Archive for Shalini Nagarajan

Robinhood CEO says shorting the same shares over and over causes a ‘runaway chain reaction’ – and it’s worth looking at setting a limit

robinhood vlad tenev
Vladimir Tenev.
  • Robinhood's CEO criticized the "runaway chain reaction" of short-selling the same shares multiple times.
  • "That's a lot of what causes this short-squeeze dynamic to begin with," he told DealBook's conference.
  • There's an argument to be made that the same share should be shorted only once, he said.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Short selling the same shares repeatedly causes a "runaway chain reaction" that results in chaos for markets and investors, Robinhood CEO Vlad Tenev said at the New York Times DealBook conference Tuesday. 

"If you short the same share, you know, ten times, twenty times, well then, if it gets recalled there's sort of like ten holders of that share," he said. "That's a lot of what causes this short-squeeze dynamic to begin with."

Tenev said many market participants don't fully understand the "plumbing" of the financial system, but there is now more eagerness to understand the concepts of short-selling and payment for order flow

"How many times should we let the same share be shorted? I think there's an argument that the answer should be one," he told host Andrew Ross Sorkin. "If you short sell the same share hundreds of times, I don't know if people have really studied the effects of that and how things would be different if there was some limitation."

Tenev was joined at the DealBook session by former SEC chairman Jay Clayton, who called for more real-time disclosure of shorts.

Robinhood came under fire last month for temporarily blocking trades of volatile equities including GameStop, AMC, and Nokia, following a Reddit-fueled buying frenzy. The brokerage defended its decision by saying the halt was the result of a spike in its legally-mandated deposit requirements.

In his remarks to Congress last week, Tenev denied blocking purchases at the request of hedge funds and called to modify SEC trading rules. He asked the committee to consider settling trades in real-time, in order to allow investors to make purchases faster and allow brokers to clear up proprietary cash.

Robinhood is now expanding its live phone support after the company's lack of customer assistance came under fire at the Congressional hearing.

Read the original article on Business Insider

Churchill Capital Corp IV plunges 48% after Lucid Motors strikes SPAC deal to go public with a $24 billion valuation

Lucid studios_5
Lucid Air.
  • Churchill Capital IV fell as much as 48% on Tuesday after Lucid Motors struck a deal to go public via the SPAC.
  • The deal will generate $4.4 billion for Lucid, which plans to use the funds to expand its Arizona facility.
  • Churchill's transaction values Lucid at about $24 billion at the PIPE offer price of $15.00 per share.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares in Churchill Capital IV fell as much as 48% on Tuesday after the blank-check company's merger with Lucid Motors was announced. 

Electric-vehicle maker Lucid confirmed it would go public via the special-purpose acquisition company run by financier Michael Klein with a pro-forma equity value of $24 billion. 

The deal will generate about $4.4 billion in cash for 14-year-old Lucid, which plans to use the funds to expand its manufacturing facility in Arizona. The facility has a production capacity of 365,000 units per year at scale.

Churchill's latest stock performance is a reversal from previous sessions when reports on the deal sparked consecutive rallies. Its shares were last trading 36% lower, at $36.48 per share, as of 10:20 a.m. ET, having earlier fallen by as much as 45%.

Speculation over the deal has been going around for over a month. Earlier in February, shares in Churchill Capital IV soared 33% on a report the SPAC was nearing an agreement. On Monday, shares spiked 19% after Bloomberg said a deal could be announced Tuesday.

Lucid's deal with Churchill, which is expected to close in the second quarter of this year, marks one of the highest-profile SPAC arrangements in the EV space after a wave of interest in electric-vehicle startups and automotive tech suppliers. That may have been sparked by a rally in Tesla's shares over the past 12 months. Peter Rawlinson, the company's CEO and CTO, is known for his work as chief engineer at Tesla for the Model S. He joined Lucid in 2013.

"I see the SPAC as just a tool, another lever to pull on, where we can accelerate our trajectory," Rawlinson told Bloomberg in an interview. "This is a technology race. Tesla gets this. It's why they are so valuable and Lucid also has the technology."

The SPAC merger represents the largest capital boost since Saudi Arabia's sovereign wealth fund injected an investment worth more than $1 billion in 2018. The deal was led by the Public Investment Fund as well as BlackRock, Fidelity Management & Research, Franklin Templeton, Neuberger Berman, Wellington Management, and Winslow Capital Management.

