Opening Bell: 9.18.20

WeChat, too; new stress tests to stress about; an extra-special SPAC; Xi Jinping confirms all of Peter Navarro’s suspicions; and more!

Author:
Dealbreaker
Publish date:
Sep 18, 2020

WeChat, too; new stress tests to stress about; an extra-special SPAC; Xi Jinping confirms all of Peter Navarro’s suspicions; and more!

Trump to block U.S. downloads of TikTok, WeChat on Sunday [CNBC]
The announcement comes ahead of an expected statement Friday by President Donald Trump on whether or not the government will approve a deal for Oracle to take a minority stake in TikTok and become a “trusted technology partner” for the company in the U.S…. “It’s not doing the same thing to TikTok as to WeChat,” Ross said in an interview on Fox Business Friday. ”...As to TikTok, it’s just upgrades, maintenance things like that, that would be shut down at this stage. The real shutdown would come after November 12 in the event that there is not another transaction. So it’s very different how the way the two are being handled.”

Fed Details New Round of Big-Bank Stress Tests [WSJ]
Unlike an earlier round of stress tests this year, the Fed will release the results of the tests for each bank, rather than providing aggregate results for the group…. In a sign of the uncertainty facing the industry and broader economy, the Fed required banks to resubmit updated capital plans this fall to reflect current stresses….
The Fed said both scenarios for the fall tests weren’t forecasts and are significantly more severe than most current baseline projections for the path of the U.S. economy.

SoftBank exits cellphone distributor Brightstar in telecoms sell-down [Reuters]
SoftBank will sell the money-losing firm to a newly formed subsidiary of private equity firm Brightstar Capital Partners for cash plus a 25% stake in the subsidiary, it said in a statement…. The sale marks SoftBank's latest move away from the telecoms industry, as it slashes holdings in wireless carrier SoftBank Corp to 40% and following the merger of Sprint with T-Mobile US.

SEC Charges Former NS8 Chief With Defrauding Investors [WSJ]
The regulator in its complaint alleged that from at least 2018 through June 2020 Adam Rogas, the Las Vegas-based technology company’s former CEO, changed company bank statements to show customers paid millions of dollars and that those bank statements were used by the finance department for putting together the company’s financial statements.
The SEC claimed that the company raised about $123 million last year and this year due to the former CEO’s fraud. The regulator also alleged that Mr. Rogas took home at least $17.5 million in investor funds.

UBS Mulls China Expansion, New Hires for Asset Management [Bloomberg]
Under new regulations introduced this year, foreign firms such as UBS can take full control of their mutual fund joint ventures in China, or seek partnerships with a local bank’s asset management arm to increase offerings…. Heightened foreign competition is putting pressure on incumbents like UBS that have long benefited from a first-mover advantage in China. UBS this year became the biggest global manager of Greater China funds with a 9.1% market share, up from 5.1% in 2018….

U.S. Charges Two Russian Nationals Who Allegedly Stole Cryptocurrencies [WSJ]
The cryptocurrency exchanges targeted in the attack were Poloniex, Binance and Gemini, according to court documents. As the men sought to circumvent the exchanges’ compliance controls, they created a trail of evidence that helped investigators to identify them, according to the Treasury…. In one case, Messrs. Potekhin and Karasavidi used stolen funds to purchase an inexpensive virtual currency and increase its price. They then quickly sold off the currency to generate a profit, authorities said.

A New Spin on SPACs [DealBook]
In a crowded field of blank-check companies, Reid Hoffman and Mark Pincus think that their special purpose acquisition company, or SPAC, is particularly special. Their company, Reinvent Technology Partners, raised $600 million in an I.P.O. and started trading yesterday, posting one of the biggest one-day share price gains of any SPAC so far this year.

China’s Communists to Private Business: You Heed Us, We’ll Help You [NYT]
Mr. Xi sees smaller private firms as a weak spot in his efforts to secure Communist Party dominance across society…. The official instructions are likely to reinforce accusations from critics of Beijing, including members of the Trump administration, that China’s private businesses must follow the orders of the Communist Party….
Businesses must build up party organizations, the guidelines said, implying that internal Communist Party committees will be more active in companies. Entrepreneurs should receive instruction to ensure they “identify politically, intellectually and emotionally” with the party, the guidelines said.

Opening Bell

Relief filibuster catches COVID; Giuliani’s guys catch SEC attention; Clover Health, too; A-Rod’s grand SPAC; and more!

Opening Bell

Goldman certainly thinks Trump lost; Peter Navarro is a lawless political hack; papal capitalism; and more!

Opening Bell

Stress free; SPAC sadness; Didi doing it; terrible band loses billionaire banjo player; and more!

