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  • Taiwan says its chip firms will adhere to new U.S. rules blacklisting China supercomputing entities

    Taiwan said on Wednesday its chip companies will adhere to U.S. rules after Washington added seven Chinese supercomputing entities last week to an economic blacklist and after a Taipei-based chipmaker halted orders from one of the entities named. The U.S. Commerce Department said the seven Chinese entities were "involved with building supercomputers used by China's military actors, its destabilizing military modernisation efforts, and/or weapons of mass destruction programs." Companies or others listed on the U.S. Entity List are required to apply for licenses from the Commerce Department that face tough scrutiny when they seek permission to receive items from U.S. suppliers.

  • Jack Ma’s Double-Whammy Marks the End of China Tech’s Golden Age

    (Bloomberg) -- The full implications of Beijing’s rapid-fire moves against Jack Ma’s internet empire in recent days won’t be apparent for weeks, but one lesson is already clear: The glory days for China’s technology giants are over.The country’s government imprinted its authority indelibly on the country’s technology industry in the span of a few days. In landmark announcements, it slapped a record $2.8 billion fine on Alibaba Group Holding Ltd. for abusing its market dominance, then ordered an overhaul of Ant Group Co. On Tuesday, regulators summoned 34 of the country’s largest companies from Tencent Holdings Ltd. to TikTok owner ByteDance Ltd., warning them “the red line of laws cannot be touched.”The unspoken message to Ma and his cohorts was the decade of unfettered expansion that created challengers to Facebook Inc. and Google was at an end. Gone are the days when giants like Alibaba, Ant or Tencent could steamroll incumbents in adjacent businesses with their superior financial might and data hoards.“Between the rules for Ant and the $2.8 billion fine for Alibaba, the golden days are over for China’s big tech firms,” said Mark Tanner, founder of Shanghai-based China Skinny. “Even those who haven’t been targeted to the same extreme will be toning down their expansion strategies and adapting many elements of their business to the new bridled environment.”Tech companies are likely to move far more cautiously on acquisitions, over-compensate on getting signoffs from Beijing, and levy lower fees on the domestic internet traffic they dominate. Ant in particular will have to find ways to un-tether China’s largest payments service from its fast-growth consumer lending business and shrink its signature Yu’ebao money market fund -- once the world’s largest.Even companies that have been less scrutinized so far -- like Tencent or Meituan and Pinduoduo Inc. -- are likely to see growth opportunities curtailed.The watershed moment was years in the making. In the early part of the last decade, visionary entrepreneurs like Ma and Tencent co-founder Pony Ma (no relation) created multi-billion dollar empires by up-ending businesses from retail to communications, elevating the lives of hundreds of millions and serving as role models for an increasingly affluent younger generation. But the enormous opportunities coupled with years of hyper-growth also fostered a winner-takes-all land-grab mentality that unnerved the Communist Party.Regulators grew concerned as the likes of Alibaba and Tencent aggressively safeguarded and extended their moats, using data to squeeze out rivals or forcing merchants and content publishers into exclusive arrangements. Their growing influence over every aspect of Chinese life became more apparent as they became the conduits through which many of the country’s 1.3 billion bought and paid for things -- handing over vast amounts of data on spending behavior. Chief among them were Alibaba and Tencent, who became the industry’s kingmakers by investing billions of dollars into hundreds of startups.All that came to a head in 2020 when Ma -- on the verge of ushering in Ant’s record $35 billion IPO -- publicly denigrated out-of-touch regulators and the “old men” of the powerful banking industry.The unprecedented series of regulatory actions since encapsulates how Beijing is now intent on reining in its internet and fintech giants, a broad campaign that’s wiped roughly $200 billion off Alibaba’s valuation since October. The e-commerce giant’s speedy capitulation after a four-month probe underscores its vulnerability to further regulatory action.Chinese titans from Tencent to Meituan are next up in the cross-hairs because they’re the dominant players in their respective fields. Regulators may focus on delivery giant Meituan’s historical practice of forced exclusivity -- particularly as it expands into burgeoning areas like community e-commerce -- while investigating Tencent’s dominant gaming service and whether its messaging platform WeChat excludes competitors, Credit Suisse analysts Kenneth Fong and Ashley Xu wrote Tuesday.