In today’s briefing:
- KOSDAQ150 Ad Hoc Index Rebalance: HFR (230240) To Replace BH (090460)
- Tesserent (TNT AU)’s Offer From Thales
- Tesserent (TNT AU): Thales’s A$0.13 Offer
- $GSIT. Meme Stock Or NVIDIA Slayer?
- Carta Holdings (3688 JP) – 1Q FOLLOW-UP
- Carly Holdings Limited – Placement Allows Greater Leverage to Growth
- Adobe: Opportunities In Generative AI, Q2 Earnings And Considerations For Long-Term Holders
KOSDAQ150 Ad Hoc Index Rebalance: HFR (230240) To Replace BH (090460)
- Following Bh Co Ltd (090460 KS) moving from the KOSDAQ to KOSPI Market, the stock will be deleted from the KOSDAQ 150 Index and replaced with HFR Inc (230240 KS).
- The change will be implemented at the close on 19 June and passive trackers will need to trade over 1x ADV on both stocks.
- We had HFR Inc (230240 KS) as a potential replacement candidate and there could be pre-positions built up on the stock.
Tesserent (TNT AU)’s Offer From Thales
- Cybersecurity firm Tesserent Ltd (TNT AU) has announced it has entered into a Scheme with France’s Thales SA (HO FP).
- Thales is offering A$0.13/share, a whopping 165% premium to last close. Although, TNT is down 87% from its January 2021 high.
- The Offer is conditional on TNT shareholder approval and FIRB/OIO approvals. Those regulatory approvals will not be straightforward.
Tesserent (TNT AU): Thales’s A$0.13 Offer
- Tesserent Ltd (TNT AU) has entered into a scheme implementation deed with Thales SA (HO FP) at A$0.13 per share, a juicy 165.3% premium to the undisturbed price (9 June).
- The offer is subject to several conditions such as shareholder, FIRB and OIO approval. FIRB approval is likely due to Australia and France being part of the Nine Eyes alliance.
- Despite the substantial premium, shareholders’ acceptance of the offer could be a risk due to their higher buy-in prices. At the last close, the gross spread is 8.3%.
$GSIT. Meme Stock Or NVIDIA Slayer?
- GSI Technology (GSIT US) share price is up ~5x in the past month fuelled by the fact that they have an AI Accelerator (APU) called Gemini-I
- Launched in 2020, Gemini-I was 3 years late, has never been properly benchmarked and has thus far attracted just one customer, the Israeli military
- We remain wholly unconvinced that GSIT is on the cusp of a breakthrough in the world of Accelerated AI
Carta Holdings (3688 JP) – 1Q FOLLOW-UP
- In 1Q FY23/12, CARTA Holdings posted a 23.3% YoY increase in transaction volume for programmatic TV commercial service TELECY, and a 2.8-fold increase in gross sales in the retail domain, showing steady performance in the mass retail domain, which the company has positioned as a priority area in its medium-term management plan.
- On the other hand, the weak macro environment continued to weigh on double-digit sales declines in reservation-based ads, resulting in a 7.7% YoY drop in sales and a 59.3% drop in operating profit overall.
- YoY comparisons will ease off from the next quarter, but with 2Q usually being a slow period for advertising and the lack of activity from advertisers in the new fiscal year from April onward, earnings are expected to recovery smoothly rather than sharply.
Carly Holdings Limited – Placement Allows Greater Leverage to Growth
- Carly Holdings Limited (ASX:CL8) operates a vehicle subscription business, which it launched in March 2019.
- Car subscription allows business and retail customers to pay a single monthly fee to access a car for 30 days or more and is an alternative to purchasing or financing a vehicle.
- Carly has attracted larger automotive industry businesses as shareholders, with a model that facilitates sales volumes of new vehicles and delivers a new recurring revenue stream for automotive manufacturers and dealers.
Adobe: Opportunities In Generative AI, Q2 Earnings And Considerations For Long-Term Holders
- Adobe’s share price is experiencing significant momentum, which is likely to be sustained for the time being.
- Better than expected quarterly results could easily prompt a new wave of rating upgrades by the sell-side analysts.
- Investors interested in holding Adobe for a longer period of time should not ignore some important red flags.
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