Finance

On June 7th each share in Nvidia will become many. In one sense such stock splits ought not to matter much: they merely lower the share price, usually returning it to somewhere near $100, in order to make small trades easier. Yet for the company and its long-time backers this administrative exercise is cause to pop the champagne. For a split to be necessary in the first place, the share price must have multiplied, commonly by two or three, prompting each share to be divided by the same factor. Each Nvidia share, however, will become ten. Two years ago both Alphabet and Amazon split each of their shares into 20. Investors in big tech have had plenty of opportunities to let the corks fly.All three firms have made traditional valuation measures look hopelessly outdated. Dividend yields, for instance, were once a popular tool for assessing prospective returns. But Amazon has never made such a payout and Alphabet will make its first ever on June 17th (of 20 cents per $175 share). Nvidia’s quarterly dividend after the split will be just one cent per share, each priced at around $116. Plainly, there is no stretch of the imagination by which these payouts explain the stocks’ spectacular returns. More

Starwood Capital Group CEO Barry Sternlicht defended his decision to cap how much money investors could pull from his real estate fund.
Starwood introduced new restrictions that cap monthly withdrawals at 0.33% of net asset value.
Sternlicht said he decided to implement the cap to protect loyal clients who never redeemed.

Barry Sternlicht, chairman and CEO of Starwood Capital Group, speaks at the Milken Conference 2024 Global Conference Sessions at The Beverly Hilton in Beverly Hills, California, on May 7, 2024.
David Swanson | Reuters

Barry Sternlicht, Starwood Capital Group chairman and CEO, defended his decision to cap how much money investors could pull from his real estate fund amid mounting losses and redemption requests.
“With all the hysteria in the media, people are saying, ‘I want to get out now and I’ll come back in later when the coast is clear.’ So we took a very tough decision,” Sternlicht said on CNBC’s “Squawk Box” Wednesday. “I decided that for the benefit of the 80% of people who’ve never redeemed we would slow down redemptions. … We hope this is going to be a six-month thing.”

The investor’s $10 billion Starwood Real Estate Income Trust, which invests in multifamily, industrial and office properties, has suffered from steep declines as it became difficult to refinance loans in light of the Federal Reserve’s aggressive rate hikes.
In a letter to shareholders on May 23, Starwood introduced new restrictions that cap monthly withdrawals at 0.33% of net asset value, compared with the previous 2% limit. Meanwhile, the firm also decided to waive 20% of its management fee.
Sternlicht said he decided to implement the cap to protect loyal clients who never redeemed, which represents 80% of his investors.
The firm said the real estate trust, one of the largest in the world, maintained $752 million of immediate liquidity as of the end of April.
Sternlicht called the Fed’s monetary policy “unbelievably ineffective,” but he believes interest rates will come down soon.

“The real estate asset class is probably the biggest victim of the unintended consequence of his actions,” he said. “The spreads are coming in, which means the markets are healing, the future’s getting clearer.”

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Hanesbrands said Wednesday that it signed a deal to sell its Champion brand to Authentic Brands Group.
The deal could reach up to $1.5 billion through an additional cash contingent consideration of up to $300 million if performance thresholds are met.
This comes after Hanesbrands announced it was considering selling the business in late September.

A shopper walks past the American sportswear fashion brand Champion store in Hong Kong.
Budrul Chukrut | Getty Images

Hanesbrands agreed to sell its global Champion business to Authentic Brands Group in a transaction valued at $1.2 billion, including a contingent cash consideration, the company announced on Wednesday.
The deal has the potential to reach $1.5 billion through an additional cash contingent consideration of up to $300 million if performance thresholds are met, according to a press release from Hanesbrands.

