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May 2018

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Tesla Model S’s fatal accident on Autopilot mode leads to a NHTSA preliminary investigation

After the closing bell Thursday, Tesla Motors Inc. (NASDAQ:TSLA) shares tumbled after the US National Highway Traffic Safety Administration (NHTSA) opened a preliminary investment on the automaker’s flagship sedan, the Model S. The decision was taken after a critical accident of the vehicle while its Autopilot mode was activated. Tesla stock closed the trading session up 0.99% at $212.98 on Thursday and during the extended trading hour, it slid as much as 3.20% to $205.45.

About 25,000 sedans with Autopilot systems will be investigated by NHTSA, which said that the accident happened in the 2015 production version of the vehicle with autonomous driving technology. Thus, the organization will examine the system’s performance and design. This is the initial step ahead of recalling the vehicles, if it thinks that they are unsafe.

Tesla responded to the news, claiming that this is “the first known fatality in just over 130 million miles where Autopilot was activated.” Typically, there is a casualty after 94 million miles in the US and after 60 million miles worldwide, its vehicles are far safer than other vehicles on the road.

The automaker informed the agency regarding the crash right after it happened. The NHTSA just wants to check whether or not the autonomous driving system worked properly. The vehicle was driving on a dual carriageway with Autopilot activated when a tractor trailer moved across the highway, perpendicular to the sedan. Both the driver and the autonomous system did not notice the trailer’s white side against a bright lit sky, therefore, the vehicle’s brakes were not applied.

Notably, since the technology is new and still in beta phase, the Autopilot is disabled by default and it needs “explicit acknowledgement” before it can be activated. Additionally, owners are advised to keep their hands on the steering while using the autonomous system so that they can regain control of the vehicle.

Moreover, whenever the Autopilot is enabled, the vehicle tells the owner to keep his hands on the steering and be ready to intervene. Tesla cars also frequently checks whether the driver’s hands are on the steering or not and gives audible and visual alerts if it doesn’t detect hands. It decelerates until the hands are detected. Tesla is gradually improving the system through software updates and it plans to create fully autonomous electric vehicles within two years.

Apple announced new features for the company’s upcoming AI powered devices

Apple Inc. (NASDAQ:AAPL) took the opportunity during its Worldwide Developers Conference (WWDC) event to announce new and improved features for the company’s upcoming artificial intelligence powered operating systems. The tech giant wants to make its smartphones and other devices smarter by anticipating the activities desired by users to carry out.

In addition, the company also stated that it had officially given full access to third-party developers to work on some of its featured applications, including Siri, iMessage, Maps, etc. This is a big shift from the company’s previous policy of always having a tight control over its applications and software systems.

Apple has taken a shift from its previous tight controls and allowed third-party developers to work on its applications and software in order to improve the user experience for its users. Before, due to the company’s tight controls and restrictions of third-party integrations, users were overwhelmed with too much data from applications, which also restricted their user experience in many ways. Apple wants to integrate smarter artificial intelligence in the user experience of its devices to improve the functionality of its products.

Apple made another major announcement regarding artificial intelligence, which could have been a direct inspiration from Microsoft’s Cortana virtual assistant programmed for Windows operating system. Apple wants to follow a similar path to bring its own voice-based virtual assistant “Siri” to its desktop and MacBook. The idea is to give the accessibility to users to talk from their macs and desktops just like their iPhones. Apple wants to make the experience of shifting between devices seamless and efficient, which is why it decided to follow a similar path to one of its biggest competitor.

Apple has taken another step in the right direction to ensure a better user experience for its users. The tech giant knows that all of its biggest competitors are currently working on their very own artificial intelligence powered devices. Thus, it has also acted quickly to ensure it doesn’t lag behind the pack.

The newly announced price by Starbucks Corporation will be applicable from July 12 onwards

Starbucks Corporation (NASDAQ:SBUX) has announced a change of prices for a select few beverages on its menu. On Friday, the company’s management announced the price hike as a solution to contracting margins and increased cost of ingredients that are used in the said concerned beverages. The said price change is reflective of the recent changes in macroeconomic situation and hints towards rapidly growing inflation and forex fluctuation.

In a narrative issued by the company, an apology was also included for wrongfully implementing the said price changes. According to reports, a large number of customers have complained about being charged more than they should have. The management was, however, quick to respond and has offered refund to all of the customers who might have been wronged as the price changes were wrongfully implemented in the company’s point of sale systems throughout US.

