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May 2019

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Cyprus has finalized its selection for oil and has majors that would be awarded with the three oil and gas licenses to carry out exploration in the Mediterranean

Coming ahead of the OPEC meeting in Vienna on November 30 with non OPEC members resulting in a positive outcome, it would not be wrong to state that energy super majors are back to square one. Pushing forth long delayed projects and ramping up their exploration and production plans, oil and gas companies are doing what the slight price rally allows them to.

As per the latest updates by Reuters, Cyprus has finalized its selection for oil and has majors that would be awarded with the three oil and gas licenses to carry out exploration in the MediterraneanThe companies include Eni SpA (ADR) (NYSE:E), Exxon Mobil Corporation (NYSE:XOM) and Total SA (ADR) (NYSE:TOT). While mentioning this update, it shall be noted that Italy based Eni SpA has made the largest gas discovery in the past ten years.

Not only has Eni been granted with a license to operate an exploration block along with French energy company Total, but the Italian oil producer has also been awarded with a separate exploration block. Apart from this, the third exploration block went to U.S oil producer Exxon Mobil that would operate it along with Qatar Petroleum.

Other bidders for the exploration licenses include Norway based Statoil SA (ADR) (NYSE:STO), Delek, Cairn and Avner. However, all of them failed to succeed.

Coming ahead of Eni’s discovery of the massive Zohr field in Egypt, 10% stake of which being recently acquired by BP plc (ADR) (NYSE:BP), exploration in the Mediterranean’s Levant basin has become quite appealing. Containing 850 billion cubic metres of gas, the Zohr field happens to be the largest gas discovery of the decade.

Baird sees $400 billion opportunity in Amazon.com, Inc’s logistic ambitions as the company announced a deal with Air Transport Service

The announcement that Amazon.com, Inc. (NASDAQ:AMZN) and Air Transport Services are working together has received highly bullish coverage from Baird. Baird analyst Colin Sebastian commented on how the move establishes Amazon’s roadmap of expanding its logistics and how the resultant synergies would create cost saving as well as help Amazon become a logistics company in its own right, adding billions in revenue. Baird had an Outperform rating on Amazon with a $710 price target.

According to Baird, the partnership with Air Transport Services will create an air cargo logistics network for Amazon’s customer base. Baird sees this as an opportunity for Amazon to move beyond the expansion of its fulfillment network and last-mile delivery facilities into the broader logistics business. The partnership with Air Transport Services will add additional capacity to Amazon’s logistics and may create additional opportunities for it to grow its delivery network and improve customer satisfaction. It could also offer the extra capacity to third parties in need of logistic support.

Sebastian noted that the investments into the network would of course impact the company’s margins in the short term but the synergies created from the expansion of their delivery network would save costs as dependency on costlier options like UPS and FedEX would be reduced. The move would also give the company more control over its services and thus their ability to improve customer satisfaction.

Adding transport and logistics as a service would bring Amazon into a lucrative market with Baird estimating as much as $400 billion from Amazon’s logistics services in delivery, freight forwarding and contract logistics with retailers manufacturers and businesses. The move was postulated by the Baird analyst in earlier notes and was reiterated with the new partnership.

 

The coming week is expected to be good for the bulls

Chinese e-commerce retailer Alibaba Group Holding Ltd.’s (NYSE:BABA) recent developments seem to have finally increased the optimism among investors. Meanwhile, brokerages have had a bullish stance for a while now. Renowned Street houses such as Morgan Stanley have reckoned that the e-commerce stock has an upside of more than 70%, while investors have not yet explored its true potential. That being said, we expect the coming week to take the e-commerce retailer’s stock to a higher level. Alibaba Group Holding is due to report its first quarter earnings on Thursday, and there are a lot of positive developments expected within.

The Country Caller has recently discussed Jack Ma’s recent moves to take e-commerce to a whole new level, by integrating it with Virtual reality. Moreover, the company’s recent alliance with the International e-sports federation is also expected to play a vital role in future. One of the reasons why investors kept themselves away from the e-commerce stock were the controversies surrounding the e-commerce giant. However, the $211.97 billion company has recently got a partial clean chit in one of the law suits that accused the company from claims related to counterfeit goods, as a U.S judge dismissed few claims filed by brands against Alibaba.

