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(Bloomberg) -- Ethiopian authorities are probing missing funds a military contractor already accused of graft was meant to spend on a showpiece dam on a Nile tributary that’s raised tensions with Egypt.Military-linked Metals & Engineering Corp., which was replaced as a contractor on the Grand Ethiopian Renaissance Dam in August 2018, said it could only account for spending of 9 billion birr ($305 million) of the 16 billion birr it received from a state-owned power company for mechanical and structural works. Work on the project on the Blue Nile is running about five years late, with Ethiopia planning to finish it in 2023.The money may have been used for some “administrative” or other purpose, Metec’s director-general, Ahmed Hamza, said of the unaccounted for funds in an interview in the capital, Addis Ababa. Ethiopia’s auditor-general, Gemechu Dubiso, said the transfers from Ethiopian Electric Power Corp are being investigated.Metec, which had played a crucial role in projects to develop Africa’s fastest-growing economy, has been roiled by corruption allegations over the past year and its leadership has been comprehensively changed.The GERD, which is set to be the continent’s largest power plant, is currently 68.5% complete, according to project engineer Kifle Horo. The civil part of construction by Italy’s Salini Impregilo SpA has overtaken work international contractors are doing after Metec’s replacement.Tensions over the dam have flared in recent weeks, as Egypt has accused Ethiopia of dismissing its concerns over the timescale for filling the project’s reservoir -- a key issue in sustaining a reliable Nile flow to Egypt -- and called for an external mediator in talks.Ethiopia proposes filling the reservoir in between four and seven years, according to Gideon Asfaw, water ministry adviser and Ethiopia’s head of negotiations on the dam with Egypt and Sudan until earlier this year.To contact the reporter on this story: Nizar Manek in Addis Ababa at firstname.lastname@example.orgTo contact the editors responsible for this story: David Malingha at email@example.com, Michael Gunn, Mark WilliamsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
for his Brexit deal in a landmark vote on Tuesday night but suffered an immediate setback after MPs derailed his attempt to take Britain out of the EU on October 31. European Council president Donald Tusk proposed an extension until January 31 after MPs defeated a “programme motion” to fast-track exit legislation through the Commons.
Roll up, roll up, for the greatest show on earth. Tomorrow is Tesla’s third-quarter earnings, and Alphaville will be covering it on a live chat. So do pop by if you’ve got nothing better to do with your ...
(Bloomberg) -- It was just weeks ago that Adam Neumann was running one of the world’s most valuable startups. As chief executive officer of WeWork, he was on the verge of an initial public offering of a venture once valued at $47 billion.Today, in a remarkable fall from grace, the office-sharing company that he co-founded in 2010, the one he promised would elevate the world’s consciousness, is no longer his.SoftBank Group Corp., the company’s largest investor, unveiled Wednesday in Tokyo a multibillion-dollar rescue package that nets it 80% of WeWork, part of a desperately needed lifeline. It brings an end to an era marked by lavish spending and self-dealing that deepened the company’s losses and eroded investors’ faith in Neumann’s ability to lead. Even with the capital infusion and new ownership, it also leaves WeWork beset by woes that include sagging morale, landlord unrest and tens of billions of dollars in rent payments.“Obviously the biggest challenge is just steadying the ship,” said Duncan Clark, chairman of BDA China, an advisory firm. “Can the company remain solvent? It’s a race against time to trim costs, sell assets, change culture.”The rescue package is personally humbling for the 40-year-old Neumann, a natural showman with a penchant for speaking in grandiose terms about changing the world while doling out shots of tequila in the workplace. But it’s also poised to make him a very rich man.Read more: WeWork Taps ‘Adult in Room,’ Ex-Amazon Exec to Replace NeumannIn an unusual deal that is almost certain to spark the ire of WeWork staffers being dismissed by the thousands, Neumann will walk away with as much as $1.2 billion as well as a $500 million credit line from SoftBank, after it pushed him out as chief executive officer last month. He’ll remain as a board observer and can assign two board seats.The deal gives WeWork a second chance at least in the short-term. SoftBank will soon provide WeWork with $1.5 billion, accelerating a financing agreement that was originally scheduled for April. SoftBank is also organizing a $5 billion debt package, which will include contributions from SoftBank itself, Mizuho Financial Group Inc. and other lenders.Emblematic of high-flying, growth-at-all-costs unicorns, WeWork’s never made a penny in profits, losing $900 million in the first half of this year. Burning through cash since its inception, it faced a crunch that could have left the company short of funds as soon as next month. Much of that binge stems from Neumann, a fierce and unpredictable negotiator unafraid of spending his way to growth: In the past nine years, WeWork has opened 425 office locations in 36 countries, become Manhattan’s biggest tenant, and upended the stodgy world of commercial real estate.Serious questions remain about its business model of renting and renovating office space that it leases to individuals and companies. That strategy has made it the biggest private office tenant in cities like New York and London. But it’s also left it in a precarious position. It has some $47 billion of future rent payments due and some $1 billion in renovation costs.Landlords and tenants have become cautious when dealing with the firm. Google has walked away from a potential Toronto lease and landlords are reaching out to WeWork rivals to see if they will take over WeWork leases or buildings