Press release Malmö, Sweden September 9, 2020 Acarix announces preliminary outcome in oversubscribed rights issue INSIDE INFORMATION: The preliminary… Liberty Street Advisors, Inc. ("LSA") today announced it has entered into a transition support services agreement with SP Investments Management, LLC ("SPIM") to facilitate LSA becoming the investment advisor to the SharesPost 100 Fund (the "Fund")(Tickers: PIIVX, PRIVX, Partnership with Cove Hill and Vista Equity Partners positions company for continued rapid growth While falling 32% in a week is rough, Tesla is still up 22% since its stock split reveal, and many times more since this time last year. A report commissioned by President Trump’s Commodity Futures Trading Commission issued dire warnings about climate change’s impact on financial markets.
Malmö, Sweden September 9, 2020
Acarix announces preliminary outcome in oversubscribed rights issue
INSIDE INFORMATION: The preliminary result of the rights issue in Acarix AB (”Acarix” or the “Company”), in which the subscription period ended on 8 September 2020, indicates that a total of 105,414,911 shares have been subscribed or registered for subscription in the rights issue, which corresponds to approximately 122 percent of the rights issue. Thus, the preliminary results show that the rights issue has been oversubscribed.
The preliminary result of the rights issue in Acarix, in which the subscription period took place from and including 21 August 2020 up to and including 8 September 2020, indicates that 66,052,303 shares have been subscribed for with subscription rights, which corresponds to approximately 76.7 percent of the rights issue. In addition, the Company has received applications to subscribe for 39,362,608 shares without subscription rights, corresponding to approximately 45.7 percent of the rights issue. Accordingly, in total 105,414,911 shares have been subscribed or registered for subscription in the rights issue, which corresponds to approximately 122 percent of the rights issue.
Notice of allotment
Those who have subscribed for shares without use of subscription rights will be allotted shares in accordance with the principles for allotment set out in the prospectus which has been prepared for purposes of the Rights Issue. Notice of potential allotment of shares subscribed for without use of subscription rights will be provided through the distribution of a settlement note. Payment shall be made no later than three (3) banking days following issuance of the settlement note. Those who have not been allotted shares will not receive any notification hereof. If payment is not made at the right time, the shares may be transferred to another party. Those who subscribe for shares without preferential rights through its nominee will receive notice of allotment in accordance with the nominee’s procedures.
Number of shares, votes, share capital and dilution
Through the Rights Issue, Acarix share capital will increase by SEK 861,567.38 to SEK 1,378,507.81. The total number of shares and votes will increase by 86,156,738, from 51,694,043 to 137,850,781 shares and votes. For existing shareholders who did not subscribe for their pro rata share of the Rights Issue, a dilution of approximately 62.5 percent of the total number of shares and votes in the Company following the rights issue will arise. On or around seven days following the registration of the rights issue with the Swedish Companies Registration office, paid subscribed shares (BTA) will be converted into new shares without any specific notice from Euroclear Sweden. The new shares will be admitted to trading in connection with the BTAs conversion to shares, which is expected to take place around week 41, 2020.
Redeye AB is acting as financial adviser and Baker McKenzie is acting as legal adviser to Acarix in connection with the rights issue. Hagberg & Aneborn Fondkommission AB is acting as issuing agent.
This information is information that Acarix AB is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information in this press release has been published through the agency of the contact persons below at the time and date indicated by GlobeNewswire, the news distributor of Acarix AB, in conjunction with the publication of this press release. The persons below can also be contacted for further information.
Per Persson, VD Acarix AB,
+46 (0)73 600 59 90,
Christian Lindholm, CFO Acarix,
+46 (0)70 511 83 33,
Acarix was established in 2009 and is listed on Nasdaq First North Premier Growth Market (ticker: ACARIX). Acarix’s CADScor®System uses an advanced sensor placed on the skin above the heart to listen to the sounds of cardiac contraction movement and turbulent flow. It has been designed to be an all-in-one system in the sense that the heart signal will be recorded, processed, and displayed as a patient specific score, the CAD-score, on the device screen. Readout is obtained in less than 10 minutes. Safe and suitable for use in both out- and inpatient settings, the CADScor®System thus has the potential to play a major role in patient triage, avoiding the need for many patients to undergo stressful invasive diagnostic procedures. Wildeco Ekonomisk Information AB (+46 8 545 271 00, email@example.com) is Certified Adviser to Acarix. For more information please visit www.acarix.com.
