Polaris RZR 100 at the Dubai International Baja 2019.
Francois Nel/Getty ImagesAll vehicles are electric now.
First came General Motors EV1 in the 1990s when electric vehicle technology wasn’t ready for prime time. Less than a decade later came Tesla. Nikola and Hyliion, who want to electrify heavy-duty trucks, have joined the fray since then. And Harley-Davidson launched its LiveWire electric motorcycle in 2019.
Now comes electric snowmobiles and off-road vehicles.
Polaris and Zero Motorcycles announced a 10-year deal to electrify Polaris products Tuesday. The deal between Zero, an electric motorbike maker, and Polaris, which makes boats, ATVs, snowmobiles, and Indian brand motorcycles, is only for ATVs and snowmobiles. Indian products aren’t covered yet. Still, Harley-Davidson’s ears might be burning this morning.
Harley has had some problems manufacturing the LiveWire, demonstrating going electric isn’t as easy as it sounds. Companies can’t just slap a battery on any vehicle and call it an EV. That’s why Polaris opted for a proven electric-powertrain developer to slowly introduce EV products to its customers. Zero has been making electric bikes for more than a decade.
Polaris’ electric products are still a few years off but investors like the deal. The company’s stock is up 4% in premarket trading. Harley shares are unchanged.
—Al Root
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President Trump and Joe Biden Square Off in Their First Debate
Fox News anchor Chris Wallace will moderate the first debate between President Donald Trump and former Vice President Joe Biden Tuesday night at Case Western Reserve University in Cleveland.
- Due to the ongoing pandemic, the candidates will forego the customary pre-debate handshake, and the audience will be limited to less than 100 people. Neither will wear a face covering onstage.
- The debate will focus on six key topics, including Covid-19, the Supreme Court, the economy, election integrity, the recent protests across U.S. cities, and “The Trump and Biden Records.”
- The New York Times report on Trump’s taxes that showed the president has paid no federal income tax in 11 of the last 18 years, will almost certainly be addressed.
- The forum will also challenge Biden’s perceived lack of energy. Trump often refers to his rival as “sleepy Joe,” and the debate is a chance for Biden to counter Republican attacks on his mental acuity.
- RealClear Politics’ average of national polls released Sunday shows that Biden continues to have a lead over the president nationally as well as in key swing states.
What’s Next: As the first of three debates—subsequent ones will be held on Oct. 15 and Oct. 22—the showdown will be the first chance to see the dynamic between the two candidates. Viewership is expected to be high, possibly surpassing 2016’s record-setting 84 million viewers.
—Anita Hamilton
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Data Analytics Firm Palantir Set to Debut on NYSE
The latest in a wave of stock market debuts for tech firms, Palantir will start trading via a direct listing Tuesday under the symbol PLTR. The listing is drawing lots of interest because of pent-up demand among investors to get into the hot data mining space.
- Co-founded by billionaire investor Peter Thiel, the Palo Alto, Calif., company is expected to be valued at around $22 billion once its shares start trading at about $10 each.
- The company is projecting 2020 revenue to grow around 42% and 2021 revenue to grow more than 30%. It had a net loss of nearly $600 million in 2019.
- A direct listing is typically quicker than an initial public offering since it involves listing existing shares, instead of raising money by creating new ones. The company is limiting the number of shares that can be sold to just 20% of the total for the first 180 days.
- Only two other venture-backed tech firms—Slack and Spotify—have had direct listings in recent years. Slack is down about 30% from its 2019 debut price, while Spotify has risen nearly 40% since its 2018 listing.
What’s Next: As Barron’s Eric J. Savitz notes, the expected valuation for Palantir is close to 16 times its implied revenue guidance for next year. That makes it much cheaper than other recent tech listings, like Snowflake, but more expensive than “well-established companies like Microsoft at 10 times or Accenture at about 3 times,” he adds.
—Anita Hamilton
***
House Democrats Release $2.2 Trillion Pandemic Aid Bill
Democrats in the House of Representatives unveiled a $2.2 trillion stimulus package. But any such deal will need to win over Senate Republicans and the White House.
