Former Small Business Administrator Linda McMahon discusses how the U.S. can help workers and small businesses during the coronavirus crisis.
Former Small Business Administrator Linda McMahon discusses how the U.S. can help workers and small businesses during the coronavirus crisis.
(Bloomberg) -- The U.K.’s fraud prosecutor opened a probe into Sanjeev Gupta’s GFG Alliance over suspicions of fraud and money laundering, causing a potential lender to the group to withdraw from agreements to provide new financing.The Serious Fraud Office is investigating “suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business,” according to a statement. The probe includes the financing arrangements with Greensill Capital UK Ltd. The SFO has been looking at GFG since Greensill’s collapse in March and decided to open a formal probe, according to a person familiar with the investigation.As a result, White Oak Global Advisors LLC is pulling out of discussions to provide loans to Gupta’s businesses. “As with any regulated financial institution, we are not in a position to continue discussions with any company that is under investigation by the Serious Fraud Office for money laundering,” a spokesperson for the group in London said.The Financial Times first reported that White Oak was pulling out of financing talks. A representative for GFG declined to comment on White Oak’s decision. Last week, Bloomberg reported Gupta had agreed a 200 million pound ($282 million) facility with the San Francisco-based lender to provide working capital to his U.K. steel businesses. He had also secured the refinancing of one of his Australian units.It’s a massive setback for the tycoon, who appeared to be just on the cusp of securing a lifeline for his beleaguered metals empire. He now faces the extremely difficult task of negotiating new loans while being subject to a fraud probe.Prosecutors are starting to round in on both Gupta and Greensill, after months of scrutiny from lawmakers and the media over its financing practices. Earlier this week, the U.K. Financial Conduct Authority said it was also investigating Greensill and cooperating with counterparts in other U.K. enforcement and regulatory agencies.It’s also working with German, Australian and Swiss authorities. The FCA and SFO probes are completely separate although inevitably will involve cross-over and information sharing, according to the person familiar with the investigation.Read More: Lex Greensill Says His Investors Knew What They Were Buying“GFG Alliance will co-operate fully with the investigation,” a GFG spokesperson said. Grant Thornton, Greensill’s administrators, declined to comment.While the SFO has collected billions in fines in recent years from companies with deferred prosecution settlements, its track record in the criminal courts is patchy. Last month a trial into two Serco Group Plc directors collapsed and the agency lost a mammoth case against Barclays Plc bankers in 2020.GFG has come under the microscope after the collapse of Greensill Capital in March revealed it had been a recipient of financing based on expected future invoices, for sales that were merely predicted.What has also come to light is the activities of the tycoon’s trading business Liberty House Group. Four banks stopped working with the company, starting in 2016, after they became concerned about what they perceived to be problems in paperwork provided by Liberty, Bloomberg News reported.Read More: As Gupta Rose From Trader to Tycoon, Several Banks Backed AwayGreensill was Gupta’s largest source of financing before its collapse. The London-based lender supplied billions of dollars in loans to GFG, many of which were packaged and sold onto investors in funds run by Credit Suisse Group AG. Greensill fell into administration after a key insurance partner didn’t renew coverage on loans made to some of its customers, including GFG.Much of the financing extended to GFG by Greensill was from the finance firm’s German banking unit. Germany’s financial watchdog shuttered Bremen-based Greensill Bank AG and asked law enforcement officials to investigate accounting irregularities at the lender in March. The bank was closed after the lender identified problems in how Greensill Bank booked assets tied to Gupta’s companies.The announcement of the probe came a day after former Prime Minister David Cameron was grilled by lawmakers over his employment by Greensill. He defended his intensive lobbying on behalf of the firm as part of a parliamentary inquiry that’s raised questions over private dealings at the top of the British government.(Updates with detail of White Oak talks collapsing.)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.
