This post was published at Daily Caller
(2) The last four years has been a blast, both financially and politically. While I know many of you didn’t always agree with my snarky takes on Trump, Elon, etc., I hope I at least made you consider a different, if not ancient, point-of-view.
— Diogenes (@WallStCynic) December 29, 2017
Financial twitter is set to lose some of its more prominent “anonymous” voices in just a few days. The reason: in a decision that has passed largely under the radar, beginning in 2018, the SEC will require registered investment advisors – i.e. carbon-based asset managers, hedge funders and so on, to disclose any anonymous social media accounts, on their Form ADV.
This goes back to a recently filed amendment to Form ADV, i.e., the “Umbrella Registration” for asset managers, specifically Item 1. I. as described below by K&L Gates:
Recognizing the increasing use of social media by advisers, the SEC has also amended Item 1. I. to request information regarding the registrant’s accounts on publicly available social media platforms, such as Twitter, Facebook, and LinkedIn. Previously, Item 1. I. only asked for information about an adviser’s websites. Now, the registrant must provide, in addition to its website addresses, the addresses of each of its social media pages in Section 1. I. of Schedule D. However, a registrant should not provide the addresses of websites or accounts on publicly available social media platforms where the registrant does not the control the content, nor should it provide the website and social media addresses of its employees’ accounts, regardless of whether the registrant controls the content of such accounts.
This post was published at Zero Hedge on Fri, 12/29/2017 –.
Talk amongst many traders is that they are so unsure how the new rules and regulations surrounding the implementation of MIFiD II (Markets in Financial Instruments Directive) are to be imposed, that some even said they were keen to extend their holidays until this mess is sorted out. In other words, until they hear that regulators will grant firms a six-month delay for part of the changes about to be implemented for both the company and country, many just do not even know how to conduct business anymore.
The most critical problem surrounding this nightmare is the fact that every trade (with a European Counterpart) will require a LEI (Legal Entity Identifier). This is not such a critical issue for Wall Street Banks since they have already won a 30-month grace period after the SEC requested time to negotiate terms with the EU. Goldman Sachs has installed another of its board members as the top negotiator inside the SEC – Alan Cohen. Goldman Sachs has now three strategic people in the Trump Administration to steer the legislation in their favor both in the USA with restoring Glass Steagall to reduce their competition (Gary Cohen & Steven Mnuchin) and they have now added Alan Cohen, who was their Head of Global Compliance.
This post was published at Armstrong Economics on Dec 29, 2017.
This can happen only during the very late stage of a bubble. It just doesn’t let up. UBI Blockchain Internet, a Hong Kong outfit whose shares trade in the US [UBIA], filed with the SEC to sell an additional 72.3 million shares owned by its executives. In other words, it isn’t selling the shares to raise money for corporate purposes, but to allow its executives, including CEO Tony Liu, to bail out.
This is happening after the company – which sports zero revenues and a disconnected phone number in its SEC filings – managed to get its shares to spike briefly by over 1,100%, pushing its market capitalization to $8 billion.
UBI Blockchain didn’t do an IPO. Instead, in October 2016, it acquired a publicly traded shell company registered in Las Vegas, called ‘JA Energy.’ It then changed the name and ticker symbol to what they’re now.
Over the six trading days starting on December 11, 2017, its shares soared over 1,100%, from $7.20 to $87 on December 18, as the word ‘blockchain’ in its name and sufficient hype and speculator-idiocy took hold. By December 21, shares had plunged 67% to $29. They closed on Wednesday at $38.50. At this price, it still has a ludicrous market cap of $3.64 billion.
This post was published at Wolf Street on Dec 28, 2017.
‘Tis the season to determine who’s been naughty or nice. I’ll give you the facts, then you decide.
This holiday story is about an SEC investigation that ended in May 2017. It was wrapped in plain, brown paper and just found under our tree, opened by Probes Reporter (‘Independent Investment Research Focused on Public Company Interaction with the SEC’) and Dealbreaker.
The three major players in this holiday tale are Tesla Inc. (Nasdaq: TSLA), Goldman Sachs Group Inc. (NYSE: GS), and the SEC itself.
What makes this a holiday story is that it’s about gifting. Who gifted what to whom, how much, and, most importantly, why.
