| |  | TOGETHER WITH |  | | | Good morning.
Moderna's brand new chief financial officer — sorry, that's Moderna's brand new former chief financial officer Jorge Gomez left his job Tuesday, a day after he started. The biotech company announced his departure yesterday.
In certainly unrelated news, Gomez's former employer, dental equipment maker Dentsply, said it has launched an internal probe into suspect bookkeeping. For his day’s labor at Moderna, Gomez will receive a full year’s salary — $700,000. As they say, all in a day’s work. | | | • | | The euro could fall level with the dollar for the first time in twenty years. | | • | | Blackstone and KKR emerge as possible Toshiba suitors. | | • | | Hawaiian Airlines is betting travelers will line up to island-hop on electric seagliders. | | | | |  | Currency | The Euro Could Hit Dollar Parity in Six Months, Says Amundi | | The €3 jambon-beurres in Paris and €4 döner in Berlin were already the bargain-hunting foodie’s mouthwatering treasures. Soon they could be the deal of a lifetime — for American tourists, that is.
Amundi, Europe’s largest fund manager, said Wednesday that it expects the euro to hit dollar parity later this year for the first time since 2002. The reason: the European Central Bank’s regulatory quagmire. | Tale of the Red Tape | | Whether they moved fast enough or not, the US Federal Reserve is fighting inflation. This year, the Federal Reserve has raised its benchmark interest rate by 0.75 percentage points to a range of 0.75 to 1% in an effort to tame the fastest rise in the cost of living in a generation.
The European Central Bank (ECB) has a similar problem — annual inflation in the eurozone is expected to hit a record 7.5% in April 2022, up from 7.4% in March. Yet the ECB hasn't raised borrowing costs since 2011. Its deposit rate has been negative since 2014, and because the European economy is seen as too fragile to absorb a rate hike without descending into a recession, the ECB may be trapped in a bygone era of ultra-loose monetary policy. A contraction of the economy may be on its way anyway. “We are facing lower growth or probably a recession in the eurozone,” Amundi’s chief investment officer Vincent Mortier told the Financial Times.
Amid lackluster economic growth, the euro is already down 7% to $1.05 this year, while the ECB’s monetary and geopolitical worries could lead to currency and inflation woes: | • | | The ECB’s inflation target of 2%, Mortier says, has fallen to third on the bank’s list of priorities, behind stabilizing the borrowing costs for weaker member states like Italy and Greece and supporting growth as the eurozone deals with the economic fallout of Russia’s invasion of Ukraine. | | • | | Amundi says that taking the focus off of a weakening currency will make inflation in the eurozone worse. “Losing sight of the euro-dollar exchange rate is a big mistake when your inflation is mainly coming from imported goods,” Mortier told the FT. | | | | ECB officials, including president Christine Lagarde and governing council member Joachim Nagel, have hinted this week that they could finally hike rates in July — but that, again, raises the specter of higher borrowing costs for weaker member states.
Survey Says: Mortier is not alone. An MLIV Pulse survey of 400 foreign-exchange traders found 60% think the euro will end up level with the US dollar. In the meantime, the eurozone grew by only 0.2% in the first quarter. Forty percent of those traders say they fear a recession in Europe more than inflation. | | | | | | Private Equity | Blackstone and KKR Discuss Joint Bid for Toshiba | | With Covid restrictions lifting, it seems everyone is finally going on that long-delayed trip abroad. Private equity firms are no exception, and perhaps no foreign destination has drawn more interest from the industry of late than Japan.
Blackstone, the world's largest PE firm, is in preliminary talks with KKR to prepare a joint bid for electronics conglomerate Toshiba, according to sources who spoke with Bloomberg. The potential takeover sets the chess pieces for a showdown with Bain Capital — if Japanese authorities allow a deal at all. | Buyout Battle Royale | | Large American private equity firms have long viewed Japan's advanced economy as a target-rich environment. In the past year alone, US shops completed over $50 billion worth of takeovers of Japanese companies, according to Bloomberg. Japan’s relatively small private equity industry — PE firms are involved in 8% of mergers and acquisitions in Japan, compared to 15% in the US — makes troubled megacorp Toshiba even more of a ripe target for American investors.
Toshiba has lurched from one crisis to another of late — an accounting scandal in 2015 hammered profits and a disastrous foray into US nuclear power led to a $6.3 billion writedown in 2017, forcing an $18 billion sale of its chip unit in 2018. Shareholders are of mixed minds about what to do — earlier this year, they rejected a nonbinding proposal to split the company in two and another to explore alternative options including a sale.
