Tag Archives: MOBAPP

Business

Startups spring from ashes of Big Tech purge

Leave a comment

  • Mass tech layoffs spawn new wave of startups
  • Early-stage VC funding at around record levels
  • Echoes of dotcom crash that fueled Facebook, others

Jan 3 (Reuters) – Nic Szerman lost his job at Meta Platforms (META.O) in November, just two months after joining full-time, falling victim to a sweeping 13% reduction of its workforce as the advertising market cratered.

Days later he was back working, seeking investment for his own company Nulink, a blockchain-based payment company, and sent pitches to startup accelerator Y Combinator and Andreessen Horowitz’s cryptocurrency fund.

“As counterintuitive as it may sound, this layoff left me in a really good position,” the 24-year-old said. “Because I don’t have to pay back the sign-on bonus, I get four months of pay, and now I have time to focus on my own project.”

Szerman is part of a wave of would-be entrepreneurs who are emerging from the ashes of the mass job losses seen in Silicon Valley in the second half of 2022, according to venture capitalists.

U.S. tech giants including Meta, Microsoft (MSFT.O), Twitter and Snap (SNAP.N) have purged more than 150,000 staff, according to Layoff.fyi, which tracks technology job losses.

While overall venture capital (VC) financing fell 33% globally to about $483 billion in 2022, early-stage funding was robust, with $37.4 billion raised in so-called angel or seed rounds, in line with the record level seen in 2021, according to data from research firm PitchBook.

Day One Ventures, an early stage venture fund in San Francisco, launched a new initiative in November to fund startups founded by people who had been laid off from their tech jobs, touting the slogan “Funded, not Fired”.

The program aims to cut 20 checks for $100,000 by the end of 2022. Day One said it had received over 1,000 applications, most of them from people who were cut loose by Meta, Stripe and Twitter.

“We’re investing $2 million in 20 companies – if we just find one unicorn it almost returns the fund, which I think is a really unique opportunity for us as fund managers,” said Masha Bucher, co-founder at Day One Ventures.

“Looking at the last economic cycle, companies like Stripe, Airbnb, Dropbox have been created in crisis.”

HOT: GAMING AND AI

Also in November, multi-stage fund Index Ventures, which has bankrolled Facebook, Etsy and Skype, launched its second Origins fund, which will invest $300 million in early-stage startups.

Silicon Valley investor U.S. Venture Partners and Austrian VC firm Speedinvest have meanwhile earmarked a similar amount for newly founded companies.

Investors highlighted gaming and artificial intelligence among hot areas of interest.

“With advances in game design, new innovations like cloud gaming, and the emergence of social networking in this sphere, gaming has really transcended into mainstream culture,” said Sofia Dolfe, partner at Index Ventures.

“In every period of economic uncertainty, there is opportunity – to reset, re-prioritize and re-focus energy and resources.”

DOTCOM BUBBLE 2.0

Szerman said his project was rejected by Y Combinator, while he hasn’t heard back from Andreessen Horowitz yet, though he added that other early-stage venture capitalists had expressed interest.

“I told the investors we’ll chat in two or three months,” he added. “I’ll focus on scaling the system now.”

Some investors compared the 2022 downturn to the dotcom crash of the early 2000s, when dozens of overvalued startups went bust, flooding the market with talent and helping to spark a wave of new companies such as Facebook and YouTube.

“Many great companies have been created in relatively dark times,” said Harry Nelis, partner at investment firm Accel, who sees a new generation of risk takers emerge among the swathe of people left unemployed.

Some industry players say former Big Tech employees are uniquely placed to start their own companies, having seen first-hand how some of the biggest firms in the world operate, and enjoying ongoing access to their network of highly skilled colleagues.

One former Googler has sought to help others like him looking for life after technology giants. In 2015, Christopher Fong, who spent almost a decade working for the tech titan in California, launched Xoogler, a project designed to help former employees hoping to start their own companies. Since then, the group’s membership has since swelled to more than 11,000.

Fong told Reuters that experience in Big Tech firm gave founders a “strong brand that can be leveraged to meet investors, potential customers, and recruit team members”.

