Tag Archives: SPACs

Business

Trump-tied SPAC delays vote after falling short on shareholder support

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NEW YORK, Oct 10 (Reuters) – The blank-check acquisition firm that agreed to merge with former U.S. President Donald Trump’s social media company postponed on Monday its shareholder vote to Nov. 3 after failing to garner enough support to win a 12-month extension.

At least 65% of the shareholders of Digital World Acquisition Corp (DWAC.O) needed to agree to the extension. The special purpose acquisition company (SPAC) opted to push back the deadline to try to find more votes.

Digital World, which had already pushed back the deadline for its shareholders to vote on the 12-month extension several times over the past month, fell short of that threshold on Monday.

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At stake is an over $1 billion private investment in public equity (PIPE) financing that Trump Media & Technology Group (TMTG) stands to receive from Digital World, which inked a go-public deal with the social media company in October 2021.

Digital World last month said it had received termination notices from PIPE investors who were pulling out about $139 million of the total financing commitment.

The transaction with TMTG has been on hold amid civil and criminal investigations into the circumstances around the deal. Digital World has not yet received approval from the U.S. Securities and Exchange Commission (SEC), which is reviewing its disclosures on the deal.

Digital World is set to liquidate on Dec. 8, after managing to extend its life by three months in September.

Reuters reported last month that executives behind Digital World had failed to pay Saratoga Proxy Consulting, their proxy solicitors, for its work rallying shareholders for the vote.

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Reporting by Echo Wang in New York, additional reporting by Svea Herbst-Bayliss; Editing by Will Dunham

Our Standards: The Thomson Reuters Trust Principles.

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Business

Some investors backing out of SPAC merging with Trump’s media firm

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The Truth social network logo is seen on a smartphone in front of a display of former U.S. President Donald Trump in this picture illustration taken February 21, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

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Sept 23 (Reuters) – Some investors are backing out of Digital World Acquisition Corp’s (DWAC.O) plan to acquire former U.S. President Donald Trump’s social media firm Truth Social, the blank-check firm said on Friday.

Digital World said it had received termination notices from private investment in public equity (PIPE) investors ending nearly $139 million in investments out of the $1 billion commitment it had previously announced.

Investors, who signed the PIPE commitment about one year ago, are free to move their money after the Sept. 20, 2022 deadline if the deal has not completed.

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Digital World did not disclose the investors that pulled out. Sources told Reuters Sabby Management, which had committed $100 million to the PIPE, is one of the investors who have terminated.

Sabby Management declined to comment.

More investors could pull out in the next few weeks, sources said, as they can terminate anytime after the deadline. Many are waiting for DWAC to propose more preferred terms to PIPE investors, sources added.

The deal between the special purpose acquisition company (SPAC) and Trump Media and Technology Group (TMTG), which owns Truth Social, has been on ice due to civil and criminal probes into the circumstances around the agreement.

TMTG did not immediately respond to a request for comment.

The SPAC had been hoping the U.S. Securities and Exchange Commission, which is reviewing Digital World’s disclosures on the deal, would have given its blessing by now.

Digital World said this month it would extend the deal’s life by three months after its bid for a 12-month extension from its shareholders fell short.

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Reporting by Akash Sriram and Nivedita Balu in Bengaluru, Svea Herbst-Bayliss and Krystal Hu in New York; Editing by Maju Samuel and Josie Kao

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Business

Exclusive: Deal partner for Trump’s Truth Social fails to get backing for SPAC extension

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The Truth social network logo is seen on a smartphone in front of a display of former U.S. President Donald Trump in this picture illustration taken February 21, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

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Sept 5 (Reuters) – The blank-check acquisition firm that agreed to merge with Donald Trump’s social media company failed to secure enough shareholder support for a one-year extension to complete the deal, people familiar with the matter said on Monday.

At stake is a $1.3 billion cash infusion that Trump Media & Technology Group (TMTG), which operates the former U.S. president’s Truth Social app, stands to receive from Digital World Acquisition Corp (DWAC.O), the special purpose acquisition company (SPAC) that inked a deal last October to take TMTG public.