The company expects to receive net proceeds of $900 million from the deal, the release says. Hanesbrands said the company plans to use the net proceeds to accelerate debt reduction.
Hanesbrands shares popped more than 5% during Wednesday’s trading session.
As of the end of the first quarter of 2024, Champion generated around $75 million of adjusted EBITDA over the past 12 months.
“We believe this transaction will enable the company to accelerate its debt reduction while positioning Hanesbrands to deliver consistent growth and cash flow generation through a focused strategy on advancing its leading innerwear brands and optimizing its world-class supply chain,” said board chairman Bill Simon.
The agreement, which the Hanesbrands’ board of directors approved unanimously, comes months after the company said it was considering a sale of Champion.

CNBC reported in November 2023 that Authentic Brands Group and fellow brand management firm WHP Global were both interested in buying Champion.
Hanesbrands first announced it was considering offloading Champion in late September, which was just over one month after activist firm Barington Capital Group began pressuring Hanesbrands to cut costs and generate cash amid declining sales.

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Alphabet’s new chief financial officer is Anat Ashkenazi, who will join the company after more than two decades at pharmaceutical giant Eli Lilly.
Ashkenazi will replace current CFO Ruth Porat, effective July, as the latter shifts to a new role as president and chief investment officer of Google.
Google’s finance unit has undergone restructuring as the company devotes more resources to the AI race.

A view of Google Headquarters in Mountain View, California, United States on April 16, 2024. 
Tayfun Coskun | Anadolu | Getty Images

Eli Lilly Chief Financial Officer Anat Ashkenazi will become Alphabet’s new CFO effective July 31, Google’s parent company announced Tuesday, almost a year after Alphabet first announced that current CFO Ruth Porat would move into a new role as president and chief investment officer.
Ashkenazi had a 23-year career at Eli Lilly, which in a separate release confirmed her departure.

“We’re very pleased to have found such a strong CFO, with a track record of strategic focus on long-term investment to fuel innovation and growth,” Alphabet CEO Sundar Pichai said in a release.
Ashkenazi joined Eli Lilly in 2001 and has been CFO since 2021. She will continue to serve on the pharmaceutical company’s executive committee until her departure. She previously served as CFO for several of the company’s global business areas, helping manage the revenue windfall from Eli Lilly’s weight loss and diabetes drugs.
Porat had a nearly three-decade career as an investment banker at Morgan Stanley, culminating as its CFO, before joining Google in 2015. She helped Google grow into one of the most valuable companies in the world, including while the company has recently contended with threats ranging from the artificial intelligence race to antitrust investigations.
The leadership shuffle has long been in the works. Google first announced in 2023 that Porat would step down and has since been mounting a search process.
Google’s finance unit has been grappling with other changes in recent months as well. Porat announced earlier this year that Google was restructuring its finance unit as the company pushed to favor investments in AI, CNBC previously reported, with layoffs and relocations that would impact teams worldwide.

Other top executives at the firm include Chief Business Officer Philipp Schindler, Head of Google Search Prabhakar Raghavan and Google Cloud CEO Thomas Kurian.
Google’s “old guard” has experienced shifts beyond just Porat, CNBC has previously detailed. YouTube CEO Susan Wojcicki, former Chief Business Officer Robert Kyncl and widely respected AI authority Geoffrey Hinton are among those who have departed or announced their departure since 2023.
Google shares were slightly up in premarket trading Tuesday.
— CNBC’s Jenn Elias and Annika Kim Constantino contributed to this report. More

Billionaire investor Ron Baron, longtime Tesla bull and shareholder, wrote an open letter in support of CEO Elon Musk’s controversial $56 billion pay package.
The Baron Capital chairman and CEO said Musk’s compensation contract in 2018 included “aggressive” performance metrics that few believed could be achieved. Musk would have earned nothing if these ambitious goals had not been met, he said.

“Elon is the ultimate ‘key man’ of key man risk,” Baron said in the letter. “Without his relentless drive and uncompromising standards, there would be no Tesla. Especially considering how he slept on the floor of Tesla’s Fremont factory when the company was going through what he called ‘production hell!'”

