193.64 +0.49 (0.25%)
Pre-market: 8:14AM EST
|Bid||193.16 x 900|
|Ask||193.49 x 1000|
|Day's range||191.48 - 194.03|
|52-week range||123.02 - 208.66|
|Beta (3Y monthly)||1.06|
|PE ratio (TTM)||30.88|
|Earnings date||28 Jan 2020 - 3 Feb 2020|
|Forward dividend & yield||N/A (N/A)|
|1y target est||238.96|
Nov.13 -- Jason Rosenbaum, a former digital ad director for the Hillary Clinton campaign, and Tim Cameron, Chief Executive Officer of Flexpoint Media, discuss how social media companies should handle political ads. They speak with Taylor Riggs on "Bloomberg Technology."
(Bloomberg) -- Sign up to our Brexit Bulletin, follow us @Brexit and subscribe to our podcast.Britain’s Labour party pledged to offer all consumers free fiber broadband within a decade by nationalizing phone carrier BT Group Plc’s Openreach unit at a cost of 20 billion pounds ($26 billion).BT shareholders would get newly-issued government bonds in return for their shares, Labour’s shadow chancellor, John McDonnell, said in a speech in Lancaster, England on Friday. Shares of BT fell as much as 3.7%.It’s the biggest new pledge of the election campaign from Labour, which already has plans to nationalize the postal service, the railways and water and energy utilities. The broadband effort would be financed in part with taxes on multinational companies such as Amazon.com Inc., Facebook Inc. and Alphabet Inc.’s Google. While the proposals may win over some voters, Labour may not be in a position to implement them. It has an average of 29% support in recent polls, trailing the Conservatives at 40%.“A Labour government will make broadband free for everybody,” party leader Jeremy Corbyn said at the campaign event at Lancaster University. “This is core infrastructure for the 21st century. It’s too important to be left to the corporations.”McDonnell said the new broadband pledge would be funded by asking “tech giants like Google and Facebook to pay a bit more” in proportion to their activities in the U.K. “So if a multinational has 10% of its sales, workforce, and operations in the U.K., they’re asked to pay tax on 10% of their global profits,” McDonnell said.While Labour puts the cost of the plan at about 20 billion pounds, BT’s Chief Executive Officer Philip Jansen said the proposal would cost almost five times that amount.BT shares were down 1.6% as of 12:29 p.m. in London, suggesting shareholders aren’t too worried about the nationalization risk. That gives the company a market value of about 19 billion pounds.“These are very very ambitious ideas,” Jansen said Friday in an interview on BBC Radio 4. “The Conservative Party have their own ambitious ideas for full fiber for everybody by 2025.”“How we do it is not straightforward, it needs funding,” Jansen said, putting the cost of such a roll-out over eight years at “not short of 100 billion pounds.”Lower Value?BT has been working to speed up its own full-fiber build and Jansen said the company’s shares have fallen on the recognition that “we’re going to be investing very very heavily.” Shareholders “are nursing massive losses on their investment” in BT if they’d bought it a few years ago, he said.Investors could get burned, as Openreach’s business would likely be undervalued in an expropriation, New Street analyst James Ratzer said in an email, adding that nationalization “rarely works well for shareholders.” Analysts at Jefferies put Openreach’s value at 13.5 billion pounds, flagging annual costs for operations and to service its high pension deficit.Labour’s McDonnell said the party has taken advice from lawyers to ensure its broadband plan fits within European Union state aid rules in case the U.K. is still in the bloc when the plans are carried out.Britain LaggingCorbyn’s plan is meant to solve a connectivity gap: Britain lags far behind other European nations when it comes to full-fiber coverage, which allows for gigabit-per-second download speeds. About 8% of the country is connected -- just under 2.5 million properties, according to a September report by communications regulator Ofcom. That compares with 63% for Spain and 86% for Portugal.As policymakers and regulators have been creating conditions to spur more competition with BT, rivals including Liberty Global Plc’s Virgin Media and Goldman Sachs Group Inc.-backed CityFibre have been jumping in to commit billions of pounds to infrastructure plans.“Those plans risk being shelved overnight,” Matthew Howett, an analyst at Assembly, said in an email. “This is a spectacularly bad take by the Labour Party.”The Labour announcement caused TalkTalk Telecom Group Plc to pause talks to sell a fiber project as the industry seeks clarity.Analysts are skeptical the government could roll out fiber more effectively than private industry and Howett pointed to delays and budget overruns from a state-led effort in Australia.It’s not the first time radical ideas have been proposed for BT’s Openreach unit, a national network of copper wire and fiber-optic cable that communication providers including BT, Comcast Corp.’s Sky and Vodafone Group Plc tap into to provide home internet to customers.BT was forced to legally separate the division from the rest of the company in recent years over concerns about competition, and that it wasn’t investing fast enough to roll out fiber, and some investors have suggested the company should fully spin it out into an independent, listed business to unlock value.‘Fantasy’ PlanNicky Morgan, the Conservative cabinet minister with responsibility for digital services, dismissed Corbyn’s plan in a statement as a “fantasy” that “would cost hardworking taxpayers tens of billions” of pounds.The Conservative Party’s own proposal for full-fiber broadband across the U.K. by 2025 -- eight years ahead of a previous government goal -- has raised eyebrows across the telecom industry, as some executives and analysts expressed skepticism about whether it’s doable, whether there’s consumer demand for the ultrafast internet service and how companies would make money.‘A Disaster’TechUK, the industry’s main trade body, called Labour’s plan “a disaster” for the telecom sector. “Renationalization would immediately halt the investment being driven not just by BT but the growing number of new and innovative companies that compete with BT,” said Chief Executive Officer Julian David.The announcement will provide more fodder for the arguments by Prime Minister Boris Johnson’s Conservatives that a Labour government risks plunging the country into an economic crisis. Chancellor of the Exchequer Sajid Javid over the weekend released analysis estimating Labour would raise spending by 1.2 trillion pounds over five years. McDonnell at the time called it “fake news.”McDonnell said Parliament would set the value of Openreach when it’s taken into public ownership and that shareholders would be compensated with government bonds. Under Labour’s plan, the roll-out would begin in areas with the worst broadband access, including rural communities, followed by towns and then by areas that are currently well-served by fast broadband.According to elections expert John Curtice, Corbyn’s chances of forming a majority government are “as close to zero” as it’s possible to get. The election is still hard to predict, and it is possible that Labour could yet win power, either on its own or with the support of smaller parties.(Updates with Corbyn remarks in fourth paragraph, McDonnell in fifth.)\--With assistance from Jennifer Ryan and Kit Rees.To contact the reporters on this story: Alex Morales in London at email@example.com;Thomas Seal in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Rebecca Penty at email@example.com, ;Tim Ross at firstname.lastname@example.org, Frank ConnellyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
A duo of FT writers — one as author, the other as reviewer — this week demolish two pillars of received wisdom about today’s business environment. Rana Foroohar’s book Don’t Be Evil quotes Google’s own ...
