Facebook (FB) Facebook has officially released it's white paper on ‘Libra’, their long-awaited foray into the cryptocurrency industry. According to the white paper, a collection of groups, such as Facebook, PayPal, and Uber will each have voting power in what has been called the ‘Libra Association’. Some have argued that this currency, due to the fact that it has limited oversight from a central banking system, places too much power in the hands of corporations, who may have an incentive to create more currency following the widespread adoption of this system. Additionally, despite the aims of Libra to help provide banking services to the 1.7 billion ‘unbanked’ adults in the world today, there appears to be a lack of a concrete plan as to how this would actually work.
Alphabet (GOOGL) Google has recently been the center of a potential anti-trust probe brought forth by the United States Department of Justice. However, one recent development is the preparation of many competitors of Google to release documents pertaining to the case in upcoming meetings with the department of Justice. Some of these competitors, such as TripAdvisor, Yelp, and News Corp, claim Google has been promoting its own content over theirs, a practice which violates anti-trust legislation. However, according to many in the industry, there is much more unrest that is yet to be publicly voiced.
Exxon Mobil (XOM) Exxon Mobil has begun preparations for the sale of their Norwegian upstream holdings, hoping to focus upstream operations on other regions instead. These assets currently produce 150,000 Barrels of Oil (Equivalent) per day, and are in an attractive region for potential buyers. Some sources have stated that the value of these assets is $3-4 billion, and could represent a significant step in Exxon’s attempt to meet a goal of $15 billion in divestment. Front runners for the purchase of these assets include other North Sea independents, such as Okea and Chryasor.
Alibaba (BABA) With less than three months until Alibaba founder Jack Ma steps down from his chairman position, major changes are coming to the Chinese e-commerce giant. Ma will be succeeded by Alibaba’s current CEO, Daniel Zhang, who has already begun implementing his agenda in the form of recent management changes. On June 18th, the company announced that current CFO, Maggie Wu, will be promoted to head Alibaba’s strategic investments unit. This function was previously performed by Executive Vice-Chairman, Joe Tsai, who operated as Ma’s right hand man.
Morgan Stanley (MS) & Big Banks Morgan Stanley was among a group of the 18 largest U.S. banks that passed the first component of the Federal Reserve’s stress test on June 21st. In a statement, the Fed maintained that U.S. big banks have “strong capital levels that would allow them to stay well above their minimum requirements after being tested against a severe hypothetical recession.” The hypothetical scenario being tested involved the unemployment rate rising to 10%, a large decline in the prices of real assets, and increased stress in corporate loan markets. Although the results of this test indicate that the big banks would be able to continue lending to businesses and households during a recession, the Fed noted that the banks would experience “substantial losses.”
Occidental (OXY) After months of negotiation, Occidental Petroleum emerged victorious in what was a nearly two-year pursuit of competitor, Anadarko Petroleum. Occidental’s bid was accepted in May when Chevron, who had previously agreed to acquire Anadarko, decided to bow out of negotiations. Occidental’s offer of $38 billion includes cash payments of almost 80% of the purchase price. With the acquisition still pending, Occidental has made an agreement with Total S.A. to acquire Anadarko’s African assets. This second deal is contingent on the Occidental successfully completing the acquisition of Anadarko, but the $8.8 billion price tag for APC’s African assets will reduce the blow to Occidental’s cash account following the substantial cash payments for the acquisition.
FANG+ Performance Analysis
Source: Bloomberg, See FANG+ Rebalance Report
Big Oil Performance Analysis
Source: Bloomberg, See Big Oil Rebalance Report
Big Bank Performance Analysis
Source: Bloomberg, See Big Bank Rebalance Report.
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