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June 2019

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Tesla hires Sunedision’s grid-solution expert for its Grid Solution team to maximize the value of energy-storage solutions

The world’s largest renewable-energy developer, Sunedision Inc (NYSE:SUNE), is on the verge of filing for Chapter 11, with stock price down 92% year-to-date (YTD). While the company’s employees are searching for new employers, it appears that one important member of the SunEdision family has joined Tesla Motors Inc (NASDAQ:TSLA).

Electrek reported that Tesla scooped former manager of Energy Storage Center of Excellence at SunEdision, named Mohammad Bozchalui last month, for its new battery-storage arm. According to his LinkedIn profile, he attained his MSc in Electrical Engineering, Power System from University of Tehran and Ph.D. in Power and Energy Systems from University of Waterloo. His Ph.D. research paper was on “Optimal Operation of Residential Energy Hubs in Smart Grids.”

Mr. Bozchalui started working at SunEdition in August 2014, as Senior Power Engineer and after 10 months was promoted to Principal Engineer, Advanced Solutions. During the last four months, he was Manager, Energy Storage Center of Excellence at the solar developer.

The grid-solution specialist has been working for Tesla Energy’s Grid Solution team and is responsible for “Maximizing the value of energy storage solutions for behind-the-meter customers, microgrids, utilities, and grid operators.”

Tesla has big plans for its battery-storage business which is expected to bear fruits faster than the automotive division. The company will be providing its Powerpack systems to SolarCity Corp (NASDAQ:SCTY) for it’s project with Kaua’I Island Utility Cooperative (KIUC) in Hawaii. Powerwall, the battery system for households, is being installed in the US, the UK, Germany, Australia, and South Africa.

Since October 2015, Tesla Energy products are being built at the $5 billion lithium-ion battery factory, the Gigafactory, in Reno, Nevada, where cell production is scheduled later this year. By the end of last year, Tesla’s stationary batteries were sold out for the entire 2016 production and well into 2017. The management plans to earn roughly $500 million in Tesla Energy revenue in 2016.

The company has shown strong fundamentals for the past few quarters and received exceptional response from the customers

Fitbit Inc. (NYSE:FIT) is all set to post Q1 earnings with the call scheduled to be held on May 04, after the close of market proceedings. The San Francisco based company became the industry leader of fitness gadgets and related accessories following its founding in 2007. The company was co-founded by Eric Friedman and James Park, who currently serves as the CEO of the company. The company maintained a quiet existence for the most part until the launch of Blaze which was received exceptionally well and can be deemed the primary reason behind the company’s recent success.

Betty Chen, analyst at Mizuho Securities remains positive on the stock as trends continue to improve with more and more units being sold. The company has also established itself in other geographical regions apart from North America such as Asia, Europe and Africa. The analyst expects the company to beat the Street’s earnings estimate and post a solid quarterly earnings report and compliment it with an equally strong guidance. Furthermore, the analyst still sees upside potential in the stock despite the fact that the stock has gained 46% in the last 3 months.

RBC Capital’s recently held survey points towards a dramatic rise in Fitbit gadgets ownership. The survey also sees a sharp rise in the willingness to purchase newer products with added features even with higher ASPs. The upgrade cycle also remain relatively short with people willing to upgrade more frequently the long term story for FIT remains incredibly positive. The company can also manipulate prices in order to gain margins as the customer base is relatively inelastic. The analyst maintained a Buy rating with a price target of $20. The stock is currently traded at a price of $18.06.

SolarCity recuses two more board members, JB Staubel and Peter Rive, from voting on Tesla’s offer

Last week, when Tesla Motors Inc (NASDAQ:TSLA) announced its plans to merge its operations with SolarCity Corp (NASDAQ:SCTY), it clarified that Elon Musk, Tesla’s CEO and SolarCity’s chairman, and Antonio Garcia, director at both the companies, will not be voting on the $2.86 billion deal.

Reuters reported that now two more board members from the SolarCity have taken the similar decision, as both the directors do not meet the independence requirement. JB Staubel, who also serves as CTO at Tesla, and SolarCity CTO and Co-founder, Musk’s cousin Peter Rive are the two board members.

Jonathan Bass, spokesman of SolarCity, told Reuters that the solar company aims to ensure a process which leads to “independent, objective decisions” and in support of the shareholders. “Only board members who meet the requirements for independence will be involved in the decision-making process at SolarCity,” he added.