The transaction has been on ice amid civil and criminal probes into the circumstances around the deal. Digital World had been hoping that the U.S. Securities and Exchange Commission (SEC), which is reviewing its disclosures on the deal, would have given its blessing by now for the transaction to proceed.

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Most of Digital World’s shareholders are individual investors and getting them to vote through their brokers has been challenging, Digital World Chief Executive Patrick Orlando said last week.

Digital World needs 65% of its shareholders to vote in favor of the proposal to extend its life by 12 months for the move to become effective. By Monday evening, far fewer Digital World shareholders than those required had voted in favor, the sources said.

The outcome of the vote is set to be announced at a special meeting of Digital World shareholders on Tuesday. Digital World executives do not believe they will be able to muster enough shareholder support in time and have started to consider alternative options, according to the sources.

The sources requested anonymity because the vote tally figures have not been publicly announced. Representatives for Digital World and TMTG did not immediately respond to requests for comment.

One option being considered by Digital World is to postpone the vote deadline in a final bid to boost more shareholder support, the sources said. Without further action, the SPAC is set to liquidate on Thursday and return the money it raised in its September 2021 initial public offering.

Were Digital World to fail in its bid to get its shareholders to back the one-year extension, its management has the right to extend its life without shareholder approval by up to six months. It is unclear whether Digital World will pursue this option and if it would provide enough time for regulators to reach a conclusion on whether to allow the deal to proceed.

Digital World has disclosed that the SEC, the Financial Industry Regulatory Authority and federal prosecutors have been investigating the deal with TMTG, though the exact scope of the probes is unclear.

Among the information sought by regulators are Digital World documents on due diligence of potential targets other than TMTG, relationships between Digital World and other entities, meetings of Digital World’s board, policies and procedures relating to trading, and the identities of certain investors, Digital World has said.

INDEBTEDNESS CAPPED

Were the deal to be completed, TMTG would receive $293 million that Digital World has on hand plus $1 billion committed from a group of investors in the form of a private investment in public equity (PIPE).

The PIPE is scheduled to expire on Sept. 20 unless the deal is completed. Investment bankers for Digital World have been reaching out to investors in the last few weeks to gauge their interest in extending the PIPE, a person familiar with the matter said.

It is unclear how TMTG is getting by without having access to Digital World’s funding. It raised $22.6 million through convertible promissory notes last year and an additional $15.4 million through bridge financing in the first quarter of this year. The agreement with Digital World caps the indebtedness that TMTG can assume prior to the deal closing at $50 million.

Digital World has said it believes TMTG will have “sufficient funds” until April 2023. TMTG said last week that Truth Social is “on strong financial footing” and would begin running advertisements soon.

Trump started using Truth Social in April, two months after it launched on Apple Inc’s (AAPL.O) app store. He currently has more than 4 million followers – a fraction of the 89 million he had on Twitter Inc (TWTR.N) before he was banned over his role in the January 2021 U.S. Capitol riots by thousands of his supporters.

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Reporting by Svea Herbst-Bayliss in Rhode Island; Additional reporting by Echo Wang and Krystal Hu in New York; Editing by Greg Roumeliotis and Edwina Gibbs

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Business

SEC targets SPACs with new rules about forecasts, mergers

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A flag outside the U.S. Securities and Exchange Commission headquarters in Washington, D.C., U.S., on Wednesday, Feb. 23, 2022.

Al Drago | Bloomberg | Getty Images

The Securities and Exchange Commission on Wednesday debuted a host of new rules for SPACs that, if enacted, would mark one of the broadest attempts to date at cracking down on the hot market for blank-check companies.

SPACs, or special-purpose acquisition companies, have come under fire in recent years by investors who say that the firms often inflate the business outlooks of the firms they seek to acquire. Many of those companies include start-ups that have not yet become profitable.

With its new rules, the SEC also hopes to address complaints about incomplete information and insufficient protection against conflicts of interest and fraud. The issues are not as pervasive in a traditional initial public offering.

SPACs are typically shell firms that raise funds through a listing with the goal of buying a private company and taking it public. That process allows the often-young firms to circumvent the more rigorous scrutiny of a traditional initial public offering.

