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Hollister Biosciences Inc. and Heavy Brands Inc. Enter into Letter of Intent for Proposed Joint Venture Agreement

Wed, 08/05/2020 - 08:00

Hollister Biosciences Inc., the creator of California's most hash-infused pre-roll HashBone, is pleased to announce that it's entered into a letter of intent to manufacture pre-rolls for some of the biggest names in rock and metal music.

LivePerson Spikes 15% On Raised Profit Guidance; Needham Almost Doubles PT

Wed, 08/05/2020 - 07:40

Shares in LivePerson are leaping almost 15% in pre-market trading after the company raised its revenue and profit outlook for the year fueled by a robust sales pipeline and increased demand from existing customers.The stock is surging to $52.90 in Wednesday’s pre-market trading after the company lifted its 2020 adjusted EBITDA to a range of $16 million to $19 million, up from prior guidance of $3.5 million to $10.5 million. The Street consensus was for $6.6 million. LivePerson (LPSN) also raised its full year 2020 revenue guidance to a range of $357 million to $361 million, up from previous guidance of $340 million to $355 million. Analysts had forecast $347.45 million. For the third quarter, the company expects to generate $92 million-$93 million, which is above the analyst consensus of $89.35 million.In addition, LivePerson is targeting full-year growth of 22% to 24%, up from 17% to 22% previously. LivePerson is helping companies to better communicate with customers through its AI-based communication platform. The coronavirus pandemic has forced multiple call centers around the world to change their work mode from office- to-home, which in turn has boosted demand for the company’s services.“We expect that our focus on internal automation and a tight discipline around expense controls will enable the company to continuing driving year-over-year profit improvements and margin expansion even while investing in key growth drivers of AI, product innovation, go-to-market capacity and tech infrastructure,” the company said in a statement. “LivePerson is entering the second half of 2020 with a favorable backdrop comprised of strong year-to-date contract signings, better-than-anticipated conversation volumes on our platform and a robust sales pipeline.”LivePerson added that it “continues to balance this strengthening outlook with a healthy respect for the potential risks that may arise from a poor macroeconomic environment.”Following the guidance, Needham analyst Ryan MacDonald ramped up the stock’s price target to $60 (30% upside potential) from $33 and reiterated a Buy rating, saying that the company is “firing on all cylinders.”“The COVID-19 pandemic has clearly driven increased volumes within the contact center, requiring businesses to expand the number of channels through which they can interact with consumers,” MacDonald wrote in a note to investors. “We expect LPSN to remain a key beneficiary and continue to accelerate top line growth into FY21, while also improving leverage in the model.”The rest of the Street shares MacDonald’s bullish outlook. The Strong Buy analyst consensus boasts 9 Buys versus 2 Holds. With shares up 25% so far this year, the $47.70 average price target implies a modest 3.2% upside potential to current levels. (See LPSN stock analysis on TipRanks)Related News: Square’s 64% Revenue Spike Pushes Shares Up 9% In Pre-Market Beyond Meat Dips 9% As Covid-19 Costs Widen 2Q Loss; Analyst Says Hold Disney Soars 4% After-Hours On Strong Subscriber Growth More recent articles from Smarter Analyst: * Pfizer, BioNTech Ink Deal To Supply Canada With Potential Covid-19 Vaccine * Amazon Gets UK Nod To Buy 16% Stake In Food Delivery Platform Deliveroo * Fiverr Pops 18% In Pre-Market On Upbeat 2Q Earnings And Raised Outlook * CyberArk Drops 6% On 3Q Outlook, Top Analyst Says Hold

Trade Alert: The President Of Navient Corporation (NASDAQ:NAVI), John Remondi, Has Just Spent US$391k Buying 1.9% More Shares

Wed, 08/05/2020 - 07:20

Investors who take an interest in Navient Corporation (NASDAQ:NAVI) should definitely note that the President, John...