You decide who’s naughty: Goldman Sachs, Tesla, the SEC, or all of the above?
Here are the unwrapped details…
What Tesla Knew vs. What Tesla Did
The story starts back on May 7, 2016. That’s when a Tesla Model S electric car in partial, self-driving autopilot mode plowed into the side of a truck on a divided highway in Florida, killing the driver of the Tesla.
Tesla brass found out about the crash that day but didn’t alert regulators until May 16, nine days later.
This post was published at Wall Street Examiner on December 22, 2017.
For the past couple of months, we’ve frequently shared our views that Europe’s MiFID II regulations, which force investment banks to charge for equity research instead of “giving it away” in return for trading commissions, could be a wake up call for 1,000’s of highly paid research analysts who were about to have their true ‘value add’ subjected to a market bidding test. Here are just a couple of examples:
Deutsche Bank Forced To Slash Fixed-Income Research Price By Half On Lackluster Demand New European Regulations Set To Crush Equity Research Budgets By $300 Million Macquarie Identifies The Winners And Losers Of MiFID II Sticker Shock: Small Hedge Funds Seen Ditching I-Banking Research Under MiFID Now, per a note from Reuters, it seems that a growing number of equity research analysts are finally waking up to the fact that hedge funds don’t really have a burning desire to drop $400,000 per year on reports drafted by a 23-year-old recent college grad that do little more than summarize free SEC filings. Who could have known?
This post was published at Zero Hedge on Nov 17, 2017.
‘It is not possible to estimate the amount of loss or range of possible loss.’
Equifax reported that revenue ticked up 4% year-over-year in the third quarter to a less-than expected $835 million and that net income plunged 27% to $96 million due to the initial costs related to the most damaging consumer data hack in US history. But it also disclosed in the fine print of its SEC filing just what a legal and financial nightmare it is getting into over what it calls the ‘cybersecurity incident.’
The ‘cybersecurity incident’ occurred in mid-May, was discovered in July, and was first disclosed on September 7. Its dimensions have since expanded. It compromised the personal-data crown jewels, including Social Security numbers, of 145.5 million US consumers, credit card numbers of 209,000 US and Canadian consumers, ‘certain dispute documents with personal identifying information’ for 182,000 US consumers, personal information of 8,000 Canadian consumers, and personal information of at least 690,000 UK consumers.
The initial expenses related to the ‘cybersecurity incident’ were an undramatic $27.3 million. But that’s just the timid beginning.
Then the costs related to the ‘free credit file monitoring and identity theft protection’ will likely range between $56 million and $110 million. And that too is just the beginning.
This post was published at Wolf Street on Nov 10, 2017.
‘It is not possible to estimate the amount of loss or range of possible loss.’ Equifax reported that revenue ticked up 4% year-over-year in the third quarter to a less-than expected $835 million and net income plunged 27% to $96 million due to the initial costs related to the most damaging consumer data hack in US history. But it also disclosed in the fine print of its SEC filing just what a legal nightmare it is getting into over what it calls the ‘cybersecurity incident.’
The ‘cybersecurity incident’ occurred in mid-May, was discovered in July, and was first disclosed on September 7. Its dimensions have since expanded. It compromised the personal-data crown jewels of 145.5 million US consumers, credit card numbers of 209,000 US and Canadian consumers, ‘certain dispute documents with personal identifying information’ for 182,000 US consumers, personal information of 8,000 Canadian consumers, and personal information of at least 690,000 UK consumers.
The initial expenses related to the ‘cybersecurity incident’ were an undramatic $27.3 million. But that’s just the timid beginning.
This post was published at Wolf Street on Nov 10, 2017.
They don’t need to know, Snap says. Tencent rues the day it bought a 12% stake.
Tuesday evening, Snap Inc., parent of Snapchat, reported a very ugly quarter, and its shares tanked in late trading. This morning, perhaps to stem the slide, it disclosed in a separate SEC filing that Chinese internet giant Tencent Holdings had acquired 145.78 million shares of SNAP, the crappy non-voting Class A common stock. This briefly boosted shares in early trading, until people started reading the fine print: The purchases were made in the past, and Snap didn’t notify its Class A shareholders because they were voteless and didn’t need to be notified.
