Here’s what we’re watching ahead of Friday’s trading action.
—U.S. stock futures edged lower Friday, putting the S&P 500 on track to end the week with muted gains after notching its ninth record closing high for 2021.
Futures tied to the S&P 500 slipped 0.3%, pointing to a drop after the opening bell. Contracts linked to the Nasdaq-100 Index edged down 0.3%, suggesting that technology stocks may also slip. Read our full market wrap.
What’s Coming Up
—The University of Michigan’s consumer sentiment index for the opening weeks of February, due at 10 a.m. ET, is expected to inch up to 80.8 from 79.0 at the end of January.
Market Movers to Watch
—All hail Baby Yoda. Walt Disney shares were up 0.9% ahead of the bell after the entertainment giant reported a first-quarter profit, as its flagship streaming service, Disney+, added more than 21 million new subscribers during the period. But the pandemic continued to zap results in the company’s movie-distribution and theme-park segments.
Raffles and gift give-aways aren’t uncommon at company parties, but the company behind Genshin Impact went a step further, randomly awarding hard-to-get graphics cards and PS5s to employees as thanks for helping make one of last year’s hottest new free-to-play gacha games.
“MiHoYo, the developers of Genshin Impact, held their annual employee meeting where they gave away a bunch of electronics to employees in a lottery,” Niko Partners senior data analyst, Daniel Ahmad, wrote on Twitter yesterday. Accompanying photos showed giant stacks of iPhones, Nintendo Switches, GeForce RTX graphics cards, and PlayStation 5s, the latter of which has been especially hard for people to get their hands on following ongoing inventory shortages.
The irony, of course, as PC Gamer pointed out, is that Genshin Impact is itself largely based around lotteries—based on random number generators (RNG)—in which players pay currency earned in-game or real money for a chance to unlock rare new characters. Some are much harder to get than others, leading players to grind and burn through resources waiting for top-tier characters like Venti to drop. Some players have spent loads of money on the game this way, one of the reasons Genshin Impact went on to make nearly $400 million in its first couple of months, according to mobile analytics firm Sensor Tower.
To celebrate the game’s lucrative launch, MiHoYo reportedly used a similar drop-rate system to allocate the limited supply of gaming hardware it planned to give away to employees on top of other bonuses. According to a screenshot shared by Ahmad, staff had a 30% shot at a Nintendo Switch, a 21% shot at an RTX 3070 graphics card, a 16% shot at a PS5, and a 1% chance of getting a combined Apple Watch Series 6 and iPhone 12 Pro Max bundle.
G/O Media may get a commission
For the time being, it looks like you’ve got at least as good a chance of scoring a PS5 from getting a job working on Genshin Impact as you do from refreshing your Amazon cart.
There have been complaints for a few months now that one of PC case company NZXT’s products has been catching fire. This week, the company has finally apologised and removed the case from its store.
The issues concerned their H1 case, which is basically a very big, Xbox Series X-like box. As OC3D report, “it looks like the screws on the H1’s PCIe Riser Card are causing a short circuit, causing sparks to fly, smoke to generate and burns on the H1’s PCIe riser card.”
One owner managed to film the short circuit taking place, complete with ensuing flames.
After initially failing to address the issue when it was first reported last year, then putting forward a half-assed fix that involved swapping out some metal screws for some nylon ones, NZXT has finally—mostly thanks to increasing pressure from PC hardware sites—issued a statement on their company site and taken more concrete steps to make this right.
That statement reads (emphasis mine):
To our community,
We’re sorry.
The nylon screws were not the complete solution for the H1 fire hazard; they didn’t address the root cause of the issue. We didn’t account for scenarios where someone could replace the nylon screws with metal ones unknowingly. Our execution did not live up to the quality that our community has come to expect from us.
We will be removing the H1 from the NZXT Store and NZXT BLD. We’re going to send out redesigned PCIe Gen3 Riser Assemblies for current H1s and we’re going to help with installation for those who need it.
Going forward, we’re instituting more robust and thorough design processes. From the initial designs, QA, to additional testing, we’re committed to quality in both our products and our response to your concerns.