if it becomes necessary.SoftBank also must grapple with reducing costs including a workforce of more than 12,000 people that had grown bloated under Neumann. WeWork already plans to lay off 2,000 people and sell some non-core businesses.Even as it reduces the workforce, SoftBank will also need to deal with growing dissatisfaction among employees, some of whom have worked for years in anticipation of an initial public offering that never materialized. At least five C-level executives have headed for the exits in recent weeks, and some staffers, unsure of their fate, stopped reporting for duty altogether, people familiar with the situation said last week.As part of the package, SoftBank executive, Marcelo Claure, will take over as chairman of WeWork’s board. WeWork appointed Artie Minson and Sebastian Gunningham as co-CEOs last month after investors pushed back against the IPO.Even before the bailout, the Japanese conglomerate had committed more than $10 billion to the company. As its estimated valuation cratered, WeWork last month ousted Neumann as CEO and, eventually, pulled its IPO in the face of investors who balked at its losses and corporate governance.The debacle has been an embarrassment for SoftBank. It valued WeWork at $47 billion as recently as the start of the year. Already, SoftBank has invested more than WeWork is estimated to be worth without its latest capital infusion-- about $8 billion.Under the deal, Neumann is allowed to sell a little under $1 billion of stock to the Japanese conglomerate, said people familiar with the matter. Neumann currently owns 22% of WeWork. It couldn’t immediately be learned what his stake will fall to after any sale to SoftBank. He will also get a roughly $185 million consulting fee.SoftBank and JPMorgan declined to comment. WeWork couldn’t immediately be reached.SoftBank’s stock purchase from Neumann is part of a broader offer to buy as much as $3 billion from existing shareholders. The $500 million credit line for Neumann will be secured by some of his stock. And a $500 million loan to Neumann extended by JPMorgan, UBS and Credit Suisse will be repaid, one of the people said.When Neumann stepped down from the CEO role, it triggered terms of the loan that would have put him in technical default, according to a person familiar with the matter.JPMorgan had been pitching a $5 billion debt package for WeWork. Last week, the company had been leaning toward the bank’s plan over SoftBank’s, because it wouldn’t dilute existing shareholders or force the startup to cede control.But disagreements over the company’s valuation -- JPMorgan’s plan had pegged WeWork about $5 billion -- pushed the company toward SoftBank, which was willing to increase its equity stake and provide a payout to Neumann, according to a person familiar with the situation.For his part, SoftBank chief Masayoshi Son is showing signs of contrition for the role he played in inflating WeWork’s valuation. On a call Monday, Son apologized to investors in the first Vision Fund, which injected capital into WeWork at a valuation of north of $21 billion in 2017, according to a person briefed on the matter.(Updates with deal details from the third paragraph)\--With assistance from Candy Cheng.To contact the reporters on this story: Gillian Tan in New York at firstname.lastname@example.org;Michelle F. Davis in New York at email@example.comTo contact the editors responsible for this story: Tom Giles at firstname.lastname@example.org, Larry ReibsteinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The futuristic door handles on Tesla Inc.’s Model S are being blamed for a fatal crash in which a police officer was unable to pull a man to safety from his burning car.Omar Awan, a 48-year-old anesthesiologist, was driving his leased Tesla in February when he lost control on a south Florida parkway and the car slammed into a palm tree, according to a wrongful death lawsuit filed in state court in Broward County.A police officer couldn’t open the doors because the handles were retracted and bystanders watched helplessly as the car filled with smoke and flames, according to the complaint, which alleges the fire originated with the car’s battery.The door handles on the Model S are flush with the car and pop out -- “auto-present” in the words of Tesla -- when they detect that the key fob is nearby.“Fire engulfed the car and burned Dr. Awan beyond recognition -- all because the Model S has inaccessible door handles, no other way to open the doors, and an unreasonably dangerous fire risk,” according to the Oct. 10 suit. The complaint lists the cause of death as smoke inhalation and states that Awan had sustained no internal injuries or broken bones in the crash.Read More: What First Responders Don’t Know About Fiery Electric VehiclesTesla didn’t immediately respond to a request for comment.Consumer Reports said in 2015 that broken door handles were one of the most common problems with the Model S.Awan’s Tesla continued to burn for hours, reigniting several times even after firefighters had extinguished the flames and the car had been towed, according to the complaint.This isn’t the only case to fault the Model S’s lithium-ion batteries as flammable. The family of an 18-year-old who lost control of his Tesla at 116 miles per hour and crashed into a concrete wall last year blames an explosion of the battery for his death in an “entirely survivable” crash, according to a suit filed this month in state court in San Jose, California.Awan’s case is Awan v. Tesla Inc., 19-021110, Circuit Court of Broward County, Florida.To contact the reporter on this story: Robert Burnson in San Francisco at email@example.comTo contact the editors responsible for this story: David Glovin at firstname.lastname@example.org, Peter Blumberg, Joe SchneiderFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Facebook Inc. is following other tech titans like Microsoft Corp. and Google, pledging to use its deep pockets to ease the affordable housing shortage in West Coast cities.The social media giant said Tuesday that it would commit $1 billion over the next decade to address the crisis in the San Francisco Bay Area, building as many as 20,000 new homes that are accessible to teachers, nurses, first responders and other essential workers. A quarter of the funds are earmarked for a partnership with California to construct housing on state-owned land in areas where there aren’t enough residences.