Author: slightbourne@noblecapitalmarkets.com

Medtech Industry Heats Up as KARL STORZ Acquires Surgical Robotics Firm Asensus

Posted on by slightbourne@noblecapitalmarkets.com

The medtech deal landscape just got a major shake-up with medical technology giant KARL STORZ announcing it will acquire surgical robotics company Asensus Surgical for $0.35 per share in cash. The $775 million transaction represents a significant premium for Asensus shareholders and will create a new leader in robotic surgery systems within KARL STORZ’s vast product portfolio.

The acquisition highlights the intense interest and competition around next-generation surgical robotics platforms. KARL STORZ is doubling down on the space by bringing Asensus and its augmented intelligence technologies in-house to enhance its robotic surgery offerings, particularly the promising LUNA system Asensus had in development.

For the medtech sector and investors, this high-profile deal carries several implications:

Robotic Surgery Becomes Key Priority
KARL STORZ’s major bet on Asensus signals just how strategically important robotic-assisted surgery has become for medtech companies. The ability to market cutting-edge robotic platforms that improve precision and outcomes is now table stakes in many areas of surgery.

Medtechs involved in supporting technologies like visualization, data integration, and procedural automation should see increased interest and investment from larger players looking to beef up their surgical robotics capabilities. KARL STORZ’s acquisition also puts increased pressure on peers like Intuitive Surgical and Stryker to stay ahead of the innovation curve.

More Consolidation Could Follow
Billion-dollar acquisitions often beget more deals as competitors look to keep pace and buttress their own product portfolios. This could kick off another wave of M&A in the surgical robotics space specifically, with smaller innovative companies becoming prime targets for medtech incumbents.

But beyond just robotics, KARL STORZ’s aggressive move may spur more consolidation across the broader medtech landscape. Major strategic buyers have been a bit apprehensive on M&A recently. This deal could provide a catalyzing force for other medtechs, pharmaceuticals, and life science companies to start getting more acquisitive, especially with several cutting-edge names trading at more attractive valuations.

Public Listing Exits Will Continue
By taking Asensus private, KARL STORZ adds another data point to the growing trend of medtech companies going private or getting acquired by larger players. With the IPO markets effectively shuttered and sustaining a public listing increasingly difficult for many small-to-mid-sized medtechs, a lucrative exit via acquisition could become the preferred route.

Investors may need to adjust expectations and position accordingly. Rather than holding out for the “next big IPO,” top-performing private medtech holdings may deliver the biggest windfall by positioning to get scooped up via M&A premium valuations down the road.

Capital Allocation Will Be Key
The KARL STORZ-Asensus transaction underscores how critically important prudent capital allocation and portfolio management will be for medtech investors. The 67% premium paid by the German firm highlights the potential upside for backing innovative, promising names before they get acquired.

But it also serves as a reminder of the downside risks – making the wrong medtech bets can lead to significant impairment if firms struggle to remain viable acquisition targets or get their technologies to market successfully. Having robust processes to separate the wheat from the chaff across the medtech universe will be paramount moving forward.

KARL STORZ’s acquisition of Asensus represents both an ambitious strategic move for the medical device titan and an intriguing data point for medtech investors to digest. As the broader life science space continues rapidly evolving, this landmark M&A deal provides some insight into the developing landscape that savvy medtech investors will need to navigate adeptly.

Robinhood Doubles Down on Crypto With $200M Bitstamp Buyout

Posted on by slightbourne@noblecapitalmarkets.com

Robinhood Markets is making its biggest bet yet on the booming crypto market. The popular trading platform announced a deal to acquire Bitstamp, one of the world’s oldest and largest cryptocurrency exchanges, for approximately $200 million in cash.

The blockbuster transaction represents Robinhood’s largest acquisition to date and a major escalation of its push into the digital assets space. By bringing Bitstamp’s established crypto exchange capabilities in-house, Robinhood is positioning itself to become a fierce competitor to industry giants like Binance and Coinbase.

