• Facebook's Libra Probably Won't Happen, Analyst Pachter Says
    Bloomberg

    Facebook's Libra Probably Won't Happen, Analyst Pachter Says

    Oct.11 -- Michael Pachter, Wedbush analyst, explains why he doesn't think Facebook Inc. will be able to launch its Libra cryptocurrency. He speaks with Bloomberg's Taylor Riggs on "Bloomberg Technology."

  • Trade Deal Will Send Apple's Bears Into Hibernation, Analyst Ives Says
    Bloomberg

    Trade Deal Will Send Apple's Bears Into Hibernation, Analyst Ives Says

    Oct.11 -- Dan Ives, Wedbush Securities analyst, discusses the potential impact of the U.S.-China trade deal on Apple Inc. with Bloomberg's Taylor Riggs on "Bloomberg Technology." Ives, his family and his firm do not own shares of Apple.

  • WeWork Said to Weigh Bailout That Hands Control to SoftBank
    Bloomberg

    WeWork Said to Weigh Bailout That Hands Control to SoftBank

    (Bloomberg) -- WeWork is considering a bailout that will hand control of the co-working giant to SoftBank Group Corp., according to a person familiar with the matter, one of two main options to rescue the once high-flying startup.The Japanese investment powerhouse controlled by billionaire Masayoshi Son is convinced it can turn around the cash-strapped American company with the right financial controls in place, the person said, asking not to be identified talking about internal deliberations. WeWork’s board and backers however are also weighing another option: JPMorgan Chase & Co. is leading discussions about a $5 billion debt package, Bloomberg has reported.Either rescue package would ease a cash crunch that could leave the office-sharing company short of funds as soon as next month. The office-sharing startup had been headed toward one of the year’s most hotly anticipated IPOs before prospective investors balked at certain financial metrics and flawed governance, turning the American giant into a cautionary tale of private market exuberance and costing the company’s top executive his job.The fast-growing, money-losing startup had been counting on a stock listing -- and a $6 billion loan contingent on a successful IPO -- to meet its cash needs.Son, SoftBank Risk Too Much With WeWork Takeover: Tim CulpanRead more: WeWork Is in Talks for $5 Billion Debt Package With LendersThe Wall Street Journal first reported that SoftBank may be discussing a deal to gain control of WeWork. Representatives for the Japanese company weren’t immediately available for comment Monday, a national holiday.SoftBank is already WeWork’s biggest shareholder but the proposed deal would shore up its control of the startup, the person said, declining to elaborate on when a decision on the competing offers might be reached. The Japanese company is in advanced talks to acquire more shares at a significantly lower valuation than the $47 billion WeWork sported in January, two people familiar with those discussions said last week. The New York Times has reported that members of the board would meet Monday to decide on which bailout to select.If the board ops for the SoftBank deal, the Japanese company will be taking on a troubled enterprise at a time it’s struggling to convince the market about its longer-term investment vision. It’s also busy wooing potential investors for a successor to its record-breaking Vision Fund.Read more: SoftBank’s Son Is ‘Embarrassed’ By Record, Impatient to ImproveSon is going through a rocky stretch after repositioning his company from a telecommunications operator into an investment conglomerate, with stakes in scores of startups around the world. He built a personal fortune of about $14 billion with spectacularly successful bets on companies such as Alibaba Group Holding Ltd. But SoftBank’s shares are down about 30% from their peak this year as investors, unnerved by WeWork and Uber Technologies Inc.‘s disappointing debut, grow skittish about startup valuations. In an interview with the Nikkei Business magazine, Son said he is unhappy with how far short his accomplishments to date have fallen of his goals.WeWork and Uber may be losing money now, but they will be substantially profitable in 10 years’ time, Son said in that interview. But at a private retreat for portfolio companies late last month, he had a different message: get profitable soon. At the gathering, held at the five-star Langham resort in Pasadena, California, Son also stressed the importance of good governance. Just days later, SoftBank led the ouster of WeWork’s controversial co-founder Adam Neumann.“WeWork has retained a major Wall Street financial institution to arrange a financing,” a representative for the U.S. company said in a statement on Sunday. “Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company’s management and its bankers over the course of this past week and this coming week.”(Updates with details of SoftBank investments from the sixth paragraph)To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Michelle F. Davis in New York at mdavis194@bloomberg.net;Davide Scigliuzzo in New York at dscigliuzzo2@bloomberg.netTo contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, ;Tom Giles at tgiles5@bloomberg.net, Edwin Chan, Virginia Van NattaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • How Do You Value Amazon Heading Into 2020?
    Morningstar

    How Do You Value Amazon Heading Into 2020?

