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February 2019

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Jawbone expands its complaint against Fitbit following recent revelations

Fitbit Inc was already in trouble for taking part in corporate espionage against its rival, Jawbone, and now a complaint has been filed against the company, which explains how it poached Jawbone’s employees. Additionally, those who left Jawbone stole confidential information. Considering how valuable these secrets and plans were, it comes as no surprise that Jawbone is ramping up legal proceedings.

This move also comes at a time when Fitbit had already announced that it would be going public, and also after forensics revealed that the issue was even more complicated than originally thought of. Apparently, a former employee of Jawbone, who joined Fitbit, emailed important details and plans which laid out Jawbone’s strategies for the future.

That being said, the expanded lawsuit provides further details on what actually happened and how there was more at stake for Jawbone than being discussed.

Originally, Jawbone thought that 18.000 important files were stolen, but after an in-depth analysis, it was concluded that a staggering 335,191 files were actually found to be missing.

The stolen information contained sensitive data like prices and schematics. Jawbone even explained how Fitbit’s latest gadget, Alta, had in fact incorporated several of its own concepts.

On the other hand, Fitbit is adamant in proving its innocence. The company explained how it had already confirmed the existence of said files back in December last year. Furthermore, it also stated that the additional files did nothing more than confirm what the company had already known for quite some time.

All in all, regardless of how it might be right or wrong, this case is nothing short of a fiasco. Even if Fitbit was right all along, its reputation did take a hit. But then again, the fact that it has sold more than 10 million wearable devices proves that its target audience may not really care.  

The need of the hour is to divert focus on the financial aspect of the company, rather than innovation

Recent developments taking place within Tesla Motors Inc. (NASDAQ:TSLA) hint that the company is once again looking to raise funds through capital markets or debt offering. TheCountryCaller has discussed the current liquidity position of the company, which is as dry as it gets. The twelve-year-old automaker has ambitious plans to expand its presence, but it lacks the financial stability required to do so. Perhaps the strategic decisions of the company are more forward looking than focusing on the present, and this is what is posing huge problems for the company.

Let’s discuss about the $2.6 billion that the company is spending on the SolarCity acquisition. Despite itself being in a financial distress, Elon Musk reckons that the acquisition of another loss making company may create positive synergies for both the companies. Ever since the news came into the markets, the bearish side of the coin has been gaining more strength, as experts do not consider the deal as a lucrative proposition.

Tesla’s frequent visit to the capital markets for raising funds is a strange thing, as none of the other automakers raise funds at such small intervals. Perhaps because the company investing into a new technology may just be a good reason for this stance. But in our view, even a new technology has only a few visible benefits for any company.

Tesla’s case is an exception to that as well, we have seen vehicle deliveries and production targets discussed more often than the top line or bottom line numbers. This is itself a big danger that might take the Palo-Alto based automaker to a dead end.

Talk about the key indicators that might be of value after the capital raise. If Tesla opts for Capital markets, more number of shares would dilute the loss per share now, but it will also dilute profits in future. On the contrary, if it opts for debt offering, a lower interest coverage ratio in future would pose problems, should the company start to post profits (which is a very optimistic guess, at least for the next two years.)

The need of the hour is to divert focus on the financial aspect of the company, rather than innovation.

Twitter shares have jumped by more than 25% since Friday, following reports that the company may finally be up for sale

Twitter Inc (NYSE:TWTR) shares have jumped by more than 25% since Friday, following reports that the company may finally be up for sale. Already, names of large cap companies have been put forth as potential suitors for Twitter. Among them include Walt Disney Co (NYSE:DIS), Microsoft Corporation (NASDAQ:MSFT) , salesforce.com, inc.(NYSE:CRM) and Alphabet Inc (NASDAQ:GOOGL).