Founded in 2011, Bitstamp has emerged as a leading crypto exchange particularly popular among European and Asian traders. Its core spot trading platform offers a deep pool of liquidity with over 85 digital assets available for trading. Critically, Bitstamp also holds around 50 operational licenses and registrations across the globe.

For the fast-growing Robinhood Crypto division, acquiring Bitstamp provides an immediate expansion of its product lineup and geographic reach. The deal comes as Robinhood’s crypto business is already experiencing explosive growth. In the first quarter of 2024, crypto revenues drove a massive earnings beat, underscoring the intense customer demand. However, the company is also facing headwinds from U.S. regulators.

Just last month, Robinhood disclosed that it received a Wells Notice from the Securities and Exchange Commission regarding its crypto trading practices. The SEC has staked out an aggressive position that many digital assets should be classified and registered as securities. In contrast, Robinhood and other major crypto firms have pushed back against what they view as regulatory overreach by the SEC into the crypto markets. Despite the legal turbulence, Robinhood intends to keep communicating with regulators as it moves forward with the integration of Bitstamp.

Analysts view Robinhood’s big crypto bet as ultimately positioning the company for further growth. The Bitstamp deal supercharges its global crypto capabilities at a time when adoption of bitcoin, ether and other digital assets is rapidly accelerating worldwide. An analyst stated the acquisition fits squarely with Robinhood’s crypto-first strategy and could be a game-changer, immediately making them a major player worldwide. The analyst reiterated a Buy rating and $15 price target on the stock.

Indeed, Robinhood’s shares spiked over 3% in pre-market trading as investors cheered the transformative deal. The stock has already surged 69% so far this year amid the company’s renewed focus on profitable growth after cost-cutting measures.

While the $200 million price tag is just a drop in the bucket for Robinhood’s over $6 billion war chest of cash reserves, the acquisition symbolizes its all-in embrace of crypto. By combining Bitstamp’s battle-tested exchange with its own fast-growing retail crypto platform, Robinhood is positioning itself for a major shake-up of crypto trading.

The deal is expected to close in the first half of 2025, pending any additional regulatory hurdles. But one thing is clear – Robinhood has gone full-crypto, and its fight for dominance in this rapidly evolving space is only just beginning.

Rare Disease Pharma Play: Cycle Bids $466M for Vanda

Posted on by slightbourne@noblecapitalmarkets.com

Cycle Pharmaceuticals Ltd., a rapidly growing pharmaceutical company laser-focused on rare diseases, has set its sights on acquiring Vanda Pharmaceuticals Inc. (NASDAQ: VNDA) for $8.00 per share in an all-cash transaction valuing Vanda at $466 million.

The unsolicited proposal, disclosed publicly on June 6th, represents an attractive 98% premium to Vanda’s share price prior to an earlier $4.05 per share acquisition offer from Future Pak LLC announced in April. Cycle’s $8.00 bid also represents a 58% premium to Vanda’s closing price on June 5th.

Vanda, which has been publicly traded since 2006, currently markets therapies for sleep disorders, jet lag, and schizophrenia, with additional pipeline candidates in development. The company’s shares have struggled over the past year, trading as low as $3.30 before the Future Pak offer surfaced.

Cycle was founded in 2012 with the sole mission of developing and commercializing treatments for underserved rare disease patients. The company has quickly built an arsenal of six approved drugs, including recent U.S. launches of TASCENSO ODT for multiple sclerosis in 2023 and TIOPRONIN for a rare metabolic disorder in 2024.

In disclosing its proposal publicly, Cycle cited its “extensive U.S. operational footprint and distribution,” stating this makes it “a strong strategic fit” to maximize the value of Vanda’s commercial products and pipeline. Cycle reported $109 million in 2023 net sales and $40 million in operating profits.

The proposal represents “immediate, compelling and certain cash value” for Vanda shareholders according to Cycle. Its $8.00 per share cash bid exceeds the cash component of Future Pak’s most recent $23 per share revised offer on May 7th, which included stock and contingent value rights.

Cycle stated it has substantial cash reserves on hand and is highly confident it can secure committed debt financing for the transaction after limited due diligence. The firm is aiming to complete diligence within 2-3 weeks and finalize a definitive merger agreement shortly thereafter.

