Rig counts continue to decline!

Baker Hughes reports U.S. rig count down 5 to 258 rigs

Baker Hughes (BKR) reports that the U.S. rig count is down 5 rigs from last week to 258 with oil rigs down 4 to 181, gas rigs down 1 to 75, and miscellaneous rigs unchanged at 2.

The U.S. Rig Count is down 700 rigs from last year’s count of 958, with oil rigs down 603, gas rigs down 97, and miscellaneous rigs unchanged at 2.

The U.S. Offshore Rig Count is unchanged at 12 and down 14 year-over-year.

The Canada Rig Count is up 8 rigs from last week to 26, with oil rigs unchanged at 6 and gas rigs up 8 to 20.

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The Canada Rig Count is down 91 rigs from last year’s count of 117, with oil rigs down 79 and gas rigs down 12.

The international offshore rig count for April 2018 was 194. Stockwinners

WTI crude is up $1.06 to $40.67 per barrel. Brent is up 99 cents to $43.34 per barrel.

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Mohawk shares tumble on investors lawsuit

Mississippi Retirement System sues the carpet maker

In January, the Public Employees’ Retirement System of Mississippi filed a lawsuit claiming accounting fraud at Mohawk (MHK). The suit did not get a lot of attention at the time, but new filings submitted in late June add significant details about the allegations.

According to analysts, the filing includes testimony from a former Mohawk employee who claims the company has used fictitious sales to artificially boost revenue since 2017.

JPMorgan

JPMorgan analyst Michael Rehaut noted earlier that the Public Employees’ Retirement System of Mississippi, as part of a consolidated class action complaint filing dated June 29, gave “significant incremental details” regarding claims that Mohawk engaged in channel stuffing at the end of the quarter and intentionally overproduced product.

MPERS sues Mohawk Industries

While “the veracity of these accusations will likely not be determined until after an extended legal process” of several months if not longer, Rehaut sees the lawsuit as likely to remain an overhang on the stock until this matter concludes.

He also sees the “fairly granular level of detail across the allegations” and quotes from interviews with several former employees creating a higher level of risk for the company from this lawsuit, added the analyst, who keeps a Neutral rating on Mohawk shares.

SunTrust

A shareholder lawsuit filed earlier this year has recently added new court filings that allege multiple issues inside Mohawk Industries, the most damaging allegation being its revenue recognition practices which included shipping goods on the last day of the quarter and then having those as returns in the following quarter, SunTrust analyst Keith Hughes tells investors in a research note.

The allegations being made during the company’s quiet period “have hamstrung any response,” says Hughes, who admits “it is hard to say as an outsider whether these have merit at this point.” However, given the size of Mohawk, it would need “widespread practices to boost revenues via the method” alleged, adds the analyst, who keeps a Buy rating on Mohawk with a $119 price target.

Wells Fargo

Wells Fargo analyst Truman Patterson notes that the Public Employees’ Retirement System of Mississippi has filed a Class Action Complaint against Mohawk and CEO Jeff Lorberbaum, claiming the company engaged in a “fraudulent scheme to fabricate revenues through fictitious ‘sales’ of products that were not delivered to customers and to conceal from investors the true reasons for the company’s ballooning inventory,” damaging shareholders between April 2017 and July 2019.

While Mohawk stakeholders have known about the lawsuit since early January, filings have only recently become publicly available, which the analyst believes drove shares down on Wednesday. Patterson expresses no opinion on the validity of the allegations against the company, but acknowledges that they would clearly be a negative if proven to be true, likely damaging shareholder confidence in management. The analyst has an Underweight rating and an $80 price target on the stock.

The stock is down 19% to $74.10. The question now shifts to whether the allegations will result in a full SEC investigation.

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National General sold for $4 billion

Allstate to acquire National General for $34.50 per share, in cash

Allstate (ALL) has agreed to acquire National General (NGHC) for approximately $4B in cash, or $34.50 per share.

The companies said in a release, “The transaction is expected to close in early 2021, subject to regulatory approvals and other customary closing conditions.

