The Daily Chase: Canadian GDP surges in Q2, new homebuyer incentive about to launch

Dara Khosrowshahi talked up Uber Technologies’ “path to profitability” in an interview with our Bloomberg partner Emily Chang yesterday.
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Noah Zivitz

Managing Editor, BNN Bloomberg

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Canada’s exporters put some shine on this country’s economic growth in the second quarter as total annualized GDP surged 3.7 per cent. That was far above Bay Street’s expectations. But if you scrape below the surface, there’s some cause for concern. Non-residential business investment plunged 16 per cent and household spending slowed sharply. It’s a lot to take in – and the stakes are significant, with a Bank of Canada rate decision coming up next week.

GETTING INTO THE HOUSING MARKET

The federal government’s First-Time Home Buyer Incentive program will start accepting applications next week, opening the door for eligible new buyers to get a booster shot from the feds – which would chip in five per cent for an existing home, and up to 10 per cent for a new home. Eligibility is restricted to households with no more than $120,000 in annual income, meaning buyers in pricier cities might have to temper expectations for their first abode. Here’s a primer on BNNBloomberg.ca.

OSC SETTLES BIG BANK FX CLAIMS

Earlier this week we reported on the Ontario Securities Commission’s allegations about certain inappropriate behaviour among the FX teams at RBC and TD. This morning, the regulator signed off on settlements that will see RBC pay $13.5 million, while TD pays $9.3 million. Both banks will also cover $800,000 in OSC staff costs, and they’ve agreed to audit the compliance frameworks at their FX trading units.

IN CONVERSATION WITH UBER’S CEO

Dara Khosrowshahi talked up Uber Technologies’ “path to profitability” in an interview with our Bloomberg partner Emily Chang yesterday. He discussed the company’s nuts and bolts (including his view that “the category of food can be as large or even larger than the ride-sharing category”) and the competitive landscape. Watch for highlights this morning on BNN Bloomberg.

TARIFF TIT-FOR-TAT

While Beijing pacified investors earlier this week, worth keeping in mind the next wave of China-U.S. tariffs take effect on Sunday. The list of Chinese exports being subjected to the new 10 per cent surtax as of Sept. 1 is here. U.S. President Donald Trump, meanwhile, said the two countries were planning “a talk [Thursday] at a different level.”

OTHER NOTABLE STORIES

-SNC-Lavalin today said the U.S. Department of Energy is extending a contract with a consortium including its Atkins Nuclear Secured Holdings unit. In total, the extension could be worth $725 million.

-DHX Media Founder Michael Donovan has stepped down as CEO of the Halifax-based kids’ content warehouse. He’s being replaced by Eric Ellenbogen, who previously held senior roles at Marvel and DreamWorks. DHX’s stock is down 27 per cent so far this year.

-CAE is partnering up with business jet conglomerate Directional Aviation Capital. The arrangement includes CAE paying US$85 million for a 50 per cent stake in a specialized simulator business. I see that at least one analyst subsequently upgraded CAE.

-The proposed multi-jurisdiction U.S. settlement with Oxycontin maker Purdue Pharma has reportedly hit a hurdle, with The Wall Street Journal reporting some state attorneys general are pushing back on the terms. Earlier reports suggested the settlement could be worth upward of US$12 billion.

-Tesla shares moved higher in pre-market trading after China’s industry ministry indicated the carmaker will be exempted from a tax on auto purchases.

-Apple has sent out invitations for a Sept. 10 product launch event in Cupertino at the Steve Jobs Theatre.

NOTABLE RELEASES/EVENTS

-Notable earnings: Campbell Soup

-Notable data: Canadian GDP, U.S. personal income and spending

-9:00 a.m. ET: OSC hearing re. proposed settlement with Toronto-Dominion Bank over FX activities

-10:00 a.m. ET: OSC hearing re. proposed settlement with RBC over FX activities

-11:00 a.m. ET: Prime Minister Justin Trudeau meets with Mayor Kennedy Stewart in Vancouver

-12:00 p.m. ET: Foreign Affairs Minister Chrystia Freeland announcement at University of Toronto

-2:00 p.m. ET: British Columbia Utilities Commission Chair David Morton holds news conference in Vancouver to release findings from inquiry into gasoline prices.

Every morning BNN Bloomberg’s Managing Editor Noah Zivitz writes a ‘chase note’ to BNN Bloomberg’s editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnnbloomberg.ca/subscribe.

