SEC hasn’t approved Bitcoin ETFs, says X account was compromised

Allyson Versprille, Bloomberg News

The U.S. Securities and Exchange Commission said it had not yet granted approval of spot-Bitcoin exchange traded funds, despite a post on X that appeared from the regulator’s official account.

The post, which included a fake comment purporting to be from SEC Chair Gary Gensler, briefly fueled a jump in the price of Bitcoin. Traders have been speculating for weeks that the agency could approve several of the products as soon as Wednesday. 

Gensler said from his X account that the post was a fake and that the agency hadn’t taken action. 

About a dozen companies have applied to list ETFs backed by Bitcoin in the US. The SEC has until Jan. 10 to take action on at least one of those applications, and crypto insiders have speculated the regulator will use that date to announce a slew of decisions at once. 

There are two technical requirements that must be fulfilled before a spot-backed Bitcoin ETF can start trading. First, the SEC must sign off on so-called 19b-4 filings by the exchanges that would list the ETFs. Second, the regulator must approve the relevant S-1 forms, which are the registration applications from the would-be issuers — a list that includes BlackRock and Fidelity.

The SEC is planning to vote on the exchanges’ filings, the 19b-4s, this week, Bloomberg News has reported. The regulator may or may not take action on the issuers’ applications, the S-1s, around the same time. If the SEC grants both sets of required approvals, the ETFs could start trading as soon as the next business day. 

 

Why a pending U.S. decision on Bitcoin ETFs matters

Ben Cousins, BNN Bloomberg

On the cusp of what could be a transformative moment for cryptocurrency, experts are split on what to expect from a pending U.S. securities decision that could expand options for Bitcoin investing.

On Wednesday, the U.S. Securities and Exchange Commission (SEC) is scheduled to release its decision on whether exchanges will be able to launch exchange-traded funds (ETF) backed by Bitcoin.

The change would allow investors to have exposure to the cryptocurrency, without actually buying it. It’s believed that the changes could go a long way toward normalizing crypto investments among traditional investors.

“This is a firm mark of approval and that should drive confidence to the industry overall,” Jess Houlgrave, COO of WalletConnect and former head of crypto for Checkout.com, told BNN Bloomberg in a television interview on Monday.

“I think we will now see a big push in terms of the narrative around ETFs, the narrative around investing in Bitcoin ETFs, which will see competition.”

Houlgrave, who has already seen increasing activity in crypto wallets in advance of the decision, believes it’s too close to the deadline for the SEC to reverse course and deny the applications.

“I think it’s highly unlikely we see the SEC pull something at the eleventh hour here,” she said. “We’re already now talking about pricing and fees, which is often really the last step when we see these ETFs. So to argue that something is going to come up at the last minute is unlikely.”

Several firms, including Grayscale, Fidelity and Invesco, have already released their fee structures for spot ETF trading, a sign that financial companies believe the regulations will be approved.

Markus Thielen, head of research and strategy at Matrixport, isn’t as confident the SEC will offer a swift approval.

“We have been massively bullish last year really predicting this market … but of course, a lot has been priced in and based on our assessments, we have looked at the ETFs and the whole filings, we think that there are actually three building blocks that some investors are maybe a little bit overestimating here,” he said in a television interview.

Thielen pointed to global surveillance regulations for the Bitcoin market that the SEC could want to see before approving, as most exchanges require global cooperation. 

Thielen predicted the SEC could push the deadline approval back a couple of months in order to further study the matter.

WHAT WILL HAPPEN TO BITCOIN PRICES?

Regardless, Wednesday’s announcement will impact the price of Bitcoin.

Thielen worries if the ruling comes down against spot Bitcoin ETFs, prices of the coins could fall as much as 20 per cent in January, while an approval will shoot prices higher, but risks a quick sell-off.

“The risk-reward might be better to just hedge yourself, or go a little bit short through the options and protect yourself,” he said.