The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in Acarix in any jurisdiction, neither from Acarix nor from someone else.
This press release is not a prospectus for the purposes the (EU) 2017/1129 Prospectus Regulation and has not been approved by any regulatory authority in any jurisdiction. A prospectus, corresponding to an EU Growth prospectus including published supplements, has been prepared by the Company and published on the Company’s web page.
This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Company. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. Redeye is acting for Acarix in connection with the Rights Issue and no one else and will not be responsible to anyone other than Acarix for providing the protections afforded to its clients nor for giving advice in relation to the Rights Issue or any other matter referred to herein.
This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into Australia, Hong Kong, Japan, Canada, New Zeeland, Singapore, South Africa, the United States or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.
In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, “qualified investors” who are (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.
This press release contains forward-looking statements that reflect the Company’s intentions, beliefs, or current expectations about and targets for the Company’s and the group’s future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company and the group operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “intend”, “may”, “plan”, “estimate”, “will”, “should”, “could”, “aim” or “might”, or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless it is not required by law or Nasdaq First North Growth Market rule book for issuers.
Information to distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in Acarix have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment”). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the shares in Acarix may decline and investors could lose all or part of their investment; the shares in Acarix offer no guaranteed income and no capital protection; and an investment in the shares in Acarix is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Rights Issue.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in Acarix.
Each distributor is responsible for undertaking its own target market assessment in respect of the shares in Acarix and determining appropriate distribution channels.
Author: Acarix AB
Liberty Street Advisors and SP Investments Management Agree to Support the Transition of Liberty Street Advisors as the Investment Advisor to the SharesPost 100 Fund
NEW YORK, Sept. 8, 2020 /PRNewswire/ — Liberty Street Advisors, Inc. (“LSA”) today announced it has entered into a transition support services agreement with SP Investments Management, LLC (“SPIM”) to facilitate LSA becoming the investment advisor to the SharesPost 100 Fund (the “Fund”)(Tickers: PIIVX, PRIVX, PRLVX). The Fund is a non-diversified, closed end interval fund investing in private, late-stage, venture-backed, growth companies. The transaction, which is subject to customary closing conditions, including the approval of the Fund’s Board of Trustees (“Board”) and shareholders, is expected to close in the fourth quarter of this year.
“This Fund has been at the forefront of democratizing access to this increasingly important asset class. Because of its novel structure, the Fund offers streamlined access to the venture-backed asset class at very low minimums and without investor accreditation requirements,” said Liberty Street’s president, Vic Fontana. “Inclusion of these types of private, high-growth, pre-IPO investments in a portfolio allocation can be an important diversifier and an uncorrelated source of capital appreciation.”
“The entire SharesPost team is enormously excited that Liberty Street will be continuing with and expanding upon the original mission for the SharesPost 100 Fund,” said Greg Brogger, founder of the Fund and the SharesPost platform. “They have the expertise and the infrastructure to grow the Fund’s ability to provide liquidity to private growth companies and provide access to the venture ecosystem for many, many investors.”
The Fund was created in 2012 in response to demand from customers of SPIM’s parent company, SharesPost Inc., who, in 2009, established one of the first secondary markets for private tech company shares. Since then, the Fund’s shareholder base has expanded greatly and experienced significant asset growth in the last few years. As of August 31, 2020, the Fund’s assets under management were over $200 million.
“We are thrilled with the prospect of adding this unique and groundbreaking fund to our product offering,” said Tim Reick, Liberty Street’s CEO. “High-growth companies have been staying private longer with a significant portion of their appreciation typically occurring before their entry into the public markets. The Fund provides a unique opportunity for financial advisors and their clients to participate in this growth.”
The Fund will be marketed by LSA’s affiliated broker dealer, HRC Fund Associates, LLC (“HRC”). HRC, based in New York City, is the exclusive marketer for all of the LSA funds. Over its 13-year life, HRC has developed and maintains significant longstanding relationships with numerous financial advisors at major wire-house, registered investment advisor and independent broker dealer distribution channels. HRC’s successful asset raising capabilities, combined with those of the existing SPIM sales team, are expected to help grow the Fund’s asset base and lead to expanded high-profile investment opportunities.