Ron Baron, founder of Baron Capital
Anjali Sundaram | CNBC

The pay package, proposed by Tesla’s board of directors, has repeatedly come under fire for its close ties with Musk. The package has no salary or cash bonus and sets rewards based on Tesla’s market value rising to as much as $650 billion over the 10 years from 2018.
If passed, it would be the largest pay package for a CEO in corporate America. Tesla’s shareholder meeting is scheduled for June 13.
“I’m voting for the pay package,” Baron said on CNBC’s “Squawk Box” Wednesday.
In January, Judge Kathaleen McCormick of Delaware’s Court of Chancery voided the original pay package. Musk then sought to move Tesla’s state of incorporation to Texas from Delaware.

Baron previously revealed that his firm has made about 20 times its investment in Tesla since he first bought the stock in 2014. Tesla is the biggest holding in Baron’s oldest and biggest fund, Baron Partners Fund (BPTIX), accounting for nearly 30% of the portfolio.
“At Baron Capital, our answer is clear, loud, and unequivocal: Tesla is better with Elon. Tesla is Elon,” he said. More

Digital bank Starling will not re-apply for a European Union banking license and will instead pursue international expansion through its software business Engine, incoming CEO said.
Engine is a software platform that Starling sells to other companies, so that they can set up their own digital banks.
Raman Bhatia outlined the company’s international expansion plans, in his first public remarks since his March appointment as Starling CEO in March.

Raman Bhatia, incoming chief executive officer of Starling. Bhatia moved over from OVO Energy Ltd., where he was CEO. 
Zed Jameson | Bloomberg | Getty Images

AMSTERDAM — Digital bank Starling will not re-apply for a European Union banking license and instead pursue international expansion through its software business, the incoming CEO said, in a diverging approach to overseas growth from some of its rivals.
Starling is among the U.K.’s breed of so-called “neobanks” — digital-only banks that usually have no branches. It started life in 2014, has racked up 4 million customers and was last officially valued at £2.5 billion ($3.2 billion).

The digital bank, which is backed by Goldman Sachs, has traditional offered banking services, like current accounts and more recently lending. Starling’s customers are mainly in the U.K. The company sought to expand abroad by applying for an Irish banking license, which would have given the bank access to the European Union market. Starling withdrew that application in 2022.

Raman Bhatia outlined the company’s international expansion plans on Wednesday, in his first public remarks since his appointment as CEO in March, taking over from founder Anne Boden.
Bhatia said that the company has no plans to re-apply for the EU banking license to push into new countries. Instead, international expansion will be driven by Engine, a software platform that Starling sells to other companies, so they can set up their own digital banks.
“I am very bullish about this approach around internationalization of what is the best of Starling, the proprietary tech versus market by market, idiosyncratic regulatory regime, capital requirements, and building trust and brand extension, which is unproven for any plan,” Bhatia said during a fireside chat at the Money 2020 conference moderated by CNBC.
He described opportunities in places like Thailand and the Middle East as “immense.”

Engine is a unique model amongst neobanks, which have tended to pore over consumer-focused apps and services. Starling is betting it can sell the technology to other banks.
Salt Bank in Romania and AMP in Australia are Starling’s first Engine customers.
Bhatia said he’d like the “double down” on the Engine strategy and capture market share in the enterprise software space. More

TXSE Chairman and CEO James Lee said the Dallas-headquartered group has raised $120 million with the support of more than two dozen investors.
The Wall Street Journal reported on the endeavor earlier, saying the exchange is billing itself as a “more-CEO friendly” alternative to the New York Stock Exchange and Nasdaq in the face of rising regulation.
TXSE’s website said it will be a “fully electronic, national securities exchange that will seek registration with the U.S. Securities and Exchange Commission.”

The Texas flag is seen before the game between the Houston Cougars and the Texas Longhorns at TDECU Stadium on Oct. 21, 2023 in Houston.
Tim Warner | Getty Images Sport | Getty Images

BlackRock and Citadel Securities are among investors backing a group seeking to start a new national stock exchange in Texas.
TXSE Chairman and CEO James Lee said the Dallas-headquartered group has raised $120 million with the support of more than two dozen investors.