We want to thank Steve from Gamers Nexus. He and his team brought the issue of someone replacing the nylon screws with metal screws to our attention and raised the urgency surrounding it.
Google Stadia, the late 2019 streaming platform that promised to revolutionize gaming by letting users stream games without needing to own a powerful PC or console, is altering course, getting out of the game-making business and will now offer its platform directly to game publishers alongside offering Stadia Pro to the public.
The company is announcing the news today, though Kotaku began to hear rumblings from sources close to Stadia last week that Google’s service was heading for a major change. One games industry source told Kotaku that Google was canceling multiple projects, basically any games slated for release beyond a specific 2021 window, though they believed games close to release would still come out. Today brings some clarification.
Google will close its two game studios, located in Montreal and Los Angeles. Neither had released any games yet. That closure will impact around 150 developers, one source familiar with Stadia operations said. The company says it will try to find those developers new roles at Google.
Jade Raymond, the veteran producer who helped build Assassin’s Creed for Ubisoft and moved on to EA several years ago before leaving to run game creation at Stadia, is exiting the company, according to Google.
Google will continue to operate the Stadia gaming service and its $10 monthly Stadia Pro service. It’s unclear how many, if any, exclusive games will still come to the service, though the company has indicated that it can still sign new games and will bring more third-party releases to the platform. It nevertheless will look to many like a draw down of the plan to have Stadia run as a bona fide competitor to console platforms.
G/O Media may get a commission
The company plans to begin offering its Stadia tech to publishers, opening up the possibility for Stadia to become the streaming tech for other video game companies. Google’s head of Stadia operations, longtime console executive Phil Harrison, will focus on pursuing these new partnerships.
“We see an important opportunity to work with partners seeking a gaming solution all built on Stadia’s advanced technical infrastructure and platform tools,” Harrison wrote in a blog post today. “We believe this is the best path to building Stadia into a long-term, sustainable business that helps grow the industry.”
Google initially offered Stadia in a $129 Founder’s Edition bundle, which included a custom controller, a Chromecast Ultra (used for streaming games from Google’s servers to a TV), and three months of Stadia Pro, a subscription service that granted access to certain games.
Google promoted some exciting features, including the ability to let players pass control of a livestreamed Stadia game on the fly and to share savestates of games, but many of them weren’t available at launch and remained in testing phases.
The service’s best moments may have been when its third-party ports showed off the strength of the cloud gaming model, in which a game can run well on just about any device with a screen and a strong internet connection. Ubisoft games such as Assassin’s Creed Odyssey ran well on Stadia. Destiny 2‘s Stadia support let players of that game drop in for an extra match or quest from their phone or laptop when they were far from their regular gaming gear. When Cyberpunk 2077 was faltering on everything else in December, it was running quite well on Stadia.
Still, without offering an all-you-can-play service nor offering killer exclusive games, Stadia struggled to get its footing. Meanwhile, Microsoft ramped up its xCloud cloud gaming service as part of its Game Pass Ultimate bundle, and Stadia became less and less alluring to the kind of hardcore gamer who can build buzz for a new gaming service.
Google seemingly built for the future with the creation of first-party studios and a leadership team consisting of accomplished studio heads and creative directors, but those efforts weren’t enough to stave off the fate many people feared when hearing about this Google initiative: that it would lose support from within before it got ample time to realize its potential.
Stadia isn’t quite done. The Stadia tech could still succeed. By many accounts, Stadia runs games great. But as a game-maker, Google appears to have packed it in. Said one source familiar with Stadia’s first-party operations, citing another tech giant’s widelypublicized failure to create video games: “Google was a terrible place to make games. Imagine Amazon, but under-resourced.”
Special-purpose acquisition companies—shell companies planning to merge with private firms to take them public—are rising more than 6% on average on their first day of trading in 2021, up from last year’s figure of 1.6%, according to University of Florida finance professor
Jay Ritter.
Before 2020, trading in SPACs was muted when they made their debut on public markets.