(This story has been refiled to correct Harry Nelis’ designation to partner from managing partner in paragraph 19)

Reporting by Martin Coulter in London, Supantha Mukherjee in Stockholm and Krystal Hu in New York; Editing by Pravin Char

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Twitter restores suicide prevention feature after Reuters report

Leave a comment

NEW YORK, Dec 24 (Reuters) – Twitter Inc restored a feature that promoted suicide prevention hotlines and other safety resources to users looking up certain content, after coming under pressure from some users and consumer safety groups over its removal.

Reuters reported on Friday that the feature was taken down a few days ago, citing two people familiar with the matter, who said the removal was ordered by the social media platform’s owner Elon Musk.

After publication of the story, Twitter head of trust and safety Ella Irwin confirmed the removal and called it temporary. “We have been fixing and revamping our prompts. They were just temporarily removed while we do that,” Irwin said in an email to Reuters.

“We expect to have them back up next week,” she said.

About 15 hours after the initial report, Musk, who did not initially respond to requests for comment, tweeted “False, it is still there.” In response to criticism by Twitter users, he also tweeted “Twitter doesn’t prevent suicide.”

The feature, known as #ThereIsHelp, placed a banner at the top of search results for certain topics. It listed contacts for support organizations in many countries related to mental health, HIV, vaccines, child sexual exploitation, COVID-19, gender-based violence, natural disasters and freedom of expression.

Its elimination had led some consumer safety groups and Twitter users to express concerns about the well-being of vulnerable users of the platform.

In part due to pressure from consumer safety groups, internet services including Twitter, Alphabet’s Google (GOOGL.O) and Meta’s Facebook (META.O) have for years tried to direct users to well-known resource providers such as government hotlines when they suspect someone may be in danger of harming themselves or others.

In her email, Twitter’s Irwin said, “Google does really well with these in their search results and (we) are actually mirroring some of their approach with the changes we are making.”

She added, “We know these prompts are useful in many cases and just want to make sure they are functioning properly and continue to be relevant.”

Eirliani Abdul Rahman, who had been on a recently dissolved Twitter content advisory group, said the disappearance of #ThereIsHelp was “extremely disconcerting and profoundly disturbing.”

Even if it was only temporarily removed to make way for improvements, “normally you would be working on it in parallel, not removing it,” she said.

Reporting by Kenneth Li in New York, Sheila Dang in Dallas, Paresh Dave in Oakland, and Fanny Potkin in Singapore; Editing by Daniel Wallis

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Elon Musk’s Twitter suspension of journalists draws global backlash

Leave a comment

Dec 16 (Reuters) – Twitter’s unprecedented suspension of at least five journalists over claims they revealed the real-time location of owner Elon Musk drew swift backlash from government officials, advocacy groups and journalism organizations across the globe on Friday.

In a 24-hour poll later by Musk on Twitter on whether to restore the journalists’ accounts, 58.7% votes were in favor of restoring them immediately.

The accounts were still suspended approximately 15 minutes after the poll closed, a check by Reuters showed.

Twitter did not immediately respond to a Reuters request for comment.

The suspensions on Thursday evening drew criticism from government officials, advocacy groups and journalism organizations in several parts of the world, with some saying the microblogging platform was jeopardizing press freedom.

Officials from France, Germany, Britain and the European Union condemned the suspensions.

The episode, which one well known security researcher labeled the “Thursday Night Massacre”, is being regarded by critics as fresh evidence of the billionaire, who considers himself a “free speech absolutist,” eliminating speech and users he personally dislikes.

Shares in Tesla (TSLA.O), an electric car maker led by Musk, slumped 4.7% on Friday and posted their worst weekly loss since March 2020, with investors increasingly concerned about his being distracted and about the slowing global economy.

Roland Lescure, the French minister of industry, tweeted on Friday that, following Musk’s suspension of journalists, he would suspend his own activity on Twitter.

Melissa Fleming, head of communications for the United Nations, tweeted she was “deeply disturbed” by the suspensions and that “media freedom is not a toy.”

The German Foreign Office warned Twitter that the ministry had a problem with moves that jeopardized press freedom.

ELONJET

The suspensions stemmed from a disagreement over a Twitter account called ElonJet, which tracked Musk’s private plane using publicly available information.

On Wednesday, Twitter suspended the account and others that tracked private jets, despite Musk’s previous tweet saying he would not suspend ElonJet in the name of free speech.

Shortly after, Twitter changed its privacy policy to prohibit the sharing of “live location information.”