“Functionally, the SPAC target IPO is being used as an alternative means to conduct an IPO,” SEC Chair Gary Gensler said in a statement. “Thus, investors deserve the protections they receive from traditional IPOs, with respect to information asymmetries, fraud, and conflicts, and when it comes to disclosure, marketing practices, gatekeepers, and issuers.”

Some of the SEC’s proposed rules would:

  • Amend the definition of a “blank check company” to make the liability safe harbor for forward-looking statements, such as business forecasts, unavailable in filings by SPACs. The move would leave SPACs open to investor lawsuits if they feel like the blank-check company’s estimates were wildly bullish.
  • Require that the SPAC’s private business target be a co-registrant when the blank-check company files a take-public Form S-4 or F-4.
  • Better police conflicts of interest, fee responsibilities and the dilution of investor holdings.
  • Update the Securities Act of 1933 to limit the types of financial statements shell companies can make of their potential business combinations and their would-be merger targets.

Dilution is a paramount concern for individual investors, as many have complained that murky SPAC processes can leave investments open to unexpected losses if the company elects to issue more stock, the SEC told reporters.

Gensler has voiced concerns about SPACs since May, but Wednesday’s proposed rules represent the first broad rulemaking from Wall Street’s watchdog.

The SEC has nonetheless launched independent investigations into a raft of SPACs and blank-check merger deals, including one involving former President Donald Trump’s social media project, Digital World Acquisition Corp.

The U.S. SPAC market was one of the hottest trades of 2021. An explosion of hundreds of deals in the first half of the year waned as the SEC cracked down and many deals performed badly.

The proprietary CNBC SPAC Post Deal Index, which is comprised of SPACs that have completed their mergers and taken their target companies public, is down 44.8% over the past year and has declined 20% in 2022 alone.

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US

Trump-linked SPAC’s shares surge as Truth Social app tops Apple downloads

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Feb 22 (Reuters) – Shares of Digital World Acquisition Corp (DWAC.O), the blank-check company behind former U.S. President Donald Trump’s new social media venture, Truth Social, rose about 14% on Tuesday as the app topped downloads on Apple’s App Store after its launch late on Sunday.

Truth Social was downloaded 170,000 times since its launch, according to research firm Apptopia. read more

The app’s launch could mark Trump’s return to social media after he was banned from Twitter Inc (TWTR.N), Facebook (FB.O) and Google (GOOGL.O) following an attack on the U.S. Capitol by his supporters last year. read more

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Digital World’s shares jumped 14% to $96.36, levels last seen in October, days after the blank check firm announced a deal to publicly list Trump Media & Technology Group (TMTG), the venture behind Truth Social.

The stock was also trending high on investor-focused social media site stocktwits.com, indicating interest from retail traders.

“It’s driven by hype but I’m skeptical that the retail driven frenzy can be sustained,” said Dennis Dick, head of markets structure, proprietary trader at Bright Trading LLC in Las Vegas.

The Truth social network logo is seen displayed behind a woman holding a smartphone in this picture illustration taken February 21, 2022. REUTERS/Dado Ruvic/Illustration

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“From a fundamental perspective, it’s too early to tell. Trump has a huge following and they could move from traditional social media to this platform… but it depends on how good the app is.”

New users faced trouble signing up for the free app or were placed on a waitlist that cited “massive demand” soon after the launch. It was unclear if the issues were resolved by Tuesday.

Trump Media & Technology Group and Digital World did not immediately respond to Reuters’ request for comment.

Wall Street’s top financial regulators are investigating Trump’s $1.25 billion deal to float TMTG on the stock market, a filing showed in December. read more

Other stocks linked to Trump also advanced. Phunware (PHUN.O), hired by Trump’s 2020 Presidential re-election campaign to build a phone app, climbed 11%. SPAC CF Acquisition Corp VI (CFVI.O), which is taking video platform Rumble Inc public, added 3.3%.

Twitter Inc (TWTR.N) slipped 1.7%, while Facebook-parent Meta Platforms (FB.O) shed 1%.

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Reporting by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty

Our Standards: The Thomson Reuters Trust Principles.

