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Reuters

Exclusive: U.S. watchdog mulls guidance to curb SPAC projections, liability shield – sources

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The U.S. securities regulator is considering new guidance to rein in growth projections made by listed blank-check companies, and clarify when they qualify for certain legal protections, according to three people with knowledge of the discussions.

The previously unreported measures being weighed by staff at the Securities and Exchange Commission (SEC) would escalate its crackdown on the deal frenzy in special purpose acquisition companies, or SPACs, which it worries is putting investors at risk.

The SPAC market had already started to lose steam after the SEC earlier this month suggested warrants issued by SPACs should be accounted for as liabilities instead of equity instruments, and the potential new guidance could compound that slowdown.

Wall Street’s biggest gold rush of recent years, SPACs are listed shell companies that raise funds to acquire a private company and take it public, allowing targets to sidestep the more onerous regulatory checks of an initial public offering.

A record $100 billion has already been raised by U.S. SPACs – also known as blank-check companies – so far this year, while the value of SPAC mergers and acquisitions hit a record $263 billion, according to data from Dealogic.

In the past year, the likes of sports betting platform DraftKings Inc (DKNG.O), electric truck maker Nikola Corp (NKLA.O) and Playboy owner PLBY Group (PLBY.O) have gone public through SPAC mergers.

The boom has drawn scrutiny from the SEC which has issued a number of warnings over SPAC marketing and investor communications.

Among the concerns it has flagged are SPAC earnings growth projections. SPAC sponsors say the projections are important for investors, especially when targets are unprofitable startups, but investor advocates say they are frequently wildly optimistic or misleading.

In addition, the SEC is considering guidance aimed at clarifying when a key liability protection for such forward-looking statements applies to SPACs, the three sources said.

SAFE HARBOR

The legal safe harbor created by the 1995 Private Securities Litigation Reform Act protects listed companies from shareholder litigation provided forward-looking statements are made in good faith, identified as such and couched in cautionary language.

While the safe harbor does not apply to IPOs, SPAC sponsors have generally operated on the basis that it does apply to SPAC deals, and have leaned on it heavily to issue growth projections.

But some attorneys say the SEC’s rules on the safe harbor are ambiguous, and the SEC’s acting director of corporation finance, John Coates, earlier this month cast doubt on whether it applies to SPAC deals.

He said SPAC targets “have no more of a track record” than private companies doing IPOs, raising questions about the potential liability of sponsors and other parties involved in the transactions.

The SEC guidance would aim to clarify the conditions upon which the safe harbor applies, the sources said. Those changes would likely prompt more due diligence and caution on the part of SPAC dealmakers wary of incurring liability, the people said.

The SEC has not substantively amended the definition of “blank-check company” since the passage of the 1995 law, the agency has said.

The changes are being discussed by staff in the SEC’s corporation finance division but it was unclear if the agency’s leadership would back them, said one of the sources.

The sources declined to be identified because the discussions are private.

NEUTRAL STANCE

While Coates has said there are “significant” issues with some SPAC deals, he has also emphasized he is neither pro- nor anti-SPAC.

In addition to the recent accounting guidance and warnings over projections, marketing and investor communications, the SEC has opened an inquiry into how Wall Street banks are managing the deal risks and is probing electric vehicle-makers that went public via SPACs. read more

The SPAC boom has been fueled in part by easy monetary conditions as central banks have pumped cash into pandemic-hit economies, while the SPAC structure provides startups with an easier path to go public.

But the SEC scrutiny may be starting to tamp down the market. SPACs raised roughly $17 billion during the first 20 days of January, but that fell to $2.5 billion during the corresponding period in April, according to Dealogic.

RBC Capital Markets co-heads of SPAC coverage, Amir Emami and Michael Ventura, said valuations had been stretched during the SPAC boom and that, as with other frothy markets in the past, the sector was due a “reset.”

“And then when there’s a reset, it’s a hard reset. So we’re going through that reset right now,” said Ventura.

Source: Reuters – Exclusive: U.S. watchdog mulls guidance to curb SPAC projections, liability shield – sources

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Source: https://spacfeed.com/exclusive-u-s-watchdog-mulls-guidance-to-curb-spac-projections-liability-shield-sources?utm_source=rss&utm_medium=rss&utm_campaign=exclusive-u-s-watchdog-mulls-guidance-to-curb-spac-projections-liability-shield-sources

Reuters

Some big U.S. hedge funds bought value stocks, SPACs during first quarter

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NEW YORK, May 17 (Reuters) – A number of well-known U.S. hedge funds bought value stocks and blank-check acquisition companies, selling some winners from the technology-led stock rally as bond yields rose during the first quarter, filings released on Monday showed.

Special-purpose acquisition companies, known as SPACs, proved popular among hedge fund managers, with funds such as Third Point and Saschem Head adding shares of SPACs, including FinTech Acquisition Corp V and healthcare company Orion Acquisition Corp to their portfolios. Over 400 SPACs have listed their shares since the start of 2021, though the majority are underperforming the broad stock market, a Reuters analysis here.