Then on Thursday evening, several journalists, including from the New York Times, CNN and the Washington Post, were suspended from Twitter with no notice.

In an email to Reuters overnight, Twitter’s head of trust and safety, Ella Irwin, said the team manually reviewed “any and all accounts” that violated the new privacy policy by posting direct links to the ElonJet account.

“I understand that the focus seems to be mainly on journalist accounts, but we applied the policy equally to journalists and non-journalist accounts today,” Irwin said in the email.

The Society for Advancing Business Editing and Writing said in a statement on Friday that Twitter’s actions “violate the spirit of the First Amendment and the principle that social media platforms will allow the unfiltered distribution of information that is already in the public square.”

Musk accused the journalists of posting his real-time location, which is “basically assassination coordinates” for his family.

The billionaire appeared briefly in a Twitter Spaces audio chat hosted by journalists, which quickly turned into a contentious discussion about whether the suspended reporters had actually exposed Musk’s real-time location in violation of the policy.

“If you dox, you get suspended. End of story,” Musk said repeatedly in response to questions. “Dox” is a term for publishing private information about someone, usually with malicious intent.

The Washington Post’s Drew Harwell, one of the journalists who had been suspended but was nonetheless able to join the audio chat, pushed back against the notion that he had exposed Musk or his family’s exact location by posting a link to ElonJet.

Soon after, BuzzFeed reporter Katie Notopoulos, who hosted the Spaces chat, tweeted that the audio session was cut off abruptly and the recording was not available.

In a tweet explaining what happened, Musk said “We’re fixing a Legacy bug. Should be working tomorrow.”

Reporting by Sheila Dang in Dallas; Additional reporting by Hyunjoo Jin in San Francisco, Eva Mathews, Rhea Binoy and Sneha Bhowmik in Bengaluru; Editing by Nick Zieminski, Jonathan Oatis and Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Elon Musk’s team seeks new funding for Twitter – investor

Leave a comment

Dec 16 (Reuters) – Elon Musk’s team has reached out to investors to raise new funds for his struggling social media platform Twitter, one of the investors said.

Ross Gerber, president and CEO at Gerber Kawasaki Wealth & Investment Management, told Reuters that he was contacted by a Musk representative about offering more shares at the same price, $54.20, that Musk paid to take the company private in October.

Jared Birchall, the managing director of Elon Musk’s family office reached out to potential investors this week, news platform Semafor reported on Friday, citing two people familiar with the fundraising effort.

Twitter and Musk did not respond to Reuters requests for comments.

Twitter has seen advertisers flee amid worries about Musk’s approach to policing tweets, hitting revenues and its ability to pay interest on the $13 billion debt that Musk took on to buy the social media company.

Musk sold another $3.6 billion worth of shares in Tesla earlier this week, making it nearly $40 billion worth of shares in the electric-vehicle company sold this year.

Tesla shares on Friday posted their worst weekly loss since March 2020, with investors increasingly concerned about Musk being distracted by Twitter and the slowing global economy.

Reporting by Hyunjoo Jin in San Francisco, Priyamvada C in Bengaluru; Editing by Shounak Dasgupta and Michael Perry

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Electric vehicles confront the leap to the mass market

Leave a comment

DETROIT, Dec 15 (Reuters) – The past year was sobering for investors who poured money into Tesla Inc (TSLA.O) and rival electric vehicle startups that hoped to emulate Tesla CEO Elon Musk’s success.

As interest rates rose and financial markets gyrated, shares in many EV startups deflated. Rivian Automotive Inc (RIVN.O), which had a higher market value than Ford Motor Co (F.N) shortly after it went public in 2021, lost more than 70% of its value over the past year.

Other EV startups fared worse. Electric van maker Arrival warned it could run out of cash in less than a year. Lucid Group Inc (LCID.O), backed by Saudi Arabia’s sovereign wealth fund, struggled to build its sleek Air luxury EVs. Chinese Tesla challenger Xpeng Inc’s (9868.HK) shares lost more than 80% of their value.

Now comes the hard part: Persauding more mainstream consumers to come along for the ride.

WHY IT MATTERS

The automobile industry is pouring more than $1 trillion into a revolutionary shift from combustion engines to electric vehicles guided by software. From Detroit to Shanghai, automakers and government policymakers have embraced the promise of electric vehicles to provide cleaner, safer transportation. European countries and California have set 2035 as the deadline for ending sales of new combustion passenger vehicles.

