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Tag: Corporate news

  • Estee Lauder to buy Tom Ford in a deal valued at $2.8B

    Estee Lauder to buy Tom Ford in a deal valued at $2.8B

    The Estee Lauder Cos. is acquiring luxury powerhouse Tom Ford in a deal valued at $2.8 billion, marking the beauty firm’s biggest acquisition yet.

    As part of the deal announced Tuesday, Ermenegildo Zegna Group and Marcolin S.p.A. will enter long-term license agreements for Tom Ford fashion and Tom Ford eyewear, respectively.

    While Estee Lauder said the deal values the total enterprise at $2.8 billion, the New York-based beauty company is expected to pay roughly $2.3 billion, after a $250 million payment from Italian eyewear manufacturer Marcolin SpA.

    The purchase, subject to regulatory approvals, is slated to close in the first half of 2023.

    Under the agreement, Tom Ford, founder and CEO of Tom Ford International, will remain the brand’s creative visionary through the end of 2023. Domenico De Sole, chairman of Tom Ford International, will stay on as a consultant until that same time.

    Estee Lauder introduced its Tom Ford Beauty line in 2006. In Estee Lauder’s fiscal year that ended June 30, the brand’s net sales grew nearly 25% compared to the prior year. The beauty company said that in the next few years it expect the beauty line to bring in net sales of $1 billion.

    “This strategic acquisition will unlock new opportunities and fortify our growth plans for Tom Ford Beauty,” said Fabrizio Freda, president and CEO of Estee Lauder in a statement. “It will also further help to propel our momentum in the promising category of luxury beauty for the long-term, while reaffirming our commitment to being the leading pure player in global prestige beauty.”

    Estee Lauder said it aims to finance the acquisition through a combination of cash, debt and $300 million in deferred payments to sellers that become due beginning in July of 2025.

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  • Buffett’s firm cuts stakes U.S. Bank, BYD; adds chip maker

    Buffett’s firm cuts stakes U.S. Bank, BYD; adds chip maker

    OMAHA, Neb. — Warren Buffett’s company slashed its stake in U.S. Bank’s parent company and also sold shares in Chinese electric car maker BYD in the third quarter, according to regulatory filings Monday.

    The moves were among several others including a more than $4.1 billion investment in Taiwan Semiconductor that Berkshire Hathaway disclosed in the filings with the SEC and the Hong Kong stock exchange.

    The filings detailed all the stock moves made by Buffett’s company in the third quarter.

    Many investors follow Berkshire’s moves closely because of Buffett’s remarkably successful track record over the decades.

    Berkshire revealed a new 60 million share stake in Taiwan Semiconductor and two smaller new investments in Jefferies Financial Group and Louisiana Pacific Corp.in Monday’s filing.

    Berkshire also picked up nearly 4 million more Chevron shares worth more than $700 million to give it 165.4 million shares and continue betting on oil producers. One of Buffett’s biggest investments this year has been buying up roughly $12 billion of Occidental Petroleum shares, including adding nearly 36 million shares in the third quarter.

    Buffett’s company trimmed its Activision Blizzard, General Motors and Kroger holdings during the quarter. It also eliminated an investment in Store Capital Corp.

    Berkshire said Friday that it now owns 3.5% of Minneapolis-based U.S. Bancorp, down from nearly 10% at the start of the year. The 52.5 million shares Berkshire now holds were worth roughly $2.4 billion Monday.

    It also reduced its investment in the Bank of New York Mellon by 10 million shares during the quarter.

    But financial stocks remain a core part of Berkshire’s portfolio. The Omaha, Nebraska-based conglomerate’s stake of more than 1 billion shares of Bank of America is one of its biggest investments.

    Berkshire’s filings with regulators don’t specify if the decisions were made by Buffett or were the responsibility of the company’s two other portfolio managers, but Buffett generally handles investments over $1 billion. Berkshire officials don’t routinely comment on these stock filings, and they haven’t said why they are selling BYD and U.S. Bancorp stocks.

    Berkshire said it now owns a little over 182 million BYD shares, down from 225 million when it started selling off the stock in August. Previously, Buffett hadn’t touched the investment he paid $232 million for in 2008. The stake had soared in value to nearly $7.7 billion by the end of last year.

    Buffett’s company now holds 16.6% of the Hong Kong-issued shares of BYD.

    Besides its equity investments, Berkshire owns more than 90 companies outright, including Geico insurance, BNSF railroad, several major utilities and an assortment of well-known brands such as Duracell, Dairy Queen and Fruit of the Loom.

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  • 40 states settle Google location-tracking charges for $392M

    40 states settle Google location-tracking charges for $392M

    HARTFORD, Conn. — Search giant Google has agreed to a $391.5 million settlement with 40 states to resolve an investigation into how the company tracked users’ locations, state attorneys general announced Monday.

    The states’ investigation was sparked by a 2018 Associated Press story, which found that Google continued to track people’s location data even after they opted out of such tracking by disabling a feature the company called “location history.”

    The attorneys general called the settlement a historic win for consumers, and the largest multistate settlement in U.S history dealing with privacy.

    It comes at a time of mounting unease over privacy and surveillance by tech companies that has drawn growing outrage from politicians and scrutiny by regulators. The Supreme Court’s ruling in June ending the constitutional protections for abortion raised potential privacy concerns for women seeking the procedure or related information online.

    “This $391.5 million settlement is a historic win for consumers in an era of increasing reliance on technology,” Connecticut Attorney General William Tong said in a statement. “Location data is among the most sensitive and valuable personal information Google collects, and there are so many reasons why a consumer may opt-out of tracking.”

    Google, based in Mountain View, California, said it fixed the problems several years ago.