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Business

Goldman profit hit by weaker trading, rising expenses; shares tumble

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Jan 18 (Reuters) – Shares in Goldman Sachs Group (GS.N) fell as much as 8% Tuesday after Wall Street’s premier investment bank missed quarterly profit expectations, hampered by weaker trading revenues and rising expenses.

The share decline put Goldman on course for its worst single-day showing since June 2020, shedding about $10 billion off its market valuation since Friday’s close, although it recovered to trade down 6.5% towards the close.

Bank earnings in the fourth quarter have taken a hit from lower trading volumes as the Federal Reserve slowed the pace of its asset purchases after 18 months of pumping liquidity into capital markets to ease the impact of the COVID-19 pandemic.

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The Fed’s intervention had fueled trading activity as clients bought and sold more stocks and bonds, repositioning their portfolios to match the changing economic environment. But fourth-quarter earnings from large U.S. banks have showed the market backdrop returning to more normal levels. read more

With its capital markets focus, Goldman had been one of the main beneficiaries of market volatility since March 2020, enabling its fixed income and equities traders to enjoy their best period since the 2007-09 financial crisis.

However, revenue from global markets fell 7% in the fourth quarter to nearly $4 billion, owing to declines in both equities and fixed income trading revenues compared with a year ago.

“Goldman Sachs had an impressive record year, but a thud of a quarter,” said Viola Risk Advisers analyst David Hendler.

Since taking over the reins from Lloyd Blankfein in 2018, Goldman’s Chief Executive David Solomon has looked to diversify the bank’s revenue with an aim to focus more on predictable revenue streams like consumer banking, wealth and asset management. The strategy aims to reduce the bank’s reliance on unpredictable capital markets-focused businesses.

However, the bank’s global markets division, which houses its trading businesses, still accounted for more than a third of its revenues last year.

Aside from the trading slowdown, Goldman was also handicapped by a 23% rise in operating expenses, mainly reflecting higher compensation and benefits costs.

Wage inflation has crimped banks’ profits as top Wall Street banks have raised salaries for junior bankers, in particular, over the past year to attract and retain top talent.

Oppenheimer analyst Chris Kotowski expressed surprise that Goldman’s compensation ratio, which measures the proportion of a bank’s revenues set aside to pay staff, had risen during the quarter.

The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly

“This is the first time we’ve been covering the stock where the ratio increased 3Q to 4Q,” he said.

Goldman has traditionally been one of the best-paying banks.

“Our philosophy remains to pay for performance, and we are committed to rewarding top talent in a competitive labor environment,” Chief Financial Officer Denis Coleman told analysts on a conference call.

For the year as a whole, Goldman’s compensation ratio was 200 basis points lower at 30% than it was the year previously.

Last week, top executives at JPMorgan Chase (JPM.N), the country’s largest bank, flagged similarly high fourth quarter expenses and saw its shares fall 6%. read more

TRADING PAIN

Like its rivals, Goldman’s trading slowdown overshadowed a 45% jump in investment banking revenue to $3.8 billion as its top rainmakers raked in record fees from advising on some of the largest mergers and initial public offerings.

The bank’s investment banking pipeline remained strong heading into 2022, Solomon told analysts.

Solomon acknowledged last year was exceptional in terms of client’s trading activity but said he anticipates more market volatility than usual in 2022.

“Activity levels, given we’re in a very, very unusual macro environment, are going to continue to be reasonable as we start into this year,” he told analysts. “You’ve still got a lot of volatility around the pandemic.”

The bank expects to hold on to market share gains made by its trading business even as the market environment returns to normal, executives said.

Goldman’s profit fell to $3.8 billion in the quarter $4.4 billion a year earlier.

Earnings per share fell to $10.81 from $12.08 a year earlier. Analysts on average had expected a profit of $11.76 per share, according to Refinitiv data.

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Additional reporting by Niket Nishant in Bengaluru and Matt Scuffham in New York; Writing by Anirban Sen and Matt Scuffham; Editing by Arun Koyyur and Nick Zieminski

Our Standards: The Thomson Reuters Trust Principles.