While Cycle stated a preference to reach an agreement privately with Vanda’s board, it has gone public with its proposal “for the benefit of Vanda shareholders” to encourage them to voice support for the premium cash bid.

The rare disease focus of both companies could make this an intriguing strategic fit, while Cycle’s bold premium cash offer puts the onus on Vanda’s board to either embrace this higher-valued bid or make a compelling case that greater long-term value could be unlocked by rejecting it. Regardless, this acquisition play instantly ratchets up the stakes in Vanda’s strategic review process.

Eskay Mining and P2 Gold Merge to Become New Golden Triangle Force

Posted on by slightbourne@noblecapitalmarkets.com

In a move to create a new exploration player focused on British Columbia’s mineral-rich Golden Triangle, Eskay Mining Corp. and P2 Gold Inc. have agreed to join forces through an all-share merger. The combined company will also gain a foothold in Nevada’s Walker Lane Trend through P2’s Gabbs gold-copper project.

Under the terms of the deal announced Monday, P2 Gold shareholders will receive 0.2778 Eskay shares for each P2 share they hold. When the transaction closes, expected by October 31st, existing Eskay shareholders will own approximately 80% of the combined company, with P2 investors holding the remaining 20%.

The merger brings together two mineral exploration companies with complementary assets and expertise in prolific mining jurisdictions. Eskay’s flagship asset is its Eskay-Corey property, a large 52,600 hectare land package located in the heart of the Golden Triangle of northwestern British Columbia. This region has gained prominence in recent years due to successful mine developments by companies like Pretivm, Seabridge Gold, and others operating in the area.

P2 Gold, meanwhile, holds the Gabbs project in Nevada’s Walker Lane mineral belt. A 2022 preliminary economic assessment outlined a potentially robust mid-sized open pit mine at Gabbs producing over 100,000 ounces of gold and 13,500 tonnes of copper annually over a 14-year mine life. The deal provides the combined company with a more advanced, development-stage asset to complement Eskay’s exploration upside in the Golden Triangle.

The current Eskay CEO, who will transition to the role of Chair for the merged entity, touted it as a significant step toward finding the next major discovery in the Golden Triangle region. He praised the P2 team’s track record of strong exploration results in the area.

The current P2 President and CEO, who previously helped discover and develop Pretivm’s high-grade Brucejack gold mine in the Golden Triangle, will take the helm as CEO of the as-yet unnamed combined company. P2 has already been contracted to plan and execute the 2024 exploration program at Eskay-Corey under an exploration services agreement.

In addition to exploration upside, the merger is expected to provide improved access to capital markets for funding the advancement of the companies’ project portfolio. As single assets, Eskay and P2’s respective market caps were around C$40 million each, limiting their ability to raise funds for major programs.

One investment manager sees the deal unlocking value, stating the combined company will have much more relevance and reduce single asset risk, putting it on the radar for more institutional investors and funds.

Prior to closing, P2 Gold will settle approximately $1.7 million in outstanding convertible debentures and $1.2 million in shareholder loans through share issuances. The transaction remains subject to shareholder approvals from both companies as well as regulatory and court approvals.

The merger continues the wave of consolidation across the mining sector, as companies seek economies of scale and diversified asset bases. If successful, the combined Eskay-P2 entity will aim to leverage its exploration and development expertise to establish new mines in mining-friendly North American jurisdictions.

Private Hiring Slows More Than Expected as Labor Market Cools

Posted on by slightbourne@noblecapitalmarkets.com

The red-hot U.S. labor market showed further signs of cooling in May as private hiring slowed more than anticipated, according to the latest employment report from payroll processor ADP.

Companies added just 152,000 jobs last month, coming in well below economist projections of a 175,000 increase. It marked the lowest level of monthly job gains since January and a notable deceleration from April’s downwardly revised 188,000 figure.

The ADP report, which captures private payroll changes but not government hiring, suggests the robust labor market demand that has characterized the pandemic recovery is moderating amid higher interest rates, still-elevated inflation, and growing economic uncertainty.

