Category: Economic World News

The turnaround at Quebec-based Bausch Health Cos. Inc. appeared to take another step forward Tuesday, after the company reported positive organic growth for the third quarter, sending shares up more than five per cent in Toronto.

Bausch, which changed its name from Valeant Pharmaceuticals Inc. in July, has been digging out from a pile of debt and legal issues ever since it was swept up in fraud allegations that sparked a spectacular share price collapse.

At its high in July 2015, the company was valued at $341.84 per share, making it for a time the most valuable company on the Toronto Stock Exchange. Less than two years later, the shares had plunged to a low of $11.20.

Tuesday’s earnings report was well-received — despite a US$350 million net loss — because the pharmaceuticals company beat expectations on both revenue and EBITDA, according to a CITI Research report. Bausch also raised its EBITDA guidance to between US$3.30 billion and US$3.45 billion from US$3.20 billion and US$3.35 billion.

“I’m pleased to say, the third-quarter results further demonstrate that the progress towards transformation is on track,” CEO Joseph Papa said on an earnings call.

Perhaps most important for investor confidence, the company reported a three per cent increase in organic growth — which it calculates by removing divestitures and currency fluctuations.
Bausch, Papa said, has now seen organic growth for eight straight quarters.

In two years since he took over from Michael Pearson, Papa has focused on reducing the company’s more than US$30 billion debt load, which had piled up in the wake of dozens of acquisitions.

In May, the company said it had reduced its debt by US$6.9 billion in two years. That trend continued in third quarter as Bausch used nearly 70 per cent of its cash flow — more than US$360 million of US$522 million — to pay down debt. There’s still a long way to go, Papa acknowledged. Bausch still owes about US$25 billion. Most of that is due after 2021, with more than US$6 billion due in 2023.

Evercore ISI pharmaceutical analyst Umer Raffat said the move to push out the majority of their debt was an important one in the company’s turnaround.

“They’ve pushed out the debt maturities, along with (completing) asset divestitures, along with doing a very good job with expectations management and they have beat expectations,” said Raffat, who remains equal weight on the company.

What Bausch needs to prove, Raffat said, is that the company has a clear path to growth in spite of its debt. The way forward, he said, is investing in innovation and new drugs.

During the earnings call, chief financial officer Paul Herendeen said Bausch spent an additional US$26 million on research and development this quarter compared with the third quarter of 2017.

Herendeen said productivity was slower than expected but won’t “sacrifice the productivity of our investments … for speed.”

Productivity was slower than expected but (Bausch) won’t ‘sacrifice the productivity of our investments … for speed’

CFO Paul Herendeen

In the call, Papa outlined three products — a non-opioid to help those with withdrawal, a bowel cleanser and an acne treatment lotion — that have launched since August. Two more drugs, both for psoriasis treatments, are expected to be launched in the coming months.

The launch of these products contributed to Morgan Stanley upgrading Bausch to overweight from equal weight and moved its target price for the New York listed shares to US$32 on Monday. Equity analyst David Risinger wrote that he expects the company to accelerate toward durable revenue growth in 2020.

In a report on Bausch’s third-quarter earnings, Stifel Nicolaus analyst Annabel Samimy said she expects a positive move for Bausch’s stock after another quarter of stability.

“We think as BHC demonstrates its success in stabilizing and transforming, the market will again grant the company appropriate value for its franchises, which in our view has been overwhelmed with negative sentiment,” she wrote.

Bausch was boosted in August when Moody’s upgraded its credit rating to positive from stable.

Its shares closed Tuesday at US$26.72 in New York and $35.19 in Toronto.

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Ripple (XRP) on Tuesday established a bullish setup after rising more than 10 percent against the US dollar.

The pair broke above the October peak to set a new one-month high at 0.569-fiat. It was previously stuck in a narrow trading range for multiple weeks amidst lower volatility. While the lack of bias-defining price action is itself not significant, the absence of solid bullish momentum, coupled with failed rally attempts of the recent weeks, confirms XRP’s overall downtrend. The latest rally marks the asset’s latest attempt to break above a strong resistance trendline.

However, nothing concrete is backing the XRP rally at this moment. The coin’s fundamentals have remained strong even in the times of bearish actions. The launch of xRapid, the presence of Bill Clinton and the financial market’s key players at Ripple’s Swell Conference, and many strategic partnerships are all favoring XRP’s rise in the long term. The company has also expanded its operations to the Middle East, with its Global Head Dilip Rao confirming that banks in the region would be using XRP to settle cross-border payments.

The volume indicators in the last 24 hours point to a massive traffic coming from Japanese and Korean markets. At the same time, tether is also contributing about 18% of the volume in XRP markets, hinting the influence of USDT traders on the altcoin.