“State government cannot solve housing affordability alone, we need others to join Facebook in stepping up,” California Governor Gavin Newsom said in the statement. “Progress requires partnership with the private sector and philanthropy to change the status quo and address the cost crisis our state is facing.”Newsom, who campaigned last year with the promise of building 3.5 million homes in the state to ease the shortage, has been under pressure to deliver. This month, he signed legislation that’s intended to curb rent growth. But he’s made clear that the state won’t be able to solve its problem without building many more new homes. Recent data suggests that permits for new construction have fallen this year, calling into question whether the state will be able to make progress.While researchers have said there are other barriers to construction in California, the success of Facebook and other technology companies has contributed to soaring housing costs in the San Francisco Bay Area and greater Seattle, where Microsoft is based. The firms employ tens of thousands of high earners who have bought or rented homes, leaving fewer options for poor and middle-income residents. San Mateo County, which includes Facebook’s headquarters in Menlo Park, added more than 13 jobs for every new unit of housing between 2010 and 2015, according to an analysis by Up for Growth, a group that advocates for more construction.That imbalance has contributed to a backlash against tech firms at the same time they’re facing tough questions about their market power, their role in spreading disinformation and their approach to user privacy. Facebook Chief Executive Mark Zuckerberg is set to appear for a public hearing before the House Financial Services Committee on Wednesday in Washington. That committee, run by Maxine Waters, a Democrat from California, oversees housing and urban development issues.“A company like Facebook wants to build all the good will that it can, and this is certainly one way to do it,” said Margaret O’Mara, a University of Washington history professor and author of “The Code: Silicon Valley and the Remaking of America.” “I’m glad that big tech companies are stepping up to address the problem, but it’s going to require much more than this.”The pledge was announced Tuesday, in part because it took time to work out details of the partnership with the state, said Menka Sethi, the company’s director of location strategy. Other pieces of the commitment -- such as a $25 million investment in teacher housing in Silicon Valley -- were previously disclosed or build on prior efforts.Facebook said that $150 million, for instance, would go toward an affordable housing fund set up by the Partnership for the Bay’s Future, an organization backed by Zuckerberg and his wife Priscilla Chan that was unveiled earlier this year. Another $350 million will serve as “additional commitments” that will be allotted to efforts that are deemed effective in the Bay Area or elsewhere where the company does business. The final $225 million is related to land that the company previously purchased and has zoned for housing.That’s similar to what Google is pursuing with the lion’s share of its own $1 billion pledge to build housing in the Bay Area, which was announced in June. Microsoft led the pack with a $500 million commitment to Seattle-area housing in January.Facebook’s Sethi emphasized that her company is also interested in changing policy and partnering with the public and private sector on the issue, so that California can start producing the 3.5 million homes it needs.“The funding alone is not going to get the job done,” she said.(Updates with executive’s comment starting in eighth paragraph)\--With assistance from Kurt Wagner.To contact the reporter on this story: Noah Buhayar in Seattle at email@example.comTo contact the editors responsible for this story: Craig Giammona at firstname.lastname@example.org, Dan Reichl, David ScheerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Snap Inc.’s revenue and user growth beat analysts’ estimates in the third quarter, boosted by an increase in downloads of the revamped Android version of its mobile app. A tepid forecast for the current period, combined with a strong runup in the stock price this year, sent the shares lower in late trading.The company reported a 13% quarterly jump in daily active users for its Snapchat application, to 210 million, beating the 206 million average estimate of analysts surveyed by Bloomberg. Third-quarter sales jumped 50% to $446 million, compared with the $437.9 million projected by Wall Street.Snapchat, which lets people send video and picture messages that disappear and offers popular photo filters, seems to have mostly recovered from a rocky performance after its 2017 initial public offering. It has weathered executive departures, user defections and tough competition from Facebook Inc.’s Instagram. The company has been working toward reducing expenses, helping narrow the net loss in the recent period to $227 million, or 16 cents a share. Analysts had projected $262.3 million.But the positive results were overshadowed by Snap’s revenue outlook for the fourth quarter, which at the midpoint came in below analysts’ expectations. Even after three quarters of beating Wall Street’s projections, the forecast signaled that Snap’s growth is still a work in progress.The company has improved Snapchat’s performance, especially on Android phones, and increased the amount of fun and creative tools for the app, including social games and filters that allow people to manipulate their faces into cartoon characters. That’s led users to open it 30 times a day on average, according to Chief Executive Officer Evan Spiegel. Previously, the Android version of the app was buggy and slow, making it difficult for Snapchat to grow in important markets where Android is dominant -- outside the U.S. and Europe. Following the long process of rebuilding the app, the new Android version was finally released to all users earlier this year.Now, advertisers are slowly looking to Snapchat as an alternative to the technology industry’s much larger platforms.