“The days of reckless expansion and wild growth are gone forever, and from now on the development of these firms is likely going to be put under strict government control. That’s going to be the case in the foreseeable future,” said Shen Meng, a director at Beijing-based boutique investment bank Chanson & Co. “Companies will have to face the reality that they need to streamline their non-core businesses and reduce their influence across industries. The cases of Alibaba and Ant will prompt peers to take the initiative to restructure, using them as the reference.”The revamp of Ant -- a sprawling financial titan once worth as much as $320 billion -- is a case in point. In its ruling, the People’s Bank of China said it wanted to “prevent the disorderly expansion of capital” and ensure that all of Ant’s financial business will be regulated under a single holding company.What Bloomberg Intelligence SaysAnt Group’s prospects could wane further after China halts improper linking of Alipay payments with Ant’s other products. New curbs on Yu’ebao also hurts its wealth business. Alipay’s 711 million active users are its potential fintech-product buyers. Ant’s valuation could now be near banks we cover (average 5x forward earnings) compared with over 30x at its IPO attempt.- Francis Chan, analystClick here for the research.Ma’s company will likely have to apply and register to get into any new areas of finance in future -- a potential ordeal given the infamously creaky wheels of Beijing bureaucracy. It faces restrictions in every key business -- from payments and wealth management to credit lending.The company’s most lucrative credit lending arm will be capped based on registered capital. It must fold its Huabei and Jiebei loan units -- which had 1.7 trillion yuan ($260 billion) of outstanding loans between them as of June -- into a new national company that will likely raise more capital to support its operations. And Ant must reduce its Yu’ebao money market wing, which encompasses a self-operated Tianhong Yu’ebao fund that held $183 billion of assets as of the end of 2020, making it one of the largest pools of wealth in the world.Alibaba appears to have got off lightly in comparison. While the $2.8 billion was triple the previous record set by Qualcomm Inc.’s 2015 penalty, it amounts to under 5% of the company’s annual revenue. Far more insidious however is the threat of future action and the dampening effect it will have on Alibaba.The fine came with a plethora of “rectifications” that Alibaba will have to put in place -- such as curtailing the practice of forcing merchants to choose between Alibaba or a competing platform. Executives also volunteered to open up Alibaba’s marketplaces more, lower costs for merchants while spending “billions of yuan” to help its clients handle e-commerce.Ant will likewise have to tame its market share grab in payments. Changes to that business, which is fending off Tencent’s WeChat Pay, were among the top priorities regulators outlined. Ant pledged to return the business “to its origin” by focusing on micro-payments and convenience for users.The most amorphous yet dire threat lies in the simple principle implicit in regulators’ pronouncements over the past few days: that Beijing will brook no monopolies that threaten its hold on power.The central bank warned in draft rules released previously that any non-bank payment company with half of the market for online transactions -- or two entities with a combined two-thirds share -- could be subject to antitrust probes. If a monopoly is confirmed, the State Council or cabinet has powers to levy a plethora of penalties, including breaking up the entity.That’s an entrepreneur’s ultimate nightmare.“Everyone is on the regulators’ radar, and it really depends on each one’s reaction next,” Chanson & Co.’s Shen said. “It’s better to take the initiative to self-rectify, rather than having to go through restructuring ordered by the regulators, which may not have your best interests in mind.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Biden's chip dreams face reality check of supply chain complexity

