NEW YORK (Reuters) – OnDeck Capital Inc has set up a subsidiary that will provide technology and other services to banks looking to lend to small businesses online, it said on Tuesday.
Called ODX, the new company will expand OnDeck’s existing business of providing online lending software to banks, such as JPMorgan Chase & Co, the company said.
ODX plans to announce a new bank partnership imminently and has a pipeline of other potential bank partners across the world, the company said.
It believes ODX will make it faster and easier for banks to digitize their lending to small businesses.
“We felt that given the robust demand we are seeing by the largest banks, it is not a question of if they are moving into online lending, but of when,” Noah Breslow, chief executive of OnDeck, said in an interview. “We thought that by creating ODX, we would set ourselves to take advantage of that opportunity.”
New York-based OnDeck is one of the most established companies that extends credit to small businesses through its website and then sells loans to financial institutions such as banks.
It announced a partnership with JPMorgan Chase in late 2015, through which the bank uses OnDeck’s technology to lend to small businesses.
Brian Geary, who served as vice president of OnDeck’s partnership unit, has been appointed president of ODX.
The company also hired financial technology executive Raj Kolluri to serve as ODX’s head of product and technology.
Kolluri joins ODX from financial services software provider SS&C Primatics, where he served as vice president of product and engineering.
On Wednesday, a potential deal was reported between Canadian cannabis company Aphria (OTCQB:APHQF) and tobacco maker Altria (MO).
“U.S. tobacco giant Altria Group Inc. is in talks to acquire an equity stake in Canadian cannabis grower Aphria Inc., multiple sources say.
Details of Altria’s proposed investment in Aphria are still being finalized, said the sources, who asked to remain unnamed because the talks are private. They said Altria has expressed an interest in acquiring a minority stake in the Leamington, Ont.-based grower with the intention of eventually holding a majority of the company’s shares.
The sources cautioned that it could take time for the two companies to strike a deal and that talks could still fall through.”
Shares of Aphria had been trading at C$17.24 on the Toronto Stock Exchange (TSE:APH), and quickly shot up as high as C$20.36. Shares are currently at ~C$20, as of this writing – up ~16% after being down prior to the news.
For their part, Aphria basically said, “No comment.” Aphria’s response:
“Aphria Inc. today responded to a request from the Investment Industry Regulatory Organization of Canada regarding media reports suggesting the Company is engaged in discussions regarding a potential investment in Aphria. While Aphria engages in discussions with potential strategic partners and/or investors from time to time, the Company notes that there is no agreement, understanding or arrangement in place with a potential investor at this time.
Aphria will advise the investment community of any material changes, if and when they occur, in accordance with applicable disclosure requirements.”
An investment from Altria could pay huge dividends for Aphria. Altria could also benefit from access to the enormous potential cannabis market – worth $200 billion by 2032, according to Canopy Growth – to offset tobacco declines.
From Aphria’s point of view, they would gain access to a large pool of both capital and knowledge. Altria has been operating in a regulated industry for decades and has extensive experience working with regulators worldwide. Altria also has decades of experience in a related industry, and could help Aphria in marketing, supply chains, and distribution.
Aphria is not short on cash. In my recent article on Aphria, I noted that Aphria has a free cash flow deficit of ~C$56 million/quarter and has ~C$335 million in net cash. That free cash flow deficit can be expected to turn positive very soon – recreational cannabis will be legalized next week and Aphria’s expansion projects are set to come online in early 2019. At that point, Aphria will not have much higher operating cash flow and much lower capital expenditures – they should be significantly cash flow positive.
However, Altria could provide a capital injection that will provide Aphria with optionality. One of Canopy Growth’s largest advantages – which I wrote about in “Canopy Growth: The King Of Cannabis Doesn’t Come Cheaply“ – is that they have billions of dollars in the bank. Globally, cannabis laws are rapidly-evolving. As cannabis laws are loosened around the world (e.g., in Germany last year), Canopy Growth will be able to use their capital to expand into any new country that legalizes cannabis:
“So this is really rocket fuel. It does add quite a lot. As we look around the world, we’re going to be expanding production, we’re going to be doing more research, we’re going to develop more intellectual property, we’re going to create more leading brands, we’re going to have more products, and we’re going to be way more global.
If you’re thinking about this it does establish that Canopy is the cannabis platform for Constellation. And that’s a great deal of focus and trust, and we took it seriously as a management team. Everybody on my team was unbelievably excited to take this next step to the place where we could actually go global and do it with and for Constellation.”
While Aphria does not need additional capital to grow their Canadian production to 255,000 kg/year, an Altria investment could give Aphria the “rocket fuel” it needs to think globally and to compete for global cannabis markets as laws liberalize and those markets open to both medical and recreational cannabis.
History of Investments in Cannabis
This is still just a rumor, and the deal could still fall through. If the deal is finalized, it would be another in a line of investments in Canadian cannabis from alcohol and tobacco makers.
That investment sounds quite similar to the proposed Altria investment into Aphria: Constellation acquired a minority stake in Canopy Growth and has warrants sufficient to expand that stake into a majority position. Constellation also has the right to nominate a majority of Canopy Growth’s board as a result of the deal.
Shareholders in Canopy Growth were big winners as a result of the Constellation deal. Canopy Growth’s US-listed shares closed at $24.62 on the day prior to the Constellation investment (8/14). Yesterday (10/9), shares closed at $48.72 – up 98% since Constellation’s investment. Aphria shareholders will hope to see similar gains from an Altria investment.
While Constellation’s deal was the largest investment in Canadian cannabis, it is not the only investment.
Back in August, Molson Coors (TAP) entered into a joint venture with HEXO (OTCPK:HYYDF) to form a company which will sell cannabis-infused beverage products. That joint venture now has a name, as of October 4:
“The joint venture, Truss, will be led by former Molson Coors executive, Brett Vye, in the role of Chief Executive Officer. Vye will report to the Truss board of directors consisting of three members appointed by MCC and two members appointed by HEXO.
‘With the backing of two partners with deep Canadian roots, proven success, and market-leading experience in the respective beverage and cannabis industries in Canada, Truss will hit the ground running,’ said Brett Vye, Chief Executive Officer at Truss. ‘When consumable cannabis is legalized in Canada, Truss will be ready to make its mark as a responsible leader in providing high-quality beverages for the Canadian consumer. Why ‘Truss’? We are joining together the extensive experience and excellent practices of each partner to build a powerful foundation for the future.'”
Molson Coors owns 57.5% of the Truss joint venture, while HEXO owns the other 42.5%. As part of the deal, Molson Coors received 11.5 million warrants for HEXO shares with a strike price of C$6 for 3 years. HEXO currently trades at C$8.70, up ~85% from its price prior to the Molson Coors deal.
CannTrust (OTC:CNTTF) also has an exclusive partnership with Breakthru Beverage Group, a larger Canadian alcohol distributor. By dollar value, this deal is a lot smaller than either the Canopy Growth or the HEXO deals. As part of this deal, Breakthru invested C$9 million into CannTrust for ~900,000 shares and Breakthru has options to purchase another 2,000,000 shares for a 15% discount.
There have also been other rumors, such as rumors of a deal between Coca-Cola (KO) and Aurora Cannabis (OTCQX:ACBFF). Nothing has come of those rumors yet. However, given interest in cannabis from alcohol companies (STZ, TAP), a tobacco manufacturer (MO), and potentially soft-drink manufacturers (KO), it may be only a matter of time before other deals are announced. The most likely targets would be other cannabis producers with large production capacity – capable of growing enough cannabis to supply a globally-distributed product, be it CBD- or THC-based.
Two weeks ago, I wrote “Aphria: The Best Value Of The ‘Big 5’ Cannabis Producers“ and put a BUY rating on Aphria. This rating is only strengthened by a potential investment from Altria – Aphria will be able to use any capital it receives to continue expanding aggressively within Canada and to make international expansion deals as well.
That said, this is a very volatile time to purchase shares of Aphria. Shares are up sharply today on a deal that has not yet been finalized. Purchasing based on this rumor may be a risky proposition, given that the deal could still fall through or the rumors could turn out to be false or exaggerated.
Further, any investment in cannabis is going to be a risky investment – this is a speculative, volatile market. For that reason, I suggest that investors diversify their holdings within the industry. Consider an approach like my Model Cannabis Portfolio, available to The Growth Operation subscribers, which holds nine different cannabis companies. There is no need to “pick a winner” as, odds are, there will be multiple winners in this market. Holding a diverse group of companies will allow you to weather storms that might impact single companies and will still allow you to capture the long-term upside of this market.
Aphria may also be volatile this week because they are set to announce first quarter (FY19) results on October 12, 2018. I will write more about those results when they are released later this week.
Aphria remains a part of both my personal portfolio and my Model Cannabis Portfolio, available to The Growth Operation subscribers.
This is an exciting time to be a cannabis investor, but please, invest responsibly.
Exclusive access to my in-depth research articles on smaller cannabis companies.
Access to my Model Cannabis Portfolio.
Up-to-date news and updates on cannabis companies.
Access to my full, live portfolio.
This month only, membership is 25% off for your first year. Prices are going to rise come October, so sign up for a free trial today. (If prices rise later, early members get grandfathered prices, forever.)
Disclosure:I am/we are long APHRIA, AURORA CANNABIS, CANOPY GROWTH, CANNTRUST.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek.
The disappointment was crushing. Especially after the preparation.
Adam and Heather Halkuff have five children, two of whom have autism.
They wanted to take the whole family on a trip to Kansas City. So the Texas family did all they could to make it happen.
As NBC 5 reports, they called American Airlines in advance. The airline has a program that helps kids, including those with autism, become familiar with all the trials and quirks of flying.
Five-year-old Milo and two-year-old Ollie took part, on September 24, more than a week before their flight.
Yet on the day of the flight, Milo became distressed — many call it a meltdown — during the boarding process at Dallas/Fort Worth airport.
A meltdown might involve screaming, crying and other expressions of feeling overwhelmed.
The Halkuffs say other passengers were kind, but an American Airlines gate agent was less so.
“Right away she goes, ‘He can’t get on the flight … he’s going to bother the other passengers and then he’ll still be upset during the flight and we’ll have to turn around and escort you off the plane,” Heather Halkuff told NBC.
Some might observe that they’ve seen all sorts of kids get on planes and express upset.
Sometimes, they calm down quickly. Surely everyone has at least once been on a flight when a child didn’t quieten at all.
At times, ground crew and Flight Attendants can be sympathetic. At other times, not so much.
The Halkuffs depiction of this particular gate agent suggests that she was of the latter variety.
Worse, Heather Halkuff says that the whole family weren’t allowed to board. Even though Adam Halkuff offered to take Milo home, so that at least Heather and the other children could still take the trip.