Gold Barrels Past $2,000 With Stage Set for Further Rally

Wed, 08/05/2020 - 07:12

(Bloomberg) -- Gold rallied into record territory above $2,000 an ounce as investors assessed increased geopolitical risks and the prospect for further stimulus to combat fallout from the pandemic.Bullion is up more than 30% this year, with its haven status enhanced by sliding U.S. real yields. Gold could extend gains as governments and central banks respond to slowing growth with vast amounts of stimulus. The metal’s appeal is strengthening as the dollar weakens and a long global recovery looms. Goldman Sachs Group Inc. forecasts a rally to $2,300.“The stage has been set for gold to continue to climb higher,” Paul Wong, market strategist at Sprott Inc., said in a report. “We see increased fiscal spending ahead, extremely accommodative monetary policy in place for years and a challenging economic recovery.”Treasury Secretary Steven Mnuchin said the White House and Democrats aim to strike a deal on virus-relief legislation this week, even though the two sides remain far apart on some issues. Federal Reserve Bank of San Francisco President Mary Daly said Tuesday the U.S. economy needs more support than originally thought.Spot gold rose as much as 1.3% to a record $2,044.86 an ounce, and was at $2,041.33 at 11:52 a.m. in London. Spot silver climbed as much as 3.8% to $26.9998 an ounce, the highest since 2013. Holdings in gold-backed exchange-traded funds rose for a 28th straight day Tuesday.The rally comes in spite of economic data showing activity in the Euro-area is recovering well. European stocks climbed to a one-week high, with U.S. equity futures also rising. The Bloomberg Dollar Spot Index slipped 0.3%.Shifts in the U.S. bond market have helped underpin gold’s ascent. Real yields on 10-year Treasuries have collapsed below zero and hit a record low below -1% on Tuesday.Still, on CPI-adjusted measures they remain above levels seen during previous gold-price peaks, said Adrian Ash, head of research at BullionVault. That means gold could go “a long way higher than $2,000 per ounce,” he said.Meanwhile, U.S. and Chinese officials plan to assess the nations’ trade accord this month against a backdrop of rising tensions between the countries, according to people briefed on the matter.The latest tension “adds to an extensive laundry list of concerns that are sending investors toward safe-haven assets,” Stephen Innes, chief global markets strategist at AxiCorp, wrote in an emailed note. Gold’s “momentum is strong, likely coupled with some short covering.”The surge in gold does pose risks for a correction, with two major technical indicators suggesting the precious metal was already overbought before it broke through $2,000.“A spike like this is inherently unstable, although behind it is a wide array of tailwinds and the daily physical evidence of the ETF numbers gives confidence to others,” said Rhona O’Connell, head of market analysis for EMEA and Asia at StoneX Group Inc. “For as long as the markets are plagued with uncertainties about the duration and spread of the virus, then the overall risk will be to the upside.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Brent Oil Tops $45 on Sliding U.S. Stockpiles, Technical Breaks

Wed, 08/05/2020 - 07:03

(Bloomberg) -- Oil climbed to a five-month high in London, topping $45 a barrel after U.S. industry data showed a decline in the nation’s stockpiles.Brent futures gained for a fourth day, rising as much as 2.6% to the highest price since March 6. The American Petroleum Institute reported a 8.59 million-barrel drop in crude inventories last week, according to people familiar with the figures.The international benchmark moved above its low from March 6 in European trading hours, closing a so-called price gap that was formed on that day, a move that traditionally leads to additional buying. Over the same period, West Texas Intermediate rose above its 200-day moving average for the first time since January. Oil has resumed gains in recent days after rallying from a plunge below zero in April but rising coronavirus infections have raised concerns about a sustained recovery in consumption. OPEC+ is set to test the market by returning some supply this month after historic output curbs, but a persistently weaker dollar and the recovery in equity markets has helped the market draw out further gains.“Oil prices are rising, pricing in what looks like a sizable decline in U.S. crude inventories,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy.European equities and U.S. futures advanced on signs American lawmakers are making progress on an economic aid package, while the dollar continued to grind lower, adding further support to crude markets.A Bloomberg survey shows U.S. crude stockpiles probably fell by 3.35 million barrels last week. That would be the third weekly decline in four weeks if confirmed by official data from the Energy Information Administration later on Wednesday. American shale drillers have signaled the end of output growth, with Diamondback Energy Inc.’s chief executive officer saying there are currently no market signals that such growth is needed.“I am not so sure if Brent will maintain its consolidation above the $45 level,” said Kevin Solomon, an analyst at brokerage StoneX Group. “The significant weakness in the U.S. dollar has helped oil prices remain buoyant despite the stalled oil demand recovery.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Not Many Are Piling Into LexinFintech Holdings Ltd. (NASDAQ:LX) Just Yet

Wed, 08/05/2020 - 06:50

With a price-to-earnings (or "P/E") ratio of 8.9x LexinFintech Holdings Ltd. (NASDAQ:LX) may be sending very bullish...

Is It Smart To Buy Skyworks Solutions, Inc. (NASDAQ:SWKS) Before It Goes Ex-Dividend?

Wed, 08/05/2020 - 06:14

Skyworks Solutions, Inc. (NASDAQ:SWKS) stock is about to trade ex-dividend in four days. Investors can purchase shares...