“I joined SharesPost to help the investment team continue to innovate and disrupt how specialized private market strategies, like the SharesPost 100 Fund, could be offered to a broader investor universe,” added SPIM’s Chief Investment Officer and veteran secondaries manager, Christian Munafo. “LSA’s experience and added resources will strengthen our ability to work even closer with the venture capital and growth-oriented ecosystem and allow us to further develop our investment capabilities.”
Upon the closing of the transaction, the present SPIM investment team – including Mr. Munafo – will join LSA and remain intact. The team will continue to reside in NYC and the San Francisco Bay area, maintaining close proximity to its deep relationships throughout Silicon Valley and the entire venture capital ecosystem. Similarly, the Fund’s governance structure, board of trustees and service providers will also remain unchanged resulting in a seamless transition for the Fund’s shareholders.
Kevin Moss, SPIM’s president, noted “Everyone is appreciative and grateful for the support provided over the years by SharesPost Inc. and its founder, Greg Brogger. We are very proud of what the Fund and our employees have accomplished. The entrepreneurial team at Liberty Street is a great cultural fit for our employees. The transition to LSA as the Fund’s new investment advisor is the right and logical next step for the Fund’s development and growth.”
About Liberty Street Advisors
Liberty Street Advisors, Inc. (“LSA”) is an SEC registered investment advisor managing mutual funds sub-advised by unaffiliated asset managers. The firm is located in New York City and launched its first fund in 2007. Liberty Street provides access to valuable and timely investment strategies designed to help investors and financial advisors meet the challenges of today’s market environment. In 2010, LSA, serving as its investment advisor, created the Center Coast MLP Focus Fund (“CCCNX”), one of the first open-ended mutual funds to specialize in midstream master limited partnerships. Marketed by LSA’s affiliate, HRC Fund Associates, CCCNX, at its high point, amassed over $3 billion in assets under management (“AUM”). In 2018, Brookfield Asset Management’s Public Securities Group acquired CCCNX’s sub-advisor and became CCCNX’s new investment advisor. At present, LSA manages 4 mutual funds with AUM, as of August 31, 2020, of over $1 billion.
Before investing you should carefully consider the Center Coast Brookfield Midstream Focus Fund’s (CCCNX) investment objectives, risks, fees, charges and expenses. This and other information is in the prospectus and summary prospectus, a copy of which may be obtained by calling (855) 244-4859 or by visiting the fund’s website at https://publicsecurities.brookfield.com. Please read the prospectus or summary prospectus carefully before investing. The Center Coast Brookfield Midstream Focus Fund is distributed by QUASAR DISTRIBUTORS, LLC.
About HRC Fund Associates
HRC Fund Associates, LLC (“HRC”) is an SEC and FINRA registered broker dealer. The company was founded in 2007 and is headquartered in New York City. HRC acts as the exclusive marketer for all of the Liberty Street funds and as third-party marketer for a select group of investment managers. The firm maintains relationships with financial advisors and wealth managers at over 120 intermediary platforms, including major wire-houses, registered investment advisors and independent broker-dealers. HRC’s gross investment fund sales over the 5-year period ending August 31,2020 were approximately $6 billion.
About SP Investments Management
SP Investments Management, LLC (“SPIM”) is the Advisor to the SharesPost 100 Fund, and is an SEC registered investment advisor. SPIM is a wholly owned subsidiary of SharesPost, Inc., and an affiliate of SharesPost Financial Corporation. The firm’s focus is on identifying investment opportunities involving late-stage, venture-backed private companies that have the potential for strong growth and technological innovation. SPIM has strong relationships with the entrepreneurs who, in many situations, are the founders and the key operators of these companies, along with all types of investors who focus on the private market ecosystem. The SPIM investment team conducts in-depth analyses of many factors, including business models, market potential, key financial and operating metrics, and management, as part of its rigorous investment and valuation process. SPIM has six employees, with offices in San Francisco and New York.
SharesPost 100 Fund:
This press release is not intended to, and does not, constitute an offer to purchase or sell shares of the Fund. Shares of the Fund are sold only through their respective share class prospectus. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. This information is included in the Fund’s prospectus, which you may obtain at no cost from your financial advisor or the Fund’s website, www.sharespost100fund.com. Please read the prospectus carefully before investing.
