Wednesday 16/09/20

  1. In SOCIAL MEDIA & TECH NEWS, we look at the TikTok deal, how the FTC is gearing up for an antitrust suit with Facebook, Spotify’s plans for livestreaming concerts, Nvidia/Arm shockwaves and Apple’s new stuff
  2. In RETAIL NEWS, China sales are up, Ocado/M&S goes well, New Look survives and Thomas Cook reappears online
  3. In INDIVIDUAL COMPANY NEWS, Nikola faces a DoJ investigation, the FCA rules on Covid insurance claims and Carnival Cruises announces a loss
  4. AND FINALLY, I bring you an interesting WFH desk option and a CIA observation test…

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SOCIAL MEDIA & TECH NEWS

So TikTok tries to satisfy the White House, the FTC appears to be about to launch an antitrust lawsuit against Facebook, Spotify homes in on concert streaming, the Nvidia/Arm deal ruffles feathers and Apple unveils new gadgetry…

*** NEWS JUST IN – JAPAN’S GOT A NEW PRIME MINISTER. Yoshihide Suga will be taking over from Shinzo Abe, who is stepping down due to ill health. Suga was Abe’s preferred successor. ***

In China’s ByteDance to keep majority TikTok stake in Oracle deal under US consideration (Wall Street Journal, Kate Davidson, Georgia Wells and Michael C.Bender) we see that the proposed structure of the TikTok US deal with Oracle is now with the Committee on Foreign Investment in the US (aka “Cfius”), who have yet to announce a recommendation. As the deal currently stands, Oracle will be TikTok’s US technology partner whilst still allowing the Chinese parent company ByteDance to have a majority stake in the business. TikTok’s global business will be headquartered in the US and the deal would create around 25,000 new jobs. * SO WHAT? * If this deal goes through in its current form, it’s hard to see what all the posturing over the last month or so has actually been about – especially considering that ByteDance gets to keep a majority stake! From where I’m standing, this looks like a result for ByteDance as only days ago it was probably fearing shutdown!

FTC preparing possible antitrust suit against Facebook (Wall Street Journal, Brent Kendall, John D. McKinnon and Ryan Tracy) shows that the Federal Trade Commission (FTC) is thought to be preparing to file an antitrust lawsuit against Facebook by year-end, challenging its hugely powerful position in social media. * SO WHAT? * I don’t think that this is going to come as a huge surprise given that it comes shortly after the conclusion of an investigation of over a year into concerns that it had used its near-monopolistic position to snuff out any competition. It’s not a given that it will go ahead with suing the company as it has had form in the past of walking away from things after preparing to file – take Google, for example. Precise details of this have yet to be released and for a case to go forward a majority of its five-member panel would have to agree to do so.

Spotify to push live streaming concerts in response to Covid-19 (Financial Times, Anna Nicolaou) highlights a deal that Spotify has just struck with Songkick, a ticketing platform owned by Warner Media, to promote live streaming events as it makes moves in the alternative concerts business. This business surged in popularity during lockdown and Spotify will now add a feature for musicians to list their upcoming events on their page to promote cirtual concerts. * SO WHAT? * This is a very hot business right now and when you consider that K-Pop stars BTS made almost $20m in June from just one virtual show called “Bang Bang Con”, you can see why Spotify is itching to get a piece of the action. Given that most tours have been postponed until at least 2021, you would have thought that this is going to be a massive business. Having said that, it has not decided to launch a live streaming function in its app – unlike Amazon, which did so via Twitch. Still, this could get quite exciting I think!

Nvidia sends shockwaves through chip industry with Arm deal (Financial Times, Richard Waters) shows that the proposed Nvidia purchase of Arm Holdings is ruffling some feathers as customers are worried that they will be “disadvantaged” by one of their competitors (Nvidia) gaining control and will go to the back of the queue as a result. Customers including Apple, Qualcomm and Broadcom have not publicly backed the deal. * SO WHAT? * If the deal goes through, it will be the biggest one ever done in the field of semiconductors and the enlarged company will attempt to succeed at the very different businesses of selling chips (Nvidia’s speciality) and licencing intellectual property for other companies to use (Arm Holdings’ speciality). Qualcomm is the only other major chip business that has ever succeeded at combining both.