    “Consistent with improvements we’ve made in recent years, we have settled this investigation, which was based on outdated product policies that we changed years ago,” company spokesperson Jose Castaneda said in a statement.

    Location tracking can help tech companies sell digital ads to marketers looking to connect with consumers within their vicinity. It’s another tool in a data-gathering toolkit that generates more than $200 billion in annual ad revenue for Google, accounting for most of the profits pouring into the coffers of its corporate parent, Alphabet — which has a market value of $1.2 trillion.

    In its 2018 story, The AP reported that many Google services on Android devices and iPhones store users’ location data even if they’ve used a privacy setting that says it will prevent Google from doing so. Computer-science researchers at Princeton confirmed these findings at the AP’s request.

    Storing such data carries privacy risks and has been used by police to determine the location of suspects.

    The AP reported that the privacy issue with location tracking affected some 2 billion users of devices that run Google’s Android operating software and hundreds of millions of worldwide iPhone users who rely on Google for maps or search.

    The attorneys general who investigated Google said a key part of the company’s digital advertising business is location data, which they called the most sensitive and valuable personal data the company collects. Even a small amount of location data can reveal a person’s identity and routines, they said.

    Google uses the location information to target consumers with ads by its customers, the state officials said.

    The attorneys general said Google misled users about its location tracking practices since at least 2014, violating state consumer protection laws.

    As part of the settlement, Google also agreed to make those practices more transparent to users. That includes showing them more information when they turn location account settings on and off and keeping a webpage that gives users information about the data Google collects.

    The shadowy surveillance brought to light by The AP troubled even some Google engineers, who recognized the company might be confronting a massive legal headache after the story was published, according to internal documents that have subsequently surfaced in consumer-fraud lawsuits.

    Arizona Attorney General Mark Brnovich filed the first state action against Google in May 2020, alleging that the company had defrauded its users by misleading them into believing they could keep their whereabouts private by turning off location tracking in the settings of their software.

    Arizona settled its case with Google for $85 million last month, but by then attorneys general in several other states and the District of Columbia had also pounced on the company with their own lawsuits seeking to hold Google accountable for its alleged deception.

    ———

    Gordon reported from Washington, D.C. AP Technology writer Michael Liedtke in San Ramon, California, contributed to this report.

    ———

    This story has been updated to reflect that the Supreme Court ruling on abortion was issued in June, not last month.

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  • EXPLAINER: What’s happening at bankrupt crypto exchange FTX?

    EXPLAINER: What’s happening at bankrupt crypto exchange FTX?

    The imploding cryptocurrency trading firm FTX is now short billions of dollars after experiencing the crypto equivalent of a bank run.

    The exchange, formerly one of the world’s largest, sought bankruptcy protection last week, and its CEO and founder resigned. Hours later, the trading firm said there had been “unauthorized access” and that funds had disappeared. Analysts say hundreds of millions of dollars may have vanished.

    The unraveling of the once-giant exchange is sending shockwaves through the industry. Here’s a look at the company’s collapse so far:

    WHY DID FTX GO BANKRUPT?

    Customers fled the exchange over fears about whether FTX had sufficient capital, and it agreed to sell itself to rival crypto exchange Binance. But the deal fell through pending Binance’s due diligence on FTX’s balance sheet.

    FTX had valued its assets between $10 billion to $50 billion, and listed more than 130 affiliated companies around the world, according to its bankruptcy filing.

    FTX and dozens of affiliated companies — including CEO Sam Bankman-Fried’s hedge fund, Alameda Research — filed the bankruptcy petition in Delaware on Friday.

    This week’s developments marked a shocking turn of events for Bankman-Fried, who was hailed as somewhat of a savior earlier this year when he helped shore up a number of cryptocurrency companies that ran into financial trouble. He was recently estimated to be worth $23 billion and has been a prominent political donor to Democrats.

    WAS IT HACKED, TOO?

    FTX confirmed Saturday there had been unauthorized access to its accounts, hours after the company filed for Chapter 11 bankruptcy protection.

    A debate formed on social media about whether the exchange was hacked or a company insider had stolen funds — a possibility that cryptocurrency analysts couldn’t rule out.

    Exactly how much money is involved is unclear, but analytics firm Elliptic estimated Saturday that $477 million was missing from the exchange. FTX’s new CEO John Ray III said it was switching off the ability to trade or withdraw funds and taking steps to secure customers’ assets.

    IS FTX UNDER INVESTIGATION?

    The Royal Bahamas Police Force said Sunday it is investigating FTX, adding to the company’s woes. The police force said in a statement Sunday it was working with Bahamas securities regulators to “investigate if any criminal misconduct occurred” involving the exchange, which had moved its headquarters to the Caribbean country last year.

    IS ANYONE ELSE INVESTIGATING?

    Even before the bankruptcy filing and missing funds, the U.S. Department of Justice and the Securities and Exchange Commission began examining FTX to determine whether any criminal activity or securities offenses were committed, according to a person familiar with matter who spoke to The Associated Press last week on condition of anonymity because they could not discuss details of the investigations publicly.

    WHAT ARE THE REPERCUSSIONS?

    Companies that backed FTX are writing down investments, and the prices of bitcoin and other digital currencies have been falling. Politicians and regulators are calling for stricter oversight of the unwieldy industry. FTX said Saturday that it was moving as many digital assets as can be identified to a new “cold wallet custodian,” which is essentially a way of storing assets offline without allowing remote control.

    FTX had also entered into a number of sports-related deals, some of which are crumbling. The NBA’s Miami Heat and Miami-Dade County decided Friday to terminate their relationship with FTX, and will rename the team’s arena. Earlier Friday, Mercedes said it would immediately remove FTX logos from its Formula One cars.

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  • Funds vanish at bankrupt crypto exchange FTX; probe underway

    Funds vanish at bankrupt crypto exchange FTX; probe underway

    NEW YORK — Collapsed cryptocurrency trading firm FTX confirmed there was “unauthorized access” to its accounts, hours after the company filed for Chapter 11 bankruptcy protection Friday.

    The embattled company’s new CEO John Ray III said Saturday that FTX is switching off the ability to trade or withdraw funds and taking steps to secure customers’ assets, according to a tweet by FTX’s general counsel Ryne Miller. FTX is also coordinating with law enforcement and regulators, the company said.

    Exactly how much money is involved is unclear, but analytics firm Elliptic estimated Saturday that $477 million was missing from the exchange. Another $186 million was moved out of FTX’s accounts, but that may have been FTX moving assets to storage, said Elliptic’s co-founder and chief scientist Tom Robinson.

    A debate formed on social media about whether the exchange was hacked or a company insider had stolen funds, a possibility that cryptocurrency analysts couldn’t rule out.

    Until recently, FTX was one of the world’s largest cryptocurrency exchanges. It was already short billions of dollars when it sought bankruptcy protection Friday and its former CEO and founder, Sam Bankman-Fried, resigned.

    The company had valued its assets between $10 billion to $50 billion, and listed more than 130 affiliated companies around the world, according to its bankruptcy filing.

    The unraveling of the once-giant exchange is sending shockwaves through the industry, with companies that backed FTX writing down investments and the prices of bitcoin and other digital currencies falling. Politicians and regulators are calling for stricter oversight of the unwieldy industry. Experts say the saga is still unfolding.

    “We’ll have to wait and see what the fallout is, but I think we are going to see more dominoes falling and an awful lot of people stand to lose their money and their savings,” said Frances Coppola, an independent financial and economic commentator. “And that is just tragic, really.”

    The timing and the extent of access that the assumed hacker appeared to achieve, siphoning money from multiple parts of the company, led Coppola and other analysts to theorize that it could have been an inside job.

    FTX said Saturday that it’s moving as many digital assets as can be identified to a new “cold wallet custodian,” which is essentially a way of storing assets offline without allowing remote control.

    “It does look as if the liquidators didn’t act fast enough to stop some kind of siphoning off of funds from FTX after it filed for bankruptcy, and that’s bad, but it just shows how complex this thing is,” Coppola said.

    Initially, some people were hoping that perhaps all the missing funds were liquidators or bankruptcy administrators trying to move assets to a more secure spot. But it would be unusual for that to happen on a Friday night, said Molly White, cryptocurrency researcher and fellow with the Library Innovation Lab at Harvard University.

    “It looked very different from what a liquidator might do if they were trying to secure the funds,” she said.

    White also said there are signs of possible insider involvement. “It seems unlikely that someone who is not an insider could have pulled off such a massive hack with so much access to FTX systems.”

    The collapse of FTX highlights the need for cryptocurrency to be regulated more like traditional finance, Coppola said.

    “Cyrpto isn’t in the very early stages anymore,” she said. “We’ve got ordinary people putting their life savings into it.”

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  • Funds vanish at bankrupt crypto exchange FTX; probe underway

    Funds vanish at bankrupt crypto exchange FTX; probe underway

    NEW YORK — Collapsed cryptocurrency trading firm FTX confirmed there was “unauthorized access” to its accounts, hours after the company filed for Chapter 11 bankruptcy protection Friday.

    The embattled company’s new CEO John Ray III said Saturday that FTX is switching off the ability to trade or withdraw funds and taking steps to secure customers’ assets, according to a tweet by FTX’s general counsel Ryne Miller. FTX is also coordinating with law enforcement and regulators, the company said.

    Exactly how much money is involved is unclear, but analytics firm Elliptic estimated Saturday that $477 million was missing from the exchange. Another $186 million was moved out of FTX’s accounts, but that may have been FTX moving assets to storage, said Elliptic’s co-founder and chief scientist Tom Robinson.

    A debate formed on social media about whether the exchange was hacked or a company insider had stolen funds, a possibility that cryptocurrency analysts couldn’t rule out.

    Until recently, FTX was one of the world’s largest cryptocurrency exchanges. It was already short billions of dollars when it sought bankruptcy protection Friday and its former CEO and founder, Sam Bankman-Fried, resigned.

    The company had valued its assets between $10 billion to $50 billion, and listed more than 130 affiliated companies around the world, according to its bankruptcy filing.

    The unraveling of the once-giant exchange is sending shockwaves through the industry, with companies that backed FTX writing down investments and the prices of bitcoin and other digital currencies falling. Politicians and regulators are calling for stricter oversight of the unwieldy industry. Experts say the saga is still unfolding.

    “We’ll have to wait and see what the fallout is, but I think we are going to see more dominoes falling and an awful lot of people stand to lose their money and their savings,” said Frances Coppola, an independent financial and economic commentator. “And that is just tragic, really.”

    The timing and the extent of access that the assumed hacker appeared to achieve, siphoning money from multiple parts of the company, led Coppola and other analysts to theorize that it could have been an inside job.

    FTX said Saturday that it’s moving as many digital assets as can be identified to a new “cold wallet custodian,” which is essentially a way of storing assets offline without allowing remote control.

    “It does look as if the liquidators didn’t act fast enough to stop some kind of siphoning off of funds from FTX after it filed for bankruptcy, and that’s bad, but it just shows how complex this thing is,” Coppola said.

    Initially, some people were hoping that perhaps all the missing funds were liquidators or bankruptcy administrators trying to move assets to a more secure spot. But it would be unusual for that to happen on a Friday night, said Molly White, cryptocurrency researcher and fellow with the Library Innovation Lab at Harvard University.

    “It looked very different from what a liquidator might do if they were trying to secure the funds,” she said.

    White also said there are signs of possible insider involvement. “It seems unlikely that someone who is not an insider could have pulled off such a massive hack with so much access to FTX systems.”

    The collapse of FTX highlights the need for cryptocurrency to be regulated more like traditional finance, Coppola said.

    “Cyrpto isn’t in the very early stages anymore,” she said. “We’ve got ordinary people putting their life savings into it.”

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  • Prosecutors push 15-year sentence for Theranos’ CEO Holmes

    Prosecutors push 15-year sentence for Theranos’ CEO Holmes

    Federal prosecutors have asked a judge to sentence disgraced Theranos CE0 Elizabeth Holmes to 15 years in prison, arguing she deserves a lengthy prison term because her massive scheme duped investors out of hundreds of millions of dollars by falsely convincing them her company had developed a revolutionary blood testing device.

    Calling the case “one of the most substantial white collar offenses Silicon Valley or any other District has seen,” prosecutors vehemently rejected defense attorneys’ characterization that Holmes had been unfairly victimized, in part by media coverage.

    Holmes is set to appear for sentencing on Nov. 18 in federal court in San Jose, California, nearly a year after she was convicted of three felony counts of wire fraud and one felony count of conspiracy to commit fraud. She faces up to 20 years in prison for each count.

    “She repeatedly chose lies, hype and the prospect of billions of dollars over patient safety and fair dealing with investors,” Assistant U.S. Attorney Robert S. Leach wrote in a 46-page brief filed Friday. “Elizabeth Holmes’ crimes were not failing, they were lying — lying in the most serious context, where everyone needed her to tell the truth.”

    Holmes’ attorneys filed an 82-page document late Thursday calling for a lenient sentence of no more than 18 months, saying her reputation was permanently destroyed, turning her into a “caricature to be mocked and vilified.”

    Besides asking that Holmes receive a lengthy prison sentence, prosecutors called for the 38-year-old pay $803,840,309 in restitution for her role in the yearslong scheme that turned her into one of the most widely respected and immensely wealthy entrepreneurs in the Silicon Valley and the United States.

    “She preyed on hopes of her investors that a young, dynamic entrepreneur had changed healthcare. She leveraged the credibility of her illustrious board,” Leach wrote. “And, through her deceit, she attained spectacular fame, adoration, and billions of dollars of wealth.”

    Leach also pointed to how, after Wall Street Journal reporter John Carreyrou exposed the scheme, Holmes “attacked him, along with his sources” and desperately tried to pin the blame on others.

    “At trial, she blamed her COO (and longtime boyfriend), her board, her scientists, her business partners, her investors, her marketing firm, her attorneys, the media — everyone, that is, but herself,” Leach wrote.

    The company’s former chief operating officer, 57-year-old Ramesh “Sunny” Balwani, was convicted on 12 felony counts of investor and patient fraud in July during separate trial. He is scheduled to be sentenced Dec. 7.

    And Leach wrote that the health of actual patients was put into jeopardy by what Holmes had done.

    “As money was drying up, she went to market with an unproven and unreliable medical device,” he wrote. “When her lead assay developer quit as Theranos launched, she chillingly told the scientist: ‘she has a promise to deliver to the customer, she doesn’t have much of a choice but to go ahead with the launch.’”

    Holmes’ attorneys have argued that if U.S. District Judge Edward Davila does decide to send her to prison, she deserves a lenient sentence because she poses no danger to the public and has no prior criminal history.

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  • Steel Dynamics, LegalZoom rise; Flowers Foods fall

    Steel Dynamics, LegalZoom rise; Flowers Foods fall

    NEW YORK — Stocks that traded heavily or had substantial price changes Friday:

    Steel Dynamics Inc., up 40 cents to $96.74.

    The steel producer and metals recycler increased its stock buyback program by $1.5 billion.

    Toast Inc., up 48 cents to $20.48.

    The restaurant software provider raised its revenue forecast for the year.

    Doximity Inc., up $8.61 to $34.94.

    The medical social networking site beat analysts’ fiscal second-quarter earnings and revenue forecasts.

    LegalZoom.com Inc., up 98 cents to $10.44.

    The online platform for legal services raised its revenue forecast for the year.

    Mister Car Wash Inc., up $1.37 to $10.63.

    The car wash operator beat Wall Street’s third-quarter financial forecasts.

    Flowers Foods Inc., down $2.51 to $26.90.

    The bakery goods company maintained its earnings forecast for the year.

    Thermo Fisher Scientific Inc., up $18.10 to $538.68.

    The maker of scientific instruments and laboratory supplies announced a $4 billion stock buyback plan.

    Figs Inc., up 34 cents to $6.91.

    The maker of scrubs and other apparel for healthcare workers reported encouraging third-quarter financial results.

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  • US weather satellite, test payload launched into space

    US weather satellite, test payload launched into space

    LOS ANGELES — A satellite intended to improve weather forecasting and an experimental inflatable heat shield to protect spacecraft entering atmospheres were launched into space from California on Thursday.

    A United Launch Alliance Atlas V rocket carrying the Joint Polar Satellite System-2 satellite and the NASA test payload lifted off at 1:49 a.m. from Vandenberg Space Force Base, northwest of Los Angeles.

    Developed for the National Oceanic and Atmospheric Administration, JPSS-2 was placed into an orbit that circles the Earth from pole to pole, joining previously launched satellites in a system designed to improve weather forecasting and climate monitoring.

    NASA said there was no immediate data confirming deployment of the satellite’s electricity-producing solar array, but late in the day the space agency announced that it was fully extended.

    “The operations team will continue to evaluate an earlier solar array deployment issue, but at this time, the satellite is healthy and operating as expected. The team has resumed normal activities for the JPSS-2 mission,” a NASA statement said.

    The array has five panels that were collapsed in an accordion fold for launch. The fully deployed array extends 30 feet (9.1 meters).

    Mission officials say the satellite represents the latest technology and will increase precision of observations of the atmosphere, oceans and land.

    After releasing the satellite, the rocket’s upper stage reignited to position the test payload for re-entry into Earth’s atmosphere and descent into the Pacific Ocean.

    Called LOFTID, short for Low-Earth Orbit Flight Test of an Inflatable Decelerator, the device is an “aeroshell” that could be used to slow and protect heavy spacecraft descending into atmospheres, such as those of Mars or Venus, or payloads returning to Earth.

    According to NASA, effectively slowing heavy spacecraft will require greater atmospheric drag than can be created by traditional rigid heat shields that fit within the shrouds that surround payloads aboard rockets.

    The LOFTID shield inflates to about 20 feet (6 meters) in diameter.

    In the thin atmosphere of Mars, for example, having such a large shield would begin slowing the vehicle at higher altitudes and reduce the intensity of heating, according to the space agency.

    Video showed the inflated heat shield separate from the rocket and descend toward Earth. A camera aboard a recovery vessel a few hundred miles east of Hawaii showed the it splash down under a parachute.

    NASA said the shield was picked up by the boat, which then headed to recover a backup data module that was ejected during the descent.

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  • Musk ends remote work at Twitter, warns of troubles ahead

    Musk ends remote work at Twitter, warns of troubles ahead

    Elon Musk has emailed Twitter employees, most working remotely, ordering them to return to the office immediately for at least 40 hours a week and warning of “difficult times ahead.”

    A pair of Wednesday night missives seen by The Associated Press marked Musk’s first companywide message to employees who survived last week’s mass layoffs. Many have had to rely on the billionaire Tesla CEO’s public tweets for clues about Twitter’s future.

    “Sorry that this is my first email to the whole company, but there is no way to sugarcoat the message,” wrote Musk, before he described a dire economic climate for businesses like Twitter that rely almost entirely on advertising to make money.

    “Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn,” Musk said. “We need roughly half of our revenue to be subscription.”

    Musk’s memo followed a livestreamed conversation trying to assuage major advertisers Wednesday, his most expansive public comments about Twitter’s direction since he closed a $44 billion deal to buy the social media platform late last month and dismissed its top executives. A number of well-known brands have paused advertising on Twitter as they wait to see how Musk’s proposals to relax content rules against hate and misinformation affect the tenor of the platform.

    Musk told employees “the priority over the past ten days” was to develop and launch Twitter’s new subscription service for $7.99 a month that includes a blue check mark next to the name of paid members — the mark was previously only for verified accounts.

    An executive last week said Twitter was cutting roughly 50% of its workforce, which numbered 7,500 earlier this year.

    Musk had previously expressed distaste for Twitter’s pandemic-era remote work policies that enabled team leaders to decide if employees had to show up in the office. On Wednesday, he ordered all employees to return to the office Thursday.

    Musk told employees in the email that “remote work is no longer allowed” and the road ahead is “arduous and will require intense work to succeed.” He said he would personally review any request for an exception.

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  • GM recalls 340K big SUVs; daytime running lights can stay on

    GM recalls 340K big SUVs; daytime running lights can stay on

    FILE – This Oct. 16, 2019, file photo shows a sign at a General Motors facility in Langhorne, Pa. General Motors is recalling nearly 340,000 big SUVs in the U.S. because their daytime running lights may not shut off when the regular headlights are on. The National Highway Traffic Safety Administration says in documents Thursday, Nov. 10, 2022, that having both lights on at the same time could cause glare, increasing the risk of a crash. (AP Photo/Matt Rourke, File)

    The Associated Press

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  • Cryptocurrencies slump again amid fallout from FTX sale

    Cryptocurrencies slump again amid fallout from FTX sale

    NEW YORK — Bitcoin slumped to a two-year low and other digital assets sold off following the sudden collapse of crypto exchange FTX Trading, which has been forced to sell itself to larger rival Binance.

    Bitcoin traded around $17,645, and overnight fell to its lowest level since December 2020. Just a year ago, bitcoin hit an all-time high of $68,990. Ethereum, the second most actively traded digital currency, fell 10%.

    FTX agreed to sell itself to Binance after experiencing the cryptocurrency equivalent of a bank run. Customers fled the exchange after becoming concerned about whether FTX had sufficient capital.

    The sudden sale was a shocking turn of events for FTX CEO and founder Sam Bankman-Fried, who was hailed as somewhat of a savior earlier this year when he helped shore up a number of cryptocurrency companies that ran into financial trouble.

    Shares of publicly traded companies with heavy exposure to crypto were also down in early trading after falling sharply on Tuesday.

    Online trading platform Robinhood Markets fell more than 6% after sinking 19% Tuesday. Bankman-Fried’s holding company Emergent Fidelity Technology had a 7.5% stake in Robinhood as of Tuesday. Coinbase, the second-largest cryptocurrency exchange behind Binance, was down 6% in early trading.

    FTX is the latest cryptocurrency company this year to come under financial pressure as crypto assets have collapsed in value. Other failures include Celsius, a bank-like company that took in crypto deposits in exchange for yield, as well as an Asia-based hedge fund known as Three Arrows Capital.

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  • Elon Musk sells $3.95 billion worth of Tesla stock

    Elon Musk sells $3.95 billion worth of Tesla stock

    Twitter’s new owner and Tesla CEO Elon Musk sold nearly $4 billion worth of Tesla shares, according to regulatory filings.

    Musk, who bought Twitter for $44 billion, sold 19.5 million shares of the electric car company from Nov. 4 to Nov. 8, according to Tuesday’s filings with the Securities and Exchange Commission.

    He sold $7 billion of his Tesla stock in August as he worked to finance the Twitter purchase he was trying to get out of at the time. In all, Musk has sold more than $19 billion worth of Tesla stock since April, including those in Tuesday’s filings, likely to fund his share of the Twitter purchase.

    The takeover of Twitter has not been smooth and the social media platform has seen the exodus of some big advertisers in recent weeks in including United Airlines, General Motors, REI, General Mills and Audi.

    Musk acknowledged “a massive drop in revenue” at Twitter, which heavily relies on advertising to make money.

    Musk had signaled that he was done selling Tesla shares and the revelation that those sales continue left some industry analysts exasperated.

    “Our fear heading into the final days of the deal was that Musk was going to be forced to sell more Tesla stock to fund the disaster Twitter deal and ultimately those fears came true which speaks to some of the massive selling pressures on the stock of late,” wrote Daniel Ives at Wedbush. “For Musk who multiple times over the past year has said he is ‘done selling Tesla stock’ yet again loses more credibility with investors and his loyalists in a boy who cried wolf moment.”

    Most of Musk’s wealth is tied up in shares of Tesla Inc. On Tuesday, his personal net worth dropped below $200 billion, according to Forbes, but he is still the world’s richest person.

    Musk had lined up banks including Morgan Stanley to help finance the Twitter deal. His original share of the deal was about $15.5 billion, Ives estimated . But if equity investors dropped out, Musk would be on the hook to replace them or throw in more of his own money.

    “The Twitter circus show has been an absolute debacle from all angles since Musk bought the platform for all the world to see: from the 50% layoffs and then bringing back some workers, to the head scratching verification roll-out to users which many are pushing back on, to the constant tweeting in this political firestorm backdrop, and now…..selling more TSLA stock,” Ives wrote. “When does it end?”

    Shares of Tesla Inc., which were flat before the opening bell Wednesday, have fallen 8% this week and are down 46% this year, far outpacing broader market declines in what has been a dreadful year for investors.

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  • Adidas lowers earnings outlook after breakup with Yeezy

    Adidas lowers earnings outlook after breakup with Yeezy

    Shoe and sports apparel maker Adidas has lowered its earnings forecast for the full year to account for losses from ending its partnership with rapper Ye, formerly known as Kanye West, in response to Ye’s antisemitic remarks

    FRANKFURT, Germany — Shoe and sportswear maker Adidas on Wednesday lowered its earnings forecast for the full year to account for losses from ending its partnership with rapper Ye, formerly known as Kanye West, in response to the artist’s antisemitic remarks.

    Adidas cut its sales outlook for the year as part of its third-quarter earnings statement, to a low single digit increase from a mid-single digit increase, and net profit from continuing operations to 250 million euros ($252 million) instead of 500 million euros.

    The company, based in Herzogenaurach, Germany, had previously said ending the partnership with Ye’s Yeezy brand would cost it 250 million euros. The Yeezy brand accounted for up to 15% of Adidas’ net income, according to Morningstar analyst David Swartz. Adidas has ended production of all Yeezy products and ceased royalty payments.

    For weeks, Ye made antisemitic comments in interviews and social media, including a Twitter post earlier this month that he would soon go “death con 3 on JEWISH PEOPLE,” an apparent reference to the U.S. defense readiness condition scale known as DEFCON. He was suspended from both Twitter and Instagram.

    The company had already cut its year forecasts on Oct. 20, five days before it announced it was ending the relationship with Yeezy. The earlier outlook revision cited slowing activity in China, where severe restrictions aimed at limiting the spread of COVID-19 have held back the economy, and clearance of elevated inventory levels.

    Net income for the third quarter from continuing operations was 66 million euros, down from 479 million euros in the same quarter a year ago. The decrease largely reflected 300 million in one-time costs, most of it from winding down the company’s business in Russia.

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  • Elon Musk sells $3.95 billion worth of Tesla stock

    Elon Musk sells $3.95 billion worth of Tesla stock

    Twitter’s new owner and Tesla CEO Elon Musk has sold nearly $4 billion worth of Tesla shares, according to regulatory filings.

    Musk, who bought Twitter for $44 billion, sold 19.5 million shares of the electric car company from Nov. 4 to Nov. 8, according to Tuesday’s filings with the Securities and Exchange Commission.

    He sold $7 billion of his Tesla stock in August as he worked to finance the Twitter purchase he was trying to get out of at the time. In all, Musk has sold more than $19 billion worth of Tesla stock since April, including those in Tuesday’s filings, likely to fund his share of the Twitter purchase.

    Most of Musk’s wealth is tied up in shares of Tesla Inc. On Tuesday, his personal net worth dropped below $200 billion, according to Forbes, but he is still the world’s richest person.

    Musk had lined up banks including Morgan Stanley to help finance the Twitter deal. His original share of the deal was about $15.5 billion, Wedbush Analyst Dan Ives estimated . But if equity investors dropped out, Musk would be on the hook to replace them or throw in more of his own money.

    Tesla’s shares closed down $5.78, or 2.9%, at $191.30. The stock has lost 52% of its value since the start of this year. In comparison, the S&P 500 index has lost about 20% of its value so far this year.

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  • Disney posts Q4 results below Wall Street estimates

    Disney posts Q4 results below Wall Street estimates

    The Walt Disney Co. on Tuesday posted lower-than-expected profit and revenue for its fiscal fourth quarter even as its streaming services did well, sending its shares lower in after-hours trading.

    The company said it earned $162 million, or 9 cents per share, in the July-September quarter, nearly flat compared to $160 million, or 9 cents a share, a year earlier.

    Excluding one-time items, Disney earned 30 cents per share. Analysts, on average, were expecting earnings of 56 cents per share on that basis, according to FactSet.

    Revenue grew 9% to $20.15 billion from $18.53 billion. Analysts were expecting revenue of $21.27 billion.

    Disney said it ended its fiscal year with more than 235 million subscribers to its streaming services. That’s above analysts’ expectations of 231.5 million.

    The company plans to increase prices at Disney+ next month and also introduce a lower-priced version that includes advertisements. Currently, Disney+ is ad-free.

    Disney+ added 12.1 million subscribers to bring the total 164.2 million as of Oct. 1. In comparison, Netflix — which is also adding an ad-supported tier to its streaming service — has about 223 million subscribers.

    CEO Bob Chapek said the company still expects Disney+ to be profitable in 2024 “assuming we don not see a meaningful shift in the economic climate.”

    Shares in Disney, which is based in Burbank, California, fell almost 8% in after-hours trading.

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  • Germany may block sale of chip factory to Chinese-owned firm

    Germany may block sale of chip factory to Chinese-owned firm

    BERLIN — The German government may decide this week to block the sale of a chip factory to a Swedish subsidiary of a Chinese company, following a recent compromise over a Chinese shipping firm’s investment in a German container terminal.

    German company Elmos said late Monday that it was informed by the Economy Ministry that the sale of its factory in Dortmund to Silex Microsystems AB “will most likely be prohibited in the upcoming cabinet session.” The ministry previously “had indicated to the parties that the transaction most likely will be approved,” Elmos added.

    Silex is owned by Sai Microelectronics of China, according to German media. The planned 85 million-euro (dollar) sale was announced in December.

    The change comes as Germany struggles with the extent it should allow Chinese companies to invest in Europe’s biggest economy.

    The Cabinet, which will hold its weekly meeting Wednesday, reached a compromise late last month after officials argued over whether to allow China’s COSCO to take a 35% stake in a container terminal at the Hamburg port.

    Members of two junior parties in the governing coalition opposed that deal while Chancellor Olaf Scholz, a former Hamburg mayor, downplayed its significance.

    COSCO was cleared to take a stake below 25%, with a threshold above that allowing an investor can block a company’s decisions.

    Scholz traveled to Beijing last week, becoming the first leader from the Group of Seven leading industrialized nations to meet President Xi Jinping since the start of the COVID-19 pandemic. The visit, coming shortly after Xi further cemented his authoritarian rule at home, drew some criticism at home.

    Scholz is encouraging companies to diversify but not discouraging business with China. He said before the trip that “we don’t want decoupling from China” but that “we will reduce one-sided dependencies in the spirit of smart diversification.”

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  • Nintendo’s profit climbs on Switch machine, software sales

    Nintendo’s profit climbs on Switch machine, software sales

    TOKYO — Japanese video game maker Nintendo recorded a 34% surge in its profit in the first half of the fiscal year on strong sales of products for its Switch console like “Splatoon 3,” a paint-shooting game, the company said Tuesday.

    That prompted the maker of Pokemon and Super Mario games to raise its profit forecast for the April-March fiscal year to 400 billion yen ($2.7 billion), from an earlier projection for a 340 billion yen ($2.3 billion) profit.

    Even the better forecast is below what Nintendo earned in the last fiscal year, at 477.7 billion yen.

    Entertainment companies got a boost from the pandemic because people tended to stay home more, instead of going out. That advantage is likely to wear off as coronavirus restrictions ease.

    Japanese exporters like Nintendo are also getting a boost from a weaker yen, which lifts the value of their overseas earnings when translated into yen. The U.S. dollar, trading at about 110 Japanese yen a year ago, is now at nearly 150 yen.

    Net profit at Kyoto-based Nintendo Co. totaled 230.45 billion yen ($1.6 billion) during the six months through September, up from 171.8 billion yen the previous year.

    First-half sales totaled 656.97 billion yen ($4.5 billion), up 5% from 624.3 billion yen.

    Nintendo said shortages of computer chips and other components caused by COVID-19-related lockdowns and other disruptions hurt production. Nintendo Switch sales fell 19% from the previous year to 6.68 million units.

    Other Japanese companies like Sony Corp. and Toyota Motor Corp. have also been hurt by the chips shortage.

    Other popular Nintendo game software released during the last six months include “Nintendo Switch Sports,” which sold 6.15 million units, and “Mario Strikers: Battle League,” at 2.17 million units.

    The Mario Kart and Kirby games, released earlier, also sold briskly, as did offerings from outside publishers, resulting in 15 million-seller games for the Switch during the six month period.

    Nintendo’s software sales grew by 1.6% year-on-year to 95.41 million units. Downloadable online games also did well, it said.

    Nintendo said the crunch in chips and other parts would likely improve gradually over the coming months. Christmas and the New Year’s holidays are crucial times for Nintendo’s business.

    “By continually working to front-load production and selecting appropriate transportation methods in preparation for the holiday season, we will work to deliver as many consoles as possible to consumers in every region of the world,” the company said in a statement.

    In game software, “Bayonetta 3” is set for release in October, followed by “Pokémon Scarlet” and “Pokémon Violet” in November, “Fire Emblem Engage” in January 2023, and “Kirby’s Return to Dream Land Deluxe” in February 2023, according to Nintendo.

    Nintendo expects to sell 19 million Switch consoles in the current fiscal year. It earlier expected to sell 21 million Switch machines. Cumulative Switch sales around the world have topped 114 million machines.

    ———

    Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

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  • Renault, China’s Geely announced powertrain joint venture

    Renault, China’s Geely announced powertrain joint venture

    Renault SA and China’s Geely say they plan to launch a joint venture to produce gasoline-powered and hybrid powertrains, adding to a series of partnerships between global automakers to share soaring technology costs

    BEIJING — Renault SA and China’s Geely announced plans Tuesday for a jointly owned venture to produce gasoline-powered and hybrid powertrains, adding to a series of partnerships between global automakers to share soaring technology costs.