We expect trade volumes to be high on Thursday as the earnings release nears. The Street expects a topline of $4.61 billion for the current quarter, which implies a quarterly increase of 41.2%. The expected EPS is $0.63 for the recent quarter, while there are high chances that the stock prices may jump following the earnings, as the trend has persisted four out of the last seven times. We may see adjustments by brokerage houses, should the earnings beat. However, we expect investors to be active from Monday. Let’s if the bullish run can start on Monday.

Peabody Energy Corporation asks for grace period to consider possible options before filing for bankruptcyIs Bankruptcy In The Best InterestWhat’s Best For Shareholders?

Peabody Energy Corporation (BTU) announced earlier in a 10-k filing that it appears difficult for the company to continue as a going concern. It opted for grace period after failing to make its interest payments, and it seems that it has no options left out except for filing for bankruptcy.

Its peer Arch Coal had earlier filed bankruptcy after failing to survive in lower commodity prices arena. Peabody stated that it had opted for grace period, but it appears that the grace period is just to further delay its bankruptcy.

Some options available for the company to survive include divesting its noncore assets, negotiate with its debtors, debt exchange, and cost improvement, which could enhance its shattered liquidity concern. One of the available options also includes debt buyback as mentioned by the company in its regulatory filing.

Peabody had options to keep its ship afloat, and it took certain measures too such as attempts to negotiate with creditors back in December, last year. However, difficult market conditions forced the company consistent failure in opting for any possible solution.

With just a month in grace period, it seems highly unlikely that there is any possible solution to the company’s depressed condition. By the end of 2015, Peabody had a liquid position of around $1.2 billion. However, this also declined to $900 million when the company filed its 10-k due to its operational expenditures.

Is Bankruptcy In The Best Interest

Yes, bankruptcy appears to be in best interest of the company. If this isn’t the case, it would tend to weaken its liquidity position further as Peabody had mentioned in its filing that it expects negative cash flows.

With a mountain of debt hovering above the company, smooth operations appear difficult. Debt holders can make the company survive by negotiation, but it appears unlikely that they would do so. Hence, any delay in bankruptcy would mean further cash bleed which the company should avoid in favor of all stakeholders.

What’s Best For Shareholders?

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Its stock has already declined by around 97% in the past one year, reducing the value of its shareholders. However, in the past day’s trading, the stock surged by around 9.5%. It appears that it is the best time for shareholders to get rid of their investment by cashing out.

The tech giant’s phone is believed to be released next year

Microsoft Corporation (NASDAQ: MSFT) is rumored to have been working on the Surface Phone for quite some time now. However, some recently surfaced rumors now suggest that the phone is in development and will be revealed by next year.

According to Windows Central, the company will release not one, but three different variants of the highly anticipated phone.

Additionally, each variant is designed to cater to a different target audience; to be more precise, an audience which includes enthusiasts, business users and consumers. However, there are no details about the phones’ specifications and how much each device will cost. But taking the Surface Book and Pro products in mind, it is safe to assume that the new Surface Phones too will target the high end segment.

Seeing how poorly the Lumia lineup is doing, it is extremely important that Microsoft exceeds expectations with the rumored Surface Phone. Also taking into account how much is being invested in developing Windows OS, a new phone may be in works, although there is no guarantee that it could be a Surface Phone or not.

The two graphics cards represent amazing value for mainstream gamers

We reported yesterday that Advanced Micro Devices, Inc. (NASDAQ:AMD) is planning to release Radeon RX-460 on July 28 and RX-470 on August 4. It has now been confirmed through PR slides that RX-470 in on point for launch but RX-460 will launch four days later on August 8. (via Videocardz)

 

 

 

The leaked slides have also given us the complete specifications of both Radeon GPUs. Like the RX-480, its younger sibling is also based on the Polaris 10 chip but a cut-down version. Stream processors are down from 2304 to 2048 and Compute Units from 36 to 32. Texture Units and ROPs have remained the same at 128 and 32, respectively. The RX-470 has a memory bandwidth of 211 GB/s over a 256-bit GDDR5 memory interface. The total computational performance lands in an impressive 4.9 TeraFLOPs.

