Equity Analyst, LightStream Research

Supun Walpola

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

<ul class="">
<li>
<a href="https://www.smartkarma.com/entities/25895" target="_blank" data-smartkarma-citation="entities:25895:1">Bitcoin (XBTUSD CURNCY)</a> continued to hover around the USD6,500 mark this week despite some negative headlines including the USD59m hack in the Japanese cryptocurrency exchange Zaif, Bitcoin developers discovering a major big in the software and reports on increased mining malware. </li>
<li>Ripple tripled its value during this week to edge out on Ethereum as the second largest cryptocurrency in terms of market capitalization. </li>
</ul>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/064/626/original/XRP.PNG?1537559289" class="editor-image img-responsive" data-smartkarma-image-id="64626"></figure>
<div class="content-caption">Source: Coinmarketcap</div>
<ul>
<li>Regulatory crackdown against cryptocurrency continued with lawmakers in the UK, the US (NY) and China releasing several reports/announcements highlighting the risks in investing in cryptocurrencies. </li>
<li>Listed Japanese and South Korean companies <a href="https://www.smartkarma.com/entities/13003" target="_blank" data-smartkarma-citation="entities:13003:1">Fisco Ltd (3807 JP)</a>, <a href="https://www.smartkarma.com/entities/18507" target="_blank" data-smartkarma-citation="entities:18507:1">Kintetsu Group Holdings Co L (9041 JP)</a>, <a href="https://www.smartkarma.com/entities/509" target="_blank" data-smartkarma-citation="entities:509:1">Samsung Sds (018260 KS)</a> and <a href="https://www.smartkarma.com/entities/1113" target="_blank" data-smartkarma-citation="entities:1113:1">LG Uplus Corp (032640 KS)</a> expanded their reach in the blockchain and cryptocurrency space this week. </li>
<li>Fidelity Investments aims to release cryptocurrency products by year end. </li>
</ul>



Bitcoin (XBTUSD CURNCY) continued to hover around the USD6,500 mark this week despite some negative headlines including the USD59m hack in the Japanese cryptocurrency exchange Zaif, Bitcoin developers discovering a major big in the software and reports on increased mining malware. 
Ripple tripled its value during this week to edge out on Ethereum as the second largest cryptocurrency in terms of market capitalization. 


Source: Coinmarketcap

Regulatory crackdown against cryptocurrency continued with lawmakers in the UK, the US (NY) and China releasing several reports/announcements highlighting the risks in investing in cryptocurrencies. 
Listed Japanese and South Korean companies Fisco Ltd (3807 JP), Kintetsu Group Holdings Co L (9041 JP), Samsung Sds (018260 KS) and LG Uplus Corp (032640 KS) expanded their reach in the blockchain and cryptocurrency space this week. 
Fidelity Investments aims to release cryptocurrency products by year end. 


This Week in Blockchain & Cryptos: More Hacking! More Crackdown!