Apple unveils new Watch, fitness service, bundled subscription options (Wall Street Journal, Tim Higgins) gives us details of the new gadgetry unveiled last night by Apple. The unveiling was online-only and new trinkets included a new Watch that can measure blood oxygen, a new virtual fitness service and some bundled subscription options for its services. It also announced a new iPad Air, starting at $599 with a new touch-ID button on the side but it seems that investors greeted the announcements with a resounding “meh” as the company’s share price fell in trading although they later recovered to close slightly up on the day. * SO WHAT? * It’s interesting to see that “services” now makes up 20% of Apple’s quarterly sales – up from 10% five years ago and that sales of tablets have been particularly strong during lockdown. The Watch’s increasing focus on healthcare and fitness is highly likely to make it an ongoing success IMO – especially given current circumstances.

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RETAIL NEWS

China sees stronger sales, Ocado does OK, New Look survives and Thomas Cook pops up online…

Chinese retail sales grow for first time since coronavirus outbreak (Financial Times, Thomas Hale) highlights some good news in a sign that consumer spending is now catching up with the country’s wider recovery, according to the latest official data. * SO WHAT? * Consumer spending has been a notable weakness in China, given that many other areas of the economy have been in recovery mode. Households have remained stubbornly cautious so this thawing is particularly welcome. Many countries look to China to see what the future may hold as it was the first major country to go into lockdown and the first one out, but I think that the different range of stimulus measures and incentives adopted around the world will have varying levels of success – and these differences will emerge more fully as time goes on.

In other retail stories today, Ocado says M&S items a hit after parting with Waitrose (Daily Telegraph, Simon Foy and Laura Onita) highlights a positive trading update yesterday from Ocado as it says that more shoppers are buying M&S goods in the fortnight since it launched its JV than they bought Waitrose goods in the two weeks before the switch-over while sales and revenues were up around the 50% mark for the quarter. It’ll be interesting to see how this plays out but surely Ocado will do a better job than M&S did on its own! New Look wins radical rent reform (The Times, Ashley Armstrong and Louisa Clarence-Smith) highlights a stay of execution for the troubled retailer as the believers trounced the doubters in yesterday’s vote on its latest CVA and Thomas Cook relaunches with customer cash pledge (The Times, Dominic Walsh) shows the return of a well-known name as its Chinese owner, Fosun Tourism Group, revives the travel company as an online player. It has kicked off with a promise that it will not take customer payments until they return from holiday, in a bid to gain customer trust. Good luck with that.

3

INDIVIDUAL COMPANY NEWS

Nikola faces investigation, FCA rules on insurance claims and Carnival Cruises makes a big loss…

The plot thickens in Justice Department probes electric-truck startup Nikola over claims it misled investors (Wall Street Journal, Ben Foldy) as the US Department of Justice is now getting together with security regulators to look at allegations that the company misled investors by making exaggerated claims. Nikola/Hindenburg: uphill battle (Financial Times, Lex) makes the point that although Nikola might have been able to get away with scrappy tactics as a private company, now that it is publicly quoted it has to face much more scrutiny – as it is currently finding out !

FCA proves it can be Fast, Competent and Adept in insurance test case (Financial Times, Cat Rutter Pooley) heralds the latest development in the test case where the FCA took on a number of insurers regarding the wording over their insurance policies concerning “business interruption” and whether claimants were covered for the effects of coronavirus and lockdown. Policy holders should be hearing from their insurer within seven days but they won’t be getting any money just yet as insurers will be appealing the decision which came down largely in policy holders’ favour.

Then in Carnival Cruises posts $3bn quarterly loss due to Covid (The Guardian, Gwyn Topham) we see that cruise operator Carnival had a massive quarterly loss (somewhat unsurprising!) although they said that things are likely to improve from here. Yeah right. This business is toast for now IMO and will be hyper-sensitive to any further outbreaks. It’s a shame, but it’s just in the wrong business at the wrong time IMO.

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...AND FINALLY...

…in other news…

Today, I thought I’d leave you with an unusual working from home idea in This insane motorized scorpion computer chair is perfect for work-from-home supervillains (SoraNews24, Casey Baseel) as well as a quick test to see if you have the ability to join America’s finest in CIA shares tricky observational test for aspiring spies – see if you can pass (The Mirror, Luke Matthews)

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