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(Bloomberg) — Nasdaq Inc. is asking for more specifics relating to share allocations for initial public offerings by small-cap firms as it boosts scrutiny in a corner of the market that’s seen a number of huge price swings. 

The exchange in the past few weeks asked a slew of applicants for information including the names and account details for individuals being allocated shares during the IPO process, according to Gordon Tsang, a partner at Hong Kong-based law firm Stevenson, Wong & Co. Nasdaq also requested detail on the quantity of shares allocated and the brokerages involved, said Tsang, who has advised on recent US IPOs including Magic Empire Global Ltd. and Top Financial Group. 

The details follow a Bloomberg News report last week that Nasdaq has increased its oversight following outsized stock price fluctuations at more than a dozen small-cap companies that debuted in the US this year. The stricter checks may add to uncertainty around the timing of several planned IPOs, including Hongli Group Inc., Lichen China Ltd. as well as US-based Alopexx Inc. 

“The fresh requests from Nasdaq aims at enhancing transparency on placements and connected transactions at IPOs, a lot like what Hong Kong regulators asked for a few years ago,” Tsang said in an interview. “We are optimistic that the deals would eventually go through and successfully list.” 

A representative from Nasdaq declined to comment.

The gap between pricing an IPO and its first trading day is much shorter in the US than in Hong Kong, where there’s typically a five-day lag. In the US, underwriters aren’t routinely asked to submit share allocation details, in part due to the limited time for it to be reviewed. 

In Hong Kong, the regulator halted some deals in 2017 amid concern there were abnormalities in the share allocations of some small-cap listings that might jeopardize an orderly market open on debut.

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(Bloomberg) — Terraform Labs co-founder Do Kwon, who faces South Korean charges over a $60 billion cryptocurrency wipeout, denied he’s in hiding after authorities said Interpol had issued a red notice for his arrest. 

Kwon took to Twitter on Monday to say that he’s “making zero effort to hide,” adding “I go on walks and malls.” Prosecutors in Seoul earlier said Interpol had requested law enforcement worldwide to locate and arrest the fallen 31-year-old crypto entrepreneur.

Officials have accused Kwon and five others of crimes including breaches of capital-markets law. 

Kwon earlier this year moved from South Korea to Singapore, where his now collapsed Terraform Labs project had a base, but his location became unclear after the city-state on Sept. 17 said he’s no longer there. Prosecutors subsequently stepped up their efforts to find him.

Terraform Labs was behind the TerraUSD algorithmic stablecoin and sister token Luna. Both coins imploded in May, sparking huge losses in crypto markets and intensifying regulatory scrutiny of digital assets.

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(Bloomberg) — Komainu, a digital asset custody venture backed by Nomura Holdings Inc., has appointed Nicolas Bertrand as chief executive officer. 

Bertrand, 51, joins from Borsa Italiana, where he headed derivatives markets and commodities, the firm said in a press release Tuesday. He will be based in London and starts with immediate effect.                           

Komainu, which takes its name from the lion-like statues that often guard the entrance of Japanese shrines, is a custodian and depositary firm for digital assets. It was started in 2018 as a joint venture between Nomura, blockchain firm Ledger, and CoinShares, a digital asset investment firm. It raised $25 million at the beginning of 2021, when it held more than $3 billion in assets under custody from a range of investors.

“Institutional clients are getting more interested in digital assets,” Bertrand said in a phone interview. “They will need to hold those assets, and we will be there to provide that service.”

He said he is not planning to raise further funds for the startup at the moment, and intends to keep a lid on costs while focusing on innovation. The custodian firm which employs about 40 people, has a provisional regulatory approval from Dubai to operate in the region, and is working on obtaining a similar license in the U.K., the newly-appointed CEO said. 

Before Bertrand’s appointment, London Metal Exchange Chief Executive Officer Matthew Chamberlain was named CEO of the start-up. He ultimately decided to stay on to steer the LME through the fallout from March’s nickel crisis.