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Business

China proposes tighter rules but no ban for offshore listings

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BEIJING, Dec 24 (Reuters) – China’s securities watchdog on Friday proposed tightening rules governing Chinese companies listing abroad, which it said would improve oversight while allowing them to continue to do so, the latest in a spate of regulatory moves by Beijing in 2021.

The draft rules, which had been keenly awaited by investors and were posted by the China Securities Regulatory Commission on its website, extend the CSRC’s oversight of offshore listings to Chinese firms with variable interest entity (VIE) structures.

There had been much uncertainty among investors and Chinese firms over how much tighter the new rules would be.

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“China is tightening the screws on offshore listings but not turning the valves off completely,” Andrew Collier, managing director of Orient Capital Research, said of the plans.

The CSRC said that the existing rules regulating offshore listings were outdated and the proposed new ones reflect China’s desire to further open up and are “not about policy tightening”.

Previously, the regulator would only examine companies incorporated onshore in China that proposed an offshore listing, such as in Hong Kong.

Beijing has unleashed a flurry of regulatory tightening this year under President Xi Jinping, including clamping down on anti-competitive behavior, banning private tuition groups and reining in a debt binge by property developers in a wide-ranging campaign that has rattled domestic and global markets.

VIEs have mostly been used by companies that list on offshore stock markets, primarily the United States, to skirt Chinese rules restricting foreign investment in sensitive industries such as media and telecommunications.

Most offshore-listed Chinese tech firms, including Alibaba Group Holdings and JD.com Inc , use the structures, which give them more flexibility to raise capital, while also bypassing the scrutiny and lengthy IPO vetting process that locally-incorporated companies have to go through.

“The real key is how much data needs to be retained, location of servers, and whether the U.S. or China has responsibility for accounting,” Collier said.

CSRC said the proposed registration process should take up to 20 working days if adequate materials were submitted.

It will also require international banks that underwrite a Chinese firm’s offshore listing to register with the CSRC.

DIDI IMPACT

Offshore IPOs have provided an alternative source of capital for Chinese companies and a New York listing has been seen as a badge of honor for many.

But Beijing has been ramping up supervision of overseas listings since the $4.4 billion initial public offering (IPO) of ride-hailing giant Didi Global Inc (DIDI.N) and the proposals on Friday were not as stringent as some had expected.

Chinese firms have raised about $12.8 billion in U.S. listings in 2021, according to Refinitiv data, but the deals ground to a halt after Didi’s debut in New York in early July.

The CSRC said Chinese regulators respected the choices made by companies on listing locations and the rules would not be retroactively applied, adding that it would not consider whether firms met the requirements of overseas listing locations.

But the Chinese government can order a company to dispose of its assets or businesses if its offshore listing jeopardizes national security, according to the proposed new rules.

The announcement came as U.S. markets were closed on Friday for the Christmas holiday period.

In a VIE, a Chinese firm sets up an offshore company for an overseas listing that allows foreign investors to buy into it.

The offshore company enters into a series of contracts with the owner of the local Chinese company, which operates the business in China, to obtain 100% economic interest in that business, analysts have said previously.

Chinese IPOs on all world markets have reached a record $100 billion this year, Refinitiv data showed.

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Reporting by Kane Wu, Samuel Shen, Selena Li, Julie Zhu; Beijing Newsroom; Writing by Scott Murdoch and Tom Daly; Editing by Alexander Smith

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Business

Cramer rips SPACs, urges investors to avoid the blank-check companies

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CNBC’s Jim Cramer on Thursday implored viewers to steer clear of special purpose acquisition companies right now, suggesting there’s too much risk for retail investors because of the structure of the transactions.

“The SPAC deals keep coming because they’re a great way for institutional money managers to get a guaranteed return, but everybody else in the process gets the short end of the stick,” the “Mad Money” host said. “Sooner or later, privately held companies will figure this out and stop agreeing to participate, but until then I recommend you give this group a wide berth or no berth at all.”

The pace of SPAC deals accelerated this fall, following a months-long slowdown beginning in March after the Securities and Exchange Commission issued new accounting guidance involving the blank-check firms.

“We’re now seeing roughly 20 SPAC fundraises per week. That’s insane. Again, that’s because while buying a SPAC stock after a deal gets announced is a terrible bet, getting in on a SPAC IPO actually makes sense financially,” Cramer said.