    To understand President Joe Biden's challenge in taming a semiconductor shortage bedeviling automakers and other industries, consider a chip supplied by a U.S. firm for Hyundai Motor Co's new electric vehicle, the IONIQ 5. Production of the chip, a camera image sensor designed by On Semiconductor, begins at a factory in Italy, where raw silicon wafers are imprinted with complex circuitry. The wafers are then sent first to Taiwan for packaging and testing, then to Singapore for storage, then on to China for assembly into a camera unit, and finally to a Hyundai component supplier in Korea before reaching Hyundai's auto factories.

  • Biden's chip dreams face reality check of supply chain complexity

    To understand President Joe Biden's challenge in taming a semiconductor shortage bedeviling automakers and other industries, consider a chip supplied by a U.S. firm for Hyundai Motor Co's new electric vehicle, the IONIQ 5. Production of the chip, a camera image sensor designed by On Semiconductor, begins at a factory in Italy, where raw silicon wafers are imprinted with complex circuitry. The wafers are then sent first to Taiwan for packaging and testing, then to Singapore for storage, then on to China for assembly into a camera unit, and finally to a Hyundai component supplier in Korea before reaching Hyundai's auto factories.

  • TikTok Founder's $60 Billion Fortune Places Him Among The World's Richest People

    (Bloomberg) -- Just last year, the world’s most valuable startup, ByteDance Ltd., was being squeezed from all sides.The Trump administration wanted the Chinese firm, which owns the ubiquitous TikTok video-sharing platform, to get rid of assets. Beijing was cracking down on tech businesses, and India blacklisted some of its social-media apps.For all the obstacles, ByteDance kept growing. Now its founder, 38-year-old Zhang Yiming, is among the world’s richest people -- a distinction that lately has carried increased risks in China.Shares of the company trade in the private market at a valuation of more than $250 billion, people familiar with the dealings have said. At that level, Zhang, who owns about a quarter of ByteDance, could be worth more than $60 billion, placing him alongside Tencent Holdings Ltd.’s Pony Ma, bottled-water king Zhong Shanshan and members of the Walton and Koch families in the U.S., according to the Bloomberg Billionaires Index.ByteDance, famous for its short-video apps and news aggregator Toutiao, more than doubled revenue last year after expanding beyond its core advertising business into areas such as e-commerce and online gaming. It’s now weighing options for the initial public offering of some businesses.“Zhang is someone who’s known for thinking long-term and not easily dissuaded by short-term setbacks,” said Ma Rui, partner at venture-capital firm Synaptic Ventures. “He is set on building an enduring, global business.”Surging ValuationDuring its last fundraising round, ByteDance reached a $180 billion valuation, a person with knowledge of the matter said. That’s up from $20 billion about three years ago, according to CB Insights. But in the private market, some investors recently were asking for the equivalent of a $350 billion valuation to part with their shares, people familiar have said. The company’s value for private-equity investors is approaching $400 billion, the South China Morning Post reported. That would mean an even bigger fortune for Zhang.ByteDance representatives didn’t respond to requests for comment.It’s a tough time to be wealthy in China as the government seeks to rein in the country’s most powerful corporations and their billionaire founders. Just ask Jack Ma: After opening an antitrust probe, regulators fined Alibaba a record $2.8 billion and the central bank ordered an overhaul of his Ant Group Co. fintech empire so it’d be supervised more like a bank. On Tuesday, China ordered 34 internet companies to rectify their anti-competitive practices in the coming month. While ByteDance hasn’t been singled out as a target, its dominance in social media and war chest for deal-making are sensitive areas the government is looking into.“There are no more silly games in the U.S. with Trump and potential bans or forced asset sales,” said Kirk Boodry, founder of investment research firm Redex Holdings. “But the pressure on tech-share prices and China in particular might make $250 billion a tough sell,” he added, referring to ByteDance’s value in private transactions.Born in the southern Chinese city of Longyan, Zhang, the only son of civil servants, studied programming at Tianjin’s Nankai University, where he built a following on the school’s online forum by fixing classmates’ computers. He joined Microsoft Corp. for a brief stint after graduating, later calling the job so boring he often “worked half of the day and read books in the other half,” according to an interview with Chinese media. He went on to develop several ventures, including a real estate search portal.His breakthrough came in 2012, when working in a four-bedroom apartment in Beijing he created ByteDance’s first hit -- a joke-sharing app later shut down by censors. It then turned to news aggregation before winning over more than 1 billion global users with its short-video platforms TikTok and Chinese twin app, Douyin. In the process, it attracted big-name investors such as SoftBank Group Corp., Sequoia Capital and proprietary-trading firm Susquehanna International Group, making it a rarity among Chinese internet startups that usually get absorbed into the wider ecosystems of Tencent and Alibaba Group Holding Ltd.Novel ConceptOne of Zhang’s earliest supporters, Susquehanna has become ByteDance’s largest outside backer with a 15% stake, according to a Wall Street Journal story in October. The initial bet was made at the start of 2012, when ByteDance’s news app Toutiao was just a concept that Zhang had drawn up on napkins, according to a 2016 blog post by Joan Wang, who led that investment for Susquehanna’s Chinese venture-capital unit.With TikTok facing scrutiny in the U.S. and India, Zhang has put more effort into ByteDance’s nascent and fast-growing Chinese businesses, which range from gaming to education to e-commerce. That helped it increase sales to about $35 billion last year and operating profit to $7 billion, a person familiar with the results said.Investors are eyeing the IPO of some of ByteDance’s businesses after Chinese competitor Kuaishou Technology raised $5.4 billion in February in the biggest internet listing since Uber Technologies Inc., with its market value now nearing $140 billion. Last month, ByteDance hired former Xiaomi Corp. executive Chew Shou Zi as its chief financial officer, filling a long vacant position that will be crucial for its eventual market offering.But for Zhang, it’s not all about immediate payoffs. The affable founder is known for his business philosophy of “delaying satisfactions” as he puts the focus on long-term growth -- a message he stressed again during his spiel to employees at the company’s ninth anniversary celebration last month.“Keep an ordinary mind, that’s something that sounds easy but important to do,” he said. “Put in the plainest words, when hungry, eat, when tired, sleep.”(Adds latest on China crackdown in ninth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Putin’s Ukraine Gambit Turns Debt Sanctions Into a Real Threat