Investments in the Fund involve substantial risk. The Fund is not suitable for investors who cannot bear the risk of loss of all or part of their investment. The Fund is appropriate only for investors that do not require a liquid investment. An investor should expect to sell shares only pursuant to the Fund’s repurchase policy. The Fund does not expect to a secondary market for its shares to develop. The Fund intends to primarily invest in securities of private, late-stage, venture backed growth companies. There are significant potential risks to investing in securities of private, late-stage, venture-backed growth companies. Because most of the securities in which the Fund invests are not publicly traded, the Fund’s investments will be valued by the Investment Adviser pursuant to fair valuation procedures and methodologies adopted by the Board of Trustees, based on the parameters set forth by the Prospectus. As a consequence, the value of the securities, and therefore the Fund’s NAV, may vary. The Fund focuses its investments in a limited number of securities, which could subject it to greater risk than that of a larger, more varied portfolio. There is a greater focus in technology securities that could adversely affect the Fund’s performance. If the Fund does not have at least 500 shareholders for an entire taxable year, you could receive adverse tax treatment. The Fund’s quarterly repurchase policy may require the Fund to liquidate portfolio holdings earlier than the Investment Adviser would otherwise do so, and may also result in an increase in the Fund’s expense ratio. This is not a complete enumeration of the Fund’s risks. Please read the Fund prospectus for other risk factors related to the Fund, its investment strategy and your investment in the Fund, and other additional details. Certain potential conflicts of interest involving the Fund’s Investment Adviser and its affiliates could impact the Fund’s investment returns and limit the flexibility of the implementation of its investment policies. Prospective investors should review the conflicts of interest described in the section entitled “Conflicts of Interest” in the Prospectus prior to making an investment in the Fund. The SharesPost 100 Fund is distributed by FORESIDE FUND SERVICES, LLC.
Matters Relating to the SharesPost 100 Fund
The new investment management agreement with LSA is subject to the approval of the Fund’s Board of Trustees and shareholders. Because the current day-to-day portfolio managers are expected to join LSA, the transaction is not expected to result in any change in the portfolio management of the Fund or in its investment objective or policies. The structure and governance of the Fund, together with the members of the Fund’s Board of Trustees and its service providers, will also remain the same following the transaction.
This release contains forward-looking statements that subject to risks, uncertainties and other factors that may cause actual results to differ materially. Statements in this press release that are not historical facts are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. When used in this press release, words or phrases generally written in the future tense and/or preceded by words such as “will,” “may,” “could,” “expect,” “believe,” “anticipate,” “intend,” “plan,” “seek,” “estimate,” “preliminary” or other similar words are forward-looking statements. Various forward-looking statements in this press release relate to the transition of the Fund’s advisory relationship from SPIM to LSA, including regarding expected scale opportunities, operating efficiencies, integration of personnel, growth opportunities, shareholder and other benefits, and returns.
Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors that could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. Important risk factors that may cause such differences include: (i) the anticipated benefits and synergies of the transaction may not be realized; and (ii) LSA may be unable to successfully integrate SPIM’s business with those of LSA or to integrate the businesses within the anticipated timeframe. Any forward-looking statement made in this press release speaks only as of the date on which it is made. Factors or events that could cause actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not undertake any obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
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SOURCE Liberty Street Advisors, Inc.
SecureLink Announces Strategic Investment from Cove Hill Partners
AUSTIN, Texas, Sept. 08, 2020 (GLOBE NEWSWIRE) — SecureLink, the leader in vendor privileged access management (VPAM), today announced that it will receive a strategic investment from Cove Hill Partners (“Cove Hill”) to propel the company into its next phase of growth. Upon closing, Cove Hill will become SecureLink’s majority owners, with Vista Equity Partners (“Vista”) maintaining a minority stake in the company.
“In today’s digital economy, data and network security is a primary concern for every organization across all sectors. Our VPAM solutions are an essential part of our customers’ security infrastructure, and we have tremendous opportunity to further expand our presence in the market,” said Joe Devine, CEO of SecureLink. “We are thrilled to welcome Cove Hill and to continue working with the Vista team as we look to accelerate our growth and further advance product innovation. This investment is a recognition of our entire team’s fierce dedication to providing valuable solutions and services that keep our customers’ networks secure.”