“As long as you come in early, when the SPAC is still just a pile of money, you’ve got a no-lose scenario because you can always decide to cash out at $10 whenever a deal gets announced,” Cramer said, describing a process known as a redemption.

Additionally, Cramer said money managers who participate in the initial SPAC IPO typically get lucrative equity warrants alongside the actual shares of stock.

“The problem is, most home gamers can’t take full advantage of these SPAC IPOs, and the companies that decide to merge with SPACs are getting a raw deal, too,” Cramer said.

Instead, retail investors largely have to buy SPAC shares as they trade on the open market, Cramer said. However, Cramer said that generally once the blank-check firms announce their merger target, the stocks have struggled. That’s why he’s advising retail investors to just stay away.

“When you zoom out, it’s remarkable how badly some of these post-deal SPAC stocks have done,” Cramer said, noting that the CNBC Post SPAC Index, which consists of 193 SPACs, is down sharply for the year.

“If the market reacts poorly to the news of a merger, the SPAC’s early shareholders can just back out,” Cramer said. “But the investors who come in later still experience the carnage, and there’s a lot of it.”

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Business

Southeast Asia’s Grab slumps in U.S. debut after record SPAC deal

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  • Grab listed on Thursday after $40 bln deal with Altimeter
  • Debut marks biggest U.S. listing by a Southeast Asian firm
  • Early backers SoftBank, Didi set for payday bonanza
  • Bell-ringing ceremony takes place in Singapore

SINGAPORE, Dec 2 (Reuters) – Shares in Grab , Southeast Asia’s biggest ride-hailing and delivery firm, slid more than 20% in their Nasdaq debut on Thursday following the company’s record $40 billion merger with a blank-check company.

Grab’s shares rose as much as 21% minutes after the listing before retreating to trade 23% lower at $8.51 by 1834 GMT.

“The price makes no difference to me. I’m going to celebrate tonight and get back to work tomorrow,” Chief Executive Anthony Tan told Reuters just after the shares started trading.

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The backdoor listing on Nasdaq marks the high point for the nine-year-old Singapore company that began as a ride-hailing app and now operates across 465 cities in eight countries, offering food deliveries, payments, insurance and investment products.

Grab kicked off the biggest U.S. listing by a Southeast Asian company with a bell-ringing event in Singapore, hosted by Nasdaq and Grab’s executives.

The event was attended by about 250 people including its investors, drivers, merchants and employees, with many dressed in the company’s signature green.

Thunderous handclaps reverberated in the hotel ballroom as an emotional Tan thanked them for putting Grab and Southeast Asia’s tech economy on the global map.

CEO Tan and Tan Hooi Ling developed the company from an idea for a Harvard Business School venture competition in 2011. The two Tans are not related.

The listing comes after Grab’s April agreement to merge with U.S. tech investor Altimeter Capital Management’s SPAC, Altimeter Growth Corp (AGC.O) and raise $4.5 billion, including $750 million from Altimeter.

Grab’s flotation “will provide a bigger cash buffer” to its “cash burn”, S&P Global Ratings said in a note. But it said the company’s “credit quality continues to be constrained by its loss-making operations, and free operating cash flows could be negative over the next 12 months.”

Southeast Asia’s internet economy is forecast to double to $360 billion in gross merchandise value by 2025, prompting Grab’s rivals, including regional internet firm Sea Ltd (SE.N) and Indonesia’s GoTo Group, to bulk up.

GoTo plans a local IPO in 2022 after completing an expected $2 billion private fundraising, sources have told Reuters. A U.S. listing will follow the Jakarta offering.

“Longer term, we’re really excited about Grab Financial Group,” said Chris Conforti, partner at Altimeter Capital, referring to Grab’s financial services unit. “I think the bell curve on that is much wider in terms of what the outcome could be, but it could be extremely large.”

BONANZA FOR BACKERS

CEO Tan, 39, expanded Grab into a regional operation with a range of services, after launching it as a taxi app in Malaysia in 2012. It later moved its headquarters to Singapore.

