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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."
Financial Times
The nominees for a Nobel Prize for management
Alfred Nobel helped build an industrial empire. While Nobel’s bequest established prizes that commemorate his love of literature and science, it seems unlikely he would ever have considered rewarding managers in the same way, except perhaps to encourage them to do the dull managerial jobs he hated. Any would-be management prize-winner would have to demonstrate mastery of what the late Jim March, the Stanford sociologist, described as the “plumbing” and the “poetry” of effective leadership — that elusive combination of practical organisational skills and vision.
Financial Times
Cartoon, October 14
“Keep an eye out — this could be our big chance for a selfie with some very happy central bankers.” Copyright © 2015 The Financial Times Limited. Please don't cut and paste FT.com articles and redistribute ...
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.
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,
Financial Times
Global regulators put pressure on Libra with enhanced scrutiny
Facebook’s plans for a digital currency are coming under further pressure as global regulators step up their scrutiny of the troubled Libra project. In a letter to G20 finance ministers on Sunday, Randal Quarles, the head of the global Financial Stability Board, said that, with a “host of challenges” posed by global “stablecoins”, such as Libra, “possible regulatory gaps should be assessed and addressed as a matter of priority”. This, the letter said, created challenges including financial stability, consumer and investor protection, data privacy, money laundering, terrorist financing, fair competition, cyber security and tax evasion.
Financial Times
Facebook’s hubris comes at a heavy cost for Libra
As it meets with backers on Monday, Facebook is realising just how much. Digital transformation in banking is welcome, but regulators are right to argue that Facebook has yet to make the case for its own e-bucks. Libra — billed as a “stablecoin”, pegged to a basket of currencies — was sold as a disrupter that could bank the unbanked and slash transaction costs and times.
Financial Times
California’s new model for fixing inequality
The Democratic presidential candidate would like not only to break up Big Tech, but tax companies such as Facebook and people like Mr Zuckerberg a lot more. It galls me not that I pay roughly half my income in taxes, but that I do so because I earn it from actual work while those who earn money from rising share prices pay much less. , a book by Emmanuel Saez and Gabriel Zucman, who are advising Ms Warren on tax issues, including the details of how to tax wealth rather than just income.
Bloomberg
Trump Stands by ‘Great Guy’ Giuliani as Investigation Deepens
(Bloomberg) -- President Donald Trump stood by Rudy Giuliani, calling him “a great guy and a wonderful lawyer” who’s under attack from the “Deep State,” a day after saying he didn’t know if the former New York City mayor was still his attorney.Trump’s comment, posted on Twitter as he traveled via motorcade to his golf course in Northern Virginia, followed news that Giuliani is being scrutinized by federal investigators for his financial dealings following the indictment of two of his associates for violating campaign finance laws.‘Yeah, Sure’At the White House on Friday afternoon, asked whether Giuliani was still his lawyer, Trump told reporters, “I don’t know, I haven’t spoken to Rudy.” He then added: “He’s a very good attorney, and he has been my attorney. Yeah, sure.” On Saturday, Trump told Fox News host Jeanine Pirro that Giuliani is still his lawyer and that he’s a “great gentleman.”A law enforcement official, who asked to remain anonymous speaking about the sensitive matter, declined this week to discuss details about the scrutiny around Giuliani, 75, but it’s a dramatic development for a man who made his reputation as a crusading mob prosecutor when he was the U.S. attorney in Manhattan.He now finds himself drawn into an expanding criminal probe run by his old office into illegal campaign contributions.Giuliani attorney Jon Sale didn’t immediately respond to calls and email messages seeking comment on the reported probe or whether he continues to represent Trump.Foreign MoneyRepresentatives for the Southern District of New York, which is leading the probe, declined to comment.Of the four men charged Thursday with funneling hundreds of thousands of dollars in foreign money into efforts to support Trump and other candidates for office, two have worked closely with Giuliani since he became Trump’s personal lawyer last year.The men -- Lev Parnas and Igor Fruman -- are represented by John Dowd, Trump’s former lawyer. Dowd himself wrote last week to Democrats saying the two men wouldn’t testify in the impeachment inquiries, explaining “Parnas and Fruman assisted Mr. Giuliani in connection with his representation of President Trump. Mr. Parnas and Mr. Fruman have also been represented by Mr. Giuliani in connection with their personal and business affairs.”Trump told reporters