with love, Russia ❤️
EV races, fintech deals, and WeChat’s casualty.
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Stock summary: 📊
US:
S&P 500 - down 0.80%
Nasdaq - down 1.69%
India:
Nifty 50 - up 0.46%
Sensex - up 0.59%
WeChat’s unseen casualty 💬
Quick refresher - in an attempt to take on China tech, Trump had issued an executive order a couple days ago banning WeChat (which is basically the Whatsapp of China) in the US and blocking ALL US companies from doing business with them.
The problem however is that WeChat is well loved in China. The Chinese use it for everything—calls, messages, payments, social media. So naturally early reports suggest that the Chinese are very likely to stop buying products that block WeChat altogether. And Apple’s prized iPhone is at the worst risk here.
As of today, Apple sells about 25% of all its iPhone units in China and the market is one of the most aggressive areas of expansion for the company. The Chinese love American products and often show them off as a sign of luxury.
But with no WeChat installed on iPhones, all of those revenues could be threatened posing a risk to the stock and Apple’s standing. In a more forgivable scenario, if WeChat is removed just from Apple US App Stores but kept live on the Chinese App Store, Apple’s losses could be about 2-3% of sales.
Regardless, all is fun and games until political actions start hurting the pockets of investors. Several analysts are advising investors to cut back on Apple holdings in their portfolio given these risks. Read on.
Fintech deal brewing 🤝
Global credit card company American Express (Amex) is reportedly in talks to buy one of the largest online lending platforms, Kabbage, in an $850 million deal. Details aren’t out yet while the teams negotiate terms.
Amex is the largest provider of credit cards to small businesses in the United States while Kabbage is an upstart lending platform offering loans to small businesses online. The two marrying together will solidify Amex’s portfolio of services and value proposition, especially during times when small businesses are struggling to keep their lights on.
Amex has been on an acquisition spree, using the pandemic driven slump to solidify its market position as it fends off attacks from banks and startups alike. Most recently they scooped up restaurant-reservation system Resy and then an airport lounge booking platform called LoungeBuddy.
Kabbage has some big name investors behind it, with Softbank most recently infusing $250 million at a $1 billion valuation. But the Amex deal looks to value the company at a 15% discount to that round. Well something better than nothing. Read on.
Russia stuns with COVID vaccine 💉
The Russian President has announced the official acceptance and launch of a COVID-19 vaccine in the country, making the nation the first to get there as global powers race to beat the pandemic.
The vaccine is made by Gamaleya Research Institute and the Russian Defence Ministry, and had just begun phase 3 trials last week. Medics will start receiving doses starting next week.
However, the international community is questing the veracity of these claims. Experts accuse Russia for speeding up the testing processes by flouting norms and procedures just so they could claim victory. Putin’s response? Well the president claims his daughter was one of the firsts to be vaccinated.
The country claims that so far they have received pre-orders for a billion doses of the vaccine from 20 nations. Of course there may be demands for independent tests but it is very unlikely that Putin allows others to review his studies.
EV moves 🔌
Xpeng motors, an electric car startup from China has filed for an IPO where it plans to sell 430 million shares to the public, raising approximately $100 million. The company is part of a group of Chinese startups looking to woo US investors and will list on the New York Stock Exchange.
The company had just raised almost $400 million from existing shareholders including Alibaba and other biggies including Qatar Investment Authority (QIA) and Abu Dhabi sovereign wealth fund Mubadala.
Xpeng will list alongside Tesla and and another Chinese electric carmaker Li Auto which recently listed in the US.
Takeaway: The electric car market is rapidly progressing in China, thanks to numerous subsidies rolled out by the government to build charging and other infrastructure across the nation. Read more.
In other sustainable auto news,
Nikola Corp, the maker of hydrogen fueled cars will develop 2,500 electric garbage collection trucks for a vendor named Republic Services Inc. Yep! Not the fanciest of contracts but its progress.
The zero-emission vehicles will have a range of 150 miles (240 kms) and are expected to be integrated into the fleet by 2023. Obviously, shares of Nikola rose 22%, notching a $16.9 billion valuation of the company that is yet to make a formal car sale. Efficient markets anyone?
Tweet of the day -
What else are we snackin’ 🍿
🚕 Trouble for Uber, Lyft - a California judge granted the state’s request for a preliminary injunction that blocks Uber and Lyft Inc from classifying their drivers as independent contractors rather than employees. The companies will challenge the ruling.
🙌 Daughters’ fight - India’s Apex court has ruled that daughters of an Hindu practicing household will have coparcenary rights on father’s property even if he died before the Hindu Succession Act 2005 came into force. Although the amendment was applicable to Hindu daughters as coparceners who died after coming of the act, there was no clarity on whether it will have retrospective effect.
🔥 Import heat - The government is planning on increasing customs duty on imports for close to 20 product segments including laptops, cameras, textiles and aluminum goods etc. as part of its latest move to restrict imports from China. The issue is now before the finance ministry. Working from home? Buy that set up before they get expensive!
🔍 Add yourself to Google Search - Google has rolled out a new Search feature in India that enables influencers, entrepreneurs, freelancers, or anyone else who wants to be easily discovered online to create a virtual visiting card. Brilliant!
😷 NZ celebrated too early - New Zealand said that authorities have found four cases of the coronavirus in one Auckland household, making these the first cases of local transmission in the country in 102 days. New restrictions have now been imposed.
👏 WFH until 2021 - Unacademy has extended its remote work policy till January 1, becoming one of the firsts in India to make such a long extension publicly known. The move comes after a bunch of employees tested positive for Covid-19 when its Bengaluru office reopened in May-June.
💪 Stripe’s big win - the payment processing startup yesterday poached General Motors’ CFO Dhivya Suryadevara to fill its own CFO shoes, as the company prepares to go public next year. Dhivya has had an illustrious stint at GM, one of the largest car makers in the world, and will be key in appeasing investors on Wall Street when Stripe goes about on its raise.
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