A Well-Deserved Weekend

General Motors is expanding a recall of one of its first EVs over concerns that the car could catch on fire. The risk supposedly stems from “defective battery modules in the vehicles.”

The expanded recall involves a total of 73,000 Chevrolet Bolt EVs and EUVs from the 2019-2022 model years. GM claims it will replace the defective battery modules. Unfortunately, the whole ordeal will cost over $1.8 billion. According to InsideEVs, that comes out to about $11,000 per vehicle. Oof.

The company was quick to assign blame to its battery provider, LG Energy Solutions, for manufacturing defects. GM expects to pursue “reimbursement commitments” from LG. In other words, GM wants its money back and wants LG to fix the problem. LG Energy Solutions, which is owned by LG Chem, also provides batteries to for EVs built by Tesla and Renault. 

$GM stock fell over 10% this week. LG Chem rose 1.8%.

Coinbase is finally putting crypto on its balance sheet. Surprised it took this long? 😅 So are we. 

The company’s board approved a purchase of $500 million in crypto, with a commitment to invest 10% of the company’s future profits into the asset class. The purchase will take place over multiple years, taking advantage of dollar cost averaging.

According to Coinbase finance chief Alesia Haas, the company will invest in “Ethereum, Proof of Stake assets, DeFi tokens,” and other assets. The allocation will be decided by “aggregate custodial crypto balances,” which means the company’s investments will be informed by what users are holding on the platform.

Many companies considering cash alternatives on their balance sheets have opted for Bitcoin. For investors looking for a way to bet on the future of crypto, Coinbase is trying to minting itself as the best option with this move.

Investors reacted kindly to the news. $COIN stock rose 3.66%. The global crypto market boosted 4.6% today.

A few weeks ago, Ackman’s mega-SPAC retreated from a wild proposal to acquire a minority stake in Universal Music Group. The deal received mixed reviews from investors, but was downright rejected by regulators — and not because regulators hate the idea of a SPAC buying a stake in Big Music, but because the deal structure was headache-inducing.  

Since then, investors have felt burned. One lawsuit claims Ackman’s Pershing Square Tontine Holdings SPAC is an “illegal investment company.”  With that cloud looming over the SPAC, Ackman is asking for a do-over. He wants to return the $4 billion he raised from investors and explore something else…

Giving back the money is the easy part. $PSTH shareholders will get back $20 per share from the company’s trust. But Ackman wants to (partially) revive one of the redeemable parts from the first deal: the SPARC.

A SPARC, or special purpose acquisition right company, is kind of like a SPAC… but not. A SPARC would give $PSTH shareholders a warrant in a new entity, with the right to exercise if they like the acquisition target.

That might not be relevant now, but once Ackman entices a new company, SPARC warrants could be redeemed by former $PSTH shareholders to “get in on the ground floor” of said company.

It sounds better than a SPAC at face value… but there’s a caveat: a SPARC is a completely new thing, and it would require changes to NYSE rules and the approval of the SEC. Like we said, the $20 isn’t the hard part… the gift on the way out is. We’re keeping an eye out for Ackman’s Final Act.

BlackRock has invested in the US-based Bitcoin mining firms Marathon Digital Holdings and Riot Blockchain. 🤖 📈

Per a mandatory quarterly filing, the world’s largest asset manager ($9.5 trillion in AUM) holds 6.71% of Marathon Digital Holdings and 6.61% of Riot Blockchain. The investments are worth a total of almost $384 million.

The news comes amidst China’s crackdown on crypto and Bitcoin mining firms. Meanwhile, miners in other countries have been reaping the benefits of China’s recent crackdown.

Data from Cambridge University shows that China formerly held two-thirds of the global mining industry this time last year. In April 2021, the country’s share fell below 50%.

Blackrock joins Fidelity Group and Vanguard as companies invested in blockchain-related businesses. The mediums that these large institutions are using to invest include ETFs, wealth managers, and their investment banking divisions.

Looks like corporate turnover isn’t just happening in mid-level management. It’s happening at the very top of the corporate ladder, too. 😂

Last night, Johnson & Johnson announced that CEO Alex Gorsky will step down on Jan. 3. He’ll be replaced by Joaquin Duato, the current head of Johnson & Johnson’s pharmaceutical and consumer health segments.

Duato is not new to J&J. In fact, he’s been with the company for over three decades. Over the last few years, Duato has developed the company’s pharma segment— in J&J’s latest annual report, pharmaceutical revenue represented 54% of the company’s total revenue. 💰

Nonetheless, Duato has his work cut out for him: the COVID-19 pandemic is far from over, and J&J didn’t exactly have a smooth rollout of its one-shot vaccine. The company experienced numerous hiccups in production, quality assurance, and side-effects. On top of its COVID vaccine, J&J faces several lawsuits ranging from baby powder asbestos to opioid charges.

$JNJ rose 0.49% today.