  holds any form of authorisation, registration or licence to conduct business in the country. This implies that Binance is operating in a regulatory grey area there, with users bearing all the risk if anything goes wrong. On Friday, a day before the UK's FCA issued its warning, a similar agency in Japan issued the same warning. The country's

Alert: John McAfee Dies In Spanish Custody

John McAfee , a controversial tech entrepreneur and crypto promoter who was facing criminal charges in the US, has been found dead in a Spanish jail cell where he was held, according to local reports . His death is being investigated as a suicide, as it's reported he was found hanging in his cell. McAfee's death came shortly after Spanish authorities ruled that he could be extracted to the US to face criminal charges. He was indicted in the US with charges of tax evasion and running a "pump and dump" crypto scheme where he promoted certain cryptocurrencies in exchange for undisclosed payments. McAfee was facing multiple criminal charges and got arrested at a Spanish airport last October. Since then, he's been in detention in the country awaiting extradition proceedings, which were given a greenlight just this Wednesday. McAfee died in the  Brians 2 prison in Barcelona. His lawyer confirmed he hanged himself, pointing at suicide. It's possible that the eccent

Bitcoin 'Whale' MicroStrategy Files For $1B Share Sale

MicroStrategy, the foremost bitcoin "whale" of the corporate world, has filed for a share offering to raise as much as $1bn on the public markets. The filing comes barely days after the company sold $500mn worth of bonds wholly to buy bitcoin. This time around, the proceeds from MicroStrategy's share sale aren't earmarked to buy bitcoin but for "general corporate purposes", which the company though said may include buying bitcoin.  For the share sale, MicroStrategy filed a "shelf" registration with the US SEC. "Shelf" in this case means filing for a share sale up to two years before it actually takes place, with no certain intent for an immediate sale but anytime in the 2-year window when markets are optimal. This is the first time MicroStrategy is holding a dedicated share offering in years. For the large amount of cash it raised to buy bitcoin, they were all corporate bonds.   MicroStrategy's $1bn share sale just looks like the co

Crypto: MicroStrategy Offers More Junk Bonds To Buy BTC

There's been one company at the forefront of promoting bitcoin use in the corporate world - MicroStrategy . It's bought a few billion dollars worth of bitcoin, financed by its own cash flow as well as borrowings on the bond market. Now, MicroStrategy is back again on the bond market to raise cash to buy bitcoin. This is despite its own indication of expecting to report an impairment loss of $285mn  in its next earnings report due to fluctuation in the price of bitcoin that it holds. MicroStrategy is selling $500mn worth of high-yield bonds, fondly called junk bonds, to buy bitcoin. The bonds are senior notes due by 2028, with an annual interest of 6.125%. MicroStrategy apparently is dazzled with bitcoin, such that after selling $1.6bn worth of bonds last year to buy it, it's back on the block to sell $500mn more. In fact, it originally planned to sell $400mn but topped $100mn more at the last minute. Buying bitcoin is how MicroStrategy has drawn the attention of many inves

Diddy, Kevin Durant Invest In Crypto Wallet Startup

A group of celebrities including rapper-cum-businessman Sean "Diddy" Combs and basketballer Kevin Durant have invested in a startup whose core product is a crypto wallet app. That startup is Eco , which recently  closed a $26mn round . Eco announced that Diddy and Kevin Durant were among the investors that chipped into its $26mn round. They were joined by other celebs including Durant's fellow NBA star Carmelo Anthony and comedian Tiffany Haddish. With crypto on the boom, it's attracted major interest from entertainers and celebs who are known to always follow the money. Their investments usually bring clout for the companies they buy into and in some cases see them reap strong monetary rewards. Durant and Diddy are stars who made their names in the respective worlds of basketball and music but have branched out to become major businessmen. Durant has a VC firm of his own, Thirty Five Ventures, that's invested in companies including crypto exchange Coinbase and s

