Ripple takes a big hit.
Only last week, Ripple appeared to lay claim to the biggest alternative to Bitcoin. That isn’t the case anymore.
The price of Ripple’s XRP virtual currency has plunged about 27 percent over the past 24 hours, reaching $2.47 this morning, according to CoinMarketCap. Ripple’s total market capitalization has fallen back below that of Ethereum.
To be fair, other virtual currencies — including Bitcoin — are falling as well.
It was only last week: Investors breathlessly touted Ripple co-founder Chris Larsen, who owns a significant amount of XRP, as richer than Mark Zuckerberg.
The breathlessness hasn’t abated: Shares in Seagate were briefly up more than 10 percent on Monday amid excited speculation that the hard drive company owned a huge stake in XRP as part of its investment in Ripple almost three years ago. (It’s not clear that’s actually the case.)
— Michael J. de la Merced
GoPro’s woes continue to grow.
Its announcement of preliminary fourth-quarter results today compounds the troubles for what has been one of the most disappointing market debutantes in recent years.
The company issued a revenue forecast that was lighter than analysts were expecting. And the action-camera maker announced its latest efforts to turn around its business:
• Laying off at least 254 employees, bringing its headcount to under 1,000 worldwide
• Its founder and C.E.O., Nick Woodman, reducing his cash compensation this year to $1.
• Getting out of the drone market amid “a hostile regulatory environment” in Europe and the U.S.
Over all, GoPro’s shares have fallen 79 percent since the company’s I.P.O. three-and-a-half years ago.
— Michael J. de la Merced
How much of its tax windfall will Apple spend on buybacks?
Steven Milunovich, an analyst at UBS, expects the iPhone maker to use the overseas cash it repatriates to buy back $122 billion in stock through 2019.
“Repatriation of ~$250bn of offshore cash should increase the rate of Apple’s share buybacks since the company believes the stock remains attractive in that its services business is undervalued.”
Apple has bought back more than $165 billion of stock over the past five years.
Credit Jason Henry for The New York Times
Is 2018 the year that Twitter is sold?
The analyst Rich Greenfield of BTIG thinks so. Leading his list of predictions for the year is speculation that the social network would finally become the target of deal-making. (Remember that Salesforce had held talks to buy the company in the fall of 2016.)
From Mr. Greenfield’s note:
Twitter offers a unique acquisition opportunity for any company looking to own breaking news, politics and sports, infused with video on mobile devices with tens of millions of daily active users across the world. Add to that a vast treasure trove of data on its users and a Twitter acquisition becomes compelling for many companies across the TMT universe.
Who would buy Twitter? Maybe Salesforce comes back. Or maybe Google does. Or Microsoft.
• AT&T will defeat the Justice Department in the court battle over Time Warner.
• CBS and Viacom finally combine.
• Spotify will go public this year, but may sell itself down the road.
— Michael J. de la Merced
How long can Nvidia’s rally last?
The chip-maker’s stock is up 2.5 percent Monday. The driver? News that Nvidia will partner with Uber and Volkswagen on autonomous driving projects.
• “Nvidia CEO Jensen Huang said at the CES technology conference in Las Vegas that Uber’s self-driving car fleet was using their technology to help its autonomous cars perceive the world and make split-second decisions.”
• “With Volkswagen, Nvidia said it was infusing its artificial intelligence technology into the German automakers’ future lineup, using their new Drive IX platform. The technology will enable so-called “intelligent co-pilot” capabilities based on processing sensor data inside and outside the car.”
Some context: Shares of Nvidia more than doubled over the past 12 months after a roughly 200 percent gain in 2016. The rally in Nvidia’s shares has come as demand for chips to power data centers, artificial intelligence, autonomous driving and gaming has surged.
Nvidia said that “320 companies involved in self-driving cars – whether software developers, automakers and their suppliers, sensor and mapping companies – are using Nvidia Drive, formerly branded as the Drive PX2,” Reuters reports.