Toshiba has long resisted a sale, and a buyout of the $18 billion, 146-year-old conglomerate would be the largest in Japanese history. But it would also need to earn the approval of wary regulators: | • | | Japanese authorities are unlikely to approve a full takeover — be it by Blackstone or Bain, which made its own offer in April — without participation from either Japanese partners or state-backed investment funds, according to bankers and lawyers who spoke with the Financial Times. | | • | | Of particular concern are the highly-sensitive business pillars of Toshiba’s portfolio, including defense, nuclear power, and all-important semiconductor computer chips. | | | | Piece by Piece: Although Toshiba shareholders rejected a plan to split off its devices unit in March, American PE firms see large asset sales (rather than total takeovers) as a potential inroad into the country. “There is significant opportunity for the de-conglomeration of Japan,” a private equity executive told the Financial Times on Wednesday. | | | | | | SPONSORED BY retina Technologies | These Facts About Vision Are Eye-Opening | Ready? Buckle up. Fact #1: The eye exam market in the U.S. alone is worth upwards of $5 billion, while the global ophthalmology diagnostic tools market (say that three times fast) is worth another $2.7 billion. Fact #2: An optometrist’s office can cost as much as $150,000 to furnish, with equipment that weighs over 150 lbs total. Fact #3: The average eye exam can last for over an hour. If your takeaway from those stats was anything besides “with that much money on the line, there’s gotta be a better way,” we’ve got news. There is. It’s called Retina Technologies, and their OcuVue™ digital vision screening platform has the potential to change eye care forever. Their affordable and easy-to-use modular vision screening platform uses virtual reality, retinal imaging, and machine learning to deliver fast, simple, visual exams in less than 15 minutes. The best part? They can be performed by any healthcare provider, anywhere, anytime – no clunky equipment or costly office visits required. Retina Technologies is still in the early fundraising stages, which means you get the most bang for your buck. Invest in their StartEngine right here and change the future of eye care. | | | | | | Transportation | Hawaiian Airlines Invests in Island-Hopping Electric Seagliders |  | | It’s a boat… it’s a plane… it’s a seaglider! Fully electric, powered by eight propellers, hovering 30 feet above the ocean, and charging forward at 180 miles per hour — it’s how Hawaiian Airlines is betting travelers will one day island hop from Maui to Oahu and beyond.
The largest commercial flight operator in America’s lone archipelago state announced a strategic investment in the Massachusetts firm that’s developing the breakthrough new boat-plane-glider on Wednesday. | Do the Electric Glide | Being responsible for 2.5% of all human-induced CO2 emissions puts immense pressure on aviation companies to go green. And what better way to get there than in a futuristic electric vehicle that floats like a hovercraft, flies like a low-swooping bird, and docks like a boat? That’s precisely what the engineers at Boston-based Regent are aiming for. Words may fail to describe the company’s products in development, but thankfully a CGI video set to Miami Vice-type music gets the job done. For Hawaiian Airlines, which did not detail its investment, partnering with Regent is a chance to stake out a future as it recovers from Covid-era losses. Hawaiian’s $1.6 billion in revenue last year was down 44% compared to pre-pandemic 2019. Seagliders could help in a few ways: | • | | Seagliders are categorized as Wing in Ground Effect craft, or WIGs, which are regulated by the US Coast Guard, and not the Federal Aviation Administration. That means the FAA rule that pilots need 1,500 hours of training — which has contributed to a shortage of thousands of pilots, causing thousands of flights to be canceled this year — doesn’t apply here. | | • | | Regent’s seagliders can glide in and out of harbors, meaning they can use existing infrastructure, reducing capital costs. Their electric-battery-powered motors will also be welcome at Hawaiian, which partly attributed a disappointing $122 million loss in the first quarter to rising fuel prices. | | | | On Board: Regent has raised $27 million from investors including Thiel Capital and Dallas Mavericks owner Mark Cuban. Regional carrier Mesa Air agreed to buy 200 twelve-passenger Regent seagliders to service US East Coast hubs starting in 2025. Hawaiian will work with Regent to develop a 100-passenger version with a 2028 launch in mind.
Big in Japan: Inter-island travel accounted for 20% of Hawaiian's passenger revenue before the pandemic. Unfortunately, the seaglider’s 180-mile range will prevent it from flying the 4,000-mile route to Japan, which represents 70% of the airline’s international revenues. | | | | | | Extra Upside | • | | The good news: On a monthly basis, US inflation rose the least in eight months. The bad news: it still rose 8.3% year-over-year, continuing a white-hot streak. | | • | | Cryptocurrency Luna fell 87% in 24 hours. | | • | | Are you having a hard time finding other unbiased news sources like The Daily Upside? Yeah, thought so. For political news that doesn’t want to make us move to an underground bunker, we read The Flip Side. They have a bipartisan team of news junkies that scour over 30 publications every day to find the most informed perspectives from both the left and right. The end-product is a balanced and informed digest that can be read in just 5 minutes per day. Subscribe today and join 250k+ readers doing news better.* *Partner | | | | | | |  | Just For Fun | | | | | Written by Sean Craig and Brian Boyle. | Disclaimer | | | | The preceding post was written and/or published as a collaboration between The Daily Upside’s in-house sponsored content team. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. The Daily Upside may receive monetary compensation from the issuer, or its agency, for publicizing the offering of the issuer’s securities. This content is for informational purposes only and is not intended to be investing advice. This is a paid ad. Please see 17b disclosure linked in the campaign page for more information. | | | | | No longer want to receive these emails? Unsubscribe here. Copyright © 2022 The Daily Upside, LLC., All rights reserved. 1230 York Avenue, Box 154, New York, NY 10065 | | | | |
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