|Bid||33.93 x 1000|
|Ask||33.93 x 3200|
|Day's Range||33.78 - 34.17|
|52 Week Range||28.63 - 45.86|
|Beta (5Y Monthly)||0.57|
|PE Ratio (TTM)||16.65|
|Earnings Date||Feb 05, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||34.05|
Twitter is pouring a little more fuel on the messaging fire. It's added a heart+ button to its direct messaging interface which lets users shortcut to a pop-up menu of seven emoji reactions so they can quickly express how they're feeling about a missive. Emoji reactions can be added to text or media messages -- either via the heart+ button or by double tapping on the missive to bring up the reaction menu.
In addition to the threat of hacking and interference from foreign actors ahead of the November elections, tech giants like Facebook micro-target users, serving up hyper-specific ads that mirror an individual’s beliefs, interests and opinions.
(Bloomberg Opinion) -- Get Jonathan Bernstein’s newsletter every morning in your inbox. Click here to subscribe.After two days of the Senate impeachment trial, it’s time for one cheer for that much-maligned group, Senate Republicans who are not always knee-jerk defenders of President Donald Trump.Only one cheer. The trial leaves much to be desired. The request for witnesses and documents made by the impeachment managers from the House of Representatives should be a no-brainer, not something to maybe possibly be granted down the road. And yet when the Washington Post’s Robert Costa reported that Republicans were looking to Senator Lamar Alexander of Tennessee as a key figure on the question of whether there would be enough votes to allow witnesses to be called, I noticed that the reactions on Twitter were united in assuming that Alexander would ultimately do whatever Trump and Senate Majority Leader Mitch McConnell wanted.I have plenty of criticisms of Alexander and other supposed defenders of the Senate. They have allowed Trump to treat Congress with contempt. They’ve approved clearly unqualified nominees. They’ve failed to use their leverage to push Trump to give up his lawless ways. But I’ve watched two days of the impeachment trial so far and I’m sure of one thing: It’s not what Trump wanted. It’s almost certainly not what McConnell wanted. In fact, it’s not what I and some others feared — a full-on show trial focused on smearing former Vice President Joe Biden, House Speaker Nancy Pelosi and any other Democrat whom Trump wants to target. There’s been a bit of that, and I’m sure there will be more. It’s what the president’s lawyers want to do with their time. But if those who believe that all Republicans will ruthlessly exploit every opportunity by taking maximum advantage of their partisan power were correct, we would never have had hours and hours of Democratic House managers speaking on the Senate floor, and to the TV cameras, about Trump’s malfeasance. Indeed, if it was up to McConnell, I think the only question would be whether he would have dismissed the trial on Day One — or worse. The reporting on McConnell, and just everything we know about him, suggests that the only reason he didn’t just throw the whole thing out is that four or more Republicans insisted on something that at least looked like a fair trial. And that’s given House Intelligence Committee Chair Adam Schiff and the rest of his House manager team a chance to make their case to the nation, whether Republican senators are listening or not.I don’t want to oversell this: The appearance of a marginally fair trial is a pretty minimal thing to grant, especially if eventually the House’s request for subpoenas is denied. Republicans haven’t pushed back against restrictions on the media. They haven’t stopped McConnell’s express-train scheduling, although they did slow it a bit. And of course, there’s still nothing close to a guarantee of calling witnesses and securing other evidence. So at this point I’m only giving one cheer for whichever Republicans stood up to McConnell (and Trump). But it’s not nothing.1\. Julie Novkov at A House Divided on the history of U.S. impeachments beyond the presidency.2\. Lori Poloni-Staudinger and J. Cherie Strachan on women running for president.3\. Nate Silver on what the polls are saying after the Jan. 14 Democratic debate.4\. Amelia Thomson-DeVeaux on Elizabeth Warren and electability. 5\. Nate Cohn on how things look for Bernie Sanders.6\. My Bloomberg Opinion colleague Noah Smith on housing.7\. And Ronald A. Klain and Nicole Lurie on what the U.S. should be doing to lower the risk of infectious-disease epidemics.Get Early Returns every morning in your inbox. Click here to subscribe. Also subscribe to Bloomberg All Access and get much, much more. You’ll receive our unmatched global news coverage and two in-depth daily newsletters, the Bloomberg Open and the Bloomberg Close.To contact the author of this story: Jonathan Bernstein at firstname.lastname@example.orgTo contact the editor responsible for this story: Jonathan Landman at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Jonathan Bernstein is a Bloomberg Opinion columnist covering politics and policy. He taught political science at the University of Texas at San Antonio and DePauw University and wrote A Plain Blog About Politics.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The incendiary claim that the crown prince of Saudi Arabia was involved in hacking Amazon.com Chief Executive Officer Jeff Bezos’s mobile phone will refocus critical attention on the controversial young leader just as he was seeking to repair rifts and build for a year in the global spotlight.United Nations experts on Wednesday called for an investigation into the allegations, first reported by The Guardian. They pointed to information that suggested a possible role for Prince Mohammed, 34, in the surveillance of Bezos, who also owns the Washington Post, in an effort to influence the newspaper’s reporting on Saudi Arabia and in light of separate claims the prince was involved in the 2018 murder of Post columnist Jamal Khashoggi.A probe would take time, yet the damage to Saudi Arabia’s image the allegations bring could be more immediate, with speculation swirling as the kingdom prepares to host G-20 finance ministers next month. That’s one of dozens of events meant to showcase the prince’s economic program to transform his nation and lure billions in foreign investment ahead of the grouping’s main extravaganza in November.The allegations reinforce the existing perception among some “that he’s not a good guy,” said Kamran Bokhari, founding director of the Center for Global Policy in Washington. People have already made up their mind about Prince Mohammed, Saudi Arabia’s de facto ruler, and unless he enacts major political reforms, it’s unlikely public opinion will shift in the West, he said.Officials have spent the past year trying to rebuild the country’s reputation after Khashoggi’s killing at the Saudi consulate in Istanbul. They have won support from President Donald Trump, who defended the prince and shielded the kingdom against any major retaliation by U.S. lawmakers. The government pulled off a flagship investment conference in October and then sold an initial stake in its oil giant Aramco against the backdrop of a missile attack that temporarily knocked out its biggest crude processing facility.Riyadh has also attempted to disentangle from regional problems with limited results. It showed openness to talks in a long-running Gulf dispute with Qatar, helped end fighting between two factions that were Saudi allies in the war in Yemen, and sought de-escalation with chief foe Iran, which it blames for the missile strike -- rejecting Tehran’s denials.A Saudi court sentenced five people to death for Khashoggi’s murder, who had criticized Prince Mohammed’s rule in his writing, while three others were given prison terms totaling 24 years in a move designed to close a damaging chapter, at least locally. The kingdom denies the prince was involved in the killing and the court cleared his former top aide.“We have seen in recent months a far more consultative and multi-lateral approach, partly triggered by doubts about U.S. reliability and given the fact of the chairmanship of the G-20,” said James M. Dorsey, a Middle East scholar at Nanyang Technological University in Singapore.The hacking report doesn’t help in the rebranding of Saudi Arabia and Prince Mohammed, he said. If Bezos, the world’s richest man, can be a target, what about other people doing business in the kingdom?“If you are a businessman communicating with the Saudis, you are going to become a lot more cautious and ask yourself -- am I being monitored?” Dorsey said.Saudi Arabia has promoted a veneration of the crown prince in an effort to swing nationalist opinion behind his reforms, which have been accompanied by a crackdown on dissent at home. On Thursday, a hashtag urging Saudis to boycott Amazon products was trending on Twitter, with users defending Prince Mohammed, suggesting other online shopping companies and posting photos of Bezos sitting next to or hugging Khashoggi’s fiancee.In a response to queries citing an unidentified official, Saudi Arabia’s information ministry rejected news reports on the Bezos phone breach as “wholly unsubstantiated allegations,” and said it doesn’t conduct or condone such illicit activities.‘Demonstrably False’“We request the presentation of any supposed evidence and the disclosure of any company that examined forensic evidence so that we can show it is demonstrably false,” it said Wednesday.Saudi Arabia is a key U.S. ally in the Middle East and the Trump administration rebuffed talk of the prince’s involvement in the Khashoggi murder despite reported CIA findings that he ordered it.Read more: A QuickTake explains the Saudi crown prince Even so, Washington has been pushing Riyadh and other Gulf states to end the nearly three-year diplomatic and trade crisis with Qatar, saying it was playing into the hands of Iran at a time when the U.S. is seeking to weaken the Islamic Republic’s miltary and economy.Saudi Arabia had shown an openness to talks with Doha ahead of taking over the G-20 chairmanship in December, raising hopes among Gulf officials of an end to the crisis.Riyadh hosted Qatar’s foreign minister late last year to discuss the regional row, but those efforts have since lost momentum, according to three Gulf officials briefed on the discussions who asked not to be named.While the hack reports are seen as denting the kingdom’s image, investors are unlikely to pull back, after already weathering the Khashoggi fallout.Bond OrdersSome Western companies distanced themselves from the kingdom in the months after his killing -- their executives staying away from a 2018 investment conference -- but others continued to pour in money. That’s continued. The government sold $5 billion of debt its first Eurobond offer of the year on Tuesday, with orders worth more than $23 billion.Several overseas investors in Saudi Arabia said it was too early to gauge the impact of the Bezos claims, but said they were unlikely to change their existing views on the kingdom.Ayham Kamel, head of Middle East and North Africa research at Eurasia Group, a consultancy, said that while individual countries would proceed with the kingdom at their own pace, the trajectory was unlikely to change.“There will be incidents along the way that take things off-track for short periods of time and just make it very difficult for the kingdom to define this on its own,” he said.\--With assistance from Simone Foxman and Fiona MacDonald.To contact the reporters on this story: Sylvia Westall in Dubai at firstname.lastname@example.org;Donna Abu-Nasr in Riyadh at email@example.comTo contact the editors responsible for this story: Lin Noueihed at firstname.lastname@example.org, ;Riad Hamade at email@example.com, ;Rosalind Mathieson at firstname.lastname@example.org, Mark WilliamsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The 20-year-old student, Luo Daiqing, allegedly tweeted some “indecent” images of a “national leader” between September and October 2018, according to the court paperwork. “While he was studying at the University of Minnesota," Luo "used his Twitter account to post more than 40 comments denigrating a national leader's image and indecent pictures," which "created a negative social impact," says the court document dated Nov. 5, 2019.