At the same time, several hedge funds added to financial, energy and consumer companies. Third Point added a new position in Carvana Co and Uber Technologies Inc, while Epoch Investment Partners added new positions in energy firms such as Exxon Mobil Corp, Pioneer Natural Resources Co and Diamondback Energy Inc.

Billionaire Ray Dalio’s Bridgewater Associates, the largest hedge fund manager in the world, added a new position in General Motors Corp, Ecolab Inc and Johnson Controls International PLC while selling out of its position in media companies, including the New York Times Co, News Corp and Discovery.

The moves into stocks that benefit from a broadly growing economy came during a quarter in which so-called value stocks – in industries such as financials and materials that rise on economic growth – surged and interest rates rose as investors positioned for a reopening of the global economy after the coronavirus pandemic.

The Russell 1000 Value index, for instance, is up 17% for the year to date, while the Russell 1000 Growth index – which is top-loaded with shares of technology companies like Apple Inc and Amazon.com Inc that surged during the economic lockdowns – is up 3.5% over the same time.

Bond yields, meanwhile, rose to reflect rising inflation expectations, increasing borrowing costs for consumers and companies. Consumer prices rose in April by the largest measure in 12 years, prompting some mutual fund managers to increase their cash positions and turn more defensive.

Hedge fund managers’ positions were revealed in 13F filings that show what fund managers owned at the end of the quarter. While they are backward-looking, these filings are one of the few public disclosures of hedge fund portfolios and are closely watched for clues on trends and what stocks certain fund managers are favoring.

They do not disclose the date a purchase was made during the quarter.

Some hedge fund managers unloaded shares of companies that performed well over the last year, suggesting they see limited gains ahead. Epoch Investment Partners, for example, liquidated its position in Under Armour Inc, which is up 34% for the year to date, and cut its position in Amazon by roughly 46%.

Third Point, meanwhile, sold out of its position in Alibaba Inc.

Source: Reuters – Some big US hedge funds bought value stocks, SPACs during first quarter

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Source: https://spacfeed.com/some-big-u-s-hedge-funds-bought-value-stocks-spacs-during-first-quarter?utm_source=rss&utm_medium=rss&utm_campaign=some-big-u-s-hedge-funds-bought-value-stocks-spacs-during-first-quarter

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AI

CBDCs Are Not That Stable And May Eventually Kill Bitcoin, Says Financial Expert

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[PRESS RELEASE – Please Read Disclaimer]

AscendEX, formerly BitMax, an industry-leading digital asset trading platform built by Wall Street quant trading veterans, congratulates PlotX – a cross-chain prediction market protocol on their v2 Mainnet launch on the Polygon Network on May 14 at 12:00 p.m. UTC.

PlotX Version 1 (“v1”) was launched in October 2020 as a decentralized non-custodial prediction market protocol on the Ethereum Blockchain. PlotX allows crypto-traders to use their skills to predict the future value of digital assets like ETH, BTC. Markets on PlotX v1 were automatically created in intervals of 4 hour, 1 day and 1 week.

The v2 has been under development since December 2020 and the testnet was released on April 13th, 2021 for the public. After rigorous testing by the community, the launch of PlotX v2 on the Polygon Mainnet is now scheduled on May 14th, 2021.

PlotX v2 has focussed heavily on simplifying the prediction-making experience for users thanks to a consistent dialogue with their community via the research forum and their official community telegram group. It brings the experience closer to mainstream applications while retaining the DeFi ethos of being non-custodial and permissionless.

This can be seen in the marquee features that PlotX announced via their recent blog post about the mainnet release:

  1. Gasless prediction-making – via meta-transactions that abstract the process for users so they only have to make a single transaction while making predictions
  2. Smooth token bridging – via cross-chain swap technology, that enables users to move $PLOT between Ethereuem, Polygon and other EVM compatible chains like BSC & Solana, from within the application itself
  3. Guaranteed liquidity provisions – via incentive alignment of market creators for providing liquidity for new markets, making it lucrative for users to participate in
  4. Simple onboarding experience – for users, especially ones who are not familiar with metamask and RPC changes, to login using their email addresses without compromising on the non-custodial nature of the dapp

The team has built a class product and is highly receptive to the community. As per the roadmap, upgrades in V2 do not end here; numerous new features are slated to be introduced that will equip users with exciting new prediction opportunities.

Ish Goel, co-founder PlotX, shares his thoughts “It has been an exciting journey for us since the launch of PlotX v1 in October 2020. Prediction markets have always been an exciting derivative for crypto traders. However, they have always faced the challenges of a complex UX, high gas fees & low market liquidity that has also resulted in a lack of growth of the space. With PlotX v2 we have worked alongside our community to solve these challenges by introducing an overhauled UX, deploying on Polygon and introducing liquidity bootstrapping mechanisms for new markets. The community has reacted positively to these features and we’re super excited to reveal the mainnet app to them as well as the larger crypto trading community!”