Tesla Inc’s (TSLA.O) surge to become the world’s most valuable automaker – achieving a $1 trillion valuation last year – humbled established automakers such as Toyota Motor Corp (7203.T) and Volkswagen AG (VOWG_p.DE) that once were reluctant to go electric.

Starting next year, a wave of new electric vehicles from pickup trucks to middle market SUVs and sedans will hit the world’s major markets.

Industry executives and forecasters do not agree on how rapidly electric vehicles could take over half the global vehicle market, let alone all of it.

In China, the world’s largest single automotive market, battery electric vehicles have captured about 21% of the market. In Europe, EVs account for about 12% of total passenger vehicle sales. But in the United States, EV market share is only about 6%.

Among the barriers to EV adoption, industry executives and analysts said, were a dearth of public fast-charging infrastructure, and the rising cost of EV batteries, driven by shortages of key materials and uncertainty over government subsidies that have buoyed EV purchases in major markets including the United States, China and Europe.

The all-electric Ford F-150 Lightning pickup truck is unveiled at the company’s world headquarters in Dearborn, Michigan, U.S., May 19, 2021. REUTERS/Rebecca Cook/File Photo

By 2029, electric vehicles could account for a third of the North American market, and about 26% of vehicles produced worldwide, according to AutoForecast Solutions, a consultancy.

Electric vehicle sales likely will not increase in a smooth, ever-ascending curve, said AFS President Joe McCabe. If there is a recession next year, as many economists forecast, that will slow EV adoption.

Wards Intelligence forecasts that combustion vehicles will make up just under 80% of North American sales in 2027. Based on automakers’ product plans, Wards analyst Haig Stoddard said at a recent conference that manufacturers “expect strong ICE (internal combustion engine) volume heading into the next decade.”

WHAT DOES IT MEAN FOR 2023?

Throughout 2022, established automakers such as Mercedes, Ford and General Motors Co (GM.N) unveiled dozens of new electric vehicles to challenge Tesla and the upstarts.

Mass production of most of these vehicles kicks into gear starting in 2023 and 2024.

By 2025, there could be 74 different electric vehicle models offered in North America, McCabe said. But he predicts fewer than 20% of those models are likely to sell at volumes above 50,000 vehicles a year. Automakers could be stuck with too many niche models and too much capacity.

Slowing economies threaten overall vehicle demand in Europe and China, too.

During the early years of the 20th Century, new auto companies sprang up, backed by investors eager to catch the wave of mass mobility that Henry Ford and other automotive pioneers started. By the 1950s, the global auto industry had consolidated and once-heralded brands such as Duesenberg had disappeared.

The next few years will determine whether the 21st Century’s crop of electric vehicle brands will follow a similar path.

Explore the Reuters round-up of news stories that dominated the year, and the outlook for 2023.

Reporting by Joe White
Editing by Bernadette Baum

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Technology

Sony to expand Chinese game incubator in Microsoft head-to-head

Leave a comment

HONG KONG, Nov 23 (Reuters) – Sony Group Corp (6758.T) said it plans to expand a programme to identify and incubate Chinese-made games, in a race with Microsoft Corp (MSFT.O) to tap China’s gaming market.

The programme will invest more than 1 million yuan ($140,080) in each game it enrols, and will not only fund small teams but also big teams with dozens of engineers or more, Bao Bo, Sony’s director of China game production, said

The Japanese tech giant’s plans were made public during an event live-streamed on Tuesday from the southwestern Chinese city of Chengdu to restart the China Hero Project programme, which ground to a halt due to COVID-19.

“The scale of the third phase will far exceed the previous two,” Bao said, adding that Sony will publish some games and its PlayStation Studios will support enrolled projects.

Sony said that it will be the publisher of Lost Soul Aside and Convallaria, two games enrolled in the previous two phases.

The China Hero Project unveiled its first two batches of games in 2017 and 2019 and has supported 17 titles, of which seven have reached the market.

Bao told Reuters in an interview on Wednesday that the new batch aims to include 10 titles or more, and it welcomes games of all genres.

It marks the latest in Sony’s years-long approach to China, which ultimately led it to a lucrative exclusivity deal with the Chinese hit game “Genshin Impact” outside of the China Hero Project. Little known before its 2019 launch, it became of the world’s most profitable games.