“Google and Facebook dominate mobile advertising, but there is plenty of room for other winners as mobile time spent continues to scale,” said Rich Greenfield, an analyst at Lightshed Partners. “Our conviction in Snapchat’s recovery has grown meaningfully over the course of 2019, as we hear positive first-hand feedback from advertising clients.”Snapchat still needs to win over advertisers in Android-heavy countries, where most of its growth is. Snap said it expects 214 million to 215 million daily average users in the fourth quarter, helping the company generate revenue of $540 million to $560 million. Analysts on average expected $557 million in sales this quarter.Snap shares fell 1.4% in extended trading, after earlier closing down 4% at $14. The shares have more than doubled so far this year, but aren’t yet higher than their $17 IPO price in 2017.Santa Monica, California-based Snapchat has become a poster child for Facebook’s competitive hold on the social-media market. Facebook and its photo-sharing app Instagram have repeatedly copied Snapchat’s best features, cutting into its potential. Now, Facebook is under investigation by the U.S. Justice Department and the Federal Trade Commission for antitrust violations. Snapchat’s recovery could weaken the government’s argument.Both companies are now facing competition from TikTok, a new social network popular with young people, owned by China’s Bytedance Inc. While Facebook CEO Mark Zuckerberg is rallying employees to compete with TikTok through a copycat app called Lasso, Snap’s Spiegel said Tuesday on a conference call that “we definitely consider them a friend,” noting that TikTok uses Snap’s app-development tools and advertises on Snapchat.(Updates with comment on TikTok competition in final paragraph)To contact the reporter on this story: Sarah Frier in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Snapchat’s ability to thrive boils down to this question: Can it close the gap with Facebook without becoming Facebook?Investors in internet companies have tended to fixate on whether the companies can keep pulling in more people to spend more time with their online hangouts. Those metrics are watched extra closely at Snapchat for signs of whether its generally young fans are drifting away to Facebook’s Instagram, YouTube, TikTok, Fortnite or other internet distractions.But as parent company Snap Inc. grows up, it has sensibly said it wants to increasingly focus on generating more money from the people who choose to spend time on Snapchat. The question is both whether Snapchat can become an effective internet money-making machine and whether it can do so without following the Google and Facebook model of increasingly invasive internet surveillance.Snap, so far, has taken steps in the right direction, but it has a long way to go — if it can ever get there.In a disclosure of its third-quarter financial results on Tuesday, Snapchat reported a second consecutive quarter of relatively steady growth in the number of users and said it expects a similar rate of gains in the fourth quarter. Revenue jumped 50% from a year earlier. In its most lucrative domestic market, Snapchat’s growth in average revenue from each user continued to pick up speed. This is all good. (Snap shares fell in after-hours trading, perhaps reflecting worries about a slightly lower-than-expected revenue forecast for the fourth quarter.)As analysts have expected, CEO Evan Spiegel said in a conference call script that Snap is on a path to the company’s first positive number in earnings before interest, taxes, depreciation and amortization after stripping out more costs such as stock compensation. It’s kind of profitable, with an asterisk, but it’s an important milestone now that the mood has turned sour for wildly unprofitable young companies.The company’s shares have rallied this year — though they remain below the price at which Snap sold stock in its March 2017 initial public offering — as it recovers from mostly self-imposed missteps. It now seems that Snapchat’s app is stable; the company continues to come up with fresh and fun ideas; it is no longer focused on 15 contradictory priorities; and it is restoring credibility with its fans, partners and companies that want to pitch to Snapchat’s largely young users.Snapchat knows what its financial future could look like if it does everything right. That is, it could look like Facebook, which honed the model of turning people’s time and attention into revenue from pitching ad messages. Yes, newspaper, radio and television did the same thing, but Google and Facebook have played this tune on an entirely different scale. Those companies are both a model of what Snapchat could become financially and a cautionary tale.Snapchat generated an average of $2.12 of revenue for each of its daily users in the third quarter. The figure at Facebook was $10.64 in the second quarter.