(Bloomberg) -- The U.K. is set to start its own carbon market with the aim of putting a price on polluting that it hopes will help achieve the country’s ambitious climate goals.The first auction of emission permits on May 19 is the latest test of how the country copes with the separation from the European Union, its largest trading partner.Until January, Britain was part of the EU’s emissions trading system, the world’s largest cap-and-trade program and the centerpiece of the bloc’s efforts to limit climate change. By going it alone, the U.K. is forgoing a 16-year-old market that helped cut EU emissions by almost a quarter in the past two decades.The U.K. auction will be keenly watched to see how close prices will be to those in Europe, where emission costs have doubled in the past six months to a record. Too high a price could tilt the economic playing field against U.K. companies by overburdening them with permit costs, while one too low diminishes the incentive to invest in low-carbon technology.While the U.K. market was designed to be almost exactly like the EU system, there are a few key differences.The main one is that it’s much smaller. That means there are far fewer industrial and power-sector emissions that need permits. The U.K. is set to auction about 83 million permits this year, compared to more than 700 million for the EU.It’s an issue market participants are concerned about. Earlier this year representatives from industry groups in the U.K. and Europe wrote to Prime Minister Boris Johnson to urge him to link the carbon trading system with the larger EU system. That would mean permits from both the U.K. and EU could be used to account for emissions in either.The smaller market size also raises the risk of bigger price swings. An emissions trading system is meant to give businesses an indication of when is a good time to invest in lower-carbon alternatives. A high degree of volatility could hurt confidence that the emissions price is a reliable figure.“It’s an emissions trading system for a very small market, which makes no sense,” said Jan Ahrens, head of research at SparkChange, a platform to facilitate investments in carbon markets. “That has the risk of having high price volatility.”Volatility and a surging price could also be affected by how much financial players buy into the market. Demand from investment funds helped drive the gains in the EU carbon price this year. Ahrens said the investors he works with are eager to buy British carbon.So how much will emissions cost in the U.K.? The main indicator is the EU carbon price, which has gained more than 70% this year to a peak of 56.90 euros per metric ton, or 49.01 pounds, on Friday.The U.K. market is set to be oversupplied from the outset, a bearish indicator for prices. The cap for total emissions is about 156 million tons, compared with about 97 million tons of actual emissions estimated by BloombergNEF. That surplus is intentional, allowing market participants to accumulate permits to hedge for future years. The cap will likely be revised in the coming years to shrink with the U.K.’s plans to rapidly cut emissions this decade.There is also a safety net built into the British system. Unlike the EU, the U.K. has a price floor so that permits can’t be auctioned below 22 pounds. But similar to the EU, there’s a mechanism for the government to add permits to the market if prices rise too far, too fast.U.K. Plans Deeper Carbon Cuts to Spur Climate Change FightIt’s a part of the U.K.’s effort to ensure that the system works as planned, that companies that need permits can get them and that prices don’t bounce around too much after the market’s launch.“This is the first year, so they want to make sure the market is effective,” said Bo Qin, analyst at BloombergNEF. “Not too high, not too low,”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.