Read the original article on Business Insider

Churchill Capital Corp IV plunges 48% after Lucid Motors strikes SPAC deal to go public with a $24 billion valuation

Lucid studios_5
Lucid Air.
  • Churchill Capital IV fell as much as 48% on Tuesday after Lucid Motors struck a deal to go public via the SPAC.
  • The deal will generate $4.4 billion for Lucid, which plans to use the funds to expand its Arizona facility.
  • Churchill's transaction values Lucid at about $24 billion at the PIPE offer price of $15.00 per share.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares in Churchill Capital IV fell as much as 48% on Tuesday after the blank-check company's merger with Lucid Motors was announced. 

Electric-vehicle maker Lucid confirmed it would go public via the special-purpose acquisition company run by financier Michael Klein with a pro-forma equity value of $24 billion. 

The deal will generate about $4.4 billion in cash for 14-year-old Lucid, which plans to use the funds to expand its manufacturing facility in Arizona. The facility has a production capacity of 365,000 units per year at scale.

Churchill's latest stock performance is a reversal from previous sessions when reports on the deal sparked consecutive rallies. Its shares were last trading 36% lower, at $36.48 per share, as of 10:20 a.m. ET, having earlier fallen by as much as 45%.

Speculation over the deal has been going around for over a month. Earlier in February, shares in Churchill Capital IV soared 33% on a report the SPAC was nearing an agreement. On Monday, shares spiked 19% after Bloomberg said a deal could be announced Tuesday.

Lucid's deal with Churchill, which is expected to close in the second quarter of this year, marks one of the highest-profile SPAC arrangements in the EV space after a wave of interest in electric-vehicle startups and automotive tech suppliers. That may have been sparked by a rally in Tesla's shares over the past 12 months. Peter Rawlinson, the company's CEO and CTO, is known for his work as chief engineer at Tesla for the Model S. He joined Lucid in 2013.

"I see the SPAC as just a tool, another lever to pull on, where we can accelerate our trajectory," Rawlinson told Bloomberg in an interview. "This is a technology race. Tesla gets this. It's why they are so valuable and Lucid also has the technology."

The SPAC merger represents the largest capital boost since Saudi Arabia's sovereign wealth fund injected an investment worth more than $1 billion in 2018. The deal was led by the Public Investment Fund as well as BlackRock, Fidelity Management & Research, Franklin Templeton, Neuberger Berman, Wellington Management, and Winslow Capital Management.

Read the original article on Business Insider

Churchill Capital Corp IV plunges 48% after Lucid Motors strikes SPAC deal to go public with a $24 billion valuation

Lucid studios_5
Lucid Air.
  • Churchill Capital IV fell as much as 48% on Tuesday after Lucid Motors struck a deal to go public via the SPAC.
  • The deal will generate $4.4 billion for Lucid, which plans to use the funds to expand its Arizona facility.
  • Churchill's transaction values Lucid at about $24 billion at the PIPE offer price of $15.00 per share.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares in Churchill Capital IV fell as much as 48% on Tuesday after the blank-check company's merger with Lucid Motors was announced. 

Electric-vehicle maker Lucid confirmed it would go public via the special-purpose acquisition company run by financier Michael Klein with a pro-forma equity value of $24 billion. 

The deal will generate about $4.4 billion in cash for 14-year-old Lucid, which plans to use the funds to expand its manufacturing facility in Arizona. The facility has a production capacity of 365,000 units per year at scale.

Churchill's latest stock performance is a reversal from previous sessions when reports on the deal sparked consecutive rallies. Its shares were last trading 36% lower, at $36.48 per share, as of 10:20 a.m. ET, having earlier fallen by as much as 45%.

Speculation over the deal has been going around for over a month. Earlier in February, shares in Churchill Capital IV soared 33% on a report the SPAC was nearing an agreement. On Monday, shares spiked 19% after Bloomberg said a deal could be announced Tuesday.

Lucid's deal with Churchill, which is expected to close in the second quarter of this year, marks one of the highest-profile SPAC arrangements in the EV space after a wave of interest in electric-vehicle startups and automotive tech suppliers. That may have been sparked by a rally in Tesla's shares over the past 12 months. Peter Rawlinson, the company's CEO and CTO, is known for his work as chief engineer at Tesla for the Model S. He joined Lucid in 2013.

"I see the SPAC as just a tool, another lever to pull on, where we can accelerate our trajectory," Rawlinson told Bloomberg in an interview. "This is a technology race. Tesla gets this. It's why they are so valuable and Lucid also has the technology."