“What we have shown to the world is that home grown tech companies can develop great technology that can compete globally, even when international players are in town,” Tan told Reuters in an interview on Wednesday. “We can compete and win.”

He will control 60.4% of voting rights along with Grab’s co-founder, and president Ming Maa, but hold only a 3.3% stake with them.

Grab’s listing brings a payday bonanza to early backers such as Japan’s SoftBank (9984.T) and Chinese ride-hailing giant Didi Chuxing, which invested as early as 2014.

They were later joined by the likes of Toyota Motor Corp (7203.T), Microsoft Corp (MSFT.O) and Japanese megabank MUFG (8306.T). Uber became a Grab shareholder in 2018 after selling its Southeast Asian business to Grab following a five-year battle.

In September, Grab cut its full-year adjusted net sales forecasts, citing renewed uncertainty over pandemic curbs on movement.

Third-quarter revenue fell 9% from a year earlier and its adjusted loss before interest, taxes, depreciation, and amortisation (EBITDA) widened 66% to $212 million. GMV in the quarter rose to a record $4 billion.

It aims to turn profitable on an EBITDA basis in 2023.

JPMorgan and Morgan Stanley were the lead placement agents on the fundraising, while Evercore and UBS were the co-placement agents.

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Reporting by Anshuman Daga and Aradhana Aravindan; Additional reporting by Noor Zainab Hussain in Bengaluru; Editing by William Mallard, Kirsten Donovan, Emelia Sithole-Matarise and Susan Fenton

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Business

Dow Jones Futures: Snap Crashes, Intel Tumbles On Earnings; Donald Trump Makes SPACs Great Again

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Dow Jones futures and S&P 500 futures fell slightly Thursday night, while Nasdaq futures retreated as Snap stock crashed and Intel (INTC) tumbled on earnings. That Snap Snap (SNAP) news also hit Facebook (FB), Google parent Alphabet (GOOGL) and Twitter (TWTR), Pinterest (PINS) and Trade Desk (TTD), while the Intel news boosted AMD stock.




X



The stock market rally was mixed Thursday, but the S&P 500 hit a record high while growth stocks led despite rising Treasury yields. Tesla (TSLA) neared a buy point Thursday and several stocks flashed buy signals. But the day’s big mover was the SPAC merger partner for Donald Trump’s new social media venture.

Dow Jones Futures Today

Dow Jones futures lost a fraction vs. fair value. S&P 500 futures fell 0.2%. Nasdaq 100 futures sank 0.5%. Intel stock is a Dow Jones, S&P 500 and Nasdaq member. Facebook and Google stock are S&P 500 and Nasdaq titans.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Tesla stock, Google and AMD are on IBD Leaderboard. AMD stock also is on SwingTrader. Google stock is on IBD Long-Term Leaders. Snap stock, AMD and Google are on the IBD 50.

The video embedded in this article reviewed the overall market action and analyzed Match Group (MTCH), Boot Barn (BOOT) and Netflix (NFLX).

Snap Stock Cracks, Facebook Slumps

Snap earnings came in far above third-quarter estimates. But revenue just missed. The Snapchat parent also guided low for Q4 revenue. Recent Apple (AAPL) privacy changes are taking a toll on Snap’s advertising business.

Snap stock plummeted 22%, signaling a plunge below the 50-day and 200-day lines and a possible five-month low. Snap stock had been trying to set up again after several head fakes in the past several months.

Meanwhile, Snap’s advertising woes are a bad sign for social media rivals and beyond.

FB stock, which has been trying to bounce back from its own woes, slumped 4% in overnight trading. Facebook has warned of headwinds from Apple privacy changes.

TWTR stock gave up 5%. Google stock sank 2%, back below its 50-day line. PINS stock slid nearly 4%. Pinterest shot up 13% Wednesday on reports that PayPal (PYPL) is in talks to buy the digital scrapbooking site.

The Trade Desk stock lost almost 6%. Facebook, Google and Twitter report next week, with Trade Desk earnings likely in early November.

Intel Earnings

Intel earnings topped views. But adjusted revenue fell short by some measures, led by data-center chips. Q4 earnings guidance was light, as operating expenses rise. The chip giant’s CFO is stepping down as well. Intel stock, which has been a laggard for quite some time, sank 9%.