(Bloomberg) -- Want to receive this post in your inbox every day? Sign up for the Balance of Power newsletter, and follow Bloomberg Politics on Twitter and Facebook for more.Europe just witnessed two low-key political developments that may have far-reaching consequences.The European Union’s executive threatened legal action against the U.K. after Boris Johnson’s government refused to nominate an EU commission member. Despite Brexit, the U.K. is obliged to put up a candidate, and its failure to do so seemed to catch the bloc off guard. The standoff might delay the new EU commission from taking office Dec. 1 and risks further stoking tensions.In Luxembourg, the European Investment Bank — the EU’s lending arm — opted to stop funding fossil-fuel projects and favor more support for clean energy. EIB director Werner Hoyer called the decision a “quantum leap” in ambition to tackle the No. 1 issue on “the political agenda of our time.”Both developments, while not entirely out of left field, underscore how unforeseen events can force governments’ hands. Just look at the violent protests in Hong Kong or the political unrest unleashed from Iraq and Lebanon to Bolivia and Chile. Climate protests have erupted in cities across the globe this year.Oscar Wilde wrote that to expect the unexpected is a sign of a thoroughly modern intellect. More than a century later, it’s advice that politicians would do well to heed.Global HeadlinesSpotlight on | Rudy Giuliani’s role in back-channel efforts to pressure Ukraine will come under closer scrutiny today as the House impeachment investigation hears public testimony from Marie Yovanovitch, who was abruptly ousted as U.S. ambassador to Kyiv in May following what she has described as a smear campaign Giuliani directed.Giuliani, Trump’s personal lawyer, also is being investigated by federal prosecutors for possible campaign finance violations and failure to register as a foreign agent, Chris Strohm and Jordan Fabian report.White-collar protests | Hong Kong professionals joined lunchtime protests in the financial district for the fifth straight day, capping a week of unprecedented violence that began with a demonstrator being shot and seriously injured on Monday and then saw the death of a government employee who police say was hit by a brick. Chinese President Xi Jinping condemned the unrest, which once again threatens to drag into the weekend, as university and school closures left the city practically paralyzed. Click here for more on the economic toll.The U.S. Senate is preparing for quick passage of legislation to show support for the protesters by placing Hong Kong’s special trading status with the U.S. under annual review.Sanctions master | North Korea is poking holes through a global web of sanctions and generating enough cash to keep its nuclear weapons program moving along as a year-end deadline Kim Jong Un set to reach a deal with the U.S. approaches — with little progress in sight. Kim has yet to make any concessions on his nation’s nuclear program, making it difficult for America’s “maximum pressure” campaign to deliver on what the Trump administration has promised.Crunching the numbers | The economic experts that 2020 Democratic presidential candidate Elizabeth Warren is careful to cite on the costs of her multi-trillion-dollar policy proposals actually disagree among themselves about how or whether those plans will work. And it highlights Warren’s challenge in convincing voters that she can generate enough revenue to provide free health care, free public college, universal childcare, forgive a portion of student loans and mitigate climate change.The Democratic National Committee has announced the 10 candidates who will participate in the fifth Democratic primary debate in Atlanta on Wednesday.China’s influence | Sri Lankans face a stark choice as they elect a new president Saturday. Gotabaya Rajapaksa’s powerful family has a history of authoritarian rule and is likely to take the country closer to Beijing. His main rival — Sajith Premadasa, from the current ruling alliance — promises more freedoms but faces a credibility test over security lapses that led to deadly bombings on Easter.What to WatchLebanon’s major political parties agreed to name businessman and ex-finance minister Mohammad Safadi as the new premier, local media reported, but anti-government demonstrators immediately rejected the choice. The Organisation for Economic Co-operation and Development is asking companies that mine and buy copper and cobalt from the Democratic Republic of Congo to do more to fight corruption and child labor. Bolivian interim President Jeanine Anez is struggling to consolidate control as lawmakers and former ministers loyal to ousted socialist leader Evo Morales try to reclaim the levers of power.Pop quiz, readers (no cheating!). Britain is under increasing pressure to return its last African colony. What is it? Send us your answers and tell us how we’re doing or what we’re missing at email@example.com.And finally ... Italian Prime Minister Giuseppe Conte’s unusual request for his ministers to put aside their squabbles and find a way to rescue a bankrupt steel mill in the southern city of Taranto has laid bare the intense pressure on his fragile coalition. As Ross Larsen and Alessandro Speciale explain, the premier is scrambling for a solution to an industrial crisis — precipitated in part by his own allies — that’s dominated front pages for weeks and provided fodder for the opposition. \--With assistance from Muneeza Naqvi and Iain Marlow.To contact the author of this story: Alan Crawford in Berlin at firstname.lastname@example.orgTo contact the editor responsible for this story: Kathleen Hunter at email@example.com, Karl MaierFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Investing.com -- Alibaba (NYSE:BABA) completes the year's biggest stock sale in a simmering Hong Kong, while U.S. retail sales and industrial output data will show how strongly the U.S. economy started the fourth quarter. The IEA predicts a tough time for OPEC and its allies next year, while the U.K. Labour amps up its Socialist credentials ahead of a general election next month. Here's what you need to know in financial markets on Friday, 15th November.