(1)The gap is not a surprise, given the relative immaturity of Snapchat’s advertising sales machine and its stumbles.To close it, the company has copied sensibly from Facebook, giving a retailer, for example, options to pitch a specific handbag from its catalog to Snapchat users who might be interested. Snapchat needs to offer more options like this to businesses, prove that ad messages translate into sales and avoid annoying its fickle young fans. It’s a tall order.Snapchat also has to do this without getting too creepy. We don’t yet have a model of an internet company that can be successful without following the Google and Facebook model of sucking up ever-more granular information on people’s habits to fine-tune marketing pitches. Snapchat promises it can make money without being an insatiable data hog in the service of selling movie tickets or sneakers, but that remains to be seen. I’m also not sure that, structurally, Snapchat can resolve the division between the features on which users spend most of their time and the features that generate big chunks of the company’s revenue. That division may be a permanent ceiling on Snapchat’s revenue.For now, stability is a new and welcome look for Snapchat. To continue to fulfill its potential, Snapchat now has to pivot from recovery to a grown-up advertising vehicle while writing new rules for being a responsible internet company. (1) Facebook discloses a different average revenue figure based on monthly users. My figure is calculated from Facebook's daily user numbers.To contact the author of this story: Shira Ovide at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Facebook Inc. and Amazon.com Inc. set federal lobbying records in the third quarter as Washington ramps up oversight of the tech giants’ business practices.Facebook spent $4.8 million, an increase of almost 70% from the same period the year before. The world’s largest social media company is grappling with a mushrooming list of challenges, including federal and state antitrust investigations, criticism of its handling of users’ personal information, and dissatisfaction with its treatment of political content.Amazon spent $4 million on lobbying, the most the e-commerce giant has ever spent in a single quarter. Amazon, which runs a diverse set of businesses, is fending off criticism from lawmakers and regulators over its acquisitions and its bid for a highly lucrative Pentagon cloud contract.Spending by Alphabet Inc.’s Google dropped almost 50%, to $2.8 million from $5.5 million in the same period last year. Google is reshuffling its Washington lobbying operations under Karan Bhatia, the global policy chief who joined the company last year. In September, Google hired former Republican Senate aide Mark Isakowitz to head up its operations in the capital, replacing Susan Molinari. During the second quarter, Google ended its relationship with more than a dozen lobbyists at six outside firms.The big internet platforms are facing a high level of scrutiny of their business practices after years of virtual inaction in Washington. Both the Justice Department and the Federal Trade Commission, which share a mandate to enforce antitrust laws, have announced broad reviews of the technology sector -- indicating that Facebook and possibly Amazon will undergo parallel investigations by both agencies. The House Judiciary Committee is investigating antitrust issues in the tech sector, including scrutiny of how Amazon treats third-party sellers on its platform. The FTC is also questioning third-party merchants who sell their goods through Amazon, Bloomberg has reported. Facebook and Google face bipartisan antitrust probes by dozens of state attorneys general, as well.Although Google has decreased its lobbying footprint, it’s turning to other ways to get out a new message in Washington: The search engine is promoting users’ safety and security.In October, even as Google faced an array of public-policy challenges, the company rolled out a security-awareness campaign that included ads at Ronald Reagan National Airport and seven metro stations -- including “station domination” of two stops with posters throughout the stations, even on the bases of turnstiles, according to Washington’s transit agency.The initiative included three-day, pop-up displays touting Google’s privacy check-up features and educating passersby about online security tools in Union Station and at the Federal Triangle metro station, just blocks from the Capitol and the White House, respectively. The campaign, which was billed as part of National Cybersecurity Awareness Month, featured ads declaring that “Gmail blocks over 100 million phishing attempts, every day,” and touting a feature that allows users to automatically delete their data periodically.The campaign was designed to target Washington’s population of lawmakers, congressional staff, members of the media and think-tank workers, a target-rich environment for hackers, according to a person familiar with the campaign.Tim LaPira, an associate professor of political science at James Madison University who studies lobbying, said the campaign’s message pushes back against the notion that the company has lost control of users’ privacy and should be regulated in ways it would oppose.“Rather than only lobbying ‘inside’ the marbled halls of Capitol Hill, Google is trying to convince regular folks that their self-initiated security and privacy features are sufficient,” LaPira said in an email.Expenditures for ad campaigns don’t normally appear on lobbying disclosures, and the company didn’t disclose the cost.After years of growing popularity, the internet companies’ fortunes are falling in Washington due in part to revelations about how Facebook was exploited by Russia, which meddled in the 2016 election, and to concerns that Facebook’s privacy practices are too lax.In July, Facebook agreed to pay $5 billion to the FTC -- the largest privacy fine in the agency’s history -- to resolve the Cambridge Analytica data scandal in which a consulting firm hired by Donald Trump’s campaign obtained data without users’ knowledge from a researcher who created a personality quiz app on the social network. Google was also fined by the FTC to settle claims it violated children’s privacy on its YouTube platform.Facebook lobbied on competition, online advertising, a campaign finance transparency bill focusing on digital ads, and federal privacy legislation, among other issues, according to the disclosures, which cover the period ending Sept. 30. It lobbied Congress, the White House, the FTC and the Justice Department.Google lobbied on global trade, digital advertising, cybersecurity and other issues, according to its filings.Apple Inc. reported spending $1.8 million during the third quarter, up 34% from the same period last year. The company said it lobbied on a range of issues including tariffs, privacy, government access to data and patent litigation.Trade groups representing Facebook and Google have also pushed the U.S.’s proposed trade deal with Mexico and Canada to replace Nafta, which contains several digital provisions the groups favor -- including the extension of liability protections for third-party content that internet platforms host. Both companies lobbied on the pact.That shield is increasingly under threat in the U.S. The leadership of the powerful House Energy and Commerce Committee suggested in an August letter that the liability exemption, which helps the companies avoid a wide range of lawsuits, shouldn’t stay in the trade deal while lawmakers are weighing whether to keep it intact.Contested ContractSoftware giant Oracle Corp. spent $1.7 million in the third quarter, an increase of more than 20% from the same period last year. Microsoft Corp. slightly increased its spending to $2.3 million in the period.Both companies have been battling Amazon over a $10 billion Pentagon cloud-computing contract with moves that grabbed the attention of the White House. In July, Trump said he was considering intervening after hearing complaints that the bid terms are biased and tainted by conflicts of interest. Defense Secretary Mark Esper, who on Tuesday recused himself from deciding anything involving the deal because his son works with one of the original applicants, had ordered a review of the contract, known as the Joint Enterprise Defense Infrastructure, or JEDI. Esper had said there is no “hard timeline” to complete the review.Oracle has waged a legal and lobbying campaign against the cloud-computing program for about two years. Amazon appears to be fighting back. In June, its cloud unit, Amazon Web Services, hired Trump-connected Jeff Miller to lobby for the company.The third-quarter reports also showed significant activity on trade and tariff issues as Trump continued his trade war with China. Lobbying efforts to pass the U.S.-Mexico-Canada Agreement, or USMCA, also intensified.The National Retail Federation, which is helping lead a coalition of trade groups opposed to Trump’s tariffs, showed almost $2.3 million in lobbying spending in the third quarter, up from almost $2 million in the second quarter. A spokeswoman said much of the increase was related to trade and tariffs.The Consumer Technology Association, whose members include Apple Inc., Amazon and Facebook, reported spending more than $1.6 million during the third quarter, up from $1.1 million in the same period last year.“As long as the president continues to use tariffs as a weapon, CTA will continue to lobby Congress to exercise its clear authority on trade and tax matters,” Michael Petricone, the group’s senior vice president for government and regulatory affairs, said in a statement to Bloomberg.(Updates with Google advertising from seventh paragraph.)\--With assistance from Mark Niquette.To contact the reporters on this story: Naomi Nix in Washington at email@example.com;Ben Brody in Washington, D.C. at firstname.lastname@example.orgTo contact the editors responsible for this story: Sara Forden at email@example.com, Mark NiquetteFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Want to receive this post in your inbox every afternoon? Sign up hereFor many Republicans in Congress, it wasn’t enough that President Donald Trump asked a foreign power to interfere in the 2020 campaign; they wanted a quid pro quo. On Tuesday, a top U.S. diplomat reportedly testified that Trump required Ukraine to probe the son of former Vice President Joseph Biden as a condition for receiving military aid already passed by Congress. William Taylor, Democrats said, kept “meticulous” notes about his concerns and interactions with colleagues regarding attempts by lawyer Rudy Giuliani to influence Ukraine’s government on Trump’s behalf. —Josh PetriIt’s down to the wire with Brexit: To keep up with the latest news, sign up for our daily newsletter, follow us on Twitter and subscribe to our podcast.Here are today’s top storiesBoris Johnson’s pledge to take the U.K. out of the European Union in nine days’ time was temporarily derailed as Parliament blocked his plan to rush his Brexit deal into law. The votes on Tuesday did however move the U.K. away from a prospect of a no-deal Brexit. The pound still fell.The world economy is stumbling toward disaster, writes Bloomberg’s Editorial Board. If a new recession strikes, the Trump administration will get—and deserve—much of the blame.Trump has been privately testing the idea of replacing his chief of staff, Mick Mulvaney, who’s swiftly fallen out of favor, especially since admitting that Trump sought a quid pro quo with Ukraine.One nurse slept on the job. Another didn’t show up. A third scalded a child so badly that her skin peeled. A fourth failed to check on a toddler who depended on a breathing tube. The child died. When private equity took over a nursing company, profits grew and patients died.The original space race was between superpowers vying for supremacy. Now it’s all about business. In the first episode of Giant Leap, a four-part Bloomberg Originals video series, we explore the risk and rewards awaiting startups battling over the multibillion dollar-market for satellite rocket launches.Google lured billions of consumers to its digital services by offering copious free cloud storage. Now its whittling down those free services and prodding users toward a new paid subscription.What’s Joe Weisenthal thinking about? The Bloomberg news director is thinking about the morality of startup culture. Most fail. Years of an employee’s life can go down the drain on a mission with no payoff. For more than a decade, we’ve essentially seen leverage risk transferred outward from investors to the individual employee, who Joe says are encouraged to take on student debt and move to an expensive city in the highly improbable hope of a big score. Unlike venture capitalists, who can spread their bets around, most individuals are all-in. Today, we’re seeing the downside as more and more employees of these companies find themselves underwater on their stock options. Yes, Adam Neumann is out at WeWork, but he will leave a billionaire. Many of his long-term employees, who spent years of their lives thinking they were on the verge of multi-millionaire status, will probably get wiped out in the latest Softbank bailout.