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StreetAccount Top Stories: August 20, 2021

Companies and Markets

By FactSet Insight  |  August 20, 2021

Each week we compile the most read stories from StreetAccount, FactSet’s premium real-time market intelligence news service.

WSJ's Heard on the Street column doesn't draw broad conclusion on neobanks, digital wallets

August 13, 2021

The column notes that fintech companies offer opportunities, but they're also more expensive than traditional banks, and while there's likely to be more than one winner, the champions may end up reigning in different areas, such that the lending winner isn't the same as the investing winner. The column further observes that the fintechs' effect on traditional banks varies, as some are partnering with neobanks or digital wallets, and others are setting up apps to appeal to consumers.

Top executives at Tencent, Alibaba "furious" at Didi Global - WSJ

August 18, 2021

People familiar with the matter tell the WSJ that Tencent president Martin Lau and Alibaba chairman/CEO Daniel Zhang—both of whom are Didi directors—were mightily unhappy to find out that Didi was having problems with the Cyberspace Administration of China. The sources tell the WSJ that Didi executives weren't completely forthcoming to the board about the regulatory concerns that Didi faced, making the decision to proceed with the IPO ill-informed; the article says that it isn't clear exactly what information Didi executives gave and withheld from directors. The sources tell the WSJ that Lau and Zheng had previously told Didi chairman Will Cheng and president Jean Liu (who are also on the board) that listing quickly while China was cracking down on the tech sector wouldn't be a good idea. The article notes that Tencent and Alibaba have long held stakes in Didi, and neither company can afford more regulatory headaches of its own.

U.S. to begin wide distribution of COVID-19 booster shots in September, as widely expected

August 18, 2021

As anticipated, the U.S. confirmed it will begin offering COVID-19 booster shots next month as the available data indicates that the protection against SARS-CoV-2 infection begins to decline over time after the initial vaccination doses. "The available data make very clear that protection against SARS-CoV-2 infection begins to decrease over time following the initial doses of vaccination, and in association with the dominance of the Delta variant, we are starting to see evidence of reduced protection against mild and moderate disease," according to the statement signed by CDC Director Dr. Rochelle Walensky, acting FDA Commissioner Dr. Janet Woodcock, White House chief medical advisor Dr. Anthony Fauci, and other U.S. health leaders. "Based on our latest assessment, the current protection against severe disease, hospitalization, and death could diminish in the months ahead, especially among those who are at higher risk or were vaccinated during the earlier phases of the vaccination rollout." The U.S. is preparing to offer booster shots to all Americans starting the week of September 20 (assuming the FDA and CDC approve the safety and efficacy of the doses by that timeframe), starting eight months after the second dose of vaccines from Pfizer (PFE) or Moderna (MRNA). Those who received JNJ's single-shot vaccine will likely need a booster, but officials are waiting on more data in the next few weeks before formally recommending boosters. Editor's Note: This comment was revised to include a link to the joint statement. (18-Aug-2021, 10:40 ET)

U.S. to recommend booster shots against coronavirus - NYT

August 16, 2021

Administration officials familiar with the discussions tell the NYT that the decision may be announced this week, and third shots could start being offered in the middle of next month. The officials tell the NYT that assuming that the FDA authorizes the boosters, the government wants people who have gotten the Pfizer-BioNTech or Moderna vaccines that they should take a third shot eight months after they've taken their second. The officials tell the NYT that they expect an additional shot will also be recommended for the single-dose Johnson & Johnson vaccine, but they're waiting for results of a two-dose trial that Johnson & Johnson is running. The officials tell the NYT that the administration feels people's boosters should be the same COVID-19 vaccine they originally got.

Doctors increasing use of antibody treatments on COVID-19 patients - WSJ

August 18, 2021

The WSJ reports that doctors in COVID-stricken states have recently been increasing their use of monoclonal antibody treatments, primarily Regeneron's, on higher risk COVID-19 patients, in an attempt to keep their hospitals from being overwhelmed. Regeneron shared data with the WSJ showing that the number of doses it delivered last week was up nine-fold from a month ago, and its CEO said in an interview that as many as 30% of high-risk patients are now receiving the treatment, up from less than 5% as recently as June.

Hyatt Hotels to acquire Apple Leisure Group from owners KKR and KSL Capital Partners for $2.7B including debt - WSJ

August 15, 2021

People familiar with the matter tell the WSJ the deal could be announced Monday (August 16).

Twilio paying 10% premium for its investment in Syniverse - NY Post

August 18, 2021

Insiders tell the NY Post that though it wasn't announced with the rest of the deal on August 16, Twilio is paying $11/share for its $500-750 million investment in M3-Brigade Acquisition II Corp, vs the $10/share that other people are paying to invest in the SPAC. A source close to the situation tells the NY Post that Twilio executives haven't publicized the price to avoid causing worry for shareholders, but Twilio thinks that paying the premium will cause M3-Brigade holders to not cash out and help stabilize M3-Brigade's share price. A shareholder tells the NY Post that M3-Brigade wants redemptions to remain under 10%; a person with SPAC knowledge tells the NY Post that the rate of SPAC holders getting out of SPACs between the times that deals are announced and close has risen to 46% in Q3 from 9.4% in Q1. The article says that a Brigade Capital Management told people about Twilio's $11/share investment in the PIPE in an investor call August 17. Sources tell the NY Post that M3-Brigade and Syniverse agreed to merge in March, but given the various issues that SPACs are facing in general, creativity was required to both bring Twilio on board and keep Syniverse, which is owned by Carlyle Group.

Intel pushing chip factories to governments globally - WSJ (August 14)

August 16, 2021

People familiar with the event tell the WSJ that CEO Pat Gelsinger and directors met with Biden administration officials last month and delivered the same messenger Gelsinger has been delivering to other governments around the world: Intel plans to build big chip factories outside of Asia, and billions of dollars of subsidies will help get the job done. People familiar with the matter tell the WSJ that Intel has also discussed factory projects in China, Singapore, Vietnam, Malaysia, and India, though to appease US concerns, the company would likely not put its most advanced manufacturing in the countries. Citing a presentation, the WSJ reports that Gelsinger met with European Commissioner Thierry Breton this spring and told him setting up a site with two factory modules would cost 17 billion ($20 billion). The article says that in June, Gelsinger met with politicians in France, the Netherlands, and Italy, and citing an Intel email, the WSJ reports that Gelsinger plans to return to Europe more than once by the end of the year. A company official tells the WSJ that Intel believes that setting up factories in Europe could cost 40% more than it does in Asia, mostly as a result of subsidies Asia provides. In an interview, Global Foundries CEO Tom Caulfield tells the WSJ that more and more, western governments are finding that they need to offer subsidies to match the incentives that Asia has been offering so as "to be more globally competitive." People familiar with the conversation tell the WSJ that TSMC officials have met with the Commerce Department adviser setting up the US's grant program.

SEC goes hard on Chinese companies listing in the U.S - Bloomberg

August 19, 2021

People familiar with the matter say Chinese companies listing in the U.S are facing more questions from the SEC about their offshore corporate structures. Sources say that the queries are mainly focused on areas of cash flows and the relationships between parent companies and other entities. The article notes that it remains unclear whether regulators will allow new Chinese listings overseas as the SEC Chair asked staff to take a pause for IPOs that use the VIE structure on Monday. StreetAccount notes Bloomberg reported on July 7 that the CSRC intended to change the rules so that firms employing a Variable Interest Entity model need to get approval before listing outside of mainland China.

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Disclaimer: The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.