    (Bloomberg) -- A massive troop buildup on the border with Ukraine has turned the once unthinkable idea of U.S. sanctions on Russian sovereign debt into a real possibility for investors.Yields on ruble bonds, known as OFZs, jumped to the highest level in more than a year last week and were edging higher again on Tuesday as the market watched deepening tensions between Moscow and Washington take another turn for the worse.“This makes OFZ sanctions significantly more likely,” said Paul McNamara, an emerging-markets investor at GAM Investments in London. He doesn’t expect a full-scale Russian offensive, but said “there are a lot of outcomes that are worse than the current situation.”The administration of U.S. President Joe Biden was already preparing more penalties on Russia over alleged election interference and hacking before the latest flareup in Ukraine. NATO joined the Group of Seven nations and the European Union on Tuesday in calling for Russia to de-escalate.The threat of OFZ sanctions, often dubbed the “nuclear option,” has been hanging over bondholders for years, but after several false alarms, most investors weren’t considering it a base case. That may now be changing.Analysts at JP Morgan Chase & Co. downgraded the ruble and Russian bonds last week, citing the escalating tensions and the risk that U.S. investors might close long positions on OFZs. The Finance Ministry has had to rely on state-run banks to meet demand at its latest debt auctions after a sale was canceled due to reduced appetite from foreign buyers.What’s Sparking Tension Between Russia and Ukraine?: QuickTakeThe Treasury Department warned in 2018 of global financial market turmoil if Russia’s sovereign debt market were sanctioned because of how deeply tied the Russian market is to global indexes.Since then the California Public Employees’ Retirement System, or Calpers, has cut all of its bond holdings in Russia. Foreigners have curbed their share of the total market to just 20% from about 35% last year as the Finance Ministry sold more debt to locals.Russian officials say the move wouldn’t cause much damage to Russia’s financial markets because local banks and non-U.S. investors would step in to replace those forced to sell. A move to ban U.S. banks from buying new issues of Russian Eurobonds in 2019 did little to dent the Kremlin’s access to foreign funding.An even harsher measure that has been mooted in Washington in the past would be to bar Russian banks from the international financial messaging system used for most international money transfers, a measure that has been used against Iran. Foreign Minister Sergei Lavrov warned last month that Russia needs to find alternatives to the system, known as SWIFT, to make itself less vulnerable.“If it goes to an outright military conflict, I wouldn’t exclude SWIFT sanctions, which would be really disruptive,” said Viktor Szabo, a money manager at Aberdeen Asset Management in London.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Stock market news live updates: Stock futures drift sideways ahead of big bank earnings

    Stock futures hugged the flat line Tuesday evening after a mixed session on Wall Street, with traders looking ahead to a slew of earnings results from big banks.

  • 3 Gold Stocks to Watch This Summer

    While demand for gold bullion coins is increasing, gold and precious metals markets have remained remarkably flat, but we believe that is all about to change

  • “Er xuan yi”: The business tactic that led to Alibaba’s $2.8 billion antitrust fine

    The regulator's statement offers the most detailed look so far at how companies like Alibaba use a controversial business tactic.

  • TikTok Founder's $60 Billion Fortune Places Him Among The World's Richest People

