FTX Disaster - The Crypto Lehman Brothers 💣💥

Good Morning,

The crypto market is in disarray, business well-being in New Zealand has fallen, the Russian military has withdrawn from Kherson, inflation has increased in Norway and Denmark, Joe Biden has cheered better-than-expected results for the democrats in the US midterm elections, Elon Musk has stopped allowing remote work for Twitter employees & land allocated to oil and gas exploration in Africa is expected to quadruple.

FTX is on the verge of bankruptcy and becoming the crypto Lehman Brothers.

Let's jump in.

Before The Bell

Markets

• Strong earnings weren't enough to push the New Zealand market into the green as it declined again.

• The ASX was down as investors wait for finalised midterm results and US inflation data which is due this morning.

• FTX has warned it will need to file for bankruptcy unless they are provided more capital as its faces an $8B (USD) shortfall. (BBG)

  • This caused chaos in the crypto market, with Bitcoin falling below $15,000 (USD).

  • JPMorgan has warned cascades of margin calls are coming for the crypto market and that crypto markets face weeks of deleveraging. They have said bitcoin prices could drop as low as $13,000 (USD). (BBG)

  • This collapse has affected investors from Tiger Global to Tom Brady and has led to the launch of an investigation by US regulators. (BBG)

Earnings

• Beyond Meat reported a worse-than-expected Q3 loss and weak revenue on tumbling demand. It also lowered their FY sales outlook. Its stock fell 9.2% yesterday. (CNBC)

• Blis Technologies has seen a 10% increase in revenue to $4.3m (NZD) for the first half of FY23 and a net loss of $1.7m. Its shares fell 3.4%. (NBR)

• Bumble missed on Q3 revenue estimates and provided disappointing holiday quarter forecasts. Mainly due to foreign currency headwinds. Its stock fell ~19% yesterday. (MW)

• Mainfreight announced another big profit rise of 66% to $217m (NZD) for the six months to September; however, they expect a decrease in air and ocean performance going forward. Its shares fell 1.7%. (NBR)

• Rivian posted another Q3 loss and missed on revenue estimates. However, it did reaffirm its 2022 25k vehicle production target and that it would cut spending. Its stock fell ~12% yesterday before rising 6%+ in AH trading. (CNBC)

• Roblox posted a worse-than-expected Q3 loss. It did however, report a 24% YoY increase in daily active users. Its shares fell ~21% yesterday (TC)

• Xero reported a $16.1m (NZD) loss for the first half of 2022 and announced that Singh Cassidy would take over as CEO. Its shares fell 10.9%. (NBR)

News Summary

• A man has been charged with kidnapping after taking hostages at BNZ in Rotorua. (Stuff)

• Sweeping arms control changes will take effect in New Zealand in the coming months. (Stuff)

• National has criticised the Reserve Bank of New Zealand's policy review. (Stuff)

• Business well-being in New Zealand has fallen as financial concerns rise. (NBR)

• Train strikes will resume in Sydney this weekend. (9 News)

• Australian Prime Minister Anthony Albanese welcomes the chance to meet Chinese President Xi Jinping next week. (9 News)

• Britain says it has frozen 18 billion pounds of Russian assets. (RT)

• The Russian military has withdrawn from Kherson in a significant blow to Russia's invasion of Ukraine. (BBC)

• The growth of Italian banking lending to firms slowed down in September. (RT)

• Inflation has increased in Norway and Denmark. (BBG)

• The ECB has raised the amount of bonds it can lend against cash to ease the market squeeze. (RT)

• US President Joe Biden has cheered better-than-expected results for the democrats in the US midterm elections. (BBC)

• Joe Biden has said it is worth looking into Elon Musk's foreign ties. (BBC)

• AstraZeneca has withdrawn its US application for its COVID vaccine. (RT)

• Land allocated to oil and gas exploration in Africa is expected to quadruple. (BBG)

• Elon Musk has stopped allowing remote work for Twitter employees. (BBG)

• Chinese CPI declined significantly to 2.1% YoY in October. (WSJ)

• England has dispatched India in the second T20 World Cup semi-final to book their place in the final vs Pakistan on Sunday at the MCG. (BBC)

Deal Flow

Investments/ M&A

• Italy's largest utility company Enel is considering selling assets outside of Italy to reduce its €70B debt pile. (BBG)

• Four investment banks are involved in PE firms Brookfield and EIG's $18.4B (AUD) bid for Australian energy company Origin Energy. (AFR & AFR)

• US manufacturer Chart Industries will acquire UK-based industrial tool maker Howden for $4.4B (USD). (RT)

• TC Energy, a North American natural gas company, is seeking $3.7B (USD) from asset sales. (BBG)

• Microsoft co-founder Paul Allen's art collection has hit the record $1.6B (USD) mark at Christie's New York, making it the biggest art sale in auction history. (CNBC)

• New Zealand's emergency services will get a $1.4B (NZD) communication network. It will be delivered via a joint venture with state-owned enterprises Kordia and Christchurch-based technology company Tait Communications. Spark and Vodafone have also joined the venture. (Stuff)

• Telenor, a Norwegian telecom operator, is pushing ahead with plans to sell its Pakistan operation. It could fetch a price tag of ~$1B (USD). (BBG)

• French international banking group Credit Agricole has said its regional-bank shareholders will boost their stake by up to $1B (USD). (BBG)

• Adani Ports and Special Economic Zone, India's largest private port operator, has agreed to buy a 49.38% stake in Indian Oiltanking, a liquid storage facility company, for $129m (USD). They also acquire an additional 10% stake in IOT Utakal Energy Services, an infrastructure services company that is a subsidiary of Indian Oiltanking. (BBG)

• The Saudi Arabian Public Investment Fund is making a further $80.6m (USD) in Newcastle United, the UK football club it owns. (BBG)

• Funds management business Perpetual has rejected the $33 (AUD) per share bid from BPEA and Regal. (AFR)

• Forbes Media, a business magazine, is in exclusive talks with a family office consortium to be acquired. (BBG)

• Japan's Skymark Airlines is planning to add 12 Boeing 737 Max jets to its fleet. (BBG)

• BoA has hit the street to sell TPG Telecom's Vision Network. (AFR)

• Rio Tinto's proposed takeover of Turquoise Hill faces regulatory challengers after the Canadian regulator flagged public interest concerns. (AFR)

• Binance has backed out of its FTX bailout, citing finances and investigations as reasons to back away. (BBG)

• Lionel Messi has taken a stake in NFT fantasy football game Sorare. (CNBC)

VC & Fundraising

• Sweden's EQT Ventures closed its third fund at $1.1B (USD). (TC)

• HealthNow, a healthcare finance startup, is looking to raise $5m (NZD). (Stuff)

Equity Raises

• Jervois Global, a cobalt and nickel supplier, has officially launched its $231m (AUD) equity raises that was hinted at earlier in the week. AustralianSuper, their biggest shareholder, will invest as much as $55.6m (AUD). (AFR)

• Dubai school operator, Taaleem's IPO book has been covered in hours as it seeks to raise $204m (USD). (BBG)

• Resolute Mining, an African gold miner listed on the ASX, has launched a $200m equity recapitalisation. (AFR)

• Kiland, an Australian listed timber company, is seeking $10m (AUD) for a new biochar venture called Nobrac at a $50m (AUD) valuation. (AFR)

• Japan's Skymark Airlines will list on the Tokyo stock exchange next month. (BBG)

Debt

• Credit Suisse aims to raise $5B (USD) from two new debt issues. (RT)

• Grill maker Weber has taken a $60m (USD) loan from its largest shareholder and possible buyer, BDT Capital Partners. (BBG)

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