The detail of the price changes were not yet disclosed but the management did point towards a maximum hike of 30 cents per unit of select beverages and the same could have been overcharged owing to the said error. The management also assured that the concerned errors have now been rectified and the customer service department is more than willing to make things right by refunding the overcharged amount back to the customers.

Starbucks is among the largest chain of stores in the United States with a market capitalization of over $82.93 billion. The current moving average for the stock is 8.50 million shares and has a 52 week price range of $42.05 – $64.00. The stock currently trades at a price of $56.84 and has declined by 0.26% since the open of the market. The analyst opinion for the stock has 14 strong buy, 11 buy and 5 hold ratings.

Under the clause a maximum of 9.9 million shares can be sold in a period of over 1 year

A credible source has confirmed that Alibaba Group Holding Ltd’s (NYSE:BABA) Chairman Mr. Jack Ma has filed an application with the SEC in order to adopt the rule 10b5-1. Under this rule, the applicant Mr. Jack Ma will be allowed to sale a maximum of 9.9 million shares over the next 12 months. The rule was first introduced with the passing of Securities and Exchange Commission act of 1934. It is understood that the sale of shares will commence in the month of September.

The analyst doesn’t view the news as a game changing one for Alibaba and believes that the sale is most likely for personal reasons and does in no way hint towards an upcoming period of weakness. Jack Ma is also known to have engaged in a number of philanthropic causes and the recent agreement is seemingly done in order to fulfill his philanthropic commitments. Personal wealth management might also be a reason behind the adoption of the rule 10b5-1, the analyst speculated.

According to a rough estimate by the analyst, 9.9 million shares of Alibaba equate to about 5% of the total holdings of Mr. Ma or related parties of which Mr. Ma is a beneficiary of. The sales will be handled by a neutral third party broker and will strictly abide by the price and volume restrictions laid down in the act.

The analyst does not see any material impact on Alibaba in the wake of the news as the section 10b5-1 provides a detailed schedule of quantity and timing of sale in order to minimize the impact.

The analyst ratings for the stock are 16 Buy, 16 Outperform, 4 Hold and 1 Sell. The stock closed yesterday at a price of $96.86.

Google has worked on 5 rules to minimize dangers pertaining to Artificial Intelligence

Alphabet Inc (NASDAQ:GOOGL) is one of the numerous tech giants to currently work on developing artificial intelligence software. Artificial intelligence has divided opinion amongst the leading technology gurus, where some are highly in favor of such technical advancement but others are not too sure about its consequences. Many are worried about the physical threat that AI systems can pose to human life. In order to avoid a ‘terminator’ like doomsday, Google aims to perfect its artificial intelligence systems with the implementation of five golden rules.

In a blog, Google researcher, Chris Olah, stated five ways for the company to ensure that AI systems never pose a threat to the human race. The first rule is “Avoiding Negative Side Effects” which means that artificial intelligence should complete its tasks as it was designed to and not indulge in disturbing its environment. The second rule is “Avoiding Reward Hacking” which means that artificial intelligence systems should complete its tasks accordingly and not look for shortcuts to completing tasks. The third rule is the use of “Scalable Insight” which means that artificial intelligence should not regularly require constant feedback or human input in order to function properly. The fourth rule is that AI systems should only engage in “Safe Exploration” where they do not damage the environment in order to learn. The fifth rule is that AI systems should have “Robustness to Distributional Shift” meaning that systems should be able to function properly in different environments.

There is significant doubt that human ignorance can take them beyond the point of no return if they do manage to create a deadly artificial intelligence system. The tech giant has outlined five unsolved challenges that they will tackle in order to perfect its artificial intelligence system and make any future domestic robot safe. The glitchy and early artificial intelligence assistance systems might seem harmless but the human mind might just have the capability of ending its own race. Thus, Google has taken a step back and recalibrated its position on the AI.

Google has already invested significantly in developing such system. It cannot afford to make the slightest mistake with its project. Major technology gurus, such as Elon Musk, have stated that by perusing AI systems, humans are calling upon their own doom. Hence, it is a logical strategy from Google to effectively minimize this threat.