Institutional investors including banks have been pushing into digital assets as yields dried up in others markets. Nomura has recently created a new entity called Laser Digital Holdings AG.

“Post-trade and custody are the least sexy parts of the digital assets infrastructure,” said Bertrand. “But it’s a critical element.”

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(Bloomberg) — “Don’t Worry Darling,” a thriller from director Olivia Wilde, topped the North American box office after weeks of media coverage about personal disputes among its cast drew attention to the film. 

• The Warner Bros. movie generated $19.4 million in US and Canadian ticket sales over the weekend, researcher Comscore Inc. said Monday. That put it below the $21.6 million forecast from Boxoffice Pro. The studio had projected sales of around $17 million.
• A rerelease of the 2009 blockbuster “Avatar” took in $10.5 million domestically, Comscore estimated, as Walt Disney Co. seeks to drum up interest in the sequel, “Avatar: The Way of Water,” before its debut in December.

Key Insights

• The current period is a slow one for the industry as theater chains await potentially big films later this year, including “Black Panther: Wakanda Forever” on Nov. 11. In the meantime, smaller-budget pictures have been competing with classic movie rereleases and foreign films as cinema owners try to fill seats.
• “Don’t Worry Darling” tells the story of residents in a fictional town called Victory, California, which was created and paid for by a secretive company. It’s Wilde’s second film after her 2019 directorial debut with “Booksmart,” and stars Florence Pugh and Harry Styles. It has a 38% critical approval rating on Rotten Tomatoes, though 80% of moviegoers said they liked it. It was made for $35 million. “We’re enormously proud of this film and are pleased with these results given our modest production budget,” Warner Bros. said in a statement.
• The movie, which was made under Warner Bros.’ New Line Cinema label, was the subject of unusually intense press coverage before its premiere. One of its stars, Shia LaBeouf, was fired and replaced with Styles, according to Wilde. LaBeouf accused her of lying, saying he quit, while others have speculated a rift also developed between the director and Pugh.
• The audience for “Don’t Worry Darling” was 66% female, most of them over 18 years old, the studio said. “The Woman King,” a Sony Group movie about a female-led group of African warriors, which opened in first place last weekend, took the No. 2 spot. It sold $11 million in tickets, Comscore estimated.

Get More

• Read about the general malaise in Hollywood.
• See the schedule for upcoming releases.
• See Boxoffice Pro’s long-range forecast.

(Updates with final weekend totals.)

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(Bloomberg) — President Joe Biden lashed out at airlines over “hidden fees” he said took money from Americans already facing persistent high inflation, as he unveiled plans for new regulations that would force air carriers and internet-service providers to be more transparent about charges.

“Junk fees are hitting families at a time when they can’t afford it,” Biden said at a meeting of the White House Competition Council on Monday, detailing efforts by the White House to battle rising costs that threaten Democrats’ prospects in November. 

“I’m directing members of the council to sharpen their focus on lowering costs for families,” he said. “This isn’t just some abstract goal, because the problem isn’t just theoretical.”

A proposed rule would require airlines to disclose more information about the fees they charge — such as those levied on passengers for canceling a trip or parents seeking to sit next to their children on a flight.

Biden said consumers shouldn’t be forced to pay fees to rebook flights, even if the airline had canceled. “Come on, man,” the president said. “It’s just not fair.” 

In the agriculture sector, the administration is also proposing to strengthen competition rules in poultry and livestock markets. Biden said major meat processors act as middlemen, controlling the market at the expense of ranchers and consumers.

And he touted expected Federal Communications Commission requirements for internet-service providers to offer a clear breakdown of fees and other charges — similar to the nutrition label found on food purchased at grocery stores — to help consumers more easily comparison shop. 

 “It’s all taking money out of the pockets of average Americans,” Biden said.

Polling Troubles

The efforts come amid the highest inflation in decades, which has damped prospects for Democrats to keep their narrow control of both chambers of Congress in the midterm elections. A Gallup survey earlier this month found that a 56% majority of Americans say inflation is causing financial hardship for their household, while around eight in 10 Americans rate the economy as “only fair” or “poor,” despite strong employment data.

