Good Evening! Monday was a positive day for U.S. equities as Wall Street rebounded from a negative week and an approaching inflation number left investors on edge.
The S&P 500 increased by 1.14%, while the Dow Jones rose by 1.11%. The Nasdaq Composite surged the most by 1.48%.
Shares of commercial-stage biopharmaceutical company Sorrento Therapeutics (SRNE) struggled. What is causing this precipitous decline? Sorrento disclosed in an 8-K filing with the SEC that it and its wholly-owned subsidiary Scintilla Pharmaceuticals (“the debtors”) had voluntarily initiated a Chapter 11 bankruptcy process in the U.S. Bankruptcy Court for the Southern District of Texas.
Why did this happen? This Chapter 11 bankruptcy filing is related to losing an arbitration case against billionaire Patrick Soon-NantPharma Shiong’s LLC, according to an SEC filing. On top of that, The petition also comes after a court affirmed the American Arbitration Association‘s decision to award damages in the millions of dollars in a legal battle with NantCell and NANTibody.
Going forward… there is a possibility that Sorrento may emerge from this restructuring in a better financial position than before this award. But this “best-case scenario” is by no means certain. So long as this significant headwind persists, investors may choose to observe this narrative from the safety of the sidelines.
FORD IS GETTING A HEAD START
Ford (F) stated today that it will build a new battery facility in its home state of Michigan. Ford will develop a $3.5 billion electric vehicle battery facility in Marshall, Michigan, as part of the company’s $50 billion worldwide commitment to electrification.
With this new facility, they take a competitive stance. BlueOval Battery Park Michigan will develop lithium iron phosphate (LFP) batteries for its electric vehicles. Ford asserts that it will be the only U.S. carmaker to produce LFP and nickel cobalt manganese (NCM) batteries. The majority of electric vehicles in the U.S. utilize NCM batteries.
Regarding introducing the EV supply chain to the U.S…. The automaker’s ability to produce batteries in the U.S. will not only help it cut costs, but it will also help it meet the strict requirements set forth by the Inflation Reduction Act (IRA) for domestic battery production and the sourcing of critical minerals. These requirements must be met in order for consumers to be eligible for the federal electric vehicle tax credit.