 

 

AMD is targeting a sweet spot for 1080p gaming with the RX-470. The performance numbers, according to one of the slides show RX-470 handling games like Battlefield 4, DOOM, HITMAN, Fallout 4 and Total War: WARHAMMER at Ultra settings with more than 60 frames-per-second. This is quite literally the best bang for the buck gamers can get, perhaps even more than the RX-480. The MSRP of $149 is a very attractive feature of the GPU. One slide from a previous AMD presentation showed the RX-470 can handle high profile games at 70+FPS, but the new one takes it a bit further by showing that it can actually keep up with Ultra settings while delivering that smooth 60FPS experience.

While the RX-470 is aimed at mainstream gaming with enough power to tackle every game at 1080p with respectable settings, Polaris 11 based RX-460 is much more power efficient and meant to serve as an entry level solution for gamers or as AMD puts it “Cool and Efficient E-Sports Gaming.”

 

 

RX-460 has 14 Compute Units, 896 Stream Processors, 48 Texture Units and 14 ROPs. It has a memory bandwidth of 112 GB/s on a 128-bit GDDR5 memory interface. The GPU can achieve 2.2 TeraFLOPs in performance. The reference version of the graphics card is so power friendly that it does not require an external power connector. The GPU draws just about 75W. Polaris 11 will also make its way to powering gaming laptops, although we may see an under-clocked version of the GPU in notebooks due to power limitations.

 

 

 

E-Sports gaming is where AMD wants RX-460 to excel. In games like DOTA 2, Counter Strike Global Offense and Overwatch, the graphics card actually delivers above 100FPS. The quality settings used during the benchmark have not been listed. AMD is referring to the stats as “HD Gaming” so we are assumingly seeing 1080p results.

Citibank has raised its price target on Facebook shares from $148 to $158

Over the past few years, Snapchat has grown significantly popular in the mobile social media space. This has caused a certain number of investors and analysts to express concern that Facebook Inc. (NASDAQ:FB) could perhaps take a hit from this growing competitive threat.

Equity research firm Citibank, however, begs to differ. The firm disregarded such concerns describing them as “Overblown” recently. In fact, it even raised its price target on the stock from $148 to $158, reflecting 22.81% upside potential over the last close.

The analyst at the firm highlighted that Facebook holds significant influence in today’s advertising market. He noted that despite this, Facebook is still in a growth phase. The firm noted that some investors have overestimated the competitive threat Snapchat poses to Facebook at this point. The firm on the basis of its review and analysis of third-party numbers from the company, noted that Facebook’s user engagement is showing growth and does not indicate any negative impact from Snapchat’s growth.

The analysts are of the opinion that the consensus estimates for Facebook are conservative. Additionally, the firm described Facebook’s earnings result as “strong,” which surpassed the Street’s estimates. These results were attributed to Facebook’s advertisement and pricing strategy by the firm.

Earlier this month, research firm Morgan Stanley raised its price target on Facebook stock from $150 to $160 while keeping an Overweight rating. Morgan Stanley projects that Facebook can see revenue and EPS upside relative to the Street’s estimates of 6% and 10%, respectively. The firm noted that Facebook stock has traded below its median multiple due to certain concerns regarding slight revenue deceleration. As such, the firm believes that at current levels Facebook’s stock presents a lucrative buying opportunity to investors. “Even this deceleration could prove overly conservative given the potential for other platforms with lower ad load levels – Instagram, Messenger, and FAN – to start contributing more,” read the firm’s research note.

Uber and Honda face a lawsuit after Sarah Milburn got into an accident, leaving her paralysed, in Uber’s Honda Odyssey due to the driver’s negligence

Ride-hailing service, Uber is facing some serious backlash in Dallas after one of its drivers crashed into a Ford F-150 pickup in December. The accident put passenger, 24-year-old Sarah Milburn, in critical condition after she was left a quadriplegic. Now, paralyzed chest-down, Ms. Milburn’s family is targeting Uber for its lack of diligence and its dangerously lenient checks on drivers.

The story reveals that Milburn ordered an Uber late night to avoid driving herself. She claims that she wanted to avoid drunk-driving as well as refrain from walking to the next stop. However, it is evident that Milburn’s decision to rely on Uber backfired epically. The company’s Honda Odyssey vehicle ran a red light and lacked insurance, resulting in the accident. Such sloppy mistakes have already occurred in the past, now putting Uber in a critical position of public bashing.

Considering that the ride-hailing service has been operating as one of the most popular and used platforms in the US, we believe that Uber should really look into restructuring its system to avoid more unfortunate incidents in the future.