The recent raise in the company’s TP may have been the reason for price increase

The Country Caller discussed yesterday about the astonishing increase in the stock prices of Exact Sciences Corp. (NASDAQ:EXAS). The stock was also among the pre-market gainers with a significant price increase, yet the reasons were unexplained. The molecular diagnostic company finally caught the attention of Street houses and Jefferies Group initiated its Buyrating on the stock. Also, Canaccord’s price target of $12 may have helped the stock to double from its 5-year low price hit in March.

In the past one year, the stock price has slipped more than 50%, which indicates a negligence from investors. Last year, Exact Sciences stock prices dropped significantly after the company announced that it has received disappointing recommendation from a medical task force. Following this, many street brokerage houses lowered their ratings on the company and cut their TPs significantly. Since then, it has been difficult for it to withstand its position in the stock market. The organization was generally neglected by street houses who have been skeptical about its future prospects.

Exact Sciences has been trying to interact with investors lately, which is why CEO Kevin Conroy has actively participated in stock conferences. The Country Caller had already discussed that a probable update to detect colon cancer may be the reasons for the price hike. Mizuho Securities analyst, Mr. Eric Criscuolo, suggests that a possible update may result in volumetric growth, and help in improving the financial position of the company.

Last month, the company posted better than expected quarterly EPS of ($0.49), better than the consensus estimate of ($0.52). The quarterly revenue also jumped more than 200% YoY. Analysts expect the company to report EPS of ($1.99) for this year. The overall stance on the company remains Neutral. Exact Sciences shares were down 0.64% to $9.33, with a trading volume of 39.29 million in yesterday’s trading session.

Shares of the company are trading lower at $203.11 (12:27 EDT)

The Country Caller’s bearish stance on electric-car maker Tesla Motors Inc. (NASDAQ:TSLA) was worth it, as shares of the company are trading lower at $203.11 (12:27 EDT). In our article yesterday named “Hedge of The Day”, we did discuss on the possible risks of holding the $30 billion company’s stock. We also gave an alternate swap, while recommending taking a long position on the e-commerce giant Alibaba Group Holding Ltd (NASDAQ:BABA) stock.

Perhaps, investors seem to have realized by now that the stock prices were highly inflated. The twelve-year-old company may pose to be one of the strongest players on the innovation front, but its financial health is as weak as one can imagine. Despite itself not being able to show profits, its acquisition of a loss making company started to put questions in the minds of street analysts.

Elon Musk’s recent decision to opt for additional financing through equity or debt is what may have dissuaded investors lately. We have discussed that it is only a good pick for those investors who are aware about the recent developments in the company, as the stock movements are mainly based on sentiments rather than financial numbers.

The street’s high valuation of the company on innovational grounds itself poses a strong question. The company has been facing some challenges lately that include the SEC probe, lack of liquid resources, and lenders’ denial to lend the energy storage company. To face these challenges, a different approach is what’s needed. The focus should be on improving the present scenario than making the future safe.

The numbers should be given more weightage than any new products, since a technology is only sustainable as long as you have the financial strength to sustain it. Our thesis on the EV makers stock remains bearish.

Tesla’s German competition plans to enter Hong Kong with full force of EVs and hybrids, convincing the government for incentives

In July, The Country Caller said that Hong Kong is a “beacon city” for Tesla Motors Inc. (NASDAQ:TSLA) Model S and Supercharger, after Tesla CEO Elon Musk’s quote which said it is a “beacon city for electric cars.” While on-the-road EVs of the Chinese special administrative region have bumped up by 60 times since 2010, Tesla holds 80% of the market, according to South China Morning Post (SCMP).

The publication reported earlier this week that German automakers are gearing up to hurt the young EV maker’s dominance in Hong Kong, one of the world’s fasting growing EV markets. German Consul General Nikolaus Graf Lambsdorff told SCMP that German carmakers could provide new technologies in e-mobility (hybrid or EV).

He said: “In the end it should be the consumer that should decide who is successful in the market and who is not. But the government has to set the right framework. It’s happening. Maybe a bit slow, but Hong Kong is moving in the right direction.”

While pure EV such as the BMW i3, the Model S, Nissan LEAF and Volkswagen e-Golf get 100% waiver on first registration taxes up to the next year, BMW Group VP Kevin Coon wanted to see incentive on hybrids as well, as it would be “a good bridge” between ICE and zero-emission vehicles. He believes that subsidies on hybrids would present more choices for consumers.