    (Bloomberg) -- Just last year, the world’s most valuable startup, ByteDance Ltd., was being squeezed from all sides.The Trump administration wanted the Chinese firm, which owns the ubiquitous TikTok video-sharing platform, to get rid of assets. Beijing was cracking down on tech businesses, and India blacklisted some of its social-media apps.For all the obstacles, ByteDance kept growing. Now its founder, 38-year-old Zhang Yiming, is among the world’s richest people -- a distinction that lately has carried increased risks in China.Shares of the company trade in the private market at a valuation of more than $250 billion, people familiar with the dealings have said. At that level, Zhang, who owns about a quarter of ByteDance, could be worth more than $60 billion, placing him alongside Tencent Holdings Ltd.’s Pony Ma, bottled-water king Zhong Shanshan and members of the Walton and Koch families in the U.S., according to the Bloomberg Billionaires Index.ByteDance, famous for its short-video apps and news aggregator Toutiao, more than doubled revenue last year after expanding beyond its core advertising business into areas such as e-commerce and online gaming. It’s now weighing options for the initial public offering of some businesses.“Zhang is someone who’s known for thinking long-term and not easily dissuaded by short-term setbacks,” said Ma Rui, partner at venture-capital firm Synaptic Ventures. “He is set on building an enduring, global business.”Surging ValuationDuring its last fundraising round, ByteDance reached a $180 billion valuation, a person with knowledge of the matter said. That’s up from $20 billion about three years ago, according to CB Insights. But in the private market, some investors recently were asking for the equivalent of a $350 billion valuation to part with their shares, people familiar have said. The company’s value for private-equity investors is approaching $400 billion, the South China Morning Post reported. That would mean an even bigger fortune for Zhang.ByteDance representatives didn’t respond to requests for comment.It’s a tough time to be wealthy in China as the government seeks to rein in the country’s most powerful corporations and their billionaire founders. Just ask Jack Ma: After opening an antitrust probe, regulators fined Alibaba a record $2.8 billion and the central bank ordered an overhaul of his Ant Group Co. fintech empire so it’d be supervised more like a bank. On Tuesday, China ordered 34 internet companies to rectify their anti-competitive practices in the coming month. While ByteDance hasn’t been singled out as a target, its dominance in social media and war chest for deal-making are sensitive areas the government is looking into.“There are no more silly games in the U.S. with Trump and potential bans or forced asset sales,” said Kirk Boodry, founder of investment research firm Redex Holdings. “But the pressure on tech-share prices and China in particular might make $250 billion a tough sell,” he added, referring to ByteDance’s value in private transactions.Born in the southern Chinese city of Longyan, Zhang, the only son of civil servants, studied programming at Tianjin’s Nankai University, where he built a following on the school’s online forum by fixing classmates’ computers. He joined Microsoft Corp. for a brief stint after graduating, later calling the job so boring he often “worked half of the day and read books in the other half,” according to an interview with Chinese media. He went on to develop several ventures, including a real estate search portal.His breakthrough came in 2012, when working in a four-bedroom apartment in Beijing he created ByteDance’s first hit -- a joke-sharing app later shut down by censors. It then turned to news aggregation before winning over more than 1 billion global users with its short-video platforms TikTok and Chinese twin app, Douyin. In the process, it attracted big-name investors such as SoftBank Group Corp., Sequoia Capital and proprietary-trading firm Susquehanna International Group, making it a rarity among Chinese internet startups that usually get absorbed into the wider ecosystems of Tencent and Alibaba Group Holding Ltd.Novel ConceptOne of Zhang’s earliest supporters, Susquehanna has become ByteDance’s largest outside backer with a 15% stake, according to a Wall Street Journal story in October. The initial bet was made at the start of 2012, when ByteDance’s news app Toutiao was just a concept that Zhang had drawn up on napkins, according to a 2016 blog post by Joan Wang, who led that investment for Susquehanna’s Chinese venture-capital unit.With TikTok facing scrutiny in the U.S. and India, Zhang has put more effort into ByteDance’s nascent and fast-growing Chinese businesses, which range from gaming to education to e-commerce. That helped it increase sales to about $35 billion last year and operating profit to $7 billion, a person familiar with the results said.Investors are eyeing the IPO of some of ByteDance’s businesses after Chinese competitor Kuaishou Technology raised $5.4 billion in February in the biggest internet listing since Uber Technologies Inc., with its market value now nearing $140 billion. Last month, ByteDance hired former Xiaomi Corp. executive Chew Shou Zi as its chief financial officer, filling a long vacant position that will be crucial for its eventual market offering.But for Zhang, it’s not all about immediate payoffs. The affable founder is known for his business philosophy of “delaying satisfactions” as he puts the focus on long-term growth -- a message he stressed again during his spiel to employees at the company’s ninth anniversary celebration last month.“Keep an ordinary mind, that’s something that sounds easy but important to do,” he said. “Put in the plainest words, when hungry, eat, when tired, sleep.”(Adds latest on China crackdown in ninth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Bitcoin Touches $64,000 High as Traders Eye Coinbase Listing

    (Bloomberg) -- Bitcoin advanced Wednesday, breaching the $64,000 level for the first time after eclipsing its most recent record in March a day earlier as the mood in cryptocurrencies turned bullish ahead of Coinbase Global Inc.’s listing this week.The token climbed as much as 1.6% to as high as $64,207 in Asia trading. Cryptocurrency-exposed stocks such as Riot Blockchain Inc. and Marathon Digital Holdings Inc. advanced during U.S. trading hours.Crypto bulls are out in force as a growing list of companies embrace Bitcoin, even as skeptics doubt the durability of the boom. In one of the most potent signs of Wall Street’s growing acceptance of cryptocurrencies, Coinbase will list on the Nasdaq on April 14 at a valuation of about $100 billion.Coinbase’s debut “will mark the first official juncture between the traditional financial avenue and the alternative crypto path,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note. “As such, a successful addition to Nasdaq should act as endorsement of cryptocurrencies by traditional investors.”Goldman Sachs Group Inc. and Morgan Stanley have announced plans to offer their clients access to crypto investments. Tesla Inc. earlier this year disclosed a $1.5 billion investment in Bitcoin and more recently started accepting it as payment for electric cars.Still, skeptics argue that digital coins have been inflated by stimulus that’s also sent stocks to records. Regulators around the world are stepping up oversight and casting doubt on its usefulness as a currency.Isabel Schnabel, member of the executive board of the European Central Bank, called Bitcoin “a speculative asset without any recognizable fundamental value” in an interview with Der Spiegel this month.Coinbase’s public debut this week is also boosting the digital coins of other cryptocurrency exchanges, such as Binance Coin, which has jumped to become the third-most valuable cryptocurrency behind Bitcoin and Ether.Many analysts expect the rally to continue.“The lowest 30-day volatility since October tells us Bitcoin is ripe to exit its cage and continue in a bull-market on its way to the next $10,000 move,” according to Mike McGlone, Bloomberg Intelligence commodities strategist. “Similar to Tesla’s equity-wealth allocation to Bitcoin, the Coinbase IPO may add to the growing list of 2021 crypto-validation milestones.”(Updates with latest Bitcoin pricing in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • American Defers 37 Boeing Deliveries as Long as Three Years

