David Fuller and Eoin Treacy's Comment of the Day
Category - Technology

    Vaccine makers tap into virus-driven rally to raise money

    This article from MarketWatch may be of interest to subscribers. Here is a section: 

    “We don’t expect Novavax will run human trials without non-dilutive government funding,” Ladenburg Thalmann’s Michael Higgens wrote in a note. “The timing for such support in our view depends on how severe and uncontrolled the 2019-nCoV becomes.”

    Moderna Inc. MRNA, -0.95%  said it is working with the National Institutes of Health on a potential vaccine response, saying its “vaccine technology could serve as a rapid and flexible platform that may be useful in responding to newly emerging viral threats.” Moderna’s stock was up 10%.

    NanoViricides Inc. NNVC, +75.32%  said it has raised $7.5 million in an offering of 2.5 million shares at a price of $3 per share. Its stock was down 55% in morning trading, after gaining 153% on Monday.

    The company had also worked on treatments for MERS and the Ebola virus. NanoViricides president Anil Diwan said in an email that the company believes that the drugs “we had previously developed are worth testing against the Wuhan virus and are likely to work against it.”

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    DoubleLine Round Table Prime 1-6-20 - Segment 3: Best Ideas

    This third part of the round table may be of interest to subscribers.

    Netflix's Decline Emphasizes Limited Value of Users Overseas

    This article by Joe Easton, Kit Rees and Kamaron Leach for Bloomberg may be of interest to subscribers. Here is a section:

    Netflix Inc.’s latest earnings report spurred mixed feelings across Wall Street as growth overseas was offset by a slowdown in the U.S. amid rising competition from Walt Disney Co., Apple Inc. and more forthcoming launches. Needham Co. believes the spike in streaming rivals will increase Netflix’s churn and customer acquisition costs, most likely lowering the lifetime value per subscriber as growth overseas isn’t equivalent to that domestically. Netflix would need to “add four $3-per-month subscriptions in India to offset each U.S. subscriber lost,” Laura Martin, TMT analyst at Needham, wrote in a note.

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    DoubleLine Round Table Prima 1-6-20 - Segment 2: Markets

    This video which is the second in the three-part series highlights some of the differences between economists’ perspective on growth and the forward-looking perspective offered by the stock market. I commend it to subscribers.

    Fiat Chrysler and Foxconn plan Chinese electric vehicle joint venture

    This article from Reuters may be of interest to subscribers. Here is a section: 

    Fiat Chrysler and Foxconn plan Chinese electric vehicle joint venture - This article from Reuters may be of interest to subscribers. Here is a section:

    FCA last month reached a binding agreement for a $50 billion tie-up with France’s PSA (PEUP.PA) that will create the world’s No. 4 carmaker. FCA said that the proposed cooperation was initially focused on the Chinese market.

    It “would enable the parties to bring together the capabilities of two established global leaders across the spectrum of automobile design, engineering and manufacturing and mobile software technology to focus on the growing battery electric vehicle market,” it said.

    FCA said it was in the process of signing a preliminary agreement with Hon Hai, aiming to reach final binding agreements in the next few months.

    However, it added there was no assurance that final binding agreements would be reached or would be completed in that timeframe.

    Foxconn has been investing heavily in a variety of future transport ventures for several years, including Didi Chuxing, the Chinese ride services giant, and Chinese electric vehicle start-ups Byton and Xpeng.

    Foxconn also has invested in Chinese battery giant CATL and a variety of other mostly Chinese transportation tech start-ups.

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    Boeing Lost Its Way by Going on a Wall Street Detour

    This article by Joe Nocera for Bloomberg may be of interest to subscribers. Here is a section:

    By the time Boeing decided to cobble together the 737 Max, its engineering culture was completely broken. Here’s how Aboulafia described it to Useem in the Atlantic:

    It was the ability to comfortably interact with an engineer who in turn feels comfortable telling you their reservations, versus calling a manager [more than] 1,500 miles away who you know has a reputation for wanting to take your pension away. It’s a very different dynamic. As a recipe for disempowering engineers in particular, you couldn’t come up with a better format.