(Bloomberg) -- Unifying Singapore’s fractured opposition “remains a real challenge” ahead of the city-state’s anticipated general elections, according to the leader of the country’s biggest opposition party.“The reality is that different parties and individuals have different philosophies, both ideologically and in terms of how we engage the issues of the day,” Pritam Singh, head of The Workers’ Party, said in a Facebook post this week.Singapore’s politics is dominated by the ruling People’s Action Party, which has been in power since before Singapore became its own country in 1965. Led by Prime Minister Lee Hsien Loong, the PAP won 83 out of 89 parliamentary seats in the 2015 elections, with the rest retained by The Workers’ Party.Singapore’s next general election must be held by April 2021, though the ruling party has called for early polls in recent cycles. It’s widely expected to be Lee’s last as leader, having vowed to hand over the reins by the time he turns 70 in 2022. The PAP last year picked Finance Minister Heng Swee Keat as Lee’s de facto successor.Singh said his Workers’ Party is hoping to maintain its role as “an important check and balance,” adding their objective was not “the destruction of our political opponents,” but rather to cultivate a “loyal” opposition.“As a small political player in our landscape, the Worker’s Party must get its political purpose right,” he said. Singh and other opposition officials was recently under public scrutiny when they were found liable by the courts over the misuse of town council funds.Meanwhile, Prime Minister Lee called on members of the ruling party to prepare for a “tough fight” at the next general election while speaking at a party convention over the weekend. “This election is not just about the PAP doing a bit better or a bit worse, this election will decide if Singapore can sustain good and stable government,” Lee said.To contact the reporter on this story: Philip J. Heijmans in Singapore at firstname.lastname@example.orgTo contact the editors responsible for this story: Ruth Pollard at email@example.com, Derek Wallbank, Joyce KohFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- U.S. hedge funds bought shares of Facebook Inc. and Netflix Inc. despite steep declines in the technology darlings during a volatile third quarter.Chase Coleman and David Tepper were among the money managers who increased their Facebook holdings during the three-month stretch that saw the social-media giant fall nearly 8%. Netflix was favored by firms including Lee Ainslie’s Maverick Capital Ltd. and Dan Sundheim’s D1 Capital Partners despite a 27% drop in the three months ending Sept. 30.Hedge fund managers, who have long adored FAANG stocks, had to navigate a tumultuous period. While Amazon.com Inc. also fell, down 8%, Google parent Alphabet Inc. and Apple Inc. both rose more than 13%. At the same time, the S&P 500 index gained 1.2% amid an escalation in the U.S.-China trade war and dovish moves by central bankers.Here are some other notable moves:Harvard University’s endowment added 2 million Facebook shares, bringing the value of its position to roughly $400 million on Sept. 30, and making the company its biggest single U.S. equity holding.Stan Druckenmiller offloaded almost his entire stake in Uber Technologies Inc., selling 2.5 million shares. His Duquesne Family Office took a stake in Shopify Inc.Warren Buffett’s Berkshire Hathaway Inc. announced new common-equity stakes in Occidental Petroleum Corp., which is on top of a preferred stake that was previously disclosed, and home furnishings company RH. The firm trimmed some of its largest stock bets, including Apple, Wells Fargo & Co. and Phillips 66.Viking Global Investors ditched its $1.2 billion stake in UnitedHealth Group Inc. as health-care stocks were hit by politics both in Washington and on the campaign trial.Maverick sold 690,000 shares of managed-care company Humana Inc., which had been the fund’s top U.S. equity position in the second quarter. (It now sits at No. 9).Microsoft Corp. was one of the less popular stocks for the second quarter in a row. Tiger cubs Viking, Coatue Management and Maverick all decreased their holdings in the tech giant as did Duquesne. But the software giant was up more than 3% during that period and has been a top performer this year -- shares have gained almost 46%.\--With assistance from Katherine Chiglinsky, Emma Vickers, Vincent Bielski, Scott Deveau and Michael McDonald.To contact the reporters on this story: Katia Porzecanski in New York at firstname.lastname@example.org;Hema Parmar in New York at email@example.com;Melissa Karsh in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Sam Mamudi at email@example.com, Alan MirabellaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Democratic presidential candidate Andrew Yang proposed a tax on digital ads that takes aim at the revenue models of companies such as Facebook Inc. and Alphabet Inc.’s Google.Along with a proposal for a cabinet-level secretary of technology, the value-added tax was among a series of ideas for regulating privacy, antitrust issues and digital platforms’ impact on democracy released Thursday by the former tech entrepreneur.“Digital giants such as Facebook, Amazon, Google and Apple have scale and power that renders them more quasi-sovereign states than conventional companies,” said Yang, who founded Venture for America, a fellowship program for people who want to work in start-ups.The proposal would use revenue from the tax to grant “a slice of every digital ad” to those whose data is used to deliver the advertisements, while also ensuring customers can opt out of data collection, have their existing information deleted and move their data between rival services.Tech giants such as Facebook and Google have risen to the heights of the digital economy by helping companies target ads to users based on the data collected from social media and search platforms. Yang’s proposal would aim to restructure the sector, and the tax would be part of an explicit effort “to incentivize companies to shift to an ad-free, subscription model.”Yang has made his tech experience key to his outsider presidential bid, focusing on the issue of automation and his desire to respond to it by guaranteeing Americans a basic income regardless of their work. He is polling at around 2.8%, far behind leaders such as Joe Biden, Elizabeth Warren and Bernie Sanders, according to Real Clear Politics’ average of polls.Plan CriticizedNetChoice, a lobbying group that counts Facebook and Google as members, criticized Yang’s proposal.