“Job gains and pay growth are slowing going into the second half of the year,” said Nela Richardson, ADP’s chief economist. “The labor market is solid, but we’re monitoring notable pockets of weakness tied to both producers and consumers.”

A Shift Toward Services
While goods-producing sectors like manufacturing, mining, and construction have driven solid hiring for much of the recovery, last month they contributed only 3,000 net new jobs.

Job creation was instead carried by services industries, led by trade/transportation/utilities with 55,000 new positions. Other strong areas included education/health services (+46,000), construction (+32,000), and other services (+21,000).

However, even within services there were weak spots, including the previously booming leisure/hospitality sector which saw just a 12,000 job gain in May. Professional/business services also posted a decline.

Manufacturers Slashing Payrolls
The report highlighted particular softness in the manufacturing sector, which shed 20,000 jobs last month amid a broader industrial slowdown.

Factories have been cutting payrolls for most of the past 18 months as higher material and energy costs, supply chain disruptions, and softening demand weighed on production. The sector has contracted in seven of the last eight months, according to survey data.

Regional manufacturing indexes have also pointed to slowing activity and employment levels, including the latest readings from the Dallas and Richmond Federal Reserve districts.

Small Businesses Feeling the Pinch
Companies with fewer than 50 employees were disproportionately impacted in May, seeing a net decrease in headcounts. Those with 20-49 workers reduced staffing levels by 36,000.

The pullback at smaller firms underscores how rapidly tightening financial conditions and ebbing consumer demand have started to squeeze profits and required some businesses to adjust their workforce levels.

Annual Pay Growth Steady at 5%
Despite some loss of momentum in overall hiring, the ADP report showed private wage growth stayed on a 5% annual trajectory last month, holding steady at that level for a third consecutive period.

The elevated but moderating pace of pay increases suggests employers are still working to attract and retain staff even as overall job creation starts to wane from its torrid pandemic-era pace.

While a single data point, the ADP release could preview what’s to come from the more comprehensive government nonfarm payrolls report due out Friday. Economists expect that report to show a 190,000 increase in total U.S. payrolls for May, slowing from April’s 253,000 gain.

As borrowing costs continue climbing and spending softens, further hiring deceleration across both goods and services sectors seems likely in the months ahead, though an outright decline remains unlikely based on most economic projections.

Nvidia’s AI-Driven Stock Split Could Unlock New Investor Appeal and Dow Jones Potential

Posted on by slightbourne@noblecapitalmarkets.com

As the semiconductor industry’s unrivaled leader in artificial intelligence, Nvidia (NASDAQ: NVDA) has become a Wall Street sensation in recent years. The company’s latest strategic move – a 10-for-1 stock split – could further amplify its appeal to both individual investors and the prestigious Dow Jones Industrial Average.

The announcement of Nvidia’s stock split, effective June 7th, comes on the heels of the company’s blockbuster Q1 2024 earnings report. With revenue and forecasts exceeding analyst expectations, Nvidia’s shares have more than doubled so far this year, solidifying the chipmaker’s status as a bona fide tech titan.

Lowering the Barrier to Entry for Retail Investors
Nvidia’s decision to split its stock could open the doors wider for individual, or “retail,” investors to participate in the company’s AI-driven growth story. By reducing the per-share price from around $1,040 to approximately $104, the split makes Nvidia’s stock more accessible to investors with smaller trading accounts.

Analysts believe the lower price point could spark greater interest from retail investors, who typically trade in smaller lots compared to institutional investors. Currently, Nvidia is the most heavily weighted stock in the average retail trading portfolio, accounting for 9.3% of holdings – a figure that has more than doubled from a year ago.

While many retail investors can already buy fractional shares, the lower price could still make Nvidia more appealing to those without access to such features. The reduced share price could make Nvidia’s stock “less of an obstacle” for these investors, according to one expert.