Deutsche Bank’s woes continue.
The German bank is down seven percent the past two days after it said it would post a small loss for 2017, its third consecutive annual. Weak trading and a $1.8 billion hit from the United State’s tax overhaul are the main culprits.
Of those, Deutsche Bank’s trading woes should be more concerning to shareholders, writes Christopher Thompson of Breakingviews.
The bank said sales and trading revenue was expected to decline 22 percent in the fourth quarter from a year ago. While Deutsche Bank’s trading performance has not be appreciably worse than its European rivals, the decline in its shares “is that it is more dependent on this revenue than other big investment banks.”
“Equities and fixed income sales and trading brought in more than 31 percent of Deutsche’s total revenue in the third quarter of 2017, compared with around 28 percent at Credit Suisse and 19 percent at Barclays. The German group also lacks a consistent source of stable earnings similar to Credit Suisse’s wealth management franchise or Barclays’s UK retail bank.”
That means that “without a pickup in volatility or client activity, trading revenues – and shareholders – remain stuck in a rut,” Mr. Thompson writes.
Credit Rebecca Butala How/Getty Images
If your business flight to New York was disrupted this weekend, here’s why.
Jason Rabinowitz of The Points Guy explained how John F. Kennedy International Airport in particular functions — and why its operations were severely disrupted even after the “bomb cyclone” of last week.
Among the interesting pieces of trivia to emerge from the piece:
Essentially, each terminal at JFK is its own little fiefdom with separate operations, management and employees. If an airline calls Terminal 7 home, that’s the only terminal it’s allowed to use. Even if Terminal 4 has a dozen empty gates, an airline slated for Terminal 7 may have to wait hours for a gate to open at Terminal 7.
Here’s Mr. Rabinowitz’s concluding thought:
Savvy travelers all know to avoid NYC area airports whenever possible, and this winter storm drove that point home once again.
— Michael J. de la Merced
Credit Mike Blake/Reuters
Intel’s C.E.O. is in the hot seat, just in time for CES.
Questions Brian Krzanich is likely to face about as he prepares for a keynote speech at the biggest convention in consumer electronics:
• How well will planned fixes work against Meltdown and Spectre, the two computer chip security flaws that affect most of the world’s processors?
• Can Intel design new chips without either of the problems?
• Were the $39 million worth of stock sales he made in November, after the flaws were discovered but before they were disclosed, really just part of a prearranged trading plan?
What he would prefer to talk about: Augmented reality and self-driving cars.
Today’s talking point, from Nathaniel Fick, the C.E.O. of the cybersecurity company Endgame, in an NYT Op-Ed:
From a corporate governance and accountability perspective, cybersecurity today is being treated like accounting was before the fallout from the Enron scandal inspired the Sarbanes-Oxley Act’s increased standards for corporate disclosures.
The tech flyaround, CES edition
• The convention’s organizers said they were seeking more women speakers. (CNET)
• Google is preparing to step up its fight against Amazon’s Echo. (FT)
• Amazon isn’t sitting still and wants to put its Alexa virtual assistant in more and more devices. (Recode)
• Superfast 5G wireless internet will be a big focal point of the convention. (Business Insider)
• The proliferation of next-generation streaming services is a reminder of how far online video has come since the debut of Web TV 20 years ago, Neal Mohan, YouTube’s chief product officer writes. (Variety)
Credit Paul Drinkwater/NBC
#MeToo and Oprah take center stage at the Golden Globes.
Among the highlights from last night’s awards, where the uniform was black to acknowledge systemic harassment and sexism in Hollywood:
• Oprah Winfrey, who received the Cecil B. DeMille Award for lifetime achievement, used her acceptance speech as a call to arms, saying, “A new day is on the horizon.” Speculation has arisen about whether she might run for president.
• The actresses Debra Messing and Eva Longoria used red-carpet interviews to chastise the E! network on gender pay inequity.
