WEBVTT - Rathbones Plunges, STMicro Dips, Porsche Down

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market. Harnessing the power of Bloomberg Data.

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<v Speaker 3>Let's take a look at thumb stocks on the move

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<v Speaker 3>today in Europe. I'm James Wilcock with Stephen Carroll and

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<v Speaker 3>we're joined by Bloomberg's Breaking News editor Louise Moon. First up,

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<v Speaker 3>Louise Wrathbones. It's a tough morning for the UK wealth manager.

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<v Speaker 3>It has been a costly FCA review.

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<v Speaker 4>Yeah, it has.

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<v Speaker 1>Indeed, so there's been a review by the FCA, the

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<v Speaker 1>regulator here in the UK, and essentially as a result,

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<v Speaker 1>Wrathbones are having to pause some of their new onboarding

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<v Speaker 1>of clients. Shares fell as much as eighteen percent as

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<v Speaker 1>a result. This is because of that they need essentially

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<v Speaker 1>to do extra due diligence and that could be up

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<v Speaker 1>to a year, so that they say that they're expecting

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<v Speaker 1>costs of about sixty million pounds over two years as

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<v Speaker 1>a result. And lists well, there's particularly Jeffrey's analysts, I

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<v Speaker 1>should note, are saying that the changes this changes the

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<v Speaker 1>conditions that Rathbones twenty twenty seven targets were based on

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<v Speaker 1>so presumably they'll be delayed in hitting those, so it's

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<v Speaker 1>the scope for a hit of those twenty twenty seven profits.

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<v Speaker 1>As I say, shares fell eighteen percent, the most ever

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<v Speaker 1>for the Welsh manager.

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<v Speaker 4>Okay, so that's on wrath bones.

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<v Speaker 2>St Micro's shares are lower this morning, down over two

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<v Speaker 2>percent at the moment.

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<v Speaker 4>What's driving it.

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<v Speaker 1>So they've offered one point five billion dollars of convertible bonds,

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<v Speaker 1>so essentially they're looking to raise one point five billion

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<v Speaker 1>dollars from selling debt and that will be exchanged into equity.

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<v Speaker 4>This follows their share price.

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<v Speaker 1>It's tripled in value so far this year, so it's

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<v Speaker 1>the third best performer actually in the stocks Europe six

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<v Speaker 1>hundred gage and that's obviously on the back of this

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<v Speaker 1>boom in demand for AI and in particular for data

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<v Speaker 1>center chips.

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<v Speaker 4>Sc Micro, the chip maker.

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<v Speaker 1>It is also kind of the latest of AI related

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<v Speaker 1>companies to sell convertible bonds in recent months. Essentially, these

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<v Speaker 1>companies are looking for cheaper ways to fund investments in

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<v Speaker 1>those spaces, in data centers and those other AI plays

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<v Speaker 1>as well.

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<v Speaker 4>But as you say, shares dipped as a result.

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<v Speaker 1>Essentially there's a risk of dilution, So the convertible bonds

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<v Speaker 1>can lead to more ect issuance investors more likely to

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<v Speaker 1>want to swap their debt into shares. So there's that

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<v Speaker 1>dilution risk there which is pulling shares lower. But as

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<v Speaker 1>I say, they have tripled in value so far this yes,

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<v Speaker 1>still far higher than they were before.

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<v Speaker 3>And so luis LASTI Porsche the car makers enjoying an

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<v Speaker 3>upgrade and Barkery at least, but our trade is taking

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<v Speaker 3>the stock for a ride.

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<v Speaker 1>Well exactly, it's an interesting one. So initially shares rose

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<v Speaker 1>on the back of this. I'd say Barklay's upgraded Porsche

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<v Speaker 1>to equal weight, saying that they see improved investor sentiment

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<v Speaker 1>and a lack of near term negative things negative catalysts,

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<v Speaker 1>noting particularly that shares are recently outperformed peers. They say

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<v Speaker 1>that recent twenty six twenty seven downgrades have already.

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<v Speaker 4>Been digested by the byside.

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<v Speaker 1>It also follows upgrade from Goldman recently, as well as

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<v Speaker 1>upgrade from Ubs recently. These are all in June, and

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<v Speaker 1>it's on the back of Porsche being in the middle

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<v Speaker 1>of this turnaround, so some positive sentiment there, But as

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<v Speaker 1>I say, shares initially rose and then and when they

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<v Speaker 1>rose it was the highest level since March twenty twenty five,

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<v Speaker 1>and then they dipped. So yeah, the potentity being taken

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<v Speaker 1>for a bit of a ride. Maybe there's not as much,

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<v Speaker 1>you know, of that positive sentiment really swirling as being

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<v Speaker 1>indicated by a list. But again in a similar way

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<v Speaker 1>to su Micro, if you look back, shares have since

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<v Speaker 1>they announced their turnaround in March, shares have been heavily rising.

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<v Speaker 1>So as much as there's a small dip this morning,

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<v Speaker 1>there's still a lot higher than they were, so overall

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<v Speaker 1>positivity in terms of their turnaround.

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<v Speaker 2>The Stock Movers report from Bloomberg Radio. Check back with

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<v Speaker 3>Mm HM