Now, shares of blank-check companies almost always go up. The last 140 SPACs to go public have either logged gains or ended flat on their opening day of trading, per a Dow Jones Market Data analysis of trading in blank-check companies through Thursday. One hundred and seventeen in a row have risen in their first week. The gains tend to continue, on average generating bigger returns going out to a few months.
The gains in companies that don’t yet have any underlying business underscore the wave of speculation in today’s markets. Merging with a SPAC has become a popular way for startups in buzzy sectors to go public and take advantage of investor enthusiasm for futuristic themes.
But lately, day traders are even putting money into SPACs before they have revealed what company they are buying. At that stage, they are pools of cash, so investors are wagering that the company will eventually complete an attractive deal.
Despite the risks, many are embracing the trade, underscoring how online investing platforms and social-media groups now send individuals flocking to new corners of markets, including shares of unprofitable companies such as GameStop and
AMC Entertainment Holdings Inc.
AMC 53.65%
That trend also is playing out in everything from shares of silver miners to SPACs, which were relatively rare before last year but are suddenly ubiquitous in finance.
“I would just have a bad case of FOMO if I wasn’t in SPACs,” said
Marco Prieto,
a 23-year-old real-estate agent living in Tucson, Ariz., referring to the fear of missing out that is driving many individuals to put money into markets.
He has a roughly $50,000 portfolio and about 60% of his holdings tied to blank-check companies. Some of his positions are early on in shell firms such as
Social Capital Hedosophia Holdings Corp. VI,
while others are based on rumors tied to possible deals by companies including
Churchill Capital Corp. IV.
Share-price performance of existing SPACs without deals announced*
Amount of cash
held by SPAC:
Biotechnology/Life science/Health care
Share-price performance of existing SPACs without deals announced*
Amount of cash
held by SPAC:
Biotechnology/Life science/Health care
Share-price performance of existing SPACs without deals announced*
Amount of cash
held by SPAC:
Biotechnology/Life science/Health care
Share-price performance of existing SPACs without deals announced*
Amount of cash
held by SPAC:
Biotechnology/Life science/Health care
Shares of that company have more than doubled since Bloomberg News reported on Jan. 11 that it is in talks to combine with electric-car firm Lucid Motors Inc. Trading got so frenzied that the SPAC put out a statement a week later saying it wouldn’t comment on the report and that it is always evaluating a number of possible deals. The stock has still been gyrating in the days since.
Investors betting on SPACs even before such reports is extraordinary because the underlying value of a blank-check firm before it pursues a deal is the amount of money it raises for a public listing. That figure is typically pegged at $10 a share. Still, it has become common for investors to buy at higher prices such as $11 or $12 to back big-name SPAC founders such as venture capitalist
Chamath Palihapitiya
and former Citigroup Inc. deal maker
Michael Klein.
In another sign blank-check firms are now frequently traded by individuals, several SPACs and companies that have merged with them recently joined GameStop and AMC on a list of stocks that had position limits on Robinhood Markets Inc., a popular brokerage for day traders. Those restricted included Mr. Klein’s Churchill Capital IV and a few of Mr. Palihapitiya’s SPACs in the
Social Capital Hedosophia
SPCE 2.74%
franchise.
The flood of money pouring in is a concern for skeptics who worry that everyday investors don’t understand the dangers of the trade. Even recent losses in a few hot companies such as electric-truck startup
Nikola Corp.
NKLA -0.39%
and health-care firm MultiPlan Inc. that merged with blank-check firms aren’t deterring investors because of the gains in other SPACs.
“It’s a tremendous amount of speculation,” said
Matt Simpson,
managing partner at Wealthspring Capital and a SPAC investor. His firm invests when SPACs go public or right after, then takes advantage when shares rise and typically sells before a deal is completed. He advertised an expected return from the strategy of 6% to clients, but last year it returned 20%.
Ninety-one SPACs have raised $25 billion so far this year, putting the market on track to shatter last year’s record of more than $80 billion, according to data provider SPAC Research.