(Bloomberg) -- Sanjeev Gupta’s plans to save his sprawling metals empire were mired in confusion on Saturday as a key financial backer sent mixed messages about its support in the wake of a U.K. fraud probe.On Friday, the Serious Fraud Office launched an investigation into possible fraud and money laundering at Gupta’s GFG Alliance That initially prompted White Oak Global Advisors LLC -- which had recently offered loans to his U.K. steel businesses and one of his Australian units -- to say it wasn’t in a position to continue discussions with a company facing a probe.Hours later, a spokesperson for the San Francisco-based lender said it was continuing efforts to refinance Liberty Primary Metals of Australia, “subject to financial due diligence and acceptable governance.” Last week it had agreed terms with Gupta to refinance the unit.The apparent reversal throws the fate of Gupta’s businesses into further confusion. It’s unclear whether the loan to the Australian unit, which includes the Whyalla steelworks, will still go ahead as planned or depends on the SFO investigation.White Oak declined to comment Saturday on the status of a reported 200 million pounds ($282 million) of lending to Gupta’s U.K. businesses, The company also wouldn’t comment on a report in the Financial Times saying White Oak may be reluctant to walk away because it has a financial exposure to Gupta’s businesses after buying up debt from the steel tycoon.GFG said Friday it will co-operate fully with the SFO investigation. It declined to comment on White Oak’s decision.Gupta has been scrambling to find new financing after Greensill, his biggest lender, fell into insolvency. His group employs 35,000 people across 30 countries, all which may be in danger of losing their jobs if the tycoon can’t secure replacement loans. He faces an uphill battle, with the SFO probe likely to deter many potential financiers.The exact scope of the SFO investigation isn’t yet clear. Four banks stopped working with Gupta’s Liberty House Group trading business, starting in 2016, amid concerns about what they perceived to be problems in paperwork provided by Liberty, Bloomberg News has reported. In one example, the company had presented a bank with what seemed to be duplicate shipping receipts. A spokesman for Gupta has denied any wrongdoing.The two-month period from when it started looking into GFG and its financing by Greensill to announcing the formal probe is a quick turn-around for the SFO, which often takes years to publicly confirm it’s taking action against a company.It will now start to gather evidence, including securing devices and documents. However, it’ll likely take years for the office to make any tangible updates to the investigation, including whether it decides to charge individuals as part of the probe.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.
(Bloomberg) -- The group of rich government creditors known as the Paris Club is willing to delay a $2.4 billion debt payment from Argentina due this month if the nation meets certain conditions, potentially averting a damaging default, according to three people with direct knowledge of negotiations.The club will spare Argentina from default if it misses the May 31 payment in the hope that the country can rework a $45 billion credit with the International Monetary Fund, said one of the people, who asked not to be named because the talks are private. An agreement with the IMF may not come until after Argentina’s midterm elections later this year, the person said, declining to specify the conditions that the group is demanding.The Paris Club secretariat declined to comment, citing its policy not to publicly discuss ongoing negotiations. Argentina’s economy ministry press office didn’t reply to a request of comment.Argentina’s President Alberto Fernandez extended his European tour to meet IMF Managing Director Kristalina Georgieva in Rome on Friday in a bid to drum up support for a delay and renegotiations with the IMF. Argentina has formally asked the Paris Club for more time to make the payment and is expecting to receive a response by the end of the month.Georgieva said in a statement that the face-to-face gathering was “very positive” and that she will consult IMF members on the country’s request for a reform to the organization’s surcharge policy.“The goal is to reach an agreement as soon as possible, though we can’t be thinking of an accord that demands greater efforts from the Argentine people,” Fernandez said after the meeting, which lasted over an hour at the Sofitel hotel in Rome.Argentina dollar-denominated bonds due 2030 edged up 0.4 cents to 35.2 cents on the dollar and bonds due 2038 rose 0.6 cents to 37.3 cents on the dollar, the most in two months. The Argentine peso, which is managed by authorities through capital controls, lost almost 11% this year in the second biggest depreciation among emerging market currencies.Read More: Argentina Urges IMF to Suspend Surcharges on $45 Billion LoanThe deadline comes at a difficult time for the administration in Buenos Aires, with the country in its third year of recession, inflation approaching 50% and unemployment over 10%. While analysts’ estimates of its cash reserves vary, some calculations have put them near zero since September of 2020, limiting Argentina’s capacity to meet its international obligations.International PariahThe temporary Paris Club waiver aims to ease the economic ravages wrought by the pandemic, but it needs to be tied to conditions so it doesn’t turn into a habit, said one of the sources. Argentina has defaulted on its overseas debt nine times in its history.“Nobody wants Argentina to become an international pariah again,” said Rodrigo Olivares-Caminal, a professor in banking and finance law at Queen Mary University of London. “A default would be negative for Argentina and its creditors. But I’m concerned about Argentina’s endemic balance of payment problem.”In May 2014, Argentina reached a deal with the Paris Club to repay a $9.7 billion debt after 13 years in default. The debt was supposed to be repaid over a five-year period, but the country’s latest financial troubles delayed the final payments due this month. Creditors include the U.K., Italy, Spain and Canada.A Paris Club rule known as a “conditionality principle” states that the group only negotiates debt restructuring with debtors that have “a demonstrated track record of implementing reforms under an IMF program,” according to the group’s website. Argentina ceased following guidelines from a program with the IMF after a change of administration in late 2019, and talks for a new plan have stalled.Read More: Paris Club Seizes Pandemic Opportunity to Reclaim Lost Influence(Adds comments from the IMF’s Georgieva in fifth paragraph, updates market reaction in seventh 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.