“The current online advertising model enables consumers to access high quality content and sophisticated services for free,” NetChoice Vice President Carl Szabo said in a statement. “Yang’s policy would create more paywalls around content and diminish the presence of free services.”In addition to the tax, Yang would create a government Department of Technology focused on artificial intelligence and based in Silicon Valley, alongside a department of the “Attention Economy that focuses specifically on how to responsibly design and use smartphones, social media, gaming, and chat apps.”Yang would also amend a liability shield that tech companies prize because it stops lawsuits over content that others publish on their platforms. The changes weren’t detailed but were listed among measures designed to combat online misinformation, including a requirement that companies such as Facebook disclose their algorithms publicly, or to the Department of the Attention Economy.He also proposed making sure that companies such as Amazon.com Inc. provide “an even playing field for competitor products or services on their platforms” to assuage antitrust concerns. The e-commerce giant has been criticized for competing against the third-party merchants that also sell through its site. The proposal echoes one from Senator Elizabeth Warren, who would break up the company.Yang suggested new rules around cryptocurrencies and “free” games that often push purchases during play.To contact the reporter on this story: Ben Brody in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Sara Forden at email@example.com, ;Wendy Benjaminson at firstname.lastname@example.org, Max Berley, Steve GeimannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Want to receive this post in your inbox every day? Sign up for the Balance of Power newsletter, and follow Bloomberg Politics on Twitter and Facebook for more.The first day of public impeachment hearings into U.S. President Donald Trump didn’t produce a definitive smoking gun. But it was illuminating in other ways.As Nick Wadhams explains, the testimony from key diplomats lays out starkly how foreign policy in the Trump administration has become the purview of a small group of loyalists in the White House, cutting out officials who’ve spent years in the field building expertise on countries and how to deal with them.In particular, it shows how Trump’s lawyer Rudy Giuliani moved to insert himself into policy on countries like Ukraine, even as seasoned diplomats sought to warn him off.At best, Trump’s advisers sideline people who’ve spent decades, through multiple administrations, navigating America’s interests everywhere from the Middle East to Russia and Asia. At worst they could undermine U.S. national security.Since coming to office, Trump has repeatedly tied geopolitical goals to economic and trade outcomes. While not unusual, he’s made those links more overt than prior presidents.That makes foreign policy less predictable. Guided by his inner circle, and his own thinking, Trump has a tendency to make sudden announcements that catch his diplomats, and military, by surprise.In some cases he’s turned longstanding policy on its head (like stepping away from the Kurds in Syria). For those out in the field, yesterday’s testimony shows that managing America’s strategic goals is becoming ever harder.Global HeadlinesJust in: China says it will allow imports of qualified poultry from the U.S., after the Department of Agriculture made a similar decision on Chinese chicken.Stalemate | Trump said Turkey’s purchase of a Russian anti-aircraft missile system presents “some very serious challenges” for the U.S., and he directed Secretary of State Michael Pompeo to work on resolving the impasse. That indicates the president and a small group of Republican senators were unable at meetings yesterday to persuade Turkish leader Recep Tayyip Erdogan to reconsider deploying the weapons.Erdogan said he personally returned an Oct. 9 letter from Trump, where the president warned him to not to be a “tough guy” or a “fool” in his dealings in Syria.Stormy weather | Campaigners in the U.K.’s first December election in almost 100 years are battling wintry conditions that could influence the result. As well as icy days and dark evenings, flooding has hit northern England, where voters vented at Prime Minister Boris Johnson when he visited yesterday.Want to follow the elections in one place? You can see the key stories on our website. If you are a Bloomberg terminal subscriber you can use the ELEC function for our new dashboard, which includes the latest polls, research and social media.Shaking it up | The exit of socialist icon Evo Morales in Bolivia is pitting governments in the region against each other along ideological lines. As Juan Pablo Spinetto writes, Mexico, Venezuela and the incoming Argentine president have slammed Morales’s ouster, whereas the U.S. and its ally Brazil quickly recognized his self-appointed successor.Martha Viotti Beck and Mario Sergio Lima report that Brazilian President Jair Bolsonaro has limited time to win support for an overhaul of Latin America’s largest economy before October’s municipal elections. More turmoil | Speculation swirled that Hong Kong would impose a weekend curfew after China’s state-run Global Times tweeted that one was expected, then deleted the post without explanation. Such a development would be a first in the five months of pro-democracy protests in the city, with schools to be suspended through Sunday after transit disruptions and clashes at universities paralyzed swaths of the Asian financial hub.Coup claims | Cambodia’s Hun Sen knows a few things about holding onto power. But Asia’s longest-serving leader says he’s now worried about being overthrown by a group of exiled dissidents. His fears aren’t baseless, Philip Heijmans reports. Citizens are chafing against soaring household debt, unemployment and an influx of Chinese investment. There are also rumors of rifts in his party, while opposition leader Sam Rainsy is looking to head home.What to WatchU.S. Defense Secretary Mark Esper is in South Korea today amid strains on one of America’s most important military alliances, including a demand from Trump to pay about five times more to host U.S. troops. For the second time in less than a week, Trump said he’ll go to the Supreme Court to appeal rulings threatening to expose his tax records. Trump holds a second rally in Louisiana in support of Republican Eddie Rispone, who’s vying to unseat the only Democratic governor in the Deep South in a Saturday runoff. Former Massachusetts Governor Deval Patrick is telling associates he plans to join the crowded 2020 Democratic campaign as early as today amid concerns in the party that the existing field won’t produce a nominee strong enough to beat Trump.Tell us how we’re doing or what we’re missing at email@example.com.And finally ... The key to the cultural and economic revolution underway in Saudi Arabia is the unshackling of the nation from the puritanical brand of Islam known as Wahhabism. Crown Prince Mohammed