Trump Interrupts the China Day-Trading Party (Fri, 07 Aug 2020)
(Bloomberg Opinion) -- The U.S. threat to delist Chinese companies just got a lot more real. Yet businesses from Asia’s biggest economy continue to line up to sell shares on American exchanges — and are thriving. What’s going on?The President’s Working Group on Financial Markets has told U.S. exchanges to set rules that would require companies to grant American regulators access to their audit work papers, something that China has refused to allow. Firms already listed will have until Jan. 1, 2022, to comply, with removal from U.S. exchanges the ultimate penalty. Those seeking to sell shares will need to adhere to the new rules, according to the high-powered group of U.S. regulators, which includes Treasury Secretary Steven Mnuchin.You might think this ratcheting up of pressure, which reflects increasing geopolitical tensions and the fallout from accounting scandals at Chinese companies such as Luckin Coffee Inc., would put a damper on the rush of enterprises looking to go public. Anything but. Almost every day, it seems, another Chinese company announces plans to list in the U.S. — and they’re finding no shortage of takers. Late last month, Beijing-based electric-car maker Li Auto Inc. raised $1.1 billion selling shares in an initial public offering that priced above the marketed range. It was the biggest IPO by a Chinese company in New York since Shanghai-based rival NIO Inc. sold $1.15 billion of stock in September 2018. Xpeng Motors, based in Guangzhou, is poised to follow this month.Shares of U.S.-listed Chinese companies are also outperforming the broader market. The Nasdaq Golden Dragon China Index has surged 30% this year, compared with a 3.7% gain for the S&P 500.The phenomenon may be partly the product of a craze in day-trading fueled by pandemic lockdowns, which have left many Americans stuck at home looking for amusement. If the Robinhood crowd can drive shares of bankrupt companies to illogical heights, then why not Chinese stocks, too?On a more rational level, some investors may be betting that threats to delist Chinese companies are largely noise, and a compromise will eventually be worked out. Chinese listings are a gravy train for the New York Stock Exchange and Nasdaq, and both sides have a financial interest in ensuring that it doesn't get derailed.On this point, it’s worth noting that the U.S. regulators left some wiggle room. Chinese companies can hire a “co-auditor,” effectively having a second inspection performed by a U.S. accounting firm after a Chinese affiliate does the first. That would be a potential workaround for Beijing’s rules that prevent the Public Company Accounting Oversight Board from reviewing audits of U.S.-listed Chinese companies.To count on peace breaking out may be rash, though. There’s plenty of evidence that the move toward a U.S.-China decoupling is serious and tangible. Just look at the lengthening list of U.S.-traded Chinese companies that are selling shares in Hong Kong, giving them a secondary outlet into international capital markets in the event that they are forced to leave: Alibaba Group Holding Ltd., JD.com Inc. and NetEase Inc. among them.Or witness Tencent Holdings Ltd., which lost $30 billion of market value in Hong Kong on Friday after the Trump administration moved to ban U.S. residents from doing business via its WeChat app. It will be a brave investor who bets on this trend reversing itself.  This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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Fortinet Slips 7% After-Hours As 2Q Billings Missed Estimates (Fri, 07 Aug 2020)
Shares of Fortinet plunged 6.6% in extended trading on Thursday after the company’s 2Q billings fell short of analysts’ expectations. The cybersecurity solution provider’s billings, a key sales growth metric, grew 14.3% to $711.5 million year-over-year but missed Street estimates of $712.1 million.Fortinet’s (FTNT) 2Q billings result reflects slowing traditional firewall market growth as corporates shift to cloud computing. During the earnings conference call, the company’s CEO Ken Xie said, “the traditional firewall [is] where we do see the growth slowdown.” As a result, the company is now focusing on expanding cloud solutions to counter the weakening firewall market, he further stated.Last month, Goldman Sachs analyst Brian Essex downgraded Fortinet to Hold from Buy stating that "expectations and multiples" of the stock are elevated at current levels. Essex said that "investors have become much more optimistic about FTNT’s ability to execute over the next several years.” However, he raised the stock’s price target to $140 (0.35% upside potential) from $129.Nonetheless, Fortinet reported better-than-expected 2Q results. Its adjusted EPS of $0.82 beat analysts’ expectations of $0.65 and improved from the year-ago quarter’s EPS of $0.58. Revenues rose 18% to $615.5 million year-over-year and surpassed Street estimates of $599 million.Overall, FTNT has a Moderate Buy analyst consensus. The average price target of $135.93 implies a downside potential of 2.6%. (See FTNT stock analysis on TipRanks)Related News: Etsy Crushes 2Q Revenue Expectations; Roth Raises Stock To Buy Roku Tops 2Q Estimates But Cautions About Ad Outlook Zynga Rises On Record 2Q Revenues Fueled By Digital Gaming Demand More recent articles from Smarter Analyst: * Zillow Surges 13% On Better-Than-Feared Earnings; Analyst Urges Caution * Booking Holdings Sees Gross Bookings Plunge 91%; Analyst Still Says Buy * Cloudflare Beats 2Q Estimates On Strong Customer Growth * Stifel Lifts EPAM Systems’ PT After Strong 2Q Results