On Monday, the price of Bitcoin climbed above $47,000 for the first time since April 2022 in advance of the ruling.

With files from Bloomberg News

Grayscale’s 1.5% fee is higher than spot

Bitcoin ETF competitors like Fidelity, Invesco

Katie Greifeld, Bloomberg News

As spot Bitcoin ETF hopefuls rush to file their final documents with U.S. regulators, a key difference is emerging among the applicants in their proposed fee structures. 

At the top end: The Grayscale Bitcoin Trust, which would carry a 1.5-per-cent fee if the U.S. Securities and Exchange Commission approves its conversion into an exchange-traded fund. While that would be lower than GBTC’s current two-per-cent fee, it comes well above its competitors.

The race-to-the-bottom on fees is a feature of the highly competitive US$8 trillion US ETF industry, where even a couple of basis points of difference can translate into millions of dollars worth of inflows. 

While GBTC has an enormous advantage in existing assets — it boasts $27 billion in assets as a trust since its 2013 inception — its competitors will charge a fraction of its proposed expense ratio. 

Bitwise and Ark / 21Shares are offering an initial sweetener of zero fees for the first six months or the first $1 billion in assets, whichever comes first. After that, their fees rise to 0.24 per cent and 0.25 per cent respectively. 

VanEck’s HODL product would charge 25 basis points. BlackRock intends to charge 0.2 per cent for the first year or until it reaches $5 billion in assets, with 0.3 per cent as its eventual fee.

“This fee war is best possible situation for end investors,” said Bloomberg Intelligence ETF analyst James Seyffart. 

Grayscale said they expect that GBTC would “continue to be a best-in-class offering for investors”, and cited their “liquidity, tight spreads, high trading volumes, and a decade-long track record of operational success”.

Crypto insiders are counting down to Wednesday, when the SEC faces one of its key deadlines to take action on pending spot Bitcoin ETF applications. 

With assistance from Emily Nicolle.

 

West Fraser to close one sawmill, curtail another due to high costs and soft markets

The Canadian Press

West Fraser Timber Co. says it's closing one U.S. sawmill and indefinitely curtailing another because of high fibre costs and soft lumber markets. 

The Vancouver-based company says it's closing its Maxville, Florida, sawmill and indefinitely curtailing operations at its Huttig, Arkansas, sawmill by the end of the month.

West Fraser says the closure of the Maxville sawmill will affect around 80 employees, while the curtailment of the Huttig sawmill will affect 140 employees. 

The company says it will mitigate the impact on employees by providing opportunities at its other operations. 

West Fraser says it anticipates restructuring and impairment charges of approximately $50 million in the fourth quarter of 2023 as a result. 

The decision will reduce West Fraser's U.S. lumber capacity by around 270 million feet.

 

Fired Gildan CEO responds to board criticism in open letter

Jordan Fleguel, BNN Bloomberg

GILDAN ACTIVEWEAR INC (GIL:CT)

42.12 0.05 (0.12%)

As of: 01/09/24 10:18:03 pm
REAL-TIME QUOTE. Prices update every five seconds for TSX-listed stocks

Chart Type - 3month

See Full Stock Page »

Gildan Activewear Inc.’s ousted CEO responded to criticism from the company’s board Tuesday, calling their actions a “premeditated” attack on his record that threatens to undermine the business itself.

“I am deeply disappointed by the actions of the Gildan board of directors. Having been at the helm of Gildan for more than two decades, I take great offence at what appears to be a premeditated effort to publicly undermine my record,” Glenn Chamandy said in a statement.

“What is even worse from a corporate standpoint, is that their careless behaviour is also tarnishing the reputation of a great company.”

Chamandy was dismissed by Gildan’s board of directors on Dec. 11. Soon after, several of the company’s biggest investors called for him to be reinstated, including U.S. investment firm Browning West, which owns a five per cent stake in the company.