Tencent in Talks to Create $10 Billion Streaming Giant

Wed, 08/05/2020 - 06:12

(Bloomberg) -- Tencent Holdings Ltd. is driving discussions to merge China’s biggest game-streaming platforms Huya Inc. and DouYu International Holdings Ltd., people familiar with the matter said, in a deal that would allow it to dominate the $3.4 billion arena.The Chinese social media titan -- which owns a 37% stake in Huya and 38% of DouYu -- has been discussing such a merger with the duo over the past few months, although details have yet to be finalized, said the people, who asked not to be identified because discussions are private. Tencent is seeking to become the largest shareholder in the combined entity, one person said.A deal would create an online giant with more than 300 million users and a combined market value of $10 billion, cementing Tencent’s lead in Chinese games and social media. Faced with rising competition for advertisers from ByteDance Ltd. and its rapidly growing stable of apps, the WeChat operator would then run a highly profitable service akin to Inc.’s Twitch. Huya and DouYu would keep their respective platforms and branding while working more closely with Tencent’s own esports site eGame, said the people.Douyu’s shares surged 18% in pre-market trade in New York, while Huya soared 15%. Tencent climbed 2% to a two-week high in Hong Kong.“As the major shareholder of both platforms, Tencent would benefit because a merger would remove unnecessary competition between them,” Bloomberg Intelligence analyst Vey-Sern Ling said. “The enlarged scale can also help to drive cost synergies and fend off emerging competitors.”Tencent and DouYu representatives declined to comment, while Huya spokespeople didn’t respond to requests for comment.Tencent’s shoring up its home-market position against the backdrop of a Trump administration increasingly hostile toward Chinese tech companies. WeChat has a limited U.S. presence and Trovo Live, a mobile-focused game-streaming service for American consumers, is only in its initial stages.China’s game-streaming market is estimated to generate 23.6 billion yuan ($3.4 billion) in revenue this year, according to iResearch. The country’s streaming networks live and die by the popularity of star players and the virtual tips and gifts that fans buy for them, leading to intense bidding wars for the most-recognized names. Companies like Google-backed Chushou TV shuttered their services after failing to secure new money, while NetEase Inc.’s CC Live has found a small niche in broadcasting its in-house titles.Already featuring Tencent’s marquee games like PUBG Mobile and Honor of Kings, Huya and DouYu have established a clear lead as the top two platforms. Nevertheless, revenue growth slowed down for both in recent quarters as users shifted their attention to ByteDance’s Douyin, the Chinese twin to the globally popular TikTok short-video service. A merger would help them lower broadcast and content costs at a time when rival video services like Kuaishou and Bilibili Inc -- both also backed by Tencent -- intensify their efforts to compete for more gaming content.In April, Tencent bought an additional stake in Huya for about $260 million from Joyy Inc., boosting its voting power in the platform to more than 50%. When asked about the possibility of a merger with Huya, DouYu founder and Chief Executive Officer Chen Shaojie told analysts on a March earnings call: “We believe it’s Tencent’s vision.”(Updates with share action from the fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Lending seized up in the second quarter: Morning Brief

Wed, 08/05/2020 - 06:05

Top news and what to watch in the markets on Wednesday, August 5, 2020.