bin Salman is trying to push the change with his Vision 2030 program to modernize the economy, bring women into the workforce, and reduce religious influence on education. But as Donna Abu-Nasr and Rodney Jefferson explain, many young Saudis have a nagging concern: Where have the Wahhabis gone, and what are the chances of them coming back? \--With assistance from Karl Maier, Kathleen Hunter, Karen Leigh, Muneeza Naqvi and Tim Ross.To contact the author of this story: Rosalind Mathieson in London at firstname.lastname@example.orgTo contact the editor responsible for this story: Michael Winfrey at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Romania’s new finance minister pledged to wrest control of a budget gap that’s forecast to become the European Union’s widest in the coming years.Florin Citu, part of a Liberal Party government that took power last week, said Thursday that the 2019 deficit will breach the EU’s ceiling of 3% gross domestic product and could even top 4% if measures aren’t put in place to curb it.He didn’t reveal specific plans, blaming the previous administration for “undermining the economy” and may seek a criminal probe into what he called its misappropriation of public funding.“We discovered the situation is much worse than we estimated,” Citu told reporters in Bucharest. “But we have some solutions to contain it.”The shortfall, stoked by the last government’s spending largess, has become a key test for Prime Minister Ludovic Orban’s team, which wants to avoid EU punishment for exceeding the bloc’s fiscal limits.But closing the gap will be a challenge. Without action, the European Commission predicts it will reach more than 6% of GDP in 2021 -- double the maximum permitted.The projections include the last government’s pledges of double-digit growth in pensions in 2020 and 2021. Dialing back promises for expenditure would be unpopular and tricky for Orban’s minority cabinet, which faces elections next year.Citu said next year’s budget will honor existing spending commitments, including the boost to pensions. But he said the plan will also respect EU rules and will focus on investments -- an area that’s been neglected of late.He said Tuesday on Facebook that poor tax collection and rosy projections resulted in revenue missing forecasts by 21 billion lei ($4.9 billion) so far this year.What’s more, Citu said Thursday that the last government pushed through significant spending during its final days in office for allies in local administrations.The need for action is clear, and pressure from the EU and markets may soon be felt.“In the absence of corrective measures, the budget deficit will soar to levels that could put Romania under the Excessive Deficit Procedure next year, trigger a negative response from rating agencies and lead to an increase in borrowing costs,” said Eugen Sinca, an economist at Erste Group Bank AG in Bucharest.(Updates with minister starting in second paragraph.)To contact the reporters on this story: Andra Timu in Bucharest at firstname.lastname@example.org;Irina Vilcu in Bucharest at email@example.comTo contact the editors responsible for this story: Andrea Dudik at firstname.lastname@example.org, Andrew LangleyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- On his path to becoming Asia’s longest-serving leader, Hun Sen has mastered the art of fighting for power.When he first took charge of Cambodia as a 33-year-old in 1985, he battled remnants of the Khmer Rouge for control of the Southeast Asian nation. After losing the first election following a United Nations-brokered peace in 1993, he threatened to secede unless he was made co-prime minister. Four years later, a de facto coup put him solely in charge, a position he’s kept to this day.Now 67, Hun Sen is suddenly worried that a group of exiled dissidents might overthrow him by force -- a claim that looks hysterical on its face given many of his main political opponents have been locked up or abroad since he won all of the country’s parliamentary seats during a boycotted election last year.But he has lots of reason to worry.Discontent is building among the country’s 16 million people -- most of whom have never been alive under another leader -- over skyrocketing household debt, resentment at an influx of Chinese investment and a lack of jobs. The European Union is threatening to pull preferential tariffs that could upend the garment sector, the economy’s most important industry. And questions over succession are spurring rumors of internal rifts in his ruling Cambodian People’s Party.“There could easily be a popular uprising,” said Ou Virak, director of Phnom Penh-based think-tank Future Forum and former chairman of the Cambodian Center for Human Rights.‘Peaceful Uprising’Hun Sen’s opponents see an opportunity to pounce. Long-time opposition leader Sam Rainsy, who has spent the past four years in Paris, has vowed to return to Cambodia to fight for democracy along with others who fled abroad. Hun Sen’s government said the efforts amounted to a coup attempt, and he moved the military to the border while warning he’d use “weapons of all kinds” to stop them.After arriving in Malaysia, Sam Rainsy told reporters this week he and his colleagues would head to Cambodia “when there is a material, physical possibility to do so.” He said the whole world wanted democracy in Cambodia except for China, and called for a “peaceful uprising” among the masses.“I have called on the Cambodian army not to shoot at the people, not to shoot at the civilians, not to shoot at innocent people,” Sam Rainsy said. “And Mr. Hun Sen is very afraid because he is not sure of the loyalty of the army. The army will stand with the people. The army will not stand with dictators.”Phay Siphan, a Cambodian government spokesman, dismissed talk of an uprising, a mutiny in the army or any internal dissent within the ruling party.