Coinbase listing marks latest step in crypto’s march to the mainstream

LONDON (Reuters) – Coinbase Global Inc, the biggest U.S. cryptocurrency exchange, will list on the Nasdaq on Wednesday, marking a milestone in the journey of virtual currencies from niche technology to mainstream asset.

The listing is by far the biggest yet of a cryptocurrency company, with the San Francisco-based firm saying last month that private market transactions had valued the company at around $68 billion this year, versus $5.8 billion in September.

It represents the latest breakthrough for acceptance of cryptocurrencies, an asset class that only a few years ago had been shunned by mainstream finance, according to interviews with investors, analysts and executives.

“The listing is significant in that it marks the growth of the industry and its acceptance into mainstream business,” said William Cong, an associate professor of finance at Cornell University’s SC Johnson College of Business.

Bitcoin, the biggest cryptocurrency, hit a record of over $63,000 on Tuesday. It has more than doubled this year as large investors, banks from Goldman Sachs to Morgan Stanley and household name companies such as Tesla Inc warm to the emerging asset.

Coinbase’s direct listing – which means it has not sold any shares ahead of its market debut – is likely to accelerate that process, those interviewed by Reuters said, by boosting awareness of digital assets among investors.

“This is a very positive thing for bitcoin in itself, as it proves the bridge that has been built from an esoteric, left-of-field arena, full of cowboys, to mainstream finance,” said Charles Hayter of data firm CryptoCompare.

Still, some institutional investors voiced caution over long-term prospects for Coinbase and the crypto sector.

Swiss asset manager Unigestion said it was wary of the hype around cryptocurrencies, and as a result would not be buying Coinbase stock.

“We think there is a lot of frenzy and exuberance in everything that looks like crypto,” said Olivier Marciot, a portfolio manager at Unigestion, which oversees assets worth $22.6 billion.

“Hedge funds and retail will probably be the early birds in these new stocks – probably buying into them pretty heavily – which shouldn’t be a clear indication of how they will be in the longer term.”

BEHOLDEN TO BITCOIN?

Others experts said risks included Coinbase’s exposure to a highly volatile asset that is still subject to patchy regulation.

Founded in 2012, Coinbase boasts 56 million users globally and an estimated $223 billion assets on its platform, accounting for 11.3% crypto asset market share, according to regulatory filings.

The company’s most recent financial results underscore how revenues have surged in lock-step with the rally in bitcoin trading volumes and price.

In the first quarter of the year, as bitcoin more than doubled in price, Coinbase estimated revenue of over $1.8 billion and net income between $730 million to $800 million, versus revenue of $1.3 billion for the entire 2020.

“The correlation to bitcoin will be very high after the stock stabilizes after listing,” said Larry Cermak, director of research at crypto website The Block.

“When price of bitcoin goes down, it’s inevitable that Coinbase’s revenue and inherently price of the stock will decline as well.”

Regulatory risks also loom, others said, as Coinbase increases the number of digital assets users can trade on its platform.

Coinbase last year suspended trading in major digital currency XRP after U.S. regulators charged associated blockchain firm Ripple with an $1.3 billion unregistered securities offering. Ripple has denied the charges.

“Given the expansion of assets covered by Coinbase it’s almost inevitable that other listings will come into question,” said Colin Platt, chief operating officer of crypto platform Unifty.

Coinbase declined to comment.

Reporting by Tom Wilson and Anna Irrera; Editing by Nick Zieminski

SolarWinds dealing with hack fallout cost at least $18 million

WASHINGTON (Reuters) – Texas-based SolarWinds Corp said the sprawling breach stemming from the compromise of its flagship software product has cost the company at least $18 million in the first three months of 2021.

In preliminary results made public on Tuesday, the company said it spent between $18 million and $19 million in the first quarter of 2021 to investigate and remediate what it described as “the Cyber Incident.”

SolarWinds has been working since December to deal with the fallout of a series of intrusions blamed on Russian hackers across the U.S. government and scores of private companies. In many cases, the hackers compromised their targets by piggybacking on a subverted version of SolarWinds Orion, a widely used network management tool.

SolarWinds has hired cybersecurity company CrowdStrike Holdings Inc and professional services firm KPMG to help it investigate the intrusions. The company said its costs were likely to grow.