Paving the Way for Dow Jones Inclusion
In addition to attracting more retail interest, Nvidia’s stock split could also improve the company’s prospects for inclusion in the prestigious Dow Jones Industrial Average. As a price-weighted index, the Dow favors lower-priced stocks, and Nvidia’s current share price of around $1,040 would make it the second-largest component, behind only UnitedHealth Group.

However, after the split, Nvidia’s share price would fall to approximately $104, making it the 21st-largest stock in the Dow, just behind Merck and ahead of Walt Disney. This more manageable price point could pave the way for Nvidia’s eventual inclusion in the blue-chip index.

Analysts believe Nvidia “checks all the boxes” for Dow Jones inclusion, citing the company’s strong reputation, history of sustained growth, investor appeal, and sector representation.

A Potential Boost for Shareholder Returns
Historically, companies that announce stock splits have tended to outperform the market. According to an analysis from Bank of America Global Research, stocks announcing splits have seen their shares rise an average of 25.4% over the following 12 months, compared to an 11.9% increase for the S&P 500.

However, it’s important to note that a stock split alone is unlikely to overcome broader market forces that can sway a company’s share price. As evidenced by the selloffs experienced by Amazon and Alphabet in 2022, even after their own stock splits, external factors such as rising interest rates can still weigh heavily on stock performance.

Nonetheless, Nvidia’s stock split announcement comes at a time when the company’s AI dominance has made it a must-have investment for both institutional and individual investors. By making its shares more accessible and potentially paving the way for Dow Jones inclusion, this move could further cement Nvidia’s position as a leading player in the rapidly evolving semiconductor and AI landscapes.

Core Scientific Enters AI Compute Market with $3.5B Deal

Posted on by slightbourne@noblecapitalmarkets.com

In a significant development in the high-performance computing (HPC) space, Core Scientific, a leading digital infrastructure provider for bitcoin mining and hosting services, has announced a landmark deal with CoreWeave, an AI hyperscaler. The 12-year agreement will see Core Scientific deliver approximately 200 megawatts of infrastructure to host CoreWeave’s high-performance compute operations, positioning the company as a major player in the AI data center space.

This strategic move marks a significant expansion of Core Scientific’s hosting business and earnings power, while maintaining its strong bitcoin mining franchise. The deal is expected to generate over $3.5 billion in cumulative revenue for Core Scientific during the initial contract terms, with estimated average annual revenue of $290 million. This development highlights the growing importance of HPC in the tech industry and the opportunities it presents for emerging growth companies.

The Rise of High-Performance Computing

HPC is a critical component in various industries, including AI, scientific research, and cryptocurrency mining. The increasing demand for powerful computing capabilities has led to a surge in the adoption of HPC solutions. Core Scientific’s agreement with CoreWeave demonstrates the company’s commitment to meeting this growing demand and diversifying its business model.

AI Computing: A Key Driver of Growth

AI computing is a significant driver of the HPC market, with applications in various sectors, including healthcare, finance, and technology. The increasing adoption of AI solutions has led to a rise in demand for high-performance computing infrastructure. CoreWeave’s partnership with Core Scientific will enable the company to expand its AI compute capabilities, further solidifying its position in the AI hyperscale space.

Bitcoin Mining and HPC: A Synergistic Relationship

Core Scientific’s roots in bitcoin mining have provided a natural segue into HPC. The company’s existing infrastructure and expertise in high-power computing have enabled it to expand into the HPC space seamlessly. This synergistic relationship between bitcoin mining and HPC presents opportunities for companies like Core Scientific to leverage their existing infrastructure and expertise to tap into the growing HPC market.

Opportunities for Emerging Growth Companies

The HPC space presents significant opportunities for emerging growth companies. As demand for high-performance computing continues to outpace supply, companies like Core Scientific are well-positioned to meet customer needs with a much shorter time to power than greenfield data center projects. This deal demonstrates how small-cap companies can leverage their existing infrastructure and expertise to tap into the growing HPC market, providing a pathway for growth and expansion.