(Bloomberg Opinion) -- It’s hard to underestimate just how much damage Crown Prince Mohammed bin Salman of Saudi Arabia has done to his country in the last 15 months. Yet it’s also difficult to see how the U.S. can defend its interests in the region without his cooperation.The damage became visible on Oct. 2, 2018, when a Saudi hit team lured Washington Post columnist Jamal Khashoggi to the Saudi consulate in Istanbul to murder him. The latest revelation is a hacking campaign against Jeff Bezos, the founder and CEO of Amazon.com Inc., who also owns the Washington Post. As a UN report released Wednesday notes: “The information we have received suggests the possible involvement of the Crown Prince in surveillance of Mr. Bezos, in an effort to influence, if not silence, The Washington Post’s reporting on Saudi Arabia.”A security consultant for Bezos made a version of this claim last year. The UN report fills in more details. It says that Bezos and the crown prince, known as MBS, attended a dinner on April 4, 2018, where the two men exchanged their WhatsApp contact information. On May 1, a video was sent to Bezos from MBS’s account that included malware that allowed the Saudis to keep tabs on his phone. More than six months later, on Nov. 8, MBS trolled Bezos, sending him a photo of a woman that resembled his paramour. This was months before the National Enquirer published a story about Bezos and his extramarital affair.UN reports are not always reliable, of course. The Wall Street Journal reported last March that the Enquirer got its scoop about the Bezos affair from his lover’s brother, to whom it paid $200,000. That said, the specifics of the report support what’s widely known about the Saudis’ extensive cyberespionage operation. In November, for example, the Justice Department charged two former employees of Twitter and a Saudi national with spying for Saudi Arabia. In October, Facebook sued an Israeli company, alleging it had compromised the accounts of 1,400 users of WhatsApp, which Facebook owns. That company has also sold its products to Saudi Arabia.The company, the NSO Group, issued a statement Wednesday saying its technology “cannot be used on U.S. phone numbers” and “was not used in this instance.” And the UN report, it should be noted, does not explicitly say that it was, noting that the hack “likely was undertaken” by the use of spyware “such as the NSO Group’s Pegasus-3 malware.”It’s worth paying attention, however, to something else in the NSO Group’s statement. These kinds of hacks “put a strain on the ability to use legitimate tools to fight serious crime and terror.”This is an understatement. Saudi Arabia has already shown that it cannot be trusted with powerful cybertools such as those developed by the NSO Group. Technology that is vital to combating jihadist groups should never be used to target dissidents — or the owners of U.S. newspapers, for that matter.A straightforward response to the latest episode of this Saudi scandal would be to ban any exports of advanced cyberweapons to the regime. And it’s a tempting proposition.Before Western governments take that step, they might recall that it took years after the Sept. 11 attacks to get Saudi Arabia to fully commit to fighting the jihadist groups its religious leaders had inspired and some of its wealthiest citizens had financed. MBS represents a departure from this double game. His reforms infuriate not just the liberal activists he jails and disappears, but the reactionaries who prospered under the previous system.If it were just another dictatorship, it would be easy enough to quarantine Saudi Arabia until it reforms. Unfortunately, Saudi Arabia remains a vital partner against Iran and the jihadists in the Middle East. Its enemies are also the West’s enemies. For now, as my Bloomberg Opinion colleague Bobby Ghosh notes, the challenge is to press MBS to stop acting like the thugs he’s fighting.To contact the author of this story: Eli Lake at email@example.comTo contact the editor responsible for this story: Michael Newman at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Eli Lake is a Bloomberg Opinion columnist covering national security and foreign policy. He was the senior national security correspondent for the Daily Beast and covered national security and intelligence for the Washington Times, the New York Sun and UPI.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Google engineers said a tool Apple Inc. developed to help users avoid web tracking is fundamentally flawed and creates more problems than it solves.The Intelligent Tracking Prevention feature on Apple’s Safari web browser, which is meant to block tracking software used by digital advertisers, can be abused to do the exact opposite, according to a paper released Wednesday by Google researchers. Google told Apple about the problem in August, and in December the iPhone maker published a blog post saying it had fixed the issues and thanking Google for its help.But Wednesday’s paper concluded that the problems go beyond the issues that Apple addressed. Instead of making a big list of cookies to block, Apple’s ITP continuously learns what websites users visit and which kinds of cookies try to hitch a ride. Over time, this creates unique cookie-blocking algorithms for each web surfer that can be used to identify and track them, according to the paper.“I can assure you that they still haven’t fixed these issues,” Justin Schuh, engineering director for Google’s Chrome browser, said on Twitter. Apple’s December blog post “didn’t disclose the vulnerabilities or appropriately credit the researchers,” he added. Apple said the bugs mentioned in the report were patched in December, but declined to comment further.This isn’t the first time the two tech giants have clashed over privacy. Apple Chief Executive Officer Tim Cook has criticized internet companies for collecting too much personal information, and last year Google researchers reported a two-year long vulnerability in the iPhone maker’s software. Google’s Chrome and Apple’s Safari are two of the most popular web browsers, with Chrome used by more people overall but Safari dominating on iPhones. Apple has been touting Safari privacy features to persuade more consumers to use it. Apple first introduced Intelligent Tracking Prevention in 2017. The tool targets cookies, bits of code that let marketers follow people around the web and send them targeted ads.Google refused to block cookies for years, arguing that targeted ads help publishers and keep the internet free. But last week, the internet giant said it would eventually phase them out, setting off a race among advertisers to adapt. Privacy advocates have lauded Apple’s approach to tracking, and criticized Google for taking so long to do the same. But the paper suggests Apple may have to go back to the drawing board to find a new way to block tracking.“This bug is quite counter-intuitive, but rather very serious,” said Lukasz Olejnik, an independent cybersecurity researcher.To contact the reporter on this story: Gerrit De Vynck in New York at email@example.comTo contact the editors responsible for this story: Alistair Barr at firstname.lastname@example.org, Jillian WardFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- U.S. Representative Adam Schiff began the House impeachment managers’ case for the conviction of President Donald Trump with a masterful opening statement in the U.S. Senate on Wednesday.In a bit over two hours — especially impressive after a session that ended well after midnight on Tuesday — Schiff did an excellent job of weaving together the basic facts of Trump’s attempt to pressure a foreign government to help his 2020 re-election campaign, and to explain why it should persuade senators to remove the president from office. He effectively used video clips from House impeachment hearings to make the argument more vivid. And he included just enough poetry to drive home the importance of the president’s actions and the Senate’s choices.As he summed up the first article of impeachment, charging Trump with pressuring Ukraine to launch a criminal investigation of a leading Democratic rival, former Vice President Joe Biden, Schiff, who is chair of the House Intelligence Committee, talked not about Trump but about Russian President Vladimir Putin, and about the differences between Putinist autocracy and U.S. democracy. It was a powerful framework for thinking about why Trump’s actions should not be excused or ignored.I can hear a lot of cynics, however, humming their chorus. It doesn’t matter, the lyrics go; everyone has made up their partisan minds. And it’s almost certainly true that a somewhat better or somewhat worse presentation from either side isn’t going to make the difference between whether Trump will be acquitted — the almost certain result at this point — or convicted and removed. Indeed, there’s evidence that a lot of Republican senators aren’t bothering to pay attention.And ...Nevertheless, don’t believe the cynics.For one thing, it is certainly possible that a few of the less-zealous partisans in the Senate — Republicans such as Tennessee’s Lamar Alexander, Maine’s Susan Collins, Alaska’s Lisa Murkowski and Utah’s Mitt Romney, and Democrats including West Virginia’s Joe Manchin, Alabama’s Doug Jones, and Arizona’s Kyrsten Sinema — could change their votes on procedural matters and even possibly their final votes based in part on what they hear during the trial. And, for that matter, on how the trial presentations are covered by the press. Trial oratory wouldn't be the only factor, or even a major factor, but could it matter at the margins? Sure.But that’s only the beginning. The Senate trial is receiving tons of media coverage. It’s going to affect how the people paying attention, including reporters and editors, think about impeachment and about Trump. It could have effects on Trump’s approval ratings, which in turn could make it easier or harder to get things done. It might even, at the margins, have small effects on the 2020 elections. It could have effects, too, on Trump’s professional reputation, which also could make it easier or harder for him to convince people to go along with things he wants. There are also a lot of specific precedents that will be set about how Senate impeachment trials work in the future. This trial, whatever the verdict, will either raise or lower the bar for what a future House of Representatives might do, and how a future Senate is likely to act. What happens in the trial will also affect the course of the presidency. Will future presidents take the threat of impeachment seriously? Or will they think of it as a small annoyance that isn’t worth avoiding? Will they feel secure in resisting what has been up to now routine congressional oversight, or will they accept that bargaining with Congress is part of the rules of the game? Will they feel emboldened to ignore the law when it comes to appropriations, or will they accept that spending law is binding? All presidents take domestic politics into account in foreign affairs, and rightly so, but will future presidents remember this episode and feel licensed to conduct foreign affairs for their own narrow personal interest — or will they remember this episode and exercise caution?Or, to put it more or less as Schiff did: Will the U.S. wind up a stronger democracy after this trial — or a lesser one?The answer to all those questions depends in part on how the public comes to understand what happened in 2019-2020. And that understanding will be, in part, created by what happens in the Senate right now, how it is reported, and how the citizenry reacts to it. The public assessment will be affected by the performances of the House managers and the president’s lawyers. So yes, the cynics are surely correct that senators aren’t likely to be persuaded by Schiff, his colleagues or his trial adversaries when they finally vote on removing the president. But that doesn’t mean that the conduct of the trial won’t affect the rest of Trump’s administration and the future of U.S. democracy. To contact the author of this story: Jonathan Bernstein at email@example.comTo contact the editor responsible for this story: Jonathan Landman at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Jonathan Bernstein is a Bloomberg Opinion columnist covering politics and policy. He taught political science at the University of Texas at San Antonio and DePauw University and wrote A Plain Blog About Politics.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- In the spring of 2018, Saudi Arabia’s crown prince, Mohammed Bin Salman, arrived in the U.S. for a three-week cross-country tour to pitch a progressive vision for his kingdom, including an economic plan less reliant on oil, and to charm America’s elite.He visited MIT and Harvard, talked space travel with Richard Branson and hobnobbed with celebrities, including Oprah Winfrey, according to media reports. The crown prince also met with business executives, including Amazon.com Inc. Chief Executive Officer Jeff Bezos.It was an encounter likely weighted with tension. Both Amazon’s e-commerce site as well as its most profitable business, Amazon Web Services, had been pushing to expand in the Middle East, including in Saudi Arabia. At the same time, Jamal Khashoggi, a columnist at the Bezos-owned Washington Post, had written columns sharply critical of the crown prince including one, while Bin Salman was visiting the U.S., saying that “replacing old tactics of intolerance with new ways of repression is not the answer.” They met at a small dinner in Los Angeles on April 4. It’s not clear what the two men talked about, but it apparently went well enough that they exchanged phone numbers.Nearly four weeks later, on May 1, Bezos received a WhatsApp message from the crown prince’s account, which arrived “unexpectedly and without explanation, meaning it was not discussed by the parties in advance of being sent,” according to a November 2019 report by FTI Consulting Inc., a business advisory firm, which was published by Vice.The message included a 4.22 MB video. Within hours of receiving it, “a massive and unauthorized exfiltration of data from Bezos’s phone began,” according to the report.News of the alleged hack was reported by The Guardian on Tuesday and confirmed Wednesday by two United Nations experts, who said in a statement, “The information we have received suggests the possible involvement of the crown prince in surveillance of Mr. Bezos, in an effort to influence, if not silence, The Washington Post’s reporting on Saudi Arabia.”The Saudi Embassy has denied involvement in the hack, calling the allegations “absurd.”The details from the U.N. statement add a remarkable twist to last year’s already remarkable accusation by Bezos that the National Enquirer tried to blackmail him by threatening to publish embarrassing personal photos and texts from him a month after it published an article saying he was having an extramarital affair.Bezos’s security team launched an investigation into how the texts leaked, led by security consultant Gavin de Becker. It didn’t take long for De Becker to home in on Saudi Arabia. De Becker said the Saudi government was targeting Bezos as the owner of the Washington Post.A few months earlier, in October 2018, Khashoggi was murdered by agents of the Saudi government and the Washington Post published “ever-expanding revelations” about the role of the Saudi government and of the crown prince personally, according to the U.N. experts. That was soon followed by an online campaign against Bezos: In November 2018, the top-trending hashtag on Saudi Twitter was “Boycott Amazon.”On Nov. 8, 2018, Bezos received another message from the crown prince’s WhatsApp account, when Bezos and his wife were exploring a divorce and before his marital problems became public, according to the FTI Consulting report. It showed a picture of a woman who resembled Lauren Sanchez, with whom Bezos was having a then-secret relationship, and read: “Arguing with a woman is like reading the Software License Agreement. In the end you have to ignore everything and click I agree,” according to the report.De Becker’s inquiry included interviews with current and former executives at the National Enquirer’s parent company, American Media Inc., discussions with Middle East experts and cybersecurity officials who have tracked Saudi spyware. He concluded, in a March 30, 2019 column in the Daily Beast “with high confidence that the Saudis had access to Bezos’ phone and gained private information.”But the investigation wasn’t over. De Becker hired FTI Consulting on Feb. 24, 2019 to do an analysis of Bezos’ iPhone X, according to the company’s report. The analysis was conducted in a “well-equipped and secure lab environment, including forensic imaging of Bezos’ phone and analysis of phone behavior in a sandboxed network,” the report says.What the FTI investigators found was that the amount of data being transmitted out of Bezos’s phone changed dramatically after receiving the video file from the crown prince’s account. His phone averaged about 430 KB of egress per day in the six months prior to receiving the WhatsApp video. Hours later, the egress jumped to 126 MB, according to the report.The FTI Consulting report was completed in November, and was passed along to experts at the U.N. who were already looking into the Khashoggi murder. One of those experts, David Kaye, the U.N. special rapporteur on the promotion and protection of the right to freedom of opinion and expression, said evidence shared with his team was reviewed by four independent experts, who asked some questions of the authors, leaving the U.N. team ultimately satisfied with the results.Kaye said they sent a letter to the Saudi government warning that their statement was coming.“The allegations here are very grave, they’re about a foreign government compromising the communications account of a phone of an American citizen,” Kaye said in an interview. “There’s clearly enough for federal authorities to examine this.”The crown prince hasn’t yet addressed the allegations. But on Feb. 16, 2019, two days after Bezos had received a briefing on the Saudi online campaign against him, his WhatsApp account sent another message to Bezos telling him to be skeptical of what he was hearing.“Jeff all what you hear or told to it’s not true and it’s matter of time tell you know the truth,” the message says, according to the FTI Consulting report. “There is nothing against you or Amazon from me or Saudi Arabia.”\--With assistance from Matt Day.To contact the reporters on this story: David Wainer in New York at email@example.com;Alyza Sebenius in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Andrew Martin at email@example.com, Molly SchuetzFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Chinese internet giant ByteDance Inc. is seeking a new chief executive officer for its TikTok business, a hugely popular video app that American politicians have targeted as a potential security threat.The company has interviewed candidates in recent months for the CEO role, which would be based in the U.S., according to people familiar with the matter, who asked not to be named because the search is private. In one potential scenario, the new CEO would oversee TikTok’s non-technical functions, including advertising and operations, while current TikTok chief Alex Zhu would continue to manage the majority of product and engineering out of China, one person said. The hiring process is ongoing and the envisioned role could still change depending on who is selected, the people added.Zhu, who co-founded a predecessor to TikTok called Musical.ly, took over the business last year, though ByteDance also has a Chinese version of TikTok called Douyin, which is run by a different management team. The eventual corporate structure involving Zhu and the new CEO is still unclear, the people said, and Bytedance has hired executive search firm Heidrick & Struggles to help lead the process.A spokesman for TikTok declined to comment. Heidrick & Struggles didn’t respond to a request for comment.The new hire won’t affect the role of Vanessa Pappas, who currently oversees TikTok’s U.S. operations from Los Angeles, one person said. In a blog post Wednesday, Pappas wrote that TikTok has opened a new Culver City office with plans to “scale our local operations,” and now has more than 400 U.S. employees.“While we are a global company, having a permanent office in LA speaks to our commitment to the U.S. market and deepens our bonds with the city, and the talent and companies, that call it home,” she wrote.Beijing-based ByteDance, led by CEO Yiming Zhang, has built TikTok and Douyin into some of the world’s most popular apps with more than a billion users between them who share short video clips of things like lip-syncing and dance videos. That has made ByteDance the most valuable tech startup in the world, challenging the dominance of U.S. companies like Facebook Inc. and Snap Inc.The app is growing fast and drawing a lot of attention from advertisers and competitors. Snap CEO Evan Spiegel said over the weekend he thought TikTok alone could grow to be larger than Instagram, which has more than 1 billion active users and has been the go-to social media destination for young people in the U.S.With rising tensions between China and the U.S., however, American politicians have warned the app represents a national-security threat. The Committee on Foreign Investment in the U.S., better known as CFIUS, has begun a review of ByteDance’s 2017 purchase of the business that became TikTok, Bloomberg News reported in November.ByteDance is weighing a range of options to address those concerns, from an aggressive legal defense to the sale of a stake in TikTok, Bloomberg News reported in December. A representative for the company said at the time there have been no discussions about any partial or full sale of TikTok.“I remain deeply concerned that any platform or application that has Chinese ownership or direct links to China, such as TikTok, can be used as a tool by the Chinese Communist Party to extend its authoritarian censorship of information outside China’s borders and amass data on millions of unsuspecting users,” U.S. Senator Marco Rubio, a Republican from Florida, wrote in a letter to the Treasury Department, which chairs CFIUS.The hiring of a new U.S. CEO may be aimed at resolving those security concerns, the people said. It’s possible ByteDance is searching for a candidate who could help address questions in Washington or for someone with the skills to lead an independent business if it faces pressure to separate TikTok from the Chinese parent. It’s unclear how much autonomy this new CEO would have. A number of successful tech companies are led by CEOs who also have influence over product direction, including Facebook, Snap and Twitter.ByteDance would prefer to maintain full control of the business if possible, given its soaring popularity and profit potential, Bloomberg News reported earlier. It may argue that TikTok presents no security threat or that the U.S. has no legal standing over the business.TikTok has said it strives to create a safe and positive online environment. “We are not influenced by any foreign government, including the Chinese government; TikTok does not operate in China, nor do we have any intention of doing so in the future,” the company said in October.(Updates with detail on search company in the third paragraph.)\--With assistance from Zheping Huang.To contact the reporters on this story: Kurt Wagner in San Francisco at firstname.lastname@example.org;Sarah Frier in San Francisco at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Jillian Ward, Andrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Planters just killed off its iconic Mr. Peanut mascot in a Super Bowl pregame ad. The Kraft Heinz (KHC)snack brand changed the name on Mr. Peanut’s official Twitter (TWTR)account on Wednesday to “The Estate of Mr. Peanut” and tweeted that the natty nut known for his top hat, monocle, spats and cane had passed away. It is with heavy hearts that we confirm that Mr. Peanut has died at 104.
(Bloomberg) -- United Nations experts accused the Saudi Crown Prince Mohammed bin Salman of possible involvement in hacking Jeff Bezos’s phone in an effort to “influence, if not silence” reporting on Saudi Arabia by the Bezos-owned Washington Post.Bezos’s iPhone was infiltrated via an MP4 video file sent from the WhatsApp account used by the prince in 2018, according to a statement Wednesday by U.N. independent experts appointed by the Human Rights Council.“The alleged hacking of Mr. Bezos’s phone, and those of others, demands immediate investigation by U.S. and other relevant authorities, including investigation of the continuous,multi-year, direct and personal involvement of the crown prince in efforts to target perceived opponents,” Agnes Callamard, U.N. Special Rapporteur on summary executions and extrajudicial killings, and David Kaye, U.N. Special Rapporteur on freedom of expression, wrote in the statement.Bezos, who is also the chief executive officer of Amazon.com Inc., had exchanged phone and WhatsApp numbers with the crown prince at a dinner in April 2018, a month before the alleged hack, according to the U.N. statement. On May 1, a message from the crown prince’s account was sent to Bezos through WhatsApp containing an encrypted video file. A forensic analysis found that within hours of clicking on the video file, “massive and (for Bezos’ phone) unprecedented exfiltration of data from the phone began.”Around that time, Jamal Khashoggi, a Saudi dissident who was living in self-imposed exile in the U.S. and working as a columnist for the Washington Post, was writing pieces critical of the Saudi government. Khashoggi was murdered at the Saudi consulate in Istanbul in October 2018 by agents of the Saudi government. The U.S. Central Intelligence Agency has said it’s certain that the crown prince directed the killing and dismemberment of the Saudi insider-turned-critic.As the Post began to report on the murder and role of the Saudi government and crown prince, a massive online campaign was being waged against Bezos, according to the U.N. report, identifying him principally as the owner of the Washington Post and prompting Twitter hashtags of “Boycott Amazon.”On. Nov. 8, 2018 a single photograph was texted to Bezos from the crown prince’s WhatsApp account, along with a sardonic caption, according to the U.N. statement. It was an image of a woman resembling Lauren Sanchez, whom Bezos was dating, and sent months before the affair became public.“At a time when Saudi Arabia was supposedly investigating the killing of Mr. Khashoggi, and prosecuting those it deemed responsible, it was clandestinely waging a massive online campaign against Mr. Bezos and Amazon targeting him principally as the owner of The Washington Post,” Callamard and Kaye wrote.The Saudi Embassy, in a Twitter post, denied involvement in the hack. “Recent media reports that suggest the Kingdom is behind a hacking of Mr. Jeff Bezos’ phone are absurd,” according to the tweet. “We call for an investigation on these claims so that we can have all the facts out.”The U.N. statement said the intrusion “likely was undertaken through the use of a prominent spyware product identified in other Saudi surveillance cases, such as the NSO Group’s Pegasus-3 malware, through the use of Israeli spyware.” The report notes that the product is widely reported to have been purchased and deployed by Saudi officials.A representative for the NSO Group denied any connection to the Bezos hack, describing such a suggestion as “defamatory. Our technology was not used in this instance.” The representative said “our technology cannot be used on U.S. phone numbers, our products are only used to investigate terror and serious crime.”The U.N. said the circumstances and timing of the Bezos hack “strengthen support for further investigation by U.S. and other relevant authorities of the allegations that the Crown Prince ordered, incited, or, at a minimum, was aware of planning for but failed to stop the mission that fatally targeted Mr. Khashoggi in Istanbul.”The twisting tale began in early 2019 with the surprise announcement that Bezos and his wife MacKenzie would divorce after 25 years of marriage. Shortly thereafter, the National Enquirer disclosed the extramarital affair between Bezos and Sanchez, a former television anchor, in a series of reports that relied, in part, on intimate text messages sent by the Amazon CEO.Bezos later wrote an extraordinary blog post accusing the tabloid of threatening to publish more embarrassing text messages and photos unless he publicly affirmed that there was no political motivation or outside force behind the tabloid’s coverage.Gavin de Becker, a security consultant for Bezos, said at the time that he believed the Saudi government had accessed Bezos’s phone before the Enquirer exposed the affair. He didn’t provide any direct evidence to back up his claims, which he said came from “our investigators and several experts.” De Becker said the Washington Post’s coverage of the Khashoggi murder probably explained why bin Salman sought to harm the Amazon founder.Senator Ron Wyden, a Democrat from Oregon, has written to Bezos seeking more information about the hack and concerns of Saudi involvement.“Unfortunately, the breach of your device appears to be part of a growing trend,” Wyden wrote. “To help Congress better understand what happened -- and to help protect Americans against similar attacks -- I encourage you to provide my office with information regarding your case.”Bezos has refrained from directly commenting on the crown prince’s alleged involvement in the hack, but on Wednesday tweeted a photograph from a memorial service honoring Khashoggi with the simple hashtag Jamal.(Updates with Bezos tweet in last paragraph. A previous version of the story corrected the spelling of Human Rights Council in second paragraph.)\--With assistance from David Wainer, William Turton, Ryan Gallagher, Matt Day and Gwen Ackerman.To contact the reporters on this story: Molly Schuetz in New York at email@example.com;Giles Turner in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Molly Schuetz at email@example.com, Robin Ajello, Andy MartinFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- The most astonishing revelation in reports about the hacking of Jeff Bezos’s cellphone is that Crown Prince Mohammed bin Salman may have played a direct, personal role. Bloomberg News reports that two people familiar with the breach say Saudi Arabia’s de-facto ruler, known as MBS, started the process by sending the Amazon.com Inc. chief a WhatsApp message containing hidden malware, which gave the Saudis access to the billionaire’s phone.More damning still, independent United Nations experts say they have information suggesting MBS's involvement in the hack. “The information we have received suggests the possible involvement of the Crown Prince in surveillance of Mr. Bezos, in an effort to influence, if not silence, The Washington Post’s reporting on Saudi Arabia,” wrote independent experts Agnes Callamard, UN Special Rapporteur on summary executions and extrajudicial killings, and David Kaye, UN Special Rapporteur on freedom of expression, in a statement Wednesday.How the prince responds will reveal whether he has learned any lessons from the killing of Jamal Khashoggi and its fallout.The message to Bezos preceded the grisly murder of the journalist, in the Saudi consulate in Istanbul, by five months. The UN investigation into the killing said MBS “has a responsibility in relationship to the killing” and the CIA believes he gave the order. The Saudi government denies this, and went through a form of judicial proceedings to affix blame on people it claims were involved.This saga has done little to dispel the cloud over MBS’s reputation. As I wrote on the anniversary of the murder, the ghost of Khashoggi haunts the prince’s every step. It even attended, Banquo-like, the banquet for bankers that was the Aramco IPO.The story about the hacking of the Washington Post’s owner has the potential to attract as much attention as the killing of the newspaper’s columnist.The allegation that the prince was personally involved is especially damaging, and will lower even further his international standing. In the U.S., it will harden the resolve of many in Congress to hold MBS to account for the murder, despite President Trump’s best efforts to shield him.It won’t end there. That the target was one of the world’s richest men will invite closer scrutiny of other incidents involving less prominent figures — such as the reported hacking of phones belonging to Saudi dissidents, threats against other critics, and the charge that Twitter employees spied for the kingdom. The first response from the Saudis was true to form. The Saudi embassy in Washington has characterized the reports of the Bezos hack as “absurd,” reprising the posture it adopted in dismissing first reports that Khashoggi was murdered on orders from Riyadh.The wiser course would be to allow a transparent investigation into the hack with a broader mandate than the UN probe — to find out who ordered it as well as who executed it. After the opaque process surrounding the Khashoggi killing, any investigation by Saudi authorities will inevitably give the impression of a cover-up. The best way to avert that reasonable suspicion would be to allow international supervision of the process.If such a probe concludes that the first breach of Bezos’s phone came from MBS’s WhatsApp message, then the prince must make a clear breast of it: a real mea culpa, and not the caveat-laden acknowledgment he belatedly allowed in the Khashoggi affair. Better still, he should forswear the use of such tactics against critics.MBS’s admirers and defenders often point out that the prince has a long reign ahead of him: He could be king for 50 years. That era will go easier without more ghosts and scandals dogging him.To contact the author of this story: Bobby Ghosh at firstname.lastname@example.orgTo contact the editor responsible for this story: James Gibney at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Bobby Ghosh is a columnist and member of the Bloomberg Opinion editorial board. He writes on foreign affairs, with a special focus on the Middle East and the wider Islamic world.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- I was one of those college graduates who had difficulty paying off his student loans. It was a long time ago, of course, and the world was a different place. I borrowed directly from a local bank (I can’t recall if the federal government backed the loan). The total amount seems laughably small now: $5,000 or so, paid in installments of about $50 a month.Then again, $5,000 in 1974, when I graduated, would be $26,000 in today’s dollars. And in any case, since my first few jobs paid little, it was a struggle to come up with that $50. I often slipped three or four months behind, at which point the bank would threaten to send my loan to a collection agency. I would then scramble to find a little money somewhere and get the bank off my back. Until I fell behind again.In the throes of it, I was pretty bitter about this $5,000 noose around my neck. Today, having struggled to pay off my loan, I would be well within my rights to demand that the current crop of student debtors do the same thing I did: suck it up and pay off their loans, no matter what. From reading Twitter, I can see many baby boomers feel the same way.One boomer who does not, however, is Democratic presidential candidate Senator Elizabeth Warren. She — as well as rival Senator Bernie Sanders — is proposing a substantial student-loan-forgiveness program. Hers would eliminate “$50,000 worth of student loan debt for 42 million Americans,” according to her issues website. Total student loan debt is now more than $1.5 trillion, according to estimates, higher than any other category of debt after home mortgages. Warren’s plan would erase $1 trillion of that.(1)(Sanders’s plan would go much further and simply wipe all student debt off the nation’s books.)This being Warren, she ladles her student loan plan with a heaping of progressive rhetoric: “State governments and the federal government decided that instead of treating higher education like our public school system — free and accessible to all Americans — they’d rather cut taxes for billionaires…” and so forth.But — this also being Warren — she lays out a concrete, practical reason for her loan-relief plan: Student debt, she says, is acting “as an anchor on our economy.” She continues: “It’s reducing home ownership rates. It’s leading fewer people to start businesses. It’s forcing students to drop out of school before getting a degree. It is a problem for all of us.”She is right on all counts, which is why, however unfair it may seem to those who struggled to pay their student loans, relieving some of that debt burden would benefit the country enormously.I come at this, in part, as someone who closely covered the foreclosure crisis a decade ago, an event with some parallels to the student-loan crisis. When the Great Recession brought about a collapse in housing prices, millions of Americans were left with mortgages they could no longer afford. Some of those mortgages were the result of greed or stupidity. Others were the result of bad behavior by mortgage brokers who persuaded homebuyers to take out subprime mortgages they were never going to be able to repay. Mostly, though, people were unlucky: They had bought a home only to lose their job, have a medical problem or watch their house drop so much in value that it was, as they said at the time, “underwater.”And just as there are people today who think that student debtors should suffer the consequences of their borrowing, there were plenty of people then who said that homeowners saddled with subprime mortgages didn’t deserve a government rescue. The Obama administration, which had raced to rescue Wall Street and the big banks, couldn’t bring itself to do the same for homeowners, fearing “moral hazard,” not to mention political blowback from those who would resent the idea that their neighbors might receive a bailout they weren’t getting.Yet the unwillingness of the government or the banks to modify significant numbers of mortgages prolonged the Great Recession. Once thriving neighborhoods went to seed as banks foreclosed on home after home. The people who had lived in those homes often lost their equity, which had been their only accumulated savings. Meanwhile, as housing prices continued to fall, banks were unwilling to make mortgage loans, making it difficult for people to buy new homes, and the construction industry fell into a funk that lasted longer than the recession itself. The country would have been much better off if the government had allowed people to significantly modify their mortgages, however unfair it may have seemed to other homeowners.Today, student loan debt is having the same effect on college graduates. Nearly 45 million people owe an average of $28,650, according to Forbes. A quarter of those 45 million owe more than $45,000. Nearly 12% are delinquent, while millions of others struggle to repay their loans, as I once did. And this debt cannot be discharged through bankruptcy, so former students who cannot pay it off are saddled with it forever.Yes, the economy seems to be doing just fine. Yet this debt, which hits millennials hardest, is a significant drag on the country’s future. In her student-debt white paper, Warren links to a Federal Reserve report showing a 9% drop in homeownership between 2005 and 2014 — years during which student loan debt doubled. “We estimate that roughly 20% of the decline in home ownership among young adults can be attributed to their increased student loan debts,” the authors write.In 1999, according to the Federal Reserve, about 45% of baby boomers, who were then in their 30s, owned a home. Today, that same data set shows that homeownership among baby boomers is just under 50%, but only 4% of millennials — who are in the same age bracket as boomers 20 years ago — own homes.Compounding the problem, student loan repayment problems often mean damaged credit scores later in life, making large consumer purchases of all kinds more difficult. Student loan debt has resulted in a decline of 14% in new business formation, according to one study. Black students with student loans drop out of college at a higher rate than white ones. And of course millions of students have been ripped off financially by for-profit colleges that abuse federal student loan programs to make a profit.The point is an entire generation is being held back economically by debt they took on to get an education. It is deeply counterproductive public policy. You simply can’t have a generation more concerned with paying off student loans than buying a house, starting a company or raising a family.One great advantage the government has in dealing with the student loan crisis is that it doesn’t have to deal with banks or other financial institutions. The vast majority of student loans are made directly by the government, which can wipe them off the books if it so chooses. A second advantage is that if Warren — or Sanders — were able to do this, it would act as a trillion-dollar stimulus program.Yes, there would still be those who think it’s unfair. Tom Nichols, a professor at the U.S. Naval War College — and a daily presence on Twitter, where he offers intelligent but often contrarian commentary — told me in a series of exchanges that abolishing student debt was “morally indefensible.” He added:Partly, I don’t like the fact that it doesn’t take personal choices into account. The kid who stumbled around through a major in basket weaving for six years at some boutique school on loans is not the same thing as the hard-working kid who worked her ass off to get an engineering degree while working and taking loans. It’s just a big magic wand waved over all student loans with no regard to moral hazard. In fact, some of that moral hazard could work to the country’s advantage. The generation now in college, or about to go, will not be happy seeing their elders getting their debt eliminated or reduced, and they’ll want the same for themselves. Warren, in fact, has proposed making every public university free of charge.Is that feasible? I don’t know. What I do know is that a student-loan-forgiveness program would cause students and universities alike to question the current model, which allows schools to constantly raise tuition prices knowing the government will supply the loans. If Warren’s debt-forgiveness plan blows that system up, that will be just one more net plus for students — and the economy.(1) In recent weeks, Warren has said that she believes she has the legal authority to erase that debt the day she becomespresident, without needing congressional approval. I’m not sure if she’s right about that — I’ve seen it argued both ways — but let’s leave that aside for now.To contact the author of this story: Joe Nocera at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Five years to the day since the European Central Bank announced massive cash injections to stave off deflation, President Christine Lagarde wants to know why price growth is still so lackluster.Economist Milton Friedman’s decades-old dictum that inflation is “always and everywhere a monetary phenomenon” -- implying that prices will rise if you create enough money -- is under strain. The ECB has failed to sustainably hit its goal, much of the rest of Europe has similarly struggled, and Japanese prices have been in the doldrums for a generation.While the U.S. Federal Reserve has fared a little better, with fiscal help, policy makers there are scratching their heads in a strategic review. Now Lagarde intends to agree on the ECB’s own wideranging review at a two-day policy meeting starting Wednesday. It’s the Governing Council’s 500th gathering and comes half a decade after former President Mario Draghi announced quantitative easing as the ultimate tool for restoring price stability.Policy makers want a convincing explanation for why it hasn’t turned out that way, and how they can respond. At least they don’t have to start from scratch. Researchers have offered multiple explanations including globalization, digitalization and the demise of trade unions.Weaker WorkersPerhaps the biggest quandary is why tight labor markets haven’t generated wage increases big enough to push up consumer prices. The U.S. and U.K. have the lowest unemployment in decades.One argument in the euro zone, where joblessness is the lowest since 2008, is that the European Union’s eastern expansion led to an influx of cheaper workers. The threat that companies might move factories also restrained pay, especially in Germany, according to a 2017 paper by Christian Odendahl of the Center for European Reform.The decline in organized wage bargaining may also have a role. The share of French workers that are members of a trade union is down to 9% from 23% in 1975. In Germany, it fell to 17% from 35%. That trend has affected “real disposable incomes, consumption growth and, ultimately, inflation,” ECB Executive Board member Benoit Coeure said in his final speech before his term ended last month.What Our Economists Say...“Those looking for the causes of low inflation in the euro area would do well to start with Germany. There, slow price gains are nothing new -- core inflation has averaged just 1.1% since 2000. In part, that reflects an agreement between employers and workers that secured jobs in exchange for pay restraint. It’s hard to see inflation picking up sustainably until that dynamic sees radical change.”\--Jamie Rush. Read more.Flat ExpectationsEven in nations where wages are picking up, the effect on inflation has been muted, casting doubt over the relationship between prices and economic slack known as the Phillips curve. ECB research has sought to prove the curve still holds, even if it’s flatter than it used to be. Perhaps key is a study in July showing inflation expectations to be the most important determinant of underlying price growth.AXA economist Gilles Moec says the implication is that “core inflation today is influenced by past episodes of very low or very high headline inflation.” For price growth to really kick in, the ECB needs plenty of patience and the willingness to let inflation to run above its target.Still, a Bundesbank paper last month suggested it’s not so simple -- perceptions about living costs also differ depending on factors such as earnings, education and job type.Connected WorldGlobalization is frequently blamed for depressing wages and inflation, as companies move production and services to cheaper locations, such as laptop assembly in China or call centers in India. Former Bank of England policy maker Kristin Forbes concluded in a paper last year that economic models need to do a better job of including global factors.Technology, such as ride-sharing app Uber, may also be a factor, aiding the rise of the gig economy with its low job security. The “Amazon effect” has intensified retail competition, forcing companies to compete globally while central banks operate within their currency area.ECB board member Yves Mersch has described how technology makes it difficult to get an accurate reading on inflation, as companies like Google offer services for free while extracting profits from advertising.Export ProblemA working paper by the Irish central bank last year found a correlation between the euro area’s current-account surpluses after 2011 and low inflation, a link acknowledged by ECB chief economist Philip Lane.That may signal European manufacturers are too reliant on foreign demand. While the services sector is growing faster than manufacturing, even that trend brings another problem. Coeure said services prices are considerably “stickier” because they have a high wage component, increasing the lag between monetary policy and price changes.Home TruthsFinally, it’s possible inflation hasn’t gone missing but is simply being overlooked. The gauge used by the ECB -- produced by the EU’s statistics office -- only gives housing costs a weight of 6.5%, well below what most people pay. About a third of the basket of goods and services tracked by the Federal Reserve is housing.Still, Greg Fuzesi, an economist at JPMorgan, has done research showing the impact on inflation from adding housing costs is overestimated.The complexity of factors affecting inflation, and the fact that some of them are outside the reach of central banks, makes finding a solution tricky. One governor, Austria’s Robert Holzmann, reckons the best strategy is acceptance -- lowflation might be here to stay.(Updates with size and scope of Governing Council meeting)To contact the reporter on this story: Piotr Skolimowski in Frankfurt at firstname.lastname@example.orgTo contact the editors responsible for this story: Paul Gordon at email@example.com, Jana RandowFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Jeff Bezos’s mobile phone was hacked following an exchange between the Amazon.com Inc. chief executive officer and Saudi Prince Mohammed bin Salman on WhatsApp, according to two people familiar with an analysis of the breach.While a message from the prince to Bezos in mid-2018 that preceded the hack appeared benign, investigators found digital evidence suggesting it contained code that ultimately led to the breach of the billionaire’s phone, said one of the people, who asked not to be identified because the probe isn’t public. A forensic analysis showed with moderately high confidence that a WhatsApp account used by bin Salman was involved, another person said.The Guardian newspaper reported earlier Tuesday that an analysis had found that the theft of data from Bezos’s phone in 2018 started with an infected video file sent from bin Salman’s personal account. The Financial Times, which confirmed elements of the Guardian’s account of the hack, said the analysis was conducted by global business advisory firm FTI Consulting. A representative of the firm declined to comment, saying: “We do not comment on, confirm or deny client engagements or potential engagements.”The revelation of new details about a security breach that affected the world’s richest man comes about a year after the surprise announcement that Bezos and his wife, MacKenzie, would divorce after 25 years of marriage. The National Enquirer subsequently disclosed an extramarital affair between Bezos and Lauren Sanchez, a former television anchor, in a series of reports that relied, in part, on intimate text messages sent by Bezos.Bezos subsequently published an extraordinary blog post accusing the tabloid of threatening to publish more embarrassing text messages and photos unless he publicly affirmed that there was no political motivation or outside force behind the tabloid’s coverage.Gavin de Becker, a security consultant for Bezos, later said he believed the Saudi Arabian government had accessed Bezos’s phone before the Enquirer exposed the affair. He didn’t provide any direct evidence to back up his claims, which he said came from “our investigators and several experts.” De Becker cited the Enquirer’s business relationship with the Saudis, as well as tough coverage of the murder of a critic of the Saudi regime by the Bezos-owned Washington Post, as reasons why bin Salman might seek to harm the Amazon founder. The newspaper reported last year that the Central Intelligence Agency linked the crown prince to the 2018 murder of Post columnist Jamal Khashoggi.De Becker declined to comment on the Guardian report Tuesday beyond the lengthy statement last year, which was posted on the news site The Daily Beast.The Saudi embassy, in a tweet, attacked the reports as “absurd” and called for an investigation “so that we can have all the facts out.”In an interview with Bloomberg TV, Saudi Finance Minister Mohammed Al-Jadaan referenced the statement made by the Saudi Embassy but declined to comment further.A spokeswoman for WhatsApp declined to comment.A United Nations investigation, led by UN Special Rapporteurs Agnes Callamard and David Kaye, is set to be released Wednesday and is expected to confirm that Bezos’s mobile phone was hacked using a WhatsApp message from bin Salman, the Washington Post reported late Tuesday.It’s uncertain whether the alleged hack of Bezos’s phone accessed any sensitive Amazon corporate information. The company hasn’t commented on the matter in the nine months since de Becker’s accusation. Company representatives didn’t return messages seeking comment on Tuesday.“It’s unclear whether his phone had more, privileged access to information from his companies,” said Bastien Bobe, an analyst at cybersecurity firm Lookout. “That would not be in line with security practices and risk mitigation at companies though. But technically it would be feasible for that technology to access the data.”(Updates with comments from Saudi Embassy in the eighth paragraph, WhatsApp comment, additional context)\--With assistance from Spencer Soper, William Turton, Helene Fouquet and Francine Lacqua.To contact the reporters on this story: Greg Farrell in New York at firstname.lastname@example.org;Alyza Sebenius in Washington at email@example.com;Matt Day in Seattle at firstname.lastname@example.orgTo contact the editors responsible for this story: Tom Giles at email@example.com, Andrew Pollack, Michael HythaFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
David Leavitt may be an award-winning journalist, as his Twitte bio claims, but he’s also an absolute nightmare of a customer, if his recent run-in with a Target employee is any indication.
After three years without a victory, Conor McGregor needed only 40 seconds to reclaim his place at the center of the mixed martial arts world. McGregor’s dynamic stoppage of Donald Cerrone in UFC 246 on Saturday night put the Irish superstar firmly in control of the future of two UFC divisions. A refocused McGregor seems eager to make up for lost time after three years of inactivity and outside-the-cage misbehavior, suggesting he could fight three more times this year.
(Bloomberg Opinion) -- Who said Davos doesn’t make a difference? As world leaders, business executives and cheerleaders for the planet descended on the Swiss resort for the annual World Economic Forum, one diplomatic victory was being chalked up on the sidelines: A presidential truce between Donald Trump and Emmanuel Macron over France’s plan to tax tech companies, which the U.S. says discriminates against its national champions.After threats of retaliatory trade tariffs on both sides, Macron took to Twitter to declare a “great” discussion with Trump that would lead to a “good agreement” on de-escalation. Trump retweeted that assessment, responding in the affirmative with “excellent!” But it’s hard to see much worth celebrating yet.What this truce amounts to isn’t exactly clear, for one thing, and it’s certainly not being trumpeted in the way that Trump’s “beautiful monster” of a phase-one deal with China was last week. Avoiding an escalation of tariffs is obviously a good thing. But Trump has already leveled so many trade threats at France and the European Union — driven by hatred of the trade surpluses they run with the U.S. — that it’s hard to feel excited at the prospect of one less gun barrel. If Trump actually ends up retracting his specific threat to hit $2.4 billion of French products with tariffs, that still doesn’t automatically guarantee protection for Airbus aircraft or German cars.It’s also not clear what Macron has gifted Trump in order to get de-escalation onto the agenda. According to the Wall Street Journal, France may have simply offered to “pause” its tech tax until a worldwide solution is agreed upon by the Organization for Economic Co-operation and Development — where support from the U.S. is obviously crucial. That’s not as huge a climb down as it initially seems: Paris could feasibly suspend the collection of digital tax payments due in April without scrapping the principle or the structure of its tax, as my Bloomberg News colleagues write elsewhere. But it still looks like Trump’s threats have paid off on one level.If the original sin is that today’s tech giants — Google parent Alphabet Inc., Facebook Inc., Amazon.com Inc. — aren’t paying their fair share in tax, we seem to be veering a long way from absolution. Things would be different if Europe could set aside its differences and agree on the fundamental good that a digital tax across its 28 members (soon to be 27) would bring. Brussels estimates global tech firms pay an average tax rate of 9.5%, compared with 23.2% for bricks-and-mortar peers. But the EU is divided on the need to overhaul the data economy, with low-tax jurisdictions like Ireland and the Netherlands resisting a common levy on digital firms.The Trump administration has shown itself adept at exploiting these divisions. France’s move to go it alone with a digital tax was politically popular, but fiscally weak. It is only expected to bring in 500 million euros ($555 million) a year, a digital drop in the ocean of France’s approximately 80 billion-euro deficit. Despite being fundamentally righteous, it allowed Trump to poke the soft underbelly of European unity by training his tariff weapon on Paris — and confronted the Macron administration with the prospect of pain for key exporters. The U.S. trade deficit with France was $16.2 billion in 2018.The pressure is now on to get consensus among more than 135 countries in the OECD-led push for an agreement on how to tax digital profits. It’s a solution favored by the likes of Apple Inc.’s Tim Cook, which speaks to how companies prefer the predictability of global solutions over patchy national ones. But until such a solution is actually agreed, it will be hard to celebrate this latest Franco-American “truce.” It has allowed France and Europe to save face by avoiding the reality of a new trade confrontation with Trump as he fights for re-election. It has offered tech firms a way to save money. But it hasn’t really saved the world from the threat of more trade wars. Davos can’t achieve everything.To contact the author of this story: Lionel Laurent at firstname.lastname@example.orgTo contact the editor responsible for this story: Melissa Pozsgay at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Sign up here to receive the Davos Diary, a special daily newsletter that will run from Jan. 20-24.Greta Thunberg brought a stark message to the business elite gathering in Davos: Everybody is talking about climate change, but nobody is doing anything.Her appearance at the opening of the World Economic Forum was a striking sign that the debate about how to stop the Earth warming has become mainstream in business circles. Yet only a handful of executives from the oil, gas and coal industries that are chiefly responsible for warming the planet were seen attending the panel at which Thunberg spoke on Tuesday.Meanwhile, U.S. President Donald Trump used his speech at the event to tout the benefits of soaring American oil and gas production and make a thinly veiled attack on those who warn about looming environmental catastrophe.“The climate and environment is a hot topic right now, thanks to young people pushing,” 17-year-old Thunberg said at the Swiss ski resort, where about 3,000 business and political leaders gather each year. “Pretty much nothing has been done, since the global emissions of CO2 have not reduced.”The Swedish activist’s words came as the World Economic Forum sounds alarm bells on climate change. This year and for the first time on record, environmental risks occupy the group’s top five long-term concerns, while corporate executives say they’re increasingly concerned about environmental issues. But young activists at Davos said none of this is enough.Thunberg is giving relevance to the Davos gathering, which for years has suffered from criticism that it was largely a billionaires’ playground where the rich debated among themselves without hearing outside voices. On Tuesday, there was a full room at this first 8:30 a.m. panel featuring young activists -- something relatively unusual for a climate change event at Davos.The debate on climate change is forcing businesses to respond to demands to stop carbon dioxide and other greenhouse gas emissions. While some have been slow in embracing the fight, executives at Davos highlighted that the overall views from within the business community have dramatically changed over the last decade or so, moving from denial and questioning science into complete acceptance.“I have come to Davos for well over a decade and I see behind the scenes, among top executives, a huge change in perception of the risk of climate change,” said Marco Dunand, the head of Mercuria Energy Trading SA, one of the worlds’ largest oil traders. “It’s not just talk: it’s translating into billions of dollars in investments in the energy transition.”Activists’ language has made its way to boardrooms across the world too. At another morning panel at Davos, Iberdrola SA Chief Executive Officer Ignacio Galan called on companies to close coal-powered plants in order to curb emissions.“We are in a hurry, we have to move fast,” he said. “There is already money available, cheap money, cheap technology, competitive technology and political decision in many countries to do so. Let’s not continue delaying and postponing”Trump EncounterTrump landed at Davos on Tuesday morning and was welcomed by the words “Act on climate,” carved into the snow on a hill near the helicopter landing zone. He didn’t mention the topic in his speech at the forum later in the day, focusing instead on America’s growing economy and record oil and gas production.“This is not a time for pessimism, this is a time for optimism,” Trump said as Thunberg watched from the audience. “We must reject the perennial prophets of doom and their predictions of the apocalypse. They are the heirs of yesterday’s foolish fortune tellers.”The President and the activist’s first and only meeting last year became instantly viral as Thunberg was filmed furiously staring at Trump. While they’ve never spoken face to face, they both seem to follow each other closely on Twitter.“Greta must work on her anger management problem, then go to a good old fashioned movie with a friend! Chill Greta, Chill!”, Trump tweeted in December shortly after the activist was named person of the year by Time magazine. Thunberg didn’t directly answer, but changed her Twitter biography to “A teenager working on her anger management problem.”Three-day MarchHundreds of climate activists are due to arrive at Davos on foot on Tuesday following a three-day march across the Swiss Alps. Protesters will gather at the ski resort and stage a demonstration calling for the end of the World Economic Forum. Companies attending Davos for the past five decades bear a great responsibility for today’s climate crisis, activists say.“We are tired of empty promises. But we have hopes,” said Puerto Rican activist Salvador Gomez-Colon. “We’re not waiting years to see the change that we want to see.”Thunberg urged businesses, governments and the media to listen to scientists. She cited research by the Intergovernmental Panel on Climate Change from 2018 that concluded that the carbon budget-- the amount that can be released while still keeping global warming limited to a specific level -- stands at 340 gigatons of carbon dioxide and that, at current emission levels it will be gone in less than eight years.“Since last summer I have been repeating these numbers over and over again in every speech,” she said. “I know you don’t want to talk about this. I assure you I will continue to repeat these numbers until you do.“(Updates with comments from Trump in third paragraph.)\--With assistance from Jeremy Hodges.To contact the reporters on this story: Javier Blas in Davos at firstname.lastname@example.org;Laura Millan Lombrana in Santiago at email@example.comTo contact the editors responsible for this story: Aaron Rutkoff at firstname.lastname@example.org, James Herron, Christopher SellFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Presidents Emmanuel Macron and Donald Trump agreed to a truce in their dispute over digital taxes that will mean neither France nor the U.S. will impose punitive tariffs this year.Macron said on Monday he had a “great discussion” with Trump on the issue, without giving details.“We will work together on a good agreement to avoid tariff escalation,” he said on Twitter.“Excellent!” Trump said in a reply to Macron’s post, without providing additional information. Trump is en route to Davos, Switzerland, for the World Economic Forum.A White House readout of the call was notably more muted, saying only that the “two leaders agreed it is important to complete successful negotiations on the digital services tax” and “discussed other bilateral issues.” And neither a White House spokesman nor officials with the U.S. Trade Representative’s office would confirm that the U.S. president had called off his announced tariffs.Still, the possible respite may defuse transatlantic tensions that had been building between Washington and Brussels along another potential trade war front. Last week, Trump signed a cease-fire with China in phase one of a broader deal aimed at balancing trade between the world’s two largest economies.The European Union is an even bigger U.S. trading partner than China and supply chains between the two economies, particularly in automotive and financial services industries, are intertwined in ways that would make a tit-for-tat tariff dispute even more harmful to the world economy.Macron’s government still hopes to find a solution that fits within discussions at the Organization for Economic Cooperation and Development’s work on the issue, according to a French official who asked not to be identified in line with government rules.European finance ministers meeting in Brussels Tuesday will discuss progress of the OECD talks. While the OECD is still working on its proposal for taxing tech companies around the world, France pushed ahead with its own levy last year that hit U.S. internet giants like Google, Apple Inc. and Amazon.com Inc.“We now have an agreement between the two presidents to avoid any tariff escalation and avoid any trade war,” French Finance Minister Bruno Le Maire told reporters in Brussels before the meeting. “It’s remains a difficult negotiation -- with digital tax, the devil is in the details and we need to resolve the details.”Paris and Washington have discussed the possibility of France suspending the collection of the digital tax payments due in April as long as the U.S. refrains from imposing new tariffs, French officials said. But that wouldn’t constitute a withdrawal of the levy, they added. For its part, the French government denies its national tax is discriminatory and warned that the EU would retaliate if the U.S. imposed additional levies.The U.S. has said that the French tax discriminates against American technology companies, citing Section 301 of a 1974 American law that Trump has thus far reserved to justify tariffs against China. That opened the door to the U.S.’s threat to hit $2.4 billion of French goods with tariffs in retaliation.Among the French products targeted with duties of as much as 100% were luxury items like wine, cheese and makeup. One American wine merchant called it the biggest threat to the industry since Prohibition a century ago.For its part, the French government had warned that the EU would retaliate if the U.S. imposed additional tariffs.The dispute was another headache for European trade officials scrambling to expand their policy arsenal as the U.S. takes aim at a rules-based system for global trade that Trump argues is outdated and tilted against America. It also coincided with a change in leadership at the European Commission, the EU’s executive arm.EU trade commissioner Phil Hogan visited Washington last week for the first time in the job, partly to plead for talks rather than tariffs in disagreements like the French digital tax. At stake, he said, was transatlantic trade in goods and services valued at more than $3 billion a day.“Sounds like a fairly healthy relationship to me,” Hogan said Thursday in the U.S. capital. “So why put tariffs on these EU products to make them more expensive for your people?”The truce follows weeks of discussions between Treasury Secretary Steven Mnuchin and Le Maire, who were scheduled to meet Wednesday in Davos, Switzerland, the alpine resort town where government officials and business leaders gather during the winter to discuss whatever is ailing the global economy.The dispute has ramifications outside France as other countries try to come up with ways to generate revenue from the digital economy. Mnuchin told the Wall Street Journal that the U.K. and Italy will face American tariffs if they proceed with similar levies on foreign tech firms.U.S. and EU trade relations started to sour in 2018 when the Trump administration invoked national-security considerations to impose tariffs on steel and aluminum from Europe. As a U.S. military ally, the EU was infuriated and promptly retaliated with levies on iconic American brands such as Harley-Davidson Inc. motorcycles and Levi Strauss & Co. jeans.A subsequent U.S. threat to wreak significantly more economic damage by targeting the European auto industry with duties on the same security grounds led to a hastily agreed truce and a pledge by both sides to work toward reducing industrial tariffs across the board.Since then, the Trump administration has refused to start the tariff-cutting negotiations unless Europe includes agriculture in them. Also, it imposed levies on EU products in retaliation over government aid to Airbus SE that was deemed illegal by the World Trade Organization, and disabled the WTO’s appellate body,The EU, meanwhile, is pressing ahead with a plan for tariffs against the U.S. in a parallel WTO case over unlawful subsidies to Boeing Co.Trump, scheduled to speak Tuesday in Davos at the World Economic Forum’s annual meeting, on Sunday reiterated his frustration with Europe as a trading partner.“Europe has had tremendous barriers to us doing business with them. All those barriers are coming down. They have to come down,” he told a conference of farmers in Austin, Texas. “If they don’t come down, we’re going to have to do things that are very bad for them.”He added, “Europe was, in many ways, more difficult -- and is more difficult -- than China.”