“We expect to incur significant legal and other professional services expenses associated with the Cyber Incident in future periods,” it said in a note.

Solarwinds shares gained 2.1% in Tuesday trading on the New York Stock Exchange.

Reporting by Raphael Satter; Editing by Dan Grebler

Russian opens case against Yandex over alleged competition law breach

MOSCOW (Reuters) – Russia’s Federal Antimonopoly Service (FAS) on Tuesday said it had initiated proceedings against internet giant Yandex over alleged competition law violations on the company’s search engine.

The state agency told Yandex in February it had created unequal market conditions for general online search services, that it was preferentially promoting its own products and asked it to stop. Yandex asked for extra time to respond to the accusations earlier this month.

The FAS said it would investigate possible anti-competitive practices and assess their consequences, adding that Yandex could be subject to a fine should evidence it was restricting competition be found.

“We do not agree with the accusation of restricting competition and are ready to defend our position,” Yandex said in a statement.

Yandex said it was using the global practice of enriched search results to enhance the user experience.

“Over 30,000 companies already use our enriched search technology for free,” Yandex added.

Reporting by Alexander Marrow; editing by Barbara Lewis

Apple backs wide emissions disclosure rules

(Reuters) -Apple Inc on Tuesday called for the U.S. Securities and Exchange Commission (SEC) to require companies to disclose far-reading emissions information such as how customers use their products, according to a tweet from Apple Vice President Lisa Jackson.

The comments by the iPhone maker mark the most specific prescription to date from a large public company about what disclosures are needed, said Veena Ramani, senior program director for Ceres, a Boston-based climate advocacy group.

The SEC last month said it will seek input on how companies might report on their greenhouse gas emissions and other climate factors.

Investors have poured money into funds that use environmental, social and governance factors to pick stocks, but a lack of common standards has made it hard to compare issuers’ operations.

Jackson, a former U.S. environmental regulator, in her tweet included a statement that Apple “believes that the SEC should issue rules to require that companies disclose third-party-audited emissions information to the public, covering all scopes of emissions, direct and indirect, and the value chain.”

An Apple spokeswoman confirmed the phrasing referred to so-called Scope 3 emissions like those resulting from the use of a company’s products by other parties. While that can be simple for technology or finance companies to provide, calls to publish the data can be controversial for other industries.

In reporting its Scope 3 emissions in January for the first time, oil major ExxonMobil Corp wrote that the data “is less certain and less consistent because it includes the indirect emissions resulting from the consumption and use of a company’s products occurring outside of its control.”

Various other business leaders have previously called for mandatory climate disclosures including Larry Fink, CEO of top investor BlackRock Inc. In February, BlackRock also urged heavy polluters to disclose their Scope 3 emissions to investors, like the Task Force on Climate-Related Financial Disclosures has also recommended.

In addition, Apple was among hundreds of companies that on Tuesday pressured the administration of U.S. President Joe Biden to slash greenhouse gas emissions.

Reporting by Ross Kerber in Boston Additional reporting by Stephen Nellis in San FranciscoEditing by Bill Berkrot and Matthew Lewis

Nornickel to boost nickel production in Finland for EV battery market

MOSCOW (Reuters) – Russian metals producer Nornickel said on Tuesday it will boost output of nickel products at its Harjavalta plant in Finland as it bets on the expanding market for battery materials needed for electric vehicles (EV).

Finland’s state mining investment firm Finnish Minerals Group, German chemicals giant BASF and Finnish utility Fortum are among companies currently forming an EV battery cluster in Finland.

Nornickel, one of the world’s largest producers of nickel, wants to meet rising demand from those companies in coming years, its head of sales, Anton Berlin told reporters.

Its Harjavalta refinery will expand production of nickel sulphate solution, which is used for the manufacture of intermediate products for lithium-ion batteries.

Being close to customers is vital for this product as long-distance transport eats up the bulk of its profitability, Berlin said.

“We are confident that this market will be rising,” Berlin said. Estimates of nickel consumption by the global electric and hybrid vehicles sector vary from 400,000 tonnes to 700,000 tonnes a year by 2025, he added.

Harjavalta currently produces 65,000 tonnes of nickel products a year, of which 10,000 tonnes comes in nickel sulphate solution.