I contacted American for its view and a spokesperson told me:
We are concerned to hear about this situation. Our team has reached out to the Halkuff family to gather more information about what transpired at Dallas/Fort Worth. The American Airlines team is committed to providing a safe and pleasant travel experience for all of our customers.
Clearly, the fact that American provides a service to help children — including those with autism — get used to flying means that the airline isn’t insensitive to the potential issues.
Moreover, we have no idea of the level of distress Milo might have undergone.
Yet again, though, we’re in a customer service situation when individuals are involved and initial reactions matter.
If the Halkuffs’ story is accurate, then some might conjecture the gate agent reacted too quickly.
There could, perhaps, have been an alternative solution. Could anyone really know if Milo might have calmed down, once on the plane?
Not allowing any of the family to fly, however, seems to be the sort of draconian decision still too often taken by airline staff.
I recently wrote about a dad who says he called American to explain that his three-year-old had a burst appendix and please could the airline rebook their trip.
American, he says, insisted on still charging $200 change fees for both of them. Before, says dad, the decision gained some Twitter traction.
Then the airline made a “one time exception.”
When it comes to boarding passengers, airline employees are graded severely on so-called D0.
This is the measure of whether a plane departs at the very minute and second it’s supposed to.
It could be that thoughts of this may have played upon this particular gate agent’s mind.
Yet as long as customers still see airlines as being in the customer service business — perhaps erroneously — such stories are likely to reach the media and become examples of airline insensitivity.
Airlines employ enormous numbers of people and are therefore at the mercy of each of their employees’ behavior.
The Halkuffs hope that what happened doesn’t cause Milo’s older brothers to resent him.
Perhaps there’s some way that American might provide another attempt for Milo to fly with his family.
Indeed, American told me:
A few members of the American team have been in touch with the family, and yes, we are hopeful they will reschedule and try once again.
NEW YORK (Reuters) – Walmart Inc (WMT.N) said on Monday it would partner with U.S. movie studio Metro Goldwyn Mayer to create content for its video-on-demand service, Vudu, which the retailer bought eight years ago.
FILE PHOTO: Walmart signage is displayed outside a company’s store in Chicago, Illinois, U.S. November 23, 2016. REUTERS/Kamil Krzaczynski
Walmart has been looking to prop up Vudu’s monthly viewership that remains well below that of competitors like Netflix Inc (NFLX.O) and Hulu LLC, which is controlled by Walt Disney Co (DIS.N), Comcast Corp (CMCSA.O) and Twenty-First Century Fox Inc (FOXA.O).
Media outlets had reported the Bentonville, Arkansas-based company was looking to launch a subscription streaming video service to rival that of Netflix and make a foray into producing TV shows to attract customers.
Walmart is not planning such a move, company sources have told Reuters. The retailer continues, however, to look for options to boost its video-on-demand business and offer programs that target customers who live outside of big cities.
Walmart and MGM will make the announcement at the NewFronts conference in Los Angeles on Wednesday. It will include the name of the first production under the partnership, which Walmart will license from MGM.
“Under this partnership, MGM will create exclusive content based on their extensive library of iconic IP (intellectual property), and that content will premiere exclusively on the Vudu platform,” Walmart spokesman Justin Rushing told Reuters.
The focus will be on family-friendly content that Walmart customers prefer, Rushing said.
The financial deals of the deal were not disclosed.
Licensing content is a cost-effective strategy at a time when producing original content has become a costly venture. As of July, Netflix said it was spending $8 billion a year on original and acquired content. Amazon.com Inc’s (AMZN.O) programming budget for Prime Video was more than $4 billion, while U.S. broadcaster HBO, owned by AT&T Inc (T.N), said it would spend $2.7 billion this year.
Walmart acquired Vudu in 2010 to safeguard against declining in-store sales of DVDs. Walmart bet that customers would continue to buy and rent movies and move their titles to a digital library, which Vudu would create and maintain for viewers.
But the video site has not posed a significant challenge to rivals that dominate the segment even though it is pre-loaded or can be downloaded to millions of smart televisions and video-game consoles.
Vudu offers 150,000 titles to buy or rent, while its free, ad-supported streaming service, called Movies On Us, includes 5,000 movies and TV shows.
There are currently more than 200 video services that bypass cable providers and stream content directly to a TV, laptop, phone or game console. That is up from 68 five years ago, according to market researcher Parks Associates.
Reporting by Nandita Bose in New York; Editing by Peter Cooney
SEOUL (Reuters) – SK Hynix Inc said it would invest 20 trillion won ($17.8 billion) in a new memory chip manufacturing plant opening on Thursday in South Korea, about 29 percent more than originally budgeted.
FILE PHOTO: The logo of SK Hynix is seen at its headquarters in Seongnam, South Korea, April 25, 2016. REUTERS/Kim Hong-Ji/File Photo
The amount is higher than the 15.5 trillion won investment the company announced in 2015 due to rising equipment costs for its fine technology process used to make smaller chips, the it said. The factory will produce NAND flash chips.
“Timing for equipment installation shall be decided considering market conditions,” SK Hynix said in a statement.
Prices for NAND chips, used for longer-term data storage, more than halved over the past year as supply swamped demand, data from market trackers show.
Those drops are expected to accelerate, while most analysts also predict DRAM prices will begin to decline, analysts say.
A company official said the chipmaker had already spent about 2.2 trillion won on the plant.
Reporting by Ju-min Park; Editing by Stephen Coates
In early August, Tesla CEO Elon Muskposted a fateful tweet: “Am considering taking Tesla private at $420. Funding secured.” On Saturday, two days after the US Securities and Exchange Commission filed a lawsuit against Tesla CEO Elon Musk for “false and misleading” statements made on Twitter, Musk, Tesla, and the feds reached a compromise—a settlement.
According to documents filed in a New York federal court, Musk and Tesla will have to each write $20 million checks for the misadventure, which will be disbursed to investors harmed during the wild market swings that occurred after Musk’s tweets. (Tesla announced in late August, 17 days after the tweet, that it would remain public.) The electric carmaker will appoint two additional independent members to its board. The company will have to keep firm oversight over Musk’s communications with investors—including by tweet. Most critically: Musk will have to step down from his role as Tesla chairperson for at least three years. He will remain on as the company’s CEO and will retain a seat on its board.
In reaching a settlement with the federal enforcement agency, Musk and the company seem to have reversed course. Last week, Tesla had reportedly been on the cusp of a settlement with the SEC, before backing out.
Despite that waffling, legal experts say the result could have been much, much worse for Musk and his car company, where he has served as chairperson since 2004 and CEO since 2008. “Frankly, I view this as somewhat favorable to Musk,” says Stephen Diamond, a professor of securities law and corporate governance at the Santa Clara University School of Law. “He remains CEO, he’s still the dominant stockholder in the company, and he still remains in place on the board.” (Musk owns about 22 percent of Tesla shares.)
By relinquishing his role as chairperson, Musk does lose his ability to call board meetings, as well as set their agendas. His replacement in that role, whom the SEC demands be “independent,” will break Musk’s symbolic grip on the company, at least a bit. (Indeed, a cadre of the company’s investors have been calling for Tesla to formally separate the roles of CEO and chairperson for years now.) “This will serve as a kind of check on the runaway power of Musk,” says Diamond. As CEO, Musk will retain his control over day-to-day operations of Tesla.
A major question looms: Who will the new chairperson be? Will that pick be a truly independent check on the impulsive Musk, praised often for his marketing prowess and inventiveness, but whose actions have occasionally proved destructive and expensive? Observers have long grumbled that Tesla’s board members are not nearly independent enough. (Brother Kimbal Musk is currently on the board for both Tesla and Musk’s SpaceX venture. Antonio Gracias, a founder of Valor Equity Partners, is a longtime friend of Musk’s and has invested in PayPal and Solar City.)
“If the new chairperson is somebody who is extraordinarily strong and someone who will stand up to Elon, then it will be a change in his life,” says Erik Gordon, a lawyer who studies entrepreneurship at the Ross School of Business at the University of Michigan. “If the person is as independent as the supposedly independent directors of Tesla, then it probably doesn’t change his life very much. He will dominate that chairperson in the way he has dominated his board.”
One big thing that will definitely change for Musk: The settlement instructs Tesla to “implement mandatory procedures and controls to oversee all of Elon Musk’s communications regarding the Company made in any format.” Including—you guessed it—Twitter. “The thing that will be both humiliating for Musk and good for him is that he will be the only CEO I have ever known who will have to get his communications approved before he makes them,” says Gordon. Expect this to be a particular bummer for Musk, who has built a reputation off his irreverent, goofy, startlingly transparent, and lawsuit-spurring social media posts. Professional tweet editors, polish up those resumes.
Not settling with the SEC could have led to a more dire outcome. The SEC’s initial suit sought to bar the CEO from becoming an officer or director for any public company, perhaps for life. A loss against the federal agency in court may have also made it difficult for Musk to raise money for his non-Tesla ventures: rocket-building SpaceX, neurotechnology company Neuralink, and infrastructure venture the Boring Company.
While the settlement neatly ties up Tesla’s current dealings with the SEC, the carmaker still has two more Twitter-related headaches. The first is the reported Department of Justice probe into the “funding secured” tweet, which is being investigated as a possible case of criminal fraud. The settlement here may not have any bearing on that investigation, legal experts say. The second is a series of class-action lawsuits filed by investors who say they lost big money in the market volatility following Musk’s August Twitter statements. Though the $40 million in fines will be used to mollify investors, legal experts expect the plaintiffs to push for even more funds. “Those lawsuits have always been the bigger risk to Musk and the company,” says Gordon.
The Security Exchange Commission filed a lawsuit against Elon Musk in federal court on Thursday afternoon, accusing him of misleading the public when he announced he was taking Tesla private during an August 7 tweet storm. The lawsuit claims that Musk made false and misleading statements that “caused significant confusion and disruption in the market for Tesla’s stock and resulting harm to investors.”
The statements in question began with Musk’s now-infamous tweet: “Am considering taking Tesla private at $420. Funding secured.” Musk went on to double-down on his statement in subsequent tweets, saying that a shareholder vote was the only obstacle remaining before Tesla could go private.
That, of course, proved to be false. As a result, the SEC is suing Musk directly, requesting that the court require Musk to pay civil penalties and bar him from running any publicly traded company, including Tesla.
I read through the SEC’s 23-page complaint, which you can find here. Here are five big highlights from the allegations.
1. Musk picked the price because he thought it was funny.
The complaint speaks for itself here:
According to Musk, he calculated the $420 price per share based on a 20% premium over that day’s closing share price because he thought 20% was a “standard premium” in going-private transactions. This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend “would find it funny, which admittedly is not a great reason to pick a price.”
2. The company’s chief financial officer, head of communications, and general counsel tried to do damage control almost immediately.
Tesla’s CFO sent a text message to Musk 35 minutes after his tweet went up: “Elon, am sure you have thought about a broader communication on your rationale and structure to employees and potential investors. Would it help if [Tesla’s head of communications], [Tesla’s General Counsel], and I draft a blog post or employee email for you?” Musk replied, “Yeah, that would be great.” Tesla’s Chief Financial Officer then replied, “Working on it. Will send you shortly.” Musk sent out an email providing his rationale for wanting to go private to Tesla employees, which was also posted to the company blog, about two hours later.
3. The questions started almost instantly, but Musk didn’t clarify things for six days.
Within minutes of Musk’s tweets, a Tesla investor texted Musk’s chief of staff, “What’s Elon’s tweet about? Can’t make any sense of it. Would be incredibly disappointing for shareholders that have stuck it out for so long.” Several minutes later, a business reporter texted the chief of staff, “Quite a tweet! (Is it a joke?).” Musk didn’t clarify until six days later, when he revealed for the first time that he was still in the discussion stage about taking the company private and that no official proposal had yet been presented.
4. Tesla’s head of investor relations apparently didn’t know the situation–which made things worse.
According to the complaint, at least three research analysts reached out to Tesla’s head of investor relations within hours of Musk tweeting to ask whether the company had actually secured funding. In all three cases, the exec confirmed that it had. “Firm offer means there is a commitment letter or is this a verbal agreement?” one analyst asked. The investor relations head wrote back: “I actually don’t know, but I would assume that given we went full-on public with this, the offer is as firm as it gets.”
5. The potential deal Musk thought he had with a Saudi Arabian fund might have been contingent on building a factory in the Middle East–but he never confirmed this detail.
The Saudi Arabian fund first brought up the prospect of Tesla building a facility in the Middle East back in 2017. That possibility was presented again when Musk met with the group on July 31. According to the complaint, Musk showed he was open to the idea but made no commitment. “Musk assumed,” it reads, “that whether a Tesla production facility in the Middle East was a precondition to the Fund’s willingness to take Tesla private would depend on the amount of capital the Fund was required to commit to the transaction. Musk did not discuss his assumption with the representatives of the Fund.”
Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek.
Airlines are run with very little room for maneuver.
Once the system breaks down in a single place, it can have a terrible knock-on effect.
And, of course, every new decision taken at the top has little consequences lower down.
It can all add up.
Have you noticed, for example, that the boarding time on your American Airlines boarding pass doesn’t always correspond with when the plane actually boards?
Yes, sometimes it’s delayed. Because delays are an integral part of flying enjoyment.
Sometimes, though, flights are boarding early.
After all, there’s only one aisle and scores of fraying tempers.
There’s also the pressure all American employees feel to get the planes out on time.
Still, it can be annoying to turn up at the gate on time for boarding and discover that, oh, it’s already begun.
Cue the involuntary spasms caused by wondering whether there’ll still be overhead bin space.
Why, though, doesn’t American have the correct boarding time on its boarding passes?
View From The Wing’s Gary Leff offers darkly: “This is a known issue at American, and one they’ve chosen not to spend on the IT to fix.”
I asked American the inside story.
An airline spokesperson offered:
It is not that we don’t want to update our IT. We have many projects we are working on, and we expect the fix will be in place in November.
In essence, then, the airline simply hasn’t got around to it.
Can’t you see that it’s busy?
Actually, I’m sure it is. Management puts all sorts of pressure on employees to deliver on a whole range of new parameters, as the big airlines fight for marginally more business and try to squeeze additional revenue from passengers.
Someone has to implement all that. That’s not always easy.
And have you seen how often airline IT systems break down? Why, American’s last vast issue was only in June.
Honestly, dear passenger, you can be so annoyingly inconsiderate sometimes.
(Reuters) – Google employees brainstormed ways to alter search functions to counter the Trump administration’s controversial 2017 travel ban, the Wall Street Journal reported on Thursday, citing internal emails.
FILE PHOTO: A Google logo in an office building in Zurich September 5, 2018. REUTERS/Arnd WIegmann/File Photo
Google employees discussed how they could tweak the company’s search-related functions to show users how to contribute to pro-immigration organizations and contact lawmakers and government agencies, the WSJ said. The ideas were not implemented. on.wsj.com/2DePzWh
President Donald Trump’s travel ban temporarily barred visitors and immigrants from seven majority Muslim countries. It spurred public outcry and was revised several times. Trump said the travel ban was needed to protect the United States against attacks by Islamist militants, and the Supreme Court upheld the measure in June.
The Google employees proposed ways to “leverage” search functions and take steps to counter what they considered to be “islamophobic, algorithmically biased results from search terms ‘Islam’, ‘Muslim’, ‘Iran’, etc.” and “prejudiced, algorithmically biased search results from search terms ‘Mexico’, ‘Hispanic’, ‘Latino’, etc,” the Journal added, quoting from the emails.
A Google spokesperson said the emails represented brainstorming and none of the ideas were implemented. She said the company does not manipulate search results or modify products to promote political views.
“Our processes and policies would not have allowed for any manipulation of search results to promote political ideologies,” the spokesperson said in a statement.
Reporting by Rama Venkat in Bengaluru; Editing by Cynthia Osterman
SINGAPORE (Reuters) – Oil prices rose on Wednesday following a report that crude inventories in the United States fell and as looming sanctions against Iran raised expectations of tightening supplies, with top producer Russia warning of a “fragile” global crude market.
FILE PHOTO: A pumpjack is seen at the Sinopec-operated Shengli oil field in Dongying, Shandong province, China January 12, 2017. Picture taken January 12, 2017. REUTERS/Chen Aizhu
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $69.81 per barrel at 0047 GMT, up 56 cents, or 0.8 percent, from their last settlement. WTI futures gained 2.5 percent in the previous session.
Brent crude futures LCOc1 climbed 24 cents, or 0.3 percent, to $79.30 a barrel. Brent has climbed for four straight days and gained 2.2 percent in the previous session.
“Oil prices jumped overnight as American Petroleum Institute inventory data showed a large drawdown in inventories,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.
U.S. crude stocks fell by 8.6 million barrels in the week to Sept. 7 to 395.9 million barrels, the American Petroleum Institute (API), a private industry group, said on Tuesday.
Official weekly government data will be published by the U.S. Energy Information Administration (EIA) on Wednesday.
Outside the United States, traders have been focusing on the impact of U.S. sanctions against Iran that will target oil exports from November.
Washington has put pressure on other governments to also cut imports, and many countries and companies are already falling in line and reducing purchases, triggering expectations of a tighter market.
Russian energy minister Alexander Novak on Wednesday warned of the impact the U.S. sanctions against Iran.
“This is huge uncertainty on the market – how the countries, which buy almost 2 million barrels per day of Iranian oil will act. The situation should be closely watched, the right decisions should be taken,” he said.
Novak said global oil markets were “fragile” due to geopolitical risk and supply disruptions, but added his country could raise output if needed.
“It is related to the fact that not all the countries have managed to restore their market and production,” he said, referring to outages and falling production in Mexico and Venezuela.
Should markets overheat and prices spike, Novak said Russia could raise output.
“Russia has potential to raise production by 300,000 barrels (per day) mid-term, in addition to the level of October 2016,” he said.
That month Russia produced 11.247 million barrels per day, a post-Soviet Union record high.
Crude prices were also pushed up by Hurricane Florence offshore the United States amid surging demand for gasoline and diesel. The storm is expected to make landfall on the U.S. East Coast on Friday, and has caused fuel shortages as millions of households and businesses have evacuated.
Front month gasoline futures RBV8 rose 0.5 percent on Wednesday while heating oil futures HOV8 increased 0.4 percent.
Reporting by Henning Gloystein; Editing by Joseph Radford and Christian Schmollinger
You’re not Google. Neither are you Apple. A-players aren’t fighting tooth and nail for a chance to work on your company. So it’s up to you to attract them with a kickass job description and a great company culture.
But here’s the thing:
Hiring isn’t just about attracting rockstar candidates, and conducting interviews. There’s another piece of the puzzle that’s equally important: and that’s onboarding newer hires.
According to a survey by BambooHR, 91 percent of HR managers think their onboarding processes need to be improved. And guess what? 45 percent of these managers believe that their companies waste up to $10,000 per year on ineffective onboarding processes. I mean, $10,000 is a lot of money. And it could be put to better use elsewhere, such as your marketing campaigns.
Want to work on your onboarding process, and make it more effective? Here are four tips that can help you do that.
1. Explain the big picture and set expectations.
Plenty of employees start off happy, and then get jaded six months in.
How do you prevent this from happening? Simple. Sit them down on Day One, and tell them how their work plays a role in the big picture. This way, they’ll feel like they’re contributing to the company, and that their work is meaningful.
On top of that, make sure you communicate your expectations to your new employee. What’s their scope of work? What’s their KPI? Do they have monthly targets to hit? Lay it all out.
2. Get them involved straightaway.
If you want your new employees to hit the ground running, don’t try to ease them in. Instead, get them to work with your team members on a project, right off the bat.
This does two things: first, it helps your new hire to establish a rapport with the team immediately. It also allows them to learn from your other employees’ guidance.
3. Provide them with all the information they need.
You don’t want your new hire to wander around the office like a lost sheep, so provide them with all the information they need to dive head-first into their job.
That said, don’t just dump a long, boring manual on them and be done with it. Personally, I like to use explainer videos to help new hires learn how to execute processes and get things done.
I also have an organizational chart in the office that lets everybody know who is responsible for what. If the new hire needs something, they can simply check the org chart and look for the relevant person.
4. Closely follow their progress and recognize their work.
Not many business owners realize this, but the first six months of hiring a new employee are pretty make-or-break.
Why do I say so? According to the Aberdeen Group, 86 percent of new hires make their decision to leave or stay within the first six months. And out of those who choose to leave, 79 percent do so because of a lack of appreciation from their manager.
Your job, as an entrepreneur and a leader, is to make sure your new employees aren’t struggling. Track their progress, help them if needed, and appreciate and recognize their work.
Look, onboarding isn’t rocket science, it’s just that entrepreneurs typically focus on their hiring processes, and overlook this other aspect of hiring. To keep your team happy and your retention rates high, make sure you improve upon your onboarding process. Here’s to building a team of rockstars!
Two new quarters have gone by since my last analysis of Tesla’s (TSLA) Selling, General and Administrative (SG&A) expenses. The release of the Q2 numbers is now about a month past. In the meantime, not much has happened besides some lawsuits, pedophile accusations, negative reports, positive reports, 86% doubts about Model 3 quality, and the occasional floating and subsequent sinking of the idea to take Tesla private. So really no excuse for this delay, my apologies, I know you have all been awaiting eagerly for an update on the SG&A situation. The first four graphs will simply be updates of the ones I used in my previous analysis. After that I will show two scenarios varying the gross margin for Model 3.