The investment from Cove Hill will position SecureLink to continue its rapid growth trajectory and leadership in the third-party remote access space. Since 2017, when SecureLink first partnered with Vista, the company has nearly tripled its revenue, earning it a place on the Inc. 5000 list of the U.S.’s fastest-growing privately-owned companies three years in a row. During that same period, SecureLink has maintained its strong culture, recently being recognized with a Glassdoor Employees’ Choice Award.
“Cove Hill is excited to partner with the SecureLink management team and Vista for the next phase of growth. SecureLink’s cutting edge VPAM solutions already enable thousands of companies to facilitate mission-critical work with vendor partners while safeguarding data and network security, the combination of which are critical in the modern digital economy,” said Justin Roberts, Co-Founder, and Partner at Cove Hill. “We believe our investment will allow SecureLink to deliver continued product innovation and world-class service to its customer base while fueling significant future growth.”
“We originally invested in SecureLink because we recognized the value of its products, believed in the mission of its founders and leadership team, and saw an opportunity to expand the company’s position in the market,” said Rene Yang Stewart, Co-Head of Vista’s Endeavor strategy, focused on scaling high- growth enterprise software companies. “We look forward to partnering with SecureLink and Cove Hill during this next phase of growth.”
Raymond James served as financial advisor and Kirkland & Ellis LLP served as legal advisor to SecureLink and Vista Equity Partners. Shea & Company and Choate, Hall & Stewart LLP acted as financial and legal advisors respectively to Cove Hill Partners.
SecureLink is the leader in managing vendor privileged access and remote support for both highly regulated enterprise organizations and technology vendors. SecureLink serves more than 30,000 organizations worldwide. World-class companies across multiple industries including healthcare, financial services, legal, gaming, and retail rely on SecureLink’s secure, purpose-built platform. SecureLink is headquartered in Austin, Texas.
About Cove Hill Partners
Cove Hill Partners is a long-term oriented private equity firm focused on partnering with outstanding management teams to build market-leading technology and consumer companies. The firm manages long-duration funds with over $2.5 billion of commitments from its investors and founders. The firm was founded in 2017 by seasoned private equity investors to invest their personal capital alongside a small group of like-minded investors. Based in Boston, Cove Hill has an innovative structure that provides the flexibility to enable a patient, concentrated, and value-add approach in a small portfolio of long-term investments. More information about Cove Hill Partners can be found at www.covehillpartners.com.
About Vista Equity Partners
Vista is a leading global investment firm with more than $58 billion in cumulative capital commitments. The firm exclusively invests in enterprise software, data and technology-enabled organizations across private equity, credit, public equity and permanent capital strategies, bringing an approach that prioritizes creating enduring market value for the benefit of its global ecosystem of investors, companies, customers and employees. Vista’s investments are anchored by a sizable long-term capital base, experience in structuring technology-oriented transactions and proven, flexible management techniques that drive sustainable growth. Vista believes the transformative power of technology is the key to an even better future – a healthier planet, a smarter economy, a diverse and inclusive community and a broader path to prosperity. Further information is available at www.vistaequitypartners.com. Follow Vista on LinkedIn @Vista Equity Partners.
Carol Carrubba, Highwire PR
Tesla dumped $5B worth of its stock in just 4 days — and traders hate it
A market sell-off triggered by Tesla’s dumping of $5 billion worth of stock continued on Tuesday, with the electric vehicle share price sinking by more than 15% in the early hours of trade.
Tesla stock opened the day at $356, and soon hit a low of $335.99 — down more than 32% since disclosing its “at-the-market” plan (a fancy term for fire sale) to the SEC on September 1.
At the end of August, Tesla stock had returned 974% in one year, from $46.36 to $498.32.
Of course, those figures take the company’s recent five-for-one stock split into account, a dog whistle to retail investors concerned with low per-share prices also utilized by Apple in late August.
Tesla finished its $5 billion stock dump on September 4, and while falling 32% in a week reeks of big crypto energy, Tesla stock is still up 22% since its stock split announcement.
Some analysts connected Tesla’s September strife to its S&P snub, after Elon Musk’s wunderstock was noticeably left out of the flagship index of 500 top US companies, despite its technical eligibility.