Thursday that he didn’t know Parnas or Fruman. “Maybe they were clients of Rudy,” he added. As for photos of himself with Parnas at the White House posted on Facebook, he said it was possible “but I have pictures with everybody.”Parnas and Fruman had lunch with Giuliani at the Trump hotel in Washington Wednesday, the Wall Street Journal reported. That would have been just hours before prosecutors said the two were arrested trying to board a flight out of the country on one-way tickets. The indictment doesn’t just draw Giuliani closer to prosecutors’ glare; after the arrest, House Democrats subpoenaed the men’s communications with Giuliani, saying “They are not exempted from this requirement merely because they happen to work with Mr. Giuliani.”CNN reported earlier Thursday that prosecutors in Manhattan are looking into Giuliani.Being Watched?The timing of the arrest suggests prosecutors knew the two men were leaving the country, which means they were likely tracking the pair closely before they were apprehended.“How did the feds know, in real time, they were buying plane tickets?” said John Moscow, a former prosecutor in the Manhattan District Attorney’s office. “They were probably under surveillance.”And if they were under surveillance, then it’s possible that investigators noted their recent meetings with Giuliani, he said. To that end, prosecutors might end up questioning Giuliani about whether he was aware they were planning to leave the country, among other topics.In particular, prosecutors are likely to want to know whether the two men informed Giuliani about their plans to leave and whether they wanted to avoid testifying in the House impeachment inquiry.Parnas, who was born in Ukraine, and Fruman, in Belarus, are both U.S. citizens now. The pair had been targeted by the Democrats because of their work in Kyiv over the past year with Giuliani to dig up incriminating information on Joe Biden, the leading contender to challenge Trump in next year’s presidential election, and his son. Trump’s efforts this summer to press the Ukrainian president to investigate the Bidens prompted House Speaker Nancy Pelosi to formally announce impeachment inquiries.Ambassador’s OusterAccording to the indictment, the men also played a role in another incident House Democrats are zeroing in on: Parnas allegedly pressed an unidentified congressman to push for the ouster of the U.S. ambassador to Ukraine at the behest of Ukrainian government officials. The ambassador, Marie Yovanovitch, was recalled in May and is scheduled to testify before the impeachment inquiry Friday. It’s unclear whether she will testify.The description of the congressman matches that of former Rep. Pete Sessions, who did write a letter to Secretary of State Mike Pompeo urging her ouster. Sessions, a Republican from Texas, said Thursday that he wasn’t sure he was the congressman referenced in the indictment and was never aware that the men were acting at the behest of Ukrainian politicians. He said he contacted Pompeo because of his own concerns about Yovanovitch.The pair appeared before a judge in Alexandria, Virginia, Thursday afternoon. They were granted a $1 million bond and will be released to home confinement with electronic monitoring. Kevin Downing, another lawyer for the two, declined to comment. In yet another interlocking circle, Downing represented Trump’s former campaign chairman Paul Manafort in his unsuccessful defense against tax and lobbying charges brought by Special Counsel Robert Mueller.QuickTake: On Bidens and Ukraine, Wild Claims With Little BasisIn recent weeks, as the Ukraine scandal has mushroomed in Washington, Giuliani has admitted that he did push the newly elected Ukrainian government to investigate Biden and his son, who served on the board of a Ukrainian energy company. He defended his work, saying he was concerned about corruption in the country.“The fact that they’re involved in illegal contributions and connected to things in Ukraine that Giuliani was involved in, that alone makes Giuliani a person of interest,” said Samuel Buell, a former federal prosecutor who teaches at Duke University School of Law.(Updates with Trump comment in third paragraph.)\--With assistance from Andrew Harris.To contact the reporters on this story: Greg Farrell in New York at gregfarrell@bloomberg.net;Chris Strohm in Washington at cstrohm1@bloomberg.netTo contact the editors responsible for this story: Jeffrey D Grocott at jgrocott2@bloomberg.net, ;Kevin Whitelaw at kwhitelaw@bloomberg.net, Heather Smith, Peter BlumbergFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Financial Times
Bill Gates expresses regret over meetings with Jeffrey Epstein
The world’s second-richest man said in a statement through a spokesperson that he recognised it was “an error in judgment” ever to have met Epstein, who committed suicide two months ago while facing charges of trafficking underage girls. This had given Epstein “an undeserved platform”. Mr Gates is among several prominent figures to have moved in recent weeks to distance themselves from Epstein, who cultivated a network of rich and powerful associates from business, academia, politics and royalty.