    With Amazon's AMZN business model evolving the past several years and questions about breaking up large technology companies likely to persist through the 2020 election cycle (and probably longer), we believe it's appropriate to revisit the longer-term assumptions behind our discounted cash flow analysis and introduce a sum-of-the-parts valuation for each of Amazon's key business units. While we don't see a breakup of the company as imminent, we believe this exercise can help investors gain greater confidence in an Amazon investment, which remains our top pick in online retail.

  • FX Empire

    A Light Economic Calendar Puts the GBP and Brexit in the Limelight

    The Dollar found strong support early, as the markets considered the implications on existing tariffs on the economic outlook. Brexit chatter also weighed.

  • Trade war rejuvenates 'Silicon Valley' firms in Malaysia
    Reuters

    Trade war rejuvenates 'Silicon Valley' firms in Malaysia

    Years after resisting pressure to move to China, Lee Hung Lung says his bet has paid off. Sales at his Malaysia-based Hotayi Electronic are surging, it's hiring more workers, considering an expansion, and picking and choosing orders. Lee is the founder and CEO of Hotayi, whose two factories manufacture and assemble circuit boards and other electronics products.

  • Bloomberg

    Beware of Funny Financials

    (Bloomberg Opinion) -- However frothy valuations currently seem to be, optimists can always argue they’re justified by strong earnings. In the past four years, S&P 500 operating earnings per share have grown by nearly 40%.Those numbers, however, may be as airy as the asset prices they support. The U.S. government’s national income and product accounts -- which cover a broader number of businesses than the S&P, use tax returns and adjust for certain accounting practices -- suggest that corporate profits actually peaked in 2014 and have been stagnant since. The national accounts also show significant downward revisions to corporate profit margins over the previous five years. While one would expect some discrepancies between that data and S&P numbers, which are based on Generally Accepted Accounting Principles (GAAP), the gulf is too wide to be ignored.What’s going on? In many cases, accounting choices appear to be distorting results. In early 2019, General Electric Co. reported GAAP losses of $2.43 per share; under adjusted figures it earned $0.65 per share. Tesla Inc. reported full-year GAAP losses of $5.72 per share but “non-GAAP” losses were only $1.33 per share. Over 95% of S&P 500 companies regularly use at least one non-GAAP measure, up about 50% over the last 20 years.One question is how companies choose to recognize income. In the case of long-term, multi-year contracts, such as construction projects, reported revenue can be based on a formula: a portion of the total contract amount, calculated as costs incurred in the relevant period as a percentage of total forecast costs. Understating estimated final costs allows margins to be increased and greater revenue to be recognized up front. Following the collapse of Carillion PLC, the firm was found to be aggressive in recording income which was sensitive to small changes in assumptions. Given the trend to converting sales of products (such as software) into long-term service contracts, these risks are only going to grow. Companies can understate expenses. Many tech companies use non-GAAP accounting to strip out the cost of employee stock options, for instance, thereby showing higher earnings. WeWork sought to redefine traditional earnings before interest, tax, depreciation and amortization as something called “community-based EBITDA.” The new measure conveniently excluded normal operating expenses such as marketing, general and administrative expenses, development and design costs.Spending may be treated as an asset, to be written off in the future rather than when expended. A recent JPMorgan Chase and Co. research report found software intangible assets (the amount spent but not yet expensed) averaged up to 15% of adjusted costs for a sample of European banks. The idea is to better match expenses to the period over which they are expected to benefit the business. But the practice may overstate current earnings.Related-party transactions can distort a company’s true financial position. Saudi Arabia slashed the tax rate on large oil companies to 50% from 85%, even though the government depends on the profits of Saudi Arabian Oil Co. for 80% of its revenues. Aramco will still pay most of its profits to the state, but as dividends rather than tax. That means reported profits will be higher, potentially increasing the company’s valuation ahead of a highly anticipated initial public offering. Complex structures can mask liabilities. Tesla, for instance, faces potential payments related to its SolarCity business. Before being bought by Tesla in 2016, SolarCity regularly sold future cash flows to outside investors in exchange for upfront cash. Tesla assumed these obligations and has continued the practice. The obligations now reportedly total over $1.3 billion.To reduce unfunded pension liabilities, some companies have borrowed at low available interest rates to inject money into the funds. That’s fine as long as fund returns -- generally assumed to be around 6% to 8% -- are higher than the cost of borrowing. If returns come in lower, however, the companies in question will have to raise their contributions, affecting future earnings.New business models often disregard potential costs. If Lyft Inc. and Uber Technologies Inc. drivers are reclassified as employees as proposed in California, then hidden employment costs would need to be recognized, perhaps retrospectively. Newly listed fitness company Peloton Interactive Inc. faces a $300 million lawsuit from music publishers who claim the company used their songs in workouts without paying licensing fees.Finally, stated asset values can be misleading. Goodwill, the difference between acquisition price and the fair value of actual assets acquired, now averages above 50% of acquisition price. Goodwill values are notoriously uncertain. In 2018, GE unexpectedly wrote off $23.2 billion of goodwill arising from its acquisition of Alstom SA.The problem is compounded by private markets, where funding rounds can establish questionable valuations. Recent investments into WeWork valued the company at over $40 billion, more than three times the projected pricing of its abandoned IPO. A recent proposal to get Saudi businesses to make anchor investments in Aramco ahead of its IPO could also inflate its valuation.“Fake” financials, as some would call them, undermine markets. With a correction looking increasingly likely, investors need to start working with regulators and standard setters now to close accounting loopholes, while scrutinizing underlying data more closely. Otherwise, the more creatively companies are allowed to manage their financial position for short-term gain, the bigger the bill is going to be.(Corrects definition of goodwill in twelfth paragraph.)To contact the author of this story: Satyajit Das at sdassydney@gmail.comTo contact the editor responsible for this story: Nisid Hajari at nhajari@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Satyajit Das is a former banker and the author, most recently, of "A Banquet of Consequences."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Amazon Stock Highlights: Week 2, October 2019
    Market Realist