(Bloomberg) -- Ant Group Co.’s profit rose to $3.4 billion in the December quarter after Chinese regulators thwarted its record initial public offering and told it to scale back its sprawling business.Billionaire Jack Ma’s fintech giant contributed nearly 7.2 billion yuan to Alibaba Group Holding Ltd.’s earnings, a company filing showed Thursday. Based on Alibaba’s one-third stake in Ant, that translates to 21.8 billion yuan ($3.4 billion) in profit, up 50% from 14.5 billion yuan in the previous three months. Ant’s earnings lag one quarter behind Alibaba’s. Ant declined to comment.The tally underscores the earnings powers Ant boasted before authorities demanded China’s largest fintech company fold its financial business into a holding company, curtailing its growth prospects. Regulators have issued a battery of proposals that threaten to curb Ant’s dominance in online payments and scale back its expansion into consumer lending and wealth management.While Chairman Eric Jing has promised staff that the company will eventually go public, it’s likely to be worth much less than before the crackdown that saw the IPO halted in November. Fidelity Investments halved its valuation estimate for Ant to about $144 billion in February, compared with $295 billion assigned in August.Ant isn’t alone in facing the clampdown. The government imposed wide-ranging restrictions on the financial divisions of 13 companies including Tencent Holdings Ltd. and ByteDance Ltd. Units of JD.com Inc., Meituan and Didi Chuxing were also among companies summoned to a meeting where regulators handed out stricter compliance requirements in April.The company’s affiliate Alibaba reported its first loss in nine years, vowing to hike spending for expansion next year in technology and community commerce.(Updates with Alibaba profit details in last 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.
(Bloomberg) -- Credit traders who feel stiffed after a banner year are finding a hot market for their services.Hedge funds fresh off their best performance in years are aggressively hiring, recruiters say. Banks including Barclays Plc, Goldman Sachs Group Inc. and HSBC Holdings Plc have suffered senior defections to the buy side in recent weeks. Barclays has tried promotions and pay promises to stem defections.“Whoever writes the biggest check is the winner,” Jason Kennedy, chief executive officer of U.K.-based recruiting firm Kennedy Group, said in an interview. “There is no loyalty left.”While spring moving season is nothing new on Wall Street trading desks, observers say star performers in the world of corporate credit are in particularly high demand. Adding to the turnover is discord after banks that saw trading revenue surge in 2020 kept a lid on pay because of struggles in other parts of their business. Hedge funds are trying to follow up a divisive period of pandemic-driven earnings with new strategies that benefit from outside expertise.“This year, they have targeted the credit space,” Kennedy said. “That’s why the market is moving so much.”The pressure has been felt at HSBC, where a swath of senior traders left the U.S. business in recent months as the bank restructures operations in New York and around the world. At least 10 traders are leaving the credit desk, and a spokesman has said the group was actively hiring.At Barclays, departures from the credit desk have included Ovie Faruq, director in U.S. high-yield cash and derivatives trading in New York; Shrut Kalra, head of European investment grade trading; Taymour El Chammah, global head of macro credit trading; and John Cortese, co-head of U.S. credit trading. Several are joining hedge funds.In response, the London-based bank has offered some of the team promotions and assurances about future pay. However, the tone at the top is one of caution on costs. CEO Jes Staley increased bonus accruals across the bank in the first quarter, but has said that this spending “is a very controllable number so if our performance weakens we can take it right down again.”Goldman’s head of European macro credit trading Jasdeep Singh Aneja is leaving to join hedge fund Millennium Management.