Markets: Coinbase To Raise $1.3B From Bond Offering

Shortly after going public with a direct listing, it appears that cryptocurrency exchange Coinbase is not slowing down to raise money on the public markets. It's announced a proposed private offering of $1.25bn in convertible bonds due by 2026. Notably, Coinbase had a direct listing in April and didn't raise any money from its market debut. It now appears that the company has seen fit to raise money on the public markets with convertible notes, that is debt securities that can be converted into equity on agreed terms. Coinbase is selling $1.25bn worth of convertible notes due by 2026. On top of that, there are options for the banks involved in the offering to buy an additional $187.5mn worth of bonds that could bring the total to $1.4bn. The notes Coinbase is offering will mature on June 1, 2026, unless they are earlier repurchased, redeemed, or converted into equity. Coinbase says it'll use the proceeds from its bond offering for general corporate purposes, which could en

Earnings: Coinbase Triples Revenue, Posts $800M Profit In Q1' 21

Amid a current crypto-mania like no other, one of the major beneficiaries of that mania has been cryptocurrency exchanges, ala those selling shovels in the gold rush. With more people trading higher volumes of crypto each day, the crypto exchanges are sure raking in lucrative fees just like the traditional banks do when they facilitate sending and receiving money. Coinbase is the biggest crypto exchange in the US and the first to become publicly traded on the US markets after an IPO this year. It's just unveiled its latest earnings results for the first quarter of 2021, showing that it tripled revenue and reported a record net income. By the numbers: Coinbase made $1.8bn in revenue in Q1, triple year-over-year, and a net income of $771mn from that. The bulk of that revenue came from retail crypto trading while a minority came from institutional trading. Coinbase's trading volume in Q1 was a record $335bn, compared to $89bn year-over-year. Most of the trading, $215bn to be prec

Crypto: BitGo Sells For $1.2B In Cash, Stock To Galaxy Digital

A hot crypto startup is headed for a big exit with a sale to Galaxy Digital, a leading crypto-focused financial services firm. That startup is BitGo, a crypto custodian platform for institutional holders and large investors. Details: BitGo has agreed to be bought for a price of $1.2bn by Galaxy Digital, a crypto-focused merchant bank with its shares traded on the public markets. The price will be paid with a mix of $265mn in cash and 33.8mn newly issued units of Galaxy Digital common stock, summing up to $1.2bn based on the firm's closing share price on May 4, 2021. The deal comes as Galaxy Digital is gearing up for a listing on the US markets this year. Currently, the company trades on the Canadian stock market. Before now, BitGo reportedly got an acquisition offer of as much as $750mn from PayPal but didn't go through with it. Now with an agreed $1.2bn offer, it doesn't seem like a bad decision. With BitGo's crypto custodian service, Galaxy Digital is increasing its

Crypto: Lat-Am Exchange Bitso Raises Big Funds, Valued At $2.2B

A cryptocurrency exchange serving the Latin American market has raised a big round of funding with a big valuation to match. That exchange is Bitso , which stands out as one of the few licensed and regulated crypto exchanges in the Latin American region. Details: Bitso has raised a $250mn Series C round valuing it at $2.2bn. The round was co-led by buddy investors Tiger Global and Coatue, whom were joined by a mix of new and existing investors including Mary Meeker's Bond, Valor Capital Group, and Paradigm, a crypto-focused investment firm headed by a co-founder of Coinbase. The Series C round follows an earlier $62mn Series B that Bitso closed in December 2020. For a seven-year old startup backed by such huge funding, Bitso is an outlier and obvious leader in the Latin American startup world. People across Latin America have joined the rest of the globe in increasing adoption of crypto  recently, particularly as local fiat currencies in the region depreciate. Such adoption requir

Coinbase Insiders Cash Out Big On Market Debut

After its recent debut on the public markets, several major shareholders of the cryptocurrency exchange Coinbase have apparently seen fit to cash out big sums of their stakes collectively amounting to billions of dollars. Among such insiders include Coinbase's founder and CEO Brian Armstrong and early VC investors Andreessen Horowitz and Union Square Ventures (USV). Brian Armstrong, Coinbase's CEO, sold around 750,000 shares in three separate transactions and netted $292 million from the sales, as indicated by an SEC filing . The sale represents less than 2% of his total holdings in the company. Just like Armstrong, Coinbase's other co-founder Fred Ehrsam sold 298,789 Class A shares at a weighted-average price of $374.72 and netted $112 million. He sold shares on Coinbase's Wednesday debut at prices ranging from $318.67 to $422.76. Coinbase's CFO Allesia Hass sold 255,500 shares at a price of $388.73 and netted roughly $99 million. It represents roughly 15% of her h