    Amazon Stock Highlights: Week 2, October 2019

    In the last week, we looked at Amazon Inc (AMZN) stock trends. Here is another attempt to decode the same patterns for the second week of October 2019.

  • Trade war pause, retail sales, bank earnings – What to know in the week ahead
    Yahoo Finance

    Trade war pause, retail sales, bank earnings – What to know in the week ahead

    The coming week’s docket of economic reports and earnings releases comes just following the Trump administration’s announcement of a partial trade deal with China late last week.

  • D. E. Shaw & Company: Top Holdings and Fears
    Market Realist

    D. E. Shaw & Company: Top Holdings and Fears

    David Elliot Shaw or D.E. Shaw is a prominent billionaire hedge fund manager and founder of the firm D. E. Shaw & Company.

  • Cambridge Analytica whistleblower slams Facebook for 'stalker' practices
    Yahoo Finance

    Cambridge Analytica whistleblower slams Facebook for 'stalker' practices

    Cambridge Analytica whistleblower Christopher Wylie blasted Facebook’s continued influence after its widely publicized data scandal,

  • Buttigieg: 'There's no question there's anti-competitive behavior' in Big Tech
    Yahoo Finance

    Buttigieg: 'There's no question there's anti-competitive behavior' in Big Tech

    Democratic presidential candidate noted the anti-competitive behavior among Big Tech.

  • Twitch: Bezos Owns the Ace of Spades
    Market Realist

    Twitch: Bezos Owns the Ace of Spades

    Even with Jeff Bezos bought the video game streaming company Twitch, he raised a lot of questions. At the time, his vision was unclear.

  • Trump Opts for Bezos’s Twitch and Amazon
    Market Realist

    Trump Opts for Bezos’s Twitch and Amazon

    Bezos's Amazon (NASDAQ: AMZN) stock closed on Friday, October 11, at $1731.92. In the extended trading hours, the stock was around $1,732.

  • 'One app to rule them all is dead': How Uber and Lyft can get disrupted
    Yahoo Finance

    'One app to rule them all is dead': How Uber and Lyft can get disrupted

    In Berlin, companies like Uber don't have a dominant hold on transportation. Instead, many companies compete for a slice of the market.