Now, with Milburn facing a lifetime of physical impairment, it’s no surprise that her family is looking into legal action against the company. Speculations revealed that Milburn and her family have sued Uber, Honda, the Uber driver, as well as the van-owner.

Their statement shed light on Uber’s negligence, and claims that the company “failed to provide [Milburn] with the safety she reasonably expected, and as a result, she was catastrophically injured and faces a lifetime of physical impairment and challenges.”

Since Uber recently revealed that its officials take immense interest in making sure that its drivers and vehicles are fully vouched for, the incident’s timing could be crucial for the company’s reputation. After the company recently announced that it will be carrying out strict background checks on all its drivers, it is evident that the process has not fully helped Uber get the results it hoped for.

Subsequently, since investigations revealed that Yusufzai, the Uber driver and the owner of the Uber van, Dawood Kohistanti, were previously involved in legal cases for drug possession and gambling in 2014. We believe that Milburn’s story will cost Uber to face a lot of criticism, possibly resulting in declining usage of its vehicles.

The Country Caller unveils the whisper numbers for AT&T and Advanced Micro Devices ahead of their scheduled earnings release today

AT&T Inc. (NYSE:T) and Advanced Micro Devices, Inc. (NASDAQ:AMD) are about to reveal their second quarter financials in after-market hours today. Both the companies are expected to beat the Street on their top and bottom lines according to the estimates.

AT&T

The communications service provider is expected to report $0.72 in earnings per share according to the consensus, while earningswhispers.com suggests a bottom-line beat by one cent. The company reported $0.69 in earnings per share for the same quarter a year ago, which suggests that the consensus is looking for 4.34% year-over-year growth in earnings. For the previous quarter, AT&T reported an EPS of 72 cents.

The consensus revenue estimate for AT&T’s second quarter stands at $40.66 billion. Meanwhile, the $40.72 billion estimate on Estimize suggests a top line beat might be on the cards. For 2QFY15, the company reported $33 billion in revenue, which indicates that a 23.21% YoY growth is factored in the consensus sales estimate for this quarter. The $262 billion company reported $40.5 billion in revenue for 1QFY16.

Advanced Micro Devices

For the quarter ended June 30, 2016, AMD is expected to report a loss of nine cents per share according to the consensus. Earningswhispers.com expects somewhat better earnings, with a loss of seven cents per share. For the same quarter last year, the company reported a loss of 17 cents per share, which suggests the consensus for this quarter has 47.05% YoY bottom-line growth factored in its estimate. For the previous quarter, AMD posted a loss of 12 cents a share.

Estimize forecasts $958.7 million in second quarter revenues for the chip maker. Meanwhile, the consensus estimate of $955.10 million reflects 1.4% YoY and 13.06% QoQ expected revenue growth. This happens to be in line with the company’s guidance range of 15% (±13) QoQ growth in revenue. For 2QFY15, AMD reported $942 million revenue, while for the previous quarter, it posted sales worth $832 million.

Increasing lithium prices may present new challenges for electric car manufacturer

Electric car maker, Tesla Motors Inc. (NASDAQ:TSLA), started its gigafactory in Nevada, which is set to increase the global battery production for the company. The lithium-ion batteries produced in the factory will be used in its Model 3 along for its energy storage systems.

Elon Musk has partnered with Panasonic for the factory and plans to provide more than 4,000 jobs at the new factory. Tesla has estimated to produce 35 gigawatts of batteries per year from 2018. This figure is equal to the global production of other manufacturers per year.

The production of such batteries have been led by producers out of the US. In 2015, an estimated 88% of the battery production was located in China, South Korea, and Japan. Tesla, with this factory, will change the entire dynamics of the industry.

The increase in production of lithium-ion batteries is a good news for the electric car market. However, this will have negative effects on the lithium sector. According to financial times, an electric car uses 4,800 times the amount of lithium used in a smartphone. This will result in a sharp increase in demand for lithium. The supply side of the material will not increase as its demand therefore, the prices are expected to increase drastically.

The prices for lithium increased by 60% last year, and further increased three folds in the last three months. Small miners have also started to come up, mainly in Nevada, which is home to the factory and has lithium reserves. However, they will not be able to meet the supply gap due to technical reasons.

The prices for lithium are expected to increase, leading to a drastic increase in production costs which will result in these vehicles to become expensive. The stock prices for Tesla rose by 1% in the last session and closed at $229.01.