(The Oct. 21 edition of the Evening Briefing incorrectly identified so-called Austrian century bonds.)What you’ll need to know tomorrowElizabeth Warren wants answers about the repo market turmoil. Silicon Valley CEOs appear to have chosen their 2020 candidate. Facebook shares slide as more states join antitrust probe. These are the 50 companies to watch in 2020. Justin Trudeau wins a second term as Canada’s prime minister. These $50 chicken nuggets were grown in a lab. U.S. air quality was improving. Now it’s getting worse.What you’ll want to read in Climate ChangedBig Oil has profited from the sale of fossil fuels for the better part of a century, helping poison the atmosphere and speed global warming. In recent years, U.S. cities, states and environmental groups have turned to the courts, hoping to punish these energy giants. Specifically, they allege that executives hid their knowledge of humanity’s role in climate change while casting doubt on those who raised the alarm. A major test of this strategy gets under way this week in Manhattan, as New York squares off against Exxon Mobil. Environmentalists hail the case as the first of its kind, but that label comes with a caveat. Instead of seeking to lay blame for a planetary crisis at the feet of oil companies, the trial will instead focus on something more mundane: whether Exxon cooked its books.To contact the author of this story: Josh Petri in Portland at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Phone camera quality has made it possible to identify a location from the reflection in a person's eyeball. This, as well as many other concerns, has arisen with our access to ever-improving tech.
Tesla and BYD are in a race to dominate the global EV market and, with Musk and Buffett backing their respective companies, this billionaire battle won’t slow down any time soon
(Bloomberg) -- Facebook Inc. shares fell the most in two months after a state antitrust investigation into the social-media company widened, with dozens more states joining the probe led by New York.Facebook dropped after the New York Attorney General Letitia James announced Tuesday that 45 states -- plus Guam and the District of Columbia -- are investigating whether the company harmed competition. Shares fell 3.3% to $183.44 at 3:13 p.m. in New York, the most since Aug. 14.“Big Tech must account for its actions,” Louisiana Attorney General Jeff Landry, whose state joined the probe, said in a statement. “I am proud to join my Republican and Democrat colleagues in efforts to ensure tech giants can no longer hide behind complexity and complicity.”The expansion of the investigation deepens the antitrust scrutiny into Facebook at the state and federal levels. In addition to the attorneys general, the Federal Trade Commission, the Justice Department and the House Judiciary Committee are conducting their own investigations.Separately on Tuesday, the Justice Department’s antitrust chief, Makan Delrahim, who is probing large internet platforms as part of a broad review of competition in digital markets, said at a Wall Street Journal tech conference in California that a breakup of a tech company is “perfectly on the table” if justified by the evidence uncovered in the probe.James, a Democrat, has said the state antitrust probe aims to find out whether Facebook’s actions endangered user data, reduced the quality of consumers’ choices or increased the price of advertising, its main source of revenue. State attorneys general led by Texas are separately investigating Alphabet Inc.’s Google for possible antitrust violations.A Facebook spokesman said the company intends to cooperate with the state attorneys general.“People have multiple choices for every one of the services we provide,” the company said. “We understand that if we stop innovating, people can easily leave our platform. This underscores the competition we face, not only in the U.S. but around the globe.”On Monday, James hosted a meeting of policy experts to discuss the strengths and weaknesses of various antitrust legal theories involving Facebook, according to a person familiar with the gathering. They also reviewed Facebook’s acquisitions of Instagram and WhatsApp, as well as privacy issues and the company’s power in the digital-advertising market, the person said. The Wall Street Journal first reported the meeting.James and a bipartisan group of state attorneys general met earlier this month with key officials at the Justice Department and the FTC to discuss the investigation. The meetings raised the prospect that the states could join the federal probes, similar to the way states collaborated with the epic U.S. antitrust case against Microsoft Corp. that started in the 1990s.(Updates with share price in second paragraph.)To contact the reporters on this story: Erik Larson in New York at email@example.com;David McLaughlin in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: David Glovin at email@example.com, Steve StrothFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- SoftBank Group Corp. is taking control of beleaguered WeWork, part of a rescue financing plan that will see former Chief Executive Officer Adam Neumann sever most of his remaining ties with the company he co-founded, according to people familiar with the matter.The eleventh-hour deal throws a lifeline to WeWork parent We Co., which was on the verge of running out of cash after a failed public offering in September. By salvaging one of its biggest investments, SoftBank will give a second chance to WeWork to start over under new ownership. It also tosses a buoy to Neumann, who will give up his board seat and walk away with as much as $1.2 billion as well as a $500 million credit line from SoftBank, after it pushed him out as chief executive officer last month.Neumann is allowed to sell slightly less than $1 billion of stock to the Japanese conglomerate