  • Bloomberg

    Starbucks Stores That Only Accept Mobile Orders Sure Beat the Line

    (Bloomberg Opinion) -- How worried should we be about Starbucks’s recent announcement that it plans to begin testing a new type of store that only takes orders via mobile app — no cashiers?At first glance the image seems vaguely dystopian: person after person filing through, inevitably wearing AirPods, to pick up caffeine-and-sugar infusions they ordered by pressing a few buttons on their smartphones as they were leaving home — all without a moment of human interaction.(1)But that’s more or less what’s happening right now at regular Starbucks stores: the company already accepts mobile orders, and has more than 16 million mobile users. The drawback is that those users crowd the stores and cause bottlenecks at peak times; in some outlets, the glut of mobile orders has gotten so bad that it’s discouraging walk-in customers. Thus, the mobile-only store model is presumably a response to problems already created by mobile ordering.Experiments of this kind are increasingly common. Amazon Go stores are cashier-less. Some grocery stores let you scan items as you pick them up and economize on checkout time. And mobile ordering is becoming widespread for foods ranging from salad to lobster. So we might not be too far away from the day when mobile ordering and cashier-less purchasing are the norm, rather than the exception.Will we be better off for it?In Starbucks’s case, at least, mobile-only stores might actually work out well for customers. Those who want to order via mobile will be able to go to specialized stores optimized for handling them. And that will reduce congestion at other stores, meaning that people there won’t have to spend as much time waiting for their drinks.As with many forms of product differentiation, the change might even increase demand for Starbucks coffee. Anyone who previously found Starbucks too time-consuming to stop in during their morning commutes will have a new, faster option. And people who had been driven off by the throngs of mobile-order customers might be able to come back.It’s less clear, however, how mobile-only stores will affect Starbucks employees.Some activists are trying to push for laws that would put limits on the shift to cashier-less shopping, requiring that stores must have humans on hand to ring up customer orders. That’s an onerous proposal — analogous to saying that every ATM should also have a bank teller on hand.(2)But still, you can see why there’s concern. Presumably, cashier-less stores will need fewer employees, even if they do pull in a large number of new customers. And reducing congestion in regular Starbucks stores might reduce staffing needs there as well.Then there's the drudgery factor: Working in a mobile-only store will surely be a lot more monotonous, more like being employed on a factory assembly line than in a typical coffee shop, where give-and-take between workers and customers can be part of the appeal. There will be less human interaction – and what interactions there are might well be with upset customers.It’s also likely that the workers at mobile-only stores won’t make nearly as much in tips. First off, customers might not feel an obligation to employees they don’t interact with personally. Moreover, tipping using an app isn’t observable to others, and there’s solid evidence that people take prosocial actions more frequently when others are watching.  In other words, people tend to tip more when they know they're being observed.That said, the Starbucks app’s default tipping options are on the order of 10% to 20% -- higher than many people give with the typical change-in-jar approach. So if Starbucks pushes app tipping hard with notifications and alerts, there might not be too much of a shortfall. Better would be to still have a physical tip jar in mobile stores — or even to place a star on the order display board next to the name of anyone who tips.So there’s a chance that mobile-only Starbucks might be beneficial overall, rather than dystopian. Or at least not as dystopian as the pumpkin-spice latte.(1) I mean, isn’t that basically one of the opening scenes of the movie "Equilibrium"?(2) And what about completely automated coffee shops like those now operating in San Francisco?To contact the author of this story: Scott Duke Kominers at skominers1@bloomberg.netTo contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Scott Duke Kominers is the MBA Class of 1960 Associate Professor of Business Administration at Harvard Business School, and a faculty affiliate of the Harvard Department of Economics. Previously, he was a junior fellow at the Harvard Society of Fellows and the inaugural research scholar at the Becker Friedman Institute for Research in Economics at the University of Chicago.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Warren Buys Facebook Ads That Claim Zuckerberg Backs Trump
    Bloomberg