National General sold for $4B

National General provides a wide range of property-liability products through independent agents with a significant presence in non-standard auto insurance.

The company also has attractive Accident and Health and Lender-Placed Insurance businesses.

Gross premiums written were $5.6 billion, which generated operating income of $319 million in 2019.

National General shareholders will receive $32.00 per share in cash from Allstate, plus closing dividends expected to be $2.50 per share, providing $34.50 in total value per share.

Allstate will fund the share purchase by deploying $2.2 billion in combined cash resources and, subject to market conditions, issuing $1.5 billion of new senior debt.

Allstate expects to maintain its current share repurchase program.

National General’s board of directors has approved the transaction, which includes customary terms and conditions, including a breakup fee of $132.5 million.

A voting agreement has also been signed with entities controlling 40% of National General’s common shares to vote for the transaction.

MSD Capital, which owns approximately 7.4% of National General’s outstanding common shares, also supports the transaction.

NGHC closed at $20.41.

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Novavax receives $1.6B funding from Operation Warp Speed

Novavax soars after receiving $1.6B vaccine funding

Shares of Novavax (NVAX) soared after the company said on Tuesday morning that it has received $1.6B in funding from the federal government’s accelerated COVID-19 vaccine development program.

The company has been selected to participate in Operation Warp Speed, which aims to begin delivering millions of doses of a safe, effective vaccine for COVID-19 in 2021.

Novavax receives $1.6B funding from U.S. Government

The company said the funds will be used to complete late-stage clinical development of its vaccine candidate called NVX-CoV2373, including a Phase 3 trial, and to scale up manufacturing.

The company is aiming to deliver 100 million doses of the vaccine, as early as late 2020, it said.

The agreement will fund the late-stage clinical studies necessary to determine the safety and efficacy of NVX-CoV2373, including a pivotal Phase 3 clinical trial with up to 30,000 subjects beginning in the fall of 2020.

A Phase 1/2 clinical trial of NVX-CoV2373 in 130 healthy participants 18 to 59 years of age was launched in Australia in May, Novavax said, adding that preliminary immunogenicity and safety results are expected at the end of July, and the Phase 2 portion to assess immunity, safety, and COVID-19 disease reduction is expected to begin after that.

The Phase 1/2 trial is being supported by up to $388M in funding from the Oslo-based Coalition for Epidemic Preparedness Innovations Novavax President and CEO Stanley Erck said in a statement that “The pandemic has caused an unprecedented public health crisis, making it more important than ever that industry, government and funding entities join forces to defeat the novel coronavirus together.

We are honored to partner with Operation Warp Speed to move our vaccine candidate forward with extraordinary urgency in the quest to provide vital protection to our nation’s population.”

Novavax has been awarded $1.6B by the federal government to complete late-stage clinical development, including a pivotal Phase 3 clinical trial; establish large-scale manufacturing; and deliver 100M doses of NVX-CoV2373, Novavax’ COVID-19 vaccine candidate, as early as late 2020.

NVX-CoV2373 consists of a stable, prefusion protein made using its proprietary nanoparticle technology and includes Novavax’ proprietary Matrix-M adjuvant.

Under the terms of the agreement, Novavax will demonstrate it can rapidly stand up large-scale manufacturing and transition into ongoing production, including the capability to stockpile and distribute large quantities of NVX-CoV2373 when needed.

The agreement will fund the late-stage clinical studies necessary to determine the safety and efficacy of NVX-CoV2373, including a pivotal Phase 3 clinical trial with up to 30,000 subjects beginning in the fall of 2020.

The agreement also allows for a follow-on agreement with the U.S. government for additional production and procurement to support OWS’ vaccine production goal.

This latest federal funding supports Novavax plans to file submissions for licensure with the U.S. FDA.

NVAX closed at $79.44, last traded at $105.42.

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Uber buys Postmates for $2.65B

 Uber to acquire Postmates for $2.65B in all-stock transaction

Uber and Postmates announced that they have reached a definitive agreement under which Uber will acquire Postmates for approximately $2.65B in an all-stock transaction.

