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February 2018

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Sunedison Inc (SUNE) is facing an internal audit and reportedly headed towards bankruptcy with its future now hanging in the balance

Sunedison Inc (NYSE:SUNE) has been suspended or had its price target revised downwards at a number of sell side firms as the company undergoes internal audit and investigations regarding compliance. The potential to go bankrupt has pitched the company in the limelight and investors will be sitting on the sidelines or withdrawing their positions in the company as they wait for the dust to settle and a clearer picture to emerge.

FBR Capital’s analyst Carter Driscoll, in a research note, suspended the Outperform rating and $7 price target of the company amid its current financial crisis. SunEdison has failed to release any financial statements since its 10Q for the third quarter of fiscal year 2015, the quarter ending on September 30. The energy technology company has been under an internal audit and has also noted concerns regarding internal controls and how it reports its finances. This is a dangerous situation and in the vacuum caused by the absence of information or a more concrete reasoning behind why the audit is truly in place, the company’s business and viability have been placed in doubt. Questions have also been raised regarding SunEdison’s legal disputes such as the one with Vivint and their status.

Deutsche Bank also cast some light on the matter when commenting on TerraForm which has delayed its 10-K reportedly due to a risk they see of SunEdison declaring bankruptcy. Yesterday, SunEdison stock fell 55% after the U.S Securities and Exchange Commission commented on the risk of such an eventuality. It has only been 2 weeks since SunEdison delayed its annual report but in hindsight the collapse of the Vivint deal due to SunEdison’s inability to amass the necessary funds gives credence to its insolvency. SunEdison’s business has long been criticized for its cash buwith poor cash flow and high debt remaining a consistent problem for the company.  The Street will be watching the developments at SunEdison with bated breath as bankruptcy becomes a real possibility for SunEdison.

Tesla hires new VP, Corporate Controller and Chief Account Officer, Eric Branderiz, after facing accounting issues earlier this year

In March, Tesla Motors Inc (NASDAQ:TSLA) Vice President of Finance Worldwide Controller, Michael Zanoni, jumped ships for its former employer, Amazon.com, Inc. (NASDAQ:AMZN), after an accounting error was revealed in the 4QFY15 Shareholder Letter. After six months, the automaker has hired an accountant with 20 years of experience in accounting and auditing, who also appears to be a replacement for Mr. Zanoni.

The company announced on Friday that it has hired Eric Branderiz as the new Vice President, Corporate Controller, and Chief Accounting Officer at Tesla. Mr. Branderiz will be bringing in several years of expertise in account, as well as solar.

The executive spent six years in SunPower Corporation (NASDAQ:SPWR) in multiple positions, including ‘Head of RLC, Operations & Finance,’ ‘Corporate Controller,’ and ‘Head of Corporate Financial Planning & Analysis,’ while being the Senior VP and Chief Accounting Officer. He will take his new position at Tesla on Monday, October 24.

Before joining SunPower, Mr. Branderiz did a small spell of 12 months at KinderCare Education, formerly known as Knowledge Universe, looking after corporate treasury, financial reporting, internal controls and subsidy operations. He worked for six years from 2003 to 2009 as Senior VP & Corporate Controller, Treasury & Tax at Spansion Inc, a Sunnyvale-based semiconductor maker.

Mr. Branderiz served a year at the renewable energy startup, Advanced Microgrid Solution, which is also under partnership with Tesla Energy. In his first six years, he was auditor at Ernst & Young. The executive completed his Business Commerce degree from the University of Alberta, Canada and is Certified Public Accountant.

Mr. Zanoni left Tesla shortly after the media spotted some major financial reporting issues in the Shareholder Letter. The company mistakenly increased Supercharger network’s value to $399 million and later required pointing out in a 10-K filing that the amount was overstated by $173 million.