    Warren Buys Facebook Ads That Claim Zuckerberg Backs Trump

    (Bloomberg) -- Elizabeth Warren is buying ads on Facebook that falsely claim Mark Zuckerberg has endorsed President Donald Trump -- a ploy used to showcase that ads posted by politicians need to be fact-checked.The Democratic presidential candidate’s campaign sponsored the posts that were blasted into the feeds of U.S. users of the social network, pushing back against Facebook’s policy to exempt politicians’ ads from its third-party fact-checking program.The ad begins with a lie: Facebook’s chief executive officer “just endorsed” Trump for re-election. It quickly backtracks to the truth.“You’re probably shocked. And you might be thinking, ‘how could this possibly be true?” the ad said. “Well, it’s not.”Facebook’s fact-checking policy allowed Trump’s team to share ads on the social network that allege former Vice President Joe Biden promised Ukraine $1 billion for firing a prosecutor. Biden’s campaign has dismissed Trump’s allegations as a smear.“What Zuckerberg ‘has’ done is given Donald Trump free rein to lie on his platform -- and then to pay Facebook gobs of money to push out their lies to American voters,” Warren said in the ad.Biden’s campaign has written to both Twitter and Facebook asking for the ads to be taken down, but the platforms refused, according to technology site The Verge. It quoted a Twitter spokesman as saying, “The ad you cited is not currently in violation of our policies.”Facebook’s decision to allow Trump’s ad contrasts with CNN, which rejected a request by the president’s campaign to run what the network called two “demonstrably false” claims.“If Senator Warren wants to say things she knows to be untrue, we believe Facebook should not be in the position of censoring that speech,” Andy Stone, a spokesman for Facebook, said in a statement to CNN on the ads.(Updates with details throughout)To contact the reporter on this story: Siraj Datoo in Singapore at sdatoo@bloomberg.netTo contact the editors responsible for this story: Shamim Adam at sadam2@bloomberg.net, Atul PrakashFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Activision Blizzard Softens Player’s Punishment After Backlash
    Bloomberg

    Activision Blizzard Softens Player’s Punishment After Backlash

    (Bloomberg) -- Activision Blizzard Inc., facing the threat of a boycott, reduced the punishment it meted out to a tournament player who voiced support for Hong Kong’s pro-democracy demonstrators.The company’s Blizzard Entertainment division originally barred the player from events for a year and stripped him of some $10,000 in prize money. But it said at the end of the week that it would cut the ban to six months and pay his winnings.The reversal followed an uproar from customers and even U.S. lawmakers, who felt Blizzard was kowtowing to China by punishing the player. Some analysts worried the boycott might take a toll on a company that’s already suffered recent upheaval.“This represents a new risk,” Cowen & Co. analyst Doug Creutz said in a note earlier this week. “though at present one that is very hard to evaluate.”It all started when Chung Ng Wai, a gamer who goes by the name Blitzchung, wore a gas mask and chanted a pro-Hong Kong slogan in an interview after a tournament. Blitzchung plays Hearthstone, an online card game from Blizzard.China considers support for the demonstrators an affront to the nation and its people, and Blizzard treated it as a grave offense. Blizzard said he violated its rules against an act that “brings you into public disrepute, offends a portion or group of the public, or otherwise damages Blizzard image.”But customers and even some Blizzard workers felt the reaction was too extreme. In the furor that ensued, several employees staged a protest at its offices in Orange County, California. They covered up a plaque that read “Every Voice Matters” and held up umbrellas -- a symbol of the Hong Kong protesters.“In hindsight, our process wasn’t adequate, and we reacted too quickly,” J. Allen Brack, president of Blizzard Entertainment, said in the statement. Still, he added that “if this had been the opposing viewpoint delivered in the same divisive and deliberate way, we would have felt and acted the same.”Fans calling for a boycott also complained that they had trouble canceling their subscriptions to the company’s games, which include the hit Overwatch. Among the gripes: that they had to show government identification to cancel and that other roadblocks were put in place.Server Overload?Some of the cancellation complaints may have been overblown. The video-game site Polygon said the roadblocks probably stemmed from Blizzard’s servers being overloaded, not a deliberate attempt to keep users from deleting their accounts.Video-game companies have had to grapple more with free-speech issues in recent years, now that esports -- gaming competitions that are broadcast to millions of fans -- are such a big part of the industry. The maker of League of Legends, a division of Tencent Holdings, said this week that it won’t let broadcasters discuss “sensitive” topics, including political or religious issues.For Activision Blizzard, the boycott threat came at a particularly difficult time. The Santa Monica, California-based company has struggled to come up with fresh hits, and executive turnover is high. The heads of Activision Blizzard’s three major divisions have been replaced over the past year, as was its chief financial officer, who quit.And the company is counting on customers embracing a mobile version of its hit shooting game Call of Duty, done in partnership with Tencent, which has also invested in Activision Blizzard.The company also is preparing for Blizzcon, its big fan convention held in Anaheim, California, in early November. Attendees have threatened to come dressed as Winnie the Pooh, which has become a symbol of resistance against the Chinese government.“We suspect that the decision to punish Blitzchung, which almost certainly had input from senior Activision management, was met with dismay by a meaningful portion of Blizzard’s staff,” Creutz said. “Investors are counting on a turnaround at Blizzard to reinvigorate growth, but if the internal culture is in turmoil, there is a lot of risk to that thesis.”Blitzchung’s punishment stood in stark contrast to how the NBA handled its China controversy this week. In that case, the Houston Rockets General Manager Daryl Morey tweeted his support for the Hong Kong protests, right before the league was due to play a couple of preseason games in China. But the league didn’t punish Morey and has instead endured a backlash from Chinese authorities and sponsors there.Activision’s reaction also contrasted with that of Epic Games founder Tim Sweeney, the creator of Fortnite. Sweeney, whose company also has Tencent as a significant shareholder, said on Twitter this week that he supports free speech.“Epic supports the rights of Fortnite players and creators to speak about politics and human rights,” he said.To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.netTo contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob GolumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Elizabeth Warren trolls Facebook with 'false' Zuckerberg ad
    The Guardian