Uber buys Postmates

This transaction brings together Uber’s global Rides and Eats platform with Postmates’ delivery business in the U.S.

Additionally, Postmates has been an early pioneer of “delivery-as-a-service,” which complements Uber’s efforts in the delivery of groceries, essentials and other goods.

For restaurants and merchants, Postmates and Uber Eats will together offer more tools and technology to connect with a bigger consumer base.

Following the closing of the transaction, Uber intends to keep the consumer-facing Postmates app running separately.

Uber currently estimates that it will issue approximately 84M shares of common stock for 100% of the fully diluted equity of Postmates.

The boards of directors of both companies have approved the transaction, and stockholders representing a majority of Postmates’ outstanding shares have committed to support the transaction.

The transaction is subject to the approval of Postmates stockholders, regulatory approval and other customary closing conditions and is expected to close in Q1 2021.

Uber consolidates its market position by buying Postmates

Like other travel- and transportation-related businesses, Uber’s ride-hailing segment has been negatively impacted by the COVID-19 pandemic, due to shelter-in-place orders throughout the United States.

On-demand delivery, however, has grown, with people relying on services like Uber Eats to get food without leaving their homes. According to its last earnings report, Uber’s ride-hailing gross bookings dropped, but its food delivery service saw gross sales growth of 54% during its first fiscal quarter.

UBER closed at $30.68.

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Pfizer and BioNTech report promising data on Covid-19 vaccine

Pfizer, BioNTech announce early data from Phase 1/2 study of vaccine candidate

Pfizer Inc. (PFE) and BioNTech SE (BNTX) announced preliminary U.S. data from the most advanced of four investigational vaccine candidates from their BNT162 mRNA-based vaccine program, Project Lightspeed, against SARS-CoV-2, the virus causing the current global pandemic.

The BNT162 program is evaluating at least four experimental vaccines, each of which represents a unique combination of mRNA format and target antigen.

Pfizer reports preliminary positive data

The manuscript describing the preliminary clinical data for the nucleoside-modified messenger RNA candidate, BNT162b1, which encodes an optimized SARS-CoV-2 receptor binding domain antigen, is available and is concurrently undergoing scientific peer-review for potential publication.

Overall, the preliminary data demonstrated that BNT162b1 could be administered in a dose that was well tolerated and generated dose dependent immunogenicity, as measured by RBD-binding IgG concentrations and SARS-CoV-2 neutralizing antibody titers.

The ongoing U.S. Phase 1/2 randomized, placebo-controlled, observer-blinded study is evaluating the safety, tolerability, and immunogenicity of escalating dose levels of BNT162b1. The initial part of the study included 45 healthy adults 18 to 55 years of age.

Preliminary data for BNT162b1 was evaluated for 24 subjects who received two injections of 10 microgram and 30 microgram, 12 subjects who received a single injection of 100 microgram, and 9 subjects who received 2 doses of placebo control.

The participants received two doses, 21 days apart, of placebo, 10 microgram or 30 microgram of BNT162b1, or received a single dose of 100 microgram of the vaccine candidate.

Because of a strong vaccine booster effect, the highest neutralizing titers were observed seven days after the second dose of 10 microgram or 30 microgram on day 28 after vaccination.

The neutralizing GMTs were 168 and 267 for the 10 microgram and 30 microgram dose levels, respectively, corresponding to 1.8- and 2.8-times the neutralizing GMT of 94 observed in a panel of 38 sera from subjects who had contracted SARS-CoV-2.

In all 24 subjects who received 2 vaccinations at 10 microgram and 30 microgram dose levels of BNT162b1, elevation of RBD-binding IgG concentrations was observed after the second injection with respective GMCs of 4,813 units/ml and 27,872 units/ml at day 28, seven days after immunization.

These concentrations are 8- and 46.3-times the GMC of 602 units/ml in a panel of 38 sera from subjects who had contracted SARS-CoV-2.