The World’s Hottest Stock Is a Money-Losing Tech Giant Soaring 880%

Wed, 08/05/2020 - 06:00

(Bloomberg) -- It gets far less attention than Tesla, the FAANGs or even the Robinhood flavor of the week.Yet Sea Ltd. has quietly become the world’s best-performing large-cap stock, stoking a debate on Wall Street over whether the Singapore-based gaming, e-commerce and payments company is the next great internet colossus or just Exhibit A in a global tech bubble that’s destined to burst.For now at least, bulls have the upper hand. Swelling optimism that loss-making Sea may one day become both the Tencent and Alibaba of Southeast Asia has boosted its New York-listed shares by more than 880% in the past 18 months, the largest gain worldwide among companies with a starting market value of at least $1 billion. Short sellers who placed record wagers against the stock in June are retreating at an unprecedented pace.If Sea Chief Executive Officer Forrest Li is paying attention to any of this, he’s not letting on. The 42-year-old billionaire said in a video interview that he’s been working seven-day weeks in the office since April, leading his company through what may be its most pivotal year. Demand for Sea’s mobile games and online-shopping platform has surged during the pandemic, and the company is bidding on a Singapore digital-banking license to accelerate its push into financial services. Li is also looking for potential acquisitions in gaming, logistics and e-commerce.“We don’t like to think too much about our success or how we got here,” he said when asked about Sea’s stock price. “It doesn’t matter if the environment is good or bad. It doesn’t change a company or a person.”Even by the standards of today’s tech boom, Li’s ascent has been remarkable. Born in the Chinese port city of Tianjin, he worked for the local units of Motorola Solutions Inc. and Corning Inc. before enrolling in Stanford’s MBA program. He founded Sea, then known as Garena, in 2009 and took it public with backing from Tencent in 2017.Read more about Li, who named himself after Forrest Gump.After a rocky first year of trading, Sea’s stock has gone on to trounce everything in its class. Initially, the gains were fueled by the runaway success of Sea’s first self-made mobile game -- a battle royale called Free Fire that has attracted as many as 80 million daily active users in more than 130 markets.But Sea’s e-commerce and financial services units are now increasingly important pillars of the bull case. Its Shopee platform overtook Alibaba’s Lazada in the fourth quarter of 2019 to become the top e-commerce provider in Southeast Asia, according to research firm iPrice, and the business accounted for more than 40% of Sea’s revenue in 2019, up from 2.3% in 2017.SeaMoney, which offers everything from e-wallets to micro loans, could ultimately be just as large, according to Li. “We think this is a huge business opportunity,” he said.Read more: Sea’s Singapore Digital Bank Bid Targets Millennials, SMEsThe soft-spoken founder has some big-name believers. Tencent still owns about 20% of Sea, and the stock was the biggest holding as of May in Noah Blackstein’s Dynamic Power Global Growth Class fund, one of the world’s top-performing equity mutual funds of the past decade. Other prominent shareholders include Chase Coleman’s Tiger Global Management LLC and Kora Management LP, an emerging markets-focused hedge fund in New York, according to regulatory filings as of March.Kora began investing in Sea in early 2018 after meeting with Li, Daniel Jacobs, the hedge fund’s founding partner, said in an interview. “We’ve seen over the last two years a company that’s got a great team and great products going after a big market and just executing incredibly well,” he said. “We think this is a mini Tencent and has the ability to be a really successful, large company in a global context.”Sea has already claimed the title of biggest company in Southeast Asia after its market value swelled to $65 billion, topping DBS Group Holdings Ltd. and PT Bank Central Asia for the first time earlier this year. Revenue has also grown quickly, jumping 163% to $2.2 billion in 2019, though it’s still just a fraction of DBS’s $11 billion.As for Sea’s $1.46 billion net loss last year? Jacobs isn’t bothered by it. “They are thoughtful and prudent about building a business,” he said. “We are very much of the view that the company has all this under control.”Not everyone is convinced.DBS Bank Ltd. analyst Sachin Mittal downgraded his recommendation on Sea to sell in July, citing Indonesia’s new tax regulations for cross-border transactions and the likelihood of the company burning through cash to grow its payments business. “There is a tech bubble right now,” he said in an interview. “Sea’s stock is overvalued and it’s partly a reflection of the industry.”While short sellers have closed out bets against Sea at a rapid clip in recent weeks, they still have a bearish position worth more than $3 billion, or about 8% of the stock’s free float, according to S3 Partners, a financial analytics firm. “Mark-to-market losses may have forced shorts out of their position,” said Ihor Dusaniwsky, head of predictive analytics at S3. “But they may still have a negative outlook.”Skeptics note that Sea faces deep-pocketed competitors in all of its main businesses, from Lazada to Grab Holdings Inc. and a slew of other up-and-comers in digital finance. Meanwhile, Sea’s gaming unit has yet to prove it’s more than just a one-hit wonder.Read more: Alibaba Helps Asia’s Malls Go Online After Virus Upends Retail“We could have a post-Covid situation where the jack-up in revenue does not materialize, and the gaming business is doing well but rests on only one popular game,” said Nirgunan Tiruchelvam, head of consumer equity research at Tellimer Ltd.Sea optimists see little reason to cash in. In fact, Georg Krijgh, founder and head of the investment team at Amsterdam-based Fratres, said his firm’s Knight Tech Fund, which has 150 million euros ($177 million) under management, plans to add to its Sea holdings.The stock is already the fund’s second-largest position after Shopify Inc., a Canadian e-commerce company that has gained more than 500% in the past 18 months. “There are always people who like to short excellent companies such as Sea, Tesla or Carvana, mainly based on the argument of a high valuation,” he said. “It’s an inferior strategy.”Sea’s biggest challenge now may have less to do with execution than with meeting investors’ “sky-high” expectations, said Matthew Kanterman, an analyst at Bloomberg Intelligence. In the past seven days alone, Sea’s stock has soared 28% to record.For his part, Li appears well aware that the bar has increased. It’s been hard not to notice with everyone calling his company a Southeast Asian mashup of Tencent and Alibaba, two of the most successful businesses in history.“We learned a lot from those pioneers,” said Li, who has an estimated net worth of $7.5 billion. “But at the end of the day, we don’t need to be their mini versions. We can just be ourselves.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Norbord Reports Second Quarter 2020 Earnings; Declares Quarterly Dividend

Wed, 08/05/2020 - 06:00

Note: Financial references in US dollars unless otherwise indicated.Q2 2020 HIGHLIGHTS * Adjusted EBITDA of $84 million and Adjusted earnings of $0.