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.
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.
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.
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.
Bloomberg
Anger Over Syria, Trump’s Impeachment Saga: Weekend Reads
(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.As the impeachment crisis worsens for U.S. President Donald Trump, it seems all roads lead to his personal lawyer Rudy Giuliani, who is now embroiled in scandals stretching from Ukraine to Iran.In northeastern Syria, terrified civilians are trying to work out the safest way to flee as Turkish forces entered towns along the frontier between the two countries, just days after Trump said U.S. troops in the area wouldn’t stand in the way of Ankara’s military offensive.Another conflict causing ripples throughout the world — the trade war — is showing a flicker of hope. After months of escalation, Trump offered a tacit embrace of something he has resisted for months: A partial deal. Dig deeper into these issues and take a look at some of Bloomberg’s most compelling political photos from the past seven days.Trump Urged Top Aide to Help Giuliani Client Facing DOJ ChargesFueling long-standing concerns about Trump’s governing style, it’s emerged he pressed then-Secretary of State Rex Tillerson to persuade the Justice Department to drop a case against an Iranian-Turkish gold trader who was a client of Giuliani. Tillerson refused, while others were shocked by the request, Nick Wadhams, Saleha Mohsin, Stephanie Baker and Jennifer Jacobs report.Turkey Gears for High-Risk War Against a Familiar Foe in SyriaTurkey’s armed forces face a familiar opponent as they launch a major offensive in northeastern Syria. As Selcan Hacaoglu and Marc Champion write, they’ve been fighting versions of the Kurdish People’s Protection Units, or YPG, for 35 years.Trump Mines Weak Spots in Foreign Leaders for Battles at HomeHe might be working to salvage his presidency, but Trump can still smell weakness in others. In his efforts to discredit his domestic enemies, he’s solicited help from Ukraine’s rookie president, a collapsing Italian government, an Australian battling China and Boris Johnson of Brexit-divided Britain, John Follain, Volodymyr Verbyany and Jason Scott report.When This $2 Trillion Market Turns, Start Worrying About BrexitFor post-Brexit Britain, the kindness of strangers and their money will be more vital than ever, Anooja Debnath and John Ainger write. Prime Minister Boris Johnson has amped up his rhetoric that the U.K. will leave the European Union at the end of this month — even if there is no basis for a future relationship.The Plane Crash That Helped a European Leader Take Over a NationThe news that a Polish air force plane had crashed in dense fog in April 2010 transfixed a nation. Among the dead were Poland’s president, his wife and dozens of top officials. The repercussions from that transformed the country from one of Europe’s great successes into one of its biggest renegades. Marek Strzelecki and Rodney Jefferson report.Trump’s China Deal Yields Plenty of Questions, and CriticsWith the partial agreement with China he announced yesterday, Trump is back in dealmaker mode after months of escalation. But as Shawn Donnan reports, that doesn’t mean the new grand bargain he once promised with Beijing is any more than a small step closer to reality, or that a curtain is being drawn on the uncertainty his trade wars have brought to the global economy.Moment of Truth on China Is Coming for Rest of Corporate AmericaLong before Daryl Morey’s fateful tweet — the one that set the NBA on a collision course with China — the nation had a history of employing economic might to twist corporate arms in Asia. As Matt Townsend reports, it was one of China’s most aggressive efforts yet to bend a western company to its will.Stay Radical or Get Pragmatic? AMLO’s Party Has to Decide For most of its five short years in existence, Mexico’s Morena party has revolved around one politician: Andrés Manuel López Obrador. AMLO, as he’s known, was elected president in a landslide last July. Now his leadership is at a crossroads, Eric Martin writes.GM’s Electric Future Means Prosperity for One Michigan Town, Disaster for AnotherEvery decade or so, GM undergoes a transformation to ensure the company’s long-term survival, write Bryan Gruley and David Welch. Invariably, these makeovers turn some communities into winners and others into losers — in this case, they’re separated by just 35 miles.Two Mammoth Power Plants Are Sinking Eskom and South AfricaSouth Africa’s economy was roaring along in 2007, on the