Additionally, the European Chamber of Commerce Automotive Council to the city’s Environmental Protection Department has pushed for waivers for hybrids. Even Edwin Lee King-yan, VP of Charged Hong Kong, an EV advocacy, thinks that some incentives should be given to hybrid buyers as they are better than gasoline-powered cars due to the fact that they keep “zero tax” for ZEVs only.

Mr. Lee also questioned why German automakers are not going toward full electric vehicles, which clearly define the future. He added that range anxiety is not the main issue in Hong Kong anymore.

Bloomberg Intelligence Asia Automotive Research, Steve Man, does not expect Hong Kong to provide incentives on hybrids, as it focuses to promote wide range of ZEVs. However, he believes that the German behemoths’ brand equity should give them a competitive edge in the EV industry.

Mr. Man suggested that the German automakers would have to develop appealing financing plans to attract customers in Hong Kong and Tesla would have to lower vehicle prices to stay ahead of the German rivals. While reducing the base price of the Model S, Tesla is working on its first mass-market vehicle, the Model 3. Waivers on EV are set to end in March 2017, but the government is planning to extend them.

Upgrading or reverting back to an older Android version now comes with greater ease

Alphabet Inc (NASDAQ:GOOG) has made it easier to install new Android versions for those who were complaining about it for quite some time. Additionally, the company has also made it possible for users to take advantage of an alternative restore option, which was not available before. The best part about this news is that users can finally do either without having to delete everything on their Nexus device.

From now own, users will not have to worry about starting from scratch. Google has made update images available, which means all supported Nexus devices, including the Pixel C, can upgrade immediately without having to wait any longer. Moreover, they will not have to make the difficult decision of letting go of their data in the process.

It is important to note that the concept is not entirely new, as air images have been around for years through third-party sites. Google’s first over-the-air upgrade was the Android N Preview, and it is safe to say the company will not stop here. Even though the Android N Preview had bugs and glitches, users were able to revert back to Marshmallow, which is a welcomed addition nonetheless.

With this move, Google has not only made it easier for users to upgrade or revert back to an earlier version of Android, but it has also ensured that users do not end up relying on third-party sites.

Google has given Nexus owners something to gloat about. Android phones have long lacked the ability to make such upgrades or revert back to a previous one without having to delete all their data. Now that it is possible, it will be something worth investing in, especially for those iPhone owners who are unable to decide whether or not they should invest in a Nexus phone, as they will have more control.

Tesla plans to renovate an 18,180 square foot facility for a new sales/service location in Jacksonville, FL

In 2QFY16 Shareholder Letter, Tesla Motors Inc (NASDAQ:TSLA) talked about strong expansion of its retail presences in the US, international and new markets. Following the announcement, we’ve covered a few new retail locations and Philips Highway in Jacksonville, FL is one of the new ones.

Jax Daily Record reported that plans to working on a new sales and service location along the highway, which is widely known for large number of service centers and franchise dealerships. The location will be the first store/sales service in the city, which already has a store at 4835 River City Drive Suite 105 in St. Johns Town Center. This store will be relocated to a larger location, the report said.

The electric vehicle (EV) maker submitted an application for a permit to revamp an 18,180 square foot facility at 7818 Philips Highway. It plans to spend about $250,000 in the construction of the Philip Highway Store and Service Center. Though, contactors have not been assigned.

Here’s how the location looks like for now:

The permit plan shows that Tesla will be operating a store, service center, and repair shop at the new facility. Service of an EV varies from the service of a fuel-driven vehicle, it explained. It also said that Tesla cars do not have internal combustion engine (ICE) as they are fully electric and its electric motors needs little or no maintenance.

Alameda-based MBH Architects will be designing the new Tesla felicity. The automaker has been its client since late 2012. It designed Tesla Century City Store in Los Angeles and a service center (without mentioning the location), according to its website.

Here’s a photo of the LA store:

The site plan of the new facility in Florida shows a 2,755 square foot store and a 16,248 square foot service center, which adds up the total area cover to more than what the permit says. It is located opposite Perimeter Commerce Park.

Tesla has nine Stores & Galleries in Florida, of which four of them include a service station as well. There are 14 Supercharger stations and 124 Designation Charging locations in the state. According to Supercharge.info, the company has obtained permits for stations in Naples, a Floridian city on the Gulf of Mexico.