The report leaves just three members from the SolarCity board, Donald Kendall Jr., John Fisher, and Nancy Pfund, to vote on the deal. Mr. Kendall, CEO at an investment firm Kenmont, doesn’t seem to have any relationship with both the companies, except his company’s investment in SolarCity. Mr. Fisher is partner at a venture capitalist firm, Draper Fisher Jurvetson, which has stake in all of the Mr. Musk’s companies including SpaceX. Ms. Pfund is a managing director of another venture capitalist firm, DBL Partner, which also has investments in all the three companies.

In spite of which board member from both the companies will be allowed to vote, it seems like the result of the voting will not be surprising. During the acquisition announcement, Mr. Musk said that the view of the board of directors on the deal is “unanimous” at both of his companies. However, apart from the directors, the shareholders of the automaker and the solar installer will have to give their vote of confidence as well.

U.S Patent No. 9460332 has been awarded to Apple for a revolutionary feature on the next iPhone

Apple Inc. (NASDAQ:AAPL) could once again be on track to deliver a cutting-edge feature that drives innovation in the rest of the industry as well, after the Cupertino company was awarded a patent for a “capacitive fingerprint sensor including the electrostatic lens”. Rumors have previously tipped the next flagship iPhone, which will be released next year, to sport a fingerprint sensor that will be embedded into the display itself.

This would allow Apple to get rid of the Home button, and use a full edge-to-edge OLED display with a fingerprint sensor integrated into the screen. By removing another vintage iPhone feature that users have previously associated it with, Apple would once again be displaying it’s ruthlessness to drive innovation and introduce a feature that would definitely have a lasting impact on the rest of the smartphone industry.

This year, the 3.5mm headphone jack became the first victim of Apple’s drive to take the smartphone further than ever before, and if the rumors the true, then next year could be a much bigger change than this year, symbolized by the exclusion of the Home button and its accompanying bezel.

 As for the patent itself, it was filed initially in September, 2014, and Jean-Marie Bussat has been credited with its invention. Tech companies, particularly those in the smartphone sector, regularly file for and are awarded patents that don’t necessarily make it to the final product. However, this particular embedded Home button and fingerprint sensor has been talked about previously, so we could be looking at an application sooner rather than later.

Apart from the removal of the Home button, iPhone is rumored to incorporate a number of major changes on account of iPhone’s 10th anniversary, like an OLED display for the first time, a Smart Connector at the rear, and the introduction of wireless charging in iPhone.

Transocean to increase to 1.2 shares from 1.1427 the consideration for its pending acquisition of each Transocean Partners common unit it does not already own

The much awaited merger between Transocean LTD (NYSE:RIG) and Transocean Partners LLC (NYSE:RIGP) – the fate of which has remained undecided for long, finally takes a new turn. Both the companies have announced about the increase of shareholding by Transocean to 1.2 shares from 1.1427, the consideration for its pending acquisition of each RIGP common unit it does not already own in a share-for-unit merger transaction. Following the news, Transocean Partners stock price jumped up 6.8%.

The news comes ahead of the recent failure to receive 50.1% shareholder votes that are mandatory for the merger to close. Transocean now aims to issue around 23.8 million shares for the deal to reach completion.

At present, the merger depends on the approval of the common unit holders of RIGP. Transocean shareholders have voted for roughly 21.3 million common units in support of the transaction but for the deal to close, a vote in approval for the deal by nearly 9.9 million of 19.7 million common units not held by Transocean are still needed for final closure. The transaction is now expected to complete, early next month, given that it gains customary terms and conditions.

A special meeting of RIGP that was adjourned would now be held on Tuesday, at 15:00 hours local time, at the company’s office on George Street, London.

Increase in shareholding for consideration purposes was approved by the Conflicts Committee on behalf of RIGP Board of Directors – all that are unassociated and independent of Transocean.

In our last article that covered the potential downsides for both the companies given that the merger fails to complete, The Country Caller was already quite confident that the merger would near completion. This is because earlier the companies had already received 46.8% of votes in favor of the deal, meaning 75% of the shareholders of the companies were already supporting the deal and thus, we saw nothing dramatic in any obstacles that the merger faced previously.