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Galaxy Digital Announces Second Quarter 2019 Financial Results and Provides Corporate Updates

… disciplined deployment of capital into a number of attractive investment opportunities,” said Michael Novogratz , Founder and CEO of Galaxy Digital.

Disclaimers and Additional Information

The TSXV has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release. The Ontario Securities Commission has not passed upon the merits of the disclosure record of Galaxy Digital.

FINRA’s approval of a continuing membership application does not constitute or imply that FINRA approves of or endorses any security or product offered by the member firm.

The SEC’s granting of registered investment adviser status does not imply SEC approval or disapproval nor a certain level of skill or training of an investment adviser.

BLOOMBERG is a trademark or service mark of Bloomberg Finance L.P. GALAXY is a trademark of GDCM. Bloomberg Finance L.P. and its affiliates (collectively, Bloomberg) are not affiliated with GDCM, the GBCIF and their respective affiliates (collectively, Galaxy). Bloomberg’s association with Galaxy is to act as the administrator and calculation agent of the BGCI, which is the property of Bloomberg. Neither Bloomberg nor Galaxy guarantee the timeliness, accurateness, or completeness of any data or information relating to the BGCI or results to be obtained. Neither Bloomberg nor Galaxy make any warranty, express or implied, as to the BGCI, any data or values relating thereto or any financial product or instrument linked to, using as a component thereof or based on the BGCI (Products) or results to be obtained therefrom, and expressly disclaims all warranties of merchantability and fitness for a particular purpose with respect thereto. To the maximum extent allowed by law, Bloomberg, Galaxy and its or their licensors, and its and their respective employees, contractors, agents, suppliers, and vendors shall have no liability or responsibility whatsoever for any injury or damages-whether direct, indirect, consequential, incidental, punitive, or otherwise-arising in connection with the BGCI, any data or values relating thereto or any Products-whether arising from their negligence or otherwise.

Forward-Looking Statements

Certain information in this press release, including, but not limited to, statements regarding the future of the industry the Company or Partnership’s anticipated results, business or opportunities, may constitute forward looking information (collectively, forward-looking statements), which can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” (or the negatives) or other similar variations. Because of various risks and uncertainties, including those referenced below, actual events or results may differ materially from those reflected or contemplated in such forward-looking statements. Forward looking statements are subject to the risk that the industry or the Company’s businesses do not perform as anticipated, that revenue or expenses estimates may not be met or may be materially less or more than those anticipated, that expected advisory transactions may be modified or not completed at all and those other risks discussed in the risks and uncertainties section in the Partnership’s and the Company’s Management Discussion and Analysis for the year ended December 31 , 2018. Factors that could cause actual results of the Company and its businesses to differ materially from those described in such forward-looking statements include, but are not limited to, a decline in the digital asset market or general economic conditions; the failure or delay in the adoption of digital assets and the blockchain ecosystem by institutions; a delay or failure in developing infrastructure for the trading business or achieving mandates; and for advisory transactions, a decline in the securities markets, an adverse development with respect to an issuer or party to the transaction or failure to obtain a required regulatory approval. In connection with the forward-looking statements contained in this press release, the Company has made assumptions that no significant events occur outside of the Company’s and Partnership’s normal course of business. Forward-looking statements are not guarantees of future performance, accordingly, you should not put undue reliance on forward-looking statements. Information identifying assumptions, risks and uncertainties relating to the Company and the Partnership are contained in Galaxy Digital’s filings with the Canadian securities regulators available at www.sedar.com. The forward-looking statements in this press release are applicable only as of the date of this release or as of the date specified in the relevant forward-looking statement and Galaxy Digital undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.

All figures are in U.S. Dollars unless otherwise noted.

SOURCE Galaxy Digital Holdings Ltd

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View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2019/28/c8900.html

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WeWork rival IWG mulls over spinoff for US business: report

WeWork’s largest backer, SoftBank Group Corp, has valued the New York-based firm at US$47 billion, far in excess of IWG’s market capitalisation, and …

New York

THE founder of IWG Plc is planning to spin off the firm’s US business into a separately listed company in New York, Sky News reported, citing people familiar with the matter.

IWG chief executive officer Mark Dixon is in talks with investment banks about creating a standalone business to rival WeWork Cos, the London-based broadcaster said on its website.