(Updates with possible French concession in the 11th paragraph)\--With assistance from Jonathan Stearns, Justin Sink and Chelsea Mes.To contact the reporters on this story: Ania Nussbaum in Paris at email@example.com;William Horobin in Paris at firstname.lastname@example.orgTo contact the editors responsible for this story: Ben Sills at email@example.com, Brendan Murray, Wendy BenjaminsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Huawei Technologies Co. Chief Financial Officer Meng Wanzhou shouldn’t be dispatched to the U.S. because her alleged crimes don’t meet Canada’s legal tests for extradition, her defense lawyers said at the opening of hearings.At issue in a legal battle that has severely strained Canada-China relations is whether her extradition request meets the crucial test of double criminality: Would her alleged crime have also been a crime in Canada? If the judge rules it doesn’t meet that standard, she could be discharged, according to Canada’s extradition rules.Extraditing Meng “would undermine the double criminality rule,” her defense lawyer Richard Peck told the court in Vancouver.The hearings that began Monday offer Meng’s first opportunity to avoid handover to the U.S., which accuses her of fraud, saying she lied to HSBC Holdings Plc and tricked it into transactions that violated U.S. sanctions on Iran. Meng attended the hearing in a black dress with polka-dots that displayed the GPS tracker on her ankle as some 150 media and spectators watched the proceedings from the gallery.Her defense has argued that the U.S. case is, in reality, a sanctions-violations complaint that it’s sought to “dress up” as fraud to make it easier to extradite her.“Fraud is a facade,” Peck said. “In the end, we are being asked to impose on Canada an obligation to assist the U.S. in enforcing sanctions on Iran.”Her team, citing section 29 of Canada’s Extradition Act, says double criminality needs to be assessed as of February 2019 -- the date when Canada’s justice minister authorized the start of extradition proceedings.Iran SanctionsAt that time, Canada didn’t have sanctions on Iran. Therefore, her lawyers argue, her case fails to meet the double criminality test -- any transactions by HSBC wouldn’t have broken any Canadian laws.Associate Chief Justice Heather Holmes appeared to question whether the court might consider a broader time range. “It might not be as straightforward as it appears,” she said.If so, that could throw a spanner into the defense’s arguments. Meng allegedly tricked the HSBC banker at a meeting at a Hong Kong teahouse in August 2013, when Canada had a full embargo on trade with Iran. So any transactions by HSBC at that time would have violated Canadian sanctions.The judge also appeared to test another central pillar of Meng’s defense. Her lawyers have cited Canadian legal precedent to argue that for fraud to have occurred, HSBC must have been at risk of economic loss. “That essential element of risk of deprivation is missing,” Peck said, pointing again to the lack of Canadian sanctions.Holmes seemed to challenge that: if the case were considered as a domestic proceeding but for one change -- that Meng had lied to HSBC in Canada as opposed to in Hong Kong -- would that not be a prosecutable fraud case here, she asked.Defense lawyer Eric Gottardi, seemingly caught off guard, replied: “If there was dishonesty combined with a risk of deprivation, arguably you could make out the offense.”How Huawei Landed at the Center of Global Tech Tussle: QuickTakeDetained CanadiansMeng, the eldest daughter of billionaire Huawei founder Ren Zhengfei, has become the highest profile target of a broader U.S. effort to contain China and its largest technology company, which Washington sees as a national security threat. Meng, who turns 48 next month, is charged with bank and wire fraud, which carry a maximum term of 20 years in prison on conviction.China has demanded Canada release Meng, and has retaliated by slapping sanctions on Canadian products such as canola, while detaining two Canadians after her arrest in December 2018.The double-criminality hearings are scheduled for four days but the ruling would likely come much later -- possibly in months.As the extradition hearing began, Huawei released a video statement on its Twitter feed saying it has confidence in the process. “We trust in Canada’s judicial system which will prove Ms. Meng’s innocence,” spokesman Benjamin Howes said.Meng has been biding her time in a Vancouver mansion since her arrest. That’s in sharp contrast to the conditions endured by the two Canadians -- Michael Kovrig and Michael Spavor -- who were detained in China after her arrest.Prime Minister Justin Trudeau’s government says securing the release of the two men -- one a former diplomat, the other an entrepreneur -- is a priority and that it has asked the Trump administration for help. Foreign Minister Francois-Philippe Champagne told reporters Sunday at a cabinet retreat in Winnipeg, Manitoba, that he raised the issue last week with U.S. Secretary of State Mike Pompeo.Over the weekend, a senior aide to former Prime Minister Jean Chretien joined John Manley, a former Liberal deputy prime minister and industry minister, in urging Trudeau to consider ordering an end to the Huawei executive’s extradition as part of a prisoner exchange for Kovrig and Spavor.Asked about that proposal Monday, Deputy Prime Minister Chrystia Freeland said: “Our government has been clear that we’re a rule of law country and that we honor our extradition treaty commitments. That is what we need to do, and that is what we will do.”(Updates with court arguments starting 11th paragraph)\--With assistance from Stephen Wicary.To contact the reporter on this story: Natalie Obiko Pearson in Vancouver at firstname.lastname@example.orgTo contact the editors responsible for this story: David Scanlan at email@example.com, Jacqueline ThorpeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The nation is marking the legacy of the Rev. Martin Luther King Jr. with tributes Monday recalling his struggles for racial equality, observing the federal holiday named for him against the backdrop of a presidential election year.
At the end of the third quarter, Pinterest (NYSE:PINS) had 322 million monthly active users (MAUs). That fact, along with the market value assigned PINS stock, sets up a rather interesting comparison.Source: Nopparat Khokthong / Shutterstock.com Pinterest's enterprise value (EV) -- its market capitalization less cash -- is $11.3 billion. Snap (NYSE:SNAP) announced it had 210 million DAUs (daily active users) for its 3Q earnings, which means its monthly user base is likely much higher. Furthermore, its EV is more than twice as high.Twitter (NYSE:TWTR) finished 2018 with 321 million MAUs, at which point it stopped disclosing that figure. It closed the 3Q 2019 with 145 million DAUs, and its enterprise value is right around $23 billion -- almost exactly double that of Pinterest.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFrom a per-user standpoint, PINS stock looks noticeably undervalued. The question at this point, though, is if it should be. PINS Stock RalliesTrading in Pinterest stock this week suggests investors are paying closer attention to user-based valuation. A report on Tuesday from eMarketer showed that Pinterest actually has more U.S. users than Snapchat in 2019. In the three ensuing sessions, PINS stock gained 17%. * The Top 5 Dow Jones Stocks to Buy for 2020 Again, the optimism makes some sense -- particularly with PINS stock struggling in recent weeks. Shares plunged after the company's third-quarter report in November showed slowing revenue growth. But the report was hardly terrible: the top line still grew 47% year-over-year in the quarter.Also, with PINS stock below $20 after fading further following the post-earnings selloff, valuation looked reasonable -- at least by social media stock standards. Valuation remains reasonable, with EV/2019 revenue just above 10x, and the 2020 multiple barely above 7x. On a top-line basis, too, PINS trades at a discount to TWTR and SNAP.In fact, it trades at only a modest premium to Facebook (NASDAQ:FB), whose revenue growth next year is expected to be around 21% versus 35% for Pinterest. It might seem crazy -- or the sign of a bubble in the market -- to argue that PINS stock is cheap at 7x revenue, with adjusted earnings per share (EPS) next year likely to be barely positive. But, on a relative basis, it is. The Case for Pinterest StockAnd where that gets particularly interesting is looking at how Pinterest monetizes those users. Simply put, Pinterest isn't doing a very good job -- yet. Its global ARPU (average revenue per user) in the third quarter was just $0.90. The figure at Snap (albeit on a daily user basis, which inflates the number somewhat in comparison) was $2.12. Twitter (again, based on daily numbers) was near $6, and Facebook (using MAUs) above $7 -- about eight times that of Pinterest.Somewhat counterintuitively, this is good news for PINS stock, as it means there's plenty of room for improvement. That's most obviously true overseas, as ARPU outside the U.S. in the third quarter was just 13 cents. On the other hand, SNAP stock has rallied over the past 13 months thanks to optimism toward its own potential for better monetization, especially overseas. Pinterest has a similar opportunity and a lower stock price, at least relative to its users and revenue.The eMarketer report seems to have reminded investors of that fact, and so the rally this week makes some sense. The RisksThat said, there are three key risks here. The first is that the other stocks in the social media space may well be overvalued. Pinterest stock could outperform SNAP going forward, but that alone doesn't mean PINS will rally.The second is that competition is going to be intense, and Pinterest is later to the game. Amazon (NASDAQ:AMZN) quickly is becoming a force in online advertising, and threatening the duopoly of Facebook and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) in the process. Pinterest is a later entrant into the space, which may make it more difficult to challenge those giants.Finally, it's fair to wonder at least a little bit, if execution needs to improve. The international ARPU figures in particular are quite soft -- and can't be explained solely by different demographics and buyer behaviors. All social media companies have much higher monetization domestically, but none have the huge spread that Pinterest does; ARPU in Q3 was $2.90 in the U.S., 22x the overseas figure.The opportunity for improvement is bullish in the sense that ARPU can drive overall revenue growth. However, it's bearish in the sense that the opportunity is so large. ARPU rose just 14% YOY in Q3. A 26% rise in the U.S. is solid, but with the domestic user base up just 8% YOY, there might not be enough in that market to drive the growth still priced into the stock.Meanwhile, overseas markets, again, are much smaller: even Facebook generated just $3.24 per user in Asia-Pacific in Q3, and $2.24 in its "Rest of World" segment (which excludes the U.S., Canada, Europe, and Asia Pacific). That's a big reason why PINS stock slumped so much after the Q3 report, despite seemingly impressive consolidated results. A Key Earnings Report for PINS StockRecent trading and the reaction to Q3 suggest that the fourth-quarter report, due on Feb. 6, is exceedingly important. Investor enthusiasm has built just this week. Valuation might be cheap on a relative basis, but PINS stock still trades at nearly 7 times 2020 revenue and over 300 time adjusted EPS.Pinterest doesn't necessarily have to prove its ability to better monetize users in a single quarter, but it needs to inspire confidence on that front. This increasingly is a story of opportunity versus execution, and Pinterest needs to make sure investors keep focusing on the former -- and not the latter.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post The Key Questions for Pinterest Stock Before February Earnings appeared first on InvestorPlace.