Reuters reported last month that Sony’s success with “Genshin Impact” has driven Microsoft to aggressively woo Chinese game developers with big licensing deals.

To accelerate its expansion, Sony announced that it has formed the “China Game Production” team to oversee Chinese-made games. The Shanghai branch of Sony’s gaming-focused subsidiary, Sony Interactive Entertainment (SIE) now employs just under 100 people after it entered China in 2014.

Tatsuo Eguchi, president of SIE Shanghai，said the success of Genshin Impact convinced Sony’s management that Chinese games are important, adding that Sony is allocating more resources than ever there. He also said that Sony’s partnership with Genshin Impact’s developer, miHoYO, is going strong.

Sony sells the PlayStation (PS) consoles in China, where people have traditionally preferred playing mobile-based games.

It has sold more than 3.5 million PS4 consoles in China and Jim Ryan, CEO of SIE, said it had sold about 670,000 units of PS5 there since its Chinese launch in May 2021.

Eguchi said that Sony’s goal is to sell twice as many PS5 consoles as it had for the PS4 and believed the China Hero Project could help meet this goal.

“We want gamers around the world to better understand the creativity that comes from China. I have always had a dream which is for console gaming to become a regular part of daily entertainment for Chinese people,” he said.

(This story has been corrected to say just under (not more than) 100 people, in paragraph 10)

($1 = 7.1388 Chinese yuan renminbi)

Reporting by Josh Ye; Editing by Alexander Smith and Louise Heavens

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Musk warns of Twitter bankruptcy as more senior executives quit

Leave a comment

Nov 10 (Reuters) – Twitter Inc’s new owner Elon Musk on Thursday raised the possibility of the social media platform going bankrupt, capping a chaotic day that included a warning from a U.S. privacy regulator and the exit of the company’s trust and safety leader.

The billionaire on his first mass call with employees said that he could not rule out bankruptcy, Bloomberg News reported, two weeks after buying it for $44 billion – a deal that credit experts say has left Twitter’s finances in a precarious position.

Earlier in the day, in his first company-wide email, Musk warned that Twitter would not be able to “survive the upcoming economic downturn” if it fails to boost subscription revenue to offset falling advertising income, three people who have seen the message told Reuters.

Yoel Roth, who has overseen Twitter’s response to combat hate speech, misinformation and spam on the service, resigned on Thursday, two people familiar with the matter told Reuters.

In his Twitter profile on Thursday, Roth described himself as “Former Head of Trust & Safety” at the company.

Roth did not respond to requests for comment. Bloomberg and tech site Platformer reported his exit first.

Earlier on Thursday, Twitter’s Chief Information Security Officer Lea Kissner tweeted that she had quit.

Chief Privacy Officer Damien Kieran and Chief Compliance Officer Marianne Fogarty also resigned, according to an internal message posted to Twitter’s Slack messaging system on Thursday by an attorney on its privacy team and seen by Reuters.

Robin Wheeler, the company’s top ad sales executive, told employees in a memo that she was staying at the company, a person who had seen the message said, diverging from earlier media reports that she too would be leaving.

“I’m still here,” Wheeler tweeted late on Thursday.

The U.S. Federal Trade Commission said it was watching Twitter with “deep concern” after the three privacy and compliance officers quit. These resignations potentially put Twitter at risk of violating regulatory orders.

Musk attorney Alex Spiro told some employees in an email late on Thursday that Twitter would remain in compliance.

“We spoke to the FTC today about our continuing obligations and have a constructive ongoing dialogue,” Spiro wrote.

He stated that only Twitter, not individual employees, could be held liable against the orders.

“I understand that there have been employees at Twitter who do not even work on the FTC matter commenting that they could (go) to jail if we were not in compliance – that is simply not how this works,” he wrote.

Twitter app is seen on a smartphone in this illustration taken, July 13, 2021. REUTERS/Dado Ruvic/Illustration//File Photo

In his first meeting with many employees at Twitter on Thursday afternoon, Musk warned that the company may lose billions of dollars next year, the Information reported.

Musk added in the email to workers that remote work would no longer be allowed and that they would be expected in the office for at least 40 hours per week.