Investment Opportunities in the HPC Space

The HPC space offers attractive investment opportunities for investors seeking exposure to emerging growth companies. As the demand for high-performance computing continues to grow, companies like Core Scientific are poised to benefit from this trend. Investors can capitalize on this growth by investing in companies that are well-positioned to meet the increasing demand for HPC solutions.

In conclusion, Core Scientific’s strategic move into the AI compute space highlights the growing importance of HPC in the tech industry. This deal demonstrates the opportunities available for emerging growth companies in the HPC space and the potential for investors to capitalize on this growth. As the demand for high-performance computing continues to rise, companies like Core Scientific are poised to benefit from this trend, making them attractive investment opportunities for investors seeking exposure to the HPC space.

V2X (VVX) – Capital Structure Enhancement

Posted on by slightbourne@noblecapitalmarkets.com


Tuesday, June 04, 2024

For more than 70 years, Vectrus has provided critical mission support for our customers’ toughest operational challenges. As a high-performing organization with exceptional talent, deep domain knowledge, a history of long-term customer relationships, and groundbreaking technical expertise, we deliver innovative, mission-matched solutions for our military and government customers worldwide. Whether it’s base operations support, supply chain and logistics, IT mission support, engineering and digital integration, security, or maintenance, repair and overhaul, our customers count on us for on-target solutions that increase efficiency, reduce costs, improve readiness, and strengthen national security. Vectrus is headquartered in Colorado Springs, Colo., and includes about 8,100 employees spanning 205 locations in 28 countries. In 2021, Vectrus generated sales of $1.8 billion. For more information, visit the company’s website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Repricing and Extension. Yesterday, V2X announced a repricing and extension of its $907 million First Lien term loan. The actions are another step by management to enhance the capital structure, in our view, and should lead to lower interest costs and additional financial flexibility.

Details. Under the repricing, the annual interest margin was reduced by 50 basis points to 2.75%. Additionally, the 10-basis point credit spread adjustment was eliminated from the Company’s Secured Overnight Financing Rate, further improving the anticipated savings from the repricing. The company also extended the maturity of the loan by two years to December 2030.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Eledon Pharmaceuticals (ELDN) – Data Update From Phase 1b Trial Shows Continued Tegoprubart Benefits

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Tuesday, June 04, 2024

Robert LeBoyer, Senior Vice President, Equity Research Analyst, Biotechnology, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Data From Phase 1b Trial Updated. Eledon presented data from the Phase 1b trial testing tegoprubart, its drug for prevention of kidney transplant rejection, at the American Transplant Congress. We found the data to continue to show improved kidney function during the first year after transplantation, a strong indicator of organ survival, with continued safety and tolerability.

Kidney Function Measures Continue To Show Improvements Over Tacrolimus. The Phase 1b data included 13 patients who had reached 30-day post-transplant evaluation. Their mean eGFR was above 60 mL/min/1.73m² at each reported time point. The overall mean eGFR after day 30 reached 70.5 mL/min/1.73m².  This is an improvement over standard-of-care immunosuppressive regimens that have eGFR rates around the 50ml/min/1.73m² level during the first year after the transplant.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.

Kelly Services (KELYA) – Motion Recruitment Partners in the Fold

Posted on by slightbourne@noblecapitalmarkets.com

Tuesday, June 04, 2024

Kelly (Nasdaq: KELYA, KELYB) connects talented people to companies in need of their skills in areas including Science, Engineering, Education, Office, Contact Center, Light Industrial, and more. We’re always thinking about what’s next in the evolving world of work, and we help people ditch the script on old ways of thinking and embrace the value of all workstyles in the workplace. We directly employ nearly 350,000 people around the world and connect thousands more with work through our global network of talent suppliers and partners in our outsourcing and consulting practice. Revenue in 2021 was $4.9 billion. Visit kellyservices.com and let us help with what’s next for you.

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Completed. Kelly Services has completed the acquisition of Motion Recruitment Partners, LLC (“MRP”), from Littlejohn & Co., LLC, a private investment firm. As we highlighted in past reports, this is a transformational acquisition for Kelly, the largest in its history. We believe MRP will be a key driver in Kelly posting a higher revenue growth rate as well as continued expansion of Kelly’s adjusted EBITDA margin.

