Some markets have seen a big bump in newly built homes, which is affecting supply-and-demand dynamics.
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Temenos shares continued to crash on Friday, despite the Swiss technology firm’s attempt to hit back at allegations made by short seller Hindenburg Research that have knocked more than $2 billion off its market capitalization.
Hindenburg’s report, which was published on Thursday, accused Temenos of using “aggressive accounting tactics” to boost the share price and gloss over deeper problems inside the company which were driving away its customers.
In a post on its website, Temenos said Hindenburg’s report contains “factual inaccuracies” and “false and misleading allegations,” as the Swiss banking technology company said it “fundamentally refutes” the short seller’s claims.
Temenos
TEMN,
shares fell 8% on Friday, following a 24.9% drop on Thursday. Shares in the Switzerland listed company surged 54% in 2023.
The New York investment fund alleges Temenos CEO Andreas Andreades encouraged the use of manipulative accounting methods inside the company, while failing to recognize deficiencies in its products that had led to widespread dissatisfaction among customers.
The short sellers report notes that Temenos’ executives have sold $1.1 billion worth of stock in the company over the previous 10 years, while purchasing just $26 million worth of shares in the Swiss technology company over the same period of time.
In a post on its website, Temenos said it plans to publish audited results for the full-year 2023 on Feb. 19, and that it is “confident in the strength of its business, financial performance and cash position.” Some are hoping for more comment from the company’s Capital Markets Day planned for Feb. 20.
Temenos did not offer any specific information on which allegations it refutes, and said it was not contacted by Hindenburg prior to the publication of its report.
However, in its report, Hindenburg said Temenos told the short seller it would “fully investigate” and claimed to have taken “every step to be as open and forthcoming as possible with data.”
Temenos was approached by MarketWatch for further comment.
A team of analysts at Jefferies, led by Charles Brennan, raised questions about one of Hindenburg’s points surrounding Temenos’ investments in research and development (R&D).
Hindenburg’s report claimed Temenos listed client specific implementation costs as investments in R&D, leading to the company having a 62% higher R&D capitalization rate than its peers. The short seller said this practice led to a 29.5% artificial boost to 2022 pre-tax profits.
Jeffries analysts, however, said that while Temenos has previously capitalized more of its costs than peers, this practice was debated openly by investors and led to the company enjoying only an incremental benefit between 2018 and 2020. The analysts said Temenos’ “current level of net capitalization appears in line with peers.”
Hindenburg Research derives its name from the 1937 Hindenburg Disaster, which it describes as “the epitome of a totally man-made, totally avoidable disaster.”
The short-seller says it uses “hard-to-find information from atypical sources” to shed light on “man made disasters floating around in the market.”
Hindenburg’s four month long investigation into Temenos was based on sources including interviews with the Swiss firm’s customers and former company executives.
The New York fund, which was founded by Nathan Anderson in 2017, attracted significant attention in 2020 after publishing a report that raised allegations of fraud inside electric vehicle maker Nikola Corporation
NKLA,
that saw shares in the company drop 40%.
Hindenburg Research was approached by MarketWatch for comment.
Arm Holdings PLC’s stock easily had its best day on record Thursday, and its 48% daily surge scorched short sellers in the process.
Shorts racked up $445 million in paper losses as Arm’s stock
ARM,
exploded higher in the wake of earnings, according to S3 Partners. The action highlighted how shorting semiconductor stocks “has not been a profitable trade” this year, S3’s Ihor Dusaniwsky said in a report.
Those who’ve made bearish bets against the sector are down more than $7 billion in mark-to-market losses so far this year, he noted, and about a fifth of those losses came Thursday alone.
See also: Arm’s stock explodes 50% higher as company proves itself an early AI winner
While a sizable chunk of Thursday’s paper losses in the chip sector related to Arm, daily paper losses for those short Broadcom Inc.
AVGO,
Taiwan Semiconductor Manufacturing Co. Ltd.
TSM,
and Monolithic Power Systems Inc.
MPWR,
were each in excess of $100 million, according to S3.
Dusaniwsky flagged that Arm short interest is $957 million, with about 12.4 million shares shorted and those representing roughly 1.22% of the float. Arm ranked 14th by short interest within the semiconductor sector.
“We should expect a reversal of the short-selling trend we have seen in ARM in 2024 as short sellers get squeezed out of their positions,” said Dusaniwsky, the managing director of predictive analytics at S3. “Short covering during today’s rally should continue for the next few days as short sellers look for a slight rebound to the upside to recoup some of their mark-to-market losses as they trim exposure.”
Arm, a chip designer, stunned investors late Wednesday with better-than-expected results that highlighted momentum for the company’s new architecture as well as traction related to the artificial-intelligence frenzy.
Don’t miss: Cloudflare’s stock catapults higher as earnings beat captures ‘robust momentum’
“The rise/adoption of accelerated compute/AI workloads in the data center, edge and endpoints is driving the requirement for significantly more compute capability and power efficiency per device and motivating ARM’s customer to adopt their highest-performance compute” intellectual property, JPMorgan’s Harlan Sur wrote in a note to clients.
