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Microsoft makes first climate fund investment, joins green group – BNN

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Microsoft Corp. said the first investment for its US$1 billion climate fund will be in venture capital firm Energy Impact Partners. The software maker also joined with Nike Inc.,

Starbucks Corp., Unilever NV and Danone SA in a new consortium devoted to sharing resources and tactics for slashing carbon emissions, bringing together the efforts of some of the biggest global companies that have pledged to take action against climate change.

The software giant’s US$50 million investment will bolster the VC firm’s backing of new technologies for greener energy and transportation systems.

New York-based EIP, a utility-company backed fund with US$1.2 billion in assets under management, has invested in companies that make software for improving underlying energy networks and in Urbint, an artificial intelligence company that has a methane-capture technology.

Microsoft announced in January that it plans to be carbon negative — removing more carbon dioxide from the atmosphere than it emits — by 2030, and the software maker allocated US$1 billion to a climate-innovation fund to invest in ways to reduce and remove carbon emissions, one of the most aggressive corporate plans.

By 2050, the company plans to remove the equivalent of all of its emissions since Microsoft’s founding in 1975.

Amazon.com Inc. has also made a carbon-neutral pledge and recruited other companies to join. Both technology giants have come under fire from climate activists for continuing to provide cloud-computing services to large oil and gas producers.

Redmond, Washington-based Microsoft also said it will partner with Sol Systems, a renewable energy developer and investor, on 500 megawatts of solar energy, Microsoft’s biggest renewable-energy portfolio investment.

That will include at least US$50 million in investments in parts of the U.S. most impacted by environmental issues— regions hurt by pollution, for example. Projects will prioritize businesses owned by women and minorities and will include money for jobs and skills training and habitat restoration. That amount of solar energy is enough to power about 95,000 homes, according to the Solar Energy Industries Association.

The group, called Transform to Net Zero, also includes automaker Mercedes-Benz AG; Danish shipping giant A.P. Moller-Maersk A/S; Indian information-tech firm Wipro Ltd; and Natura & Co., the Brazilian cosmetics firm that owns Avon.

The alliance, which plans to recruit other members, will work with the nonprofit Environmental Defense Fund and will share information on cutting emissions, investing in carbon-reduction technology and coordinating on public policy goals.

In addition, Microsoft will stop using diesel in its data centers by 2030. The fuel is typically used as a backup power source for cloud data centers.

–With assistance from Brian Eckhouse.

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Baidu tops revenue estimates, will keep up heavy investment – BNN

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Baidu Inc. posted a smaller-than-forecast drop in revenue after its online advertising business bounced back from the pandemic. The company said it will keep investing heavily in technology to boost growth, and the stock slipped in extended trading.

China’s leading search engine reported sales declined 1 per cent to 26.03 billion yuan (US$3.75 billion) in the June quarter, versus an average forecast for 25.7 billion yuan. Net income was 3.58 billion yuan, versus the 2 billion yuan projected, the company said Thursday in a statement.

Baidu is riding a gradual post-COVID 19 recovery in its home market but, at the same time, is trying to ward off increasingly aggressive competition in media and advertising from the likes of Tencent Holdings Ltd. and ByteDance Ltd. The company is diversifying ad revenue sources and investing in content for its Netflix-style iQiyi Inc. to keep users and marketers from migrating to hotter formats like ByteDance’s Douyin, TikTok’s local equivalent.

“With COVID-19 becoming more manageable in China, Baidu’s business is steadily rebounding,” Chief Executive Robin Li said in the statement. “We plan to continue heavy investments in technology to maximize Baidu’s future growth potential.”

What Bloomberg Intelligence Says

“Baidu’s 2Q online marketing sales could contract less than 1Q’s 19 per cent drop as the company emerges from the worst of China’s coronavirus outbreak. The second quarter has been seasonally strong for advertising in the past, and this time Baidu will benefit from the rebound in offline business activity and improved advertiser sentiment.”
– Vey-Sern Ling and Tiffany Tam, analysts

Once the runaway leader in desktop search, Baidu is trying to adapt its business to the mobile era but losing ground piecemeal to rivals such as ByteDance. To compete, it plans to offer subsidies to influencers and direct more traffic to them across its family of apps, including in live-streaming. Longer term, the search giant is investing in artificial intelligence technology, and betting on the commercialization of that through smart speakers and self-driving cars.

Rising geopolitical tensions are another source of concern. Baidu’s apps were among dozens of Chinese services targeted in India’s sweeping ban last month, while U.S. entities will soon be blocked from dealing with TikTok and Tencent’s WeChat. The U.S. Congress is moving closer to passing legislation that could effectively bar Chinese companies from trading on U.S. exchanges. Billionaire Baidu founder Li told state media earlier this year that the company is considering relisting in regions including Hong Kong.

Baidu’s U.S. shares fell about 7 per cent in extended trading following the report. The stock also came under pressure after Iqiyi disclosed Thursday after U.S. markets closed that the U.S. Securities and Exchange Commission is seeking some financial and operating records going back to 2018 and documents related to certain acquisitions and investments. Iqiyi, which is backed by Baidu, said it’s cooperating with the investigation. The company’s U.S. shares dropped as much as 19 per cent.

Baidu also said its board approved an increase of its share-repurchase program to $3 billion from $1 billion, effective through 2022.

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Baidu Tops Revenue Estimates, Will Keep Up Heavy Investment – Yahoo Canada Finance

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(Bloomberg) — Baidu Inc. posted a smaller-than-forecast drop in revenue after its online advertising business bounced back from the pandemic. The company said it will keep investing heavily in technology to boost growth, and the stock slipped in extended trading.