Twitter, Musk and Spiro did not respond to requests for comment on a potential bankruptcy, the FTC warning, or the departures.

Musk ruthlessly moved to clean house after taking over on Oct. 27 and has said the company was losing more than $4 million a day, largely because advertisers started fleeing once he took over.

Twitter has $13 billion in debt after the deal and faces interest payments totaling close to $1.2 billion in the next 12 months. The payments exceed Twitter’s most recently disclosed cash flow, which amounted to $1.1 billion as of the end of June.

Musk has begun charging $8 a month for the Twitter Blue service that will include a blue check verification.

WARNING

“We are tracking recent developments at Twitter with deep concern,” Douglas Farrar, the FTC’s director of public affairs, told Reuters.

“No CEO or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them,” Farrar said.

In May, Twitter agreed to pay $150 million to settle allegations by the FTC it misused private information, like phone numbers, to target advertising to users after telling them the information was collected only for security reasons.

Twitter’s privacy attorney on Thursday mentioned in the internal memo that Spiro had said that Musk was willing to take a “huge amount of risk” with the company. “Elon puts rockets into space, he’s not afraid of the FTC,” the attorney quoted Spiro as saying.

Twitter’s buyout has sparked concerns that Musk, who has often waded into political debates, could face pressure from countries trying to control online speech.

It prompted U.S. President Joe Biden to say on Wednesday that Musk’s “cooperation and/or technical relationships with other countries is worthy of being looked at.”

ADVERTISERS NOT REASSURED

Musk told advertisers on Wednesday, speaking on Twitter’s Spaces feature, that he aimed to turn the platform into a force for truth and stop fake accounts.

His assurances may not be enough.

Chipotle Mexican Grill (CMG.N) said on Thursday it had pulled back its paid and owned content on Twitter “while we gain a better understanding on the direction of the platform under its new leadership.”

It joined other brands including General Motors (GM.N) that have paused advertising on Twitter since Musk took over, concerned that he will loosen content moderation rules.

Reporting by Katie Paul in Palo Alto, California and Paresh Dave in Oakland, California; Additional reporting by Jeffrey Dastin in Palo Alto, Diane Bartz in Washington, Yuvraj Malik in Bengaluru and Fanny Potkin and Hyunjoo Jin; Writing by Sayantani Ghosh; Editing by Shounak Dasgupta, Bill Berkrot, Deepa Babington and Sam Holmes

Our Standards: The Thomson Reuters Trust Principles.

Paresh Dave

Thomson Reuters

San Francisco Bay Area-based tech reporter covering Google and the rest of Alphabet Inc. Joined Reuters in 2017 after four years at the Los Angeles Times focused on the local tech industry.

Read original article here

Business

Amazon shares slump, Big Tech peers stay afloat

Leave a comment

Oct 28 (Reuters) – Amazon.com Inc’s (AMZN.O) shares fell about 8% on Friday after forecasting holiday-quarter sales below Wall Street estimates, while its Big Tech peers recovered from a bruising selloff this week.

The online retailer, whose market cap briefly fell below $1 trillion, was last down 8.4% at $101.66, after hitting its lowest since April 2020.

Apple Inc (AAPL.O), however, shone bright amid a crowd of dimming lights in the Big Tech space, as the iPhone maker reported revenue and profit that topped analysts’ estimates.

Microsoft, Alphabet and Meta gained between 1.2% and 3.1% after their shares were battered this week following gloomy outlook from the companies.

The Big Tech stocks are on track to lose more than $400 billion this week.

Many view the megacap companies as bellwethers for how corporate America is faring during a year in which inflation has soared, pushing the U.S. Federal Reserve to enact a series of jumbo-sized rate hikes that have bruised markets.

The Amazon logo is seen outside its JFK8 distribution center in Staten Island, New York, U.S. November 25, 2020. REUTERS/Brendan McDermid

Analysts fear macroeconomic factors, including a strong dollar, will continue to hit Amazon in the near term, however, over a longer period of time, the retailer should be able to bounce back.

“Despite accelerating revenues, Amazon has been cut down to size by the market after missing expectations. Efficiency has yet to return to the e-commerce business,” Ben Barringer, equity research analyst at Quilter Cheviot, said.

While the cloud services segment has been one of high and sustained growth for tech companies, indications for Amazon, Microsoft and Intel Corp (INTC.O) this week point to lower investments as costs rise.