“Hedge funds are hot, they have had a good few months and they’ve raised a tremendous amount of money,” said Alan Johnson, managing director of the Wall Street compensation consultancy Johnson Associates. “If you’re a trader, they’re an attractive destination. They’re real competition for the really good or the really great traders.”Credit trading was a boon for investment banks last year as the pandemic sent bonds on a roller coaster. The trading desks buy and sell bonds and loans issued by corporations and also deal in derivatives linked to their financial health.A record $39 billion of U.S. corporate debt changed hands on average every day last year, helping the biggest banks generate the most credit-trading revenue since 2013, according to data from the Securities Industry and Financial Markets Association and Coalition Development Ltd.Hedge funds are also pursuing these gains. Oaktree Capital Management this week teamed up with investment manager Schroders to launch a global multi-strategy credit portfolio.The strategy is not without its risks: Earlier this month a slew of hedge funds took out short positions on European bonds they saw as overstretched.The turnover “isn’t specific to credit,” and traders have been on the move for some time, said Ilana Weinstein, who runs Wall Street recruitment firm IDW Group LLC.“Migration of sell-side to buy-side has been happening since the crisis with disappointing bonuses, cost-cutting and reduced ability to take risk at the banks,” she said. “The question is why someone is still sitting on sell-side if they want to be in a risk-taking versus franchise trading seat. I would argue much of the best trading talent left long ago.”(Updates with Johnson’s comment in 10th 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.
The IRS detailed on how it will handle a mixup involving a tax break for jobless benefits that became law a month after many already filed returns.
(Bloomberg) -- JD Logistics Inc. has attracted SoftBank Vision Fund and Temasek Holdings Pte as cornerstone investors in its Hong Kong initial public offering, people with knowledge of the matter said, as the warehousing and shipping firm is set to kick off one of the year’s biggest share sales in the city. Blackstone Group Inc. and Tiger Global also committed to buy stock in the offering, the people said, asking not to be identified because the information is private.SoftBank Vision Fund is set to invest $600 million in the offering, accounting for 40% of the $1.5 billion worth of shares the company has set aside for about seven cornerstone investors, the people said. That would make the prolific investor one of the largest shareholders in the company after its parent, JD.com Inc.Temasek is signing up to buy $220 million worth of stock, the people said. China Chengtong Holdings Group Ltd., Matthews Asia and Oaktree Capital have also agreed to purchase shares, they said.JD Logistics is targeting to raise as much as $3.5 billion in the first-time share sale and is set to start taking orders as soon as next week, the people said. It would be the second-largest IPO in the city this year, after Kuaishou Technology’s $6.2 billion listing in February.Bank of America Corp., Goldman Sachs Group Inc. and Haitong International Securities Group Ltd. are the joint sponsors of the offering, according to its preliminary prospectus.Cornerstone buyers typically agree to hold stock for a set period of time in exchange for early, guaranteed allocation. JD Logistics is still finalizing terms of the offering, and details could change, the people said.An external representative for JD Logistics and representatives for Blackstone, SoftBank Vision Fund and Temasek declined to comment. Representatives for China Chengtong, Matthews and Oaktree did not immediately respond to requests for comment. A representative for Tiger Global didn’t immediately respond to a request for comment outside of U.S. business hours.(Updates with SoftBank Vision Fund response in eighth 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.