China’s leading search engine reported sales declined 1% to 26.03 billion yuan ($3.75 billion) in the June quarter, versus an average forecast for 25.7 billion yuan. Net income was 3.58 billion yuan, versus the 2 billion yuan projected, the company said Thursday in a statement.

Baidu is riding a gradual post-Covid 19 recovery in its home market but, at the same time, is trying to ward off increasingly aggressive competition in media and advertising from the likes of Tencent Holdings Ltd. and ByteDance Ltd. The company is diversifying ad revenue sources and investing in content for its Netflix-style iQiyi Inc. to keep users and marketers from migrating to hotter formats like ByteDance’s Douyin, TikTok’s local equivalent.

“With Covid-19 becoming more manageable in China, Baidu’s business is steadily rebounding,” Chief Executive Robin Li said in the statement. “We plan to continue heavy investments in technology to maximize Baidu’s future growth potential.”

What Bloomberg Intelligence Says

Baidu’s 2Q online marketing sales could contract less than 1Q’s 19% drop as the company emerges from the worst of China’s coronavirus outbreak. The second quarter has been seasonally strong for advertising in the past, and this time Baidu will benefit from the rebound in offline business activity and improved advertiser sentiment.

– Vey-Sern Ling and Tiffany Tam, analysts

Click here for the research.

Once the runaway leader in desktop search, Baidu is trying to adapt its business to the mobile era but losing ground piecemeal to rivals such as ByteDance. To compete, it plans to offer subsidies to influencers and direct more traffic to them across its family of apps, including in live-streaming. Longer term, the search giant is investing in artificial intelligence technology, and betting on the commercialization of that through smart speakers and self-driving cars.

Rising geopolitical tensions are another source of concern. Baidu’s apps were among dozens of Chinese services targeted in India’s sweeping ban last month, while U.S. entities will soon be blocked from dealing with TikTok and Tencent’s WeChat. The U.S. Congress is moving closer to passing legislation that could effectively bar Chinese companies from trading on U.S. exchanges. Billionaire Baidu founder Li told state media earlier this year that the company is considering relisting in regions including Hong Kong.

Baidu’s U.S. shares fell about 7% in extended trading following the report. The stock also came under pressure after Iqiyi disclosed Thursday after U.S. markets closed that the U.S. Securities and Exchange Commission is seeking some financial and operating records going back to 2018 and documents related to certain acquisitions and investments. Iqiyi, which is backed by Baidu, said it’s cooperating with the investigation. The company’s U.S. shares dropped as much as 19%.

Baidu also said its board approved an increase of its share-repurchase program to $3 billion from $1 billion, effective through 2022.

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Investment dealer GMP Capital reworks wealth management takeover to reflect pandemic impact – The Globe and Mail

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Investment dealer GMP Capital Inc. has reworked its proposed $420-million takeover of a wealth management subsidiary to reflect the realities of a postpandemic market.

Back in February, Toronto-based GMP Capital unveiled plans to swap its publicly traded stock for shares in partly owned subsidiary Richardson GMP. Winnipeg’s Richardson family is a significant shareholder of both companies, and the restructuring has been playing out over the past two years.

On Thursday, GMP Capital announced that, as part of the transaction, its shareholders will receive an additional 15 cents a share, or a total of $11.3-million, in a special dividend. It also said the Richardson clan will leave additional capital in the company to fund expansion by keeping $32.1-million invested in preferred shares, a holding the family was required to redeem.

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In addition, GMP Capital changed the terms of the share swap with Richardson GMP’s owners, who include the firm’s 165 financial adviser teams. The company was planning to trade one GMP Capital share for every two shares of privately held Richardson GMP; now the ratio is one share for every 1.875 shares.

GMP Capital executives said the changes reflect a decline in Richardson GMP’s value after the sharp drop in interest rates in March, which cut into the profits it earns on its clients’ cash balances. In February, the transaction valued the entire franchise at $500-million; now the figure is $420-million.

“The revised terms to the previously announced transaction in February, 2020, strike what, we believe, is an appropriate balance taking into account the effects of the global pandemic, feedback raised by various stakeholders and retaining the appropriate level of capital to execute our long-term value creation strategy,” said Donald Wright, chair of the board at GMP Capital, in a news release.

Shareholders are scheduled to vote on the transaction on Oct. 6. If the deal is approved, the Richardson family will own approximately 40 per cent of Richardson GMP, the company’s financial advisers will have a 28.5-per-cent stake and existing GMP Capital shareholders will hold 31.4 per cent.

Last year, GMP Capital sold its capital markets business to St. Louis-based investment dealer Stifel Financial Corp., raising $42.2-million, in order to focus on managing money for high net worth individuals. Richardson GMP advisers currently oversee $29-billion of client assets, up from $23.5-billion when the stock market slumped in March.

“After a multiyear process to transform GMP, we can begin to capitalize on the considerable opportunities in the multitrillion-dollar wealth management industry in Canada,” said Kish Kapoor, interim president and chief executive of GMP Capital. He said that once the deal is completed, the company plans to recruit financial advisers from rival dealers, including the bank-owned firms, and will attempt to acquire small wealth management platforms.

“We believe, and the Richardson family believes, that the financial services ecosystem needs strong, high-quality independent firms,” Mr. Kapoor said. “Amongst many things, the health crisis has reminded us about the importance and demand for high-quality, face-to-face advice, especially during a period of volatile and uncertain markets.”

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