back of the global commodities boom, when power shortages struck bringing mines and smelters to a halt. State power utility Eskom Holdings swiftly opened the spending taps, but botched implementation of the expansion plan has haunted the country ever since, write Paul Burkhardt and Michael Cohen.And finally ... The Arctic is emerging as a potential geopolitical flashpoint for the U.S., Russia and China as shipping routes get unblocked, Marc Champion writes. Melting ice is opening access to new energy resources faster than predicted, and it’s prompting a nascent great power struggle as the political and economic map of the world is transformed. \--With assistance from Muneeza Naqvi.To contact the author of this story: Ruth Pollard in New Delhi at rpollard2@bloomberg.netTo contact the editor responsible for this story: Karl Maier at kmaier2@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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.
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.
Bloomberg
Google’s $2.6 Billion Looker Deal Said to Get Closer DOJ Review
(Bloomberg) -- U.S. antitrust enforcers have started an in-depth review of Google’s $2.6 billion planned acquisition of a data analytics company, a further sign of greater scrutiny on big technology companies, according to people familiar with the situation.The antitrust division of the Justice Department is seeking more information from Google and Looker Data Sciences Inc. related to the deal to determine whether the tie-up harms competition, said one of the people, who asked not to be named discussing private matters.Alphabet Inc.’s Google announced June 6 it planned to buy Looker for its cloud unit, which lags far behind Amazon.com Inc. and Microsoft Corp. with just 4% of the cloud-computing infrastructure market as of 2018, according to the most-recent figures from analyst Gartner Inc.The deal was expected to receive added regulatory scrutiny. The in-depth Justice Department review, known as a “second request,” comes as antitrust authorities start historic probes of Google and other large tech companies. One issue for enforcers is whether tech giants have used acquisitions of smaller firms to thwart rivals and cement their dominance. The U.S. Federal Trade Commission, which also enforces antitrust laws, is investigating whether Facebook Inc.’s purchases of Instagram and WhatsApp were anti-competitive.Representatives from Google, Looker and the Justice Department declined to comment.The Justice Department and a coalition of attorneys general made up of most U.S. states in the country have opened antitrust cases against Google. Those probes are mostly focused on the company’s dominant search and advertising businesses.Looker, closely held and based in Santa Cruz, California, provides tools that lets companies analyze their data stored in the cloud, a service that competes with offerings from Amazon and Microsoft. When Google announced the deal, its cloud chief, Thomas Kurian, said the company would continue to let Looker customers use other cloud providers. Google doesn’t share cloud sales.Google once spent lavishly on companies, dropping billions on device makers Motorola and Nest, as well as experimental tech like satellites and robots. More recently, the company’s acquisitions have mostly been relatively small deals in the cloud sector.It’s common for antitrust authorities to open in-depth investigations for sizable mergers, but more recently have faced criticism for allowing large tech companies to buy startups as a way to gain footholds in new markets. That charge has been aimed at Google after its takeovers of Waze, DoubleClick and YouTube. The Justice Department in July announced a broad antitrust review of the big internet platforms in search, social media and online retail.To contact the reporters on this story: Mark Bergen in San Francisco at mbergen10@bloomberg.net;Sarah McBride in San Francisco at smcbride24@bloomberg.net;David McLaughlin in Washington at dmclaughlin9@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, ;Sara Forden at sforden@bloomberg.net, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Bloomberg
Trade Deal Is ‘Game Changer’ for Tech Stocks, Wedbush Says