The SPAC merger represents the largest capital boost since Saudi Arabia's sovereign wealth fund injected an investment worth more than $1 billion in 2018. The deal was led by the Public Investment Fund as well as BlackRock, Fidelity Management & Research, Franklin Templeton, Neuberger Berman, Wellington Management, and Winslow Capital Management.

Read the original article on Business Insider

Bill Gates says he’s not bullish on bitcoin as it uses ‘a lot of energy’ – and warns people who aren’t as rich as Elon Musk against buying into the boom

GettyImages 1252191631
Bill Gates.

Bill Gates, the world's third-richest person, is not a fan of bitcoin, partly for environmental reasons. 

According to the billionaire, not only does bitcoin use a lot of energy, it can also cause trouble for investors who may not have much money to spare, given how volatile its price is.

"Elon has tons of money and he's very sophisticated, so I don't worry that his Bitcoin will sort of randomly go up or down," Gates told Bloomberg in an interview. "I do think people get bought into these manias, who may not have as much money to spare, so I'm not bullish on Bitcoin, and my general thought would be that, if you have less money than Elon, you should probably watch out."

Bitcoin fell 13% on Tuesday, to around $46,817, tumbling from a record of $58,354 struck just two days ago, as investors took profit on the near-doubling in price since the start of the year.

Philanthropist and climate activist Gates, whose book "How to Avoid a Climate Disaster" recently went on sale, has previously said cryptocurrencies have caused deaths in a fairly direct way. He also thinks the anonymity behind bitcoin transactions isn't a good thing.

"The Gates Foundation does a lot in terms of digital currency, but those are things where you can see who's making the transaction," he said in the Bloomberg interview. "Digital money is a good thing, that's a different approach."

Treasury Secretary Janet Yellen has also been vocal about her doubts on cryptocurrencies, and their environmental impact, given the amount of power used in mining digital tokens.

"I don't think that bitcoin is widely used as a transaction mechanism," Yellen told the New York Times on Monday. "It's an extremely inefficient way of conducting transactions and the amount of energy that's consumed in processing those transactions is staggering."

Read the original article on Business Insider

Tesla has scored profits worth $1 billion on its bitcoin bet, a Wedbush analyst estimates

elon musk
Elon Musk.

Tesla has racked up paper profits worth $1 billion on its bitcoin investment as the price of the cryptocurrency soars, according to estimates by Dan Ives, an equity analyst at Wedbush Securities.

"Based on our calculations, we estimate that Tesla so far has made roughly $1 billion of profit over the last month from its Bitcoin investment given the skyrocketing price of Bitcoin, which now tops a trillion of market value," Ives wrote in a note published Saturday.

The company "is on a trajectory to make more from its Bitcoin investments than profits from selling its EV cars in all of 2020," he added.

Earlier this month, the electric-car maker disclosed an investment of $1.5 billion in bitcoin and said it would soon begin to accept the digital asset as payment for its products. Following the announcement, bitcoin has surged almost 72% and its market value hit $1 trillion for the first time. The token has now crossed an all-time high of $57,000, but was trading lower around $55,863 on Monday.

Tesla made its bitcoin purchase in January, when the price was fluctuating between $30,000 to $40,000, but the company didn't specify when, or at what price, it bought the token. It remains unclear whether Tesla has sold any bitcoin.

"While the Bitcoin investment is a side show for Tesla, its clearly been a good initial investment and a trend we expect could have a ripple impact for other public companies over the next 12 to 18 months," Ives said in the note. But the analyst expect less than 5% of public companies to head down the same route until more clarity around crypto regulations are determined.

Tesla founder Elon Musk has been on a consistent tweeting spree about bitcoin, most recently saying it's a "less dumb form of liquidity than holding cash." On Saturday, he said the price of bitcoin "seems high" after its market value surpassed $1 trillion.

Read the original article on Business Insider

Bitcoin miners raked in more than $1 billion in combined earnings last month. Here’s how they make money.

2021 02 10T112623Z_7_LYNXMPEH190BX_RTROPTP_4_CRYPTO CURRENCY COMPANIES.JPG
Bitcoin miners earned a combined $1.1 billion in January.
  • Bitcoin mining is the process that allows new coins to enter circulation, adding to the crypto ecosystem.
  • Miners receive bitcoin as a reward for verifying "blocks" of transactions on the blockchain.
  • Last month, they earned more than $1 billion in combined earnings. Here's how they do it. 
  • Visit the Business section of Insider for more stories.