At day 21 after a single injection, the 12 subjects who received 100 microgram of BNT162b1 had an RBD-binding IgG GMC of 1,778 units/ml and a SARS-CoV neutralizing GMT of 33, which are 3-times and 0.35-times, respectively, the GMC and GMT of the convalescent serum panel.

At the 10 microgram or 30 microgram dose levels, adverse reactions, including low grade fever, were more common after the second dose than the first dose.

Following dose 2, 8.3% of participants who received 10 microgram and 75.0% of participants who received 30 microgram BNT162b1 reported fever greater than or equal to 38.0 degrees C.

Local reactions and systemic events after injection with 10 microgram and 30 microgram of BNT162b1 were dose-dependent, generally mild to moderate, and transient.

The most commonly reported local reaction was injection site pain, which was mild to moderate, except in one of 12 subjects who received a 100 microgram dose, which was severe. No serious adverse events were reported.

Given higher numbers of subjects experiencing local reactions and systemic events after a single 100 microgram dose with no significant increases in immunogenicity compared to the 30 microgram dose level, the 12 participants in the 100 microgram group were not administered a second dose.

These preliminary data, together with additional preclinical and clinical data being generated, will be used by the two companies to determine a dose level and select among multiple vaccine candidates to seek to progress to a large, global Phase 2b/3 safety and efficacy trial.

That trial may involve up to 30,000 healthy participants and is anticipated to begin in late July 2020, if regulatory approval to proceed is received.

The preliminary clinical data from this ongoing study has been submitted for potential publication in a peer-reviewed journal and is available on an online preprint manuscript server.

The BNT162b1 candidate remains under clinical study and is not currently approved for distribution anywhere in the world. If the ongoing studies are successful and the vaccine candidate receives regulatory approval, the companies expect to manufacture up to 100 million doses by the end of 2020 and potentially more than 1.2 billion doses by the end of 2021.

In that event, BioNTech and Pfizer would work jointly to distribute the potential COVID-19 vaccine worldwide.

The Canadian company provides lipid nanoparticles or the formulation of various mRNA vaccines.

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FDA rejects Intercept’s drug application, shares plunge

Intercept receives FDA CRL for obeticholic acid recommending additional data

Intercept Pharmaceuticals (ICPT) announced that the U.S. Food and Drug Administration has issued a Complete Response Letter regarding the New Drug Application for obeticholic acid for the treatment of fibrosis due to nonalcoholic steatohepatitis.

stockwinners.com ICPT
Shares plunge following FDA’s comments

The CRL indicated that, based on the data the FDA has reviewed to date, the Agency has determined that the predicted benefit of OCA based on a surrogate histopathologic endpoint remains uncertain and does not sufficiently outweigh the potential risks to support accelerated approval for the treatment of patients with liver fibrosis due to NASH.

NASH is the severe form of Non-Alcoholic Fatty Liver Disease (NAFLD). It can lead to liver cancer, cirrhosis, and liver transplants.

The FDA recommends that Intercept submit additional post-interim analysis efficacy and safety data from the ongoing REGENERATE study in support of potential accelerated approval and that the long-term outcomes phase of the study should continue.

Intercept had previously disclosed that, based on the FDA’s decision to postpone a tentatively scheduled advisory committee meeting, it was expected that the Agency’s review of its NDA would extend beyond the PDUFA goal date and that the FDA would move forward with rescheduling the Adcom.

The NDA submission for OCA is the first for NASH and was based on data from 35 clinical trials and more than 1,700 NASH patients treated with the drug.

OCA is the only investigational NASH drug with Breakthrough Therapy designation and has uniquely demonstrated reproducible ability to reverse or otherwise stabilize liver fibrosis in patients with advanced fibrosis due to NASH.

According to the FDA draft guidance for NASH fibrosis, of the histologic features of NASH, fibrosis is considered the strongest predictor of adverse clinical outcomes, including liver-related death.

Estimated number of people suffering from fatty liver, Stockwinners

There is currently no approved therapy for this devastating disease, which has become a leading cause of liver failure and resulting poor clinical outcomes.