    Elizabeth Warren trolls Facebook with 'false' Zuckerberg ad

    Ad claims CEO backs Trump – then admits it’s not true – after company admits letting politicians make false statements. Facebook has been taking heat all week for its decision to allow politicians to make false statements in paid advertisements. Now the Democratic senator and presidential candidate Elizabeth Warren is taking the fight to the social media company’s own turf by taking out a series of Facebook ads that make false statements about Facebook and its chief executive, Mark Zuckerberg. “Breaking news: Mark Zuckerberg and Facebook just endorsed Donald Trump for re-election,” the ads read, above a photograph of a recent Oval Office meeting between the billionaire tech executive and the president. The statement isn’t true, but as the Facebook executive Nick Clegg revealed late last month, the company’s policies banning false statements from paid advertisements do not apply to politicians. The exemption has drawn particular attention due to Facebook’s decision to allow Trump to run an ad that was rejected by CNN for promoting a “demonstrably false” narrative about Joe Biden. Warren’s ad does correct the record – neither Facebook nor Zuckerberg has endorsed Trump – but goes on to argue her point: that “Facebook already helped elect Donald Trump once” and that “It’s time to hold Mark Zuckerberg accountable”. Warren has advocated for antitrust action against major tech companies and has called for Facebook to be broken up into multiple smaller companies. Last week, leaked transcripts of a July meeting at Facebook revealed that Zuckerberg had promised to “go to the mat” and “fight” if Warren was elected and pursued her plan to break the company up. He also described her antitrust proposal as an “existential” threat and said it would “suck for us”. Warren appears to relish the fight with Facebook. She shot back: “What would really ‘suck’ is if we don’t fix a corrupt system that lets giant companies like Facebook engage in illegal anticompetitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy.” A Facebook spokesperson responded to the new ads to CNN, which first reported on them, saying: “If Senator Warren wants to say things she knows to be untrue, we believe Facebook should not be in the position of censoring that speech.”