My view was and is that SG&A is one the most important items determining Tesla’s success or failure, while at the same time being the most neglected. (UncleBrian Research is one of the few that did pay attention to it in a recent article.) Up to at least 2017 Q4, SG&A always went up nicely with revenue, thereby assuring no profit would ever be made by Tesla. That is, unless Tesla manages to break that trend and, on a per-car-basis, bring down those costs. Now that the Model 3 is being delivered in sufficient numbers to make an impact, let’s see how things are developing.
I start with my traditional first graph, an overview of SG&A per total revenue:
Nothing dramatic has happened, but there is some improvement on the overall SG&A front. Let’s see how this compares to overall gross margin:
We can see that after deducting SG&A/revenue from gross margin we still end up below zero. In other words, Tesla is still making a loss, even before deducting Research and Development (R&D) and interest expense. On the other hand, glass half full, while SG&A per revenue goes down, gross margin goes up, leading to a nice up-tick in Q2 for the difference between the two.
I continue with SG&A per delivered car. Here we can also see an improvement:
Note that the above three graphs were based on the company as a whole. Non-automotive revenue is about 16% of total revenue, so this may influence results, especially when extrapolating going forward into the future and beyond.
To estimate “automotive SG&A”, i.e., SG&A that has only to do with the automotive part, as opposed to, e.g., solar cells, I have (as before) used the following steps:
Start with total SG&A.
Subtract the SolarCity part. For 2016 Q4 and 2017 Q1, this was explicitly mentioned in the financial reports. For the rest of the 2017 and 2018 quarters, I have made estimates per quarter, using the revenue of SolarCity and assigning a similar percentage to SG&A as in Q1. Note that the further out from 2017 Q1, the more uncertain this becomes.
For all other non-automobile revenue, I have assigned a percentage to SG&A and subtracted that from the total SG&A. I don’t know what the right percentage is, so I have used varying assumptions, ranging from 20% to 70% for SG&A per non-automotive revenue.
This has led to the following estimate for Tesla’s automotive SG&A per car, assuming non-automotive SG&A to be 20% (similar to overall SG&A vs. revenue) of non-automotive revenue:
The change is less pronounced than when looking at overall SG&A, but there is still an improvement, especially in Q2 of 2018.
Profitability based on 2018 Q2 SG&A numbers
I now do two profitability estimates using the range of 20% to 70% as per point 3 above. Now that delivering more cars has actually led to lower SG&A on a per car basis, I figure an extrapolation to a total of 350,000 cars annually based on regression makes sense, using the numbers from 2016 Q3 (first time over 20K cars) to 2018 Q2. The two estimates differ only in the assumed gross margin on the Model 3: 25% (as per Musk) vs. 15% (more conservative).
My assumptions are:
Model S and X: 100,000 delivered per year (capped by Musk at that level) at an average price of $100,000, with a gross margin of 25%. Result: 100,000 x $100,000 x 0.25 = gross profit of $2.5 billion per year.
R&D: In the first half of 2018, this was about $750 million, so for a full year that is $1.5 billion.
Interest: The net amount was about $160 million in 2018 Q2. Times 4, round it down: $600 million for a whole year.
Other income and restructuring expense will be ignored.
Other lines of business will be ignored.
Add this all up, we get $2.5 billion – ($1.5 billion + $600 million) = $400 million.
Model 3: I assume a production rate of 5,000 per week, totaling about 250,000 per year. I will vary the average selling price from $35,000 to $60,000. A gross margin of 25% gives a range of gross profit for the Model 3 of about $2.2 billion to $3.8 billion per year, whereas a gross margin of only 15% gives a range of gross profit for the Model 3 of about $1.7 billion to $2.7 billion per year.
SG&A: I use the range of 20% to 70% as per point 3 further above. Now that delivering more cars has actually led to lower SG&A on a per car basis, I figure an extrapolation to a total of 350,000 cars annually based on regression makes sense, using the numbers from 2016 Q3 (first time over 20K cars) to 2018 Q2. This gives a range of ca. $2.0 billion to $3.8 billion per year, where the lower number corresponds to assuming a higher (70% of revenue) SG&A for non-automotive segments, and the higher number corresponds to 20%. Note that range is for all models combined, e.g., S, X and 3 together.
Taken all together gives me a rough estimate of the profitability of Tesla’s automotive business in a year in which the above-mentioned assumptions would be reality.
Assuming a gross margin of 25% leads to:
We can see that if at some point Musk’s expectations regarding gross margins and number of delivered cars come true, and if Tesla manages to bring down SG&A costs as it has towards 2018 Q2, then there is a chance at a modest profit even at lower average selling prices. At the higher prices, profit is “secured”, but the question remains whether there is enough demand at such prices. Another question is whether the profits would be enough to justify the current stock price. The above analysis suggests they wouldn’t be.
Assuming a more conservative gross margin of 15% leads to:
We can see that under this assumption, it is very unlikely to see any profitability, because again, an ASP of $50,000 or more seems doubtful for the number of cars assumed to be sold.
Tesla has managed to improve SG&A on a per car basis in the first half of 2018. Whether this is sufficient for profitability in the future depends on whether Tesla manages to achieve its aimed for gross margin on Model 3 of 25% and on the exact internal cost structure of Tesla’s SG&A. Even with profitability, the share price seems higher than warranted. Without a gross margin on the Model 3 of 25%, future profitability seems very difficult.
Disclosure:I am/we are short TSLA.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I am short TSLA via long-dated, out-of-the-money puts.
MINNEAPOLIS/SHANGHAI (Reuters) – The founder and chief executive of Chinese retailer JD.com Inc, Richard Liu, was arrested in Minneapolis last week following an allegation of rape, according to a public information report released by police on Tuesday.
FILE PHOTO: Richard Liu, CEO and founder of China’s e-commerce company JD.com, attends a France-Chinese forum on the applications of artificial intelligence at SOHO 3Q in Beijing, China January 9, 2018. REUTERS/Jason Lee/File Photo
Liu, identified in the report by his Chinese name Liu Qiangdong, was released from custody on Saturday without being charged, and he returned to China.
Earl Gray, a Minnesota-based lawyer for Liu, said on Monday that the Chinese businessman has denied any wrongdoing and that he did not expect his client to be charged.
On Tuesday, defense attorney Joseph Friedberg said, “They are not going to charge in this case. There’s no credible complaint.”
Minneapolis Police Department spokesman John Elder said on Tuesday that if there were any charges against Liu they would not be filed until completion of a criminal investigation that would not occur before Friday.
The police report shed a bit more light on the nature of the accusation, which authorities had previously left vague. It said the alleged offense was “criminal sexual contact – rape,” and said domestic violence was not involved.
It gave no further details, but Elder said the alleged attack reportedly occurred at 1 a.m. local time on Friday, and that Liu was taken into custody later that evening.
Elder declined to disclose whether any accuser was cooperating with police. “I wouldn’t address that. That goes to the investigation,” he said.
JD.com Inc’s stock fell as much as 7 percent on Tuesday, hitting an 18-month low, reflecting investor uncertainty. Shares in China’s second largest e-commerce company closed down 6 percent at $29.43 on Tuesday on the Nasdaq and were steady after hours.
JD.com’s rules require Liu, who holds nearly 80 percent of the company’s voting rights, to be present at board meetings for the board to make decisions, although it was not clear if he has to be physically present or could participate by teleconference.
The company counts Walmart Inc, Alphabet Inc’s Google and China’s Tencent Holdings as investors. It faces stiff competition from rival Alibaba Group Holding Ltd at home.
“If this spirals as a media focus, negative attention could offset some of the positives associated with endorsement by Walmart and Google,” analyst Rob Sanderson of MKM Partners said.
“Negative publicity could also compromise JD.com’s ability to attract international brands to its marketplace, which has been a top focus of the CEO over the past two years or so,” Sanderson said.
Liu lost a court battle in Australia in July to keep his name out of a sexual assault trial. Liu was not accused of any wrongdoing in that case, according to a court document.
The case involved a person who had been a guest at a party hosted by Liu at his home in Sydney 2015 who accused another guest of sexually assaulting her at a hotel. The defendant was found guilty of seven offenses.
Reporting by Adam Jourdan and Todd Melby; Additional reporting by Arjun Panchadar; Writing by Frank McGurty; Editing by Toni Reinhold and Edwina Gibbs
Apple became the first U.S. stock to be worth a trillion dollars. Amazon wasn’t far behind. And Tesla hit the mother of all speed bumps thanks to its CEO’s erratic behavior.
Summer is, by conventional wisdom, a traditionally sleepy time for the stock market. Investors schedule their vacations during the warm months, and volume declines enough that companies hold off until the fall on releasing big announcements. Like, say, a new version of the iPhone, which is coming in September.
Perhaps its a reflection of the work-hard ethic at Silicon Valley companies, but tech stocks didn’t seem to take the summer off. Many tech shares remained volatile, driven by second-quarter earnings or other news. Here is a recap of who won and who lost between Memorial Day and Labor Day 2018.
Apple Is Worth $1 Trillion
Apple made history in the U.S. stock market by becoming the first American-based company to ever earn a market cap of $1 trillion. Apple reached that milestone on Aug. 2.
The first company to ever be worth $1 trillion was Petrochina, which reached the valuation briefly on its first day of trading in 2008, before losing about 80% of its peak value during the following decade.
Unlike Petrochina, Apple has continued to rise after it hit the $1 trillion target. Under Tim Cook’s management, Apple’s shares have since risen another 10% since breaching the $1 trillion watermark, closing Friday with a $1.099 trillion market value. Rumors concerning Apple’s annual September product event, at once among the best- and worst-kept secrets in tech, suggest that the company will unveil new iPhones on Sept. 12.
Apple’s stock rose 22% between Memorial Day weekend and Labor Day weekend. The S&P 500 Index, by comparison, rose 7%.
… And Amazon Is Not Far Behind
Amazon broke above the $2,000 per share barrier for the first time ever this week and finished the week at $2,012.71, its highest ever close. More important to those who follow stock-market milestones, Amazon is now worth $982 billion, just $18 billion shy of that fabled $1 trillion market cap.
Amazon, of course, had a strong second quarter, with overall revenue rising 39%, with more Amazon Prime members than ever, and with segments like cloud computing and online advertising rising 49% and 132%, respectively. If the company founded by Jeff Bezos maintains that growth in the current quarter, it could easily join the 13-digit valuation club.
Amazon’s stock rose 24% during the summer session.
Tesla Was as Volatile as Ever
Thanks to the compulsive tweeting by Tesla CEO Elon Musk, shares of Tesla were as volatile as they’ve ever been. Tesla’s bullish supporters and its bearish skeptics have been waging a war over the direction of the company’s stock price. But this summer, Musk gave his critics more than enough ammunition against him.
Overall, Tesla shares rose 6% during the summer, a period when Tesla needed to prove its ability to deliver on its audacious production goals for making its lower-cost Model 3 cars. While Tesla’s internal metrics seemed to show that production of Model 3s are meeting goals, Musk distracted from that goal by berating analysts in an earnings call and infamously calling a diver who rescued a Thai soccer team a “pedo.”
Perhaps most controversially, Musk tweeted that he had secured financing to take Tesla private. Whatever financing he was thinking of didn’t pan out. Musk this week abandoned his plans to take Tesla private, causing the stock to slump at summer’s end.
Facebook’s Stock Is Having a Bad Summer
Shares of Facebook have fallen more than 8% between Memorial Day and Labor Day. The biggest drag on its share price was the company’s second-quarter earnings, in which the company suffered a slowdown in the growth of active users on its core site and warned that the trend may continue into the future.
Those disappointing metrics followed months of questions and often reluctant disclosures about massive information leaks and about how it handles false information on its site. Facebook keeps saying it’s doing its best to counter the kinds of missteps that placed Mark Zuckerberg in the middle of a Congressional inquiry into Russian meddling in the 2016 presidential election.
LOS ANGELES (Reuters) – California lawmakers sent to the governor’s desk for final approval strict “net neutrality” laws on internet providers that would defy sweeping Federal Communications Commission rules seen as a boon for the companies.
FILE PHOTO: California Governor Jerry Brown delivers his final state of the state address in Sacramento, California, U.S., January 25, 2018. REUTERS/Fred Greaves/File Photo
The Democrat-controlled California Senate voted 27-12 to pass the bill, known as SB 822, with just hours left in the legislative session. The measure was approved by their colleagues in the state Assembly one day earlier.
Governor Jerry Brown, also a Democrat, has not yet said if he would sign the bill into law. He has 30 days to act but does not typically signal his intentions before legislation lands on his desk.
Members of the California Assembly voted 58-17 to send the bill to their colleagues in the state Senate, who have until midnight to pass so-called SB 822 on the final day of the legislative session or wait until next year.
If the measure passes both chambers of the Democrat-controlled state legislature it would still require approval from Governor Jerry Brown, a Democrat, who has not said if he would sign it into law.
FILE PHOTO – Supporters of Net Neutrality protest the FCC’s recent decision to repeal the program in Los Angeles, California, November 28, 2017. REUTERS/ Kyle Grillot
“We did it, we passed the strongest net neutrality standards in the nation,” Democrat Scott Wiener, the bill’s author, said in a written statement issued after the vote. “The internet is at the heart of 21st century life – our economy, our public safety and health systems, and our democracy.”
Supporters of California’s proposed regulations contend that net neutrality rules would bar major internet providers from blocking, slowing down or giving preferential access to online content.
Critics say the restrictions limit internet providers’ ability to recoup the costs of network improvements and lead them to curb investment.
In June, the FCC under President Donald Trump repealed rules adopted during the Obama administration that barred internet service providers from blocking content or charging more for access, a move intended to establish a more level playing field or “net neutrality.”
State attorneys general and the District of Columbia asked a federal appeals court earlier this month to reinstate the Obama regulations.
They were joined in that action a week later by a coalition of trade groups representing companies including Alphabet Inc, Facebook Inc and Amazon.com Inc.
The U.S. Senate voted in May to keep the Obama-era internet rules but the measure is unlikely to be approved by the House of Representatives or the White House.
NEW YORK (Reuters) – Funds run by BlackRock Inc voted in favor of a recent shareholder proposal that would have required Tesla Inc to replace Elon Musk with an independent chairman.
FILE PHOTO: Tesla Motors Inc Chief Executive Elon Musk pauses during a news conference in Tokyo September 8, 2014. REUTERS/Toru Hanai/File Photo
BlackRock-managed funds voted for a measure requiring the chairman be an independent director, according to BlackRock’s filing with the U.S. Securities and Exchange Commission on Thursday. The proposal, which was defeated, would not have affected Musk’s standing as Tesla’s chief executive officer.
More than 86 million shares voted against the proposal at a shareholder meeting in June, while fewer than 17 million voted in favor, Tesla said.
Some corporate governance activists call for the chairman and CEO roles to be split between two people to improve oversight, and the new filing revealed at least one major investor backed such changes at Tesla. BlackRock’s role in backing the proposal was not previously reported.
Musk has been under pressure over the company’s spending and after tweeting on Aug. 7 that he planned to take the company private, only to abandon the idea by Aug. 24.
Tesla’s board had said that the company’s success “would not have been possible” without Musk’s “day-to-day exposure to the company’s business.”
FILE PHOTO: A sign for BlackRock Inc hangs above their building in New York U.S., July 16, 2018. REUTERS/Lucas Jackson/File Photo
Yet top proxy adviser Institutional Shareholder Services Inc supported the proposal, citing concerns about Musk’s pay and board independence.
“BlackRock’s approach to investment stewardship is driven by our fiduciary duties to our clients, the asset owners,” a BlackRock spokeswoman said in an emailed statement. “Our approach to engaging with companies and proxy voting activities is consistent with our commitment to drive long term shareholder value for our clients.”
BlackRock funds are a top-10 Tesla stockholder, controlling nearly 6.5 million of Tesla’s 170 million shares, according to Thomson Reuters data based on public filings.
Vanguard Group Inc-run funds voted against the independent-chair proposal, a recent filing showed. Funds run by Fidelity Investments sided with Tesla on director votes and other controversial items this spring, its filings showed.
BlackRock’s report also showed it voted this year in favor of shareholder proposals at Facebook Inc and Google parent Alphabet Inc to give each shareholder an equal vote on governance matters.
Some companies are structured in a way that gives some shareholders more power than others, regardless of how many shares they hold.
BlackRock withheld votes or voted against nearly all management recommendations at Netflix Inc, including an advisory vote on executive pay.
Reporting by Trevor Hunnicutt; Additional reporting by Ross Kerber; Editing by Cynthia Osterman and Muralikumar Anantharaman
It didn’t even last three weeks. Earlier this month, Tesla (TSLA) CEO Elon Musk tweeted that he was planning on taking the company private at $420 per share and funding was secured. Whether this was a distraction to hide poor results, an effort to burn short sellers, or something else entirely, it clearly did not work out. On Friday night, the plan was abandoned, putting Tesla in a precarious situation that likely will not end well, even with shares falling considerably already.
(Source: Yahoo! Finance)
Tesla issued this blog post to inform investors it would remain public. The post contained some questionable statements, like the fact that Elon Musk spent considerable time talking to investors about this transaction. How could he do that in just a couple of weeks, especially when he’s recently talked about working 120 hour weeks and being at the factory so much? Also, why didn’t he spend considerable time listening to investors two years ago when so many opposed the SolarCity deal? He also said that his belief that there was more than enough funding to take Tesla private suggests he didn’t have funding lined up originally.
Statements from the blog post are likely to be a key part of lawsuits from investors who bought shares thinking they were going to $420, only to see them drop since. Tesla’s board may also be in a little trouble, given they continue to give Elon Musk plenty of support despite all the issues he is dealing with. It’s really funny how the board agreed that the better path was to stay public, indicating that they didn’t agree with the go-private decision, yet they fully support Elon Musk as CEO:
The Board and the entire company remain focused on ensuring Tesla’s operational success, and we fully support Elon as he continues to lead the company moving forward.
Of course, Tesla issued the blog post after 11PM Eastern on Friday night. It was the latest example of the company dropping bad news over a weekend when investors are unable to trade. The blog post even said that a final decision was made on Thursday to remain a public entity, so why didn’t the company issue this news earlier? Unfortunately, unlike many of the bad delivery/production announcements that were dropped over weekends (sometimes even holiday weekends), this news will be front and center on the financial news outlets Monday morning. The attention here will shift to the SEC which will need to do something in order to protect investors from a similar situation happening again, and not just in regards to Tesla.
It’s amazing how Elon Musk could just tweet his plan out during the day, with the stock not being halted for quite some time, but after deciding to not go private anymore, it took more than 24 hours for a statement to be released. Tesla management and its board continues to show time and time again that it cannot be trusted, something I believe is critical when deciding whether or not to own shares. Tesla closed Friday down $65 from the August 7th high after the go private tweet, and the 2025 bonds were approaching new lows even before this decision was scrapped. How much will they fall on Monday, absent some other push to prop up the stock like opening up Model Y deposits or something else designed to distract.
I had previously mentioned that I expected this go private plan to consume most of the Tesla news cycle for the next couple of months. However, now that it isn’t happening, investors will surely focus on Q3 results. Management needs to prove that it can be GAAP profitable and free cash flow positive, and that it can sustain these items to pay off the billions in debt coming due soon, along with billions more needed for new factories. July estimates showed the quarter off to a slow start for the S/X as seen below, down about 700 units from July 2017, even without China tariff troubles, and we’re only a week or so away from getting a swarm of August numbers.
Tesla has said going back to the Q1 investor letter in May that it was evening out its delivery process as to not have such a large final month of the quarter, but so far that hasn’t seemed to be the case. Will Tesla need a huge September sales push to hit delivery and financial targets for the quarter? Recently, a few hundred inventory vehicles were posted to the EV site, containing their usual big discounts for vehicles with some mileage on them, adding to a previous statement of mine that Tesla is trying to dump as much inventory as possible to improve the balance sheet. Those efforts might come back to really hurt margins however.
In the end, Elon Musk’s quick decision to scrap his go private plan is only going to lead to more trouble for Tesla. Now, the company will be reliant on quarter to quarter results, with even more scrutiny of every single number. There already have been a number of lawsuits filed from investors that have lost money, and even more are bound to crop up. Again, management credibility is a key issue, with a late Friday night bad news drop. Tesla’s board is also in a tricky situation. The board is very highly compensated as seen below, and really needs to find a new leader, as they don’t agree with his decisions yet they full support him. That shows that there is a major corporate governance problem. In the end, we got more fluff from Elon Musk, with him not delivering as usual, and that is likely to mean big trouble for shareholders.
Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Investors are always reminded that before making any investment, you should do your own proper due diligence on any name directly or indirectly mentioned in this article. Investors should also consider seeking advice from a broker or financial adviser before making any investment decisions. Any material in this article should be considered general information, and not relied on as a formal investment recommendation.
The Northern Florida town of Mayo in is temporarily changing its name to Miracle Whip. As you might guess, this is part of a marketing campaign by Miracle Whip maker Kaft Heinz, which is reportedly paying the town somewhere between $15,000 and $25,000 for the name change.
As far as that goes, this is not an unusual story. IHOP, the International House of Pancakes, temporarily became IHOB, the International House of Burgers, to mixed reviews. Hot Springs, New Mexico changed its name to Truth or Consequences in order to bring the then-popular game show to town. Topeka, Kansas tried the same approach, temporarily changing its name to Google, in the hopes that the search giant would bring high-speed internet, but it didn’t. North Tarrytown, New York even changed its name to Sleepy Hollow, just to make sure people knew it was the setting for Washington Irving’s headless horseman story.
But there’s one big difference. None of these other towns claimed to be trying to play a trick on 1,232 unsuspecting residents. Mayo–or, rather, Miracle Whip–town officials seem to think they can fool everybody who lives in their community into thinking the name change is permanent.
The idea of the prank is for videographers from Miracle Whip to record townspeople’s reactions when they discover that their street signs and water tower are being changed to the new name. They also want to record what happens when people in town are asked to give up any mayonnaise they may have in their homes, presumably to be replaced with Miracle Whip.
How exactly did town officials expect to fool 1,232 people? For starters, they held a closed-to-the-public meeting with Kraft Heinz where they worked out the details of the surprise. Ann Murphy, the mayor, gamely tried to stick with the illusion that the name change was permanent, telling the Associated Press, “We’re not going to be boring old Mayo anymore. We are going to be Miracle Whip! I definitely think this will put us on the map.” (In case you’re wondering, the town got its original name from Confederate Colonel James Mayo.)
Unfortunately for the town’s wannabe prankster leadership, Linda Cone, town clerk, was more forthcoming, admitting to reporters that, yup, the name change is temporary and that town officials were trying to fool residents, at least for a few days, by pretending it was permanent. But in a town of just over 1,200 people, she added, everyone knows everyone and it’s not easy to keep a secret. “It’s been kind of difficult to keep everything under wraps.”
Nothing is under wraps anymore. Any residents who might have been fooled probably are in on the joke now since the story’s gone out over the Associated Press and has appeared in the Tampa Bay Times and on a local TV station’s website.
So that would appear to be that, except for one thing. That closed meeting town officials held with Kraft Heinz to plan their prank? It may have been illegal under Florida’s Sunshine Law, which guarantees open access to most government meetings.
“If this is all supposed to be a big joke perpetuated on residents, I expect they probably violated the law to pull it off,” Barbara Petersen, president of the First Amendment Foundation located in Tallahassee told the Associated Press. “I hate to be a Debbie Downer, but seriously, I don’t think they thought this through.”
Following more than a year of unrelenting focus on Russian cyber attacks on Silicon Valley giants, Facebook and Twitter announced Tuesday night that they’ve now also thwarted a network of suspicious accounts that appear to originate in Iran.
First, Facebook announced it had taken down 652 pages, groups, and accounts for “coordinated inauthentic behavior.” Less than an hour after Facebook went public with the news, Twitter announced in a brief series of tweets that, working with “industry partners,” it had shut down 284 accounts, many of which it said were from Iran.
The news is a reminder of the broad scope of potential adversaries targeting American tech companies. But it simultaneously signals a strengthening alliance between those companies, which have begun proactively sharing the details of their investigations with other tech giants.
On a call with reporters Tuesday night, Facebook executives including CEO Mark Zuckerberg described a multi-pronged investigation that unearthed several networks of bad actors. Some were associated with Russia, but others were affiliated with Iranian state media. “These were networks of accounts that were misleading people about who they were and what they were doing,” Zuckerberg explained. “People need to be able to trust the connections they make on Facebook.”
The company credits the cybersecurity firm FireEye with detecting one group called Liberty Front Press, which was connected with several accounts and pages. They often posed as news organizations and civil society groups, but using publicly available website registration information and IP addresses, Facebook researchers found that the group was actually affiliated with Iranian state media. All in, more than 200,000 users followed at least one of these accounts or pages across Facebook and Instagram. Facebook didn’t respond to WIRED’s request for comment about whether any of these users had been notified.
In its own blog post Tuesday, FireEye cautioned that identifying the origins of these groups can be difficult, due to the nature of their activities, but said they had “moderate confidence” in their assessment about Iranian involvement. The post included a labyrinthine illustration that maps out the web of different pages and their web of promotion. According to FireEye, the network promoted issues that aligned with Iranian interests. Among the striking details they discovered were “inauthentic social media personas, masquerading as American liberals supportive of U.S. Senator Bernie Sanders, heavily promoting Quds Day, a holiday established by Iran in 1979 to express support for Palestinians and opposition to Israel.”
In addition to the Liberty Front Press network, Facebook found another set of accounts and pages posing as news organizations that the company says had “links” to the Liberty Front Press group. But this network launched more traditional attacks, attempting to hack into other Facebook users’ accounts and spread malware. Facebook says it’s working with law enforcement on further investigating its findings.
The cyberthreat posed by Iran has been the subject of concern in intelligence circles for years. But when the US reached a deal with the country in 2015, which lifted key sanctions, Iran’s cyber attacks seemed to have subsided. Meanwhile, the threat Russia posed only grew in the public consciousness after the 2016 election, when Russian actors hacked into the Democratic National Committee and Hillary Clinton’s campaign chair’s emails, while also carrying out an influence campaign across nearly every social media platform. And yet, lawmakers have recently cautioned against taking an overly myopic view of the scope of cyber threats facing the tech sector.
During a hearing on Capitol Hill on Tuesday, just hours before Facebook’s announcement, Democratic senator Richard Blumenthal warned, forebodingly, “Until there’s real action, Vladimir Putin will operate with impunity, and he will continue to use a playbook which becomes the same playbook used by other countries, notably Iran. I believe there will be news about Iranian aggression in the cyber domain.”
Following Facebook’s disclosure, Democratic senator Mark Warner said in a statement, “I’ve been saying for months that there’s no way the problem of social media manipulation is limited to a single troll farm in St. Petersburg, and that fact is now beyond a doubt.”
Facebook’s discovery underscores the level of vigilance required to detect threats from multiple state actors at once, even as the company tries to find and memorize the fingerprints others have left behind. In addition to the two networks associated with Liberty Front Press, the company also detected a suspicious network that shared content about Middle East politics in Arabic and Farsi, and also shared content about the United States and United Kingdom in English. These 168 pages and 140 accounts racked up 823,000 followers across Facebook and Instagram. This group also ran $6,000 worth of ads, the oldest of which ran in 2012. Despite signals indicating these accounts and pages were connected, they “were not presenting a coordinated front in how they identified themselves,” Nathaniel Gleicher, Facebook’s head of cybersecurity policy, said on the press call.
Facebook noted that it also shut down additional accounts and pages associated with Russian military intelligence, but the company was light on details about what this group shared or how many Facebook users followed them. The company was also reluctant to blame Russia for another suspicious network it shut down at the end of July, saying that all of these investigations are still ongoing.
In his remarks to reporters, Zuckerberg continually stressed the need for tech companies and government agencies to work together to investigate and prevent these threats. His sentiment echoed Microsoft CEO Brad Smith, who earlier Tuesday also called on the government to act when he announced that Microsoft had thwarted a series of Russian cyber attacks on political groups in the United States.
“No one company can win this fight on its own,” Zuckerberg said.
(Reuters) – Huawei Technology Co’s coming U.S. launch of a solar-panel control device is expected to collide with new Trump administration tariffs on Chinese electronics, undermining a product that analysts had seen as challenging rivals on pricing.
FILE PHOTO: People walk past a Huawei sign at CES (Consumer Electronics Show) Asia 2018 in Shanghai, China June 14, 2018. REUTERS/Aly Song/File Photo
The Chinese company, best known for its smart phones and telecommunications equipment, has developed a new generation of low-cost solar inverters, which convert, manage and monitor energy produced by solar panels for home use.
Huawei has said it was aiming to roll out the product, called FusionHome, in the United States before the end of the summer, a year after its original target. Analysts and distributors had expected it to knock $100-$200 off current market prices of similar devices costing between $1,000 and $1,500 per household.
But a coming 25 percent tariff on Chinese electronics that would overturn much of Huawei’s expected price advantage may have stalled talks with U.S. installers and distributors, said analysts and research firms.
Huawei will either have to reduce its margins or raise prices, they said, potentially benefiting rival producers including SolarEdge and Enphase Energy, which are ramping up manufacturing outside China.
Huawei declined to comment on tariffs and did not respond to detailed questions from Reuters on the current status of FusionHome.
Company spokesman Joe Kelly said in July that the company was planning to introduce the new product to its partners in the United States this summer and that the timing of the roll-out would depend on those distributors.
The 25 percent tariff, if implemented, will take effect Aug. 23, and analysts covering the sector say it will affect the new Huawei product.
“It certainly would eat into profits and is just a question on how aggressive Huawei wants to be,” said Cowen & Co analyst Jeffrey Osborne.
Huawei’s foray into the high-margin residential market comes after panel installations fell in 2017 for the first time in seven years. GTM Research recently cut its forecast for 2018 residential solar market installations by 8 percent to 2.2 gigawatts.
Of four major solar panel makers Reuters talked to, only Utah-based Vivint Solar confirmed it was considering adding Huawei’s inverter to its lineup.
SunPower Corp and Tesla’s SolarCity did not respond to Reuters’ requests for comment. A SunRun spokeswoman said the company welcomed new innovations that made solar energy cheaper and more accessible.
“A 25 percent tariff could eat up the margins of cost-competitive Chinese manufacturers and potentially change the player landscape of the U.S. solar inverter market,” said another analyst, Iben Frimann-Dahl from Rystad Energy.
Reporting by John Benny in Bengaluru; Editing by Cynthia Osterman
A team of scientists at a British university say their latest experiments have revealed “exciting” progress on the road to literally “reverse aging.”
I don’t want to oversell this. The scientists concede that a real life “anti-aging pill” is still far in the future. But, they say they’ve made noteworthy progress, by developing the ability to “revers[e] the aging of human cells,” which in turn, “could provide the basis for future anti-degeneration drugs.”
This kind of research is exactly what Silicon Valley billionaires, including PeterThiel, Larry Ellison, Larry Page and Sergey Brin, have been chasing with dollars–racing to stop the clock, and live longer, before they themselves grow too old to benefit. But now these British researchers might have beaten everyone else to the punch.
Here’s the science, the experiment, and the suddenly relevant questions about what life on earth would look like if at least some of us could live much longer–maybe even indefinitely.
Turning genes on and off
First, the experiment, and what it means. One theory about how aging works is that over time, we develop a growing number cells that don’t function as they are supposed to, and that also inhibit the correction functioning of other cells around them.
Harries and Whiteman suggest that the reason we generate these “senescent cells” is because our bodies lose the “ability to turn genes on and off at the right time and in the right place,” which thus create cells with incorrect characteristics.
That’s a very esoteric description, so Harries and Whiteman include a really basic analogy: a recipe for chocolate cake.
Imagine you’re baking a cake, and that your decision whether to include chocolate is the equivalent of “turning on” a gene during cell creation. Add the chocolate, and you wind up with chocolate cake; if you don’t add it, you wind up with some other flavor.
And if you somehow were to lose the ability to decide whether to include chocolate or not, you’d wind up with some random flavored cakes.
The key: hydrogen sulphide
Okay, so why would our bodies lose the ability to turn genes on and off? Harries and Whiteman suggest that it’s a matter of your body no longer being able to create a series of about 300 proteins called “splicing factors,” which impact that “on/off” decision.
So, the theory goes, if you could restore the ability to create splicing factors, you could potentially correct the “on/off” gene decisions, which would then reduce the number of senescent cells, and thus counteract the aging process.
That’s exactly what Harries and Whiteman say their experiment did–by “treating old cells with a chemical that releases small amounts of hydrogen sulphide.”
Lo and behold, it worked: “We were able to increase levels of some splicing factors, and to rejuvenate old human cells.”
Granted, this is very tricky and in the early stages. Hydrogen sulphide is a naturally occurring substance in the body, but large amounts can be toxic. So the researchers focused on ways to deliver it in very small doses directly where they think it would do the most good.
“We are hopeful that in using molecular tools such as this,” they write, “we will be able to eventually remove senescent cells in living people, which may allow us to target multiple age-related diseases at once. This is some way in the future yet, but it’s an exciting start.”
But will Sergey Brin live forever?
Again, this all amounts to “exciting” progress, but it’s really Step One. There’s a real question whether any of this science, with experiment building upon experiment, will achieve results in time for anyone currently reading this article to benefit from it.
At Google, the head of the company’s anti-aging research writes that he thinks we “probably won’t solve death in time to make Google co-founders Larry Page and Sergey Brin immortal.”
But if we could ever pull this off, can you imagine the way it would change our society? I’m reminded of two quotes:
“Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life.” –Steve Jobs
“Millions long for immortality who don’t know what to do with themselves on a rainy Sunday afternoon.”–Susan Ertz
And that goes to why the people pushing for answers here hardest are individual, highly successful entrepreneurs with money to burn and a fear of death. Perhaps that’s the story for all of us, billionaires and mere mortals alike. We’re quite possibly the last generations to live, who believe it’s inevitable that we will one day die.
Ford Motor‘s (F) have fallen below the $10 price level this week on fears over an escalating trade war between the United States and China and higher expected commodity costs. Though Ford Motor faces some headwinds over the short haul in terms of costs, investors have turned too bearish on U.S. auto companies, in my opinion. Ford Motor makes a promising value proposition below $10 as shares are dirt-cheap and ripe for a rebound. While waiting for the storm to pass, investors get to collect a healthy 6.3 percent dividend.
Disappointing Performance And New 52-Week Low
Ford Motor hasn’t exactly been a winning investment in 2018. Year-to-date, the auto company’s share price slumped 23.4 percent. This week’s sell-off also caused Ford’s share price to fall to a new 52-week low @$9.42.
[Note that according to the Relative Strength Index, Ford Motor is now widely oversold again.]
Why Are Investors Spooked?
One word: Tariffs.
The tariff tit-for-tat between the United States and China already drags on for months but went into another round earlier in August when both countries imposed new tariffs on each other yet again. First, the United States slapped an additional 25 percent tariff on $16 billion worth of Chinese imports. China then immediately reacted, imposing a 25 percent tariff on $16 billion of U.S. goods including fuel, steel products, automobiles and medical equipment.
The big fear here is that both countries will continue to escalate the tariff stand-off. Put simply: Investors are currently pricing in a worst-case trade scenario that will lead to billions of dollars in trade lost over protectionist political stances. Auto companies, including General Motors (GM) and Ford Motor have already warned about rising commodity and steel costs, which is expected to negatively affect profitability over the short haul.
That being said, though, I expect the U.S. and China to ultimately resolve their trade dispute at the negotiating table as both countries benefit from increased trade and collaboration over the long haul.
Reduced Adj. EPS-Guidance Weighing On Investor Sentiment In The Short Run
Ford Motor, for instance, adjusted its earnings guidance for 2018, partly due to rising commodity costs. Ford Motor now expects to pull in $1.30-$1.50/share in adjusted earnings per share in 2018, which compares against a previous earnings guidance of $1.45-$1.70/share. The guidance midpoint now sits at $1.40, which is ~11 percent lower than the previous midpoint ($1.58/share).
Ford Motor’s shares are dirt-cheap, and sell for less than seven times next year’s estimated profits. I think investors have turned too bearish on Ford Motor too fast, which in turn opens up a buying window for income investors with a contrarian bent.
Still An Attractive Yield Play
Ford Motor is, first and foremost, a dividend play, which is worth reminding investors of once in a while. Shares throw off a $0.15/share quarterly dividend, and Ford Motor has paid special dividends in the past as well. An investment in F at today’s price point yields 6.3 percent.
Though Ford Motor’s share price could certainly drop further over the short haul, shares are already widely oversold, and ripe for a rebound. Hence, I see the drop below $10 as a buying opportunity, but only for those investors that have a higher-than-average risk tolerance and an investment horizon of more than one year. Though the tariff standoff between the U.S. and China makes for some interesting news, the conflict will ultimately be resolved at the negotiating table. For now, investors may want to ignore the noise. Speculative Buy for income and capital appreciation.
If you like to read more of my articles, and like to be kept up to date with the companies I cover, I kindly ask you that you scroll to the top of this page and click ‘follow‘. I am largely investing in dividend paying stocks, but also venture out occasionally and cover special situations that offer appealing reward-to-risk ratios and have potential for significant capital appreciation. Above all, my immediate investment goal is to achieve financial independence.
Disclosure:I am/we are long F, GM.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
For online presentations, the first step is to get everyone on video (sometimes you have to insist). No more audio-only calls where all your audience members are just secretly multi-tasking. You can’t make an engaging presentation with slides and their disembodied voice. Get your face on video so people can see you and ideally you can see your audience too. This allows you to really connect with your audience, and see how they are reacting to you.
Also for online presentations, consider your environment. Spotty wifi with an unprofessional background and a poorly-lit face kills your presentation. I literally interviewed a candidate who had pile of dirty laundry behind him – not the best first impression. Zoom works great on wifi right down to 3G, but if you’re giving a big presentation, your best bet is hardwiring in. Then, make sure you are in a quiet space with no distractions. Clean up your background – just use a plain wall, or a nice plant – or try Zoom’s virtual backgrounds (sorry, shameless plug). Consider your lighting. Get there a couple minutes early to make sure it’s not too much or too little lighting. And check that you are lit from the front, not from behind you (i.e. don’t sit with your back to a window). It is distracting when cameras are too high or low or are angled so we’re only seeing part of someone’s face. Check that you are looking straight at the camera and your video feed is framing the upper part of your torso and your head – you want it to look as if you were sitting across the table from your audience.
And for both online and in-person presentations, you have to engage your audience. Don’t droning on for a long time, doing too many text-rich slides, and not matching your abstract to your presentation (this is actually a big one – people want to know what they’re getting in to). Instead, stop regularly to tell a (quick!) story, ask a question, take a straw poll, tell a joke, give your audience a small task, and so forth. Just keep them awake and interested! Also, you need adjust your presentation to your audience’s response. I have multiple large screens in my office so I can see all the participants in my meeting or presentation all at once and read their body language and facial expressions. If I see attention waning or some disagreement, I will switch things up.
Finally, a quick technical recommendation for online presentations. If you’re using Zoom, when setting up your meeting, select the “Mute upon entry” option. This makes sure that your participants join with their sound off, so you don’t get background noise that can disrupt the flow of your presentation.
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(Reuters) – Tesla Inc’s board (TSLA.O) named a special committee of three directors on Tuesday to negotiate with Elon Musk on taking the electric carmaker private, although it said it was yet to see a firm offer from the company’s chief executive.
Musk said on Monday he had held talks with a Saudi sovereign fund on a buyout that would take Tesla off the Nasdaq exchange – an extraordinary move for what is now the United States’ most valuable automaker, worth more than $60 billion.
The committee, made up of Tesla independent directors Brad Buss, Robyn Denholm and Linda Johnson Rice, will wade into a deal that has puzzled Wall Street since a surprise announcement
by Musk on Twitter last week.
Musk then proposed taking the company private at $420 a share – versus the current $354 – and said funding had been “secured”.
He has given more details – including saying he is working with Goldman Sachs and buyout firm Silver Lake – but is yet to convince Wall Street analysts and investors that he can find the billions needed to complete the deal.
Corporate governance and shareholder voting advisor Institutional Shareholder Services has said it does not consider Buss to be an independent director, running counter to Tesla’s view, due to his connections to a solar panel business the company bought two years ago.
Buss was chief financial officer of solar panel installer SolarCity for two years before retiring when Tesla paid $2.6 billion for the sales and installation firm in 2016.
The purchase was Tesla’s last big deal and was criticized by some on Wall Street because the company, founded by two of Musk’s cousins, had seen its business shrink before the takeover.
FILE PHOTO: A Tesla sales and service center is shown in Costa Mesa, California, U.S., June 28, 2018. REUTERS/Mike Blake/File Photo
Denholm, the first woman to join Tesla’s board, is chief operations officer of telecom firm Telstra and the ex-CFO of network gear maker Juniper Networks (JNPR.N). Rice, the first African-American and second woman to join the company’s board, is the chairman of Johnson Publishing Co, home to Ebony and Jet magazines.
Tesla’s other board members include Musk, his brother Kimbal Musk, Twenty-First Century Fox’s CEO James Murdoch, Antonio Gracias, founder of Valor Equity Partners and Ira Ehrenpreis, founder of venture capital firm DBL Partners.
One more director, Steve Jurvetson, is currently on leave of absence following allegations of sexual harassment.
Tesla’s board disclosed on Aug. 8 that Musk had held talks with the directors in the previous week on taking the company private.
The company said in the statement that the special committee has the authority to take any action on behalf of the board to evaluate and negotiate a potential transaction and alternatives to any transaction proposed by Musk.
Latham and Watkins LLP has been retained by the committee as its legal counsel. Wilson Sonsini Goodrich and Rosati will be legal counsel for Tesla itself.
Shares in Tesla inched down 0.2 percent in early trading and have now fallen more than 8 percent from highs hit following Musk’s tweet last week.
(Reuters) – Tesla Inc’s (TSLA.O) board has named a special committee of three directors to negotiate with Chief Executive Elon Musk on taking the electric car maker private, although it said it was yet to see a firm offer from him.
The committee, made up of Tesla directors Brad Buss, Robyn Denholm and Linda Johnson Rice, will wade into a deal that has puzzled Wall Street since a surprise announcement by Musk on Twitter last week.
The following is a snapshot of the nine members on Tesla’s board.
Elon Musk 2004 Tesla’s Chief Executive Officer and
co-founder. Owns a roughly 20 percent
stake in Tesla. Also serves as CEO of
Brad Buss 2009 Served as chief financial officer of
Matt Linton, a senior software engineer at Google, says he was asked to leave Caesars Palace hotel in Las Vegas Thursday night after a tweet about hacking was reported to the Las Vegas Metropolitan Police Department. The police have confirmed that Linton is not considered a threat, but until Friday afternoon the engineer said he was not let back into Caesars, which is hosting Defcon, the annual conference that attracts thousands of security researchers, academics, lawyers, and hackers.1 The incident highlights the high level of security precautions being taken in the city less than a year after a mass shooting at the nearby Mandalay Bay Hotel, when a gunman killed 58 people and injured hundreds of others.