Boeing expands in the Muslim world, including Kuwait and Iran

Boeing Co (NYSE:BA) got the US government approval on the sale of fighter jets to Kuwait. The approval is worth $7 billion of sales. The informal notification process has also started with the US law makers.

The approval will include the sale of 36 F-15 fighter jets worth $4 billion. In addition, it would include 28 of F/A 18, worth $3 billion. This is a huge boost for the company in terms of revenues.

The sales were put on hold amidst concerns by Israel, that if such arms were sold to Gulf States, including Qatar, it could be used to fight against Israel. Also there were allegations that Qatar has been supporting certain armed groups which operated in the name of Islam.

The sale of fighter jets is slowing down gradually. Boeing plans to close F-15 line by 2019, after its work on the Saudi order is completed. It will work further if some follow-ups on the orders are required. Otherwise, it wants to focus more on revenues coming from the technology upgrades and post-sale services in order to keep its revenue stream high and operational.

Last week, Boeing and Airbus were granted the export licenses by the US Treasury in order to sell commercial aircraft to Iran. This will help the company to lay the grounds on further business opportunities in Iran and also strengthen the US ties with Iran.

Members of Congress are still doubtful over Iran deal due to security reasons. Hesitance is also shown by various foreign banks that are unwilling to finance this deal due to past relations and security issues.

The stock surged 0.08% to $132.33 at 12:12 PM EDT. The company has a huge market capitalization of $83.14 billion.  It trades in the 52-week range $102.10-150.59.

The Country Caller takes a look at the latest earnings of Exxon

The third quarter earnings season has finally arrived. Oil and gas giants Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) released their results today. Chevron in the third quarter managed to finally post a profit and broke the two quarter consecutive streak of losses. The investors thus rewarded the stock by sending the stock price as much as 4.5% during midday trading.

Exxon on the other hand wasn’t doing well. As of on Friday’s session, the stock was down 2.73% at $84.55. Exxon reported revenue of $58.7 billion coming below the consensus expectation of $2.64 billion. The company saw a 12% decline in revenues when compared to the same quarter last year.

Earnings for Exxon Mobil clocked in at $2.7 billion which translates into earnings per share (EPS) of $0.63. The earnings managed to surprise the sell-side as it topped the consensus expectation who had estimated the EPS to come in at $0.58.

The Upstream segment which produces and explores for oil suffered the most. Earnings from the segment came in at $6.3 billion declining from $738 billion from the same period last year. Like that of Chevron’s, Exxon’s production in the upstream segment also slumped. Downstream earnings also suffered declines. Earnings dropped to $1.2 billion declining from $2 billion when compared to last year. Although companies’ refining segment does well when oil prices are falling; this year a refining glut resulted in weaker margins which adversely impacted the earnings.

Rex Tillerson, the CEO of Exxon commended the company claiming that its integrated business continues to do well and deliver robust results. However, at the same time, he also indicated that the operating environment was likely to remain challenging. Some of the issues highlighted by Mr. Tillerson were to improve on advancing capturing efficiencies, strategic investments, and creating long-term shareholder value.

The Microsoft Studios website adds Lionhead to list of studios again

Microsoft Corporation (NASDAQ: MSFT) has been at the center of many discussions recently. The issue at hand right now is the closure of popular Lionhead Studios and the cancellation of its upcoming title, Fable Legends. The news has not been received well by the community and everyone has expressed dissatisfaction, feeding Microsoft with a lot of backlash on the issue. Now, it looks like Microsoft is trying to make amends once more.

After the news spread of the closure of Lionhead Studios, Microsoft removed eight of its first-party studios from its Microsoft Studios website, including Lionhead. While that was said and done, at the time of writing, Lionhead studio is back and visible on the said website. There has been no announcement or revelation on the matter so far but the studio is perfectly visible on the website as we speak. Could this be a simple mistake or could it be yet another U-turn by Microsoft?

Before you go on and point out the most probable thing to say that it could be a simple mistake on the part of team Xbox and the web developers, we must keep in mind that Microsoft did a complete U turn back at the launch of the Xbox One in 2013. For those who do not know, Microsoft completely scrapped their used games DRM plans for the Xbox One when they received a ton of backlash from the community on the matter. The plans included players not being able to play physical copies of games on another console than the one it was originally used on.