A number of other companies working on NASH treatments are also moving lower, with CymaBay (CBAY) down about 3% and NGM Biopharmaceuticals (NGM) fractionally lower.

Other companies exploring NASH treatments include Madrigal Pharmaceuticals (MDGL), Novo Nordisk (NVO), Genfit (GNFT), Eli Lilly (LLY), and Alnylam Pharmaceuticals (ALNY).

ICPT closed at $77.49, last traded at $48.00, down 38%.

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IMF warns of global slowdown

International Monetary Fund cuts global growth forecast

IMF cuts global growth forecast and warns that the rebound in global financial markets “appears disconnected from shifts in underlying economic prospects”.

The fund now expects global GDP to shrink -4.9% this year, from -3.0% expected in April.

For next year, the IMF sees a rebound of 5.4%, also lower than the 5.8% projected two months ago with downward revisions reflecting the deep scars from a larger than expected supply shock during lockdowns as well as a continued hit to demand from social distancing and other virus measures.

Orange color designates economic downgrades

The IMF warned that for nations struggling to control the spread of the virus a longer lockdown will also take a toll on growth.

“With the relentless spread of the pandemic, prospects of long lasting negative consequences for livelihoods, job security and inequality have grown more daunting”, according to the fund’s update to the World Economic Outlook.

Advanced economies are expected to lead the downdraft with a -8.0% rate, versus -6.1% in the prior forecast.

The outlook on the U.S. was downgraded to -8.0% from -5.9%.

The projection on the Euro Area was knocked down to -10.2% from -7.5%. The UK is also seen posting a -10.2% contraction versus -6.5% previously. Japan was revised to -5.8% from -5.2%.

Emerging market and developing economies are seen falling -3.0% versus -1.0% in the April forecast. China is expected to expand 1.0%, though down from the prior 1.2%.

The largest revision was seen with India where the prior 1.9% growth rate was revised to a -4.5% contraction. World trade volume is projected tumbling at a -11.9% pace this year, a downgrade from -11.0% previously, though is expected to bounce back to an 8.0% growth rate in 2021.

Consumer prices in Advanced economies is seen slowing to 0.3% versus the prior estimate of 0.5%, and is down from a 1.4% pace in 2019.

Several central bank officials have also tried to reign in optimism about the recovery as markets seem to run away with the recovery story.

India’s economy is expected to hit hard with Covid-19

Massive monetary and fiscal support may help to kick-start a rebound, but as ECB chief economist Lane warned today, it will take a long time to reach pre-crisis levels.

The Bank o Japan’s summary of opinion warned that a prolonged negative impact of virus developments on the economic outlook looks unavoidable. And China’s Beige Book expects a contraction for China’s economy this year. 

New York Governor Andrew Cuomo, along with Governor Phil Murphy of New Jersey and Governor Ned Lamont of Connecticut, announced a joint travel advisory.

All individuals traveling from states with significant community spread of COVID-19 into any of the three states must quarantine for 14 days, the governors announced.

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American Airlines raises money!

American to sell more than $1.5B in shares, borrows $500M

American Airlines (AAL) announced proposed underwritten public offerings of $750,000,000 of shares of its common stock and $750,000,000 aggregate principal amount of its convertible senior notes due 2025.

The company intends to grant the underwriters of the offerings a 30-day option to purchase, in whole or in part, up to $112,500,000 of additional shares of Common Stock in the Common Stock Offering and a 30-day option to purchase, in whole or in part, up to $112,500,000 aggregate principal amount of additional Convertible Notes in the Convertible Notes Offering, in each case solely to cover over-allotments, if any.

The company expects to use the net proceeds from the Common Stock Offering and the Convertible Notes Offering for general corporate purposes and to enhance the company’s liquidity position.

The company also announced it intends to enter into a new $500M Term Loan B Facility due 2024 concurrently with the closing of the offering of the Notes.

