TRP:CC - Wall Street Breakfast Podcast: SEC Versus Coinbase Binance

2023-06-07 07:19:06 ET

Summary

• Coinbase Global faces a lawsuit from the SEC, alleging it operates as an unregistered securities broker, causing its stock to tumble 12% on Tuesday.
• Apple reportedly acquires augmented-reality start-up Mira, which supplies technology for theme parks and the US military.
• New York City sues Hyundai and Kia for alleged negligence and creating a public nuisance by manufacturing vehicles "dangerously susceptible" to theft.

Listen on the go! Subscribe to Wall Street Breakfast on Apple Podcasts and Spotify SEC versus crypto : Regulatory clarity or confusion? (00:55) Apple ( AAPL ) reportedly acquired AR start-up Mira as it pushes new headset vision (02:44). NYC sues Hyundai (HYMTF), Kia ( KIMTF ) for negligence as car thefts escalate (05:12).

This is an abridged transcript of the podcast.

• The SEC is suing Coinbase Global. COIN dropped more than 12 percent Tuesday.

• Another Canadian oil and gas company is laying off workers. TC Energy joins the list.

• New York City is suing two car companies. The lawsuit says Kia and Hyundai made vehicles that are “dangerously susceptible” to theft.

If you hear a topic you want more information about we include all transcripts and links on Seeking Alpha where we publish under Wall Street Breakfast. We also include links to all articles on our podcast show notes. You can find show notes under the episode description on your podcast player.

OUR TOP STORIES

Coinbase Global (NASDAQ: COIN ) tumbled 12% Tuesday.

This happening after the U.S. Securities and Exchange Commission filed a lawsuit against the cryptocurrency exchange .

The suit alleges that Coinbase is operating as an unregistered securities broker.

The SEC said, according to its complaint, that since at least 2019, Coinbase ( COIN ) has unlawfully facilitated the buying and selling of crypto asset securities. The suit comes a day after the regulator sued Binance, the world's largest crypto exchange, and its CEO for allegedly violating U.S. securities regulations.

In addition, individual states are exerting pressure in the crypto space. Alabama issued a "show cause order" that gives Coinbase ( COIN ) 28 days to show why it shouldn't be directed to stop selling unregistered securities in the state. The Alabama Securities Commission said in a statement Tuesday, the order is the result of a multi-state task force of 10 state securities regulators.

The states allege that Coinbase ( COIN ) violated securities law by offering a staking rewards program without a registration to offer or sell securities.

Other states taking action against the crypto exchange are: California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin.

Mike Fay is the Investing Group leader of BlockChain Reaction on Seeking Alpha. Less than two weeks ago he wrote an article on Seeking Alpha entitled, “ Coinbase: Q2 is Going to be Rough ”.

In the article he rates COIN a hold. He said the regulatory climate domestically continues to be a major headwind for US-based businesses within the industry. Despite putting up a fight in the courts, Coinbase won't be immune from that.

Check it out with your Seeking Alpha premium account.

Apple (NASDAQ: AAPL ) has reportedly bought an augmented-reality start-up.

According to The Verge , Apple has acquired Los Angeles-based Mira.

Mira supplies tech for theme parks and the U.S. military.

This news comes a day after Apple's unveiling of the Vision Pro , its $3,500 AR/VR headset (and its biggest product launch in nearly 10 years).

According to the report, Mira has raised about $17M in funding.

The start-up's headsets are in use on the Mario Kart ride at Nintendo World parks in Japan and Los Angeles.

It also has contracts with the U.S. Air Force and Navy.

Shopify (NYSE: SHOP ) rose 6.2% on Tuesday after announcing the completion of its long-planned sale of its logistics business to Flexport.

The sale of the business was originally announced in early May alongside the company’s earnings release. In connection with the sale, Shopify will receive stock representing a 13% equity interest in Flexport.

Premarket SHOP is up 0.9%.

JOANN (NASDAQ: JOAN ) tumbled on Tuesday after the retailer missed consensus expectations for revenue, comparable sales, adjusted EBITDA, and EPS with its Q1 earnings report .

Looking ahead, JOANN ( JOAN ) guided for a full-year sales decline of 1% to 4% and adjusted EBITDA of $85M to $95M. The company will increase its focus on cash generation.