Trupanion ‘Purring Like A Kitten’ Cheers RBC On Earnings Beat

Wed, 08/05/2020 - 05:09

Shares in pet insurance provider Trupanion (TRUP) are rising 5% in Wednesday’s pre-market trading after the company reported a clean beat-and-raise quarter.Specifically, Q2 GAAP EPS of $0.04 beat Street estimates by $0.06 while revenue of $117.9M beat by $3.2M- and represented a 27.9% year-over-year increase. Subscription business revenue was $92.5M (beating the consensus of $92.1M), up 19% from the same period last year.TRUP also reported total enrolled pets of 744,727 at June 30, 2020, up 29% year-over-year, with Pet Acquisition Cost (PAC) down 7% year-over-year to $199 as Net Additions accelerated to 28% (vs. 0.5% in Q1). Meanwhile Q2 Monthly Retention Rate came in at 98.66%, an all-time-high, driven by Trupanion Express and improved customer service.“Across key financial and operational metrics, it was a very strong quarter for Trupanion,” said Darryl Rawlings, CEO of Trupanion. “I’m particularly proud of our service levels we provided to our members, which contributed to records in monthly average retention and the number of pet owners adding pets or referring friends to Trupanion in the quarter.”For the full year, management raised Revenue guidance to $487-$491M (vs. $471-$478M prior) and Adj Operating Income guidance to $56M (vs. $55M prior).Following the report RBC Capital’s Shweta Khajuria reiterated her buy rating on the stock with a $62 price target up from $51 previously. Despite shares climbing over 40% year-to-date, the new price target indicates further upside potential lies ahead.“TRUP reported clean Beat and Raise Q2 results with All Time High (ATH) Retention Rates and accelerating Net Subscription Pet Additions (highest growth since Q3:18)” cheered the analyst, in a report titled ‘Purring Like A Kitten.’ (See TRUP stock analysis on TipRanks)According to Khajuria, TRUP offers a highly predictable subscription- based business model, strong value proposition, with leading industry position in a very large, under penetrated market. “We believe TRUP should be able to grow sustainably, in the low-to-mid-20% range for the next several years” she concludes.Overall, the stock scores a bullish Strong Buy Street consensus with 4 recent buy ratings vs just 1 hold rating.Related News: Beyond Meat Dips 9% As Covid-19 Costs Widen 2Q Loss; Analyst Says Hold Amazon Rises 5% As ‘King Of E-Commerce Shines Amidst The Pandemic’ Alphabet Up 8% After-Hours Despite First-Ever Revenue Decline More recent articles from Smarter Analyst: * Fiverr Pops 18% In Pre-Market On Upbeat 2Q Earnings And Raised Outlook * LivePerson Spikes 15% On Raised Profit Guidance; Needham Almost Doubles PT * CyberArk Drops 6% On 3Q Outlook, Top Analyst Says Hold * Twilio Falls 4% In After-Hours On Weakening Corporate Demand

Australia Approves Co-Diagnostics’ Covid-19 Test; Stock Falls On Profit-Taking

Wed, 08/05/2020 - 04:31

Co-Diagnostics’ (CODX) Covid-19 detector, the Logix Smart COVID-19 Test kit, has scored the green light from The Australian Therapeutic Goods Administration. The product is an in vitro diagnostic test for the qualitative detection of the RNA from SARS-CoV-2 coronavirus (COVID-19).The molecular test uses a single step real-time reverse transcriptase polymerase chain reaction (RT-PCR) process in lower respiratory tract fluids and upper respiratory tract fluids from patients who meet the clinical criteria COVID-19. These include fever, cough, shortness of breath and travel history to China.Negative results do not preclude SARS-CoV-2 infection and should not be used as the sole basis for patient management decisions, the company adds.However, shares in CODX plunged 8% in Tuesday’s trading, and fell a further 1.4% after-hours on a bout of profit-taking after the stock’s steep climb on Monday.The stock rallied 28% following the announcement that the company’s partner, Clinical Reference Laboratory (CRL), received Emergency Use Authorization from the US FDA for CRL Rapid Response, a saliva-based COVID-19 test that can be self-administered at home, and then tested using Co-Diagnostics’ patented CoPrimer technology.“We believe that CRL’s selection of the Co-Diagnostics platform, and their successful emergency use authorization from the FDA, speaks volumes about the quality, sensitivity, and specificity of our CoPrimer primer and probe technology,” remarked Dwight Egan, CEO of Co-Diagnostics.Indeed shares in Co-Diagnostics have exploded over 3000% year-to-date, and the stock still maintains a bullish Strong Buy Street consensus. That’s alongside an average analyst price target of $34 (19% upside potential).“Logix Smart COVID-19 test’s high accuracy [has been] independently validated for multiple times” comments HC Wainwright analyst Yi Chen, adding that time to detection is just 63-90 minutes. With the U.S. continuing to record over 60,000 new cases of Covid-19 daily Chen expects Co-Diagnostics to continue to provide its partners with large volumes of its Logix Smart Covid-19 test kits.The analyst reiterated his buy rating on the stock with a $35 price target following the approval of the company’s self-collecting Covid-19 saliva test. (See CODX stock analysis on TipRanks).Related News: CytoDyn Scores Safety Thumbs Up For Late-Stage Covid-19 Trial Abiomed’s Impella Scores Emergency FDA Nod For Covid-19 Patients Regeneron: Covid-19 Antibody Combo Prevents & Treats Disease In Animals More recent articles from Smarter Analyst: * LivePerson Spikes 15% On Raised Profit Guidance; Needham Almost Doubles PT * CyberArk Drops 6% On 3Q Outlook, Top Analyst Says Hold * Twilio Falls 4% In After-Hours On Weakening Corporate Demand * Oppenheimer Lifts SolarEdge's PT After Strong 2Q Results