Earlier this year, Jason Wheeler replaced Deepak Ahuja as the new Tesla CFO and since then the finance department is going through a transition. Hopefully, Tesla will not be involved in any accounting issues under the leadership of Mr. Branderiz.

Investor seeks to attain class action status for lawsuit against Twitter

Twitter Inc. (NYSE:TWTR) has been coming under fire from analysts and investors alike over its stagnant growth numbers for quite a while now. Shareholders have grown increasingly frustrated as Twitter’s failure to address problems has taken an immense toll on its shares. During the past 12 months, the micro blogging site’s shares declined 31.64% while the S&P 500 index jumped 11.33%.

One investor who is fed up of Twitter’s state of affairs is reportedly taking matters to a court of law. According to an earlier Re/Code report, Twitter investor Doris Shenwick has decided to sue certain members of the management for deceiving shareholders about the company’s true growth position. Ms. Shenwick noted that management had misinformed investors about Twitter’s prospects in terms of user engagement and growth. The management had promised to surpass the 500 million mark in user numbers for two years, however, it failed to do so.

According to Ms. Shenwick’s lawyer, Twitter executives had claimed back in November 2014 that the company’s monthly active users would go beyond 500 million in the mid-term and above a billion in the long term. The plaintiff further alleges that Twitter had made these claims without any concrete base. As of June, Twitter’s monthly active users stood at 313 million. Meanwhile, relatively newer social media platforms such as Snapchat and Instagram have surpassed Twitter in user growth and popularity.

Ms. Shenwick had filled the case in a federal court in San Francisco. She aims to attain class action or group status through which the lawsuit would include all shareholders who purchased Twitter shares between Feb 6, 2015 and July 28, 2015. It is yet unclear how many shares Ms. Shenwick owns. Also at present, it is unclear whether or not any other shareholders have joined the lawsuit.

S&P Global Market Intelligence’s Efraim Levy believes that GM and Ford can outperform Tesla

Tesla Motors Inc. (NASDAQ:TSLA) is one of the few companies which has semi-autonomous vehicles on the roads and arguably the leading player to have state-of-art autonomous driving features. Yet, S&P Global Market Intelligence analyst Efraim Levy believes that the two big automakers – General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) – can overtake the fledgling electric vehicle (EV) maker.

Mr. Levy issued a report Monday forecasting vehicle powertrain electrification to increase over the next 10 years and boost its penetration of the market, which has been dominated by gasoline-driven vehicles for over a century. The auto industry is rapidly changing thanks to Tesla, tech giant Alphabet Inc. (NASDAQ:GOOGL) and ride-hailing service Uber Technologies. The changes are largely driven by consumer and regulatory demands for reduced carbon emission, greater fuel efficiency, and better safety standards.

Despite Tesla and Google’s leading role in the autonomous driving segment, the analyst believes that these conventional automakers, both of whom are more than a 100 years old, will have an edge. First, their manufacturing experiences and sizes make them “the natural producers, buyers and partners of a range of vehicle propulsion systems and technologies.” Second, technological changes are essential to assist carmakers in meeting consumer demand and regulatory requirements.

The research firm highlighted that Ford, the second-largest automaker in the US, invested $182 million in a cloud-based firm, Pivotal, to improve its software capabilities; it plans to transform into an automotive and mobility company. Additionally, it expects to pump $4.5 billion to electrify its vehicles. “We believe Ford’s manufacturing experience and leadership with hybrid vehicles sales and strong balance sheet will help it remain a leader as the industry changes,” Mr. Levy noted.

GM, the largest carmaker in the US, and also the market leader in China, has spent over $2 billion since 2010 to electrify its cars and expects to sell over 500,000 green-energy vehicles by 2017. At the beginning of 2016, the $47.6 billion company also invested $500 million in Uber’s rival, Lyft, and it plans to combine self-diving technology with Cruise Automation, once it acquires it for $1 billion. Moreover, Lyft drivers are potential customers for the Chevy Bolt EV. “We think transactions such as these, combined with our view of GM’s growing electric vehicle skills, position GM to be an important player as the industry evolves,” S&P Global Market Intelligence wrote.