Biden has planned a series of events throughout the week intended to highlight government efforts to combat rising prices, including one on health-care costs scheduled for Tuesday and a summit on food security planned for Wednesday. 

The new airline regulation would require that carriers, travel agents and online-ticket portals display all costs related to baggage options, flight changes and seat selection, the Department of Transportation said in a press release. 

“Airline passengers deserve to know the full, true cost of their flights before they buy a ticket,” Transportation Secretary Pete Buttigieg said in the release. “This new proposed rule would require airlines to be transparent with customers about the fees they charge, which will help travelers make informed decisions and save money.”

The proposal will dramatically improve consumer protections over more generic disclosure requirements imposed a decade ago, said Charlie Leocha, president of advocacy group Travelers United Inc. But the trade group Airlines for America said carriers, which are fiercely competitive, already offer “transparency to consumers.”

Flight Delays

Buttigieg and the airlines have sparred for months over a surge in flight delays and cancellations as travel resumed rapidly in the aftermath of the coronavirus pandemic. In recent weeks, the Department of Transportation unveiled a new online dashboard that details what services US airlines offer when flights are delayed or canceled — a move the White House says led some carriers to proactively improve offerings for waylaid passengers.

The White House also said action is expected on an FCC proposal for mandatory disclosure of broadband fees. The requirement will help consumers comparison shop among internet-service options, something that will promote competition and lower prices, the White House said.

The FCC proposed the so-called “broadband nutritional label” in January. Chairwoman Jessica Rosenworcel may ask fellow commissioners to adopt the item this week, said Paloma Perez, an agency spokeswoman.

Broadband providers, in comments to the FCC, said requiring too many details would confuse consumers and burden companies. Consumer advocates in their comments have said the industry’s current disclosures are incomplete and confusing.

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(Bloomberg) — US stocks fell in a volatile session exacerbated by sharp moves in the UK currency and bond markets, as hawkish central banks across the globe continued to subdue sentiment. 

The S&P 500 ended Monday’s session at its lowest level since December 2020. The Cboe Volatility Index spiked past 30, a level it hasn’t closed above since June. US Treasury yields rose, with the 10-year rate climbing as much as 21 basis points to 3.898%, its highest level since April 2010. 

The Bloomberg Commodity Spot Index, a key gauge for raw materials prices, tumbled to the lowest in eight months as fears of a global recession intensified. The pound dropped after the Bank of England said it may not act before November to stem a rout that took the sterling to a record low. The dollar soared to yet another record high.

Markets are on the edge after a selloff of risk assets deepened last week as the UK’s plan to lift its economy fueled fears that heightened inflation would push rates higher and ignite a global recession. UK markets were in focus on Monday as the pound remained volatile after crashing to an all-time low, with the Bank of England’s comments doing little to reassure traders who were waiting for a broader policy response to the fallout from the government’s massive tax cuts.

Read More: Everything-Selloff on Wall Street Deepens on 98% Recession Odds

Federal Reserve officials added to the hawkish rhetoric. On Monday, Boston Fed President Susan Collins said additional tightening is needed to rein in stubbornly high inflation and cautioned the process will require some job losses. Her Cleveland counterpart Loretta Mester echoed this. Atlanta Fed President Raphael Bostic also said the central bank still has a ways to go to control inflation. 

“On the macro front, it feels like a remake of West Side Story, with a gang of central bankers going after the job market, which refuses to let go,” said Mike Bailey, director of research at FBB Capital Partners. “Powell and now Andrew Bailey at the BOE are trying to slow the economy down, but my sense is employers are keeping as many workers as they can to avoid being left out in the cold when we recover from the next recession. So we almost have an arms race with central bankers raising rates and employers holding on to workers.”

US markets will continue to remain challenged by uncertainty until companies start to report their third-quarter earnings next month, which will provide greater detail on the health of corporate revenues and profit, wrote John Stoltzfus, chief investment strategist at Oppenheimer. Any company or industry that needs lower rates could be in trouble, FBB’s Bailey says. 

