Research

Pinterest decided to pay $90M to cancel a 10-year lease on 490,000 square feet being built in San Francisco

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As we analyze how our workplace will change in a post-COVID world, we are specifically rethinking where future employees could be based. A more distributed workforce will give us the opportunity to hire people from a wider range of backgrounds and experiences.
Research

Some tech executives still say they think innovation is easier to achieve when employees can meet face-to-face

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Bank of America Corp.’s Chief Operations and Technology Officer Cathy Bessant said that over the long term, developers do a better job of brainstorming and are more productive when they work in person.“Our employees feel like they’re more of a team with a purpose” when they are face-to-face, Ms. Bessant said.In recent months, her department used frequent video calls to maintain communication. It carried out new projects, releasing features for the bank’s virtual assistant, Erica, she said.In the first half of 2020, the bank set a company record for patents filed and granted during the first six months of a given year, Ms. Bessant said.
Research

Companies' difficulty going paperless, and now officeless, may be self-imposed by bias

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For decades, businesses have lamented the fact that they couldn't go paperless because of security concerns or cost, or simply because the status quo was too rigid and no one would change. Our company was already mostly paperless, but now we're also officeless. So the technology to run a back-office online is here. The unvarnished truth is that many companies maintain an inability to adopt a cloud-centric operation that is fully self-imposed and biased. It's not about the technology.
Research

Ford is removing desks for 30,000 employees, expecting remote work at least 40% of the time and easier recruiting than when they required white collar workers to be in Detroit

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Ford asked 30,000 employees to clear out their desks to make way for workplace revamp . . . offices will be arranged with the expectation that many or most employees will be working remotely at least one or two days a week. A survey of 30,000 North American employees this summer found about 70% of workers weren’t interested in returning to the office soon. Most others preferred a schedule that would allow them flexibility to come into the office on some days and work remotely others . . . Ford and GM have long had trouble attracting talent to Detroit . . . [and remote work may help them attract more talent.]
Research

Sharp drop in HSFO - VLSFO spread during COVID has pushed payback period for scrubbers to 4+ years.

View above about Issue: Odds that Ship Owners Opt Not to Install Marine Scrubbers vs. Using VLSFO fuel.

At times in January it looked as though shipowners who’d invested in scrubbers for their fleets could see payback periods of less than two years in some cases. By March, however, the spread between 3.5% HSFO and 0.5% VLSFO dropped to as low as $40 a tonne from over $300, and payback periods are now commonly assumed to be at least four or five years. We’re unlikely to see sustained interest for retrofitting scrubbers as long as the spread remains low. On newbuilds, I’m slightly more optimistic about positive economics.
Research

Amazon committed to physical office space for 3,500 more employees in 6 cities

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Amazon, which was early in sending employees home when the pandemic hit, is allowing staff who can work from home to do so until Jan. 8. The company, however, expects much of its staff to one day return to its offices, Vice President of Workforce Development Ardine Williams said. “The ability to connect with people, the ability for teams to work together in an ad hoc fashion—you can do it virtually, but it isn’t as spontaneous,” Ms. Williams said in an interview. “We are looking forward to returning to the office.” Amazon is adding more than 900,000 square feet across the six locations where it is expanding. The New York space alone totals 630,000 square feet. The jobs at the hubs will include engineering and product-management roles as well as others across various departments, including Amazon Web Services, the Alexa virtual-assistant team, advertising and Amazon Fresh. All the positions being added are new, Ms. Williams said.
Research

REI is selling its newly-built HQ and will make remote working the "normalized model" for HQ employees

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Outdoor retailer REI is selling its newly completed -- and currently unused -- 8-acre corporate campus in Bellevue, Washington, instead shifting to a "less centralized approach to its headquarters presence in the Seattle area." "The dramatic events of 2020 have challenged us to reexamine and rethink every aspect of our business and many of the assumptions of the past. That includes where and how we work," said REI CEO Eric Artz in a statement. "As a result, our new experience of 'headquarters' will be very different than the one we imagined." The future "headquarters" will instead consist of multiple satellite campuses in the Seattle area, the retailer said, rather than one central location. Remote working will be the "normalized model" for headquarters employees.
Analysis

LiqTech forms JV to Supply Water Systems to Middle East Oil & Gas Industry

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LIQT revenue declined by 50% and earnings were down 1,300% y-oy-y for Q2 as COVID has shutdown and delayed much of planned closed loop filter installations for ships. In an effort to diversify its business and increase future revenue opportunities, LiqTech formed a JV to supply water treatment systems for Middle East oil and gas industry. Investors may come to see the additional opportunities as a hedge and upside potential for LiqTech. We increased our odds of success for LiqTech in Industrial Filters and see a Mean return of 2.6x over 5 years for LiqTech's stock. If Closed Loop filters are not widely adopted or if LiqTech does not capture significant market share, the downside could lead to a languishing stock with 34% odds of losing money over 5 years.
Analysis

IMO2020 Enforcement Not a Certainty with COVID Impact on Shipping and Port Industries

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As highlighted in the prior post, COVID may hamper efforts to enforce IMO2020, the main driver of ships installing a closed loop filter. While we believe the long-term odds for IMO2020 enforcement are high, they are not an absolute certainty. Our model explicitly assigns odds for IMO2020 enforcement and the impact to the TAM of LIQT and ultimately LIQT stock price. You can see the odds of IMO2020 enforcement, we currently believe at 90%, and the impact to the number of filters ultimately installed.
Research

COVID-19 May Hamper Efforts to Enforce IMO2020 in the Near Term

View above about Issue: Our Odds IMO2020 is NOT Enforced

On 1 April 2020, with the unprecedented coronavirus lockdown in the UK barely two weeks old, the Maritime and Coastguard Agency (MCA) announced that it had suspended routine port state control inspections, including enforcing the International Maritime Organisation’s (IMO) 0.50pc sulphur cap. Port authorities in the rest of Europe and worldwide have not stated so overtly that enforcing the environmental legislation is being sidelined as they prioritise health and the movement of freight. However, according to Beth Bradley, maritime law specialist and partner at commercial law firm Hill Dickinson, a full picture of how well the global shipping industry is complying with IMO 2020 and the effectiveness of enforcement action will not emerge until after the Covid-19 pandemic has receded. “The MCA has been pretty clear that they aren’t going to routinely check for IMO 2020 compliance, but my impression is that nowhere is testing or checking taking place in the way that it would have been had the pandemic not occurred,” she says. “Ports aren’t advertising that this is the case, but it is a realistic position as they are hard pressed in terms of staff numbers and are prioritising issues such as crew changeovers in the wake of Covid-19.