Here's how to tell if dogecoin's rebound is more bark than bite, according to technical analysts following the popular crypto.
Last week, we witnessed a classic “buy the rumor, sell the news” event with the cryptocurrency Dogecoin (CRYPTO:DOGE). Many Dogecoin enthusiasts were hoping that Tesla (NASDAQ: TSLA) CEO Elon Musk’s stint hosting the television show “Saturday Night Live” would lead to higher prices. After all, Musk has been known to pump the price of this cryptocurrency on Twitter and has been one of its biggest supporters. With so many Dogecoin holders anxious to see what the Dogefather had to say Saturday, the price of cryptocurrency rallied hard into the event to hit a record high of $0.74. Unfortunately, Doge investors learned that sometimes these types of events simply cannot live up to the hype. The price of Doge dropped more than 30% following the premiere of the show after Musk failed to deliver the praise for the cryptocurrency investors were hoping for. Traders can learn a lot from this story, particularly since this “buy the rumor, sell the news” scenario repeats itself time and time again in financial markets. It highlights just how difficult it can be to trade based on the news and should be viewed as a cautionary tale. With that said, perhaps the most important lesson here is that instead of gambling on Dogecoin, why not learn a trading strategy that can deliver real results? For example, Mindful Trader has created a data-driven swing-trading strategy that can potentially help you grow your account. Because he has analyzed and dissected historical stock market price data to test his trading strategy, you won’t have to worry about trying to guess right on binary events like the one mentioned above. Instead, you can use a statistical approach with proven results to take your trading to the next level. Signing up for the Mindful Trader service gives you access to tutorials and all the trading rules he uses for successfully generating returns with stocks and options trading. He also provides data-driven stock picks that he trades himself, which allows you to learn while following his suggestions. Whether you are a beginner trader or a seasoned veteran, Mindful Trader has something for everyone. Since Mindful Trader uses a swing-trading strategy that relies on price movement, not hope, you will always be confident in making a trade. That means you won’t have to trade the news and rely on hype to potentially generate returns like those unfortunate Dogecoin investors mentioned above. Check out this link to learn more about Mindful Trader’s trading strategy and why it’s such a smart alternative to gambling with Dogecoin. See more from BenzingaClick here for options trades from BenzingaThese OTC Securities Had the Most Trading Activity in April3 Advantages to Binary Options Trading with Nadex© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
(Bloomberg) -- DBS Private Bank started Asia’s first bank-backed trust solution for cryptocurrencies as demand for digital assets increases.The offering will allow private banking clients to invest, custodize and manage these assets in a safe, secure, and structured manner, DBS Group Holdings Ltd. said in a statement on Friday. It builds on the DBS Digital Exchange, which launched in December, and offers institutional investors and accredited investors a fully-integrated tokenization, trading and custody ecosystem for digital assets.The service applies only to cryptocurrencies hosted on the digital exchange: Bitcoin, Ether, Bitcoin Cash and XRP.Traditional financial companies are ramping up their crypto offerings as digital assets mature and soar in price, creating client demand. UBS Group AG is reportedly in the early stages of planning to offer crypto investments to wealthy clients. Goldman Sachs Group Inc. and Morgan Stanley are boosting their offerings. DBS has already joined JPMorgan Chase & Co. and Temasek in creating a blockchain payments platform.Read more: Rich Crypto Investors Going Alone Gets Goldman Off Sidelines“Our trust structure allows clients to conveniently hold these assets, with a peace of mind that they will be safely managed and passed on to their intended beneficiaries,” said Joseph Poon, group head of DBS Private Bank.As of the first quarter, DBS’s digital exchange held S$80 million ($60 million) in assets under custody, with trading volumes up 10-fold to S$30 million to S$40 million, the firm said. The exchange has 120 clients and “a robust pipeline awaiting onboarding.”DBS said the digital exchange is working on efforts to conduct its first security token offering, and to expand operating hours from Asian time zones to round-the-clock.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.
