—— Titanic Tourist Submarine Missing; Bitcoin Hits Six-Week High; CVC Weighs Sale of Logistics Firm Stake; UK House Prices Post First Gain Since July; FTX Bankruptcy Costs Hit $200M; Private Company Numbers Surpass IPOs; FTC Sues Amazon
1. Titanic Tourist Submarine Missing
On Sunday, a Titanic wreck sightseeing submersible carrying five passengers went missing. The sub lost contact with its support ship less than two hours after departure, prompting the ship to alert the US Coast Guard.
A massive search operation is underway, but the sub’s oxygen supply is estimated to last less than three days.
The operator, OceanGate, designed the Titan sub to carry one pilot and four passengers.
OceanGate charges $250,000 per ticket for the Titanic sightseeing expedition, which lasts over a week, with each dive taking six to eight hours roundtrip.
The US Coast Guard estimates that the submarine’s oxygen supply may be depleted by Thursday morning, making time a critical factor.
______
2. Bitcoin Hits Six-Week High
Today, Bitcoin, the world’s largest cryptocurrency, rose as much as 3% to $28,720, its highest level since May, and has rebounded 74% year-to-date.
Investor confidence has been buoyed by the launch of EDX Markets, a crypto exchange backed by Fidelity, Citadel, and Charles Schwab. BlackRock and WisdomTree have also filed applications to launch Bitcoin ETFs in the US.
Hayden Hughes, co-founder of social trading platform Alpha Impact, stated that the latest Bitcoin rally is driven by the growing participation of major institutional investors.
After breaking a six-week high, Bitcoin is now moving toward the $32,000 mark.
______
3. CVC Weighs Sale of Logistics Firm Stake
Sources revealed that CVC Capital Partners is considering selling a minority stake in Philippine logistics company Fast Group, which could value the company at over $1 billion.
Fast Group has rapidly expanded its logistics operations beyond the Philippines in recent years. CVC first invested in 2020, though financial details were not disclosed.
CVC primarily invests in private equity, secondary markets, and credit, managing $153 billion in assets as of March 31, with over 23 years of activity in Asia.
CVC has received strong unsolicited interest in Fast Group without actively seeking buyers.
______
4. UK House Prices Post First Gain Since July
According to data released by the UK Office for National Statistics on Wednesday, average house prices rose 0.5% month-on-month in April to £286,000, marking the first increase in seven months.
Despite similarities to the US housing market, surging interest rates are expected to pressure housing demand and prices further, with the Bank of England possibly raising rates to 6%.
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, cautioned that April’s uptick may be a blip, and that home prices could still fall around 8% from their peak.
Higher mortgage rates are likely to offset falling energy prices and real income growth.
______
5. FTX Bankruptcy Costs Hit $200M
An independent auditor estimated that since crypto exchange FTX collapsed last November, lawyers, consultants, and other professionals involved have accumulated around $200 million in fees.
A 47-page court filing on Tuesday revealed that law firms like Sullivan & Cromwell deployed hundreds of attorneys and financial experts, with the total costs considered reasonable given the case complexity.
Katherine Stadler, the court-appointed fee examiner, noted that while large bankruptcy cases are not new, FTX’s situation was particularly chaotic, with little internal corporate governance.
The court auditor confirmed that cleaning up FTX’s bankruptcy mess has cost around $200 million in legal and consulting fees.
______
6. Private Company Numbers Surpass IPOs
Bloomberg’s latest analysis found that over the past 18 months, 48 companies either went private or planned to, totaling $113 billion in market value. Meanwhile, only 39 US companies completed traditional IPOs, raising just $9.3 billion.
Since early 2022, rising Fed rates have crushed the IPO market.
Major privatization deals this year include Silver Lake’s $10 billion acquisition of Qualtrics International and a consortium led by Elliott Investment’s $4.4 billion buyout of Syneos Health.
Bloomberg analyst Andrew Silverman noted that going private allows companies to focus on long-term growth without worrying about public shareholders.
Private companies can better prioritize long-term strategy without focusing solely on short-term returns.
______
7. FTC Sues Amazon
The US Federal Trade Commission (FTC) filed a lawsuit against Amazon on Wednesday, alleging that the company tricked users into signing up for Prime memberships and deliberately made cancellation difficult.
Amazon charges $139 annually for Prime, which includes free shipping, video streaming, and access to over 100 million songs.
The FTC claimed Amazon intentionally obscured the cancellation process, requiring users to click through more than five pages to unsubscribe.
The agency asserts that Amazon violated the 2010 Restore Online Shoppers’ Confidence Act. As of March, Amazon had 167 million Prime members, about the same as a year earlier.
The FTC argues that Amazon made it excessively difficult for users to cancel Prime memberships.
______
This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.