    (Bloomberg) -- American Airlines Group Inc. delayed deliveries of more than three dozen Boeing Co. aircraft and projected a deeper loss than analysts expected as the coronavirus pandemic continues to quash corporate and international travel.Eighteen 737 Max jets that were to be delivered this year and next will be postponed to 2023 and 2024, the carrier said in a regulatory filing Tuesday. American will also take fourteen 787-8 planes at the end of the next year’s first quarter, instead of this year. Another five of that wide-body aircraft will be converted to the 787-9 version, with shipments delayed until 2023.The first-quarter adjusted loss will be $4.29 to $4.41 a share, American said. Analysts had projected $4.05, according to the average of estimates compiled by Bloomberg. Revenue will decline 62% from the same quarter in 2019, before the pandemic decimated travel. The Fort Worth, Texas-based company previously said the drop could reach 65%.American’s revenue projection meshed with a similar outlook from United Airlines Holdings Inc. as increased vaccinations against Covid-19 fuel a rebound in domestic flying. International and business demand has fallen as far as 80% below pre-pandemic levels, however.The optimism over domestic travel was dealt a blow Tuesday, as U.S. health officials called for an immediate pause in the use of Johnson & Johnson’s vaccine over concerns about blood clots.American dropped 2.9% to $22.25 at 11:03 a.m. in New York, with much of the decline spurred by the J&J news. Other carriers and cruise lines declined as well. Boeing rose less than 1% to $251.71.Read more: Boeing’s 737 Max Comeback Fuels Rare Sales Win Over AirbusAmerican’s first-quarter loss excluding credits linked to federal payroll aid and costs of an employee early retirement program is expected to be as much as $2.8 billion, the carrier said. The airline projected burning an average of $27 million a day in cash for the quarter, compared with previous guidance of $30 million. Its burn rate turned positive in March, excluding debt principal and severance payments.(Updates with details on cash consumption in seventh paragraph. A previous version of this story was corrected to indicate that aircraft delivery deferrals weren’t limited to the 737 Max)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Get rich as a renter: 5 ways to build wealth without buying a home

    Owning a house isn’t the only pathway to success and fulfillment.

  • While the Indian government was busy banning Chinese apps, Indians were busy buying Chinese smartphones

    China's Xiaomi held on to its pole position in the world's second-largest smartphone market throughout 2020.

  • Credit Suisse offers big blocks of Discovery, iQIYI shares related to Archegos: sources

    Credit Suisse has not yet finished unwinding its Archegos positions, said one source familiar with the matter. The bank has taken a $4.7 billion hit from dealings with Archegos Capital, prompting it to overhaul the leadership of its investment bank and risk divisions. Shares in Discovery and IQIYI fell in U.S. afterhours trading after news the offers, which were pitched below the stocks' closing prices.

  • Bank stocks rally is not over: analyst

    The largest banks are set to kick off earnings season this week.

  • Vingroup Said to Weigh $2 Billion U.S. IPO of Unit VinFast

    (Bloomberg) -- Vingroup JSC is considering a U.S. initial public offering of its car unit VinFast that could raise about $2 billion, according to people familiar with the matter.The biggest carmaker in Vietnam is working with advisers on the potential offering that could take place as soon as this quarter, the people said. An offering could raise as much as $3 billion, said the people, who asked not to be identified as the information is private. The company is seeking a valuation of at least $50 billion after a listing, one of the people said.At $2 billion, VinFast’s IPO would be the biggest ever by a Vietnamese company after Vinhomes JSC’s $1.4 billion first-time share sale in 2018, according to data compiled by Bloomberg. The carmaker could also become the first Vietnamese company to list in the U.S. if successful.Shares in Vingroup climbed as much as 5.3% on Tuesday to a record high. They have risen 27% this year, giving the company a market value of about $20 billion.Details of VinFast’s IPO including size and timeline could change as deliberations are ongoing, the people said. A representative for Vingroup declined to comment.VinFast, founded by billionaire Pham Nhat Vuong, began delivering gasoline-powered autos to Vietnamese consumers with BMW-licensed engines in 2019. The carmaker plans a Vietnam roll-out of electric cars later this year and said last month it has received 3,692 local orders. The startup aims to deliver its first electric vehicles to the U.S., Canada and Europe next year and is looking to open a factory in the U.S.(Updates with Vingroup shares in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Geely’s Iconic Lotus Cars Said to Mull Raising $1 Billion