BP Walks Away From the Oil Supermajor Model It Helped Create

Wed, 08/05/2020 - 04:02

(Bloomberg) -- In the late 1990s, BP Plc boss John Browne used an oil-price slump to usher in the age of the supermajor, buying U.S. rivals Amoco and Arco to create a transatlantic giant. He kicked off a round of mergers that saw his company and four others dominate the industry -- Exxon Mobil Corp. and Chevron Corp. in the U.S., Royal Dutch Shell Plc and Total SA in Europe.That era ended on Tuesday when Bernard Looney, the third chief executive officer since Browne’s swashbuckling reign ended in 2007, declared BP would be a supermajor no more and proposed a very different blueprint for the oil company of the future.Just six months after taking the helm, Looney has put meat on the bones of his plans to make BP compliant with the Paris accord on climate change, saying he’ll cut dividends in half, shrink oil and gas output by 40% over the next decade and spend as much as $5 billion a year building one of the world’s largest renewable-power businesses.Where Browne created a global model, Looney’s strategy shows the oil industry is splitting in two.On one side of the Atlantic, BP, Shell and Total are trying to make themselves going concerns for a low-carbon age, diluting their fossil-fuel businesses with plans to build significant revenues from renewable energy. Exxon and Chevron -- insulated from the pressure applied by European investors and politicians -- are charting a different course: keep pumping as profitably as possible and hand the cash back to investors. Like Big Tobacco, they’re increasingly courting shareholders willing to put returns above the harm their product causes.Pay Out or Diversify“BP had two choices,” said Brian Scott-Quinn, emeritus professor at Henley Business School in southern England, who’s written on financial markets and climate change. “First, simply paying out the maximum dividend it can in the future by not investing in the future at all. Alternatively, it can diversify on a much larger scale.”Looney described his seismic shift as making an integrated oil company into an integrated energy company.“You have to knit together lots of different energy sources,” Looney said in a Bloomberg TV interview on Wednesday. “We are natural gas, we’re in solar, we’re in wind, we have one of the world’s largest trading organizations.”It’s a complete change of direction for a company that raised the dividend earlier this year and has been hammered by the post-pandemic crash in oil prices. And there are plenty of risks ahead.BP concedes that power projects still make lower returns than oil and gas investments -- one reason why the board agreed to a lower dividend. And management has acknowledged that hydrocarbon production will probably remain BP’s main source of earnings for “the next several years,” funding its shift toward cleaner energy.It’s also unclear what competitive advantage an oil company brings to building wind farms and solar parks; traditional power utilities have had a long head-start.But there are dangers for Exxon and Chevron too. As alarm over global warming increases, their universe of potential investors may keep shrinking, especially if Joe Biden takes the White House in November and resets U.S. energy policy. As this quarter’s record losses show, if the post-Covid slump in crude prices is sustained, generating meaningful returns from oil and gas won’t be easy. A decade ago, Exxon was the most valuable U.S. corporation. Today it ranks 41st.See also: Tesla Overtakes Exxon’s Market Value in Symbolic Energy Shift“There’s definitely a division between the Europeans, who are much more committed to meeting the climate agenda,” and the Americans, said Panmure Gordon & Co. analyst Colin Smith. Their success will depend on how attractive the pivot in investments is perceived to be, relative to continued spending on oil and gas, he said.Unlike their European peers, Exxon and Chevron have managed to bat away investor pressure thus far. Both companies, backed by the U.S. Securities and Exchange Commission, have resisted requests for shareholders to vote on their emission strategies.But they’ve been struggling with meager returns after investing heavily in megaprojects around the world for a decade, leaving them wholly unprepared for the era of cheap oil that began in 2014. Slow to realize the transformational effect of the shale revolution that happened on their doorstep, Exxon and Chevron are only now understanding that they must become more nimble to respond to market conditions, rather than dictate them.Sticking With OilUnder their current CEOs, neither U.S. major has the will to follow the Europeans down the green path. Both plan to stick with oil and gas long-term, tempered only by small clean-energy technology bets. For them, rushing to renewables -- where they have no competitive advantage and see smaller returns in a more regulated industry -- is not the answer.Yet in Europe, BP’s newly fleshed out plans will no doubt add pressure on Shell, which also announced ambitions earlier this year to slash its carbon emissions by 2050 and increasingly turn to renewables. The Anglo-Dutch major has promised more detail on that shift, which will ultimately result in it only doing business with emission-free companies.For the European majors, the success of their strategy depends in part on governments maintaining the scale of policy support needed to make the energy transition happen. With countries around the world pledging greener economies as they emerge from the devastation of the coronavirus, BP may have chosen its moment wisely.“If ever there was a moment to reset, this was it,” said Luke Parker, vice president of corporate analysis at consultant Wood Mackenzie Ltd. “Several factors have converged to make it possible: coronavirus and everything that comes with it; a strategic pivot to net-zero on the horizon” and a “new leadership with credit in the bank.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Beyond Meat Drops 9% As Covid-19 Costs Widen 2Q Loss; Analyst Says Hold