Shares are currently down 16%. Tencent joins those who’re ruing the day they bought these misbegotten shares.
In its filings, Snap regularly lists Tencent as one of its competitors, along with Facebook, Apple, Google, Twitter, and others. Tencent is also a pre-IPO investor in Snap, dating to a 2013 fundraising round.
Today’s disclosure said: ‘In November 2017, Tencent Holdings Limited notified us that it, together with its affiliates, acquired 145,778,246 shares of our non-voting Class A common stock via open market purchases.’
This post was published at Wolf Street on Nov 8, 2017.
Is the world’s richest man starting to get a little concerned that his $90 billion fortune in Amazon stock might just be fully valued? Well, judging by his SEC disclosures from last Friday, Bezos provided investors with roughly 1.1 billion reasons why the answer to that question may be a resounding ‘yes’.
As Bloomberg points out, Bezos sold a total of 1 million Amazon shares over the course of three days last week netting roughly $1.1 billion in proceeds. The sale represented just 1.3% of Bezos’ total stake in Amazon and leaves him with 16.4% of the company’s shares outstanding.
Of course, the stock sales came after Amazon beat earnings estimates the week prior (see: Amazon Soars Above $1,000 After Smashing Expectations) and pushed the stock to new all-time highs. As an added benefit, the move also once again thrust Bezos ahead of Bill Gates on the Billionaire leader board.
This post was published at Zero Hedge on Nov 6, 2017.
It’s often said in financial markets that correlation does not mean causation. On some occasions, however, denying the causation seems so outlandish to be, frankly, preposterous. As a case in point, Institutional Investor (II) discovered a newly published academic work investigating the investment returns of SEC employees. It turns out those guys are surprisingly good.
According to II, employees at the Securities and Exchange Commission may benefit from divesting companies ahead of investigations, research shows.
Employees at the U. S. Securities and Exchange Commission earn investment returns similar to the insider traders they prosecute, according to new research from Columbia University and Arizona State University.
Why aren’t we surprised. No matter, II continues…
This post was published at Zero Hedge on Nov 2, 2017.
It risks running out of money just before the holiday selling season. It took less than a month. Sears Holdings disclosed on Monday in an 8-K filingwith the SEC that it drew down the remaining portion, $60 million, of its $200 million credit facility that it had obtained on October 4.
Sears has been bleeding cash. In the last quarter, it lost $251 million. In fiscal 2016, it lost $2.2 billion. In fiscal 2015, it lost $1.3 billion. Over the past six years, it lost $11 billion. Its sales have recently been plunging at a rate of nearly 25% year-over-year. It’s on track to close nearly 300 stores this year, on top of the hundreds of stores it already closed in prior years. Suppliers are very nervous. And key relationships, such as the one between Sears and Whirlpool, have fractured.
Now the holiday selling season is coming up, and this requires loads of cash well in advance, especially with trade credit getting tighter because suppliers don’t want to be hung out to dry. Advertising and promotions are costly. If the money runs out before the absolutely crucial holiday selling season, it’s over for shareholders, and creditors will take control.
So Sears Holdings obtained a $200 million credit facility on October 4 through the expansion of an existing credit facility, and drew $100 million right away. On October 18, Sears drew an additional $40 million. On October 25, Sears drew the remaining $60 million, according to the filing.
This post was published at Wolf Street by Wolf Richter ‘ Oct 31, 2017.
Layoffs and cost cuts have commenced.
Let’s get this straight: Layoffs are not a sign of growth for a young money-losing company whose hoped-for explosive growth somehow had justified a ‘unicorn’ valuation not long ago. But that’s what’s happening at Blue Apron, three-and-a half months after its IPO.
In an SEC filing, the meal-kit provider disclosed that it had ‘implemented a company-wide realignment of personnel to support its strategic priorities’ – namely laying off ‘approximately 6%’ of its workforce across ‘corporate offices and fulfillment centers.’
With 5,393 employees as of June 30, per its first earnings report as a public company on August 10, 6% of the workforce would amount to about 320 people.
At the time, the company also reported that sales rose 18% to $238 million in the quarter. At that rate it would reach about $1 billion in annual sales. But to accomplish this, the bottom line swung from a gain of $5.5 million in the year-earlier quarter to a loss of $31.6 million.