    (Bloomberg) -- Zhejiang Geely Holding Group Co. is considering raising about $1 billion to help expand its iconic British sports and racing automotive business Lotus Cars into the electric vehicles market in China, according to people familiar with the matter.Geely is working with advisers to sound out potential investor interest in a funding round that could value Lotus’s EV operations at about $5 billion, the people said, asking not to be identified because the matter is private.Separately from the fundraising, the Chinese company is also weighing an initial public offering of Lotus Cars, or just the British carmaker’s EV business, as soon as next year, the people said. A listing could value the entire business, including its combustion-driven sports and racing cars, at more than $15 billion, the people said.Geely Automobile Holdings Ltd. shares rose as much as 6.6% in their biggest advance in a month, outperforming a 1% gain in the benchmark Hang Seng Index.Chinese billionaire Li Shufu’s Geely, which also controls Sweden-based Volvo Car AB, purchased a stake in Group Lotus in 2017. It owns 51% of the company, including both Lotus Cars and consultancy Lotus Engineering, while Malaysia’s Etika Automotive Bhd. owns the remainder, according to a press release. Under Geely, Lotus in 2019 launched its all-electric Evija hypercar, a 1,972-horsepower coupe that costs about $2 million.Considerations are ongoing and details including size and timing could change, the people said. A Geely representative declined to comment. Representatives for Lotus didn’t immediately comment when contacted by Bloomberg News.Geely is seeking to expand into electric vehicles amid a booming market in countries including China. Polestar, the electric carmaker controlled by Volvo Car and its owner Geely, is exploring options for going public as soon as this year, Bloomberg News has reported.Investor mania over EV-related stocks has pushed the share prices of players including Nio Inc. and Xpeng Inc. to stratospheric levels. That intense interest has also spawned a wave of EV upstarts raising billions and racing to list via special-purpose acquisition companies. More than $180 billion has been raised globally through SPAC IPOs in the past 12 months, Bloomberg-compiled data show.(Updates with Geely Automobile share price in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Bitcoin Nears Record Before Largest U.S. Crypto Exchange Listing

    (Bloomberg) -- Bitcoin neared an all-time high on Monday as bullish sentiment gathered steam ahead of a listing by the largest U.S. cryptocurrency exchange.The token rose as much as 2.6% to $61,229, the highest in nearly a month, before falling back to trade little changed. On March 13, Bitcoin reached a record of $61,742. The cryptocurrency is up almost ninefold in the past year, a return that towers above that of more familiar assets like equities or bullion.Against the backdrop of Wall Street’s growing embrace of crypto, the direct listing of digital-token exchange Coinbase Global Inc. is fanning interest. Coinbase is due to go public on the Nasdaq on April 14, the first listing of its kind for a major cryptocurrency company and a test of investor appetite for other start-ups in the sector.Meanwhile, exchange tokens, such as Binance Coin, are seeing their value rise ahead of Coinbase’s public debut as well. Binance’s, known as BNB, rose 23% Monday, according to CoinMarketCap.com. Huobi Token and KuCoin Token, among others, also gained.“A crypto company moving to IPO is a big milestone,” said Nick Jones, CEO and co-founder at cryptocurrency wallet Zumo. “It’s moves like this that make consumers feel safer with crypto and ultimately boost confidence in the space.”A growing list of companies are looking at or even investing in Bitcoin, drawn by client demand, price momentum and arguments that it can hedge risks such as faster inflation. Tesla Inc. earlier this year disclosed a $1.5 billion investment in Bitcoin and more recently started accepting it as payment for electric cars.Elsewhere, Goldman Sachs Group Inc. has said it’s close to offering investment vehicles for Bitcoin and other digital assets to private wealth clients. Morgan Stanley plans to give rich clients access to three funds that will enable crypto ownership. The deck of exchange-traded funds tracking the token is expanding, while Paypal Inc. and Visa Inc. have begun using cryptocurrencies as part of the payments process.A study by Dutch asset manager Robeco suggests that despite its high volatility, a 1% allocation to Bitcoin in a diversified multi-asset portfolio could be beneficial given its resemblance to gold and its near zero correlation to other asset classes.“In recent months, a clear and emphatic narrative that Bitcoin is becoming a store of value in the form of digital gold has developed,” according to Jeroen Blokland, a portfolio manager at Robeco.Other cryptocurrencies, such as second-ranked Ether, have also been climbing. The overall value of more than 6,600 coins tracked by CoinGecko recently surpassed $2 trillion.(Adds paragraph about exchange tokens)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Singapore’s Grab to List in U.S. in $40 Billion SPAC Deal