“Texas’s booming economy and the strong economic and population growth among states in the southeast quadrant of the U.S. present incredible opportunities for businesses — and ultimately the Texas Stock Exchange,” TXSE CEO James Lee said on LinkedIn.
The Wall Street Journal reported on the endeavor earlier, saying the exchange is billing itself as a “more-CEO friendly” alternative to the New York Stock Exchange and Nasdaq in the face of rising regulation and a “disaffection with increasing compliance costs.”
A contested Nasdaq rule requires listed companies to disclose diversity information on their board of directors. The SEC approved the plan in 2021, but it now faces a new challenge in a federal appeals court.
TXSE’s website said it will be a “fully electronic, national securities exchange that will seek registration with the U.S. Securities and Exchange Commission.” The TXSE is aiming to start trading in 2025 and host listings in 2026, according to the Journal’s report.
The Dallas Morning News reported TXSE will target companies in the “southeastern quadrant of the U.S.” In an interview with the newspaper, Lee thanked Texas Gov. Greg Abbott for his support and leadership. More

Financial technology startup Nium told CNBC Wednesday it raised $50 million in a fundraising round was led by an undisclosed Southeast Asian sovereign wealth fund.
The round, backed by venture capital firms BOND, NewView Capital, and Tribe Capital, values the company at $1.4 billion — a 30% discount to its previous valuation.
Despite the lower valuation, Nium is confident it can go public in the next 18 months and is eyeing the third or fourth quarter of 2025 for its stock market debut.

Westend61 | Westend61 | Getty Images

AMSTERDAM, Netherlands — Financial technology startup Nium told CNBC Wednesday it raised $50 million in new funds from investors, and is targeting an initial public offering in the next 18 months.
The fundraising round was led by an undisclosed Southeast Asian sovereign wealth fund and backed by venture capital firms BOND, NewView Capital, and Tribe Capital.

It places Nium’s valuation at $1.4 billion. That marks a 30% discount to its previous valuation of $2 billion, which the firm notched in 2022 when it last raised external venture capital.
Prajit Nanu, Nium’s CEO and founder, said the firm would use the fresh capital to double down on mergers and acquisitions, targeting other growth-stage payment firms.
Nanu said his company’s down round was the result of a broader depression in public market valuations of fintech companies.

Fintechs have seen their stock prices slashed in recent years as a result of macroeconomic pressures, including high inflation and rising interest rates.
“Being realistic, when we raised in early 2022, public markets were killing it,” Nanu said. “The public markets have not been kind to fintech.”

IPO in 18 months

Nanu said that, despite the lower valuation, he is still bullish on the growth story for Nium and is confident the company will go public in the next 18 months, targeting a flotation in the third or fourth quarter of 2025.
He added that valuation isn’t a concern for him and that it won’t matter what value the company prices its shares as markets are volatile by nature.
“Whether you go public at $1 billion, $5 billion, it doesn’t matter. Because the valuation is only when you get bought, or when you go through an IPO,” he said.
He noted the example of Stripe, which raised a $95 billion valuation in the heady days of 2021 before slashing its value to $50 billion and then boosting its valuation to $65 billion in secondary share transactions.

Not interested in crypto

Nanu said he’s not interested in acquiring companies in the cryptocurrency space as he doesn’t yet see merchant demand for crypto as a payment method.
“It’s on the very early side of infrastructure,” Nanu said. “Nium in the end is a layer on top of a lot of banks in the world.”
“Banks have gone from, crypto is hot, to not crypto, to crypto,” he added. “It’s not one shoe fits all.”
That’s despite a huge rise in prices of cryptocurrencies like bitcoin, which have rallied off the back of renewed investor interest following the approval of spot bitcoin exchange-traded funds in the U.S.
Bitcoin has seen its price climb roughly 150% in the last 12 months. More