MRP Refresher. MRP is the parent company to a group of leading global talent solution providers. The acquisition of MRP strengthens the scale and capabilities of Kelly’s staffing and consulting solutions across technology, telecommunications, and government specialties in North America, and recruitment process outsourcing solutions globally.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

NYSE Trading Halt Highlights Need for Robust Systems Amid Market Changes

Posted on by slightbourne@noblecapitalmarkets.com

The New York Stock Exchange experienced a technical glitch this morning that triggered trading halts in dozens of stocks, including big names like Chipotle, Berkshire Hathaway, and the meme stock GameStop. The issue stemmed from problems with the price bands published by the Consolidated Tape Association, which are used to prevent excess volatility by pausing trading if prices move too far too quickly.

While the specific cause is still being investigated, the timing raised concerns given the recent move by U.S. stock exchanges to a one-day settlement cycle last week. This SEC-mandated change requires trades to be settled one day after execution instead of two, compressing timeframes for transferring securities.

Regulators and market participants have been on high alert for potential snags as systems adapt to the new settlement cycle. Today’s incident underscores the critical importance of robust trading infrastructure and risk controls as market practices evolve.

Halting Mechanism Kicks In
At around 11am ET, the NYSE listed over 60 stocks as temporarily halted due to hitting their “limit up, limit down” (LULD) bands, which are circuit breaker levels to prevent extreme price swings. While some of those may have been unrelated cases of normal volatility, many were likely impacted by the pricing data issue.

The stock seeing among the biggest volatility was GameStop, which spiked over 70% at the open before being halted. Speculation swirled that investor Keith Gill, known as “Roaring Kitty” from the 2021 meme stock frenzy, may have taken a large new position.

Trading resumed around 11:45am after the exchange confirmed the pricing data problems had been resolved. While temporary, such disruptions can impact market quality, trading execution and risk management for investors and firms.

Need for Resilient Systems
As financial markets continually evolve, today’s problems highlight the crucial need for exchanges, trading platforms, and market participants to have ultra-resilient, glitch-proof systems able to adapt flawlessly to changes. Even brief failures can undermine market confidence and integrity.

While technological errors are inevitable at times, regulators and investors alike will be scrutinizing today’s NYSE issue and responses carefully. Having rock-solid trading infrastructure and controls in place to prevent and handle disruptions seamlessly is essential for maintaining fair, orderly and efficient markets.

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Release – Graham Corporation Receives $17 Million of Orders to Support Energy and Petroleum Expansion Projects in North America and the Middle East

Posted on by slightbourne@noblecapitalmarkets.com

Research News and Market Data on GHM

BATAVIA, N.Y.–(BUSINESS WIRE)– Graham Corporation (NYSE: GHM) (“GHM” or “the Company”), a global leader in the design and manufacture of mission critical fluid, power, heat transfer, and vacuum technologies for the defense, space, energy, and process industries, today announced that it has received approximately $17 million of orders for two expansion projects in the energy and petrochemical markets.

Daniel J. Thoren, President and CEO, commented, “We are excited to work with our North American customer as they aim to create the world’s first net-zero carbon emissions integrated ethylene cracker and derivatives site. Graham’s surface condensers with custom venting package allow the turbine drives to operate at peak efficiency and are considered state of the art in our industry. Additionally, we received a notable order to support an expansion project in the Middle East, which we attribute to our strong relationship and our customer’s preference for our high-performance steam jet ejectors.”

The North American order includes three surface condenser systems for critical service in both a main process unit and utility unit. This project aims to advance the eco-friendliness of natural gas refining, with the collective goal to minimize carbon emissions throughout the production process. The order was received in April 2024 and approximately 50% of the revenue is expected to be recognized in fiscal 2025 with the remainder expected in fiscal 2026.

For the Middle East expansion project, the Company was awarded a contract to supply a new vacuum system for a crude to chemical vacuum distillation tower. This project aims to bolster the production of Group II and Group III Base Oils. This order was received in March 2024, with revenue expected to be recognized in fiscal 2025.