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Doris Buffett, Philanthropist Sister of Warren, Dies at 92 (Wed, 05 Aug 2020)
(Bloomberg) -- Doris Buffett, a philanthropist who with the financial assistance of her billionaire brother Warren Buffett gave life-changing gifts to people down on their luck, has died. She was 92.Buffett died at her home in Rockport, Maine, on Tuesday, surrounded by family and friends, listening to Billie Holiday music, according to her grandson Alexander Buffett Rozek. Her death was reported earlier by the New York Times.“She was an amazing women and she’ll always be with us,” Buffett Rozek said in an email.Doris Buffett sifted through the hundreds of letters her brother received each year from people who wrote pleas for aid. Working with a group of volunteers, she identified the most deserving cases and vetted the requests. She used her resources to provide one-time gifts to help people who faced hardships: buying a used mobile home for a woman raising her three grandchildren in Maine, sending a wheelchair to someone in California, paying the funeral expenses for a manual laborer in Michigan whose teenage grandson committed suicide.The average gift was worth about $4,800, Buffett told the Boston Globe in 2016.Her group, the Letters Foundation, has awarded more than $10.5 million in grants, according to its website.“My brother is putting up the money, so we’re sort of limitless,” she told the Globe. “He’s told me that any time I run out of money, all I have to do is call him.”Targeted PhilanthropyBuffett created a philanthropy, the Sunshine Lady Foundation, in 1996. She said she shunned “S.O.B. charities” -- the symphony, opera and ballet -- that didn’t address human misery. Her group focused on families in crisis and the working poor. Another program she set up gives education scholarships to women who survived abuse by their partners.Her efforts expanded after Warren Buffett announced in 2006 that he was leaving the bulk of his fortune to charity, most of it flowing through the Bill & Melinda Gates Foundation. Soon afterward, he was deluged with letters from strangers who asked for money.Warren Buffett, who heads Omaha, Nebraska-based Berkshire Hathaway Inc., has a net worth of $77 billion, according to the Bloomberg Billionaires Index. He said he preferred to concentrate on the “wholesale” side of charity, targeting broad societal issues such as public health and education. When his sister agreed to handle the “retail” side, he sent her the letters -- and $5 million to start. She formed a network of volunteers to help review the requests that poured in.“There’s no question the money I give away does a lot of good but Doris is giving time, and time is the scarcest commodity,” Warren Buffett told the Globe. “No matter who you are, you have 24 hours a day, and when you give time up you’re giving up something important. So if you were keeping a scorecard in life, you’d give her a higher score than me.”‘Mary Sunshine’Doris Buffett was born Feb. 12, 1928, in Omaha, where her father, Howard Buffett, was a stockbroker, according to “Giving It All Away,” a 2010 biography. He was elected to the U.S. Congress in 1942 while her mother, the former Leila Stahl, was a homemaker. Her childhood nickname was “Mary Sunshine.”In addition to her brother Warren, she had a sister, Roberta, known as “Bertie,” who also became a philanthropist, donating more than $100 million to Northwestern University in 2015.Doris Buffett attended George Washington University, in Washington, D.C., where the family moved after her father was elected to Congress. In 1951, she married Truman Stevens Wood with whom she had three children: Marshall, Robin and Sydney. The union ended in divorce as did her three subsequent marriages.“None of my husbands had a sense of humor,” she said.After becoming wealthy from an an investment she made with her brother in the 1950s she lost her entire fortune, more than $12 million, in the October 1987 stock market crash. She came into wealth again in 1996 when her mother died, leaving her shares of Berkshire Hathaway stock.“My payoff is the constant joy that I have thinking that somebody’s life is a little better,” Buffett said. “That for once in their life they have good luck, not bad luck.”(Adds confirmation from grandson in second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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Job cuts rose 54% in July: Morning Brief (Fri, 07 Aug 2020)
Top news and what to watch in the markets on Friday, August 7, 2020.

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Japan in deals with AstraZeneca, Novavax for COVID-19 vaccines (Fri, 07 Aug 2020)
Japan plans to buy AstraZeneca Plc's experimental COVID-19 vaccine and fund a local company to manufacture Novavax's vaccine candidate, ramping up its stockpile plan as it battles surging infections. Japan will order 120 million doses of the experimental vaccine developed by the British pharmaceutical company, beginning with 30 million doses by March next year. Separately, Takeda Pharmaceutical <4502.T> said on Friday it would manufacture and sell up to 250 million doses of Novavax's COVID-19 vaccine candidate every year in Japan, with funding support from the government.

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