After more than a year of deteriorated affordability that’s priced out so many would-be buyers, their luck could be reversing as more and more cracks are visibly forming within the housing market. Mortgage rates have dropped from just above 8% to 7.41%, the share of sellers dropping prices is at a record high, and there’s an “unseasonal uptick in the total number of homes for sale, which is at its highest level since the start of the year,” according to a report from Redfin. Mortgage rate purchase applications, which have been on a steady decline, are even up 3% week-over-week on the news.
What’s behind the cracks? For one, nearly 7% of home sellers dropped their asking price in the four weeks ending Nov. 5, which is the highest share on record (tied with the four weeks ending Oct. 29), according to Redfin. In an average month, 3.6% of homes lower their prices.
Sky-high prices and what seems to be higher-for-longer mortgage rates are to blame. Home prices rose substantially during the pandemic-fueled housing boom, and the average 30-year fixed rate has more than doubled, making it increasingly difficult for the average person to buy a home. Sellers are taking notice as buyers pull back, and are lowering their asking price in response.
But there are other factors at play. Last week, the Federal Reserve decided against another interest rate hike after aggressively raising rates in an attempt to lower inflation. That’s partly helped bring mortgage rates down from their more than two-decade high of 8%.
“Though rates are more than double pandemic-era levels and some homebuyers are still priced out of the market, rates going from 8% to 7.4% shaves a few hundred dollars off a monthly mortgage payment in many areas,” Dana Anderson, Redfin’s data journalist, wrote in the report published Thursday.
That slight relief is coupled with the share of new listings rising. Inventory overall is still low, and that’s not likely to change substantially in the near future given that many sellers have locked-in historically low mortgage rates they don’t want to lose. But there has been an “unseasonal uptick” in the total number of homes for sale, which is now at its highest level since the start of the year, according to Redfin’s report. New listings rose 1.5% from a year ago during the four weeks ending Nov. 5, just the second increase since July of last year.
Potential buyers might not want to celebrate just yet. It’s unclear if these areas of relief for buyers will continue into next year, as markets tend to soften in the fall and winter as demand cools and competition lessens.
Higher mortgage rates mean more all-cash buyers
And what little relief the average buyer may start to see could be usurped by wealthier buyers. With mortgage rates still above 7%—after hitting 8% for a short period— just over a third of homebuyers are paying all cash to avoid costly interest payments as of September. That’s up from 29.5% a year ago and the highest share in nearly a decade, according to a separate Redfin report by Anderson published Wednesday.
Those who can “afford to pay cash are more apt to buy homes in such an expensive housing market, when the income necessary to buy a home is higher than ever before, and elevated mortgage rates make buying a home in cash and avoiding interest altogether more attractive,” Anderson wrote.
To wit: overall home sales are down 23% year-over-year in the metros included in Redfin’s analysis, versus an 11% decline for all-cash sales during the same time period. First-time buyers and other average Americans are more likely to be on the losing end of that equation.
“Affluent Americans are the only ones who can avoid the sting of high mortgage rates; plus, they’re spending less on housing and keeping more money in the bank because they’re avoiding interest payments,” Sheharyar Bokhari, Redfin’s senior economist, said in the report. “Meanwhile, those who are sidelined by high prices and rates not only can’t afford a home now, but they’re not building wealth through homeownership for the future.”
The last time all-cash purchases were this common was back in 2014, according to Redfin, when affluent buyers and corporate investors were leading the housing market recovery from the subprime mortgage crisis. Would-be first-time homebuyers, on the other hand, were still suffering from the effects of the Great Recession.
This story was originally featured on Fortune.com
GoPlausible, a team of developers building tools for people to create and use Algorand, has launched AlgorandExplorer. This explorer fuses the capabilities of ChatGPT to ease interaction with the public, proof-of-stake blockchain. Algorand is a smart contract platform similar to Ethereum, allowing users to deploy decentralized applications (dapps).
In a Medium post on October 10, the team said the plugin aims to solve challenges facing Algorand indexers and eventually simplify exploring the smart contract platform. Ordinarily, users rely on indexers through which users can search and query the blockchain. This is because indexers have to create a searchable database holding all data, such as transactions, blocks, and more.
Besides offering an interface for users to explore Algorand, the AlgorandExplorer supports “semantic conversational searches, enriching data with logs and related transactions,” allowing on-chain searches to “reason with data” more effectively. The explorer will integrate a language translation tool, meaning users from across the globe can explore Algorand using their native language.
Still, the AlgorandExplorer is under development. Eventually, in the coming version, the GoPlausible plans to include more enhancements, including Algorand Request for Comments (ARCs) and technical documentation.
Algorand is far from the only platform investing in AI; a few months ago, Solana announced their integration of a ChatGPT plugin focused on non-fungible tokens (NFTs). The plugin, the foundation said, facilitates the buying and listing of NFTs. At the same time, it can interpret data and find the floor price of NFT collections listed on the blockchain. The floor price is the lowest price an NFT in a given collection can be sold.
