In today’s briefing:
- VNET: Management’s Low-Balled Non-Binding Proposal
- NTT (9432) Buyback Has Come – But NTT Is Gonna Grind Out Better EPS So I’d Keep It
- 4Paradigm IPO: Is Third-Time a Charm?
- Sell Resistances Post Plunge
- ARLO: Penalized for Growth
VNET: Management’s Low-Balled Non-Binding Proposal
- Back on the 11 April, Chinese internet data center services provider VNET (VNET US) announced a non-binding proposal from Hina Group and Shanghai’s Industrial Bank at an utterly underwhelming US$8.00/ADS.
- Then crickets. A reported tilt from MBK Partners failed to materialise.
- VNET has now announced a preliminary non-binding proposal from founder Josh Sheng Chen, at a similarly underwhelming price of US$8.20/ADS.
NTT (9432) Buyback Has Come – But NTT Is Gonna Grind Out Better EPS So I’d Keep It
- NTT announced a buyback in May as discussed in NTT (9432) – Salutary Earnings Salutary Buyback, More to Go, via ToSTNeT-3 to buy a chunk of the govt’s stake.
- That will be executed by ToSTNeT-3 buyback pre-open tomorrow, with a bid of 103.1725mm shares at ¥3,877. A separate report suggests the Ministry of Finance will sell 92mm shares.
- It is like a mini tender offer so if you want to sell a large chunk of shares, you can. But I wouldn’t.
4Paradigm IPO: Is Third-Time a Charm?
- 4Paradigm (1764934D HK) is a pioneer and leader in enterprise AI. Company offers platform-centric AI solutions to enterprises that can be deployed on a large scale to support decision making.
- The company was ranked the largest player in the platform-centric decision-making AI market in China in 2021 and has filed for a HKEx listing for the third-time this month.
- 4Paradigm’s top line and margins have improved since we last wrote on the company.
Sell Resistances Post Plunge
- NDX, DAX, Asia short levels met ahead of the CPI print. Today’s insight focuses on near resistance points to sell into after the conviction bear turn and reiterates downside targets.
- Game plan was to short strength Monday/Tuesday and used pivot support/trailing stops to unwind some long exposure.
- Call to buy the USD on this pullback at DXY 108 worked well with a focus on Euro, ZAR, and weaker Asian FX.
ARLO: Penalized for Growth
- ARLO deciding to spend more on brand awareness this year has given reason for some investors to move to the sidelines
- ARLO’s second quarter results were better than expected and we believe the third quarter has trended better than expected as well
- The timing of switching CFOs was a surprise since five months prior ARLO had established its ad spending strategy.
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