But the company had only $61.6 million in cash and cash equivalent on hand as of June 30 – which is not a lot, considering that in the first half it burned through $70.7 million in cash just from operations, and it burned another $90 million to purchase equipment.
This post was published at Wolf Street on Oct 18, 2017.
There was likely a collective gasp at OppenheimerFunds Inc. yesterday when President Donald Trump made another of those market-moving pronouncements, telling Fox News that Puerto Rico’s debt would have to be wiped out. The President’s remarks suggested he thought the losers would be Wall Street banks. The President stated: ‘You know they owe a lot of money to your friends on Wall Street. We’re gonna have to wipe that out. That’s gonna have to be – you know, you can say goodbye to that. I don’t know if it’s Goldman Sachs but whoever it is, you can wave good-bye to that.’
The reality is that a large percentage of Puerto Rico’s debt is held in tax-free municipal bonds and municipal bond mutual funds, owned not by Wall Street banks or tycoons, but by mom and pop investors seeking tax-free income. (As a result of Congressional legislation, the interest on municipal bonds issued by the Commonwealth of Puerto Rico, its political subdivisions and public corporations, is not subject to Federal, state or local taxes. This has made the individual bonds and mutual funds particularly attractive in places like New York City and to residents of New York counties with high local taxes.)
According to a semi-annual report made last month at the Securities and Exchange Commission, Oppenheimer Rochester Fund Municipals, a popular tax-free fund held by many New York investors, was sitting on a boatload of Puerto Rico municipal bonds as of June 30, 2017. The SEC filing shows over 100 different Puerto Rico bonds, issued by the Commonwealth and numerous other Puerto Rico issuers like the Puerto Rico Electric Power Authority and the Puerto Rico Sales Tax Financing Corp. (The fund, of course, holds a widely diversified portfolio of other bonds as well.)
This post was published at Wall Street On Parade on October 4, 2017.
In recent days, foreign policy pundits have been scratching their heads over the apparent lack of directly lines of communication between the White House and the State Department, which led Trump to chide Sec State Rex Tillerson over the weekend, tweeting that there is no need to negotiate with North Korea, as Trump would “handle this” even as it emerged for the first time that the US had engaged in direct contact with Pyongyang. This was merely the latest example of the White House seemingly taking a position opposite to that pushed by Tillerson, prompting many to ask if there is a fallout between the former Exxon CEO and Donald Trump.
Today, NBC gives one possible explanation for the bizarre relationship between the two men, with a report that Rex Tillerson was on the verge of resigning this past summer amid mounting policy disputes and clashes with the White House. The tensions reportedly came to a head around the time President Donald Trump delivered a politicized speech in late July to the Boy Scouts of America, an organization Tillerson once led, NBC reported citing officials familiar.
This post was published at Zero Hedge on Oct 4, 2017.
Donald Trump’s pick for Chairman of the Securities and Exchange Commission, Jay Clayton, had good reason to be nervous yesterday morning as he prepared to testify before the U. S. Senate Banking Committee. The ranking member of that Committee, Senator Sherrod Brown, had previously made his feelings known about Clayton’s fitness to serve as Wall Street’s top cop prior to Clayton’s Senate confirmation. Brown had stated:
‘It’s hard to see how an attorney who’s spent his career helping Wall Street beat the rap will keep President-elect Trump’s promise to stop big banks and hedge funds from ‘getting away with murder.’ I look forward to hearing how Mr. Clayton will protect retirees and savers from being exploited, demand real accountability from the financial institutions the SEC oversees, and work to prevent another financial crisis.’
Wall Street On Parade did further investigation of Clayton around the time of his pending Senate confirmation and found that over the prior three years, Clayton had represented 8 of the 10 largest Wall Street banks as a law partner at Sullivan & Cromwell, where he had been employed for two decades.
Another problem for Clayton on the Senate Banking Committee is Senator Elizabeth Warren, who is known for coming to hearings armed with a deep trove of facts and statistics on Wall Street’s big, bad banks. Clayton seemed totally unprepared for Warren’s line of questioning yesterday, giving answers that raised further questions as to whose interests he was really representing.
This post was published at Wall Street On Parade on September 27, 2017.