The ALGO Sell-Off Continues: Will Prices Sink To New Lows?
While the move by the Algorand Foundation could see more users explore and analyze transactions on the smart contract platform, there has been no significant impact on prices. The ALGO sell-off was made worse by allegations made by the United States Securities and Exchange Commission (SEC) in June that ALGO and other coins, including Axie Infinity (AXS) and Cardano (ADA), are unregistered securities.
Presently, ALGO remains under pressure, consolidating within a tight range defined by the sell-off recorded in August. Based on that formation, the coin is technically bearish and trending within the bear bar of August 17, a bearish engulfing bar that had high trading volume.
Thus far, looking at trackers, the coin is down by over 70% in the past year of trading. From the daily chart, ALGO is also edging lower, wiping gains posted in the first week of October.
Technically, ALGO is edging closer to all-time lows registered in August, a net negative. The primary supports remain at $0.08. If broken in Q4 2023, the odds of ALGO sinking even lower, completely reversing gains of 2021, will be on the table.
Feature image from Canva, chart from TradingView
Shopping online has just gotten safer.
The INFORM Consumers Act, which went into effect Tuesday, aims to limit the sales of stolen and counterfeit products on e-commerce platforms.
The measure, which requires e-commerce sites to verify and disclose information about their high-volume third-party sellers, was passed into law following a lobbying campaign to address counterfeit products after being left out of the bipartisan Chips and Science Act last year.
All online marketplaces, including eBay, Etsy, Poshmark and Amazon’s third-party sales platform, will now be required to collect information from high-volume sellers, defined as those selling 200 items or more totaling at least $5,000 over the previous 12 months. These third-party sellers must submit information such as a government-issued ID, a bank-account number, a working email address and phone number, and a taxpayer identification number.
Customers will also be able to find the verified contact information for bigger third-party sellers — those with sales of over $20,000 a year — and to get in touch with them outside of the e-commerce platform. In the past, consumers often had to engage within the platform operator in order to communicate with a seller.
Those bigger sellers will also have their full names and physical addresses listed on their product pages in addition to their contact information, according to the Federal Trade Commission’s business guide.
“This is a game changer,” said Teresa Murray, director of the consumer watchdog office at U.S. PIRG, a nonprofit that lobbies on behalf of the public interest. “For bad guys, stealing items has generally been the difficult part. Selling things online once you’ve stolen them is easy. We hope that with the INFORM Act, it’s not nearly as easy in the future.”
“‘The only people opposing this may be thieves.’”
The act goes into effect just weeks before Amazon Prime Day, when the world’s biggest e-commerce site rolls out discounts for Prime members. This year, Prime Day will be held over two days, on July 11 and 12.
Picks: Amazon Prime Day is July 11-12. You’ll need the $139-a-year Prime membership to access the deals, but is it actually worth it?
Also see: Amazon sued by FTC, which alleges people were ‘tricked and trapped’ into Prime subscriptions
Several e-commerce platforms, including Amazon and eBay, supported the INFORM Consumers Act. TechNet, a national network of technology CEOs and senior executives representing what it calls the innovation economy, wrote to leaders in Congress last December, saying the law would improve consumer safety and increase transparency.
In a statement provided to MarketWatch, eBay
EBAY,
said it “fully supports transparency and is committed to a safe selling and buying experience for our customers. We were proud to support” the law “to protect consumers from bad actors who seek to misuse online marketplaces, while also ensuring important protections for sellers. We are fully prepared to comply with the new law.”
Etsy
ETSY,
said it “has long been supportive of the INFORM Act passing into law, as a balanced and thoughtful approach to make the ecommerce landscape safer for both consumers and sellers.” In a statement provided to MarketWatch, the company said, “We are taking appropriate steps to comply with the INFORM Act requirements.”
Amazon
AMZN,
and Poshmark, owned by South Korea–based Naver Corp.
035420,
did not immediately respond to MarketWatch requests for comment.
Some analysts, however, said the new law lacks stronger protections that were included the SHOP SAFE Act, an earlier bill that did not get passed by Congress. The INFORM Act, they noted, does not hold online platforms liable when a third party sells harmful counterfeit products or when the platform has not followed certain best practices.
“Notably, the legislation is supported by Amazon and other marketplaces as it’s seen as a watered-down bill that would head off more stringent legislation like the SHOP SAFE Act,” Ben Koltun, director of research at Beacon Policy Advisors, wrote in a note last year.
So how can consumers spot counterfeit or stolen items? A guide from PIRG has tips, such as keeping an eye out for products with suspiciously low prices or featuring misspellings or mislabeling or low-quality, photoshopped photos in their listings.
PIRG also cautions consumers about purchasing medications online. Always check the legitimacy of online pharmacies, it says.
“Many online marketplaces haven’t been doing enough to protect consumers from sellers who appear to be peddling stolen or counterfeit goods,” Murray said. “The only people opposing this [new law] may be thieves.”
Victor Reklaitis contributed.