Intel’s shares rose about 7% after the chipmaker said its cost-reduction plan includes layoffs and is expected to lower costs by $3 billion next year.

However, analysts are cautious of how the company plans to cut costs.

Cost reductions are necessary, but Intel needs to focus on cutting spending in the right places and keep research and development investments high, Glenn O’Donnell, research director at Forrester, said.

Reporting by Akash Sriram, Medha Singh, Sruthi Sankar and Chavi Mehta in Bengaluru; Editing by Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Exclusive: Tesla faces U.S. criminal probe over self-driving claims

Leave a comment

Oct 25 – Tesla Inc (TSLA.O) is under criminal investigation in the United States over claims that the company’s electric vehicles can drive themselves, three people familiar with the matter said.

The U.S. Department of Justice launched the previously undisclosed probe last year following more than a dozen crashes, some of them fatal, involving Tesla’s driver assistance system Autopilot, which was activated during the accidents, the people said.

As early as 2016, Tesla’s marketing materials have touted Autopilot’s capabilities. On a conference call that year, Elon Musk, the Silicon Valley automaker’s chief executive, described it as “probably better” than a human driver.

Last week, Musk said on another call Tesla would soon release an upgraded version of “Full Self-Driving” software allowing customers to travel “to your work, your friend’s house, to the grocery store without you touching the wheel.”

A video currently on the company’s website says: “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.”

However, the company also has explicitly warned drivers that they must keep their hands on the wheel and maintain control of their vehicles while using Autopilot.

The Tesla technology is designed to assist with steering, braking, speed and lane changes but its features “do not make the vehicle autonomous,” the company says on its website.

Such warnings could complicate any case the Justice Department might wish to bring, the sources said.

Tesla, which disbanded its media relations department in 2020, did not respond to written questions from Reuters on Wednesday. Musk also did not respond to written questions seeking comment. A Justice Department spokesperson declined to comment.

Musk said in an interview with Automotive News in 2020 that Autopilot problems stem from customers using the system in ways contrary to Tesla’s instructions.

Federal and California safety regulators are already scrutinizing whether claims about Autopilot’s capabilities and the system’s design imbue customers with a false sense of security, inducing them to treat Teslas as truly driverless cars and become complacent behind the wheel with potentially deadly consequences.

The Justice Department investigation potentially represents a more serious level of scrutiny because of the possibility of criminal charges against the company or individual executives, the people familiar with the inquiry said.

As part of the latest probe, Justice Department prosecutors in Washington and San Francisco are examining whether Tesla misled consumers, investors and regulators by making unsupported claims about its driver assistance technology’s capabilities, the sources said.

Officials conducting their inquiry could ultimately pursue criminal charges, seek civil sanctions or close the probe without taking any action, they said.

The Justice Department’s Autopilot probe is far from recommending any action partly because it is competing with two other DOJ investigations involving Tesla, one of the sources said. Investigators still have much work to do and no decision on charges is imminent, this source said.

The Justice Department may also face challenges in building its case, said the sources, because of Tesla’s warnings about overreliance on Autopilot.

For instance, after telling the investor call last week that Teslas would soon travel without customers touching controls, Musk added that the vehicles still needed someone in the driver’s seat. “Like we’re not saying that that’s quite ready to have no one behind the wheel,” he said.

The Tesla website also cautions that, before enabling Autopilot, the driver first needs to agree to “keep your hands on the steering wheel at all times” and to always “maintain control and responsibility for your vehicle.”

Barbara McQuade, a former U.S. attorney in Detroit who prosecuted automotive companies and employees in fraud cases and is not involved in the current probe, said investigators likely would need to uncover evidence such as emails or other internal communications showing that Tesla and Musk made misleading statements about Autopilot’s capabilities on purpose.

SEVERAL PROBES

The criminal Autopilot investigation adds to the other probes and legal issues involving Musk, who became locked in a court battle earlier this year after abandoning a $44 billion takeover of social media giant Twitter Inc, only to reverse course and proclaim excitement for the looming acquisition.

In August 2021, the U.S. National Highway Traffic Safety Administration opened an investigation into a series of crashes, one of them fatal, involving Teslas equipped with Autopilot slamming into parked emergency vehicles.