[Read: These tech stocks still have a price above $1K — will they split?]
Speculators could’ve bought Tesla stock hoping it would rise further upon its eventual inclusion. The idea being that Wall Street’s biggest funds would be effectively forced into holding $TSLA, a reality anchored in the appeal of large index funds among institutional investors.
Throw in that supposed “Tesla rival” Nikola just signed a deal worth billions to have old world marquee General Motors build its first car, and Tesla’s volatility appears a little sharper.
In any case, the real question here is how readily Tesla can shake off its market slump, as speculators try to figure out where to flock to next.
None of this is investment advice. Don’t pretend it is, because it’s not. Always do your own research.
Author: David Canellis
Federal Report Warns of Financial Havoc From Climate Change
A report commissioned by President Trump’s Commodity Futures Trading Commission issued dire warnings about climate change’s impact on financial markets.
WASHINGTON — A report commissioned by federal regulators overseeing the nation’s commodities markets has concluded that climate change threatens U.S. financial markets, as the costs of wildfires, storms, droughts and floods spread through insurance and mortgage markets, pension funds and other financial institutions.
“A world wracked by frequent and devastating shocks from climate change cannot sustain the fundamental conditions supporting our financial system,” concluded the report, “Managing Climate Risk in the Financial System,” which was requested last year by the Commodity Futures Trading Commission and set for release on Wednesday morning.
Those observations are not entirely new, but they carry new weight coming with the imprimatur of the regulator of complex financial instruments like futures, swaps and other derivatives that help fix the price of commodities like corn, oil and wheat. It is the first wide-ranging federal government study focused on the specific impacts of climate change on Wall Street.
Perhaps most notable is that it is being published at all. The Trump administration has suppressed, altered or watered down government science around climate change as it pushes an aggressive agenda of environmental deregulation that it hopes will spur economic growth.
The new report asserts that doing nothing to avert climate change will do the opposite.
“This is the first time a government entity has looked at the impacts of climate change on financial markets in the U.S.,” said Robert Litterman, the chairman of the panel that produced the report and a founding partner of Kepos Capital, an investment firm based in New York. “Rather than saying, ‘What’s the science?’ this is saying, ‘What’s the financial risk?’”
The commodities regulator, which is made up of three Republicans and two Democrats, all of whom were appointed by President Trump, voted unanimously last summer to create an advisory panel drawn from the world of finance and charged with producing a report on the effects of the warming world on financial markets. The initial proposal for the report came from Rostin Behnam, one of the panel’s two Democrats, but the report is written by dozens of analysts from investment firms including Morgan Stanley, S&P Global and Vanguard; the oil companies BP and ConocoPhillips; and the agricultural trader Cargill, as well as academic experts and environmental groups.
It includes recommendations for new corporate regulations and the reversal of at least one Trump administration policy.
“It was shocking when they asked me to do this,” Mr. Litterman said. “This is members of the entire community involved in financial markets saying with one voice, ‘This is a serious problem, and it has to be addressed.’”
A White House spokesman, Judd Deere, declined on Tuesday to comment on the report because the White House had not yet seen it.
Douglas Holtz-Eakin, president of the American Action Forum, a conservative research organization, who served as economic adviser to John McCain’s 2008 presidential campaign, said: “This was initiated by the Trump administration. It is the only document of its type.”
He added, “If you’re denying this exists, you don’t ask for a report on it.”
The Republican chairman of the C.F.T.C., Heath Tarbert, acknowledged the risk of climate change, but he noted that the report also detailed what the regulators called “transition risk” — the financial harm that could befall the fossil fuel industry if the government enacted aggressive policies to curb carbon dioxide pollution.
“I appreciate Commissioner Behnam’s leadership on convening various private sector perspectives on the important topic of climate risk,” Mr. Tarbert said in a statement. “The subcommittee’s report acknowledges that ‘transition risks’ of a green economy could be just as disruptive to our financial system as the possible physical manifestations of climate change, and that moving too fast, too soon could be just as disorderly as doing too little, too late. This underscores why it is so important for policymakers to get this right.”
The authors of the report acknowledged that if Mr. Trump is re-elected, his administration is all but certain to ignore the report and its recommendations.