(Bloomberg) -- The partial U.S.-China trade agreement is a “game changer” for technology stocks, at least according to one analyst.The deal announced by President Trump in the last hour of trading on Friday points to “brighter days” in relations between the two countries and makes it unlikely the U.S. will follow through with the more than $160 billion in tariffs slated to take effect Dec. 15, Wedbush Securities analyst Daniel Ives said. Concerns around those tariffs have resulted in a 10% to 15% discount on U.S. technology stocks by his estimation and the removal could “unleash a ‘risk on’ scenario” into year-end.Technology stocks had rallied throughout Friday’s session on speculation that some form of trade agreement was near. The shares pared some of those gains as investors realized that several of the thorniest issues, including those related to Huawei Technologies Co., remain unresolved. Huawei, which was blacklisted earlier this year, is a major buyer of U.S. electronic components.The late pullback wasn’t enough to prevent Apple Inc. from closing at a record and overtaking Microsoft Corp. as the world’s most valuable company. Greater China accounted for about 17% of Apple’s revenue in the fiscal third quarter and is home to a key portion of its supply chain. The Philadelphia semiconductor index also notched a 2.3% gain for the session, its best performance in a month.To contact the reporter on this story: Jeran Wittenstein in San Francisco at jwittenstei1@bloomberg.netTo contact the editor responsible for this story: Catherine Larkin at clarkin4@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Zacks
Facebook Q3 2019 Earnings Preview: Time to Buy FB Stock?
Let's take a look at what investors need to know about Facebook and some of its Q3 estimates to help us determine if FB stock might be worth buying before the social media company reports its Q3 2019 earnings results...
Bloomberg
Apple’s Record High Edges Out Microsoft Amid Trade Deal Hope
(Bloomberg) -- Apple Inc. shares closed at a record on Friday as investors looked past a year marked by turmoil from the U.S.-China trade war and uncertain demand for the iPhone, a product that Apple is moving away from, but which remains central to its business.The stock rose 2.7% to $236.21 in New York, exceeding the prior high set just over a year ago. The move made Apple the most-valuable U.S. company again, topping Microsoft Corp. Both have a market value of more than $1 trillion. Earlier, the U.S. and China agreed on the outlines of a partial trade accord.The record is the culmination of a pronounced rally throughout 2019, a year that started on a highly bearish note, as Apple cut its revenue outlook for the first time in nearly 20 years. That move, taken in response to a weak outlook for iPhones upgrades and China’s economy, took the stock to its lowest level since April 2017.Since then, however, shares have been on a nearly uninterrupted march higher, with the stock higher in seven of the past nine months, not including October’s month-to-date gain of about 4%. Apple has climbed more than 60% off its January low, returning its valuation back above $1 trillion.Just as Apple’s weakness in the fourth quarter of 2018 was largely driven by concern over iPhone demand, the 2019 recovery has come on an easing of those fears. CEO Tim Cook recently told the German newspaper Bild that he “couldn’t be happier” with the launch of Apple’s recently released iPhone 11, and it was reported in early October that Apple had told suppliers to increase production. Analysts, in turn, have been growing more positive on demand, while also anticipating that next year’s model -- expected to be the first 5G version -- will be a blockbuster.In other respects, Apple is a different company from when it was last trading at all-time highs a year ago. The Cupertino, California-based firm is reinventing itself as a services-based company, with such initiatives as streaming video, video games and a credit card. In another change, the historically high-end gadget-maker unveiled these new businesses and products at less-aggressive prices.Despite the new-found focus on services, the iPhone continues to be Apple’s keystone product. Nearly half of its third-quarter revenue came from the product, compared with the 21.3% that was derived from services.Apple is expected to report fourth-quarter results on Oct. 30. Analysts are looking for earnings of $2.84 a share on revenue of $62.9 billion, according to data compiled by Bloomberg. That represents a decline of 2.6% for earnings and flat sales growth.According to a Bloomberg MODL estimate, it will ship 41.9 million iPhones in the quarter, at an average selling price of $770.35. That would represent a year-over-year drop of 14.5% for shipments, and a 3.1% decline in average price.(Updates with closing shares in the second paragraph.)To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.netTo contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Brad OlesenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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