NBA Top Shot Parent Dapper Labs Raises $305M, Valued At $2.6B

Dapper Labs, the company behind digital collectibles sensation  NBA Top Shot and Ethereum collectibles game  CryptoKitties , has raised a big new round of funding from what's apparently a large party of sports stars, Hollywood heavyweights, and investment firms. Dapper has raised a $305 million round led by Coatue, a tech-focused investment powerhouse. Coatue was joined by others including NBA legend Michael Jordan and current stars like Kevin Durant and Andre Iguodala; musician Shawn Mendes; Hollywood stars Will Smith and Ashton Kutcher; and investment firms a16z, The Chernin Group, USV, and Venrock. Indeed many people and firms chipped into Dapper's funding round and we listed just some of them. Per reports , the round values Dapper at $2.6 billion, not bad for a company at the forefront of the recent NFT craze. Dapper's NBA Top Shot offers video highlights of NBA scenes that users can trade in the form of verifiable digital collectibles known as non-fungible tokens (NF

Crypto Firms, Chainalysis Raise Mega Rounds

Two of the latest companies in the crypto-sphere to raise a big round of funding are two well-known names, blockchain analysis company Chainalysis and cryptocurrency exchange and wallet . Chainalysis has announced that it's raised a new funding round of $100 million valuing it at $2 billion, while has raised a new round of $300 million valuing it at $5.2 billion. Both funding rounds add to the crypto funding frenzy that's been seen in the past year. Chainalysis's $100 million round was led by Paradigm, a crypto-focused investment firm launched by Coinbase co-founder Fred Erhrsam. Other participants in the round included Lee Fixel's Addition and Salesforce CEO Marc Benioff via his firm TIME Ventures. The $100 million round for Chainalysis came barely four months after the company closed a previous round of the same exact amount. The company says it's seen exceptional growth over the past year and increased its annual recurring revenue

Crypto Exchange Coinbase Fined $6.5M For False Reporting, "Wash Trading"

Coinbase, the popular cryptocurrency exchange that's on its way to a blockbuster IPO , has been fined to the tune of $6.5 million by the US Commodity Futures Trading Commission (CFTC) to settle charges of "reckless false, misleading, or inaccurate reporting" and "wash trading" by the crypto exchange. Coinbase has been ordered to pay a $6.5 million civil monetary penalty and cease and desist from any further violations of the Commodity Exchange Act or CFTC regulations, as charged. Coinbase's charges of  " reckless false, misleading, or inaccurate reporting"  stems from allegations of the company failing to disclose to the CFTC as required that it was operating more than one automated trading program and trading through multiple accounts on its own GDAX trading platform (now Coinbase Pro).   The automated trading led to perceived trading and liquidity volumes that were misleading to traders and data brokers and such was illegal. For the charges of &q

PayPal Buys Tel Aviv Crypto Startup Curv, Reportedly For $200M

In a move that signals its increasing interest in cryptocurrencies, online payments giant PayPal has moved to acquire Curv, a Tel Aviv-based startup that provides security infrastructure for digital assets and cryptocurrencies.  PayPal has announced an agreement to buy Curv for an undisclosed price. The acquisition comes barely three years after Curv was founded and is reportedly priced at under $200 million. Curv's acquisition by PayPal signals that the online payments giant is doubling down on the cryptocurrency market at a time when it's booming. After its acquisition, Curv will be rolled into a PayPal division focused on blockchain, crypto and digital currencies that was created just last year. Curv is a startup that helps its customers to store their crypto assets securely online. It operates a cloud-based service that lets its customers access their crypto wallets without any hardware device as often done. Curv's market focus is on crypto exchanges, brokers, over-th

New SPAC Deal: Bitcoin Mining Startup Cipher

The latest technology company to join the flurry of SPAC mergers is Cipher Mining, a newly-formed US-based bitcoin mining startup that's an offshoot of Bitfury, a leading maker of bitcoin mining hardware that's based in the Netherlands. Cipher Mining Inc will merge with Good Works Acquisition Corp (Nasdaq: GWAC) in a deal valuing the bitcoin mining startup at $2 billion. The SPAC will be anchored by a $425 million PIPE round committed by investors including Fidelity, Morgan Stanley (via its subsidiary Counterpoint Global), and Cipher's parent Bitfury. Bitfury will contribute a $50 million investment to the PIPE round that's structured as purchase credits for equipment and services from it for Cipher Mining. The SPAC merger will hand over $595 million in gross proceeds to Cipher Mining, consisting of the $425 million PIPE round and $170 million of cash held in trust by Good Works Acquisition Corp. Upon completion of the SPAC merger, the investors in Cipher's PIPE rou