Bitcoin is created on a decentralized network called the blockchain, where a vast network of digital "miners" work to verify transactions at any given time.

These miners earned a combined $1.1 billion in January, up 62% from December, when bitcoin's price surged to $42,000. The road to making this amount of money is no easy feat.

What do bitcoin miners do?

Miners have the responsibility to audit transactions on the blockchain to ensure the legitimacy of the network. They also work to avoid the "double-spend" scenario, in which a bitcoin owner could sneakily spend the same coin twice through duplication or falsification.

Miners don't necessarily work as a team. They work to compete with each other in order to add the next "block," or a record of all bitcoin transactions, to the chain. A block contains a partial record of the most recent transactions and carries 1 MB (megabyte) worth of data.

The miner who receives a reward would be the first among a bunch to run through hordes of number combinations to solve a numeric problem, known as proof of work, to arrive at an acceptable 64-character code. The code of this winning block helps keep the blockchain secure. It would normally look something like the last line in this image: 

Screenshot 2021 02 19 at 14.43.43

By being the first to solve the equation and successfully adding the next block to the chain, the miner is rewarded a certain amount of bitcoin. Only one such block can be added at a time, and each one takes about 10 minutes to verify and attach.

Over the course of the next 20 years, a total of 21 million coins will be released.

What are the rewards worth?

In 2009, the first time bitcoin was created, miners were rewarded with 50 bitcoin per block. But according to a mandate by Satoshi Nakamoto, rewards for mining are halved every four years. The rewards were cut to 25 bitcoin by 2012 and to 12.5 bitcoin by 2016.

As of February 2021, miners gain 6.25 bitcoin for every new block mined - equal to about $330,475 based on current value. They're also allowed to keep the transaction fees from each trade carried out on that block, which is worth $20 per trade.

An estimated 1 million bitcoin miners are in operation, at present.

Read the original article on Business Insider

10 things you need to know before the opening bell

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1. US stock futures flatline near record-highs as bond yields rise. See what markets are doing today.

2. Jeff Bezos reclaimed the title of the world's richest person. Elon Musk held the spot for six weeks, but a 2.4% slide in Tesla shares knocked him back to second place.

3. SpaceX raised $850 million, pushing its valuation to $74 billion. The jump represents another victory for Elon Musk, whose Tesla has soared around 350% in value over the last year. 

4. Berkshire Hathaway reveals billion-dollar stakes in Chevron and Verizon. It disclosed a $4.1 billion stake in the energy titan and a $8.6 billion position in the telecoms giant.

5. Saudi Arabia's wealth fund also revealed billion-dollar stakes in video game stocks. The state-backed fund raised its overall holdings of US equities to about $13 billion, up from $7 billion a quarter ago.

6. Michael Burry sold his GameStop stock last quarter. "The Big Short" investor potentially missed out on more than $750 million in profits.

7. On the data docket. MBA mortgage applications, FOMC minutes, the API's weekly crude oil stock, and the 20-year US debt auction are due. 

8. Raymond James is on the hunt for stocks that will handily outperform the S&P 500 in the coming month. The firm says to buy these 12 'center of the storm' stocks set to rebound as the economy reopens.

9. Canadian regulators just approved the world's first Bitcoin ETF. Here are the 5 things investors need to know about the outlook for a US version.

10. Morgan Stanley's quant team says it's the perfect time to be a stock-picker. The group unveils the top 13 stocks to own in an ideal risk environment for active managers.

Read the original article on Business Insider

Cathie Wood’s ARK Invest now holds more than 7 million shares in the Grayscale Bitcoin Trust

Cathie Wood
Cathie Wood, CEO and chief investment officer of ARK Invest.

Asset manager ARK Invest boosted its holdings in the Grayscale Bitcoin Trust in the fourth-quarter of 2020, according to a recent filing registered with the Securities and Exchange Commission. 

Cathie Wood's ARK, which manages assets of about $50 billion, bought 2.14 million additional shares in Grayscale's digital currency investment product, bringing its total holdings to 7.31 million shares.

Grayscale Bitcoin Trust (GBTC), the world's largest bitcoin fund and the first of its kind, enables investors to speculate on and gain exposure to bitcoin in the form of a security, without having to buy or store the digital token directly. Shares in the investment vehicle are part of a range of traditional finance products that track bitcoin prices.