It plans to raise production of nickel products to 75,000 tonnes by 2023 and to more than 100,000 tonnes by 2026, including at least 40,000 tonnes of nickel sulphate solution.

This solution would be enough to produce 1 million of electric vehicles, based on the current nickel per car usage.

Despite its expansion of raw materials production for the EV sector, Nornickel does not plan to move into actual EV battery production as it believes that “is a completely different business” to its own, Berlin added.

The Harjavalta project will cost the company several tens of million dollars, he added.

Reporting by Polina Devitt and Anastasia Lyrchikova; editing by Susan Fenton

Bitcoin hits record high of $62,575

LONDON (Reuters) – Bitcoin hit a record of $62,575 on Tuesday, extending its 2021 rally to new heights.

The world’s biggest cryptocurrency has more than doubled in price this year amid growing mainstream acceptance as an investment and a means of payment, and as investors seek high-yielding assets amid low interest rates.

Major firms including BNY Mellon, Mastercard Inc and Tesla Inc are among those to have embraced or invested in cryptocurrencies.

Reporting by Thyagaraju Adinarayan and Tom Wilson, Editing by Iain Withers

Intel to produce chips for automakers within six to nine months: CEO

(Reuters) – The chief executive of Intel Corp told Reuters on Monday the company is in talks to start producing chips for car makers to alleviate a shortage that has hobbled factories.

Chief Executive Officer Pat Gelsinger said the company is talking to companies that design chips for automakers about manufacturing those chips inside Intel’s factory network, with the goal of producing chips within six to nine months. Gelsinger earlier on Monday met with White House officials to discuss the semiconductor supply chain.

Reporting by Stephen Nellis in San Francisco; Editing by Chris Reese

HSBC bans customers from buying bitcoin-backer MicroStrategy shares

LONDON (Reuters) – HSBC has banned customers of its online share-trading platform from buying or moving into their accounts MicroStrategy Inc stock, a message seen by Reuters showed, calling it a “virtual currency product”.

The bank will not facilitate the buying or exchange of products related to or referencing the performance of virtual currencies, the message to an HSBC InvestDirect client said. Bitcoin is the largest and best-known virtual currency.

MicroStrategy declined to comment. The U.S. business software firm is led by bitcoin proponent Michael Saylor and owns bitcoin worth billions of dollars.

While HSBC will allow the holding, sale and outgoing transfer of MicroStrategy shares, it will forbid new purchases or incoming transfers, said the message dated March 29.

“HSBC has no appetite for direct exposure to virtual currencies and limited appetite to facilitate products or securities that derive their value from VCs (virtual currencies),” HSBC said in a statement.

HSBC InvestDirect is available to customers in countries including Canada and Britain.

The bank said its policy towards cryptocurrencies had been in place since 2018 and is kept under review. It could not immediately say which countries the ban applied to.

The move comes amid a growing embrace of cryptocurrencies by large financial firms, companies and investors seeking yield in a world of ultra-low interest rates.

Goldman Sachs Group Inc said last month it would offer investments in bitcoin and other digital assets to its wealth management clients. Morgan Stanley has also started offering clients investments to the emerging asset class.

MicroStrategy has along with Tesla Inc and payments firm Square Inc become one of several publicly listed U.S. companies to buy large amounts of bitcoin for its treasury.

MicroStrategy said last week it owns around 91,579 bitcoins. Its holdings, worth around $5.5 billion according to a Reuters calculation, are equal to around 80% of its $6.8 billion market capitalisation.

Reporting by Tom Wilson; Editing by David Holmes

Exclusive: GameStop initiates search for new CEO-Sources

(Reuters) – GameStop Corp is looking for a new chief executive to replace George Sherman as it pivots from being a brick-and-mortar video game retailer to an e-commerce firm, three people familiar with the matter said on Monday.

It would be the biggest shakeup at GameStop since Ryan Cohen, the co-founder and former chief executive of online pet food company Chewy Inc, joined its board in January.

GameStop’s board is working with an executive headhunter on the CEO search, the sources said, requesting anonymity because the matter is confidential.

A GameStop spokesman declined to comment.

Reporting by Svea Herbst-Bayliss; Editing by Dan Grebler