About AscendEX

Originally founded in 2018 as BitMax.io, AscendEx is a leading crypto and digital asset financial platform catering to both professional and retail traders. Our venue offers spot, futures, margin trading and staking products and incorporates key elements from the DeFi space to foster a unique market structure for users. AscendEx is led by a team of Wall Street veterans who have applied traditional markets’ rigor to create a robust, secure, and reliable experience for all participants; and a consistent source of liquidity for primary offerings.

About PlotX

PlotX is a cross-chain Prediction Market protocol built by the ex-CTO of Nexus Mutual (>$1bn mcap). It enables crypto-asset price predictions, like “What will be the price of BTC/USDT in the next 1 hour?”

Dubbed as the Uniswap of Prediction Markets, PlotX is the simplest and most fun DeFi derivative for crypto traders.

SPECIAL OFFER (Sponsored)

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Source: https://coingenius.news/cbdcs-are-not-that-stable-and-may-eventually-kill-bitcoin-says-financial-expert-47/?utm_source=rss&utm_medium=rss&utm_campaign=cbdcs-are-not-that-stable-and-may-eventually-kill-bitcoin-says-financial-expert-47

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Cleantech

Bloomberg & Reuters FUD Masters Bring Tesla Stock Down

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When will the FUD masters from Bloomberg and Reuters learn to never compare Tesla sales numbers from the first month of a quarter to the sales numbers from the last month of a quarter?

The first month of the quarter is the replenish and transport month for Tesla. There’s a low number of deliveries (sales) since a large portion of produced vehicles are on ships, trailers, and replenishing stocks at points of sales. The last month of the quarter is the month when most of the vehicles produced in the quarter are delivered (“sold”).

With a statement that the Tesla’s China sales are 27% down from the previous month, it seems the FUD masters have created a little panic in the market — and just misinformed people again. They combine the normal first-month-of-quarter dip with some minor China-related stumbles. Previous article by less prejudiced publications reported that the influence on demand would be negligible for a few days, and then disappear after the topic was out of the news.

Having only a 27% drop from March to April is actually excellent news for Tesla sales.

But “Tesla is doing Great in China” is not a headline to run with for these publications. Why do they get a kick out of tricking investors into doing the wrong thing by spreading nonsense? Or do they really not know better? In that case, though, their boss should have a word with them. Perhaps reviewing horror shows on television is better suited to their temperaments.


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Source: https://cleantechnica.com/2021/05/11/bloomberg-reuters-fud-masters-bring-tesla-stock-down/

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Blockchain

India to have a ‘window’ for Bitcoin, says minister amid crypto ban FUD

The Ministry of Finance of India continues to form a careful position on private cryptocurrencies.

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The minister of finance of India, Nirmala Sitharaman, has given a ray of hope for the Indian cryptocurrency community as more fear, uncertainty and doubt circulate regarding a supposedly impending ban on digital assets. 

In a Saturday interview with India Today, Sitharaman emphasized that the ministry does not plan to shut off Indian innovations associated with Bitcoin (BTC) and its underlying blockchain technology.

“From our side, we are very clear that we are not shutting all options off. We will allow certain windows for people use, so that experiments on the blockchain, Bitcoins or cryptocurrency […] and fintech, which depend on such experiments, will have that window available for them. We are not going to shut it off,” she said.

Sitharaman said that the ministry is finalizing a cabinet note on crypto as India continues formulating its official stance on the asset class. “It is nearing completion, and then it will be taken to the cabinet. The Supreme Court had commented on cryptocurrency. We are very clear that the Reserve Bank of India will take a call on an official cryptocurrency,” she said.

After India’s supreme court lifted a crypto banking ban one year ago, reports of a new ban started circulating in early 2021. In February, another anonymous Indian official claimed that the government was about to introduce a complete ban on crypto, giving investors up to six months to liquidate their holdings.

On Sunday, Reuters published a report citing an anonymous senior government official who claimed that India is preparing to enforce a blanket ban on crypto and impose major penalties on rule-breakers. As part of an alleged bill, India is planning to criminalize “possession, issuance, mining, trading and transferring crypto-assets,” the source claimed.

Despite reports of a ban from anonymous sources continuing to surface, Sitharaman said in early March that the ministry wants to form a “calibrated” stance on digital assets. 

Nischal Shetty, founder of local crypto exchange WazirX, seemed optimistic about Sitharaman’s comments in a tweet, stating that it is time for the Indian crypto community to build. 

The RBI and the Ministry of Finance did not immediately respond to Cointelegraph’s request for comment.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/india-to-have-a-window-for-bitcoin-says-minister-amid-crypto-ban-fud

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