“Everything is under control,” he said by phone, while also ruling out talks with the opposition. “The government will in no shape or form negotiate with Sam Rainsy.”On Wednesday evening, the government issued a statement appealing to opposition supporters to “stop listening to Sam Rainsy” adding it had fully restored public order after defeating the exiled leader’s attempted coup, the AP reported. Sam Rainsy on Tuesday said he could still return to the country “at any time.”Still, Hun Sen has taken at least one step to ease tensions. On Sunday, the government released Kem Sokha, the founder and co-leader of the main opposition Cambodia National Rescue Party, after for more than two years. Another 85 political prisoners are still in custody, according to the UN.On Thursday, the prime minister ordered the release on bail of more than 70 opposition activists arrested in recent weeks for allegedly plotting to overthrow the government, Reuters reported.One reason for Kem Sokha’s release may be the EU’s looming decision on whether to pull Cambodia’s access to a preferential trading scheme due to its deteriorating human rights record. Such a move could decimate its $5 billion garment industry and threaten the jobs of about 750,000 Cambodians, some of whom stood with Sam Rainsy during mass rallies in 2013 calling for the prime minister’s resignation.We “expect the Cambodian authorities to reinstate the political rights of all opposition members banned from political life and to fully release all opposition members, supporters and activists recently put under detention,” the EU wrote in a statement on Monday.In a confidential report submitted this week, the EU told the Cambodian government it had not done enough on its human rights record to prevent the loss of its special trade privileges, RFA reported on Thursday.China FactorHun Sen’s move to curtail political and media freedoms over the years has coincided with closer ties with China. As President Xi Jinping’s biggest ally in Southeast Asia, the Cambodian government has garnered $7.9 billion in Chinese investment from 2016 to August 2019, representing more than a third of all foreign investment, according to the official Xinhua News Agency.The slew of Chinese property projects and tourists has led to a growing backlash both in the capital Phnom Penh and the once sleepy coastal resort town of Sihanoukville, where more than a dozen new casinos have driven up crime and prostitution. China’s stake in an investment zone encompassing 20% of Cambodia’s coastline also raised fears in the U.S. that it would become a Chinese naval base, something the government denied.“Cambodians do not feel good about the Chinese influx and it created insecurity inside the country,” said Noan Sereiboth, an influential political blogger and frequent contributor to the youth-centered media group Politikoffee.Another headache for Hun Sen is growing discontent over mounting public and personal debt. With a median of $3,370 per loan, Cambodia now has the highest average for small loans in the world, according to a report published in August by local rights groups.Mostly owed to just nine lenders, the total outstanding amount is equal to roughly a third of the country’s entire GDP for 2018, while seven largest MFIs made more than $130 million in profit in 2017. During last year’s election, Hun Sen disavowed connections to microfinance lenders.Question of SuccessionConfounding the problem is the question of succession as various factions jostle for power.Hun Sen’s three sons are seen as competing for the top spot, with his eldest Hun Manet the odds-on favorite. Educated at West Point and commander of the Royal Cambodian Armed Forces, Hun Manet was elevated last year to the ruling Cambodian People’s Party’s Standing Committee, a key decision-making body.Without specifically addressing the opposition’s calls for an uprising, Hun Manet took to Facebook on Tuesday implore citizens to enjoy the annual water festival this week.“What the people do not want is chaos, insecurity, instability and the loss of peace,” he wrote. “We must work together to fully protect the peace we have today.”For all the noise, Sam Rainsy’s move is “desperate” and has little chance of success, according to Lee Morgenbesser, author of the book “Beyond the Facade: Elections Under Authoritarianism in Southeast Asia.”“A failure to try re-enter Cambodia would raise significant questions about whether those exiled are the right leaders for Cambodia’s pro-democracy movement,” Morgenbesser said.Still, those outside the country see this as one of their final chances to act. Vanna Hay, 33-year-old CNRP supporter living Tokyo, plans to join other activists in returning to Cambodia.“No matter whether Sam Rainsy was on Cambodian soil on November 9 or later, the people will rise and people power will bring Hun Sen down,” Vanna Hay said. “They will collapse soon by their own sin they made.”(Updates with EU comment in 17th paragraph)To contact the reporter on this story: Philip J. Heijmans in Singapore at email@example.comTo contact the editors responsible for this story: Ruth Pollard at firstname.lastname@example.org, Daniel Ten KateFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- “Technological sovereignty” is one of the European Union’s buzzwords of the moment, conjuring up an image of a safe and secure space for zettabytes of home-grown data, free from interference or capture by the U.S. and China.Both France’s Emmanuel Macron and Germany’s Angela Merkel have used the phrase to kick-start all sorts of initiatives, from artificial intelligence programs to state-backed cloud computing. The new European Commission president Ursula Von der Leyen has etched the concept into her political guidelines.It’s a noble goal, if only because it acknowledges Europe is anything but technologically sovereign right now. The internet behemoths are in America and China — Alphabet Inc., Facebook Inc., Amazon.com Inc., Alibaba Group Holding Ltd — and an estimated 92% of the Western world’s data is stored in the U.S., according to the CEPS think tank. China accounts for more than one-third of global patent applications for 5G mobile technology. Amazon boasts that 80% of blue-chip German companies on the DAX exchange use its cloud services business AWS. The trigger to do something about it is the race for supremacy between Beijing and Washington, which is spilling over into the tech sector and undercutting the EU’s ability to protect its turf. President Donald Trump’s ban on Huawei Technologies Co. and his attempts to bully allies into doing the same was a wake-up call, however valid his security concerns. The U.S. “Cloud Act,” which forces American businesses to hand over data if ordered regardless of where it’s stored, was another. Both China and the U.S. see the EU as an easy mark in the global tech tussle. And they’re right. Europe’s problem is that recapturing sovereignty is neither easy nor cheap. Take cloud computing, one area where France and Germany are eyeing the building of “sovereign” domestic infrastructure for use by national and European companies. This is a $220 billion global market dominated by U.S. suppliers with market values of close to $1 trillion, which invests tens of billions of dollars every year on infrastructure. Their power isn’t just technological: When Microsoft Corp. spends $7.5 billion on an acquisition such as GitHub, a forum for open-source coding, it’s bringing valuable developers into its own orbit. Likewise, Amazon’s AWS has the scale, cheap pricing and perks that lock in customers.France and Germany won’t win a head-on battle in this field. Paris is still smarting from a failed attempt years ago at building a sovereign cloud for the princely sum of 150 million euros ($165 million). Germany has Gaia-X, which