Opening Bell: 8.21.20

Ant; accreditation; antitrust; avoidance; and more!

Author:
Dealbreaker
Publish date:
Aug 21, 2020

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Ant; accreditation; antitrust; avoidance; and more!

Jack Ma’s Ant Group Produces $3.5 Billion Profit in Six Months as IPO Looms [WSJ]
The Hangzhou-based company, which was valued at $150 billion in a private fundraising round in June 2018, said last month that it is planning concurrent initial public offerings on stock exchanges in Hong Kong and Shanghai. The combined offerings could be among the largest in history…. Ant is aiming for a market capitalization of more than $200 billion when it goes public, The Wall Street Journal previously reported. That would make it more valuable than Goldman Sachs Group Inc. and place it close to PayPal Inc., whose market capitalization was recently above $220 billion following a big share-price run-up this year.

SEC to Complete Rules Expanding Access to Private Markets [Bloomberg]
The Securities and Exchange Commission will vote Aug. 26 on whether to adopt regulations that would expand the accredited investor definition, which dictates who can invest in private markets, according to an open meeting notice posted Wednesday…. The plan would let individuals with certain professional financial certifications become accredited investors, even if they don’t meet the current wealth requirements under the definition. The proposal also would permit “knowledgeable” private fund employees to buy into their firms’ investments.

Zuckerberg testifies before FTC as part of antitrust probe [CNBC]
It’s unclear what exactly Zuckerberg spoke about, but the testimony is the latest sign that the FTC is pushing forward with an antitrust probe that the agency opened into the social media company in June 2019…. The testimony follows a public hearing last month before the House Antitrust Subcommittee alongside Amazon CEO Jeff Bezos, Apple CEO Tim Cook and Alphabet CEO Sundar Pichai. At the hearing, Zuckerberg was grilled over the competitive nature of the company’s $1 billion acquisition of Instagram in 2012 and the $19 billion purchase of WhatsApp in 2014.

We Crossed the Line Debt Hawks Warned Us About for Decades [NYT]
The death spiral could be triggered once the debt surpassed the size of the U.S. economy…. “At this stage, I think, nobody is very worried about debt,” said Olivier Blanchard, a senior fellow at the Peterson Institute for International Economics and a former chief economist for the International Monetary Fund. “It’s clear that we can probably go where we are going, which is debt ratios above 100 percent in many countries. And that’s not the end of the world.”

Volkswagen Notches Early Win in Legal Fight With SEC [WSJ]
A federal judge on Thursday dismissed part of a civil fraud case against Volkswagen AG, a ruling that validated the company’s claims that regulators piled on with a 2019 lawsuit over its emissions scandal…. Judge Breyer let some of the case proceed—Volkswagen hadn’t sought an outright dismissal—but he did extinguish certain pillars of the case related to $8.3 billion in other bonds that were sold….
Judge Breyer previously questioned why the SEC brought securities-fraud claims against Volkswagen years after other government agencies resolved their litigation over the auto maker’s diesel-cheating scandal. The judge in 2019 suggested the agency looked like a “carrion hawk” picking over the remains of a crime.

Billionaire Robert Smith Fighting U.S. Criminal Tax Inquiry [Bloomberg]
Federal authorities have spent four years examining whether Smith failed to pay U.S. taxes on about $200 million in assets that moved through offshore structures, some of those people said…. Smith is trying to persuade the Justice Department to forgo criminal charges and resolve his case with a civil settlement, according to three of the people. A conviction could send him to prison and force him out of Vista Equity Partners, a money management firm with $65 billion in assets that has brought him fame and a luxe lifestyle.

Opening Bell

Giant Ant; sagging SAP; business backs Biden (except for p.e.); fried-chicken scent from an open fire; and more!

Opening Bell

Greensill groans; Instacart’s glee; “short term liquidity solution” for unhappy Ants; Gensler gets job interview; and more!

By DonkeyHotey (Mitch McConnell - Caricature) [CC BY 2.0], via Wikimedia Commons

Opening Bell

Wall Street decides it’s OK with what it said would be a nightmare; TikTok still ticking; of Ant and Alibaba; and more!

Opening Bell

Gold-mask; Powell pooh-poohs status quo ante pandemic; PPP pilfered; and more!