Wed, 08/05/2020 - 03:11

Beyond Meat shares dropped almost 9% in after-market trading as Covid-19-related costs widened its second-quarter loss.The stock declined to $130.20 in Tuesday’s extended market trading. As restaurant closures during the coronavirus pandemic throttled demand for Beyond Meat’s (BYND) plant-based meat products, the company decided to convert a meaningful portion of its foodservice inventory into retail product items. The added $5.9 million of expenses related to the product repacking and shift to retail, widened the company’s second-quarter net loss to $10.2 million from $9.4 million in the year-ago period. Meanwhile, sales jumped 69% to $113.3 million exceeding analysts’ expectations by almost $14 million.Retail net revenues during the reported quarter increased 192%, while foodservice net revenues dropped 59% year-on-year. Beyond Meat added that in retail, its recent expansion into club stores including Walmart (WMT) and Costco (COST) continues to drive “exceptional growth”.“As the toll of the Covid-19 pandemic took hold across the foodservice industry, we repurposed assets and repacked and rerouted products to meet increased consumer activity in the retail aisles,” said Beyond Meat CEO Ethan Brown. “Throughout the quarter, our brand experienced an enviable combination of consumer trends - increasing household penetration, increasing buying levels per household, and strong repeat purchase rates of nearly 50%, well above the success threshold for consumer packaged goods.”For the remainder of the year, however, Brown anticipates that US foodservice demand will remain soft relative to a year ago, given the return of high rates of Covid-19 infections across many parts of the US, including in Los Angeles.The company’s cash and cash equivalent balance was $222.3 million and total debt outstanding was $50 million as of June 27.Beyond Meat’s shift to retail markets and recent international expansion deals have helped the value of its share price balloon 88% so far this year. Following the impressive rally, the $115.44 average analyst price target now indicates 19% downside potential from current levels. (See Beyond Meat stock analysis on TipRanks)Following the 2Q earnings release, five-star analyst Rupesh Parikh at Oppenheimer said that an elevated valuation and foodservice risks keep him sidelined on the stock for now with a Hold rating.“In the near term, we expect coronavirus to weigh upon BYND's restaurant and foodservice results,” Parikh wrote in a note to investors. “We continue to look very favorably upon BYND’s global prospects including a large number of wins lately.”For now, Wall Street analysts are cautiously bearish on the stock. The Moderate Sell analyst consensus breaks down into 6 Sell and 6 Hold ratings versus 2 Buy ratings.Related News: Uber Eats, Carrefour Take Online Delivery To Rest Of France, Belgium Uber Buys Routematch To Expand Public Transit Operations Beyond Meat Shares Rise On Sale Of Plant-Based Meat In Brazil More recent articles from Smarter Analyst: * CyberArk Drops 6% On 3Q Outlook, Top Analyst Says Hold * Twilio Falls 4% In After-Hours On Weakening Corporate Demand * Oppenheimer Lifts SolarEdge's PT After Strong 2Q Results * Paycom Drops In After-Hours As 2Q Sales Disappoint

Activision Delivers Clean Beat As Revenue Explodes 72%

Wed, 08/05/2020 - 02:55

Shares in Activision Blizzard (ATVI) pulled back 2% in Tuesday’s after-hours trading, despite the video-gaming giant delivering a clean earnings beat.Specifically, Q2 Non-GAAP EPS (including GAAP deferrals) of $0.97 beat Street estimates by $0.28 while GAAP EPS of $0.75 also topped Street expectations by $0.16.Revenue came in at a whopping $2.08B, which beat consensus estimates by $380M, and represented an impressive 72% increase from the same quarter last year. Non-GAAP operating margin was 42% for the quarter, with Q2 operating cash flow at $768M.Indeed, President and COO Daniel Alegre noted that Call of Duty in-game net bookings more than doubled from Q1 and were around 5 times higher than the year-ago quarter. “Each of our key franchises delivered better than expected results with growth led by the Call of Duty franchise, following the launch of Warzone” he commented.In terms of users, ATVI reported Q2 overall monthly active users of 428M up from 407M in the previous quarter. This broke down into 125M users for Activision; 32M for Blizzard; and 271M for King Digital- vs 102M for Activision; 32M for Blizzard; and 273M for King Digital in the first quarter.“Our 400 million players continue to experience fun, joy and accomplishment through our games. Our record engagement resulted in greater revenue and earnings per share than previously forecast” said Bobby Kotick, CEO of Activision.“In the second half of the year, we expect to launch major new content into key franchises with meaningfully larger audiences than we have seen previously, creating the opportunity for strong financial performance” he added.Looking forward, for the third quarter, ATVI is guiding bookings of $1.65B- easily beating the consensus expectation of $1.4B, with bookings of $7.625B for the full year (vs consensus for $7.2B).Shares in Activision have surged 45% year-to-date, and analysts have a bullish Strong Buy consensus on the stock’s outlook. However thanks to the recent rally the average analyst price target now indicates that shares could pull back 3% from current levels.Needham’s Laura Martin has a buy rating on ATVI with a $90 price target (4% upside potential). “We believe video game play and viewing are beneficiaries of COVID-19 “shelter at home” rules, and that post-pandemic engagement levels will remain elevated compared to January 2020” she wrote.“What we like most about ATVI’s strategic position is that it owns all if its IP and manages large, global, super-fan communities. Additionally, it has diverse revenue streams with big moats (ie, barriers to entry) based on hit franchises” she told investors. (See ATVI stock analysis on TipRanks).Related News: Disney Soars 4% After-Hours On Strong Subscriber Growth Amazon Rises 5% As ‘King Of E-Commerce Shines Amidst The Pandemic’ Alphabet Up 8% After-Hours Despite First-Ever Revenue Decline More recent articles from Smarter Analyst: * Twilio Falls 4% In After-Hours On Weakening Corporate Demand * Oppenheimer Lifts SolarEdge's PT After Strong 2Q Results * Paycom Drops In After-Hours As 2Q Sales Disappoint * Square’s 64% Revenue Spike Pushes Shares Up 9% In Pre-Market