as part of the deal, said the people, who asked to remain anonymous because the agreement hasn’t been announced. He’ll remain as a board observer and can assign two board seats, one of the people said. Neumann will also get a roughly $185 million consulting fee. His net worth would still be at least $1 billion, according to calculations by the Bloomberg Billionaires Index.WeWork chose the offer from SoftBank, which already owns about one-third of the company, over a competing proposal from JPMorgan Chase & Co. The deal, which values the office-sharing startup at about $8 billion before any new capital from SoftBank, marks a shocking fall from grace for a business emblematic of the latest tech boom that had been valued as recently as January at $47 billion.As Bad as WeWork Is, It Could Get Even Worse: Shira OvideAs part of SoftBank’s plan, one of its executives, Marcelo Claure, will take over as chairman of WeWork’s board, one of the people said. WeWork appointed Artie Minson and Sebastian Gunningham as co-CEOs last month after investors pushed back against the IPO.SoftBank and JPMorgan declined to comment. WeWork couldn’t immediately be reached. Dow Jones earlier reported details of the deal.Buying SharesSoftBank’s stock purchase from Neumann is part of a broader offer to buy as much as $3 billion from existing shareholders, one of the people familiar with the matter said. The $500 million credit line for Neumann -- of which roughly $395 million is drawn -- will be secured by some of his stock. And a $500 million loan to Neumann extended by JPMorgan, UBS and Credit Suisse will be repaid, one of the people said. When Neumann stepped down from the CEO role, it triggered terms of the loan that would have put him in technical default, according to a person familiar with the matter.JPMorgan had been pitching a $5 billion debt package for WeWork. Last week, the company had been leaning toward the bank’s plan over SoftBank’s, because it wouldn’t dilute existing shareholders or force the startup to cede control.But disagreements over the company’s valuation -- JPMorgan’s plan had pegged WeWork about $5 billion -- pushed the company toward SoftBank, which was willing to increase its equity stake and provide a payout to Neumann, according to a person familiar with the situation.SoftBank is WeWork’s largest investor, and had committed more than $10 billion to the company even before the bailout. As its estimated valuation cratered, WeWork last month ousted Neumann and, eventually, pulled its IPO paperwork.Canceled IPOThe canceled public offering left WeWork, which lost $900 million in the first half of the year, without a crucial source of funding: a $6 billion loan that had been contingent on a successful entrance into the stock market.SoftBank’s bailout of WeWork is happening at a particularly sensitive time for the investment powerhouse run by billionaire Masayoshi Son. SoftBank is currently looking to raise money for a second version of its Vision Fund, a $100 billion technology-focused fund that reshaped the way the Silicon Valley startup world works by dint of its sheer size. Today, investors are expressing hesitance about the fund’s second iteration, which SoftBank hopes to make even bigger than the first.In a recent interview with the Nikkei Business magazine, Son said he was “embarrassed and impatient” with his recent track record. WeWork is not the only big bet for SoftBank that went south. It was also the largest investor in Uber Technologies Inc., whose stock price is down about a third since its May IPO.On a call Monday, Son apologized to investors in the first Vision Fund, which injected capital into WeWork at a valuation of north of $21 billion in 2017, according to a person briefed on the matter. Representatives for SoftBank and the Vision Fund declined to comment.Despite the bailout, WeWork still has a long way to go to deal with the repercussions of its growth-at-all-costs strategy. It has become the biggest private office tenant in cities like New York and London and had lease obligations worth more than $47 billion as of June, according to a regulatory filing last month.In the filing, WeWork said it only considers 30% of its space “mature,” which typically means the sales and marketing process is complete and the property is generating steady revenue. The company still faces costs associated with renovating work spaces it has already leased, which could approach $1 billion based on data in the filing.Landlords and tenants have become cautious when dealing with the firm: Google has walked away from a potential Toronto lease after months of negotiations and landlords are reaching out to WeWork rivals to see if they will take over WeWork leases or buildings if necessary. A project in Seattle was also recently scrapped.(Updates with details on call with vision fund investors in 14th paragraph.)\--With assistance from Natalie Wong and Patrick Clark.To contact the reporters on this story: Gillian Tan in New York at firstname.lastname@example.org;Michelle F. Davis in New York at email@example.comTo contact the editors responsible for this story: Craig Giammona at firstname.lastname@example.org, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The car company that is driving the electric vehicle revolution is preparing to report its earnings after the bell Wednesday, October 23rd.
Check out these augmented reality stocks to buy as the space heats up! AR is making waves because of its massive potential in virtually all industries.
Google’s Nest business made system changes that could weaken its device sales. Some homebuilders are dropping these products in their smart homes.
Google has set a high target for its cloud computing business. It wants the unit to grow rapidly and surpass Microsoft in the global cloud market.
Oct.22 -- Google has whittled down some free storage offers in recent months, while prodding more users toward a new paid cloud subscription called Google One. That’s happening as the amount of data people stash online continues to soar. Bloomberg's Alistair Barr has more on "Bloomberg Technology."