Opening Bell

Central Bank Details Losses at Bank of Cyprus (WSJ) Cyprus's central bank spelled out the financial damage to big deposit holders at Bank of Cyprus PCL, the country's biggest lender, saying they will lose almost 40% of their deposits as a result of a sweeping restructuring of the lender. Losses could grow even steeper in the months ahead. In a statement Saturday, Cyprus's central bank said that 37.5% of all deposits over €100,000 ($128,700) will immediately be converted into a special class of shares at the lender as part of its recapitalization plan. As Banks in Cyprus Falter, Other Tax Havens Step In (NYT) Bloodied by a harsh bailout deal that drives a stake through the heart of this Mediterranean country's oversize financial industry, Cyprus now faces a further blow to its role as an offshore tax haven: the vultures from competing countries are circling. With a flood of e-mails and phone calls in recent days to lawyers and accountants here who make a living from helping wealthy Russians and others avoid taxes, competitors in alternative financial centers across Europe and beyond are promoting their own skills at keeping money hidden and safe. In Herbalife Fight, Both Sides Prevail (WSJ) But for the time being, all three investors are in the black, showing that for all the bluster and bravado, timing is everything in financial markets. Mr. Loeb has cashed out the most, whereas the others have made only paper profits. Mr. Loeb's hedge-fund firm, Third Point LLC, has made at least $50 million on its estimated bet of more than $200 million, according to a person familiar with the firm. As of several weeks ago, the firm had largely exited its Herbalife stake, according to people familiar with Third Point. Mr. Icahn has made roughly $25 million in unrealized gains on his about $590 million bet. Mr. Ackman's Pershing Square Capital Management LP has notched more than $200 million, also in paper profits, on a bet of more than $1 billion. Insider Case Against SAC Manager May Be Tough to Prove (Reuters) On Friday, U.S. authorities arrested and charged Michael Steinberg, a 16-year veteran of Cohen's $15 billion SAC Capital Advisors, with insider trading in shares of the technology stocks Dell and Nvidia. The case against Steinberg, 40, is built heavily on the testimony of one of his former colleagues, Jon Horvath, who has admitted to insider trading and is now cooperating with the government. "What they're going to need to prove is that Steinberg got inside information that he knew came from an insider and that he then traded on it," said Marc Greenwald, a former U.S. prosecutor in New York who is now a partner at Quinn Emanuel in New York, and not involved in the case. "It all depends on what Horvath said he said and whether everybody believes him." Princeton alumna, who told female students to get married, defends provocative advice: ‘Find a husband!' (NYDN) "Here's what nobody is telling you," Patton wrote. "Find a husband on campus before you graduate. Yes, I went there." This controversial column, which she described as "little more than honest advice from a Jewish mother," outraged countless readers when it appeared in The Daily Princetonian on Friday and then went viral. "I sincerely feel that too much focus has been placed on encouraging young women only to achieve professionally," Patton told the Daily News. "I think in the back of their heads they all know this but nobody is saying it." Patton decided to write the open letter after speaking at a Women and Leadership conference on campus a few weeks ago. Many said Patton was scolding women for not marrying her youngest son, a junior at Princeton. ("I am the mother of two sons who are both Princetonians," she said. "My older son had the good judgment and great fortune to marry a classmate of his, but he could have married anyone. My younger son is a junior and the universe of women he can marry is limitless. Men regularly marry women who are younger, less intelligent, less educated. It’s amazing how forgiving men can be about a woman’s lack of erudition, if she is exceptionally pretty. Smart women can’t (shouldn’t) marry men who aren’t at least their intellectual equal. As Princeton women, we have almost priced ourselves out of the market. Simply put, there is a very limited population of men who are as smart or smarter than we are. And I say again — you will never again be surrounded by this concentration of men who are worthy of you.") Libor Suits by Bondholders Tossed Over Lack of Damages (Bloomberg) While potential damages were estimated to be in the billions of dollars, the judge ruled the cases must be dismissed because of the inability of litigants that included brokerage Charles Schwab, pension funds and other bondholders to show they were harmed. Buchwald, whose March 29 ruling allowed some commodities-manipulations claims to proceed to a trial, said that, while private plaintiffs must show actual harm, her ruling didn’t impede governments from pursuing antitrust claims tied to attempts to manipulate Libor. Michael Dell Said to Consider Blackstone LBO Only With CEO Guarantee (Bloomberg) In several recent meetings in Austin, Texas, with Chinh Chu and David Johnson -- the Blackstone executives overseeing the firm’s bid -- Michael Dell said he would be more likely to support their proposal if he retained an influential role, a second person familiar with the talks said. Negotiations are ongoing and the two sides may not reach an understanding. Argentina sticks to its guns on debt payout (NYP) The country, in a filing late Friday, refused to follow a court order that mandated it give equal treatment to a group of holdout bondholders led by billionaire hedge fund manager Paul Singer and his Elliott Management. Instead, Kirchner offered the group, owed $1.44 billion, the same deal it offered exchange bondholders in 2010. Pregnant woman's leg amputated after being hit with car (KHOU) The incident happened in the 9600 block of Ravensworth Drive, where Kelly, 21, lives with her boyfriend, Christopher Chaney. Chaney said his ex-girlfriend, 26-year-old Shareyll Hunter, showed up at the house Thursday morning and started arguing with Kelly. "I was in my house asleep, and then one of my kids’ mothers came," Chaney said. "I mean, they been texting and talking over the phone saying they want to fight each other and meet up right here and do it." All of the commotion outside roused Chaney from bed. "When I came outside, I seen my kids’ mother punching on the window and she wanted to fight the other one," Chaney said. He said Hunter jumped into his car and gunned it, pinning her 21-year-old rival between the car and the house, police said. Kelly was rushed to the hospital with two broken legs. Doctors had to amputate one leg. The baby is expected to be OK. Hunter drove off in her ex-boyfriend’s four-door Lincoln LS. She remained on the loose at last check. Hunter is five months pregnant and the victim is four months pregnant. Chaney, 26, says he is the father in both cases. Reporter: "You think it [the hit-and-run] is because of you getting them pregnant?" Christopher Chaney: "I mean, I’m handsome."