Opening Bell

Greek Bailout Payment Set to Be Approved by Euro Ministers After Debt Deal (Bloomberg) Ministers from the 17 nations that share the euro will gather in Brussels today to sign off on the 130 billion-euro ($170 billion) second package for Greece after bondholders agreed last week to take a loss on the country’s debt. They’ll also focus on Spain’s budget-cutting efforts and Portugal’s aid program, underscoring their desire to prevent contagion. MF Global Bonuses Under Fire (WSJ) In a letter to former Federal Bureau of Investigation Director Louis Freeh, Sen. Jon Tester (D., Mont.) said it would be "outrageous" to proceed with a proposal to a bankruptcy judge that could result in payouts of several hundred thousand dollars each for MF Global's chief operating officer, finance chief and general counsel. The size of the bonuses would depend on their job performance in helping Mr. Freeh maximize value for creditors of the company. Pandit Pay Climbs as Citigroup Revenue Slumps (Bloomberg) Pandit’s $15 million pay package for 2011 and a multi-year retention package announced in May could total $53 million, based on regulatory filings and an analyst’s estimate. The CEO also received $80 million last year from the New York-based firm’s purchase of his Old Lane Partners LP hedge fund in 2007. Latest Stress Tests Are Expected to Show Progress at Most Banks (NYT) In another milestone in the banking industry’s recovery from the financial crisis, the Federal Reserve this week will release the results of its latest stress tests, which are expected to show broadly improved balance sheets at most institutions...The examination is not merely an intellectual exercise. If institutions fall short, they could be required to raise billions in new capital, depressing their shares. If they pass, dividend increases and stock buybacks by the strongest institutions will follow as they did after the second round of tests a year ago, pleasing investors whose banks’ stocks still trade at levels far below where they where before the collapse of Lehman Brothers in September 2008. Mortgage Deal Is Built On Tradeoffs (WSJ) Banks agreed to cut loan balances, a step they had long resisted, but they won't only get credit against their shares of the $25 billion settlement for reducing balances of loans they own. In some cases, they can receive partial credit if investors shoulder the cost of writing down loans the banks service. The banks also will receive credit for some steps they are already taking, such as approving short sales, where a home is sold for less than the amount owed, according to draft settlement documents reviewed by The Wall Street Journal. The Unravelling Of A Casino Marriage (WSJ) Messrs. Wynn and Okada, both known for their big, demanding egos, were something of an odd couple. Mr. Wynn is famous for a Cheshire-cat grin and smooth, grandiose soliloquies. Mr. Okada, a former engineer who had specialized in vacuum tubes, was sometimes seen as sullen and withdrawn by company outsiders. Born the same year, 1942, Mr. Wynn and Mr. Okada became "completely and totally bonded," Mr. Wynn said after they were introduced by a mutual friend. Mr. Wynn was hunting for investors who would give him leeway to create resorts that might take years to design and build. Mr. Wynn came of age during an era when casino operators were emerging from the industry's mob-infested roots. He hobnobbed with such celebrities as Steven Spielberg and Clint Eastwood. Mr. Okada, though often ranked among the richest people in Japan, largely stayed out of the spotlight. Missing Hiker Cuddled With Cat (AP) Snuggling in a blue sleeping bag, Margaret Page and her cat survived 3 1/2 weeks in a rugged New Mexico national forest, even though temperatures dropped below freezing nearly every night...The area had seen average highs reach around 60 degrees with evening lows in the 20s. It didn’t see much rain or snow, but there were some high winds...Relying on a creek for drinking water, Page and her cat named Miya lived on just a handful of supplies, rescue workers said Friday. Wells Fargo Poised to Lead Payouts Higher (Bloomberg) Wells Fargo and Citigroup may join banks unleashing more than $9 billion in dividend increases and share buybacks if they get passing grades this week on the Federal Reserve’s annual stress test. Thirteen of the 19 largest U.S. lenders may say they’ll pay out $3.79 billion in extra dividends this year and buy $5.52 billion of additional shares, according to estimates of six analysts compiled by Bloomberg. That’s 30 percent more than they spent last year. San Francisco-based Wells Fargo probably will offer the biggest difference at a combined $4.16 billion, followed by Citigroup with $2.92 billion. SEC Probes Operators’ Use of Multiple Markets (FT) According to people familiar with the probe, SEC officials are focusing on whether operators use multiple exchanges to appease customers which provide large order flows. At Lunch, Bloomberg And Obama Discuss Future (NYT) Mr. Bloomberg’s precise response is unknown. But their meeting a few weeks ago, confirmed by aides to both leaders and previously undisclosed, was potentially significant for both men, as Mr. Obama seeks support for his presidential campaign and Mr. Bloomberg ponders his post-mayoral career. Soros-led hookup may save American Apparel (NYP) George Soros has found a new financial disaster from which to profit: American Apparel. The billionaire octogenarian — who, like American Apparel’s controversial CEO Dov Charney, has lately been entangled in lawsuits with young, beautiful women — is backing a firm that’s in talks to extend a credit line worth as much as $80 million to the cash-strapped clothing chain, The Post has learned. The credit facility from Crystal Financial, a Boston-based firm that boasts Soros’ hedge fund as its lead investor, will immediately replace and expand a $75 million revolving credit line from Bank of America that matures in July, sources said. How To Become A Skeeball Master (YG) Not all skeeball machines are created equal. Between the shape of the ramp, the geometry of the backboard, and the precise characteristics of the rolling surfaces, each skeeball machine plays slightly differently -- and those variations can throw you off your game. If you're getting settled into a serious practice session, stock up with plenty of tokens and don't step away from your chosen spot....many skeeball aficionados prefer to kneel down to play. Maybe the lower stance helps them line up their shot, or perhaps being closer to the action helps them judge their throwing power a little more accurately. Whatever the reason, it's a tried and true technique for expert skeeball players -- and it might work for you, too. If you're struggling to settle into a comfortable throw, give it a try.

Opening Bell

Stress tests; The next Silicon Valley; Why you should lease a Rolls-Royce ; Emu on the loose; AND MORE.

Opening Bell

Wolves; Stress tests; Pot offices; Billionaire Bahamas Brawl; Sharks; AND MORE.