Sky said that IWG’s US operations could be worth as much as US$3.7 billion. IWG generated about 41 per cent of its US$3.4 billion of revenue in the Americas last year, according to data compiled by Bloomberg.

sentifi.com

Market voices on:

IWG, which is the world’s largest shared office provider and owns multiple office brands including Regus, is bigger than WeWork in terms of space. The firm has almost 60 million square feet (5.6 million square metres) globally, while WeWork had 45 million square feet as of March. WeWork’s largest backer, SoftBank Group Corp, has valued the New York-based firm at US$47 billion, far in excess of IWG’s market capitalisation, and its planned initial share sale may be among the year’s biggest.

The company, which is based in Switzerland but listed in the UK, had a market value equivalent to US$4.5 billion at the close of trading last Friday. Mr Dixon said earlier this month that WeWork’s high profile has helped boost revenue growth at IWG’s US business. BLOOMBERG

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SoftBank to Lend Employees Up to $20 Billion for Fund, WSJ Says

SoftBank Group Corp. is planning to lend as much as $20 billion to its employees to buy stakes in its second venture capital fund following the success …
Masayoshi Son
Masayoshi Son
Photographer: Akio Kon/Bloomberg
Photographer: Akio Kon/Bloomberg

SoftBank Group Corp. is planning to lend as much as $20 billion to its employees to buy stakes in its second venture capital fund following the success of an earlier $100 billion fund to invest in tech start ups, the Wall Street Journal reported.

The second Vision Fund aims to raise $108 billion, SoftBank said earlier. In addition to its employees, it’s also expected to collect money from Apple Inc., Microsoft Corp., Foxconn Technology Group and the sovereign wealth fund of Kazakhstan. It’s also won support from Japanese financial institutions, with seven identified as signing memorandums of understanding to participate.

Read: Spending a $108 Billion Checkbook Can Be Hard Work

Founder and Chief Executive Officer Masayoshi Son may account for half of the employee investment pool, according to the Journal, citing people familiar with the matter it didn’t identify. Emily Claffey, an external spokeswoman for SoftBank, didn’t respond to queries on loans to employees for the fund.

Son has a net worth of $16.9 billion, making him Japan’s second-richest person, according to the Bloomberg Billionaires Index. SoftBank also said earlier it’s committing $38 billion in capital itself to the fund.

Earlier this month, SoftBank reported first-quarter profit that beat the highest analyst estimate with valuation gains from Vision Fund investments such as Slack Technologies Inc., which went public in June, hotel chain OYO Rooms and food-delivery app DoorDash Inc. The gains were offset by a 195.3 billion yen ($1.8 billion) decline in the fair value of holdings including Uber Technologies Inc.

SoftBank also said the Vision Fund held 81 investments worth about $66.3 billion. SoftBank in June disclosed the first fund had earned 62% returns so far. About five or six companies from the fund will list by next March, Son said earlier.

SoftBank’s Massive New Fund Has Scored an Unexpected Win

    Published on August 17, 2019, 5:50 PM EDT

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Lyft Shares Rise Ahead of Insiders’ First Chance to Sell Stock

(Bloomberg) — Some early investors in the ride-hailing company Lyft Inc., one of the most anticipated yet disappointing IPOs of the year, will get their …

(Bloomberg) — Some early investors in the ride-hailing company Lyft Inc., one of the most anticipated yet disappointing IPOs of the year, will get their first opportunity to sell shares on Monday.

The lockup expiry was brought ahead from Sept. 24, as the original date would have fallen within Lyft’s blackout period ahead of third-quarter earnings.

Lyft estimated that about 258 million Class A shares may become eligible for sale at the market open on Aug. 19. The company had 280 million Class A shares outstanding as of July 31, according to Bloomberg data. Including Class B shares, equity award plans and restricted stock units, the total diluted number of shares stood at about 341.5 million.

The company’s shares gained as much as 1.8% in New York on Friday.

In a report published after Lyft’s earnings on Aug. 7, DA Davidson analyst Tom White said the company’s co-founders Logan Green and John Zimmer will not be selling shares at the time of the lockup expiry.

Lyft’s latest quarterly results, which surpassed expectations, outshone larger rival Uber Technologies Inc., which reported a “messy” quarter, analysts said. Lyft shares have fallen 12% since reporting earnings on Aug. 7, while Uber shares have dropped 20% since reporting its earnings a day later.

(Adds details in third paragraph, updates shares in fourth paragraph.)

To contact the reporter on this story: Esha Dey in New York at edey@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Jennifer Bissell-Linsk

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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