Conversely, Tesla sells only zero-emission vehicles and has gathered a large number of followers. The company plans to grow its annual production 10-fold to 500,000 by 2018, up from 50,000 units it sold in 2015. Additionally, it plans to deliver the Model 3 by next year and the thunderstorm of its reservations shows that the $35,000-vehicle could be a hit. However, Mr. Levy still remains cautious over the stock as he believes it is overpriced.

Kinder Morgan and Southern Company finally sealed the deal

Southern Company (NYSE:SO) and Kinder Morgan Inc. (NYSE:KMI) ended Friday’s trading on a high as both finished trading in the green. The Southern Company stock closed up 1.21% at $51.80 while Kinder Morgan stock closed up 1.43% at $21.92.

The gains in stock prices can be attributed to the sealing of the joint venture deal between Southern Company and Kinder Morgan. As reported in the Southern Company’s press release on Friday, it would acquire a 50% stake in the Southern Natural Gas (SNG) pipeline through its subsidiary, Southern Company Gas. Kinder Morgan would be responsible for operating the pipeline. Both companies would also work in collaboration to explore for further growth opportunities.

Another reason for the rise in stock prices may be due to an increase in oil prices. On Friday’s close, the US benchmark for crude oil, West Texas Intermediate (WTI) was up 2.97% at $44.44 per barrel, while the global benchmark for crude oil, Brent Crude was up 3.04% at $46.83 per barrel.

Despite the recent gains in oil prices, they are still far below the levels they were two years ago. In such a downturn, companies continue to engage in merger and acquisition activities in order to gain growth. Southern Company is considered the world’s largest natural gas distributor, while Kinder Morgan is known for pipeline development. An amalgamation of operations can take both the companies a long way.

The President and CEO of Southern Company Thomas A Fenning, regarding the issue said that: “This strategic venture aligns with Southern Company’s previously discussed infrastructure development strategy and builds on Southern Company Gas’ midstream pipeline experience.” Kinder Morgan’s South Region President Pipelines, Norman G Holmes also expressed optimism on the issue and said that: “The Southern Company system has been a valued customer of SNG for many years and this joint venture is expected to greatly benefit the shareholders of both companies,” He added: “We are very pleased to begin pursuing the growth opportunities this strategic relationship should provide.”

Here are all the new vehicles featuring in the DLC

Earlier this week, Rockstar releases the trailer for its upcoming DLC for the insanely popular GTA franchise, Finance and Felony. The GTA online update brings a plethora of new features which include new missions and modes along with the ability to start a career as a criminal CEO. 

In addition to all the aforementioned, the trailer also revealed plenty of new vehicles into the world of GTA 5. YouTuber MrBossFTW has released a frame-by-frame breakdown of everything that Rockstar has exhibited in the new trailer. So without further ado, here are all the vehicles that you’ll be able to drive in the upcoming DLC. 

First off is the shady Benefactor SUV. The vehicle is completely blacked out and armored from head to toe, meaning it’ll be able to take a lot of hits before it bites the dust. 

This beautiful premium vehicle is the Windsor Enus equipped with a convertible red top, which looks like the perfect ride for a criminal CEO. This vehicle resembles the Rolls Royce Phantom and rightly so. 

On the supercar end, Rockstar has introduced the Vapid and the Grotti, both featuring spectacular exteriors. These cars will probably set the new high-speed record, judging by their looks. 

Another new addition is this massive armored truck, which will definitely come in handy on rampages when you simply want to destroy everything in sight without dying.  

In addition to these vehicles, the trailer also features a new tugboat. We’ve already seen this tugboat on the docks, but this time around, we actually see it sailing with the player on board. Last but not the least, Rockstar is also introducing two new aerial vehicles. In the trailer, we see a new Private Jet along with a business helicopter. Owing to their looks, expect them to cost a truckload of money. 