- The proposal is a slimmer version of the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions, or HEROES, act, which passed in the House but was a non-starter for Senate Republicans due to its size and scope.
- The bill would resume $600 expanded unemployment payments, and provide another round of stimulus checks to eligible taxpayers.
- Another round of the Paycheck Protection Program loans, with an emphasis on support for small businesses and nonprofits, as well as targeted aid for restaurants and live venue operators, is also included. Airline industry workers would also receive assistance.
- For state, local, territorial, and tribal governments, the bill would provide $436 billion to pay first responders and health workers. It also includes $75 billion for expanded testing, contact tracing, and access to free Covid-19 treatment, and $225 billion for education.
What’s Next: Earlier this month, Federal Reserve Chair Jerome Powell suggested further direct support would be needed for the U.S.’s economic recovery efforts. But amid a heated presidential election season and a debate over Amy Coney Barrett’s nomination to the Supreme Court, it may be hard for both sides to find common ground.
—Connor Smith
***
Inovio’s Vaccine Technology Called Into Question
On Monday, Inovio Pharmaceuticals said that the U.S. Food and Drug Administration had put its vaccine trial on hold until the company resolves the agency’s questions about the company’s vaccine technology.
- Inovio had guided investors to expect it would start its Phase 3 vaccine trial in September. Now, Inovio says it hopes to get its response to the FDA in October, after which, the agency will have 30 days to tell the company if it may proceed.
- The company announcement said only that the FDA “has additional questions” about the planned trial, including questions about Inovio’s proprietary inoculating device—an electronic system that opens pores on the skin to deliver the relatively large payload of the company’s vaccine.
- AstraZeneca’s Covid vaccine trial remains on hold in the U.S., after one participant in the U.K. showed worrisome symptoms. But Inovio says the FDA’s concern wasn’t prompted by any adverse events in the Phase 1 trial of its Covid vaccine.
What’s Next: In addition to resolving the FDA’s questions, Inovio will need to find money for its trial. Its Monday announcement said that it would need external funding to conduct the Phase 3 trial. Over nearly two decades, Inovio has burned through about $1 billion without bringing a product to market.
—Bill Alpert
***
Vuitton Owner Countersues Tiffany in Bid to Cancel Planned Takeover
French luxury conglomerate LVMH Tuesday accused Tiffany executives of mismanaging the company and said the New York jeweler’s “performance has been catastrophic and its prospects remain dismal” as a result, in a lawsuit trying to show that the “conditions necessary to close the acquisition of Tiffany have not been met.”
- The filing in a Delaware court is the latest development in a dispute between the two companies that became acrimonious after LVMH tried to argue for a lower acquisition price of the prestigious jeweler, due to the coronavirus impact on the industry.
- LVMH and Tiffany announced in November last year a deal whereby the French owner of Christian Dior, Louis Vuitton, Bulgari and other luxury brands would buy the U.S. jeweler for $135 a share, pricing the target at $16 billion. Tiffany’s stock now hovers around $117.
- Tiffany “paid the highest possible dividends while the company was burning cash and reporting losses,” LVMH accuses in its filing. It also argues that the case of a pandemic was not among the “carveouts for specific events” listing the risks (such as “cyberattacks” or “Hong Kong protests”) that it would have to bear.
- LVMH has argued that it had been ordered by the French foreign minister to pull out from the deal in light of current French-U.S. trade tension. But it was contradicted by the same minister, who said he just provided some political advice after the company itself requested it.
What’s Next: An expedited trial is scheduled for January, leaving time for the two sides to climb down. Tiffany’s share price was below $100 in the months before LVMH launched its bid last year. There may still be some room for a compromise that could satisfy the U.S. group’s shareholders.
—Pierre Briançon
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Everyone will start with the same amount and can trade as often or as little as they choose. We’ll track the leaders and, at the end of the challenge, the winner whose portfolio has the most value will be announced in The Barron’s Daily newsletter.
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—Newsletter edited by Stacy Ozol, Anita Hamilton, Mary Romano, Matt Bemer
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