looks like a common space for the sharing of data by the leading lights of the DAX , from SAP SE to Siemens AG. It’s hard to see how such initiatives will lead to true digital sovereignty, though; not just because of a lack of serious investment, but because it’s hard to avoid using U.S. cloud tech.Still, it wouldn’t be a bad thing if this trend led to France and Germany collaborating more — laying the groundwork for more ambitious spending — and to Brussels doing what it does best: setting the rules of engagement for tech companies everywhere. Digital commissioner Margrethe Vestager is already demanding tougher enforcement of data protection laws and taking a consistently muscular approach to antitrust violations by the Silicon Valley and Seattle giants. It’s not sovereignty, but it’s a start.To contact the author of this story: Lionel Laurent at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Microsoft Corp. is sending representatives to a series of meetings with Pentagon officials Wednesday to discuss how companies can contribute to the military’s work on artificial intelligence, according to a list of participants reviewed by Bloomberg. Microsoft is the only Big Tech company set to attend the event, which is likely to draw objections from employees and protesters who have broad concerns about the use of AI for military purposes.About 140 companies and organizations are on the list of attendees, which includes Boeing Co., International Business Machines Corp. and Lockheed Martin Corp. Anduril Industries Inc., a new startup from former Facebook Inc. executive Palmer Luckey, will also be there. The defense contractor began working this year on Project Maven, a technology unit of the Pentagon whose official name is the Algorithmic Warfare Cross-Functional Team.For the last two years, Maven has been at the center of a contentious public debate over the technology industry’s willingness to help build military technology. The project uses computer vision software to automatically analyze footage gathered by U.S. military drones. Google, an early participant in Maven, said last summer it would stop working on the project, following protests from employees who said the work strayed too closely to autonomous weaponry. Employees at Clarifai, a small computer vision startup, also objected to Maven, although that company continued to work on the project. It is on the list of attendees for this week’s meetings, which are co-hosted by Maven officials.Wednesday’s event is billed as an “AI Industry Day,” and the stated goal is to develop AI technology to assist soldiers in the field. The government said it is particularly interested in facial recognition, natural language processing, social media data and drone footage.Microsoft has made significant inroads with its military business over the last year. It won a contract a year ago worth as much as $480 million to build combat-ready versions of its HoloLens augmented reality headsets. Last month, it also won a $10 billion contract called Joint Enterprise Defense Infrastructure, or JEDI, to build cloud computing infrastructure for the Defense Department.Both contracts inspired criticism from Microsoft employees who said they hadn’t signed up to build weaponry. The company’s executives have consistently said they would not step back from working with the U.S. military. In a meeting with employees the week after the company won the JEDI contract, Microsoft Chief Executive Officer Satya Nadella said he respected dissenting opinions but that the company had always been unambiguous about its military work, according to a person who attended and asked not to be identified discussing a private event. A Microsoft spokesman declined to comment. Microsoft’s ties to government work have caused controversy in other areas, too. Workers at Microsoft’s GitHub unit have asked the company to cancel a contract with the U.S. Immigration and Customs Enforcement agency. On Wednesday morning, a group of protesters gathered at a GitHub conference in San Francisco to draw attention to the issue.The Defense Department has put increasing focus on AI in recent years. It sees the technology as key to geopolitical competition with China. But building it has come with challenges. U.S. officials have spoken openly about tensions in the military’s relationship with tech companies.“Some employees in the tech industry see no compelling reason to work with the Department of Defense,” Lieutenant General Jack Shanahan, the head of the Pentagon’s Joint Artificial Intelligence Center, said at an event last week. Their reluctance, he said, often came from the government’s inability to adapt to the pace of the private sector: “We don’t make it easy for them.”(Updates with GitHub protests in the seventh paragraph.)To contact the author of this story: Joshua Brustein in New York at email@example.comTo contact the editor responsible for this story: Mark Milian at firstname.lastname@example.org, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Facebook Inc. held talks over several months in 2016 to determine whether to buy Musical.ly, a rival app that would eventually evolve into global teen video sensation TikTok.Facebook ultimately walked away out of concern about the app’s young user base and Chinese ownership, according to a person familiar with the matter. But its interest back then may be pertinent to current government inquiries into Facebook’s history of pursuing and buying out competitors. Discussions started three years ago when Kevin Systrom, then chief executive officer of photo-sharing platform Instagram, visited Shanghai on an unrelated trip and met with Musical.ly’s founders, the person said. ByteDance Inc. -- now the world’s largest startup -- ended up acquiring the service for $800 million.The unrealized deal marked a missed opportunity to jump aboard a short-video phenomenon that’s gone viral across the U.S. and China, the world’s largest mobile market. Facebook CEO Mark Zuckerberg, who aspired to break into the world’s No. 2 economy, was hesitant when Systrom first proposed an acquisition given the app’s slowing growth at the time and popularity mostly among teens, the person said.Zuckerberg later warmed to the idea after getting introduced to the founders and seeing the app catch on on his home turf. He held talks with Musical.ly executives at Facebook’s Menlo Park headquarters in the fall of that year, according to people familiar with the matter. The talks were serious but never reached a discussion of numbers, one of the people said. That’s because Facebook realized there would be complications owning an app based in China. It also grew concerned about Musical.ly’s youthful audience, which could make it difficult to comply with U.S. laws on child internet privacy and safety, the person said.Read more: TikTok Revamps Lobbying