Read More: Fed Officials Say That Tackling Inflation Is Their No. 1 Job

Investors will also be keeping an eye on the economic data stream for hints of prices cooling, Art Hogan, chief market strategist at B. Riley, wrote in a note. 

“What the market will need to see now to get out of the current conundrum is for inflation inputs to start coming down noticeably,” said Hogan. “We will get a read on the Fed’s preferred inflation indicator this Thursday when the second quarter core PCE is reported. Along with that investors will keep a close eye on the economic data stream for hints of prices paid coming down.”

Trading this week will be punctuated by a number of economic reports including US initial jobless claims and gross-domestic-product data, along with PMI figures from China. Choppiness in price moves is likely with a steady stream of Federal Reserve officials speaking through the week.

UK Gilts

The plunge in UK gilts sent 10-year yields above 4% for the first time since 2010. Traders ramped up wagers on the scale of interest-rate hikes in the short term, with money markets pricing in more than 200 basis points of increases by the central bank’s next meeting in November. 

Meanwhile, Christine Lagarde said the European Central Bank will consider shrinking its balance sheet only once it has completed the “normalization” of interest rates. Raising borrowing costs is the most appropriate and effective tool for now to combat record-high euro-area inflation, the ECB President said on Monday. 

Geopolitical risks from the war in Ukraine to escalating tensions over Taiwan and unrest in Iran also continue to weigh on market sentiment. The OECD cut almost all growth forecasts for the Group of 20 next year while anticipating further interest-rate hikes. And a gauge of German business confidence deteriorated. 

Key events this week:

• China industrial profits, Tuesday
• US new home sales, Conference Board consumer confidence, durable goods, Tuesday
• Fed Chair Jerome Powell and Charles Evans speak at events, Tuesday
• Fed’s Mary Daly, Rafael Bostic, Charles Evans and ECB President Christine Lagarde speak at events, Wednesday
• Euro zone economic confidence, consumer confidence, Germany CPI, Thursday
• US initial jobless claims, GDP, Thursday
• Fed’s Loretta Mester, Mary Daly speak at events, Thursday
• China PMI, Friday
• Euro zone CPI, unemployment, Friday
• US consumer income , University of Michigan consumer sentiment, Friday
• Fed’s Lael Brainard and John Williams speak, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 fell 1% as of 4:03 p.m. New York time
• The Nasdaq 100 fell 0.5%
• The Dow Jones Industrial Average fell 1.1%
• The MSCI World index fell 2%

Currencies

• The Bloomberg Dollar Spot Index rose 1%
• The euro fell 0.7% to $0.9617
• The British pound fell 1.5% to $1.0697
• The Japanese yen fell 0.9% to 144.56 per dollar

Cryptocurrencies

• Bitcoin rose 1.4% to $19,173.2
• Ether rose 2.9% to $1,329.58

Bonds

• The yield on 10-year Treasuries advanced 21 basis points to 3.89%
• Germany’s 10-year yield advanced nine basis points to 2.11%
• Britain’s 10-year yield advanced 42 basis points to 4.24%

Commodities

• West Texas Intermediate crude fell 2.3% to $76.92 a barrel
• Gold futures fell 1.3% to $1,633.60 an ounce

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(Bloomberg) — For much of the year, Bitcoin has traded in the same way as US stocks, falling when they fall and rising when they have a good day. Not on Monday.

The largest digital coin by market value rose more than 2% at one point at the start of the week to trade around $19,300. The S&P 500, on the other hand, lost as much as 1.3% and was on pace to notch its fifth straight losing session. Ether, Binance Coin, Solana and other cryptocurrencies also advanced.

“A lot of the players still holding crypto now are the stronger hands,” said Andrew Tu, head of growth for crypto algorithmic-trading firm Efficient Frontier.

In fact, the number of so-called hodlers — investors who are committed to crypto through thick and thin — with as much as 0.1 BTC has grown in recent months, a trend that’s contrary to past bear markets, according to a note from Bitfinex. 