12-Month chart of American Airlines stock

The company expects to use a portion of the net proceeds from the offering of the Notes and borrowings under the Term Loan to refinance its delayed draw term loan facility which the company and the Guarantor entered into on March 18, 2020 and is scheduled to mature on March 17, 2021, with the remainder for general corporate purposes and to enhance the company’s liquidity position.

AAL closed at $16.00.

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AMC Theatres to open in July

AMC to reopen 450 U.S. theaters on July 15

Beginning July 15, AMC will resume operations of 450 U.S. theatres as part of a phased plan that is expected to bring the 600-plus U.S. theatre circuit to nearly full operation leading into the opening of MULAN on July 24 and TENET on July 31.

Adam Aron, CEO & President, AMC Theatres, said, “After a painful almost four-month hiatus due to the coronavirus, we are delighted to announce that movies are coming back to the big screen at AMC.

Our next 100 years of making smiles happen officially begin at approximately 450 theatres across the United States on July 15. I cannot emphasize enough how much care and attention to detail we have taken in developing AMC Safe & Clean, our absolute commitment to optimizing the health and safety of our theatres for our guests and associates.

Remember that there is a rumor that Amazon may buy AMC

Developed along with The Clorox Company, and current and former faculty of Harvard University’s School of Public Health, AMC Safe & Clean represents a comprehensive commitment with a broad array of tools being used in sanitizing our theatres.

Social distancing, reduced seat capacity, greatly intensified cleaning regimens, new employee health protocols, contactless ticketing and mobile food & beverage ordering are all part of AMC Safe & Clean.

So too is a new multimillion-dollar commitment to implementing high tech solutions in making AMC theatres safe, including deploying electrostatic sprayers, HEPA vacuums and upgraded MERV 13 ventilation filters.

All this is being put into motion because at AMC our single highest priority is the health and safety of our guests and associates. Both personally and professionally, I couldn’t be more excited for what this means for movie lovers.”

Disney’s Mulan to open July 24th

In the coming weeks, theatre teams will begin returning to their theatres for training on AMC’s new, enhanced cleaning and safety procedures.

AMC expects that almost all its 600-plus U.S. locations will be open and in operation for the launch of MULAN on July 24 and TENET on July 31.

The resumption of AMC operations may be adjusted if there are changes to the current theatrical release schedule, or as needed in response to local or regional conditions.

To facilitate proper social distancing within theatre auditoriums, AMC will approach seat capacity limitations in four distinct phases. But AMC will always follow all federal, state and local directives, including those that mandate a maximum capacity if lower than those envisioned in AMC’s four phases as now planned.

Tenet is scheduled for July 31 opening

The reopening schedule for specific theatres will be communicated in early July. During the weeks leading up to new major theatrical releases, AMC will be showing popular repertory titles made available from its studio partners. Those titles and ticket price information will be announced prior to reopening.

AMC closed at $5.63.

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DOJ issues guideline for online content

DOJ issues recommendations for Section 230 reform

The Department of Justice has released a set of reform proposals to update the outdated immunity for online platforms under Section 230 of the Communications Decency Act of 1996.

Responding to bipartisan concerns about the scope of 230 immunity, the department identified a set of concrete reform proposals to provide stronger incentives for online platforms to address illicit material on their services while continuing to foster innovation and free speech.

The department’s review of Section 230 over the last ten months arose in the context of its broader review of market-leading online platforms and their practices, which were announced in July 2019.

The department held a large public workshop and expert roundtable in February 2020, as well as dozens of listening sessions with industry, thought leaders, and policy makers, to gain a better understanding of the uses and problems surrounding Section 230.

The first category of recommendations is aimed at incentivizing platforms to address the growing amount of illicit content online, while preserving the core of Section 230’s immunity for defamation claims.

These reforms include a carve-out for bad actors who purposefully facilitate or solicit content that violates federal criminal law or are willfully blind to criminal content on their own services.

Additionally, the department recommends a case-specific carve out where a platform has actual knowledge that content violated federal criminal law and does not act on it within a reasonable time, or where a platform was provided with a court judgment that the content is unlawful, and does not take appropriate action.