Read More: Canadian regulators just approved the world's first Bitcoin ETF. Here are the 5 things investors need to know about the outlook for a US version

The trust holds over 649,130 BTC, or roughly 3.1% of bitcoin's current supply, according to CoinDesk. GBTC's current assets under management are around $31 billion, according to its website. At current prices, ARK's new share position in the Grayscale product stands at $351 million. The firm's Next Generation Internet ETF holds shares in GBTC.

The price of bitcoin rose to $49,998 on Tuesday before slipping back as interest from Wall Street institutions added momentum to its momentous rally.

Wood predicted earlier this month that bitcoin would shoot higher this year. "Bitcoin is only [at] roughly a $600 billion market cap," she told Yahoo Finance. "So even half the size of Apple or Amazon, right now. Doesn't that put it into perspective? And yet, it is a very big idea, I think. A much bigger idea than Apple or Amazon."

ARK runs five ETFs run by Wood and her team of analysts that actively invest in companies they believe will change the world through "disruptive innovation."

Other companies that Ark invested in during the fourth quarter include Tesla, Square, Roku, Pinterest, DocuSign, Alibaba, Snapchat, PayPal, and Netflix.

Read More: GOLDMAN SACHS: These 40 heavily shorted stocks could be the next GameStop if retail traders target them - and the group has already nearly doubled over the past 3 months

Read the original article on Business Insider

Global stocks trade at record highs on vaccine hopes and chances of fresh US stimulus

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  • Global stocks were trading at record highs on Tuesday, driven by hopes for economic recovery. 
  • Equity indices set new records around the world on the vaccine rollout and chances of US stimulus.
  • Oil prices rose as a deep freeze in parts of the US took some production offline and closed refineries.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Global stocks were trading at record highs on Tuesday, thanks to optimism over the coronavirus vaccine rollout and the likelihood of another around of US stimulus.

Futures on the Dow Jones, S&P 500, and Nasdaq rose between 0.4% and 0.6%, pointing to a higher start later in the day, when US markets reopen after Monday's public holiday.

The MSCI World Index, which includes a range of equities in 23 developed market countries, marked its longest winning streak since January 2018 and hit record highs. 

"After Monday's President's Day holiday, the Dow Jones is back in the saddle this Tuesday - and it's going record-chasing," said Connor Campbell, a financial analyst at SpreadEx. "Now that Donald Trump's second impeachment is dealt with, Congress can firmly focus on the stimulus package, which is potentially on track to be in place by mid-March."

Speaker Nancy Pelosi hopes to get the stimulus legislation approved in Congress by the end of February, in time to offset the March 14th deadline when some unemployment benefits will expire.

Read More: GOLDMAN SACHS: These 40 heavily shorted stocks could be the next GameStop if retail traders target them - and the group has already nearly doubled over the past 3 months

In Europe, the UK's FTSE 100 rose 0.5%, the Euro Stoxx 50 and Germany's DAX were about flat.

The number of confirmed daily coronavirus cases in the UK dropped below 10,000 for the first time since October 2. Prime Minister Boris Johnson is expected to reveal a roadmap to ease lockdown restrictions next week. Sterling benefited from the UK's successful vaccine rollout, trading around $1.39 for the first time since April 2018. 

The European Union is in talks with US pharmaceutical group Moderna to secure an additional 150 million vaccine doses, on top of the 160 million already booked. These could be delivered by June, according to Reuters.

In Asia, China's Shanghai Composite rose 1.4%, Japan's Nikkei rose 1.2%, and Hong Kong's Hang Seng rose 1.9%.

"While the rally in Asia may be more measured from here on, we still see another 10% upside for Asia ex-Japan equities by the year-end," said Mark Haefele, chief investment officer at UBS Global Wealth Management. UBS favors reasonably priced quality cyclical names, especially in the internet, memory, and media sectors and sees catch-up opportunities in select industrials, financials, materials, and energy.

A deep freeze in the US is raising concerns over disruption to oil supply. Texas, the largest crude-producing state in the country, is currently seeing its coldest temperatures in decades. A series of rolling blackouts took around 1 million barrels of oil production offline and closed refineries in the state. 

Brent Crude rose 0.1%, to $63.29 a barrel, and West Texas Intermediate rose 0.8%, to $59.95 a barrel.

Read More: EXCLUSIVE: An asset manager overseeing nearly $100 billion divested from Exxon on concerns it is failing to move fast enough to address climate change

Read the original article on Business Insider