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Alert: Nikola Founder Trevor Milton Indicted On Fraud Charges

The founder of embattled electric car startup Nikola Corp. has been formally indicted on fraud charges by the US Justice Department months after resigning from the company. Trevor Milton by name, he's been accused of securities and wire fraud in connection with a scheme to defraud and mislead investors. Milton is accused of misleading investors by making false statements regarding Nikola's products and capabilities. Notably, most of the investors allegedly misled were on the retail side. The DOJ alleges that Milton made false claims regarding "nearly all aspects" of Nikola's business. Milton founded Nikola in 2014 and led it through a public listing via a merger with a special-purpose acquisition company (SPAC) last year. The DOJ threw an apparent jab at SPACs in his indictment, asserting that he made 'many' of his false and misleading claims  during a period where he would not have been allowed to do so under rules that govern traditional IPOs were he

Earnings: AMD Doubles Revenue, Triples Profit

In this earnings season, companies all over are dropping their latest quarterly results and we're here equally reporting on them. We've touched on social media companies Snap Inc and Twitter , electric carmaker Tesla , and iPhone maker Apple . Now, the next is chipmaker AMD Inc . AMD has dropped its earnings for the second quarter of 2021, showing strong prospects as revenue doubled year-over-year and net income more than tripled.   Details AMD posted $3.9bn in revenue in Q2, up 99% year-over-year and 12% from the preceding quarter. For the same period, the company's net income was $710mn , up 352% year-over-year and 28% from the preceding quarter. Doubling its revenue and nearly quadrupling net income indicates AMD has a strong yet fast-growing business. It's bound to grow even more as the company is set to complete its acquisition of rival chipmaker Xilinx . AMD makes money selling high-performance chipsets used in computers, consoles, data centers, and the likes

Antitrust: Amazon Fined $900M By EU For Privacy Violations

Tech behemoth Amazon is for the nth time in the crosshairs of the European Union (EU). The latest saga in that arena is that Amazon has been fined a record-breaking amount for alleged privacy violations, according to an SEC filing from the company. Amazon has been fined the sum of €746 million ($888mn) by the Luxembourg National Commission for Data Protection (CNPD) for not complying with data privacy laws. It's the largest fine imposed under Europe's data protection law.  The fine originates from the CNPD accusing Amazon of processing customers' personal data in violation of the EU's famous-cum-infamous General Data Protection Regulation (GDPR) laws.  In June, it was reported ( WSJ )  that the Luxembourg data protection agency had sanctioned Amazon's privacy practices and proposed a fine topping $425mn to the EU's other two-dozen or so national data protection authorities. Now, it appears that the final fine is much larger than that.  Before now, the bigges

Deal: Qualtrics Buys CX Startup Clarabridge For $1.1B

Months after getting spun out of SAP into a separate public company, Qualtrics , a major provider of online survey software, has made a major acquisition. It's agreed to buy Clarabridge , a startup that does similar work to Qualtrics in the field fondly referred to as "customer experience (CX)". Qualtrics will pay $1.1bn all with shares to buy Clarabridge. The acquisition is a major strategic play for the company, pairing Qualtrics' customer survey business with Clarabridge's similar business of measuring customer sentiment from various sources like social media posts and customer support calls. Basically, Qualtrics is in the business of weighing customer surveys directly and Clarabridge in the business of doing so indirectly . Pairing both businesses represents a major strategic play for Qualtrics. In an investor presentation, Qualtrics said that Clarabridge has $100mn in annual revenue, implying an 11x multiple that it's paying to buy the company. That&#

