Stock Take 28/06/2021

BaFin approves Coinbase crypto custody and proprietary trading

For the first time, the German financial regulator BaFin has authorised a company to hold cryptocurrencies such as Bitcoin in custody and to trade them for its own account. BaFin announced in Frankfurt on Monday that it had granted Coinbase Germany Gmbh permission to do so.

On the financial market, the shares of the US parent company Coinbase, which has been traded on the New York tech exchange NASDAQ since April, reacted to the news with strong gains. At today’s close, the share price was up 9.86 per cent at 246.69 US dollars. Coinbase is the largest US trading platform for digital currencies.

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Facebook share jumps over one trillion dollar mark

The US government has suffered a major setback in its attempt to break up Facebook in court. The competition lawsuit dismissed against Facebook catapulted the social network’s shares on Monday.

A judge in Washington dismissed the corresponding lawsuit filed by the Federal Trade Commission (FTC). The FTC had not been able to show that Facebook had a monopoly in the social networking market, he argued in his decision published on Monday. However, he still left open the possibility for the authority to file an updated complaint within 30 days.

In the complaint filed in December, the FTC accused Facebook of unfair competition and sought the spin-off of Instagram and WhatsApp. Facebook bought the photo platform and chat service to protect its dominance from rivals, their argument goes. Forty states are also filing a similar lawsuit of their own.

Facebook asked the court to dismiss the lawsuits – among other things because the FTC was too vague in outlining the market in which Facebook was active.

Not only did it reach a record high, but for the first time, the company’s stock market value also exceeded the one trillion US dollar mark. At times, the shares on the NASDAQ rose by 4.8 per cent to 357.46 dollars. The stock market value was thus 1.01 trillion dollars. At the end of trading, Facebook shares were still 4.18 per cent higher at 355.64 US dollars. 

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Airbus share turns negative

Despite a report that United Airlines is close to ordering 200 aircraft from Airbus, the aircraft manufacturer’s shares came under pressure today.

Airbus defended its plans to split and possibly sell its Augsburg-based subsidiary Premium Aerotec. “The company has been accumulating losses for twelve years. These losses are in the billions,” Airbus Chief Operating Officer Michael Schöllhorn told the “Augsburger Allgemeine” (Saturday).

Because airlines are currently buying hardly any new aircraft, the situation has worsened. “Considering the considerable investments we have to make, for example in hydrogen technology, we cannot afford these losses,” the Airbus manager said. “We can’t just carry on like this in Augsburg and also at other premium Aerotec sites.”

Airbus is now looking at selling its parts manufacturing operations in Germany to an investor. In Augsburg, about 2200 of 2800 Premium Aerotec employees work in single-part production. The Varel site in East Frisia is also affected. The works council and IG Metall oppose the plans. The union fears that in the long run, parts of the production will be relocated to low-wage countries and that the workforce will suffer pay cuts.

Schöllhorn said that ideally the investor would also have access to the car industry, for example. “This would increase the number of units, make parts cheaper and make the business more competitive. This could possibly be achieved by a medium-sized company from Germany,” the manager emphasised. An investor with plants in Romania and Vietnam was also under discussion. The state governments fear that the plants in Bavaria and Lower Saxony “will no longer be able to compete with competitors in low-wage countries in a few years”.

Schöllhorn emphasised that the single-part business is competitive for “more complex work for which the German wage structure fits. But we still have too many components in Augsburg for which that does not work. Here a strong partner could help us, opening up access to a wider industry and bringing investment capacity.”

At the request of the employee representatives, the Airbus board is also examining whether the production of the individual parts can remain within the group. But that would “not be without pain, not without adjustments to higher-value work, with simpler work continuing to have to be transferred to other suppliers,” Schöllhorn said.

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The Airbus share temporarily posted gains on XETRA on Monday but then slid into negative territory, dropping 1.69 per cent to 108.32 euros.

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