AMD stock rose modestly on Intel’s woes, a common theme in recent years. Advanced Micro Devices (AMD), which reports earnings next week, climbed 2.5% to a record close on Thursday.

Tesla Stock

Tesla stock rose 3.3% in Thursday’s session to 894 following strong earnings. TSLA stock rose as high as 900, within a fraction of clearing a nine-month cup base and 900.40 buy point, according to MarketSmith analysis. Shares are on track to rise for a ninth straight week, with gains especially strong in the past two. So Tesla stock taking a break right at or below all-time highs would not be a surprise and would probably be healthy.

Trump Media SPAC Deal

After being barred from many social media sites, former Former President Donald Trump has formed his own. Trump Media & Technology Group will go public via a SPAC merger with Digital World Acquisition (DWAC). Trump Media & Technology will have a social media site named Truth Social, as well a subscription-based video-on-demand service, TMTG+.

DWAC stock shot up 357% to 45.50. Well over 400 million DWAC shares traded in Thursday’s session. DWAC stock rose sharply in extended trade as its social media rivals Snap, Facebook and Twitter sold off.

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Stock Market Rally Thursday

The stock market rally closed mixed but finished relatively strong.

The Dow Jones Industrial Average pared losses to just a fraction in Thursday’s stock market trading, nearly overcoming IBM (IBM) plunging 9.6% on weak sales. The S&P 500 index rose 0.3%, hitting an all-time high, a day after the Dow Jones did. The Nasdaq composite climbed 0.6%. The small-cap Russell 2000 advanced 0.3%

The 10-year Treasury yield rose 4 basis points to 1.68%, a five-month high.

Crude oil futures fell 1.1% to $82.50 a barrel, the first decline in six sessions. Copper prices tumbled nearly 4%.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.15%, while the Innovator IBD Breakout Opportunities ETF (BOUT) gave up 1%.  The iShares Expanded Tech-Software Sector ETF (IGV) gained 1%. The VanEck Vectors Semiconductor ETF (SMH) added 1.1%.

SPDR S&P Metals & Mining ETF (XME) slumped 1.7%, as metal prices and mixed earnings took their toll. Global X U.S. Infrastructure Development ETF (PAVE) was just above breakeven. U.S. Global Jets ETF (JETS) dipped 0.1%. SPDR S&P Homebuilders ETF (XHB) edged up 0.3%. The Energy Select SPDR ETF (XLE) slumped 1.85% and the Financial Select SPDR ETF (XLF) slid 0.4%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) climbed 0.8% and ARK Genomics ETF (ARKG) 0.15%. Tesla stock remains the No. 1 holding across ARK Invest ETFs.

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Market Rally Analysis

The stock market rally had a solid Thursday, given various factors.

Falling crude and metals prices hit those sectors. As always, commodity stocks are going to follow the underlying commodity price.

Treasury yields rose to fresh highs. But growth stocks led the way Thursday, with several flashing new buy signals. Transports, at least rail and truck firms, continued to do well.  Some retail and apparel names are looking strong, along with consumer discretionary names in general.

The Dow Jones and S&P 500 are at record highs. The Nasdaq isn’t far behind.

Nasdaq futures suggest that techs could retreat on Friday.

But a pause could be constructive for many leading stocks after running up over a few weeks, including Tesla stock. If the likes of ServiceNow (NOW), Apple, Microsoft (MSFT) and GOOGL stock could form handles around their buy points, they could look more attractive. All four of those tech giants report earnings next week, along with hundreds of other companies.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

The stock market rally continues to act well and offers a number of fresh buying opportunities. Depending on your exposure, you can continue to make new buys. But there’s also nothing wrong with letting the market digest its recent gains and see how the next week plays out.

Obviously the goal is to make money, and to make it quickly during market uptrends. But that doesn’t mean it all has to happen in one day. So don’t try to make it happen.

Identify new potential winners by running screens and building up your watchlists. Pay special attention to those with upcoming earnings.

A slew of earnings reports will generate hundreds of winners and losers, as well as set the tone for various sectors and the overall market rally.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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