    You can see that disempowerment — and its consequences — in the recently released emails. Instead of bringing their fears and complaints to superiors, the engineers grouse to themselves about the problems they see with the plane. They are bitter about management’s unwillingness to slow things down, to build the plane properly, to take the care that’s required to prevent tragedy from striking.

    There is one email in particular from an unidentified Boeing engineer that I can’t get out of my head. It was written in June 2018, about a year after the company had begun shipping the 737 Max to customers:

    Everyone has it in their head that meeting schedule is most important because that’s what Leadership pressures and messages. All the messages are about meeting schedule, not delivering
    quality…

    We put ourselves in this position by picking the lowest cost supplier and signing up to impossible schedules. Why did the lowest ranking and most unproven supplier receive the contract? Solely based on bottom dollar…. Supplier management drives all these decisions — yet we can’t even keep one person doing the same job in SM for more than 6 months to a year. They don’t know this business and those that do don’t have the appropriate level of input… .

    I don’t know how to fix these things … it’s systemic. It’s culture. It’s the fact that we have a senior leadership team that understand very little about the business and yet are driving us to certain objectives. It’s lots of individual groups that aren’t working closely and being accountable …. Sometimes
    you have to let things fail big so that everyone can identify a problem … maybe that’s what needs to happen instead of continuing to just scrape by.

    Of course that’s exactly what happened: the 737 Max failed big — at a cost of 346 lives. Shareholder value has caused much harm in the three decades since it became the core value of American capitalism: diabetics who can’t afford insulin; students ripped off by for-profit universities; patients gouged by hospital chains; and so much else. But none worse than this.
     

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    U.S. and China Sign Phase One of Trade Deal

    This article by Shawn Donnan, Josh Wingrove, and Saleha Mohsin for Bloomberg may be of interest to subscribers. Here is a section:

    The U.S. and China signed what they’re billing as the first phase of a broader trade pact on Wednesday amid persistent questions over whether President Donald Trump’s efforts to rewrite the economic relationship with Beijing will ever go any further.

    The deal commits China to do more to crack down on the theft of American technology and corporate secrets by its companies and state entities, while outlining a $200 billion spending spree to try to close its trade imbalance with the U.S. It also binds Beijing to avoiding currency manipulation to gain an advantage and includes an enforcement system to ensure promises are kept.

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    ARK Invest Big Ideas 2020

    Thanks to a subscriber for this bluesky report focusing on technological innovation. Here is a section:

    1. Deep Learning — From Vision to Language
    2. Streaming Media — The Primary Technology Behind Content Distribution
    3. Electric Vehicles — Faster Adoption Than Most Think
    4. Automation — Increased Productivity and More Jobs
    5. 3D Printing — An Underestimated Technology
    6. Autonomous Ridehailing — The Future of Transportation
    7. Aerial Drones — A Cost Saver and Potential Life Saver
    8. Next Generation DNA Sequencing — The Transformation of Oncology
    9. Biotech R&D Efficiency — The Convergence of Technologies in Healthcare
    10.Digital Wallets — The Transformation of Banking
    11.Bitcoin — An Evolution of Monetary Systems

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    South Korea's Chip Exports Headed for Rebound as Trade War Eases

    This article by Sam Kim for Bloomberg may be of interest to subscribers. Here is a section:

    Semiconductor shipments, South Korea’s biggest source of income, rose 12% in the first 10 days of January from a year earlier, data from the Customs Service showed Monday. That’s the first time the preliminary figure posted growth since October 2018.

    While the expansion benefits from a base effect of poor performance last year, it suggests global tech demand is improving after being battered by the U.S.-China trade war. The two countries entering a phase-one trade deal later this week should further support demand.

    “It’s definitely a positive signal,” said Lim Hye-youn, an economist at KTB Investment & Securities, referring to the chip shipment in South Korea’s preliminary trade data. “But it’s still difficult to see the growth big enough to be leading Korea’s strong economic recovery. The base effect played a large role.”

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    Concentration Should Lead to Opportunities

    Thanks to a subscriber for this report from Morgan Stanley which may be of interest. Here is a section: