Could There be an Impact on Robinhood Shareholders with the SBF Share Seizure
Creditors and customers of FTX may be able to reclaim some assets that were wiped out as the feds have been seizing the 7.50% stake in Robinhood (HOOD) stock held by Sam Bankman-Fried (SBF). SBF faces charges of fraud and a myriad of financial crimes after the collapse of FTX in November. The impact of the collapse is having an effect on other areas of finance, including assets that had been controlled by SBF. The Robinhood shares are valued near $450 million, and while this may bring some hope or relief to those that will receive a distribution, there is a risk to HOOD investors.
Background
The FTX bankruptcy has left a line of claimants to recapture what they can from the cryptocurrency giant. Bankruptcies are seldom easy; those that could involve layers of fraud become tied up in even larger disputes and legal battles. For example, the large Robinhood holding is tied up in a dispute between FTX and bankrupt crypto lender BlockFi. The company alleges that SBF put up the shares as collateral for a loan to Alameda Research, a company he also owned.
The HOOD stake was purchased in 2022 through a holding company SBF controlled, Robinhood of course is the innovative broker specializing in self-directed individual investors. Through the DOJ, authorities are going after the shares of HOOD and accounts that are held at the bank Silvergate Capital (SI) which is a banker for the crypto industry.
Separately, court filings on January 4th brought awareness to a NY federal judge ordered last month requiring the seizure of some $93 million that an FTX arm held in accounts at Silvergate. As it relates to this seizure. The Justice Department says it believes the assets seized are not the property of the bankruptcy estate, while a lawyer for FTX maintains that the seizures were from accounts not directly controlled by the company. They were ordered in connection with the criminal case involving SBF.
FTX investors’ asset claims in the exchange, which was once valued at $32 billion, come after creditors and other rightful claimants.
How This Could Impact Robinhood Shareholders
Asset seizures and later distribution to those hurt by fraud involve liquidation of the assets seized. In the case of stocks, they will be sold and turned into cash. Imagine a sudden effort to sell 7.50% of any company. That is a large percentage to move. The stake, worth between $400 and $500 million, may serve as a dark cloud depressing share prices and slowing any planned growth of the company. It may eventually culminate in liquidation at a pace not conducive to retaining a level stock price.
What if the U.S. placed a tax on robots? The concept has been publicly discussed by policy analysts, scholars, and Bill Gates (who favors the notion). Because robots can replace jobs, the idea goes, a stiff tax on them would give firms incentive to help retain workers, while also compensating for a dropoff in payroll taxes when robots are used. Thus far, South Korea has reduced incentives for firms to deploy robots; European Union policymakers, on the other hand, considered a robot tax but did not enact it.
Now a study by MIT economists scrutinizes the existing evidence and suggests the optimal policy in this situation would indeed include a tax on robots, but only a modest one. The same applies to taxes on foreign trade that would also reduce U.S. jobs, the research finds.
“Our finding suggests that taxes on either robots or imported goods should be pretty small,” says Arnaud Costinot, an MIT economist, and co-author of a published paper detailing the findings. “Although robots have an effect on income inequality … they still lead to optimal taxes that are modest.”
Specifically, the study finds that a tax on robots should range from 1 percent to 3.7 percent of their value, while trade taxes would be from 0.03 percent to 0.11 percent, given current U.S. income taxes.
“We came into this not knowing what would happen,” says Iván Werning, an MIT economist and the other co-author of the study. “We had all the potential ingredients for this to be a big tax, so that by stopping technology or trade, you would have less inequality, but … for now, we find a tax in the one-digit range, and for trade, even smaller taxes.”
The paper, “Robots, Trade, and Luddism: A Sufficient Statistic Approach to Optimal Technology Regulation,” appears in the advance online form in The Review of Economic Studies. Costinot is a professor of economics and associate head of the MIT Department of Economics; Werning is the department’s Robert M. Solow Professor of Economics.
A Sufficient Statistic: Wages
A key to the study is that the scholars did not start with an a priori idea about whether or not taxes on robots and trade were merited. Rather, they applied a “sufficient statistic” approach, examining empirical evidence on the subject.
For instance, one study by MIT economist Daron Acemoglu and Boston University economist Pascual Restrepo found that in the U.S. from 1990 to 2007, adding one robot per 1,000 workers reduced the employment-to-population ratio by about 0.2 percent; each robot added in manufacturing replaced about 3.3 workers, while the increase in workplace robots lowered wages about 0.4 percent.
In conducting their policy analysis, Costinot and Werning drew upon that empirical study and others. They built a model to evaluate a few different scenarios, and included levers like income taxes as other means of addressing income inequality.
“We do have these other tools, though they’re not perfect, for dealing with inequality,” Werning says. “We think it’s incorrect to discuss this taxes on robots and trade as if they are our only tools for redistribution.”
Still more specifically, the scholars used wage distribution data across all five income quintiles in the U.S. — the top 20 percent, the next 20 percent, and so on — to evaluate the need for robot and trade taxes. Where empirical data indicates technology and trade have changed that wage distribution, the magnitude of that change helped produce the robot and trade tax estimates Costinot and Werning suggest. This has the benefit of simplicity; the overall wage numbers help the economists avoid making a model with too many assumptions about, say, the exact role automation might play in a workplace.
“I think where we are methodologically breaking ground, we’re able to make that connection between wages and taxes without making super-particular assumptions about technology and about the way production works,” Werning says. “It’s all encoded in that distributional effect. We’re asking a lot from that empirical work. But we’re not making assumptions we cannot test about the rest of the economy.”
Costinot adds: “If you are at peace with some high-level assumptions about the way markets operate, we can tell you that the only objects of interest driving the optimal policy on robots or Chinese goods should be these responses of wages across quantiles of the income distribution, which, luckily for us, people have tried to estimate.”
Beyond Robots, an Approach for Climate and More
Apart from its bottom-line tax numbers, the study contains some additional conclusions about technology and income trends. Perhaps counterintuitively, the research concludes that after many more robots are added to the economy, the impact that each additional robot has on wages may actually decline. At a future point, robot taxes could then be reduced even further.
“You could have a situation where we deeply care about redistribution, we have more robots, we have more trade, but taxes are actually going down,” Costinot says. If the economy is relatively saturated with robots, he adds, “That marginal robot you are getting in the economy matters less and less for inequality.”
The study’s approach could also be applied to subjects besides automation and trade. There is increasing empirical work on, for instance, the impact of climate change on income inequality, as well as similar studies about how migration, education, and other things affect wages. Given the increasing empirical data in those fields, the kind of modeling Costinot and Werning perform in this paper could be applied to determine, say, the right level for carbon taxes, if the goal is to sustain a reasonable income distribution.
“There are a lot of other applications,” Werning says. “There is a similar logic to those issues, where this methodology would carry through.” That suggests several other future avenues of research related to the current paper.
In the meantime, for people who have envisioned a steep tax on robots, however, they are “qualitatively right, but quantitatively off,” Werning concludes.
TAAL Distributed Information Technologies Inc. delivers value-added blockchain services, providing professional-grade, highly scalable blockchain infrastructure and transactional platforms to support businesses building solutions and applications upon the BitcoinSV platform, and developing, operating, and managing distributed computing systems for enterprise users.
Joe Gomes, Senior Research Analyst, 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.
Terminating Research Coverage. As expected, TAAL announced the completion of the previously announced plan to take the Company private. Calvin Ayre has acquired all of the remaining TAALF common shares and now owns 100%. The transaction was approved by the Ontario Superior Court of Justice on December 21st. TAALF common shares will be de-listed from the Canadian Securities Exchange no later than the close of business on December 23, 2022. As a result, we are terminating research coverage of TAAL Distributed Information Technologies. Effective upon termination of coverage, investors should no longer rely on any of our prior research, financial estimates, or ratings for the Company.
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.
Nuclear Fusion’s Potential to Be a Highly Disruptive Breakthrough with Investment Opportunities
Scientists at the Energy Department’s Lawrence Livermore National Laboratory (LLNL) in California announced the first-ever demonstration of fusion “ignition.” This means that more energy was generated from fusion than was needed to operate the high-powered lasers that triggered the reaction. More than 2 megajoules (MJ) of laser light were directed onto a tiny gold-plated capsule, resulting in the production of a little over 3 MJ of energy, the equivalent of three sticks of dynamite.
This important milestone is the culmination of decades’ worth of research and lots of trial and error, and it makes good on the hope that humanity will one day enjoy 100% clean and plentiful energy.
This article was republished with permission from Frank Talk, a CEO Blog by Frank Holmes of U.S. Global Investors (GROW). Find more of Frank’s articles here – Originally published December 19, 2022.
Unlike conventional nuclear fission, which produces highly radioactive waste and carries the risk of nuclear proliferation, nuclear fusion has no emissions or risk of cataclysmic disaster. That should please activists who support renewable, non-carbon-emitting energy sources such as wind and solar and yet oppose nuclear power.
75th Anniversary of Another Great American Invention, The Transistor
I think it’s only fitting that this breakthrough occurred not just in the U.S., the most innovative country on earth, but also on the 75th anniversary of the invention of the transistor.
Like fusion energy, the transistor’s importance can’t be overstated. Invented in December 1947 in New Jersey’s storied Bell Labs—also the birthplace of the photovoltaic cell, fiber optic cable, communications satellite, UNIX operating system and C programming language—the transistor made the 20th century possible. Everything we use and enjoy today, from our iPhones to our Teslas, wouldn’t exist without the seminal American invention.
In 2021, the electric vehicle maker unveiled its proprietary application-specific integrated circuit (ASIC) for artificial intelligence (AI) training. The ASIC chip, believe it or not, boasts an unbelievable 50 billion transistors.
Private Investment in Fusion Technology Has Been Increasing
Getting your electricity from a commercial fusion reactor is still years if not decades away, but that hasn’t stopped money from flowing into the sector. This year, private investment is estimated to top $1 billion, following the record $2.6 billion that went into fusion research in 2021, according to BloombergNEF.
Private Sector Investment in Nuclear Fusion May Top $1 Billion in 2022
At the moment, there aren’t any publicly traded fusion companies. However, Bloomberg has a Global Nuclear Theme Peers index that tracks listed companies with exposure to the industry, estimated by Bloomberg to one day achieve a jaw-dropping $40 trillion valuation. Some of the more recognizable names include Rolls-Royce, Toshiba, Hitachi and General Electric.
For the five-year period, the index of 64 “nuclear” stocks has advanced approximately 100%, compared to the MSCI World Index, up 38% over the same period.
The number of private firms involved in R&D continues to grow, raising the possibility that some will tap public markets in the coming years.
Among the largest is Commonwealth Fusion Systems, or CFS, which spun out of MIT’s Plasma Science and Fusion Center in 2018. The company raised $1.8 billion in December 2021, on top of the $250 million it had raised previously. Its investors include Bill Gates and Google, along with oil companies, venture capital firms and sovereign wealth funds. CFS claims to have the fastest, lowest cost solution to commercial fusion energy and is in the process of building a prototype that is set to demonstrate net energy gain by 2025.
Another major player is TAE Technologies. Located in California, the company has raised a total of $1.2 billion as of December 2022, from investors such as the late Paul Allen, Goldman Sachs, Google and the family office of Charles Schwab. TAE says it is developing a fusion reactor, scheduled to be unveiled in the early 2030s, that will generate electricity from a proton-boron reaction at an incredible temperature of 1 billion degrees.
Other contenders in the field include Washington State-based Helion Energy, Canada’s General Fusion and the United Kingdom’s Tokamak Energy. In February 2022, Tokamak broke a longstanding record by generating 59 MJ of energy, the highest sustained energy pulse ever.
As an investor, I would keep an eye on this space!
Solar Accounted For 45% Of All New Energy Capacity Growth In The U.S.
In the meantime, energy investors with an eye on the future still have renewable energy stocks to consider.
2022 has been a challenging year for the industry, with much of it facing supply constraints. According to Wood Mackenzie, total new solar installations in the U.S. were 18.6 gigawatts (GW), a 23% decrease from 2021.
Even so, solar accounted for 45% of all new electricity-generation capacity added this year through the end of the third quarter. That’s greater than any other energy source. Wind was in second place, representing a quarter of all new energy power, followed by natural gas at 21% and coal at 10%, its best year since 2013.
WoodMac expresses optimism in the next two years. Solar projects that were delayed this year due to supply issues may finally come online in 2023, and by 2024, the real effects of President Biden’s Inflation Reduction Act (IRA) should be felt. The U.K.-based research firm forecasts 21% average annual growth from 2023 through 2027, so now may be an opportune time to start participating.
One of our favorite plays right now is Canadian Solar, up more than 11% for the year. On Thursday of this week, the Ontario-based company announced that it would begin mass-producing high efficiency solar modules in the first quarter of 2023. Canadian Solar shares were up more than 1% last week, despite experiencing two down days on this week’s news of continued rate hikes into 2023.
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All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.
The BI Global Nuclear Theme Peers is an index not for use as a financial benchmark that tracks 64 companies exposed to nuclear energy research and production. The MSCI World Index is a free-float weighted equity index which includes developed world markets and does not include emerging markets.
Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (09/30/22): Tesla Inc., Canadian Solar Inc.
Cathie Wood isn’t the only one favoring Tesla (TSLA) at recent valuations. Retail accounts have just made it their favorite stock in 2022 as transactions outpace the old favorite, Apple (AAPL). Money from retail trading accounts flowing into the company founded by Elon Musk increased by 424% to $15.41 billion, versus $2.94 billion in 2021. To be fair, the iPhone maker isn’t too far behind, as retail made $15.21 billion in cumulative purchases during the same period.
Vanda is a global independent research company that provides tactical macro and strategic investment analysis to institutional investors. In the firm’s, last research note of 2022, Marco Iachini, senior vice president of research at Vanda, shed some light and data on retail’s current favorite as institutional traders are placing more and more importance on money flows from self-directed investors.
Tesla’s share price has been moving lower in recent weeks as investors and analysts have been critical of the steps the billionaire has taken at his social media company, including the level of focus he has given to his new acquisition. They also show concern of the interrelationship between Musk’s wealth, Twitter’s financial needs, and any tie-in with how Tesla may trade.
Tesla shares are headed for a 60% decline in 2022, which is the worst sell-off since its 2010 public offering. Tesla’s year-to-date loss outpaces the S&P 500’s decline of 18% and the Nasdaq 100’s drop of 31%. The old favorite, Apple stock, has given up 23% during the year.
On a wider scale, investors in Tesla, Apple, and other large-cap tech companies have been slammed this year after two years of above-average returns. Vanda underscored Tesla’s popularity, saying the stock makes up about 11% of the average retail portfolio.
On the Robinhood platform, Tesla is the ninth most popular stock of the year, with Microsoft filling the top position.
Many institutional investors have, over the years, used retail interest as a sign of what to stay away from or even short. “Given its growing importance, we view retail activity around it as a crucial signpost for what may be an eventual full-fledged capitulation in 2023,” said Iachini, who wrote the research note. This flies in the face of institutional chief investment officer and founder of ARK Invest Cathie Wood, who has purchased slightly more than 445,000 shares of the EV manufacturer since October. Over the previous year and a half, Wood has been a net seller of Tesla.
Caroline Ellison Now Enters a New Stage of Her Young Life
Caroline Ellison, the 28-year-old former CEO of Alameda Research, pleaded guilty to seven criminal charges, including wire fraud and conspiracy to commit securities fraud, according to her plea agreement, signed Monday. Caroline, the former chief executive of Alameda Research, a trading firm with close ties to FTX, is said to face up to 115 years in prison. Her admitted role in allowing customer funds to flow through an electronic “backdoor” to be used by Sam Bankman Fried (SBF) of FTX tells us a little bit about her recent past, but who is Ms. Ellison, and how did she get to be CEO of Alameda?
What is Alameda Research?
SBF’s portfolio of crypto companies started with his founding of Alameda research in 2017. Alameda Research was, until very recently, a cryptocurrency trading firm known to specialize in quantitative research and providing liquidity to cryptocurrency and digital assets markets.
Ellison joined the Alameda team as a trader in 2018 and became its co-CEO in 2021.
Bankman-Fried had started Alameda Research as a high-risk, high-reward crypto trading firm using high-risk tactics. He has admitted he included “research” in the name to give it a better vibe. In an NPR podcast in 2017, he was shown to be aggressively taking advantage of the “wild west” crypto playing field. SBF grew his crypto-related business into more complex cryptocurrency trading, accessible to the masses, with his founding of FTX, a crypto exchange, in 2019. He did this by leveraging his image as highly experienced in crypto, which helped him to raise money from firms like BlackRock.
Who Is Caroline Ellison?
In a now-removed YouTube video and podcast, Caroline discussed her background and upbringing in an FTX public relations-type interview dated July 2020.
The 28-year-old Ellison grew up outside of Boston in a town called Newton. Her parents are professors, Glenn Ellison, her father, is a professor of economics at the Massachusetts Institute of Technology (MIT), and Sara Fischer Ellison lectures at the prestigious school.
Ellison said in the podcast that she inherited a natural aptitude for math and entered math competitions at a young age. She further would demonstrate that she was some kind of prodigy by telling people that by age five, she read a Harry Potter book by herself. “I refused to wait for my parents to read it [to me],” she said.
She went on to major in math at Stanford. After applying for trading internships, a field that is very competitive for new graduates, she landed at Jane Street Capital, a well-respected firm on Wall Street. After her internship, she worked there for a year and a half.
Is Caroline Elliman or was Caroline Elliman Sam Bankman Fried’s girlfriend? There are sources that say that Ellison met Bankman-Fried at Jane Street. He worked there from June 2014 to September 2017, according to his LinkedIn, which is still live and has 28,250 followers.
Ellison said she learned about Alameda over coffee with then-CEO Bankman-Fried while visiting the Bay Area and decided “it seemed like too cool of an opportunity to pass up.” She joined the company in 2018.
Bankman-Fried would then resign as CEO of Alameda but retained his role as CEO of FTX. In October 2021, Ellison became co-CEO with Sam Trabucco, a former trader at Susquehanna International Group.
Trabucco resigned in August 2022 to “spend a lot of time traveling,” according to one of his tweets, saying he “bought a boat.”
Was There Romance Between Ellison and SBF?
When a book about this is written, and the movie is out, it will include sex.
There have been rumors of polyamory. This is a relationship behavior that involves connections with more than one person. According to a Coindesk article from November, among the FTX executives, in the Bahamas, “All 10 are, or used to be, paired up in romantic relationships with each other.” There have also been suggestions that FTX employees and Bankman-Fried spent lavishly on the island, from yachts to thousands of dollars a day on catering.
Take Away
Financial fraud comes in many forms. Often it starts out innocently when a bad trade happens, someone tries to cover it up, and the markets don’t cooperate to bail out the bad trade, then more illegal actions are taken to cover that up. There have also been situations where unqualified, not experienced persons are in charge and either unaware of the magnitude of their deceptive actions or are following orders, perhaps just going along because others are doing it too. Then there are those that enjoy the attention they get by being out front and sharing wealth and buying fame. Another more common deceit is someone who is just plain old greedy. All are criminal.
I am not sure what the driver was in the Alameda/FTX, SBF Caroline Ellison (and others) case, but I am sure we will hear much more about this. As we do, remember the importance of trusting those you conduct business with and questioning them anyway.
Voyager Digital Ltd.’s (TSX: VOYG) (OTCQX: VYGVF) (FRA: UCD2) US subsidiary, Voyager Digital, LLC, is a fast-growing cryptocurrency platform in the United States founded in 2018 to bring choice, transparency, and cost-efficiency to the marketplace. Voyager offers a secure way to trade over 100 different crypto assets using its easy-to-use mobile application. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the globe. To learn more about the company, please visit https://www.investvoyager.com.
Joe Gomes, Senior Research Analyst, 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.
Going for Binance. Yesterday, Voyager announced that the Company selected Binance.US as the highest and best bid for the Company’s assets. The decision came after a review of strategic options with the core objective of maximizing value returned to customers and creditors. Previously, the best bid was from FTX US, but due to its current bankruptcy, FTX was not able to proceed with the bid.
Additional Details. The bid from Binance.US was for $1.022 billion comprised of the fair market value of Voyager’s cryptocurrency portfolio at a to-be-determined date in the future, which at current market prices is estimated to be $1.002 billion, plus additional consideration equal to $20 million of incremental value. The previous winning bid, FTX US, was for $1.422 billion. A $10 million good faith deposit will be made by Binance.US and will reimburse Voyager for certain expenses up to $15 million.
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.
TAAL Distributed Information Technologies Inc. delivers value-added blockchain services, providing professional-grade, highly scalable blockchain infrastructure and transactional platforms to support businesses building solutions and applications upon the BitcoinSV platform, and developing, operating, and managing distributed computing systems for enterprise users.
Joe Gomes, Senior Research Analyst, 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.
Shareholder Approval. Yesterday, TAAL Distributed Information Technologies announced that shareholders voted to approve the previously announced plan of arrangement in which Calvin Ayre, owner of 38.5% of the outstanding common, will indirectly acquire all of the remaining shares at a price of C$1.07 per share, effectively taking the Company private.
Overwhelming Approval. The Transaction required approval by: (i) two-thirds of the votes cast by shareholders (the “Special Resolution”); and (ii) a simple majority of the votes cast by minority shareholders, being all shareholders other than Mr. Ayre, whose votes were required to be excluded pursuant to applicable securities laws (the “Minority Vote”). On the Special Resolution, a total of 27,060,141 common shares were voted in favor of the transaction, representing approximately 97.8% of the votes cast on the Special Resolution. On the Minority Vote, a total of 11,416,835 common shares were voted in favor of the transaction, representing approximately 95.0% of the votes cast by minority shareholders.
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.
Digerati Technologies, Inc. (OTCQB: DTGI) is a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the business market. Through its operating subsidiaries, T3 Communications (T3com.com), Nexogy (Nexogy.com), SkyNet Telecom (Skynettelecom.net) and NextLevel Internet (nextlevelinternet.com), the Company is meeting the global needs of small businesses seeking simple, flexible, reliable, and cost effective communication and network solutions including cloud PBX, cloud telephony, cloud WAN, cloud call center, cloud mobile, and the delivery of digital oxygen on its broadband network.
Michael Kupinski, Director of Research, Noble Capital Markets, Inc.
Patrick McCann, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Strong fiscal Q1 results. The company reported revenue of $8.1 million and adj. EBITDA of $795,000 a year-over-year increase of 115% and 161%, respectively. Revenue was in line with our estimate of $8 million while adj. EBITDA exceeded our estimate of $0.47 million by 71%, illustrated in Figure #1 Q1 Variance.
Next Level & SkyNet. Management stated that they have successfully integrated SkyNet and Next level internet and that improved margins are a result of the integration. While we were anticipating improved margins from the SkyNet acquisition, the improvement was ahead of expectations. Gross margins in the latest quarter were 64.9% versus our estimate of 60%.
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.
Owners of electric vehicles (EVs) are accustomed to plugging into charging stations at home and at work and filling up their batteries with electricity from the power grid. But someday soon, when these drivers plug in, their cars will also have the capacity to reverse the flow and send electrons back to the grid. As the number of EVs climbs, the fleet’s batteries could serve as a cost-effective, large-scale energy source, with potentially dramatic impacts on the energy transition, according to a new paper published by an MIT team in the journal Energy Advances.
“At scale, vehicle-to-grid (V2G) can boost renewable energy growth, displacing the need for stationary energy storage and decreasing reliance on firm [always-on] generators, such as natural gas, that are traditionally used to balance wind and solar intermittency,” says Jim Owens, lead author and a doctoral student in the MIT Department of Chemical Engineering. Additional authors include Emre Gençer, a principal research scientist at the MIT Energy Initiative (MITEI), and Ian Miller, a research specialist for MITEI at the time of the study.
The group’s work is the first comprehensive, systems-based analysis of future power systems, drawing on a novel mix of computational models integrating such factors as carbon emission goals, variable renewable energy (VRE) generation, and costs of building energy storage, production, and transmission infrastructure.
“We explored not just how EVs could provide service back to the grid — thinking of these vehicles almost like energy storage on wheels — but also the value of V2G applications to the entire energy system and if EVs could reduce the cost of decarbonizing the power system,” says Gençer. “The results were surprising; I personally didn’t believe we’d have so much potential here.”
Displacing New Infrastructure
As the United States and other nations pursue stringent goals to limit carbon emissions, electrification of transportation has taken off, with the rate of EV adoption rapidly accelerating. (Some projections show EVs supplanting internal combustion vehicles over the next 30 years.) With the rise of emission-free driving, though, there will be increased demand for energy. “The challenge is ensuring both that there’s enough electricity to charge the vehicles and that this electricity is coming from renewable sources,” says Gençer.
But solar and wind energy is intermittent. Without adequate backup for these sources, such as stationary energy storage facilities using lithium-ion batteries, for instance, or large-scale, natural gas- or hydrogen-fueled power plants, achieving clean energy goals will prove elusive. More vexing, costs for building the necessary new energy infrastructure runs to the hundreds of billions.
This is precisely where V2G can play a critical, and welcome, role, the researchers reported. In their case study of a theoretical New England power system meeting strict carbon constraints, for instance, the team found that participation from just 13.9 percent of the region’s 8 million light-duty (passenger) EVs displaced 14.7 gigawatts of stationary energy storage. This added up to $700 million in savings — the anticipated costs of building new storage capacity.
Their paper also described the role EV batteries could play at times of peak demand, such as hot summer days. “V2G technology has the ability to inject electricity back into the system to cover these episodes, so we don’t need to install or invest in additional natural gas turbines,” says Owens. “The way that EVs and V2G can influence the future of our power systems is one of the most exciting and novel aspects of our study.”
Modeling Power
To investigate the impacts of V2G on their hypothetical New England power system, the researchers integrated their EV travel and V2G service models with two of MITEI’s existing modeling tools: the Sustainable Energy System Analysis Modeling Environment (SESAME) to project vehicle fleet and electricity demand growth, and GenX, which models the investment and operation costs of electricity generation, storage, and transmission systems. They incorporated such inputs as different EV participation rates, costs of generation for conventional and renewable power suppliers, charging infrastructure upgrades, travel demand for vehicles, changes in electricity demand, and EV battery costs.
Their analysis found benefits from V2G applications in power systems (in terms of displacing energy storage and firm generation) at all levels of carbon emission restrictions, including one with no emissions caps at all. However, their models suggest that V2G delivers the greatest value to the power system when carbon constraints are most aggressive — at 10 grams of carbon dioxide per kilowatt hour load. Total system savings from V2G ranged from $183 million to $1,326 million, reflecting EV participation rates between 5 percent and 80 percent.
“Our study has begun to uncover the inherent value V2G has for a future power system, demonstrating that there is a lot of money we can save that would otherwise be spent on storage and firm generation,” says Owens.
Harnessing V2G
For scientists seeking ways to decarbonize the economy, the vision of millions of EVs parked in garages or in office spaces and plugged into the grid for 90 percent of their operating lives proves an irresistible provocation. “There is all this storage sitting right there, a huge available capacity that will only grow, and it is wasted unless we take full advantage of it,” says Gençer.
This is not a distant prospect. Startup companies are currently testing software that would allow two-way communication between EVs and grid operators or other entities. With the right algorithms, EVs would charge from and dispatch energy to the grid according to profiles tailored to each car owner’s needs, never depleting the battery and endangering a commute.
“We don’t assume all vehicles will be available to send energy back to the grid at the same time, at 6 p.m. for instance, when most commuters return home in the early evening,” says Gençer. He believes that the vastly varied schedules of EV drivers will make enough battery power available to cover spikes in electricity use over an average 24-hour period. And there are other potential sources of battery power down the road, such as electric school buses that are employed only for short stints during the day and then sit idle.
The MIT team acknowledges the challenges of V2G consumer buy-in. While EV owners relish a clean, green drive, they may not be as enthusiastic handing over access to their car’s battery to a utility or an aggregator working with power system operators. Policies and incentives would help.
“Since you’re providing a service to the grid, much as solar panel users do, you could be paid for your participation, and paid at a premium when electricity prices are very high,” says Gençer.
“People may not be willing to participate ’round the clock, but if we have blackout scenarios like in Texas last year, or hot-day congestion on transmission lines, maybe we can turn on these vehicles for 24 to 48 hours, sending energy back to the system,” adds Owens. “If there’s a power outage and people wave a bunch of money at you, you might be willing to talk.”
“Basically, I think this comes back to all of us being in this together, right?” says Gençer. “As you contribute to society by giving this service to the grid, you will get the full benefit of reducing system costs, and also help to decarbonize the system faster and to a greater extent.”
Actionable Insights
Owens, who is building his dissertation on V2G research, is now investigating the potential impact of heavy-duty electric vehicles in decarbonizing the power system. “The last-mile delivery trucks of companies like Amazon and FedEx are likely to be the earliest adopters of EVs,” Owen says. “They are appealing because they have regularly scheduled routes during the day and go back to the depot at night, which makes them very useful for providing electricity and balancing services in the power system.”
Owens is committed to “providing insights that are actionable by system planners, operators, and to a certain extent, investors,” he says. His work might come into play in determining what kind of charging infrastructure should be built, and where.
“Our analysis is really timely because the EV market has not yet been developed,” says Gençer. “This means we can share our insights with vehicle manufacturers and system operators — potentially influencing them to invest in V2G technologies, avoiding the costs of building utility-scale storage, and enabling the transition to a cleaner future. It’s a huge win, within our grasp.”
The research for this study was funded by MITEI’s Future Energy Systems Center.
NEW YORK, Dec. 19, 2022 /CNW/ — Voyager Digital Ltd. (“Voyager” or the “Company”) (OTC Pink VYGVQ; FRA: UCD2) announced today that its operating company Voyager Digital LLC selected U.S. exchange BAM Trading Services Inc. (doing business as “Binance.US”) as the highest and best bid for its assets after a review of strategic options with the core objective of maximizing the value returned to customers and other creditors on an expedited timeframe.
Binance.US is headquartered in Palo Alto, CA, and is incorporated in Delaware. It is an independent legal entity and has a licensing agreement with Binance.com.
The Binance.US bid, which sets a clear path forward for Voyager customer funds to be unlocked as soon as possible, is valued at approximately $1.022 billion and is comprised of (i) the fair market value of Voyager’s cryptocurrency portfolio at a to-be-determined date in the future, which at current market prices is estimated to be $1.002 billion, plus (ii) additional consideration equal to $20 million of incremental value. The Company’s claims against Three Arrows Capital remain with the bankruptcy estate, and any future recovery on these and other non-released claims will be distributed to the estate’s creditors.
The Binance.US bid aims to return crypto to customers in kind, in accordance with court-approved disbursements and platform capabilities.
Binance.US will make a $10 million good faith deposit and will reimburse Voyager for certain expenses up to a maximum of $15 million. Should the deal not close by April 18, 2023 subject to a one-month extension, the agreement allows Voyager to immediately move to return value to customers.
Voyager Digital LLC will seek Bankruptcy Court approval to enter into the asset purchase agreement between Voyager Digital LLC and Binance.US at a hearing on January 5, 2023. The sale to Binance.US will be consummated pursuant to a Chapter 11 plan, which will be subject to a creditor vote and is subject to other customary closing conditions. Binance.US and the Company will work to close the transaction promptly following approval of the chapter 11 plan by the Bankruptcy Court.
This sale agreement follows Voyager’s July 5, 2022 entrance into a voluntary restructuring process aimed at returning maximum value to customers. Additional information about the timeline and customer access to crypto will be shared as it becomes available. A copy of the asset purchase agreement and other pleadings filed in this case may be obtained free of charge by visiting the Voyager case website https://cases.stretto.com/Voyager.
Voyager was advised by Kirkland & Ellis LLP, Moelis & Company LLC, and Berkeley Research Group. Binance.US was advised by Latham & Watkins LLP.
Forward Looking Statements Certain information in this press release, including, but not limited to, statements regarding the Chapter 11 Plan, the proposed transaction with Binance.US, the timeline for the proposed transaction with Binance.US, the approvals required for the proposed transaction with Binance.US the activities on the Binance.US platform following the closing of the proposed transaction with Binance.US, including the coins that will be supported, the listing review of the VGX token and the future sale of the private keys related to the VGX Token Smart Contracts, may constitute forward looking information (collectively, forward-looking statements), which can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” (or the negatives) or other similar variations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Voyager’s actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. Moreover, the crypto marketplace is a rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on the Chapter 11 process or the proposed transaction or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Forward looking statements are subject to the risks, including those risks contained in the Company’s public filings, including in its Management Discussion and Analysis and its Annual Information Form (AIF). Factors that could cause actual results of the Company and its businesses to differ materially from those described in such forward-looking statements include, but are not limited to, a decline in the digital asset market or general economic conditions; changes in laws or approaches to regulation, an adverse development with respect to an issuer or party to the transaction or failure to obtain a required regulatory approvals. Forward-looking statements, past and present performance and trends are not guarantees of future performance, accordingly, you should not put undue reliance on forward-looking statements, current or past performance, or current or past trends. Information identifying assumptions, risks, and uncertainties relating to the Company are contained in its filings with the Canadian securities regulators available at www.sedar.com. The forward-looking statements in this press release are applicable only as of the date of this release or as of the date specified in the relevant forward-looking statement and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events, except as required by law. The Company assumes no obligation to provide operational updates, except as required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements, unless required by law. Readers are cautioned that past performance is not indicative of future performance and current trends in the business and demand for digital assets may not continue and readers should not put undue reliance on past performance and current trends.
SOURCE Voyager Digital Ltd.
For further information: Contacts: Voyager Digital, Ltd., Voyager Public Relations Team, [email protected]
Nuclear Power Plant Start Will be Delayed as Reliable US Fuel Production Needs to Improve
The energy and fuel shortages stemming from the Russia/Ukraine war extend beyond oil and gas. A sharp impact is also being felt in the nuclear energy world as uranium is less available for new and existing plants. In the US, TerraPower’s natrium reactor completion date is now estimated at least two years beyond the original plan. This is because of problems securing the proper fuel. TerraPower is a start-up co-founded by Bill Gates with support from Warren Buffett to revolutionize nuclear reactor design and methods. The natrium reactor being built as a test of the technology is being built in Kemmerer, Wyoming, which is considered a coal town. The original completion date was 2028.
What is Now Expected
The company expects the natrium demonstration reactor operation to be delayed by at least two years because there will not be sufficient commercial capacity to produce high-assay low-enriched uranium fuel to test come the original 2028 in-service date.
TerraPower’s CEO and President Chris Levesque said Russia’s invasion of Ukraine earlier this year caused “the only commercial source of HALEU fuel” to no longer be a viable part of the supply chain. The company is now working with the US Department of Energy (DOE), Congress, and project stakeholders to explore potential alternative sources. Levesque said, “while we are working now with Congress to urge the inclusion of $2.1 billion to support HALEU in the end-of-year government funding package, it has become clear that domestic and allied HALEU manufacturing options will not reach commercial capacity in time to meet the proposed 2028 in-service date for the Natrium demonstration plant.”
The company has not provided a new schedule but expects to in 2023, when there may be more clarity of what will be available and when. “But given the lack of fuel availability now and that there has been no construction started on new fuel enrichment facilities, TerraPower is anticipating a minimum of a two-year delay to being able to bring the Natrium reactor into operation,” Levesque warned.
About the Plant and its Fuel
Kemmerer in Wyoming was selected in 2021 as the preferred site for the Natrium demonstration project, featuring a 345 MWe sodium-cooled fast reactor with a molten salt-based energy storage system. TerraPower remains fully committed to the project and is “moving full steam ahead” on the construction of the plant, licensing applications and engineering and design work, Levesque added. Work scheduled to begin in Spring 2023 on the large sodium facility will continue as planned, and TerraPower expects “minimal disruption” to the current projected start-of-construction date.
HALEU fuel is enriched to between 5% and 20% uranium-235, and is the fuel type which will fuel most of the next-generation reactor designs. The DOE has projected a national need for more than 40 tonnes of HALEU before the end of the decade to support the current administration’s goal of 100% clean electricity by 2035.
Funding the Construction
Gates helped found TerraPower in 2006 and has been the company’s chairman. TerraPower’s goal is to provide more affordable, secure, and environmentally friendly nuclear energy globally. The plant is expected to cost $4 billion. To date, $1.6 billion has been appropriated by Congress, and private funding of $830 has been raised by TerraPower.
Wyoming US Senator John Barrasso responded to the announcement saying the US ” must reestablish itself as the global leader in nuclear energy. Instead of relying on our adversaries like Russia for uranium, the United States must produce its own supply of advanced nuclear fuel.” He said he has sent a letter to Energy and Natural Resources Chairman Joe Manchin requesting an oversight hearing early next year to ensure that DOE is “working aggressively” to make HALEU available for the USA’s first advanced reactors. He also said he has written to Secretary of Energy Jennifer Granholm today “blasting DOE for not moving fast enough to ensure a domestic supply of HALEU”.
Take Away
The Natrium project by Bill Gate’s company, with support from US tax dollars and Warren Buffett, is being constructed as a test. One thing the test bore out is that securing a reliable fuel supply needs a good deal more work.
Natrium plants are smaller and use current technology. These plants are expected to be built faster and cheaper than a traditional large-scale nuclear power plant. When first announced last year, Gates and Buffett said that once successfully demonstrated, the plant could be quickly expanded or replicated elsewhere.
Why Fusion Ignition is Being Hailed as a Major Breakthrough in Fusion – a Nuclear Physicist Explains
American scientists have announced what they have called a major breakthrough in a long-elusive goal of creating energy from nuclear fusion.
The U.S. Department of Energy said on Dec. 13, 2022, that for the first time – and after several decades of trying – scientists have managed to get more energy out of the process than they had to put in.
But just how significant is the development? And how far off is the long-sought dream of fusion providing abundant, clean energy? Carolyn Kuranz, an associate professor of nuclear engineering at the University of Michigan who has worked at the facility that just broke the fusion record, helps explain this new result.
What Happened in the Fusion Chamber?
Fusion is a nuclear reaction that combines two atoms to create one or more new atoms with slightly less total mass. The difference in mass is released as energy, as described by Einstein’s famous equation, E = mc2 , where energy equals mass times the speed of light squared. Since the speed of light is enormous, converting just a tiny amount of mass into energy – like what happens in fusion – produces a similarly enormous amount of energy.
Fusion is the same process that powers the Sun. NASA/Wikimedia Commons
Researchers at the U.S. Government’s National Ignition Facility in California have demonstrated, for the first time, what is known as “fusion ignition.” Ignition is when a fusion reaction produces more energy than is being put into the reaction from an outside source and becomes self-sustaining.
The technique used at the National Ignition Facility involved shooting 192 lasers at a 0.04 inch (1 mm) pellet of fuel made of deuterium and tritium – two versions of the element hydrogen with extra neutrons – placed in a gold canister. When the lasers hit the canister, they produce X-rays that heat and compress the fuel pellet to about 20 times the density of lead and to more than 5 million degrees Fahrenheit (3 million Celsius) – about 100 times hotter than the surface of the Sun. If you can maintain these conditions for a long enough time, the fuel will fuse and release energy.
The fuel is held in a tiny canister designed to keep the reaction as free from contaminants as possible. U.S. Department of Energy/Lawrence Livermore National Laboratory
The fuel and canister gets vaporized within a few billionths of a second during the experiment. Researchers then hope their equipment survived the heat and accurately measured the energy released by the fusion reaction.
So What Did They Accomplish?
To assess the success of a fusion experiment, physicists look at the ratio between the energy released from the process of fusion and the amount of energy within the lasers. This ratio is called gain.
Anything above a gain of 1 means that the fusion process released more energy than the lasers delivered.
On Dec. 5, 2022, the National Ignition Facility shot a pellet of fuel with 2 million joules of laser energy – about the amount of power it takes to run a hair dryer for 15 minutes – all contained within a few billionths of a second. This triggered a fusion reaction that released 3 million joules. That is a gain of about 1.5, smashing the previous record of a gain of 0.7 achieved by the facility in August 2021.
How Big a Deal is this Result?
Fusion energy has been the “holy grail” of energy production for nearly half a century. While a gain of 1.5 is, I believe, a truly historic scientific breakthrough, there is still a long way to go before fusion is a viable energy source.
While the laser energy of 2 million joules was less than the fusion yield of 3 million joules, it took the facility nearly 300 million joules to produce the lasers used in this experiment. This result has shown that fusion ignition is possible, but it will take a lot of work to improve the efficiency to the point where fusion can provide a net positive energy return when taking into consideration the entire end-to-end system, not just a single interaction between the lasers and the fuel.
Machinery used to create the powerful lasers, like these pre-amplifiers, currently requires a lot more energy than the lasers themselves produce. Lawrence Livermore National Laboratory, CC BY-SA
What Needs to Be Improved?
There are a number of pieces of the fusion puzzle that scientists have been steadily improving for decades to produce this result, and further work can make this process more efficient.
First, lasers were only invented in 1960. When the U.S. government completed construction of the National Ignition Facility in 2009, it was the most powerful laser facility in the world, able to deliver 1 million joules of energy to a target. The 2 million joules it produces today is 50 times more energetic than the next most powerful laser on Earth. More powerful lasers and less energy-intensive ways to produce those powerful lasers could greatly improve the overall efficiency of the system.
Fusion conditions are very challenging to sustain, and any small imperfection in the capsule or fuel can increase the energy requirement and decrease efficiency. Scientists have made a lot of progress to more efficiently transfer energy from the laser to the canister and the X-ray radiation from the canister to the fuel capsule, but currently only about 10% to 30% of the total laser energy is transferred to the canister and to the fuel.
Finally, while one part of the fuel, deuterium, is naturally abundant in sea water, tritium is much rarer. Fusion itself actually produces tritium, so researchers are hoping to develop ways of harvesting this tritium directly. In the meantime, there are other methods available to produce the needed fuel.
These and other scientific, technological and engineering hurdles will need to be overcome before fusion will produce electricity for your home. Work will also need to be done to bring the cost of a fusion power plant well down from the US$3.5 billion of the National Ignition Facility. These steps will require significant investment from both the federal government and private industry.
It’s worth noting that there is a global race around fusion, with many other labs around the world pursuing different techniques. But with the new result from the National Ignition Facility, the world has, for the first time, seen evidence that the dream of fusion is achievable.
This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of, Carolyn Kuranz, Associate Professor of Nuclear Engineering, University of Michigan. Carolyn Kuranz receives funding from the National Nuclear Security Administration and Lawrence Livermore National Laboratory. She serves on a review board for Lawrence Livermore National Laboratory. She is a member of the Fusion Energy Science Advisory Committee.