    (Bloomberg) -- Grab Holdings Inc., Southeast Asia’s most valuable startup, is going public in the U.S. through the largest-ever merger with a blank-check company.The Singapore-based startup is set to have a market value of about $39.6 billion after the combination with Altimeter Growth Corp., the special purpose acquisition company of Brad Gerstner’s Altimeter Capital Management, the firms said in a statement Tuesday. Grab is raising more than $4 billion from investors including BlackRock Inc., Fidelity International and T. Rowe Price Group Inc. as part of the biggest U.S. equity offering by a Southeast Asian company.The deal would make the ride-hailing and food-delivery giant the first Southeast Asian tech unicorn to go public through a SPAC and give it funds to expand. Grab is trying to take advantage of a U.S.-led SPAC listing boom even though it’s showing signs of slowing amid increased scrutiny by regulators.“This is definitely one of the best internet companies,” Gerstner said in an interview. “The runway ahead is very long and very wide for Grab if they continue to execute.”The combined entity’s stock will trade on the Nasdaq in the coming months under the ticker GRAB. Altimeter Capital, which orchestrated the initial public offering of Altimeter Growth in September, is putting $750 million into the company, about a fifth of the fresh funds raised.That, together with a three-year lockup period for its sponsor shares, indicates Altimeter’s long-term commitment to the company, Grab Chief Executive Officer Anthony Tan said. Altimeter, which manages $15 billion of assets, has also committed as much as $500 million to a contingent investment to be equal to the total amount of redemptions by Altimeter Growth’s shareholders.“From sovereign wealth funds to mutual funds, it is world-class investors who are investing in us,” Tan said in an interview. “The world is seeing the potential of Southeast Asia and how exciting this region is.”Shares in Altimeter Growth surged about 10% Tuesday in New York.Grab, the market leader in Southeast Asia for so-called super apps for consumer services, expects its addressable market to expand to more than $180 billion by 2025 from $52 billion in 2020. Its total gross merchandise volume last year was $12.5 billion, more than doubling from 2018 even as competition from arch rival Gojek intensified and the coronavirus pandemic restricted people’s movements.The deal marks a remarkable turn for Grab. Under pressure from SoftBank Group Corp. and other investors, the company had been negotiating a possible merger with Indonesia’s Gojek for most of 2020. But the talks ultimately collapsed around December and Gojek began talks with Tokopedia, another local internet giant.Tan and Gerstner, both Harvard Business School graduates, began talking about a deal early this year after being introduced by common friends. Only about three months later, they reached an agreement for the record transaction.Gerstner is no stranger to Southeast Asia, having invested in Singapore-based gaming and e-commerce leader Sea Ltd. The Tencent Holdings Ltd.-backed company has emerged as a stock-market sensation since going public in New York in 2017. Among companies valued at $100 billion or more, the stock is the No. 1 Asian performer since the start of last year and trails only Tesla Inc. globally.“The U.S. and China have been big investment markets for 20 years and before Sea, Southeast Asia wasn’t really on many investors’ radar screens,” said Gerstner, who has been following Grab since its 2018 acquisition of the regional business of Uber Technologies Inc., another company he’s backed. “Now you have a second business with a $40 billion market cap which is going to be listed on the Nasdaq. This is a huge moment for global investors realizing the renaissance that’s occurring in Southeast Asia technology market.”Tan founded Grab in his native Malaysia as a taxi-hailing app in 2012 with Hooi Ling Tan, a Harvard classmate. They kicked off operations in Kuala Lumpur as what was then known as MyTeksi, allowing users to book cabs.Grab later relocated to Singapore before expanding as a ride-hailing app from Indonesia to Vietnam, the Philippines, Cambodia and Myanmar. With more than $10 billion raised from investors led by SoftBank over eight funding rounds, Grab became Southeast Asia’s largest ride-hailing provider before expanding into food delivery, digital payments and financial services across eight countries in the region.Working toward profitability, Grab lost about $800 million last year, on an Ebitda basis, on adjusted sales of $1.6 billion. It’s predicting earnings before interest, taxes, depreciation and amortization to become positive in 2023, reaching $500 million that year. The company is forecasting average annual sales growth of 42% for the next three years, with adjusted revenue hitting $4.5 billion in 2023.Grab said its mobility-services business is already making money in all its markets, while food delivery is in the black in five of six markets. The company said it had about 72% of Southeast Asia’s ride-hailing market, 50% of online food delivery and 23% of digital wallet payments last year. Grab was previously valued at about $16 billion, a person with knowledge of the matter said.Among companies participating in the cash injection, a so-called private investment in public equity, or PIPE, are Singapore’s state-owned investor Temasek Holdings Pte, Janus Henderson Group Plc and Nuveen LLC. The expected market value also reflects the PIPE and SPAC proceeds of $4.5 billion as well as a $2 billion term loan, according to Grab.Evercore Inc., JPMorgan Chase & Co. and Morgan Stanley advised Grab in the deal.(Updates with sales, earnings forecasts in 16th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.