A second category of proposed reforms is intended to clarify the text and revive the original purpose of the statute in order to promote free and open discourse online and encourage greater transparency between platforms and users.

One of these recommended reforms is to provide a statutory definition of “good faith” to clarify its original purpose.

The new statutory definition would limit immunity for content moderation decisions to those done in accordance with plain and particular terms of service and consistent with public representations. These measures would encourage platforms to be more transparent and accountable to their users.

The third category of recommendations would increase the ability of the government to protect citizens from unlawful conduct, by making it clear that Section 230 does not apply to civil enforcement actions brought by the federal government.

A fourth category of reform is to make clear that federal antitrust claims are not, and were never intended to be, covered by Section 230 immunity.

Over time, the avenues for engaging in both online commerce and speech have concentrated in the hands of a few key players.

It makes little sense to enable large online platforms (particularly dominant ones) to invoke Section 230 immunity in antitrust cases, where liability is based on harm to competition, not on third-party speech.

The action follows President Trump’s executive order seeking to weaken broad immunity enjoyed by Facebook (FB), Twitter (TWTR) and Google (GOOGL).

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Fed pumps more money into economy

Fed says SMCCF will begin buying portfolio of corporate bonds

The Federal Reserve Board announced updates to the Secondary Market Corporate Credit Facility, or SMCCF, which will begin buying “a broad and diversified portfolio of corporate bonds to support market liquidity and the availability of credit for large employers.”

The Fed added that “the SMCCF will purchase corporate bonds to create a corporate bond portfolio that is based on a broad, diversified market index of U.S. corporate bonds.

This index is made up of all the bonds in the secondary market that have been issued by U.S. companies that satisfy the facility’s minimum rating, maximum maturity, and other criteria.

Feds crank up their printing presses

This indexing approach will complement the facility’s current purchases of exchange-traded funds.

The Primary Market and Secondary Market Corporate Credit Facilities were established with the approval of the Treasury Secretary and with $75 billion in equity provided by the Treasury Department from the CARES Act.”

The SMCCF supports market liquidity by purchasing in the secondary market corporate bonds issued by investment grade U.S. companies or certain U.S. companies that were investment grade as of March 22, 2020, as well as U.S.-listed exchange-traded funds whose investment objective is to provide broad exposure to the market for U.S. corporate bonds.

Feds bailout Wall Street firms

The SMCCF’s purchases of corporate bonds will create a portfolio that tracks a broad, diversified market index of U.S. corporate bonds.

The Treasury, using funds appropriated to the ESF through the CARES Act, will make an equity investment in an SPV established by the Federal Reserve for the SMCCF and the Primary Market Corporate Credit Facility.

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Rig Counts Decline!

Baker Hughes reports U.S. rig count down 5 to 279 rigs

Baker Hughes (BKR) reports that the U.S. rig count is down 5 rigs from last week to 279 with oil rigs down 7 to 199, gas rigs up 2 to 78, and miscellaneous rigs unchanged at 2.

The U.S. Rig Count is down 690 rigs from last year’s count of 969, with oil rigs down 589, gas rigs down 103, and miscellaneous rigs up 2 to 2.

Rig counts decline

The U.S. Offshore Rig Count is unchanged at 13 and down 11 year-over-year.

The international offshore rig count for April 2018 was 194. Stockwinners

The Canada Rig Count is unchanged from last week at 21, with oil rigs unchanged at 7 and gas rigs unchanged at 14.

The Canada Rig Count is down 86 rigs from last year’s count of 107, with oil rigs down 62 and gas rigs down 24.

WTI crude is down 14 cents to $36.20 per barrel. Brent is up 28 cents to $38.88 per barrel.

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Boeing 737-Max Recertification Flight is set for later this month

Boeing 737-Max Recertification Flight is scheduled for later this month

Boeing (BA) is targeting late June for a recertification flight on the grounded 737 Max, Bloomberg’s Alan Levin and Julie Johnsson report.