So, which vehicle enticed you the most? Please let us know in the comments below.

RBC Capital analyst bullish on Alibaba, believes the stock would gain in near future

Alibaba Group Holding Ltd. (NYSE:BABA) impressed the investors by publishing stellar financial results in first quarter of fiscal year 2017. In 1QFY17, the company surpassed the Street expectations on both top line and bottom line by posting remarkable results. The company posted 4.9 RMB (74 cents) in earnings per share against the estimate issued at 4.56 RMB (62 cents).

It grew its revenues by 48.2% year-over-year by reporting 32.15 billion RMB ($4.8 billion) in revenues. The group beat the Street on its revenues as the consensus had expected the company to post $4.6 billion.

As the earnings headed in the right direction, RBC Capital analyst Mark Mahaney reiterated the stock as Outperform. He was impressed as the company beats his expectations of $3.97 billion in revenues. The Chinese retailer also surpassed his expectations on EBITDA by 18.25%. The company’s EPS came in 18.36% higher than what he was looking forward to. Thus, the company successfully restored his confidence in its stock.

The retailer believes that a large part of this growth was due to increased monetization in Mobile and Desktop segment. In this quarter, mobile monetization had exceeded that of desktop monetization, marking the first ever quarter to achieve this result. Mr. Mark has faith that this trend would continue and would help the company in maintaining its premium growth levels. The monetization rates jumped approximately 2.79% compared to 2.49% of the last quarter. The mobile monetization increased by 2.8% whereas the desktop monetization showed an improvement of 2.78%.

Furthermore, the $255.42 billion group has also seen growth in its cloud computing segment. The company expects the growth to accelerate in this segment and looks forward to attain a run rate of $1 billion. The company increased its customers 18% YoY by expanding its services in the core Chinese market. The analyst has high hopes that the China-based company would continue to announce solid margins and high growth in future which would be driven by the initiatives mentioned.

Following this exceptional performance, the firm not only maintained Outperform rating on the stock. RBC Capital analyst Mark Mahaney also raised the price target by 4.76% to $110. He was impressed by the company’s performance across the board. He observed that the revenue growth posted by the company was the highest and fastest in the last seven quarters due to increases in monetization and cloud computing. Based on these, the firm has raised the estimates on the stocks of Alibaba as well as the price target. The analyst also increased his FY17 EBITDA estimate to $11.58 billion.

Not only Mark Mahaney has high expectations from the group. Other analysts are also bullish on the Chinese retailer. Following the exceptional financial results for this quarter, the FactSet Fundamental analysts have revisited their ratings on the stock. They now have 32 Buy, three Overweight, and seven Hold ratings on the stock. The shares of Alibaba show a slight upward potential of 0.82% over the last close as the median price target is set at $99.06.

Rumors have emerged that AT&T could still make a “surprise offer” to buy Yahoo core internet business

During the last week of the previous month, news emerged that AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) have entered into a bidding war to acquire Yahoo! Inc.’s (NASDAQ:YHOO) web assets. Following that, AT&T, the second-largest mobile telecommunications company in the United States, was reported to have bid in order to buy Yahoo’s core internet business while the amount was not disclosed.

On Monday of this week, Verizon announced that it had entered a second round of bidding which saw the company offering $3 billion for the acquisition of web assets put on sale by Yahoo. As of Monday and late Tuesday, Verizon, the New York based telecommunication company, was deemed to be the leading contender to acquire Yahoo’s web assets, however according to a source claiming to have the knowledge of the situation, AT&T is still a strong contestant and is well positioned to make a “surprise offer”, taking away the limelight. Moreover, the terms of the bid were not revealed.