Shares of JOANN ( JOAN ) took a nosedive. JOAN ended Tuesdays trading down more than 29% to close at $1.14.

Premarket JOANN is up 5.2%.

If you had a Seeking Alpha premium account you would’ve been alerted last September that JOAN was at high risk of performing badly.

Premium is less than 5 dollars for the first month.

Another Canadian oil and gas company is laying off workers.

Reuters reported late Tuesday, citing a company spokesperson, that TC Energy (NYSE: TRP ) is cutting an unspecified number of jobs to "optimize value.”

The number of layoffs is believed to be much smaller than the job cuts announced last week at Suncor Energy ( SU ), which told employees it would eliminate 1,500 jobs.

Earlier this year , Imperial Oil ( IMO ) cut the number of contractors working on one of its projects.

TC Energy ( TRP ) owns and operates the Keystone oil pipeline and transports 25% of all the natural gas consumed in North America.

New York City is suing Hyundai ( OTCPK:HYMTF ) and Kia ( OTCPK:KIMTF ).

The city alleges that the South Korean automakers were negligent and created a public nuisance by manufacturing vehicles "dangerously susceptible" to theft.

Hyundai ( OTCPK:HYMTF ) and Kia ( OTCPK:KIMTF ) allegedly failed to install immobilizers in their cars between 2011 and 2022, long after other carmakers adopted the technology. Immobilizers ensure the ignition can't be started without the key.

The suit says "As a result, videos teaching the relative ease with which Hyundai ( OTCPK:HYMTF ) and Kia ( OTCPK:KIMTF ) vehicles can be stolen have gone viral."

The city also claimed that the firms' decision increased reckless driving, and significantly impacted the city's police department and other resources.

Nearly 1,000 Hyundai and Kia vehicles were reported stolen in NYC in the first four months of 2023. That number is up ~660% when compared to the same period in 2022.

The lawsuit follows similar cases by major U.S. cities, including St. Louis , Milwaukee , Cleveland , and Seattle .

A couple items to look out for in our catalyst watch for the day. The Jefferies Global Healthcare Conference will feature presentations from a long list of companies including Gilead Sciences ( GILD ), Amarin Corporation ( AMRN ), and Bio-Rad Laboratories ( BIO ). In addition, the IEA Global Conference on Energy Efficiency is taking place.You can find a full list of catalysts for the week in our weekly catalyst watch article .

I'd like to unpack a term we use a lot on the podcast. Some of you may not know what I’m talking about when I say Premium or a Seeking Alpha Premium account. So what is it? Premium helps you with your investing decisions. It helps you compare and track your stocks, it helps you find those companies that you may not have ever heard of, it also gives you access to the articles I mention here on the podcast and a host of other things that I wish I had time to talk about.

But in show notes you’ll find a link to Premium and on that page there’s FAQ’s about all that premium has to offer.

And right now premium is less than 5 bucks for the first month.

The Nasdaq ( COMP.IND ) added 0.4%. Gains were capped by continued weakness in shares of Apple ( AAPL ) as investors digested the implications of the highly priced new mixed-reality headset.

The S&P 500 ( SP500 ) ended 0.2% higher and the Dow ( DJI ) ended as the worst performer, rising 0.03%.

Seven of the 11 S&P sectors closed in positive territory, led by a gain in Financials.

Andrew Hecht is the investing group leader of Hecht Commodity Report , He tells Seeking Alpha, "With the debt ceiling deal and the OPEC meeting in the market's rearview mirror, we could be heading into a sleepy period this summer."

Treasury yields were mixed. The 10-year yield ( US10Y ) was down 1 basis point to 3.68% while the 2-year yield ( US2Y ) was up 3 basis points to 4.51%.

Now let’s take a look at the markets as of 6:20 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are mixed. The Dow is down 0.1%, the S&P 500 is up 0.03% and the Nasdaq is up a small fraction. Crude oil is up 1% at more than $72 a barrel. Bitcoin is up 3.2%.

In the world markets, the FTSE 100 is up 0.2% and the DAX is down 0.2%.

On today’s economic calendar, at 8:30am goods and services trade and at 3pm consumer credit.

For further details see: