XPEV - Wall Street Breakfast Podcast: XPeng Partners With DiDi Global

2023-08-28 06:44:29 ET

Summary

• XPeng announces partnership with DiDi Global, including the purchase of DiDi's smart car arm.
• 3M agrees to a $5.5 billion settlement over military earplugs lawsuits.
• Jabil sells its mobility business in China to BYD Electronic for $2.2 billion.

Listen below or on the go on Apple Podcasts and Spotify XPeng ( XPEV ) enters a strategic partnership with DiDi Global ( DIDIY ) that includes buying its smart car arm. (00:30) 3M ( MMM ) agrees to pay more than $5.5B in 3M agrees to pay more than $5.5B in settlement over military earplugs - Bloomberg over military earplugs - report. (01:29) Jabil ( JBL ) to sell China manufacturing business in $2.2B deal. (02:26)

This is an abridged transcript of the podcast.

XPeng (NYSE: XPEV ) announced late on Sunday that it will accelerate the adoption of Smart EVs and technologies through a strategic partnership with DiDi Global (OTCPK:DIDIY).

The $744M partnership includes the purchase of DiDi's smart car arm.

The Chinese electric vehicle maker plans to launch an all-new EV brand in 2024, currently being developed under the project name MONA.

The vehicles are expected to cost around $20,000.

On the financial end of the partnership, XPeng ( XPEV ) will issue Class A ordinary shares, representing approximately 3.25% of the outstanding share capital upon completion of the issuance, to acquire assets related to DiDi's Smart EV project.

DiDi will thereby become a strategic shareholder of the XPEV, with a lock-up period of 24 months after the initial closing.

The new model and brand will be differentiated from XPeng-branded products and the main brand. DiDi will provide support from its mobility ecosystem for the MONA project with access to its nationwide shared mobility market.

3M Co. (NYSE: MMM ) has tentatively agreed to a more than $5.5 billion settlement to resolve more than 300,000 lawsuits claiming the company sold the US military defective combat earplugs.

According to a Bloomberg report on Sunday, which cited people familiar with the matter, under the settlement, 3M is expected to pay out the money over five years.

3M's board still needs to sign off on the agreement.

A 3M representative told Bloomberg the company doesn’t comment on rumor or speculation.

3M (MMM), which is best known for making Scotch tape and Post-It Notes, is entangled in two legal disputes, one over ear plugs and the other related to "forever chemicals.".

Thousands of veterans sued 3M ( MMM ) subsidiary Aearo Technologies, claiming that its foam earplugs were defective and didn’t protect them from damages to their hearing. 3M ( MMM ) has argued the earplugs worked properly when soldiers were trained on how to use them.

Jabil (NYSE: JBL ) said Sunday that Chinese electric vehicle maker BYD Electronic (OTCPK: BYDIF ) (OTCPK: BYDIY ) has agreed to acquire its mobility business in China for ~$2.2B.

Jabil Circuit (JBL), which makes printed circuit boards, established a unit this month with product manufacturing business in parts of China, will now be sold to BYDE.

Jabil (JBL) said the deal, if completed, would be the largest in its history.

Other headlines to look out for on Seeking Alpha:

Raimondo in China to discuss U.S.-Sino bilateral relationship

Databricks in discussions to raise funds at $43B valuation - report

Wall Street lists potential targets for Medicare drug price negotiations

On our catalyst watch for the day

• The 3-for-2 stock split for Rush Enterprises ( RUSHA ) will become effective. The stock split will increase the number of outstanding shares of Class A common stock from approximately 41.7M to approximately 62.5M and will increase the number of outstanding shares of Class B common stock from approximately 12.1M to approximately 18.2M.
• Workhorse Group ( WKHS ) will hold its annual meeting. Shareholders will vote on a measure to increase the number of authorized shares to 450M from 250M. The company has a comparatively small number of institutional investors, which means retail investors will have a strong voice on if the new shares can be issued.

U.S. stocks on Friday ended solidly higher.

Wall Street's major averages opened in the green, but then started to give up their gains during Powell's speech, before slipping into the red. They resumed a steady upward climb soon after through the rest of the day.

The Nasdaq ( COMP.IND ) added 0.94%. The S&P 500 (SP500) rose 0.67%, while the Dow ( DJI ) advanced 0.73%.

All 11 S&P sectors ended in positive territory, led by Consumer Discretionary and Energy.

The 10-year yield (US10Y) was flat at 4.24%, while the 2-year yield (US2Y) was up 6 basis points to 5.08%.

For the week, the Nasdaq was up 2.26% and the S&P was up 0.82%. The Dow, on the other hand, lost ground by 0.45%.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up 0.2%, the S&P 500 is up 0.1% and the Nasdaq is up 0.2%. Crude oil is up 0.5% at more than $80 a barrel. Bitcoin is down 0.6%.

In the world markets, the FTSE 100 is up 0.07% and the DAX is up 0.4%.

The biggest stock movers for the day premarket: VinFast (NASDAQ: VFS ) is up 31% in the premarket after closing 40% higher on Friday. In the last five days, the Vietnamese electric car firm has increased by more than 325%. The surge higher has boosted its market cap beyond $158B, exceeding that of Ford ( F ) and General Motors (GM).

And Horizon Therapeutics (NASDAQ: HZNP ) is up more than 4% after the Federal Trade Commission dropped its in-house trial challenging Amgen's ( AMGN ) $28B acquisition.

On today’s economic calendar, at 10:30am the Dallas Fed Manufacturing Survey.

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