Alongside Verizon and AT&T, several private equity firms are also taking part in this bidding war. Private equity firms like TPG, Advent International, Vista Equity Partners, accompanied by a group led by Quicken Loans’ founder Gilbert, are contestants in the race to purchase Yahoo’s internet assets. Furthermore, it was expected that besides Verizon, TPG was also going to submit a bid price in the second round of bidding as Monday was the deadline.

The Wall Street Journal reported that there was no news of other contestants submitting a bid in the second round. Yahoo is expected to conduct another round of bidding, which would be the third, and after which the contender with the highest bid will be the new owner of Yahoo’s core internet assets. As the news regarding AT&T’s surprise entry in the bid war surfaced, the stock reacted positively. It closed at $39.79, up about 1.14% against the previous day’s close.

The energy giants will have to face various challenges to drill on federal land

President-elect Donald Trump is set to take office in a matter of days, which will mark an end to the Obama administration. Eyes of energy giants, such as the Chevron Corporation (NYSE:CVX), are on the policies of the new administration and the fact that the president-elect has said that he will allow them to drill for oil in the federal land.

Donald Trump has said that he will open up these territories as a part of his efforts to stimulate the energy sector. The move is set to create an outcry and severe opposition. This is because as much of the 500 million acres of land has national parks and wildlife refuges along the Native American tribal territories.

Energy companies are looking forward to tap into huge amounts of oil, gas, coal, and uranium reserves in these lands. However, they are likely to face various challenges for this goal. There are various entities, such as the environmental and conservation groups and local communities, which may likely file lawsuits and lobby against it.

It can also be taken as a positive sign for many of the people living in these areas as the companies will bring about more jobs. Many of them have their job prospects stripped and will welcome these companies. The companies can become a support for the local communities and contribute towards the development of the area as well.

There is still a long way to go as any amendment can still face much opposition in the house. Donald Trump may even strip his plan of such moves. In an interview in his campaign trail, he has said that he was unwilling to pass control of federal lands to the states as they may even sell them off in financial trouble, which should not be allowed to happen.

The move, if agreed by all the concerned groups, will prove to be a beneficial for Chevron. The company would be able to tap into new reserves and benefit from it massively. Share prices for the energy giant gained 0.2% as the stock closed on $116.16 in yesterday’s session.

Netflix partners with Vodafone Romania as the British telecom giant introduces its new video/music streaming service

Vodafone Group, the British telecom behemoth, launched its services in the Romanian television market on Friday, with its new video and music streaming service dubbed as 4GTV+. The company also joined hands with the world’s largest online TV network, Netflix, Inc. (NASDAQ:NFLX)

Romania Insider reported Vodafone Romania entered into a partnership Netflix, giving its local subscriber base access to the popular, American streaming service via the 4FTV+ service. Apart from “exclusive special offers,” Vodafone users will get free access to a three-month trial to watch TV series and movies.

Netflix Vice President Business Development for Europe, Middle East, and Asia EMEA (EMEA), Chris Whiteley, said in a statement, “Vodafone is a global partner for Netflix, and we are thrilled to expand this relationship to Romania today.”

Vodafone customers can avail the service from today October 03, by downloading the 4GTV+ app from Google Play or App Store. The subscribers could pay for Netflix subscription along with monthly mobile bill. They would require paying a tariff of “Red 19” for using Netflix service.

The report comes hardly a month after the British telecom announced its Supernet 4G+ Internet service in the country, offering higher download speed to its customers. Vodafone Romania President and CEO, Ravinder Takkar, said the new service was announced to allow “future developments and innovation in customer experience.”

“4GTV+ provides our users with access to the most relevant local and global content in an innovative and intuitive way,” he added.

Mr. Takkar highlighted that Romanian customers love watching online content and using their smartphones, 8% of the subscriber base watches at least one video per day using the phone, particularly the younger generation.

Netflix launched in Romania at the beginning of this year, along with over 190 new countries. Last month, Netflix started its localization services in Turkey and Poland and announced partnership with local telecom operators, Vodafone and T-Mobile, respectively.