Naturally, several investment firms have given their two cents on how a potential deal would play out and its ramifications on the stock.  Investment firm Citbank Research believes that a deal won’t likely happen in the near future. The firm, in an updated research note sent out to clients and investors today, stated that the risk and reward ratio for Twitter stock is negative due to the recent surge in its value. Analysts at the firm note that while there is a degree of ‘strategy rationale’ for some companies to purchase Twitter, the latter’s current troubles coupled with its higher valuation makes a premium offer difficult.

Analysts at Citibank believe that a proposed price of $26 per share appears very forceful. The firm notes that Twitter shares could once again hit their lows from May, if an acquisition agreement doesn’t occur. Those levels represent a 40% downside from the current share price. The firm currently has a Neutral rating and a $16 price target on Twitter stock.

Recode’s Peter Kafka expressed a similar opinion with regard to Twitter’s situation. The analyst said that it doesn’t make sense for either Disney or Salesforce to acquire Twitter. The analyst also countered the notion of Disney and Salesforce looking to buy Twitter for data mining purposes by noting that they could just ask for information from the microblogging company.

Investment firm SunTrust also weighed in on the scenario. The firm projects that Twitter could be acquired for $24-$27 per share that implies an upside of 3%-15% to current price levels. At the same time however, the firm notes that shares of the microblogging company could fall below $18 if a deal doesn’t materialize.

The Country Caller covers the specifics of the ratings given by equity groups

Rio Tinto plc (ADR) (NYSE:RIO) was reissued Buy rating by Jefferies Group in a report on Monday. The group also assigned a target price of $37.85, which came with an upside potential of 9%. Barclays also rated Overweight to Rio Tinto, with a possible upside potential of 13.6%.

The ratings came because of positive third quarter fiscal 2016 (3QFY16) production results. The company stated that its Pilbara iron ore production faced a run rate of 330 million tons a year. Due to rail maintenance, Rio stated that it has revised its guidance for the quarter to between 323-330 million tons for 2016.

Simultaneously, mine copper production for the period, January-September 2016, increased by 4% compared to same period last year. This is positive news for the investors. Rio Tinto has been under major cost cutting initiatives, which gives it an edge over its competitors in times of commodity crisis. It has also been cutting on various expansion projects that it believes would not reap enough profits.

Although, there is demand for iron ore coming from China, the company will ship less iron ore. Because of increased demand from China, rivals such as Fortescue Metals Group started to increase iron ore exports. On the other hand, Rio worked on increasing the production of industrial metal and mined copper.

Rio’s stock traded at $34.68, declining 0.49% at Monday close. It traded in the 52-week range of $21.89-37.25. It possesses a huge market capital of $65.28 billion with a year-over-year (YoY) decline of 5.01%.

Clients prefer a stronger hold in the European market; restructuring is vital for raising capital

Deutsche Bank (NYSE:DB) cannot stay out of headlines and recently, the bank announced to shrink its operations in the US. The story may not be as huge if it was not Deutsche Bank. Alasdair Warren, Corporate Investment Banking (CIB) EMEA head, spoke with CNBC expressing the long-term interests of the bank.

In the past few weeks, Germany’s biggest bank comes under spotlight as the US Department of Justice asks it to pay $14 billion in fine for selling toxic securities at the time of the crisis in 2008. Since then, Deutsche Bank has been in a series of headlines, which had further damaged the stock. The stock already lost more than half of its value since the start of the year due to challenging economic conditions.

The recent news of shrinking US investment banking puts Deutsche Bank under the question of raising capital to pay back the legal fees it surprisingly incurred. Chief executive John Cryan earlier stated that the bank doesn’t need to raise capital, as the Justice Department would settle on a lower charge. The deal has been reached yet between the lender and the US regulators. Meanwhile, the bank decided to cut thousands of jobs along with a hire freeze which may speak louder than words. The bank posted a record loss last year and is unable to put themselves into profits.

Mr. Warren told CNBC regarding the long-term strategy of the bank by restructuring the business keeping a long-term view. He said, “We have built over the last fifteen, twenty years a global franchise and if you’re going to be globally relevant you have to have a meaningful presence in the U.S. in the same way you’ve got to have a meaningful presence in Europe – which we clearly have – and a meaningful presence in Asia.”