Fast gains in the shares can result in big payoffs for their founders and the first investors in blank-check firms like Mr. Simpson. These earliest investors always have the right to withdraw their money before a deal goes through. The traders who get in later don’t have those same privileges, but that hasn’t been a deterring factor.
“If you don’t take a risk, there’s really no opportunity at all,” said
Chris Copeland,
a 36-year-old in upstate New York who started day trading on the platform Robinhood with his girlfriend last month. Roughly three-quarters of his portfolio is tied to SPACs such as
GS Acquisition Holdings Corp. II.
Mr. Prieto checks SPACs on his phone. ‘I would just have a bad case of FOMO if I wasn’t in SPACs,’ he says.
Photo:
Cassidy Araiza for The Wall Street Journal
Trading volumes in many popular blank-check firms have increased lately, an indication of investors’ heightened activity. That trend is even drawing attention from some SPAC founders.
“It worries me,” said veteran investor and SPAC creator
Bill Foley.
Trading volumes have surged in one of the SPACs founded by the owner of the Vegas Golden Knights hockey team, especially since it announced a $7.3 billion deal to take
Blackstone Group Inc.
BX 0.21%
-backed benefits provider Alight Solutions public last week.
One reason traders are getting into blank-check firms when they are just pools of cash is that the time it takes for a SPAC to unveil a deal has dwindled. Blank-check firms normally give themselves two years to acquire a private company, but many these days need only a few months.
SHARE YOUR THOUGHTS
Are you investing in SPACs? Why or why not? Join the conversation below.
It also doesn’t take long for investor speculation about a blank-check firm’s acquisition to build, particularly because SPACs can indicate the sector in which they hope to complete a deal.
Excitement can be triggered by a SPAC pioneer like Mr. Palihapitiya, who sometimes hints to his more than 1.2 million Twitter followers when activity is coming. The former Facebook Inc. executive took space-tourism firm
Virgin Galactic Holdings Inc.
public in 2019 and last month reached a deal with Social Finance Inc.
Even though he invests in a number of blank-check firms other than his own—often when SPACs need to raise more money to complete deals—shares of his own companies can climb following such tweets. One example came Jan. 21, when one of his blank-check firms rose about 4% after Mr. Palihapitiya started a tweet by saying “I’m finalizing an investment in ‘???.’”
The SPAC has since given back those gains after no news about an acquisition came out and it was revealed that Mr. Palihapitiya’s investments were in companies unrelated to his own. He declined to comment.
Mr. Palihapitiya also has thrown himself into the frenzy of activity around GameStop trading, publicizing an options trade last week in the stock and taking profits on it.
Reports about possible mergers like those surrounding the Churchill Capital IV SPAC and a possible combination with Lucid Motors also quickly attract hordes of buyers. That blank-check firm is now owned by many individuals, including Messrs. Prieto, Copeland and
Jack Oundjian,
a 40-year-old who lives in Montreal.
“I’m very excited that we have a chance to be able to participate in what could be future unicorn companies,” or startups valued at $1 billion or more, Mr. Oundjian said. He said he views SPACs as long-term investments rather than fast trades, and holdings tied to the sector make up about 30% of his roughly $1.2 million portfolio.
Private companies are flooding to special-purpose acquisition companies, or SPACs, to bypass the traditional IPO process and gain a public listing. WSJ explains why some critics say investing in these so-called blank-check companies isn’t worth the risk. Illustration: Zoë Soriano/WSJ
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com
Google temporarily yanked Element’s Android chat app from the Play Store this week for allegedly hosting abusive content. The decision’s particularly baffling given that Element is only a client for the federated chat protocol Matrix and not a service in and of itself. Meaning that Element can (and does) moderate its own servers, but has zero control over what happens on the network that users connect to.
“[J]ust as Google does not control the content on the Web, Element does not control the content on Matrix,” Element CEO Matthew Hodgson wrote in a blog post published Saturday.
Google booted Element from its app store on Friday without warning or prior notification and restored the app late Saturday evening, Element said. In a Saturday morning tweet, the company said they’d reached out to Google and confirmed that the suspension “is due to abusive content somewhere on Matrix.” Element’s developers submitted a “detailed appeal” to Google to try to overturn the suspension, and it seems to have made a difference.