Linton sent the tweet on Wednesday night in response to another user’s thread about the Defcon Wi-Fi network, which is notorious for being insecure due to the number of hackers who attend the conference. The original tweet argued that the network might be more secure than people think, since so many users are on it simultaneously. In other words, there are so many possible victims that it’s easy to hide in a crowd. Linton responded that it might be more fruitful, theoretically, to “attack” the wealthy attendees of BlackHat, a more commercial cybersecurity conference that takes place right before Defcon. Linton was a speaker at BlackHat this year.
The short conversation was about the many ways a person’s device might be compromised during the biggest week of the year for hackers. But at the time, Linton was replying to a protected account, meaning people could not view the original tweet if they didn’t already follow that user on Twitter. (The user made their tweets public on Friday.) For most people, Linton’s tweet—which began “If I had the time, budget, and motive to launch really good attacks in Vegas, I would…”—would appear without any other context.
“We saw the comment on social media, it was brought to our attention by the private sector. We have a lot of concerns when someone uses the word attack,” says Jim Seebock, a captain at the Las Vegas Metropolitan Police Department.
Linton says the police got his contact information from Caesars, and then reached him on his cellphone.
“LVPD interviewed me and I believe I had cleared it up with them satisfactorily when they liked and retweeted my second clarification tweet about how ‘attack’ means ‘hack a cell phone’ when you’re at Defcon,” Linton said in a Twitter direct message. (As of Friday afternoon, the police department’s official twitter account did not appear to have liked or retweeted Linton’s messages.)
Seebock confirmed that Linton has since been cleared as a threat, and the engineer is facing no charges. But when Linton returned to his hotel room around midnight Thursday, he discovered that he could not use his keycard to access it. He says he was then asked to leave the hotel, and that he was still charged half the price he paid for his room Thursday night. Caesars did not immediately respond to a request for comment.
“I’m not upset that people were threat-modeling after Mandalay and obviously I realize I chose the wrong verbs in my tweet and that’s on me,” Linton says. “I’m just sad and disappointed that the wind-up machine, which gets set in motion when a ‘threat’ is detected, has no mechanism for unwinding it with new information and clarification being available to show that there was no threat intended at all.”
Several other Defcon attendees publiclyasked Caesars to allow Linton to return to the conference. Linton confirmed in a Twitter direct message that Caesars let him back into the building at around 3:30 PM local time. The engineer, who says he has been a volunteer EMT for decades, worries that the incident might impact his record with law enforcement in a way he might not be able to track or understand.
Other Defcon goers are reporting increased security measures at the conference this year. Kim Zetter, a freelance cybersecurity journalist who previously worked for WIRED, tweeted that her hotel room was searched by security guards after she declined maid service.
This also isn’t the first time that Defcon attendees have had run-ins with law enforcement. Last year, authorities arrested Marcus Hutchins, a hacker credited with stopping the notorious WannaCry ransomware attack, as he tried to board a flight home to the United Kingdom. The Department of Justice subsequently unsealed an indictment against Hutchins, alleging he created banking malware. The hacker, who is still in the US, is now trying to have those charges, as well as additional ones piled on, dropped by a US federal district court in Wisconsin.
Unlike Hutchins, Linton has not been charged with any crime. The incident this week appears instead to illustrate how hacker lingo can be easily misinterpreted, especially if you’re trying to protect a city in the wake of a tragedy.
1Updated 8/10/18, 7:44 PM EDT: Shortly after this article was published, Linton was allowed back into Caesars. We have updated the story accordingly.
Now in its second year, the Voting Machine Hacking Village at the DefCon security conference in Las Vegas features a new set of voting machines—all of which will actually be used in the 2018 midterm elections—for attendees to analyze and attack. But as eager attendees get to work familiarizing themselves with the devices and revealing their weaknesses, another call has emerged from the Village as well: Finding bugs is great. But you also need the money to fix them.
Election officials can’t act on findings about voting machine and voting infrastructure vulnerabilities, DefCon speakers noted on Friday, if they don’t have the money to replace obsolete equipment, invest in network improvements, launch post-election audit programs, and hire cybersecurity staff. Some progress has come, but not enough, and too slowly.
“While I thank the United States Congress for appropriating $340 million last month, let me be abundantly clear, we need more resources,” said Alex Padilla, the secretary of state of California and the state’s top election official. “All the things that we know we have to do, all the things that I’m going to learn and observe when I go down to the Village after this panel, to implement and act on all of these findings, recommendations, and discoveries we need official resources.”
After all, it took nearly two decades for Congress to appropriate that recent election security windfall; it came from the 2002 Help America Vote Act. “That’s butterfly ballot hanging chad money, not cyberthreats 2016, 2018, 2020 money,” Padilla says. In recent months, Congress has failed to pass various bills that would fund election security and infrastructure improvements ahead of the midterms. And though the bipartisan Secure Elections Act has been steadily gaining momentum in the Senate—and was introduced through a companion bill in the House on Friday—it is likely still months away from potentially becoming law.
After months of silence on the topic, the Trump Administration said at the end of July that it would “continue to provide the support necessary to the owners of elections systems—state and local governments—to secure their elections.” Department of Homeland Security top cybersecurity official Jeanette Manfra echoed that sentiment at DefCon on Friday, noting that election officials “do a lot with not a lot of resources, and now they’re on the front lines trying to deal with a lot of these issues. They can’t do it alone.”
Jake Braun, a co-organizer of the Voting Village and a former White House and public liaison for DHS, pointed out on Friday that even a project like the DefCon research workshop is costly and would be out of reach for many organizations. “This is a volunteer operation,” he said. “None of us make a dime off of this; we actually lose money.”
The findings that come out of the Voting Village this weekend, and those from researchers more broadly, continue to provide crucial information, as security advocates work to raise the bar of voting machine defense around the US and shape guidelines for vendors. But knowledge can only go so far without the resources required to act on it.
“Most election officials have one or two people in their office,” says Noah Praetz, the director of elections for Cook County, Illinois, who also attended the Voting Village last year. “They outsource most of the work they do, and it’s really difficult” to keep up with the constant stream of election system-related vulnerability advisories.
Voting infrastructure desperately needs vetting from hackers. But now that that idea has more widespread support, the next item on the punch list is funding.
Microsoft took one of its few actions to restrict unsafe speech by demanding the microblogging service Gab.ai removed two posts by a neo-Nazi that threatened violence. Gab is known for an expansive, some say extreme attitude towards permitting all forms of speech without moderation.
Gab relies on Microsoft Azure, a popular cloud service offering, to provide the servers and networking behind the service. Microsoft told Gab that it received complaints about “malicious activity” related to two messages posted by Patrick Little, an avowed neo-Nazi, that advocated directly for violence against Jews. Microsoft gave the company two days to remove them or risk suspension.
Little removed the posts himself, noting that it was “a violation of our rights as Americans,” and concluding, “we will have no rights until the jews [sic] are expelled.”
A Microsoft spokesperson said in a statement elaborating on its move, “Microsoft received a complaint about specific posts on Gab.ai that advocate ‘ritual death by torture’ and the ‘complete eradication’ of all Jews. After an initial review, we have concluded that this content incites violence, is not protected by the First Amendment, and violates Microsoft Azure’s acceptable use policy.”
Microsoft said it would extend the two-day period if Gab chose to migrate elsewhere. That appears to be alleviated with the removal of the posts, and the company didn’t elaborate on what might occur if a similar violation occurred in the future. Facebook has an explicit three strikes within 90 days policy for hosted videos, while Twitter can opt to freeze an account until tweets are removed. But Azure isn’t a social network.
In the past, Gab has set some bright lines, banning Andrew Auernheimer, known as “weev,” notorious as both an ostensible troll and griefer, allegedly harassing people online for the joy of it, and in recent years as an apparently non-ironic adopter of neo-Nazi sensibilities. Gab suspended Auernheimer for threats and terrorism.
On the other hand, Andrew Anglin, the operator of Daily Stormer,an online publication aimed at neo-Nazis, maintains his account at Gab. His pinned tweet at the top of his account profile reads, “When you’re ready to start shoving Jews onto a train, remember that name!”
In the wake of Alex Jones and his InfoWars conspiracy-based empire being banned and restricted by Apple, Facebook, MailChimp, Pinterest, Spotify, and YouTube, it’s unclear whether a service with a history of controversy could find a new cloud host.
Gab does, however, rely on Cloudflare, which provides a front-end resistance against distributed denial of service (DDoS) and other attacks that can disable a site or access to it. Cloudflare doesn’t technically host content, but acts as a firebreak in relaying content from a site to web browsers.
Picked up bothon Redditand by the consistently reliableWinFuture, GeekBench scores have beenuncoveredfor the Pixel 3XL (codename ‘Crosshatch’). The breakdown reveals predictable aspects such as the phone running Android P and using a Qualcomm 845 chipset at its heart. But it also shows Google is going to deliver the new Pixel range with just 4GB of RAM, and this problematic for several reasons.
Pixel 3 XL ConceptConcept Creator
The obvious point to make is rivals have moved on. OnePlus leads the way with the excellent (midrange-priced) OnePlus 6 coming in 6GB and 8GB variants, while even 4GB-holdout Samsung moved up to 6GB back in 2017 with the Galaxy Note 8. For Google’s flagship device,this simply isn’t at the races from a specifications perspective – especially at the high asking price,
But more importantly, 4GB of RAM also isn’t at the races from a real-world performance perspective, as it coincides with multiple reports of Pixel 2 and Pixel 2 XL performance problems as they age.
Triggered by aseries of tweetsfrom Android Police founder Artem Russakovskii, andexpanded upon by popular YouTuber MKBHD (video below), the issues are very real and I’ve seen it on both my Pixel 2 running Android O and my Pixel 2 XL running Android P beta. Memory management has begun to struggle – particularly on devices 8-10 months old – and this hasn’t happened to similarly aged rivals like the OnePlus 5T carrying more RAM.
As such 4GB makes the Pixel 3 and Pixel 3 XL a tough sell in late 2018. Especially when we already know both phones won’t have dual cameras which,while arguably unnecessary, are a major selling point with consumers.
The Pixel 3 and Pixel 3 XL represent Google’s third generation of premium smartphones and it was the third generation for Apple (iPhone 3GS) and Samsung (Galaxy S3) which saw their ranges take-off. Consequently, as brilliant as Google’s Pixel software optimisation might be, from a hardware perspective the company risks blowing it just asiPhones become cheaperand Samsunggets its groove back…