If we look at it, the current situation is pretty much the same. The closure of Lionhead Studios and the cancellation of Fable Legends have earned Microsoft a lot of negative publicity and the management has been left to fend for themselves in front of the brutal words of the community. Given the current situation, it would not be surprising for Microsoft to make a U-turn on this move as well and if that happens, we should see an announcement pretty soon.

 

Nokia will use Android instead of Windows operating system for its upcoming smartphones

Nokia Corporation (ADR) (NYSE:NOK) will launch a new line of phones and tablets in corporation with Foxconn Tech Co Twd10 (OTCMKTS:FXCOF), which will have an Android system instead of Windows. Foxconn subsidiary has bought shares of Nokia phone business from Microsoft Corporation (NASDAQ:MSFT) for $350 million and has established a new company, HMD Global Oy, which has an exclusive license for using Nokia brand name for smartphones and tablets for upcoming 10 years.

Nokia doesn’t have any shares in HMD, however, it will be part of Board of Directors for the new company and set brand requirements as well to ensure that its brand lives up to the customers’ expectation. The chief executive officer (CEO) of HMD is the former head of Microsoft Mobile device division for Greater Asia. In the latest collaboration, Foxconn will manufacture the products and Nokia will get the royalty payments.

Nokia may lay off 10,000 to 15,000 employees as a plan of cost saving measures of $1 billion by 2018. The target employees of the cutoff will be the overlapping staff of Nokia and Alcatel Lucent SA (NYSE:ALU) merger. The expected layoff plan covers 14% of Nokia’s current staff of 104,000 employees worldwide, additional to the job cuts of Finland and Germany. Besides the job cutting measures, the company has a plan to compensate the fired employees with severance payments, and place them on bridge program that Nokia management created for the convenience of the employees to land new jobs in the future.

Nokia stock is down by 20.37% year-to-date (YTD) and has underperformed the market with significant margin. Dow Jones Index and S&P 500 index are up 1.42% and 1.86% YTD respectively. The current market price of company’s stock is $5.68 with 5.77 billion outstanding shares, which gives it a market capitalization of $33.23 billion. Moreover, its shares are trading in a 52-week range of $5.08-7.63 and are traded on average daily basis around 16.68 million shares.

With the molecule’s approval, both companies have exceptional opportunity to capture the MCC therapeutic market

Merck & Co., Inc. (NYSE:MRK) and Pfizer Inc (NYSE:PFE) are working diligently for the approval of their fourth PD-1/PD-L1 inhibitor, avelumab. The investigational molecule has been given green signal by the European Union (EU) for patients suffering from for Merkel cell carcinoma (MCC).

MCC belongs to a rare category of ailment, which directly affects the skin. The oncological pathology is fatal and less than 20% of patients suffering from it survive after five years of disease.

Both the companies are hopeful that the regulatory agency will give a go ahead for the drug’s marketing in the EU. If approved, the molecule will be the first ever one to be marketed in the region.

The investigational molecule has shown comprehensive efficacy and safety profile in JAVELIN Merkel 200, a multicenter, single-arm, open-label, phase II study involving 88 patients suffering from metastatic MCC who did not respond on initial chemotherapeutic agents.

In case of approval, the molecule will face fierce competition from Bristol-Myers Squibb’s oncology molecule, Opdivo, Keytruda by Merck, and Roche’s Tecentriq, which belongs to the checkpoint inhibitor category. Despite the presence of the aforementioned drugs, the role of avelumab will be very specific to MCC management and treatment.

The drug is a fully human anti-PD-L1 IgG1 monoclonal antibody. It is not yet approved in any part of the world. The investigational molecule is undergoing clinical trials to prove its vitality in approximately 15 tumors and 30 clinical studies involving 2,900 patients belonging to different categories such as breast, gastric/gastro-esophageal junction, head and neck, Hodgkin’s lymphoma, and urothelial (primarily bladder).

In the US, the molecule has attained the breakthrough therapy designation for the management and treatment of patients suffering from Merkel cell carcinoma. Merck and Pfizer are also working on the drug’s label expansion specifically its role in non-small-cell-lung cancer (NSCLC).

The PD-1/PD-L1 inhibitors have a drawback as the majority of patients did not respond to the single molecule, so the companies are working on the combo formulation in order to generate more prescriptions. Pfizer is working on the combo as well as triplet drug portfolio for the management of oncology ailments; it is said to be working on avelumab along with its two investigational molecules utomilumab and OX40 agonist PF-04518600.