In a blog update, Hodgson said a Google executive reached out and apologized for the “bad communication” on Google’s part. The suspension was apparently related to “some extremely abusive content” on the default matrix.org home server, which Element runs on behalf of Matrix, that had already been identified and swiftly dealt with by Element’s moderators.
G/O Media may get a commission
“We’ve explained how Element and Matrix works, established a channel for communication over any future moderation concerns, and expect the app to be restored shortly,” Hodgson wrote at the time.
Hours later, he updated the blog to announce the app was back up and running again and thanked users for their patience.
“Thanks also to Google for being transparent and apologetic and the rapid resolution once we’d established contact,” he said.
But even though the app is now back in Google’s Play Store, its abrupt disappearance undoubtedly led to some headaches for the scores of businesses, universities, and governments, including the UK, America, France, and Germany, that use Element and the Matrix network. Google has previously suspended a third-party client for content beyond its control, as Android Police notes. In February 2020, Google banned the popular open-source Reddit client Slide for almost two weeks because a screenshot in the app’s store listing contained the text “ISIS” as shown in a news-related Reddit post.
Google did not immediately respond to Gizmodo’s request for comment. The incident with Elementcomes after Google and Apple both cracked down on Parler’s app in the wake of the Capitol building attack on Jan. 6 for allegedly hosting violent content.
With thisin mind, it makes sense that Google may have its hackles raised about content moderation and is going a bit ban-happy these days. And while this approach may be warranted in some cases, let us remember that not all apps are bad, and that some really are doing their best to fight off hateful and violent content.
The PlayStation 5 launched last November, but months later, it’s still hard to snag one, especially in Japan. Early today, the Yodobashi Camera electrics megastore in Akihabara, one of the biggest in the country, sold a huge shipment of PS5. All hell broke loose.
People began shoving and pushing, descending on a Yodobashi clerk who had a stack of an estimated 300 numbered tickets to purchase the PS5.
Have a look at the chaos that ensued:
The police were called, and the sale was cancelled.
G/O Media may get a commission
Why did this happen? As Twitter’s AJapaneseDream points out, the Akihabara location is apparently only one of two Yodobashi Cameras in the greater Tokyo-Yokohama area that does not require the retailer’s black credit card to purchase the hardware—a requirement that was instituted, it seems, to thwart resellers.
What’s more, unlike in the past, the store gave out numbered tickets first come, first served. In the past, also in an effort to discourage console flipping, the retailer would give away raffle numbers for the chance to purchase the hardware.
This created a perfect opportunity for those who wanted to get a PS5 for themselves or even to resell.
Keep in mind that the Japanese government has currently declared a state of emergency over the novel coronavirus. Tokyo has the highest number of cases in the country.
Do you hear that? It’s the last dying breaths of Adobe Flash, which might finally be rendered obsolete by Mozilla’s release of Firefox 85 on Tuesday.
Up until now, Firefox had been the last of the old guard to support Flash. Apple first dissed the software in 2010 by banning it from iPhones and then again in 2020 by refusing to support it with Safari 14, and Google and Microsoft both jettisoned it earlier this year with the releases of Chrome version 88 and Edge 88, respectively. Although the software was an early pioneer for gaming, video and animation on the web, Adobe had previously announced a long-term strategy to halt updates to and distribution of the Flash Player, encouraging creators to migrate any reliant content over to the more modern open formats.
In addition to some notable omissions, Firefox 85 has also added some interesting new features, including network partitioning that works to protect users from supercookie tracking by splitting the browser cache on a per-website basis.
“Over the years, trackers have been found storing user identifiers as supercookies in increasingly obscure parts of the browser, including in Flash storage, ETags, and HSTS flags,” Mozilla wrote in a blog post. “The changes we’re making in Firefox 85 greatly reduce the effectiveness of cache-based supercookies by eliminating a tracker’s ability to use them across websites.”