  • Facebook's Libra Loses Mastercard, Visa in Cascade of Exits
    Bloomberg

    Facebook's Libra Loses Mastercard, Visa in Cascade of Exits

    (Bloomberg) -- Facebook Inc.’s effort to create a cryptocurrency was dealt a blow on Friday after several key partners, including Mastercard Inc., Visa Inc., EBay Inc., Stripe Inc. and Mercado Pago, abandoned the project. The defections followed fierce criticism from global regulators and lawmakers, and have prompted some industry-watchers to question whether the Libra program can survive.The news comes days before the Libra Association, the group that will oversee the digital currency, prepares to convene its members and ask them to sign a charter agreement. The meeting is slated to take place on Monday in Geneva. A Libra Association spokeswoman said on Friday that the gathering will proceed as planned, and that it would announce the first list of official partners once a formal charter is signed.In a statement, the spokeswoman said the group was "focused on moving forward and continuing to build a strong association" as it worked to create "a safe, transparent, and consumer-friendly implementation of a global payment system that breaks down financial barriers for billions of people."When Facebook launched plans for Libra in June, a critical part of its pitch was that major players in the payments and tech industry were supporting it. The cryptocurrency would be run out of Geneva by the organizations that comprised the Libra Association, not solely by Facebook. But now that that alliance appears to be eroding, the project’s future is uncertain."I don’t think Facebook can do this by itself," said Michael Pachter, an analyst for Wedbush Securities told Bloomberg TV. "Short of a big bank stepping in like JPMorgan, I don’t think this could ever happen."In a tweet on Friday, David Marcus, the Facebook executive spearheading the effort, said that the exit of six partners would not derail the effort. "I would caution against reading the fate of Libra into this update," he wrote. "Change of this magnitude is hard. You know you’re on to something when this much pressure builds up."Whether or not Libra implodes, the exits highlight the extreme challenges that lie ahead for the project, which if successful could have a sweeping impact on the global financial system. "It may very well fail completely," said Lisa Ellis, an analyst at MoffettNathanson. Even if it survives, progress will take much longer and "it’s likely to fall into some level of obscurity," she added.Facebook has faced fierce backlash since the company announced plans for Libra. Politicians and regulators around the world have called on Facebook to halt its progress, and some have suggested Libra could be used for illegal money laundering or trafficking schemes.Despite the scrutiny from public officials and the exodus of partners, Facebook remains committed to Libra, according to a person familiar with the matter who asked not to be identified because they were not authorized to speak publicly. Some people inside the company think the defections are partly driven by established payments providers worrying about a new entrant encroaching on their turf, the person said.In the months since its announcement, Facebook has frequently found itself in the spotlight over the cryptocurrency. Marcus went to Washington in July to testify before Congress about Facebook’s plans. Later this month, Chief Executive Officer Mark Zuckerberg is scheduled to appear before the House Financial Services Committee to answer even more questions about Libra.Earlier this week, two U.S. senators cautioned Visa, Mastercard and Stripe to reconsider their involvement in the project. Senators Sherrod Brown of Ohio and Brian Schatz of Hawaii said that Libra poses a risk to not only the financial system, but the payments companies’ broader business. "We urge you to carefully consider how your companies will manage these risks before proceeding," they said a letter to the companies.Mastercard said in a statement that it will "remain focused on our strategy and our own significant efforts to enable financial inclusion around the world," adding, "We believe there are potential benefits in such initiatives and will continue to monitor the Libra effort." Visa said the company would also continue to evaluate whether to join in Libra in the future, and that the company’s "ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations."In a statement on Friday, EBay expressed its support for the project, but said it would focus on rolling out its own payments products. “We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member,” an EBay spokesman wrote in the emailed statement. “At this time, we are focused on rolling out eBay’s managed payments experience for our customers."Payments giant Stripe, one of the most high-profile startups to sign onto the project, signaled it remained open to working on it in the future. “Stripe is supportive of projects that aim to make online commerce more accessible for people around the world. Libra has this potential,” said a company spokesperson. “We will follow its progress closely and remain open to working with the Libra Association at a later stage.”The Libra Association is composed of about two dozen organizations, including Facebook. A Lyft Inc. spokeswoman confirmed on Friday that the ride-hailing company remains a member. Other companies that have not signaled plans to leave include Uber Technologies Inc., Spotify Technology S.A., Coinbase Inc. and telecom providers Iliad SA and Vodafone Group Plc. PayPal Holdings Inc. dropped out last week. (Updates with David Marcus comment in 6th paragraph.)\--With assistance from Candy Cheng, Lizette Chapman, Spencer Soper and Lydia Beyoud.To contact the reporters on this story: Kurt Wagner in San Francisco at kwagner71@bloomberg.net;Julie Verhage in New York at jverhage2@bloomberg.net;Jenny Surane in New York at jsurane4@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Anne VanderMey, Robin AjelloFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • 3 Stocks to Consider After US Reaches Partial Trade Deal With China
    Zacks

    3 Stocks to Consider After US Reaches Partial Trade Deal With China

    Investor optimism surged today after President Trump announced that a partial trade deal was reached with China today.

  • Tesla's (TSLA) Rally Could Be An Opportunity
    Zacks

    Tesla's (TSLA) Rally Could Be An Opportunity

    The market for electric vehicles is proven, and Tesla not only is the market leader, but it produces the highest-quality vehicles.

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    Bloomberg

    Google’s $2.6 Billion Looker Deal Said to Get Closer DOJ Review

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  • Is Apple Expediting Its 5G iPhone Launch?
    Market Realist

    Is Apple Expediting Its 5G iPhone Launch?

    Recent reports hint that Apple could release its iPhone 5G modem by 2022. Today, Apple stock hit a high of $233.81, with a market cap of $1.054 trillion.

  • Oilprice.com

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