Two of the world's most prominent billionaires Tesla Inc.'s CEO Elon Musk and Jack Dorsey are facing off over the merits of bitcoin, with the future of the world's No. 1 crypto likely hanging in the balance.
Dogecoin will likely transition from a proof-of-work protocol to proof-of-stake, speculated Alex Mashinsky, the chief executive and founder of The Celsius Network on Friday during a webcast hosted by his lending platform on YouTube.
Shares of Plug Power Inc. surged Friday, after they hydrogen and fuel cell systems company completed its restatement, removing a "shroud of uncertainty" that has been weighing heavily on the stock the past couple months.
The Tesla CEO sent the price of Bitcoin and other cryptocurrencies plummeting. But he may be aiming to turn crypto-mining green in ways that benefit Tesla.
Lawmakers are looking for quick action to improve an existing forgiveness program.
(Bloomberg) -- Stock sales are reaping a windfall for the world’s richest shareholders.Corporate insiders including Amazon.com’s Jeff Bezos and Google co-founder Sergey Brin have ramped up stock sales recently, cashing in on a 14-month long bull market that’s helped boost fortunes to the tune of trillions.U.S. public company insiders offloaded shares worth $24.4 billion this year through the first week of May, with about half sold through trading plans, according to data compiled by Bloomberg. That’s almost as much as the $30 billion total they disposed of in the second half of 2020.Large shareholders frequently sell stock in planned intervals, often through pre-arranged trading programs. Yet the prolonged rally in equities markets has made the value of these disposals, whether planned or opportunistic, strikingly high.There are multiple reasons an investor of any size might be motivated to sell. After the pandemic-defying rally, valuations are increasingly under pressure from rising inflation. Investors are wary the post-Covid recovery could prompt tightening measures from the Federal Reserve. And President Joe Biden’s proposed tax hikes -- including a near doubling of the capital gains rate -- have created uncertainty.Bezos, EllisonWhatever the reason, the sales are flooding the market with yet more liquidity, the consequences of which will ripple through philanthropy, the art market, real estate and other niches.Bezos has sold $6.7 billion worth of Amazon shares this year. While a relative pittance for the world’s richest person, it’s more than two-thirds the value of shares he sold in 2020. Larry Ellison unloaded 7 million Oracle shares in the past week for total proceeds of $552.3 million. Charles Schwab has sold $192 million worth of shares of his eponymous brokerage this year.Brin, who has signaled that he intends to sell as many as 250,000 Alphabet Inc. shares, has disposed of $163 million worth of stock in recent days, his first sales in more than four years, filings show.Mark Zuckerberg and his charitable foundation, the Chan Zuckerberg Initiative, meanwhile, accelerated their sales of Facebook stock in the fall. Zuckerberg or his charity has divested shares at a near-daily clip since November, for a cumulative total exceeding $1.87 billion.The surging markets have exacerbated the concentration risk of the single-stock-dominated fortunes typical of many tech billionaires, said Thorne Perkin, president of Papamarkou Wellner Asset Management.“From a portfolio-management perspective, it makes sense to spread it around,” he said.Covid EconomyAlso among the biggest sellers are some noteworthy beneficiaries of the Covid economy. Zoom Video Communications founder Eric Yuan and used-car retailer Carvana Co.’s Ernest Garcia II have together received more than $1.75 billion from stock sales since March 2020, according to the Bloomberg Billionaires Index. George Kurtz, chief executive officer of cybersecurity firm CrowdStrike, has sold shares worth at least $250 million over that period.Zoom founder Yuan -- the poster child, in many ways, for the coronavirus economy -- has stepped up his sales this year as the firm’s share price slumped. In 2020, he typically offloaded about 140,000 shares a month through a trading plan, which generated more than $350 million over the course of the year.Since March, he’s sold almost 200,000 shares a month on average, yielding him about $185 million. He also donated more than a third of his stake in the San Jose-based company as part of “typical estate planning practices,” according to a spokesman. Some of the cash from his share sales fund donations to unspecified “humanitarian causes.”(Updates with Charles Schwab’s sales in seventh 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.