Boeing 737-Max recertification flight set for late June

The company separately is notifying airlines of an important fix to the grounded jetliner’s wiring, said two people familiar with the planning who asked not to be named discussing sensitive matters.

A draft of revised pilot training for the plane, which has been parked around the world since March 2019 as a result of two fatal crashes that killed 346 people, is also being shared with airlines, the people said.

Grounded 737-Max planes

The moves were strong indications that Boeing is finally nearing the end of the jet’s 15-month grounding and controversy that has engulfed the company after the two fatal crashes.

The flight by Federal Aviation Administration pilots to certify that the plane meets safety regulations is one of the critical remaining milestones. However, the people cautioned that the date hasn’t been finalized and has shifted repeatedly as Boeing completed its final work for regulators.

Boeing’s goal has been to return the 737 Max, a critical source of revenue, to commercial service in the third quarter. The company restarted manufacturing the single-aisle jet late last month, ending a five-month halt to work in its 737 factory in the Seattle suburb of Renton, Washington.

The company is revising a software system implicated in the two crashes that repeatedly drove down the noses of the jets due to a malfunction. Reviews of the plane’s safety following its March 13, 2019, grounding also discovered additional flaws that needed upgrading, including its flight-control computer, how electrical wires were bundled and software issues.

The FAA on Wednesday said it won’t approve the plane for passenger service until it is satisfied that all safety-related issues have been addressed.

BA is down 5% to $206.00

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Watch shares of Alnylam Pharmaceuticals

Alnylam presents Phase 3 results from ILLUMINATE-A study of Lumasiran

Alnylam Pharmaceuticals (ALNY) announced Phase 3 results from the ILLUMINATE-A study of lumasiran, an investigational RNAi therapeutic targeting hydroxyacid oxidase 1 – the gene encoding glycolate oxidase – in development for the treatment of primary hyperoxaluria type 1.

The clinical data were presented at a late-breaking session at the European Renal Association-European Dialysis and Transplant Association International Congress being held as a virtual event on June 6-9.

Lumasiran achieved the ILLUMINATE-A primary endpoint with a 53.5% mean reduction in urinary oxalate relative to placebo and showed a 65.4% mean reduction in urinary oxalate relative to baseline.

All tested study secondary endpoints were met, including the proportion of patients achieving near-normalization or normalization of urinary oxalate, compared with zero percent in the placebo group.

Lumasiran administration was associated with an encouraging safety and tolerability profile, with no serious or severe adverse events and with mild injection site reactions as the most common drug-related AE.

Primary hyperoxaluria (PH) constitutes a group of rare inherited disorders of the liver characterized by the overproduction of oxalate, an end-product of metabolism. High levels of oxalate are toxic because oxalate cannot be broken down by the human body and accumulates in the kidneys.

PH1 is an ultra-rare orphan disease caused by excessive oxalate production, and elevated urinary oxalate levels are associated with progression to end-stage kidney disease and other systemic complications.

Based on the ILLUMINATE-A results, Alnylam filed a New Drug Application with the U.S. Food and Drug Administration.

The FDA has granted a Priority Review for the NDA and has set an action date of December 3, 2020 under the Prescription Drug User Fee Act.

In addition, the Marketing Authorisation Application for lumasiran has been submitted to and validated by the European Medicines Agency, and has received Accelerated Assessment designation.

Stifel

Stifel analyst Paul Matteis believes full Alnylam’s Lumasiran data presented at ERA-EDTA reflect a relatively derisked clinical profile that’s very likely to attain regulatory approval.

Lumasiran treatment led to robust and durable reductions in urinary oxalate, which based on the well described biology in PH1 should ultimately lead to clinical benefit on renal outcomes, he contends.

The analyst notes that for the stock, lumasiran is already mostly priced-in here, though there’s some investment debate surrounding the market opportunity which is generally perceived to be ultra-orphan/small.

While he is also somewhat conservative in how he models revenues for lumasiran, there could be upside to numbers should approval/launch increase the PH1 diagnosis rate. Matteis has a Buy rating and a $159 price target on the shares.

ALNY closed at $127.59.

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