Instead, they said they saw the document as a policy road map for a Joseph R. Biden Jr. administration.
Mr. Biden’s climate policy proposals are the most ambitious and expensive ever embraced by a presidential candidate, and most of them would meet resistance in Congress. But even without legislation, he could press forward with regulatory changes. Lael Brainard, a Federal Reserve governor who is seen as a top contender to be Treasury secretary in a Biden administration, has called for financial regulators to treat climate change as a significant risk to the financial system.
In calling for climate-driven policy changes, the report’s authors likened the financial risk of global warming to the threat posed by the coronavirus today and by mortgage-backed securities that precipitated the financial crash in 2008.
One crucial difference, they said, is that in the case of climate change, financial volatility and loss are likely to be spread out over time, as they hit different regions and markets. Insurance companies could withdraw from California in the wake of devastating wildfires, and home values could plummet on coastlines and in floodplains. In the Midwest, banks could limit loans during or after extended droughts that drastically lower crop yields. All of those problems will be exacerbated by climate change, but they are unlikely to hit all at once.
“Financial markets are really good at managing risk to help us provide credit, so that the economy can flourish,” said Leonardo Martinez-Diaz, an editor of the report who served as senior official at the Treasury Department during the Obama administration. But, he added, the system breaks down “when it’s no longer able to manage risk, when it’s invisible, it’s not captured by the price of stocks.”
“That’s what we saw in the financial crisis of 2008, and it’s as relevant now on climate change as it was then on mortgage-backed securities,” he said.
Among the first of those risks already pervading the markets, the report’s authors say, are falling home prices and rising mortgage default rates in regions where wildfires and flooding are worsening.
“Climate change is linked to devaluing home values,” said Jesse Keenan, an editor of the report and a professor of real estate at Tulane University in New Orleans.
“If in your town, your house is devalued, that makes it harder for your local government to raise money,” he said. “That’s one set of risks that could lead to a contagion and broader instability across financial markets.”
Extreme weather could cause swings in agricultural commodity prices, the report warns, and climate-spurred market volatility could afflict pension and retirement funds, which invest across a range of asset classes.
“Climate change is one of the top three risks to our fund,” said Divya Mankikar, an author of the report and an investment manager at the California Public Employees’ Retirement System, the country’s biggest public pension fund “We pay pension and health benefits to over two million current and former state employees. So the payout is decades out.”
The report makes several concrete recommendations for inoculating the financial system against potential harm.
It emphasizes the need to put a price on carbon emissions, which is often done either by taxing or through an emissions trading system that caps carbon emissions and allots credits that polluters can buy and sell under that cap.
The report calls for the reversal of a proposed rule being put forward by the Trump administration’s Labor Department that would forbid retirement investment managers from considering environmental consequences in their financial recommendations.
“If there’s any class of investors that should be thinking about the long run, it’s retirement funds and pension funds,” said Nathaniel Keohane, an author of the report and an economist at the Environmental Defense Fund, an advocacy group.
The report suggests that the Financial Stability Oversight Council, a Treasury Department-led body created in the wake of the 2008 crisis, incorporates climate risks into its annual report and its communications with Congress. It suggests that the Federal Reserve and other major financial regulators join international coalitions that focus on climate threats.
The report also suggests that bank regulators should roll out a climate risk stress testing pilot program. Such stress tests, which assess how bank balance sheets and the broader system would fare in bad climate-related economic scenarios, have been under development in Britain and elsewhere in Europe.
The authors also recommend that another financial regulator, the Securities and Exchange Commission, strengthen its existing requirements that publicly traded companies disclose the risks to their bottom lines associated with climate change.
Coca-Cola has noted in its financial disclosures that water shortages driven by climate change pose a risk to its production chains and profitability. But many other companies “just check the box” on that requirement, Mr. Keohane said.
Such disclosures should also include the risk to companies’ bottom lines posed by future policies designed to mitigate climate change, such as taxes or regulations on carbon dioxide pollution, which could hurt fossil fuel producers.
“If carbon risk is priced, this will add cost to the oil and gas industry,” said Betty Simkins, a report author and professor of finance at Oklahoma State University in Stillwater. “But they need to be prepared for this. It’s better for the companies to disclose the risk and be as financially fit as possible.”
Author: Jeanna Smialek