XRP/USD Technical Analysis (4H Chart)

The latest upside breaks in the XRP/USD chart now look to correct some of its action. Those who closed their long positions already could allow the rally to step back for a while before confirming an extended bullish momentum. That said, the pair could likely repeat the September 26 action, while targeting its low at 0.496-fiat as the potential support.

The corrective action is further confirmed by the RSI momentum indicator and the Stochastic Oscillator, both of which are inside their oversold areas and should attempt a pullback anytime.

To the upside, the XRP/USD pair is testing the falling upper trendline in red as a potential breakout threshold. The pair has previously failed to break above the said level, so its invalidation could fuel the bullish bias further. Any such upside action could put XRP traders’ long position towards 0.624-fiat.

A full-fledged assault on bears could be confirmed once the XRP/USD pair breaks above 0.93-fiat, the April high. Until then, sharp corrections on every near-term rally should not surprise traders.

Featured Image from Shutterstock. Charts from TradingView.

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A reporter receives a scam tip, reviews the e-mail, checks an address on the blockchain, and figures the balance shown is the take from the scam in progress. Probably the author and most of his peers are guilty of the assumption — the pseudonymous nature of the blockchain makes it difficult to know right off the top what the real source of some funds are. A recent example involves scams targeting Tesla and SpaceX founder Elon Musk, who is the frequent target of impersonations and profile hijacking.

Reports circulated this week that these scams had collectively made more than $175,000 for their perpetrators. However, an overview of the addresses in question brings to light the reality: the scammers might have actually made as much as $175,000 from their scams, though in fact, a significant portion of the funds is likely their own. In the same way that a tip jar might have a few employee dollars to “get it started,” good scammers understand that psychologically humans are more likely to contribute to something they already perceive as in progress — if others are sending funds, it makes all the more sense to send some.

Two Transactions Out of 19

 

The address associated with one recent scam has a total of 19 transactions. Of these, many have a similar amount around .001 BTC, a few sent have 10 times that at .01 BTC, and all of these fail to meet the requirements stated on the scammer’s page, which reads: “send from .1 to 1 BTC to get from 1 to 10 BTC back!” Only two transactions in the list actually meet this requirement, indicating that the other funds are unlikely actually to be victims. And, given the close proximity of the transactions to the address, it’s entirely plausible that none of the transactions are from victims. Users who fell for the scheme would have to come forward. Ultimately, those who found these scams through legitimate channels such as Twitter or bona fide ad networks might have some legal recourse with companies serving the nonsense.

As noted by Udi Wertheimer, who took another site to task on this subject, this is a very common tactic among scammers. It makes sense for the aforementioned reasons: if people were to click a link reportedly from Elon Musk and fall for the trick, they’d be surprised that none of the billionaire’s friends or anyone else had sent any funds. He was referring to a more successful group of scams, the vastness of which have prompted Elon Musk himself to take action with the help of Dogecoin creator Jackson Palmer.

The address, 1NCj5V2a8Yp7Wu6wsEWoRZu6togKccgDYz, had just over .06 BTC in it when the first transaction for .1 BTC came in. Again, the close proximity of the transactions — all in the space of three hours — makes us suspect the scammer might have netted nothing at all. There are plenty of deep-pocketed people who recently entered the space, however, who might fall for a bitcoin doubling scam once or twice.

A potential way to see if the funds came from themselves or others would be to investigate where they go and see if the addresses are at all connected to the depositing addresses.

This author’s first use of bitcoin was in a Ponzi scheme wherein he lost more than a few hundred dollars. There’s a lot of psychological victimization that takes place in crypto scams, and it’s unfortunate to say that even in 2018 our only best defense is ourselves — those with the platform giving voice to the voiceless and warning the rest as soon as possible.

Featured image from Flickr/TED Conference

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It’s not Thursday, but this story sure feels like a throwback to headlines from last year’s cryptocurrency mania: crypto enthusiasts have begun using their tokens to take out real mortgages on virtual land.

Decentraland & Ripio Partner for Crypto Mortgage Service

This phenomenon has been made possible through a partnership between Decentraland, an Ethereum-based virtual reality platform, and Ripio Credit Network (RCN), a borderless peer-to-peer cryptocurrency lending network.

Decentraland is a decentralized application (dApp) that hopes to provide the infrastructure for a 3D-virtual world. That world, which has finite space, has been divided into 10m² parcels, each of which is represented by a non-fungible Ethereum token called LAND that can be bought and sold in the platform’s marketplace.

Developers can build games and other applications on their parcels using the Decentraland SDK, and, once the platform receives a full release, users will be able to use VR to explore the virtual world and interact with these applications.