as Washington Targets Chinese Ownership“We wanted our services in China because we believe in connecting the whole world. But we could never come to an agreement on what it would take,” a Facebook spokesperson said, declining to comment on the details of the conversations. Facebook “ultimately decided not to make an offer.” A ByteDance spokeswoman declined to comment on Facebook’s interest, which was previously reported by BuzzFeed News.Zuckerberg once prioritized getting Facebook into China, visiting president Xi Jinping and posting a picture going on a run in Beijing smog. More recently, he has rallied against China and TikTok in particular, accusing the platform of censorship that violates American values. One of his top arguments with regulators is that any breakup of Facebook may allow Chinese companies to thrive.On Wednesday, he said it is easier to espouse these principles now that Facebook’s entry into China looks impossible. ”Since we were never able to come to an agreement on a way where we would be able to operate there, we’re now in a position where we’re much more free to stand up for the things that we believe in than I think most other companies that are operating there,” Zuckerberg said during a call with reporters about content policy.TikTok ran afoul of regulators in 2019, but for different reasons than Facebook originally feared. The U.S. government has launched an investigation into whether ByteDance’s acquisition of Musical.ly two years ago to merge it with TikTok posed a national security risk, Bloomberg News has reported. Under pressure, it stepped up its efforts to enlist lobbyists in the U.S, including a policy chief for the region, according to people familiar with its plans.Ironically, the app’s growth can be in part credited to Facebook. ByteDance has long splashed money to advertise the app on platforms like Facebook and Instagram, essentially buying users away from its biggest rivals. That spending, however, has plunged since the second quarter as TikTok’s user growth slowed, according to data from Sensor Tower.Read more: Chinese-Owned Teen Sensation TikTok’s Appeal Waning (2)(Updates with Zuckerberg comment on China in seventh paragraph.)To contact the reporters on this story: Sarah Frier in San Francisco at email@example.com;Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, ;Tom Giles at firstname.lastname@example.org, Alistair Barr, Jillian WardFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Peloton Interactive Inc., the unprofitable fitness company whose stock has been skidding, plans to introduce two new pieces of workout equipment next year in a further expansion beyond cycling.The company is working on a new treadmill that will cost less than the current $4,000 model, as well as a rowing machine, according to people familiar with their development. Peloton has also explored apps for Amazon.com Inc.’s Fire TV and the Apple Watch to complement its smartphone software, though the status of those projects is unclear, said one of the people, who asked not to be identified because they weren’t authorized to discuss the information publicly.The new pieces of hardware will likely be the first introductions for the company in at least two years, when the original treadmill debuted. But people familiar with the plans said the release timing could change. Peloton’s stock jumped as much as 9% in intraday trading on the news.Jessica Kleiman, a spokeswoman for Peloton, declined to comment on products in development. “Our R&D team is always working on ideas,” she wrote in an email.In the almost two months since Peloton went public, investors have called for the company to reevaluate its expensive growth ambitions and focus on turning a profit, much like with other technology companies that have gone public this year. Peloton’s initial public offering fell flat, and the stock is down 15% since then. John Foley, the chief executive officer, said on a conference call with analysts last week that management is convinced now is the time to spend on expansion. “If we pull back on growth, we could be profitable tomorrow, but that is not what the board and the leadership at Peloton believe we should do,” he said.Foley helped start Peloton with a Kickstarter campaign in 2013, pitching live and on-demand cycling classes streamed to the home. The main hardware product is a $2,245 stationary bike affixed to an iPad-like device. It has recently expanded to Canada and Germany and is also building fitness studios in New York and London.Peloton now offers a variety of classes, including boot camp-style workouts, meditation and yoga, through apps that don’t require pricey equipment. More than 500,000 people take Peloton classes, which require a membership costing at least $19 a month. The company describes itself as the “largest interactive fitness platform” in the world.Foley has fashioned Peloton as a tech company, which has helped boost its market value to $7 billion today. Executives emphasize user engagement as a key business metric. The company said last week the average user was nearly a dozen workouts on Peloton each month, up from nine in the same period last year. Executives see the addition of new kinds of workouts as a way to increase engagement. In 2018, Peloton introduced its first treadmill at the Consumer Electronics Show in Las Vegas. The bulkiness of the equipment and $4,000 price tag have made it a niche product, though Foley has said he’s happy with sales of the treadmill.To increase sales, Peloton has looked for various ways to make its products more affordable. It offers monthly installment plans on equipment purchases through a startup called Affirm and acquired an engineering firm this year that previously designed devices for Google and Facebook Inc. Foley said in an interview last week that the acquisition would give Peloton cost advantages and potentially speed up production.Foley aspires to create the Apple Inc. of fitness and has taken many cues from the world’s most valuable public company. One of those is product secrecy. During the IPO roadshow, Foley would only answer questions about new products by saying Peloton could have a “better, best” strategy, suggesting it may sell multiple models of bikes or treadmills at different prices. In an interview with Bloomberg TV on the day of the IPO, Foley declined to answer questions about new products. When asked specifically about the potential for a rowing machine, Foley responded with a smirk: “I think rowing is a fantastic workout.”(Updates with share move in the third paragraph.)\--With assistance from Jason Kelly.To contact the reporters on this story: Julie Verhage in New York at email@example.com;Mark Gurman in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Mark Milian at email@example.com, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.