Deal: Amgen Buys Biotech Startup Teneobio In $2.5B Deal

It appears that this Covid era has led to a boom for companies that work on  antibodies , which are protective proteins produced by the human immune system to tackle foreign substances, usually viruses. Antibodies are very useful in the research and treatment of viruses such as Covid. There are companies that specialize in antibodies and one of them, BioLegend , was recently bought for a whopping $5.3bn . Now, another such company, Teneobio , is getting bought for a big amount. Teneobio has agreed to be acquired by Amgen , an American biotech giant. Amgen is paying $900mn upfront for the company, then an additional $1.6bn in cash contingent on the company hitting certain milestones. It sums up to a $2.5bn deal . Teneobio is a clinical-stage biotech startup working on antibodies aimed at treating cancer, autoimmunity, and other infectious diseases. As it's still in the clinical trial stage with no viable product yet, it appears that Amgen is betting big on Teneobio's trials b

Antitrust: UK Probes Facebook's $1B Kustomer Acquisition

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Hollywood: Reese Witherspoon's Media Co. Sold In $900M Deal

A media company founded by superstar actress Reese Witherspoon has sold for a large amount to a company still in its infancy that hasn't even been named yet. That company is Hello Sunshine , a media company that produces content distributed across various platforms; movies, TV shows, podcasts, et al. Hello Sunshine has been sold to a newly-formed media venture t hat's backed by investment capital from Blackstone , the private equity giant.  The venture is led by ex Disney honchos Kevin Mayer and Tom Staggs .  As it is, the Blackstone-funded venture is acquiring a majority stake in Hello Sunshine from a group of external investors while anchor shareholders like Witherspoon and her founding partners will roll over and retain their equity stakes in the newly-formed venture. Officially, the deal's financial terms weren't disclosed, but a report from The Wall Street Journal says it's a $900mn deal. According to the report, the Blackstone-funded venture will pay $500mn

Earnings: Shopify Beats Estimates, Reaches Major Milestone

In this season of earnings results and we at The Techee  reporting on them, we're here with a beat on Shopify , which has released its earnings statement for the second quarter (April-June) of this year. In Q2, Shopify beat revenue expectations from analysts and as well achieved a major financial milestone by crossing $1bn in quarterly revenue for the first time. Shopify had $1.1bn in revenue in the quarter, up 57% year-over-year. Net income for the same period was $897mn , most of which was due to a $778mn gain in equity investments, likely from Shopify's stake in Affirm , a major 'buy now, pay later' lender. As usual, most of Shopify's sales ( $785mn ) came from "Merchant Solutions", which groups additional services the company offers atop recurring subscriptions charged to online retailers. Sales from subscriptions came at $334mn in the quarter. Gross Merchandise Volume (GMV), representing the total worth of transactions made on the Shopify platform,

Alert: Square Buys Australia's Afterpay For $29B

It's a big day in the fintech world. There's been a major acquisition with a major American fintech company, Square , buying Australia's foremost fintech startup, Afterpay , a 'buy now, pay later' lender. Square has reached an agreement to buy Afterpay for a whopping $29bn , marking one of Australia's biggest buyouts. It's a big deal that a startup founded barely seven years ago is selling for $29bn.  Square will pay the $29bn all with shares. It means that shares of Afterpay, which are traded on the Australian Securities Exchange, will be exchanged for Square stock traded on the New York Stock Exchange (NYSE). Afterpay is Australia's foremost 'buy now, pay later (BNPL)' lender in online retail. For the uninitiated, the 'buy now, pay later' business is a relatively young one providing alternatives to credit cards for consumers to shop online. It provides loans for consumers to shop online and then pay back in installments. Usually, credi

Markets: US SEC Takes Aim At Chinese IPOs

The US Securities and Exchange Commission (SEC) has taken a swipe at Chinese initial public offerings (IPOs) after regulatory hiccups in China have affected many Chinese stocks listed on US markets and American stockholders holding them. The SEC has issued new guidance on Chinese companies seeking to list shares in the US, requiring them to make certain disclosures to investors or otherwise refrain from listing in the US markets. First of all, usually, Chinese companies listing in the US don't actually sell shares of the operating companies but that of shell companies with contractual relationships with the operating companies. These shell shares, known as American Depositary Receipts (ADRs) , are used to circumvent restrictions on foreign ownership of Chinese shares imposed by the country's government. Now, the SEC in a statement has made it clear that Chinese companies seeking to list in the US must provide clear descriptions of the shell operations involved in such listing