Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>A Reuters <a href="https://www.reuters.com/markets/deals/cybersecurity-firm-trend-micro-explores-sale-sources-say-2024-08-08/" target="_blank" rel="noopener">article</a> overnight says Trend Micro might be up for sale. This caused the ADRs to jump 10% overnight. The remaining co-founders are 65 and 70 this year. </li>
<li>The stock has effectively gone sideways the last few years as Value Act has been activisting. Now one has to exercise one's imagination to think about a possible sale price. </li>
<li>On a DCF basis, a PE fund couldn't reasonably do this. Multiples are too high. That means a strategic buyer would be more likely. But Who? Why? And How much?</li>
</ul>


A Reuters article overnight says Trend Micro might be up for sale. This caused the ADRs to jump 10% overnight. The remaining co-founders are 65 and 70 this year. 
The stock has effectively gone sideways the last few years as Value Act has been activisting. Now one has to exercise one's imagination to think about a possible sale price. 
On a DCF basis, a PE fund couldn't reasonably do this. Multiples are too high. That means a strategic buyer would be more likely. But Who? Why? And How much?


Trend Micro (4704) Up For Sale? Would Be a HUGE Buyout But How Huge? And Who?

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

Equity Bottom-Up

<ul>
<li>Given market concerns that AI is overhyped and not yet delivering sufficient value, we analyze Microsoft's Copilot disclosures and examine signs of AI services traction among corporate clients.</li>
<li>Signs indicate that Copilot is gaining substantial traction with corporate clients, adding value to software development, business operations, and healthcare documentation functions.</li>
<li>The number of organizations paying for MSFT's AI services is expanding rapidly. We view this as a promising indicator of increased AI adoption and substantial value creation.</li>
</ul>


Given market concerns that AI is overhyped and not yet delivering sufficient value, we analyze Microsoft's Copilot disclosures and examine signs of AI services traction among corporate clients.
Signs indicate that Copilot is gaining substantial traction with corporate clients, adding value to software development, business operations, and healthcare documentation functions.
The number of organizations paying for MSFT's AI services is expanding rapidly. We view this as a promising indicator of increased AI adoption and substantial value creation.


PC Monitor: Promising Uptake of Microsoft Copilot and AI Services; Remain Structurally Long

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA Corp (NVDA US)</a> and <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple (AAPL US)</a> switched positions in June setting off huge flows. Those flows could reverse in September if the current index methodology is used.</li>
<li>To avoid frequent reverse turnover, S&amp;P DJI have started a market consultation to change the index weighting methodology. We believe feedback will be positive and the proposals will be approved.</li>
<li>
<a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple (AAPL US)</a> will have inflows in September while there will be outflows from <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft Corp (MSFT US)</a> and <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA Corp (NVDA US)</a>. </li>
</ul>



NVIDIA Corp (NVDA US) and Apple (AAPL US) switched positions in June setting off huge flows. Those flows could reverse in September if the current index methodology is used.
To avoid frequent reverse turnover, S&amp;P DJI have started a market consultation to change the index weighting methodology. We believe feedback will be positive and the proposals will be approved.

Apple (AAPL US) will have inflows in September while there will be outflows from Microsoft Corp (MSFT US) and NVIDIA Corp (NVDA US). 


Technology Select Sector Index (XLK US): Market Consultation to Avoid Reverse Turnover (NVDA/AAPL)

<ul>
<li>The <a href="https://www.smartkarma.com/entities/technology-select-sector-spdr" target="_blank" data-smartkarma-citation="entities:27543:1" rel="noopener">Technology Select Sector SPDR (XLK US)</a> ETF tracks the Technology Select Sector Index and has an AUM of over US$65bn.</li>
<li>The recent drop in <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA Corp (NVDA US)</a> has taken its market cap and free float market cap lower than <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft Corp (MSFT US)</a> and <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple (AAPL US)</a>. </li>
<li>If that continues to be the case on 13 September, there will be huge outflows for <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA (NVDA)</a> and huge inflows for <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple (AAPL)</a> at the close on 20 September.</li>
</ul>


The Technology Select Sector SPDR (XLK US) ETF tracks the Technology Select Sector Index and has an AUM of over US$65bn.
The recent drop in NVIDIA Corp (NVDA US) has taken its market cap and free float market cap lower than Microsoft Corp (MSFT US) and Apple (AAPL US). 
If that continues to be the case on 13 September, there will be huge outflows for NVIDIA (NVDA) and huge inflows for Apple (AAPL) at the close on 20 September.


Technology Select Sector Index (XLK US): Reversing the Huge Flows from June

Podcast On the Business of Semiconductors, The Circuit

The Circuit

Podcast On the Business of Semiconductors

A Podcast On the Business of Semiconductors. With Jay Goldberg and Ben Bajarin

Thematic (Sector/Industry)

<ul><li>A week dominated by earnings reports, particularly in the semiconductor industry</li><li>Microsoft and AWS's strong capex spending indicates a positive outlook for data center infrastructure</li><li>AMD's revenue growth driven by data center and client segments, with potential for further growth in the next quarter due to capacity constraints and solid execution under CEO Lisa Su</li></ul><p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.</em></p>

A week dominated by earnings reports, particularly in the semiconductor industryMicrosoft and AWS's strong capex spending indicates a positive outlook for data center infrastructureAMD's revenue growth driven by data center and client segments, with potential for further growth in the next quarter due to capacity constraints and solid execution under CEO Lisa SuThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Episode 78: What a Week in Semis! AMD! ARM! Qualcomm! Intel?

United States

Microsoft Corporation operates as a software company. The Company offers applications, extra cloud storage, and advanced security solutions. Microsoft serves customers worldwide.

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Microsoft Corp (MSFT US)

Trend Micro (4704) Up For Sale? Would Be a HUGE Buyout But How Huge? And Who?

Trend Micro - target of Value Act which has gone sideways for 2 years - is apparently considering a sale. Founders are 65-70. They need new...

Travis Lundy

PC Monitor: Promising Uptake of Microsoft Copilot and AI Services; Remain Structurally Long

MSFT's latest Copilot disclosures reveal growing traction with corporates, indicating increased AI adoption and value creation in software...

Vincent Fernando, CFA

Technology Select Sector Index (XLK US): Market Consultation to Avoid Reverse Turnover (NVDA/AAPL)

To reduce reverse turnover, SnP have started a consultation to change the index weighting methodology. Passives will need to buy US$7bn in Apple...

Brian Freitas

Technology Select Sector Index (XLK US): Reversing the Huge Flows from June

NVIDIA has dropped relative to MSFT and AAPL in the last 6 weeks. That could lead to big selling in NVDA and big buying in AAPL from the XLK ETF in...

Brian Freitas

Episode 78: What a Week in Semis! AMD! ARM! Qualcomm! Intel?

Semiconductor companies, including AMD, showed strong earnings driven by data center demand and capex spending, with a bullish outlook for the...

The Circuit

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