As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week's top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.
FACEBOOK UNVEILS LIBRA: Facebook (FB) announced Wednesday on its website, "Today we're sharing plans for Calibra, a newly formed Facebook subsidiary whose goal is to provide financial services that will let people access and participate in the Libra network. The first product Calibra will introduce is a digital wallet for Libra, a new global currency powered by blockchain technology. The wallet will be available in Messenger, WhatsApp and as a standalone app - and we expect to launch in 2020.” Following the announcement, DA Davidson analyst Alan Gould kept his Buy rating and $200 price target on Facebook, saying the company's new digital currency is among its "most important initiatives" in the efforts to "commercialize the value" of its messaging platform. The analyst noted that Facebook's crypto-coin service "completes the loop" from customer acquisition to private business-to-consumer communications to enabling secure transactions. He sees the business as a "large global opportunity" that also offers the company diversification from advertising revenue. Meanwhile, Deutsche Bank analyst Lloyd Walmsley said on Wednesday he likes the "strategic play" by Facebook and the magnitude of the ambition behind it, however he has "many questions around whether it can really live up to the recent hype." He kept a Buy rating on Facebook shares. Additionally on Wednesday, Oppenheimer analyst Timothy Horan noted that Facebook said he sees the news as notable as it legitimizes blockchain technology and cryptocurrencies and helps drive the digitalization of the entire economy.
FACEBOOK’S LIBRA TO FACE SCRUTINY: Following Facebook’s unveiling of Libra, Reuters' Pete Schroeder reported that House Financial Services Committee chairwoman Maxine Waters is calling on Facebook to suspend the development of its cryptocurrency platform and allow Congress and regulators to review its plans. The congresswoman expressed concerns that "Facebook has data on billions of people and has repeatedly shown a disregard for the protection and careful use of this data", adding that her Republican committee counterpart Patrick McHenry also wishes to hold a hearing on Facebook's efforts. Additionally on Friday, Facebook co-founder Chris Hughes said in The Financial Times that a Libra coin would shift power into the wrong hands and that regulators should not underestimate the digital currency's disruptive potential. "If global regulators don't act now, it could very soon be too late," Hughes wrote, contending that "This currency would insert a powerful new corporate layer of monetary control between central banks and individuals.”
MONEYGRAM, RIPPLE ANNOUNCE STRATEGIC PARTNERSHIP: MoneyGram (MGI) announced Monday that it has entered into a strategic agreement with Ripple that will enable MoneyGram to utilize Ripple's xRapid product, leveraging XRP in foreign exchange settlement as part of MoneyGram's cross-border payment process. Through this partnership, which will have an initial term of two years, Ripple will become MoneyGram's partner for cross-border settlement using digital assets. As part of this partnership, Ripple has made an initial investment of $30M in MoneyGram equity, made up of common stock and a warrant to purchase common stock. In addition, at MoneyGram's election, Ripple may fund additional purchases of common stock or warrants up to $20M at a minimum price of $4.10 per share.
MLG ANNOUNCES BLOCKCHAIN-REGISTERED LAND FOR FIRST U.S. COUNTY: Overstock (OSTK) announced Monday that Medici Land Governance, its blockchain subsidiary focused on land administration, has recorded Teton County, Wyoming's land titles to a blockchain-based land record and information platform. The partnership makes Teton County the first county in the United States to record land information on a blockchain-based platform.
IDEANOMICS, YINLONG SIGN DEAL: Ideanomics (IDEX) announced a deal with Yinlong Energy Co. on Monday to strengthen its offering in the NEV space following the company’s creation of its NEVX division. The deal enables Ideanomics to bolster vehicle fulfilment capabilities in terms of previously announced deals, while enabling the company to participate in commission-based fees for the introduction of suppliers to the NEV purchasing market. Under the terms of the agreement, Ideanomics will commit to marketing Yinlong products for at least 5,000 tour bus orders within China over the next three years and will further assist Yinlong in marketing its entire product line within China. Ideanomics has also agreed to assist Yinlong with securing orders for 100,000 light trucks in the ASEAN region over the next three years. In return, Ideanomics will receive commissions on all product sales, of up to a maximum of 15% according to the type of vehicle, group purchase price, and its specifications.
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Overstock, DPW Holdings (DPW), Kodak (KODK), Ideanomics , Riot Blockchain (RIOT), Pareteum (TEUM) and Social Reality (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.
PRICE ACTION: As of time of writing, bitcoin rose roughly 16.2% this week to $9,761 in U.S. dollars, according to TradeBlock.
Bitcoin
+ (+0.00%)
Bitcoin
+ (+0.00%)
Ticker changed to META
+1.18 (+0.62%)
MoneyGram
+0.04 (+1.50%)
OSTK
+
Ideanomics
+ (+0.00%)
AMD
-0.24 (-0.80%)
Nvidia
-0.76 (-0.49%)
Ault Global Holdings
+0.0084 (+5.89%)
Eastman Kodak
-0.04 (-1.62%)
Riot Platforms
+0.04 (+1.53%)
Pareteum
-0.025 (-0.97%)
Srax
+ (+0.00%)