Apple, Amazon and Google Are All Pretty Bulletproof

Wed, 08/05/2020 - 02:30

(Bloomberg Opinion) -- Europe has the motivation, but not the means, to break up Big Tech. For the U.S., the inverse is true. That’s bad news for anyone hoping for a full regulatory reckoning with Silicon Valley’s and Seattle’s giants over their monopolistic tendencies.Washington lawmakers see their job as protecting the consumer first and foremost, while Brussels wants to make sure other companies are allowed to compete with the incumbents. Sadly for Europe, the Americans have all the power but their approach is unlikely to produce radical change (as my Opinion colleague Tara Lachapelle wrote this week).That isn’t to say the European Union is wasting its time in leading the charge against Big Tech. Congress’s grilling last week of the chief executives of Apple Inc., Inc., Google parent Alphabet Inc. and Facebook Inc. showed that the “Brussels Effect” is in full force. The EU plays an outsized role when it comes to regulation because other regions — even the Americans — tend to follow its lead. Up to a point, at least.As U.S. lawmakers made the case against the West Coast giants, time and again their arguments echoed efforts already well underway in Europe. When the Democratic Representative David Cicilline tackled the way Google displays news snippets in search results without reimbursing the publishers, he evoked new copyright laws proposed by the EU last year.For two years Brussels has been looking at whether Amazon uses its marketplace data to compete unfairly with the sellers on its website; that’s now a hot topic on Capitol Hill too. The market power of Apple’s App Store and of virtual assistants such as Siri and Alexa, both of which are the subject of new EU investigations, were also on Congress’s agenda.QuicktakeHow the ‘Brussels Effect’ Helps the EU Rule the WorldWhen people ask Margrethe Vestager and other European trustbusters what power they really have to moderate the behavior of trillion dollar U.S. companies, this is often their answer: When Brussels uncovers bad corporate behavior, it lays out a road map for Washington D.C. to follow.Tackling companies with combined annual revenue of $782 billion, more than the gross domestic product of Switzerland, is a huge challenge, meaning competition authorities benefit from the work that’s already been done elsewhere. Even the British Competition and Markets Authority’s study of the digital-advertising market got a shout out from Rep. Pramila Jayapal, who cited the agency’s findings on Google’s dominant market share.The European Commission does have the legal authority to try to break companies up, but no one thinks it would ever try this on a U.S. company. The political blowback would be too severe. The Americans could themselves seek breakups, and would have the power to do so, but their antitrust regime has different priorities. While the problems — and the levels of exasperation at the cavalier behavior of the companies — might be the same, the types of punishment that lawmakers have in mind are different, according to Nicolas Petit, the joint chair in competition law at the European University Institute.That’s because American antitrust law focuses on the interests of the consumer — primarily around pricing — while Europe considers the broader market dynamics and effect on competition. While Vestager probably wants to foster the creation of a company that could counterbalance Google and Facebook’s might in search and social media, her U.S. peers only worry if the impact of their dominance is detrimental to consumers.That narrower American focus limits the likelihood of far-reaching action, says Tommaso Valletti, the head of Imperial College London’s Department of Economics and Public Policy, and a former chief competition economist at the European Commission. “The U.S. has, de facto, abdicated any enforcement for 20 years in this area,” he told me.In her submission to the House of Representatives’ antitrust subcommittee, Vestager called for “common” policy responses, according to a document obtained by the website Euractiv. It’s an admirable goal and should be the logical conclusion of investigations tackling many of the same topics. It’s also a pipe dream.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

U.S. to investigate Kodak's government loan deal, Trump says

Wed, 08/05/2020 - 01:13

The company's shares closed down 3.61% at $14.40 after the Wall Street Journal reported earlier that the U.S. Securities and Exchange Commission would investigate the deal. Trump told reporters the concept of the arrangement was good because it would help Kodak branch out into a new business area, but he was not personally involved in the deal. The SEC investigation is at an early stage and may not produce allegations of wrongdoing by Kodak or any individuals, the WSJ said, citing people familiar with the matter.

Exxon to suspend company match to employee retirement plans in Oct - sources

Wed, 08/05/2020 - 01:00

Exxon Mobil Corp told employees it would begin suspending the employer match to retirement savings plans beginning in early October, said sources who received a message from the company on Tuesday. "The company intends to suspend the company match contribution to the U.S. Exxon Mobil Savings Plan for all employees covered by the Savings Plan, effective around Oct. 1, 2020."

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