“On-chain data suggests that many of those attracted by rising prices in 2020 and 2021 have stuck around, and they continue to invest a significant chunk of their capital in digital assets,” the note said. “So while their portfolios have lost value, those losses aren’t locked in because they haven’t sold — the on-chain data suggests those holders are optimistic the market will bounce back, keeping market fundamentals relatively healthy.”

It’s unusual for crypto and equities to de-couple. They’ve moved in tandem for the majority of 2022, as policies from the Federal Reserve have weighed heavily on both asset classes. US stocks have suffered and are down more than 20% from highs reached at the start of the year. Meanwhile, Bitcoin is down some 60% in the same span. 

“At some point, the market will be controlled by those in the community that are long-term believers in BTC and very unlikely to sell and the growing global community which use BTC for commerce,” said Stephane Ouellette, chief executive of FRNT Financial Inc. “When the latter participants control the market, one would expect correlations with risk assets to break down and BTC to ‘start trading in its own world’ as I believe we are seeing now.”

Still, the market mood has remained sour after this year’s drubbing, with the general population showing less interest in the space. Overall adoption has slowed down worldwide, the Bitfinex note said. 

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(Bloomberg) — Netflix Inc. is creating its first in-house video games studio in a push to be less reliable on third-party creators and expand its gaming offerings.

The new studio will be based in Helsinki and headed by Marko Lastikka, according to a statement from Netflix on Monday. Lastikka previously spent more than five years at Zynga Inc., where he worked on FarmVille 3, and before that was the co-founder and executive producer at Electronic Arts Inc.’s Tracktwenty studio in Helsinki, according to his LinkedIn page.

“This is another step in our vision to build a world-class games studio that will bring a variety of delightful and deeply engaging original games — with no ads and no in-app purchases — to our hundreds of millions of members around the world,” Amir Rahimi, vice president of game studios at Neflix, said in the statement.

The new games studio will be Netflix’s fourth overall, after the company acquired another Helsinki-based studio, Next Games, and Boss Fight Entertainment, earlier this year. Netflix brought on Night School Studio in September 2021. 

Netflix currently has 31 mobile games in its catalog, which are free of ads and in-app purchases but only available to subscribers. The company plans to have 50 games available by the end of the year. That includes the Next Games-developed Stranger Things: Puzzle Games, which is based on the platform’s hit show and will soon be exclusive to Netflix.

Netflix embarked on its push into video games in 2021 as a way to diversity its streaming offerings as growth stagnates. But just over a year later, fewer than 1% of Netflix’s 221 million users play games on the platform, CNBC reported last month, citing an analysis by Apptopia. The rush to bolster the gaming division comes after the company lost 970,000 subscribers in the second quarter.

The new studio doesn’t yet have a time line for production. “It’s still early days, and we have much more work to do to deliver a great games experience on Netflix,” Rahimi said. “These four studios, each with different strengths and focus areas, will develop games that will suit the diverse tastes of our members.”

 

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(Bloomberg) — The Biden administration and TikTok are working on an agreement that would let the video-sharing site keep operating in the US, but negotiations have stalled over concerns that the company’s Chinese ownership poses a national security threat, people with knowledge of the matter said.

Once reached, the agreement would allow the platform to continue operating in the US, though it would place additional restrictions on how data from US users is stored, said the people, who asked not to be named discussing a national security matter.

The app has been under scrutiny by US officials since 2019, when the Committee on Foreign Investment in the US — or Cfius — began reviewing a merger between the app’s parent company ByteDance Ltd. and Musical.ly.

The deal still needs to be cleared by some agencies that make up the committee, including the Justice Department, the people said. The department’s No. 2 official, Deputy Attorney General Lisa Monaco, is concerned the agreement doesn’t go far enough to keep the data of US users safe from Chinese actors, one of the people said.

The news about the pending agreement was reported earlier by the New York Times.

A spokesperson for the Treasury Department said Cfius is committed to taking all actions within its authority to safeguard national security, but doesn’t comment on transactions it may be reviewing. 