He said that the clients would prefer a stronger presence in Europe. Therefore, a move to shrink in US was imminent as the bank looks to shore up capital by downsizing while it negotiates with the Justice Department.

Event invites for December 12 have been sent out by Xiaomi’s MIJIA subsidiary

The Chinese consumer electronics company Xiaomi could be set to launch another electric vehicle next week. Invites for an event on December 12 have been sent out to the media by its MIJIA subsidiary, and the tire-marks graphic on the invite are the source of this speculation.

Previously, Xiaomi launched its first electric vehicle, the QiCycle, in collaboration with MIJIA. While it is highly unlikely for them to have developed anything other than maybe an electric scooter or a different iteration of a bike, it is a development nonetheless.

Xiaomi has kept up its efforts to delve into several product types in order to find the formula for the perfect product that really works. So far, the Chinese electronics company has managed to launch its smartphones, smartphone accessories, drones, television sets, air purifiers, Bluetooth speakers, among other things. An electric bike was the first of its kind, and the latest product to be launched on December 12 could be the second.

As for the details, we know from the invite that the upcoming product – seemingly an electric vehicle – will boast features like ABS anti-locking brakes, cruise control, and more. We’ll keep you posted about further developments before the event goes live on December 12.

Apple, Facebook and General Motors sign an important step towards equal pay, promoting reduced gender bias practices

Recently, General Motors Company (NYSE:GM), Apple Inc. (NASDAQ:AAPL), and Facebook Inc (NASDAQ:FB) have been reported to join the White House’s Equal Pay Pledge. By doing so, the three enterprise have promised to re-examine their hiring process and their pay structures. With this procedure, these companies are willing to promote practices that would significantly reduce gender bias in the workplace. The three companies are amongst 27 others who signed the agreement earlier this year. Others include Anheuser-Busch, A.T. Kearney, Coca Cola, Delta Air Lines, CVS health, Dropbox, EY, The Hartford, Dunkin’s Brands, Hershey, Hilton, IKEA US, IBM, LinkedIn, Intel, Microsoft, Patagonia, Unilever, and Nike.

Under the pledge, the companies would conduct annual analysis for their gender payments. This would help them in eliminating compensation practices that are not equitable. It would also aid them in reducing unconscious bias that may arise during their hiring procedure. With this pledge, the three businesses have taken oaths to spread their equal pay efforts across all their business lines and the firm, as a whole. This is done to lift women’s earnings in the current workplace scenario.

The White House Equal Pay Pledge has made them realize that it is important to raise women’s payments. They have now made this as their top priority alongside other states, policy makers and several employers. The cause was first started by Hillary Clinton, of the Democrats, who recognized improving women’s compensations as a foremost priority if she is elected as the president of the US. Following this, the Republicans have also started siding with the issue. From the Republicans side, the issue was first mentioned by Donald Trump’s daughter, Ivanka when she introduced him in previous month’s Republican National Convention.

Furthermore, Labor Department has observed that full time working women earn approximately 79% of what men do for the same job. According to further research, some of these disparities could be credit to women working in lower-paying fields, in general. Also, it could be a result of women who have children as they go further down the pay scale by reducing their number of working hours. Thus, it is an important issue that all the employers must focus on.

The company is serious about having everyone on board before it’s too late

We’ve all read jokes over the internet about Microsoft Corporation’s (NASDAQ:MSFT) persuation in reminding Windows 7 and Windows 8/8.1 users that their free Windows 10 upgrade is ready for install. They have just taken this to a whole new level.

According to Toms Hardware, the Redmond giant is now forcing users to jump to Windows 10 with scheduled upgrades. That’s right – you no longer have a say in the matter. Microsoft just assumed that every user on the planet is okay with the new Windows and that their consent is not needed.