NHTSA officials in June intensified their probe, which covers 830,000 Teslas with Autopilot, identifying 16 crashes involving the company’s electric cars and stationary first-responder and road maintenance vehicles. The move is a step that regulators must take before requesting a recall. The agency had no immediate comment.

In July this year, the California Department of Motor Vehicles accused Tesla of falsely advertising its Autopilot and Full Self-Driving capability as providing autonomous vehicle control. Tesla filed paperwork with the agency seeking a hearing on the allegations and indicated it intends to defend against them. The DMV said in a statement it is currently in the discovery stage of the proceeding and declined further comment.

Additional reporting by Hyunjoo Jin and David Shepardson; Editing by Deepa Babington

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Wall Street rallies on hopes of smaller Fed rate hikes

Leave a comment

  • Some Fed officials show desire to slow down hikes – WSJ
  • Alphabet, Twitter, Meta fall after Snap’s ad warning
  • AmEx down, braces for tougher macro with reserve build
  • Verizon Communications Q3 profit slumps on subscriber loss
  • Indexes up: Dow 1.47%, S&P 1.27%, Nasdaq 1.04%

Oct 21 (Reuters) – The S&P 500 and the Dow rose on Friday after a report said the U.S. Federal Reserve will likely debate on signaling plans for a smaller interest rate hike in December, while declines in social media firms capped gains on the Nasdaq.

Some Fed officials have begun sounding out their desire to slow down the pace of increases soon, according to the Wall Street Journal, and how to signal plans to approve a smaller increase in December.

“I would say that the Fed now is looking at easing up on the magnitude or slowing its rate hikes, which underscores its price stability campaign,” said Joe Brusuelas, chief economist at RSM, a U.S.-based consulting firm.

Register now for FREE unlimited access to Reuters.com

Stock markets have been hammered by worries of aggressive rate-hiking cycle tipping the U.S. economy into a recession, with the benchmark 10-year U.S. Treasury yield hitting fresh 15-year highs earlier in the session.

Traders are still widely expecting a fourth 75-basis-point hike at the central bank’s November meeting. FEDWATCH

The report helped markets recoup declines from earlier in the session when Snap Inc (SNAP.N) plummeted 30.86% after posting its slowest quarterly revenue growth in five years as advertisers cut spending due to inflation and geopolitical woes.

Other companies that rely heavily on ad revenue such as Alphabet Inc (GOOGL.O) and Meta Platforms Inc (META.O) fell 0.20% and 2.52%, respectively, pushing the S&P 500 communication services sector index (.SPLRCL) down 0.55%.

“It’s not uncommon for companies to cut back on advertising spending during concerns of an economic slowdown,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

“Right now you don’t want to be in a Snap or a Meta, and it’s probably going to transfer over to Alphabet.”

At 12:00 p.m. ET, the Dow Jones Industrial Average (.DJI) was up 444.56 points, or 1.47%, at 30,778.15, the S&P 500 (.SPX) was up 46.56 points, or 1.27%, at 3,712.34.

The Nasdaq Composite (.IXIC) was up 110.56 points, or 1.04%, at 10,725.41.

The third-quarter reporting season so far has been better-than-feared, prompting analysts to raise earnings expectations for S&P 500 companies to a 3.1% increase from 2.8% earlier in the week, according to Refinitiv data.

It is still well below the 11.1% rise that was forecast at the start of July.

Following the earnings-driven gains from earlier this week, the S&P 500 and the Nasdaq are set for their best week in six, while the Dow eyed its biggest weekly gain since late June.

Verizon Communications Inc shed 5.27% as its profit slid 23% and the carrier missed estimates for wireless subscriber additions.

American Express (AXP.N) fell 5.66% after it built bigger provisions to prepare for potential defaults as an economic downturn looms.

Schlumberger (SLB.N) rose 9.2%, pulling the S&P 500 energy sector up 2.2%, on reporting a quarterly profit above expectations.

Advancing issues outnumbered decliners for a 1.62-to-1 ratio on the NYSE and a 1.39-to-1 ratio on the Nasdaq.

The S&P index recorded seven new 52-week highs and 32 new lows, while the Nasdaq recorded 25 new highs and 252 new lows.

Register now for FREE unlimited access to Reuters.com

Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru; Additional reporting by Bansari Mayur Kamdar; Editing by Anil D’Silva, Arun Koyyur and Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

Read original article here