After Chamandy’s Tuesday statement, Browning West requested a special meeting of Gildan shareholders with the aim of replacing eight of the company’s 11 board members and reinstating Chamandy as CEO -- increasing its previous request to replace five board members.

Chamandy, who had been the company’s chief executive for nearly 20 years, maintains he was fired without cause.

In a statement released Monday, Gildan’s board said they were unanimous in their belief that keeping the longtime executive “would have jeopardized the future of Gildan and destroyed shareholder value.” 

The board also reiterated earlier statements that Chamandy forced a showdown over a proposed multibillion-dollar acquisition strategy, and said they were “dubious about these high-risk acquisitions, particularly in light of Mr. Chamandy’s inability to answer even the most basic questions about his strategic proposal.”

Chamandy responded Tuesday by saying that “contrary to what the board claims,” the strategy showed “meaningful organic growth prospects” for the company and was supported by Gildan’s management team.

“The board's unfortunate actions have resulted in a massive loss of shareholder value,” Chamandy’s letter continued.

“This destructive course of action is counterproductive, and all efforts should be redirected at driving growth that benefits all Company stakeholders, a priority which has traditionally been at the core of Gildan's values.”

Since reaching a 2023 high of more than $50 per share in early December prior to Chamandy’s departure, Gildan stock was down more than 17 per cent as of Tuesday morning.

With files from Bloomberg News and the Canadian Press

Gildan board says fired CEO Chamandy was distracted by deals, golf resort

Mathieu Dion, Bloomberg News

Takeaway for other boards watching Gildan shakeup is lead, follow or get out of the way: Professor

GILDAN ACTIVEWEAR INC (GIL:CT)

42.12 0.05 (0.12%)

As of: 01/09/24 11:08:48 pm
REAL-TIME QUOTE. Prices update every five seconds for TSX-listed stocks

Chart Type - 3month

See Full Stock Page »

The board of Gildan Activewear Inc. is digging in for a fight against major shareholders who are pressuring the clothing manufacturer to bring back fired chief executive officer Glenn Chamandy. 

Gildan directors publicly attacked Chamandy’s track record and strategies in a letter released Monday, saying they are unanimous in their belief that keeping the longtime executive “would have jeopardized the future of Gildan and destroyed shareholder value.” 

The Canadian company, which owns the American Apparel brand, is the subject of an unusual, and increasingly bitter, feud between the board and several large investors over who should run the company. Gildan announced Chamandy’s departure on Dec. 11. 

Los Angeles-based investment firm Browning West LP said last month it plans to force a shareholder meeting to elect new directors and install United Rentals Chair Michael Kneeland as chair. The effort to overhaul the board and reinstate Chamandy also has the support of Jarislowsky Fraser Ltd. and Turtle Creek Asset Management Inc. 

Those three firms together own about 15 per cent of Gildan’s shares, according to their statements and public filings. 

In Monday’s letter, the Gildan board reiterated earlier statements that Chamandy forced a showdown over a proposed multibillion-dollar acquisition strategy. “The board was dubious about these high-risk acquisitions, particularly in light of Mr. Chamandy’s inability to answer even the most basic questions about his strategic proposal,” it said, without naming the proposed acquisition targets. 

The board also accused him of being a distracted CEO and said he was rarely in the office, even after the end of COVID shutdowns. 

“Mr. Chamandy was chief executive for 20 years, and, in his last few years he gradually became more disengaged as CEO as he increasingly focused on outside personal pursuits including the development of a golf resort in Barbados,” the directors said.

“We would have preferred to keep many of these details private, but the public misinformation tactics by Mr. Chamandy and Browning West demand a public response.”

Chamandy and Browning West did not immediately reply to a request for comment.

Gildan shares were little changed shortly after 10 a.m. Monday. The Montreal-based company’s market capitalization is $7.2 billion down by more than $1 billion since Chamandy was sacked.

The board named a former Fruit of the Loom executive, Vince Tyra, as the next CEO. Browning West and other holders have been scornful of that appointment, questioning Tyra’s track record.