Despite differing outcomes, shares of GameStop and AMC Entertainment were moving in almost perfect sync on Friday as the two most popular meme stocks experienced very similar choppy trading one day after both experienced major surges.
The beneficial owners of the companies cited have no say at all in how their institutionally held shares are voted.
(Bloomberg) -- Investors aren’t yet abandoning the view that inflation pressures will pass, even after the sticker-shock of the U.S. consumer prices report sent tremors across a broad range of assets.Market gauges of inflation expectations pulled back from initial spikes following the data, which showed the biggest monthly increase in core CPI since 1982. U.S. Treasury long-end yields have pulled back well shy of their year-to-date peaks. And U.S. equity indexes snapped three straight days of losses Thursday.This moderation in market moves should reassure policy makers, who maintain that the acceleration in prices is temporary, due largely to supply bottlenecks as producers struggle to catch up with rebounding demand after the pandemic forced so much global activity to shut down.“It is not a question of whether inflation will normalize but when,” said Subadra Rajappa, head of U.S. rates strategy at Societe Generale. “The pre-pandemic secular trends like globalization, technological efficiencies, demographics should push inflation lower, but how long these distortions continue to push inflation higher is unclear.”Getting their call right on inflation is make or break for investors. Rising costs of living erode the value of their already low-yielding assets over time, and could force central banks to raise interest rates sooner than they’ve led markets to believe.The run-up in prices of real assets, from commodities to housing, highlights the need to have sturdy inflation hedges in place, according to Thomas Poullaouec, head of multi-asset solutions for the Asia-Pacific region at T. Rowe Price.“What they’re telling us is that there are different signs to suggest that higher inflation for longer than the market is pricing is a risk, and we definitely shouldn’t underestimate it,” he said.Poullaouec this year shifted to favor value stocks -- such as financials, industrials and materials and some consumer-related sectors -- over growth assets for the first time in a decade. He sees the economic recovery spurring this rotation, which he says is only half-complete.In fixed income, he is leaning into short-term inflation-linked bonds and bank loans, or even cash, to steer clear of the sort of long-dated, low-yield assets that are most vulnerable to higher borrowing costs.Longer-term measures still don’t suggest price pressures getting out of hand. The rate on the five-year, five-year forward swap contract for CPI is still around 2.5%. Adjusted for the typical gap between CPI and the Fed’s preferred measure -- personal consumption expenditures -- that means longer-run inflation is seen running only modestly above the 2% target despite April’s extraordinary surge in price gains.Even the bearish spike in equities bets -- reflected in the Cboe put-to-call ratio that tracks the volume of options tied to everything from single stocks to indexes -- may be a contrarian signal, according to Chris Murphy, co-head of derivatives strategy at Susquehanna International Group.It was likely affected by a dropoff in call purchases among retail traders, he said, noting that the S&P 500 has posted a median two-week return of around 3% following the 10 highest put-call readings over the past 12 years.Credit Traders Bet on Central Banks Keeping Nerve Amid InflationYet rates markets aren’t ignoring inflation risks, which is underscored by the past month’s rise in breakeven rates, a market gauge of the inflation outlook derived from Treasury yields. The five-year rate, which is more influenced by the recent rebound in commodity prices, touched its highest level since 2005 before paring the move.There are some lingering doubts that the Fed will be as tolerant of rising inflation as it has promised.Eurodollars contracts are priced for roughly one 25-basis-point rate hike by the end of next year, and at least three by the end of 2023. The central bank’s latest guidance, from March, suggests policy makers see no increases over that whole period.(Updates prices throughout. An earlier version of this story corrected the job title in the sixth 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.