• Several actresses arrived with activists as their guests.
• The actress Natalie Portman, introducing the best director award, said, “Here are the all-male nominees.”
The host Seth Meyers quipped, “It’s been years since a white man was this nervous in Hollywood.”
The misconduct flyaround
• An array of start-ups is offering resources for women and companies to halt harassment at work. (WaPo)
• Maria Contreras-Sweet, an investor and former Obama administration official, is said to be the front-runner to buy The Weinstein Company, according to unnamed sources. (Deadline)
• The National Limousine Association cited #MeToo in its latest ad attacking apps like Uber and Lyft. (NYT)
• Carrie Gracie, a senior editor for BBC News, stepped down from as China editor in a protest against pay inequality, calling the broadcaster’s salary system “secretive and illegal.” (NYT)
Credit Justin Lane/European Pressphoto Agency
Will Jared Kushner have to sell more stakes?
Revelations about more ties between the Kushner Companies and Israeli businesses like the insurer Menora Mivtachim have raised questions about Jared Kushner’s wealth and the complicated relationships that his family’s company has around the world. (Particularly given Mr. Kushner’s role as a top envoy for Middle Eastern peace, as well as a senior adviser in his father-in-law’s White House.)
Caveat: The NYT says that recent deals don’t appear to violate federal ethics laws, and Mr. Kushner appears not to have been personally involved. He has sold stakes in some Kushner Companies properties, like the 666 Fifth Avenue office building in Midtown Manhattan.
The pull quote, from Robert Weissman of the nonprofit government ethics group Public Citizen:
“No one could ever imagine this scale of ongoing business interests, not in a local peanut farm or a hardware store but sprawling global businesses that give the president and his top adviser personal economic stakes in an astounding number of policy interests.”
The Washington flyaround
• Steve Bannon has backed away from remarks quoted in “Fire and Fury,” Michael Wolff’s book on the Trump White House. (NYT)
• “Fire and Fury” leads Amazon’s list of best-selling books. (Amazon)
• Breitbart appears to need Mr. Bannon less than he needs it. (NYT)
• Which big companies have been trying to poach Rob Porter, the White House’s staff secretary? (Axios)
• The Brookings Institution will hold a discussion today, led by Ben Bernanke, on whether it’s time to permanently replace the 2 percent inflation target. (Brookings)
• “Mr. Trump does not know how to use bilateral trade negotiations to create pressure for stronger multilateral rules,” argues Robert Zoellick, the former World Bank president who served in both Bush administrations. (WSJ)
Credit Brett Gundlock for The New York Times
Unintended consequences of the tax law, farming edition.
Mr. Trump will head to Tennessee today to promote the tax overhaul. But the farm industry has reason to dislike some of his economic policies.
From Ana Swanson and Jim Tankersley of the NYT:
New analyses of the tax law by economists at the Department of Agriculture suggest it could actually lower farm output in the years to come and effectively raise taxes on the lowest-earning farm households, while delivering large gains for the richest farmers.
An industry breathing a sigh of relief: Analysts expect a tax windfall for retailers, especially domestically focused ones like Nordstrom and those targeting high-end consumers, according to the WSJ.
The M. & A. flyaround, second week of January edition.
• Celgene agreed to buy Impact Biomedicines, which makes blood disease drugs. It will pay between $1.1 billion and $7 billion, depending on performance. (WSJ)
• Hershey and Ferrero are among those vying for Nestlé’s American candy business, according to unidentified people. (CNBC)
• KKR sold its stake in Valinge, a Swedish maker of flooring parts, to the family that controls Lego, for about $500 million. (FT)
• Expect buying sprees from big tech companies this year, but relatively few I.P.O.s from Silicon Valley start-ups. (CNBC)
• “Deal makers are now on the clock, especially if you believe that the bull market is in its waning stages and the Federal Reserve is serious about interest-rate hikes.” (Barron’s)
Credit Jewel Samad/Agence France-Presse — Getty Images
Jana starts its corporate do-gooder push with Apple.
