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Are the wheels falling off Tesla?

In today’s top stories, Tesla mechanical faults are being investigated, as Elon Musk apologises to a former employee. Elsewhere, secondary share sales jumped to $7.4bn in February, with American Water Works [AWK] at the forefront of the action. University of Rochester scientists claim to have discovered a commercially viable superconductor. Joe Biden is hoping to close a crypto tax loophole in his upcoming budget, as Silvergate Capital [SI] goes into liquidation. Lastly, there have been warnings that Chinese AI groups are using cloud technology and third-party rental arrangements to evade US high-tech export restrictions.

Are the wheels falling off Tesla?

The US National Highway Traffic Safety Administration has opened investigations into allegations that a fatal crash was caused by Tesla’s [TSLA] Autopilot system, and into two accounts of its Model Y’s steering wheel falling off. Furthermore, a new photo shows Tesla’s Cybertruck’s single windshield wiper isn’t effectively cleaning drivers’ windows. Berenberg analyst Adrian Yanoshik has downgraded the stock. Elon Musk has apologised to a disabled Twitter employee he mocked on the app this week.

A superconductor for high-speed trains

University of Rochester scientists claim to have discovered a commercially viable superconductor that could improve grid efficiency, nuclear fusion, battery life and high-speed trains. The news comes in the wake of a Norfolk Southern Corp [NSC] train’s catastrophic derailment in the US state of Ohio, to which major freight railroad operators are responding with plans to add 1,000 temperature sensors along their routes.

Biden budget to close crypto loophole

US President Joe Biden is hoping to close a crypto tax loss harvesting loophole in his budget, which will then face congressional approval before he can sign it into law. Silvergate Capital [SI], a key lender for cryptocurrencies, is going into liquidation following recent turmoil in crypto markets. Alameda Research, the investment arm of failed crypto exchange FTX, has agreed to sell its $45m stake in Sequoia Capital to the Abu Dhabi sovereign wealth fund to raise funds for its creditors.

Could an IPO boom follow on from bumper February?

Secondary share sales (or follow-ons) rose to $7.4bn in February, from $1.8bn in the same month last year, fuelling optimism that the IPO market is set to recover. Follow-ons are seen as a barometer for IPO appetite. American Water Works [AWK] held the largest follow-on since June 2022 when it sold over $1.7bn in stock last week. Optimism for upcoming IPOs, such as that of British chipmaker Arm, is rising.

Geopolitical chips

Chinese AI groups are using cloud technology and third-party rental arrangements to evade US restrictions on high-tech exports to China. US pressure has led the Netherlands, home of ASML [ASML], to restrict exports of advanced microchip technology. Citigroup has warned its clients that Russia could be “weaponising” its status as a key exporter of aluminium, palladium and nuclear fuels by restricting sales and hiking prices.

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