(via Toms Hardware)

The Windows 10 icon now hosts a scheduler that will set your PC for an automatic update. Fortunately, you can still cancel the update, but not everyone will be expecting this. That Windows 10 icon has become an advertisement that users who just are not ready to upgrade continue to ignore on a daily basis. This allows it to sneak a scheduled update without you knowing and finally succeed in doing what it was meant to. Microsoft really really wants you on Windows 10.

Some users have criticised the nature of the new Windows. The fact that Windows 10 actively monitors your data and collects it for improving the operating system or help Microsoft advertise better, is just something too creepy for many users and a feeling of breech of privacy no less.

The best thing to do right now is to keep checking the Windows 10 update icon, to see if there is scheduler set in place.

Facebook has been highly focused on expanding its video streaming services, partnering up with broadcast channels for the Election Day

Mark Zuckerberg is enhancing video streaming options and content on Facebook as he plans to make more revenue via video ads.  The social media giant has partnered up with approximately 50 broadcasting channels for Election Day.  Whether this recent development is for selling ads or more views is unknown.

Facebook users can watch the US presidential election on the social media platform.  This option is ideal for users who do not prefer to be glued to their couches but head out; they can watch it on the road. The social media giant is covering the election live throughout, giving users the option to watch the elections while they wait in the voting line. Numerous news and media companies have partnered up with Facebook for live coverage including CNN, ABC News and Daily Caller.

Facebook’s major goal for today is to reach as many audiences as possible. It seems that Facebook is going to give Twitter some tough competition. Every channel that has partnered up with the social media platform will publish almost 15 minutes of live footage of the Election in each of the 50 states. The content can be viewed under the heading ‘Election 2016’ on Tuesday with hashtag #50states.

Facebook is not selling any ads on the Election Day streams, which is evidence that it is only focusing on views today. This will enable the platform to boost its reputation in the live news industry and beat Twitter. The option to view content on extended platforms is essential for customers who will not be home today.

Users who wish to witness the election’s highlights on Facebook should hurry up and click on ‘Election 2016.’ Real-time information will also be provided to voters.

The Country Caller takes a look at the upcoming earnings of SolarCity

SolarCity Corp (NASDAQ:SCTY) is scheduled to reveal financial results for second quarter of the fiscal year 2016 on Tuesday after the closing bell of the market. Investors would be looking at the results with scrutiny. Tesla Motors Inc. (NASDAQ:TSLA) in June had expressed an interest in the acquisition of SolarCity.

The views of most of the analysts were rather mixed. While some analysts are commending the deal, as they believe it will take away Tesla from its long-term strategy, some are of the view that this is a move to protect SolarCity which is facing a detrimental liquidity and profitability position. The deal in anyway isn’t offering much to Tesla.

Analysts across the Street forecast the company to report revenues of $146.66 million. If the revenue figure comes according to expectation then it would represent an increase of over $20 million from the preceding quarter.

In recent times, we have seen that the demand for renewables has started to improve. SolarCity thus is able to record robust bookings which help in increasing revenues. The company in the last one year has managed never to miss the expectations for revenues. Analysts at Earnings Whispers are slightly less bullish on SolarCity with revenue expectations of $134.56 million.

While SolarCity has managed to Outperform analysts’ expectations for revenues it has suffered when it comes to profitability. SolarCity since its inception has never been able to post a loss and has mostly missed the consensus expectations. Analysts across the Street expect the company to report an adjusted net loss of $213.61 million or a loss per share (LPS) of $2.5. Last year during the same quarter, the loss figure for the company was $123 million. The Earnings Whispers forecast for an adjusted net loss is $2.47.

In the most recent development, there is news about reports that Tesla has managed to reach a deal with SolarCity of lowering the purchase price for the acquisition. The deal which was previously being sold for $26.50 to $28.50 is now being closed at $25.83 per share translating into $2.6 billion.

The recent results for SolarCity if they come below par would pose a lot of question marks on Elon Musk’s decision as he would be acquiring an unprofitable company.