The hedge fund’s first campaign for its Jana Impact Capital fund: Prod Apple into finding ways to reduce children’s addiction to iPhones.
From the campaign’s public letter to the tech titan:
The only difference between the changes we are advocating at Apple now and the type of change shareholders are better known for advocating is the time period over which they will enhance and protect value.
Who’s helping Jana: The big California pension fund known as Calstrs. Also on board as advisers are the musician Sting and his wife, Trudie Styler; Sister Patricia Daly, a nun who took on Exxon Mobil over environmental issues; and Robert Eccles, a sustainability expert.
The bigger picture: Jana is wading into corporate social responsibility, an area that Wall Street has only recently started dabbling in, the WSJ reports. Firms like TPG have raised social impact funds, but no major activist fund has started campaigns focused specifically on getting companies to act better from a social standpoint.
Why Warren Buffett is optimistic about the U.S.
He explains with some math in this week’s Time, guest-edited by Bill Gates:
• America’s population should grow by about 0.8 percent a year, between births and immigration.
• Assuming annual gains in real GDP continue to be about 2 percent, that means the U.S. will deliver about 1.2 percent growth in per-capita GDP.
What that means in real terms: In 25 years, GDP per head would go from $52,000 to $79,000.
The pull quote:
This game of economic miracles is in its early innings. Americans will benefit from far more and better “stuff” in the future. The challenge will be to have this bounty deliver a better life to the disrupted as well as to the disrupters. And on this matter, many Americans are justifiably worried.
Speaking of Mr. Buffett: Now that class A shares in his Berkshire Hathaway conglomerate have surpassed $300,000 each — they closed on Friday at $301,525 — the WSJ looked at which of its products that could buy you.
If you can’t buy Bitcoin …
Then Dogecoin — the parody virtual currency inspired by an animal meme — may be your ticket to digital riches. Its market capitalization surpassed $2 billion on Saturday and was hovering just under that level this morning.
A potentially big initial coin offering: The messaging app Telegram plans to create its own virtual currency and hopes to raise as much as $500 million in a pre-sale I.C.O., according to TechCrunch.
• Marcelo Claure, the C.E.O. of Sprint, and Rajeev Misra, the head of SoftBank’s Vision Fund, will join Uber’s board following the ride-hailing giant’s share sale to a SoftBank-led group.
The Speed Read
• What happened when the U.S. tried to hold a Swiss banker personally accountable for creating accounts for Americans hiding money from tax collectors. (NYT)
• Saudi Aramco, along with some of the kingdom’s biggest companies, will raise pay after a royal order extended handouts to government workers to ease discontent over prices. (Bloomberg)
• Martin Shkreli is no longer around to deflect attention from a play by drug companies: to start prices high, then raise them incrementally. (NYT)
• Mexico is rejecting one of the Trump administration’s Nafta demands: a provision that could block its truckers from making deliveries into the middle of the U.S. (NYT)
• Indians are proving reluctant to switch to digital payments, despite intensive efforts by the government and global technology companies. (NYT)
• Sweatcoin, an app offering rewards for exercise, has raised about $1.6 million in financing and expects to close another round soon. (NYT)
• The distribution system for legal marijuana sales in California is already showing signs of strain. (WaPo)
• China’s investment banks have taken some big names public in Hong Kong, but they haven’t extended the strength in initial public offerings further. (Bloomberg)
• SpaceX successfully launched a U.S. government spacecraft called Zuma and landed its rocket back on Earth. (CNBC)
• Chinese movie audiences showed little love this past weekend for “Star Wars: The Last Jedi,” which has collected $1.2 billion worldwide. (Deadline)
• The latest to be punished in the Libor benchmark-manipulation scandal is a former Royal Bank of Scotland trader, Neil Danziger. He was fined $338,000 and banned from working in finance. (Bloomberg)
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