About Graham Corporation

GHM is a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the defense, space, energy and process industries. The Graham Manufacturing and Barber-Nichols’ global brands are built upon world-renowned engineering expertise in vacuum and heat transfer, cryogenic pumps and turbomachinery technologies, as well as its responsive and flexible service and the unsurpassed quality customers have come to expect from the Company’s products and systems.

Graham Corporation routinely posts news and other important information on its website, www.grahamcorp.com, where additional information on Graham Corporation and its businesses can be found.

Safe Harbor Regarding Forward Looking Statements

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Christopher J. Thome
Vice President – Finance and CFO
Phone: (585) 343-2216

Deborah K. Pawlowski
Kei Advisors LLC
Phone: (716) 843-3908
dpawlowski@keiadvisors.com

Source: Graham Corporation

Released June 3, 2024

GameStop Stock Erupts Again as ‘Roaring Kitty’ Reveals $175 Million Position

Posted on by slightbourne@noblecapitalmarkets.com

The original meme stock mania has been reawakened with a vengeance. GameStop (GME) shares skyrocketed over 70% amid frantic trading on Monday after retail trader Keith Gill, popularly known as “Roaring Kitty,” revealed a colossal new bullish position in the video game retailer.

In his first major post on Reddit in years, Gill shared a screenshot that appeared to show a staggering $175 million bet on GameStop. The purported stake consisted of 5 million shares valued at $116 million and $65.7 million worth of call options expiring in June.

The revelation instantly reignited the meme stock frenzy. Feverish trading volumes in GameStop stock spiked more than tenfold, briefly surpassing even the mighty Apple (AAPL) at one point. By mid-morning, GameStop’s heavily shorted shares had skyrocketed as high as 75% in an explosive upward move reminiscent of the legendary January 2021 short squeeze.

Fellow meme favorites like AMC Entertainment (AMC) caught a powerful sympathy rally bid as well, surging over 20% on massive volumes before getting temporarily halted. The meme stock comeback had arrived in full force.

Gill’s outsize position punched far above GameStop’s relatively small $7 billion market cap. Analysts noted the dramatic price impact stemmed from the stock’s concentrated short position, which got pulverized as the fortunes quickly shifted.

The sudden lurch higher put short sellers covering their losing bets on a pace to absorb nearly $1 billion in losses, according to analytics firm Ortex. GameStop once again became the most frenzied trading name across no-fee retail platforms like Robinhood (HOOD).

Longtime GameStop investors flooded Reddit forums like WallStreetBets and Superstonk with jubilant scenes. Rocket emojis and feverish rallying cries echoed the legendary meme stock heydays of 2021 as the “diamond hands” crowd smelled redemption.

However, some analysts cautioned that chasing GameStop’s vertigo-inducing rally carried substantial risks. The company continues grappling with operational challenges like slowing sales and a customer shift away from physical games toward digital downloads and streaming.

Still, the meme mania machine may be too powerful to stop now that it has been reactivated by its celebrity mascot. GameStop raised $933 million last month from a stock sale, taking advantage of May’s initial retail resurgence to fortify its turnaround ambitions.

While May’s hype dissipated quickly without broad staying power, the same explosive ingredients powering 2021’s mania remain in place today – and have only intensified with Gill’s outsized position. GameStop’s short interest spiked to nosebleed levels, leaving bearish traders acutely vulnerable to getting blown out by a sustained rally.

Those dynamics set the stage for an epic rematch between the “diamond hands” unleashed and hedge funds caught flat-footed. Redemption beckons for the OG meme crowd still down on their initial GameStop bets. Meanwhile, a new generation of retail traders is getting initiated into the frenzy, enticed by visions of generational wealth on a lucky long-shot wager.

There are no guarantees the meme stock fever lasts. But the tantalizing combination of high short interest, heavy retail buy interest, and now the return of an idolized icon like Roaring Kitty has all the makings of another wild speculative blowoff. The opening act of 2021’s wildest stock story may ultimately prove just the warmup before a shocking meme stock encore too insane to script.