Decentraland is still several major releases away from fulfilling this goal, but developers and speculators have nevertheless been sinking serious cash into virtual LAND. Just this week, one user set a record by paying $215,000 for a 126-parcel estate.

Now, thanks to Decentraland’s partnership with Ripio, users will not necessarily have to plunk down all of that cash — specifically MANA, the platform’s native Ethereum token — at once.

“Decentraland is dedicated to making the exciting new world of virtual reality decentralized—ruled by open standards as opposed to one central organization. This partnership will help us fully commit to that mission, as the buying and selling of land—the basis of all the exciting things our users can create in VR—will not just be decentralized, but done on the leading global blockchain-based credit network,” stated Decentraland CEO Ariel Meilich.

RCN CEO Sebastian Serrano added that the decision to support LAND mortgages was an “exciting new horizon for Ripio” and noted that it serves as an example of how Ethereum dApps can work together to improve their services.

“The partnership between RCN and Decentraland…is one of the first examples that highlights how different smart contracts-based applications can work together,” said Serrano. “At RCN we drive our efforts to connect lenders and borrowers and offer them. Doing so in virtual reality is an exciting new horizon.”

Applying for a Virtual Mortgage

To register for a mortgage in Decentraland, prospective “real” estate purchasers must complete a short application form and place a down payment of at least 10 percent of the market value of the property. The RCN dApp will then publish the loan request so that interest lenders can claim the mortgage; the request will remain live as long as the land parcel is for sale.

Once a lender claims a mortgage request, the platform will create a smart contract that locks the land parcel and transfers partial ownership to the purchaser, who can use the parcel as he or she sees fit throughout the duration of the mortgage and may claim full ownership from the smart contract upon repaying the loan. Borrowers can even establish an RCN credit rating by consistently paying off their mortgages on time, likely enabling them to receive more favorable interest rates in the future.

However, if the borrower fails to pay off the mortgage within seven days following its expiration date, the lender may request the mortgage back through the smart contract, which will move the borrower into default and transfer full ownership of the parcel to the lender.

But, while select LAND purchases have begun to rival the cost of actual real estate, buyers are unlikely to find the borrower-friendly interest rates or 30-year payoff dates available from traditional mortgage providers. At present, active RCN loans feature annual interest rates ranging from 28 percent all the way up to 78 percent, with most lenders opting to fulfill loan requests with payoff dates denominated in months — not years.

Featured Image from Shutterstock

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Venezuela’s Supreme Court of Justice (TSJ) has recently ordered a national institute to pay indemnities to one of its employees after she suffered a workplace injury in its oil-backed cryptocurrency petro.

According to Sputnik, the Supreme Court’s ruling was based on a decree on “Cryptoassets and the Sovereign Cryptocurrency Petro,” which was approved in April by the country’s Constituent National Assembly and establishes the “basis for the management of these alternative mechanisms in financial and commercial activity”.

Per the ruling, the National Institute of Agricultural Research (Inia), will have to pay Venezuelan citizen Maria Elena Matos “the equivalent of 266 petros” following a workplace injury. The value of 266 petros is estimated to be of $15,960.

A note the Supreme Court released on social media reads:

“It is established that the Supreme Court set this criterion taking as a reference the value that the National Executive sets for the petro, in order to materialize justice in favor of whoever is affected in their rights and interests, and to counteract the actions that have sought to destabilize the national economy.”

As CCN covered, the Venezuelan government, after months of speculation, announced the Petro was available for sale on November 5. It can be purchased with bitcoin and litecoin, and is presumably not available for purchase with the country’s fiat currency, the sovereign bolivar.

A Controversial Cryptocurrency

While the government has been pushing its citizens and businesses to adopt the Petro, by getting Venezuelans to pay their passport fees in the oil-backed cryptocurrency, by ordering the country’s banks to adopt it, and by pegging it to its devalued fiat currency, a look into its whitepaper seems to show there’s little original about the Petro.

Digging into the cryptocurrency’s whitepaper seemed to show only it was a ‘blatant’ copy of Dash, as it uses the same mining algorithm, has similar features, and even appears to have a part of the document lifted from that of the cryptocurrency.

The cryptocurrency, initially announced late last year, is reportedly not only backed by the country’s oil reserves, but also by natural resources. Per Sputnik, its value comes from oil (50%), iron (20%), gold (20%), and diamond (10%). When it was first announced, Venezuela’s National Assembly declared it unconstitutional, while the country’s Congress dubbed it “illegal.”

Nevertheless, Chinese credit rating giant Dangong Global Credit Rating revealed it believes the cryptocurrency “may help the global currency system return to its basic value,” as it can “generate useful lessons on how defects of the international currency system can be mended.”

Featured image from Shutterstock.

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