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>Today after the close, <strong><a href="https://www.smartkarma.com/entities/786" target="_blank" data-smartkarma-citation="entities:786:1">Altaba Inc (AABA US)</a></strong> announced a secondary offering of 750mm shares of <strong><a href="https://www.smartkarma.com/entities/19603" target="_blank" data-smartkarma-citation="entities:19603:1">Yahoo Japan (4689 JP)</a></strong> at ¥353-360 yen, a very slight discount to where they sold ~613mm shares to <a href="https://www.smartkarma.com/entities/27445" target="_blank" data-smartkarma-citation="entities:27445:1">Softbank Corp (9434 JP)</a>. For any unsold shares, Altaba is subject to a 120-day lockup. The pricing date of the deal is expected to be tomorrow AM pre-open.</p><p>That is 14.7% of the shares outstanding of <strong>Yahoo Japan</strong>, but it is 60% of current float (even more of the TSE's calculated float). However, given how many shares of Yahoo Japan have been shorted, the actual float long position is larger than is commonly reported.</p><p>This has been my operating model for a while (discussed in <strong><a href="https://www.smartkarma.com/insights/altaba-and-yahoo-japan-the-art-of-the-possible" target="_blank" data-smartkarma-citation="insights:20504">Altaba and Yahoo Japan - The Art of the Possible</a></strong> in May), and the indications from contacts in the market suggest it is shaping up as I had discussed in the notes.</p><p>The important takeaways of this deal are two-fold.</p><ol>
<li>The short and medium-term demand function here is different than many people think it is.</li>
<li>This goes a VERY long way to clearing out the Altaba overhang on Yahoo Japan. Perhaps all the way.</li>
</ol><p><em>For a history of this situation, background insights are shown in the table below. To get to the nitty gritty of today's trade, jump below to the Conclusions First. </em></p><div><table class="table table-striped"><tbody>
<tr><td colspan="2"><h2>Recent Insights on the Situation</h2></td></tr>
<tr>
<td><strong>Date</strong></td>
<td><strong>Insight</strong></td>
</tr>
<tr>
<td>18 May 2018</td>
<td><a href="https://www.smartkarma.com/insights/altaba-and-yahoo-japan-the-art-of-the-possible" target="_blank" data-smartkarma-citation="insights:20504">Altaba and Yahoo Japan - The Art of the Possible</a></td>
</tr>
<tr>
<td>10 June 2018</td>
<td><a href="https://www.smartkarma.com/insights/altaba-tender-offer-i-more-games-of-chicken" target="_blank" data-smartkarma-citation="insights:21139">Altaba Tender Offer I : More Games of Chicken 🐓</a></td>
</tr>
<tr>
<td>10 June 2018</td>
<td><a href="https://www.smartkarma.com/insights/altaba-tender-offer-ii-who-s-there-just-us-chickens" target="_blank" data-smartkarma-citation="insights:21162">Altaba Tender Offer II:   Who's There? "Just Us Chickens" 🐓</a></td>
</tr>
<tr>
<td>2 July 2018</td>
<td><a href="https://www.smartkarma.com/insights/altaba-tender-update-one-week-to-go-and-yj-sales" target="_blank" data-smartkarma-citation="insights:21770">Altaba Tender Update - One Week To Go and YJ Sales</a></td>
</tr>
<tr>
<td>3 July 2018</td>
<td><a href="https://www.smartkarma.com/insights/altaba-tender-extension-waiting-for-sec-exemptive-order" target="_blank" data-smartkarma-citation="insights:21845">Altaba Tender Extension - Waiting for SEC Exemptive Order</a></td>
</tr>
<tr>
<td>9 July 2018</td>
<td><a href="https://www.smartkarma.com/insights/altaba-and-yahoo-japan-more-artful-than-i-thought-possible" target="_blank" data-smartkarma-citation="insights:21981">Altaba and Yahoo Japan - More Artful Than I Thought Possible</a></td>
</tr>
<tr>
<td>11 July 2018</td>
<td><a href="https://www.smartkarma.com/insights/softaltabayahoobank-artful-complication-with-clarity" target="_blank" data-smartkarma-citation="insights:22024">SoftAltabaYahooBank:  Artful Complication with Clarity</a></td>
</tr>
<tr>
<td>5 August 2018</td>
<td><a href="https://www.smartkarma.com/insights/altaba-tender-vwap-day-and-estimating-pro-ration" target="_blank" data-smartkarma-citation="insights:22749">Altaba Tender VWAP Day and Estimating Pro-Ration</a></td>
</tr>
</tbody></table></div>

Today after the close, Altaba Inc (AABA US) announced a secondary offering of 750mm shares of Yahoo Japan (4689 JP) at ¥353-360 yen, a very slight discount to where they sold ~613mm shares to Softbank Corp (9434 JP). For any unsold shares, Altaba is subject to a 120-day lockup. The pricing date of the deal is expected to be tomorrow AM pre-open.That is 14.7% of the shares outstanding of Yahoo Japan, but it is 60% of current float (even more of the TSE's calculated float). However, given how many shares of Yahoo Japan have been shorted, the actual float long position is larger than is commonly reported.This has been my operating model for a while (discussed in Altaba and Yahoo Japan - The Art of the Possible in May), and the indications from contacts in the market suggest it is shaping up as I had discussed in the notes.The important takeaways of this deal are two-fold.
The short and medium-term demand function here is different than many people think it is.
This goes a VERY long way to clearing out the Altaba overhang on Yahoo Japan. Perhaps all the way.
For a history of this situation, background insights are shown in the table below. To get to the nitty gritty of today's trade, jump below to the Conclusions First. 
Recent Insights on the Situation

Date
Insight


18 May 2018
Altaba and Yahoo Japan - The Art of the Possible


10 June 2018
Altaba Tender Offer I : More Games of Chicken 🐓


10 June 2018
Altaba Tender Offer II:   Who's There? "Just Us Chickens" 🐓


2 July 2018
Altaba Tender Update - One Week To Go and YJ Sales


3 July 2018
Altaba Tender Extension - Waiting for SEC Exemptive Order


9 July 2018
Altaba and Yahoo Japan - More Artful Than I Thought Possible


11 July 2018
SoftAltabaYahooBank:  Artful Complication with Clarity


5 August 2018
Altaba Tender VWAP Day and Estimating Pro-Ration



Japan

Softbank Corporation provides mobile phone telecommunication and networking services. The Company offers mobile communication opening, short messaging function opening, video function opening, and other services. Softbank also provides mobile phones.

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Softbank Corp (9434 JP)

This Week in Blockchain & Cryptos: More Hacking! More Crackdown!

Bitcoin (XBTUSD CURNCY) continued to hover around the USD6,500 mark this week despite some negative headlines including the USD59m hack in the...

Supun Walpola

Altaba's Big Yahoo Japan Selldown

Today after the close, Altaba Inc (AABA US) announced a secondary offering of 750mm shares of Yahoo Japan (4689 JP) at ¥353-360 yen, a very slight...

Travis Lundy

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