“We will not comment on the specifics of confidential discussions with the US government, but we are confident that we are on a path to fully satisfy all reasonable US national security concerns,” a TikTok spokesperson said.

Regulators and lawmakers have long feared that Chinese authorities could access US user data via TikTok. These anxieties were revived following a report by BuzzFeed in June that US user data had been repeatedly accessed from China.

The same day as the BuzzFeed story, TikTok said it was routing all US user traffic through Oracle Corp.’s cloud, and that the database giant is auditing its algorithms. TikTok and Oracle are expected to continue working together on a storage setup that satisfies US national security concerns, according to a person familiar with the process.

While TikTok’s one billion active users makes it smaller than some of its social media peers, it’s growing quickly — particularly among young people. In June, the app was the second-most-likely used app among Gen Z users, trailing behind Instagram in the top spot, according to analysis from data.ai. It’s also swiftly building its ad business, with eMarketer estimating revenue of $12 billion this year, up from $4 billion in 2021.

China hawks on Capitol Hill are expected to criticize any agreement that stops short of forcing the sale of the platform to a US company. Senator Josh Hawley, a Missouri Republican, wrote to Treasury Secretary Janet Yellen last week urging her to require TikTok to sever all ties with Chinese companies and to force ByteDance to divest itself from TikTok.

Hawley hasn’t yet received a response from the department, though Treasury has acknowledged receipt, according to Philip Letsou, Hawley’s communications director.

Former President Donald Trump stopped short of banning the app in an effort to broker a deal to sell the platform to a US buyer, which never came to fruition. ByteDance had sought US approval to sell a stake in the app to Oracle and Walmart Inc., but the transaction didn’t materialize. Efforts by the Trump administration to boot TikTok from the Apple and Google app stores were blocked by a US court. 

A top TikTok executive told senators this month that the company is negotiating with US officials on restricting access to US data for employees in China but declined to commit to a total cutoff.

As the Cfius review process continues, the administration is weighing other action, including by the Commerce Department, which is considering a rule that would give the Commerce Secretary more oversight over apps owned by foreign adversaries. If enacted, the rule change would empower the Commerce Department to force TikTok to undergo third-party audits — or even restrict the app in the US.

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(Bloomberg) — Elon Musk and Twitter Inc. Chief Executive Officer Parag Agrawal are seeking to reschedule their depositions in the company’s lawsuit over Musk’s $44 billion buyout, according to people familiar with the matter.

Musk and Agrawal were scheduled to sit down for questioning Monday. The billionaire’s deposition was supposed to start at 9:30 a.m. at a law office in Wilmington, Delaware, while Agrawal was due to appear at one in San Francisco, court filings show. 

Instead, Agrawal wants to reschedule his session for later this week, while Musk wants his to take place somewhere other than Delaware, according to the people, who asked not to be identified discussing a private subject. Depositions often are rescheduled for the convenience of the parties to a legal dispute and their lawyers.

A representative for Twitter declined to comment on the matter. A spokesman for Musk’s lawyers also declined to comment.

Read More: Elon Musk Will Sit for Deposition in Twitter Case

The lawsuit is set for a five-day trial starting Oct. 17. Delaware Chancery Judge Kathaleen St. J. McCormick must decide whether the world’s richest person had legitimate grounds for walking away from the $54.20-per-share deal. 

Each side has fired an intense volley of subpoeanas at the other to elicit testimony and other evidence about the number of bot and spam accounts on the social media platform, among other subjects. Musk claims Twitter deceived him about the quality of the platform’s user base, while the company alleges that is only a pretext for abandoning the deal.

McCormick will hold a hearing Tuesday on several fights over pretrial information exchanges, such as whether Bruce Falck, who oversaw product revenue at Twitter, must sit for a deposition. 

The case is Twitter v. Musk, 22-0613, Delaware Chancery Court (Wilmington).

Read More

• Musk Can Use Twitter Whistle-Blower Payment in Buyout Fight 
• Musk Gets Potential Boost From Twitter Whistle-Blower Claims 

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