Wall Street Breakfast Podcast: Microvast Plunges

Wall Street Breakfast Podcast: Microvast Plunges


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Microvast (MVST) plunges as Energy Department said to cancel DoE contract (01:48). Tegna (TGNA) jumps 5% after Standard General deal terminated, buyback announced (06:37). Yelp (YELP) gains on report of activist investor push for sale (07:11).

This is an abridged transcript of the podcast.

  • A canceled government grant sends shares of Microvast plunging. A report says the Department of Energy canceled a grant over concerns there’s a link between Microvast and the Chinese government.

  • Dollar Tree reports earnings this week. Seeking Alpha Analyst Justin Purohit says he’s bullish on the stock and breaks down why he’s paying close attention to the new CEO and a potential negative catalyst for ticker symbol DLTR

  • TEGNA’s deal with Standard General has been terminated. TEGNA also announced a buyback.

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.

First an update to a story we told you about last week here on Wall Street Breakfast.

Last week we told you that the state of Montana decided to ban TikTok.

Well now TikTok, owned by China-based ByteDance (BDNCE) is suing Montana over its decision to ban the popular app.

The ban is set to take effect in January 2024.

The lawsuit alleges that the ban violates the First Amendment and rules governing interstate commerce, as well as laws like federal preemption, which mean that national security concerns should fall within the purview of the federal government.

Now our headline story…

Microvast (NASDAQ:MVST) is down 23% pre-market after Reuters reported that the U.S. Department of Energy canceled a $200M grant after lawmakers cited concerns over its alleged links to China’s government.

The DoE had been in talks with Microvast (MVST) over the grant to help build a plant in Tennessee, but two D.C. lawmakers reportedly criticized the deal in a letter to Energy Secretary Jennifer Granholm.

The letter said that the company had ties to the Chinese Communist Party; details about this allegation are unknown.

The grant had been set to support work by General Motors (GM) and Microvast (MVST) on developing specialized electric vehicle battery separator technology and building a new separator plant.

Microvast (MVST) is based in Texas and has manufacturing plants in Tennessee, Germany and China.

No deal!

President Biden and House Speaker Kevin McCarthy agreed that both sides will keep negotiating on a debt limit plan to avoid default after about an hour of talks on Monday evening.

Biden said in a statement that the meeting was productive and that lead negotiators will “continue to discuss the path forward.”

McCarthy told reporters that the negotiators are “going to get together, and work through the night” to try to find areas of agreement.”

It was also reported Monday that White House and Republican negotiators have agreed to cut unspent pandemic funding.

From no deal to three deals.

Plug Power (NASDAQ:PLUG) closed Monday up more than 14% and is up 1% pre-market.

This after saying it landed three deals in Europe for its green hydrogen-producing electrolyzers.

The company said with these deals this will be the first-ever use of industrial-scale green hydrogen in glass manufacturing, aluminum recycling and steel manufacturing.

The deal comes as the European Union plans to produce 10M metric tons/year of green hydrogen by 2030 to decarbonize European industries and the mobility sector.

Dollar Tree reports earnings this week.

I spoke to Seeking Alpha analyst Justin Purohit to give us a preview of what to expect.

He wrote an article on Seeking Alpha in January about Dollar Tree. He says he remains bullish on ticker symbol DLTR and there’s something he’ll be listening for on the call and you should too.


Dollar Tree reports earnings, Thursday, May 25th.

Check out the article. The easiest way to do that is with a premium account. It’s less than $5 for the first month. Just go to seekingalpha.com/subscriptions.

Farfetch (NYSE:FTCH) continued its post-earnings hot streak with a 10% push higher in late morning trading on Monday and closed Monday up nearly 13% at $5.62.

Investors have rushed back into the online retail stock after Farfetch (FTCH) topped sales, EPS and GMV estimates with the Q1 earnings report. Positive comments on the earnings call on the business in China also boosted sentiment.

Bank of America analyst Geoffroy de Mendez said Farfetch (FTCH) is giving the market a reason to reevaluate the bull thesis.

Bank of America reiterated a Buy rating on FTCH and price objective of $13. —

Another no deal situation…

Tegna’s (NYSE:TGNA) $5.4 billion deal with Standard General has been terminated.

Ticker symbol TGNA is up more than 2% in after hours trading after its planned sale to Standard General was terminated after failing to win regulatory approval.

The company also announced a $300 million share repurchase plan and a 20% increase in its quarterly dividend.

Under the terms of the merger agreement, Tegna is also entitled to receive a $136 million termination fee.

Yelp (NYSE:YELP) is up more than 10% premarket after a report that an activist has taken a stake in the company and wants them to explore alternatives, including a sale.

According to a WSJ report, which cited people familiar, TCS Capital Management built a 4% stake in Yelp (YELP), making it one of the company’s top five holders.

TCS Capital argues that Yelp could be sold to another technology or media company or private-equity firm, for at least $70 a share, the WSJ said, citing a letter the fund will deliver to the board on Tuesday.

TCS will also tell the board that his firm is prepared to make an offer for Yelp. TCS Capital also believes Yelp could evaluate a tax-free merger with rival Angi (ANGI). Angi shares rose 3.1% in after hours trading.

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.

U.S. stocks ended mixed on Monday to kick off the week.

The Nasdaq (COMP.IND) closed up 0.50%. The S&P 500 (SP500) ended slightly higher by 0.02%, while the Dow (DJI) slipped 0.4%.

Of the 11 S&P sectors, six ended in positive territory, led by a more than 1% gain in Communication Services. Consumer Staples topped the losers.

Ahan Vashi is the investing group leader of The Quantamental Investor on Seeking Alpha.

He says, “Treasury yields have been rising in recent weeks, and overbought equities could see a reversal soon. Given heightened market risks, investors would be prudent to maintain a cautious near-term stance on equities.”

Treasury yields were slightly higher on Monday. The 10-year yield (US10Y) was up 3 basis points to 3.72% while the 2-year yield (US2Y) was up 4 basis points to 4.33%.

St. Louis Fed President Jim Bullard at a fireside chat said that the Fed would need to hike the policy rate two more times to ensure inflation cools to its 2% target.

Meanwhile, Atlanta Fed President Raphael Bostic said he was “comfortable waiting a bit” to see how the central bank’s tightening campaign plays out, while Richmond Fed President Tom Barkin refrained from predicting the outcome of the June meeting.

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 down 0.04% and the Nasdaq is up 0.06%. Crude oil is up just a bit at more than $72 a barrel. Bitcoin is up 1.7% at more than $27,000.

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

On today’s economic calendar, at 945 am the PMI Composite Flash and at 10am new home sales.

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