    The venture will have 17 plants with annual production capacity of 5 million powertrains, five research and development centers on three continents and some 19,000 employees, the companies said. They gave no financial terms but said each partner will own half of the venture.

    It will supply brands owned by or linked to Renault and Geely including Nissan, Mitsubishi, Volvo Cars, Renault, Dacia, Geely Auto, Lynk & Co. and Proton, the companies said. They said it might later supply third-party brands.

    Global automakers have been forming partnerships over the past decade to share the multibillion-dollar development costs of electric vehicles and more efficient gasoline engines.

    The Renault-Geely agreement will “enable the creation of a global leader in hybrid technologies to provide highly efficient advanced solutions for automakers around the world,” Eric Li, chairman of Geely Holding Group, said in a statement.

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  • EXPLAINER: Bikes, batteries and blazes spark concern in NYC

    EXPLAINER: Bikes, batteries and blazes spark concern in NYC

    NEW YORK — A weekend fire that injured over three dozen people — and forced firefighters to use ropes to pluck people from a 20th-story window — is drawing attention to a rising concern in New York City: battery fires that can arise in the electric bikes and scooters that have proliferated here.

    City officials are considering new laws after the fire department counted nearly 200 blazes and six fire deaths this year tied to problems with lithium-ion batteries in such “micromobility” devices.

    WHAT ARE THESE BATTERIES? ARE THEY THE SAME TECH USED IN PHONES AND CARS?

    Lithium-ion batteries are a Nobel Prize-winning innovation that entered the market in the early 1990s. Hailed as rechargeable, lightweight, powerful, durable and safe, the batteries have been envisioned as a key to greening the world’s energy supply by storing energy, including from the sun, wind and other renewable sources.

    The technology has woven its way into many people’s everyday lives, powering phones, laptop computers, vehicles and more.

    WHY CAN THEY CATCH FIRE?

    The batteries’ electrolyte — a solution that lets electrical current flow — is flammable, explains Massachusetts Institute of Technology materials chemistry professor Dr. Donald Sadoway. The substance was chosen for its ability to handle the voltage involved, but fires can happen if the batteries are overcharged, overheated, defective or damaged, for instance.

    Over the years, problems have periodically triggered fires involving laptops, cellphones, hoverboards, electric vehicles, airplanes and battery power storage installations. A U.N. aviation agency said in 2016 that lithium-ion batteries shouldn’t be shipped on passenger planes.

    Battery industry group leader James Greenberger notes that other energy sources aren’t trouble-free, and he says there’s nothing inherently unsafe about the batteries. But he said the industry is concerned about the fires lately in New York and worries that they could scare off consumers.

    “This shouldn’t be happening and we need to figure out what’s going on,” said Greenberger, the executive director of NAATBatt — the North American trade association for advanced battery technology developers, manufacturers and users.

    WHY ARE E-BIKES AND SCOOTERS GETTING SCRUTINY IN NEW YORK?

    The city has seen “an exponential increase” in fires related to faulty lithium-ion batteries in recent years, Chief Fire Marshal Daniel Flynn said. He said there have been more deaths and injuries already this year than in the past three years combined.

    “It’s a big issue,” he said at a news conference Monday, describing fires that occur without warning, grow rapidly and are tough to extinguish.

    The batteries “fail almost in an explosive way — it’s like a blowtorch,” he said.

    Saturday’s fire in a Manhattan apartment was sparked by a malfunctioning e-bike battery that residents were attempting to charge and left unattended while they fell asleep, he said. They were trapped when the battery, plugged in by the front door, caught fire, Flynn said.

    Electric bikes and scooters have become popular, non-gasoline-burning ways to make deliveries, commute and zip around a city that has promoted cycling in recent decades. For the “deliveristas” who carry restaurant takeout orders, the bikes are crucial tools of the trade.

    “What these workers have learned over the years, and they know it well, is that, like any equipment, it requires the maintenance required,” said Hildalyn Colón Hernández, a spokesperson for worker advocacy group Los Deliveristas Unidos. She said many workers have used their batteries for years without a hitch.

    WHAT’S CAUSING THE PROBLEM?

    There are different opinions. Greenberger, the industry group director, suggests there’s too little quality control on some of the largely imported batteries. Sadoway, the scientist, believes “we don’t have the appropriate protective measures” on e-bikes and scooters themselves to monitor the batteries for problems.

    Colón Hernández, the delivery worker advocate, thinks there need to be tougher standards around the batteries, such as regulations for businesses that sell or service them.

    WHAT IS NEW YORK CITY DOING ABOUT THIS?

    The Fire Department has repeatedly issued warnings and safety tips over the past year. Fire Commissioner Laura Kavanagh asked the federal Consumer Product Safety Commission in August to consider new regulations. Mayor Eric Adams pointed again to the CPSC on Monday.

    “The responsibility of navigating safe and unsafe batteries on the market should not fall to hard-working New Yorkers,” the mayor, a Democrat, said in a statement.

    Some city lawmakers want to take their own steps.

    A City Council committee has set a Nov. 14 hearing on various proposals. Some would require public education campaigns or safety reports. Another would prohibit the sale of some secondhand lithium-ion batteries, or e-bike or scooter batteries without certain seals of approval.

    Meanwhile, fire officials continue to urge everyone not to leave batteries to charge unattended, to check that they’re not damaged or near a heat source, and to make sure the batteries, chargers, cords and devices are all from the same manufacturer and used as instructed.

    “We understand the benefits that these batteries pose to our communities, and we want to encourage use of them, but safe use,” Flynn said. “So understand that it does pose a danger, and just use them safely.”

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