Other big additions include changes to how bookmarked pages are stored within the browser and an option to remove all saved credentials by clicking a single button, which could make life easier for users who share a computer or need to clear out their browser for privacy reasons.
A strange outage is impacting internet users in the Northeast U.S. It’s not entirely clear what is going on, but it sure is annoying.
Around noon on Tuesday, outage reports began pouring in, according to DownDetector, which tracks online service outages. But it’s not limited to one company; users reported issues with Comcast, Google, Zoom, YouTube, Slack, Amazon Web Services, and many others. (AWS’s own status page indicates that its services are operating normally, for what it’s worth.)
While the cause (or causes) remains unconfirmed, a cut Verizon fiber optic cable in Brooklyn, New York, may be the culprit. Verizon’s customer support confirmed on Twitter that one of its cables had been severed, and customers said they received notice of the outage via email.
Not all services, nor all users, appeared to be affected equally. Even among the New York-based Gizmodo staff, the problem seems just… weird. One editor could access Slack fine, but Google services were down. Others experienced slower response times while still being able to access all services they attempted to use.
At the time of writing, several services, including Google and Zoom, appear to be coming back online. Others remain inaccessible for some users.
G/O Media may get a commission
Testing rainbow umbrella
Lorem ipsum dolor sit am ais aute irure dolor in reprehe nderittur adipissmod tempor dolore magna aliqua.
A Verizon spokesperson said in an email that they are looking into the issue.
An AWS spokesperson said the issue was related to an internet service provider and not AWS itself. In an email, a Google spokesperson echoed AWS, saying in a statement, “We are aware of reports regarding issues affecting access to some Google products, but have not found issues with our services. We’re continuing to investigate.”
We’ve also reached out to Comcast for clarity on the outage and will update when we hear back. If the outage is impacting you, let us know what you’re seeing in the comments.
Update 1:25 PM ET, Jan. 26: AWS confirmed that issues customers experienced were related to an internet service provider, not AWS. Google said it’s investigating the issue but has found no problems with its services.
Millions of users of the dating site MeetMindful got some unpleasant news on Sunday. ZDNet reported that the hacker group ShinyHunters, the same group who leaked millions of user records for the company that listed the “Camp Auschwitz” shirts, has dumped what appears to be data from the dating site’s user database. The leak purportedly contains the sensitive information of more than 2.28 million of the site’s registered users.
According to ZDNet, the 1.2 gigabyte file was shared as a free download “on a publicly accessible hacking forum known for its trade in hacked databases.” It included troves of sensitive and identifiable user information, including real names, email addresses, city, state, and ZIP code details, birth dates, IP addresses, Facebook user IDs, and Facebook authentication tokens, among others. Messages, however, were not exposed.
The outlet, which included screenshots of the file posted to the hacker forum as well as a small sample of the data exposed, highlights that not all the leaked accounts include the user’s full details. Nonetheless, it stated that the information leaked could be used to link individuals’ dating profiles to their real-world identities. The hacking forum where the data was posted has been viewed more than 1,500 times. Per the outlet, it is still available for download.
ZDNet said it was informed of the leak by a security researcher, who it did not name, earlier this week. It added that it had contacted MeetMindful on Thursday to ask for a comment on the matter but had not received a response for days.
G/O Media may get a commission
Gizmodo has also gotten in touch with MeetMindful to ask it about the reported hack. We’ll make sure to update this blog if we hear back.
According to its Crunchbase profile, MeetMindful is a dating site platform for “people who are into health, well-being, and mindfulness.” It was founded in 2013, is based in Denver, Colorado, and is still active.
Here’s where it starts to get a little strange, though. The site’s listedsocialmedia channels have been inactive for months, which is interesting considering that major dating apps have been growing during the pandemic. I mean, don’t they want to encourage their users to date (safely)? From the outside, the service seems like dead zone. Who knows though, it could be all the rage inside the site itself.
It is unclear whether MeetMindful has notified its users of the incident. If it’s true, users need to know so that they can be on the lookout for suspicious activity and change logins and passwords if necessary. Bottom line: Get moving.
