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November 4, 2021

NeoPhotonics sold for $918M

Lumentum to acquire NeoPhotonics for $16 per share in cash

Lumentum (LITE) and NeoPhotonics (NPTN) announced that they have entered into a definitive agreement under which Lumentum will acquire NeoPhotonics for $16.00 per share in cash, which represents a total equity value of approximately $918M.

NeoPhotonics Corporation develops, manufactures, and sells optoelectronic products that transmit and receive high speed digital optical signals for cloud and hyperscale data center internet content provider and telecom networks worldwide.

Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates in two segments, Optical Communications (OpComms) and Commercial Lasers (Lasers).

The transaction has been unanimously approved by the boards of directors of both companies.

The purchase price represents a premium of approximately 39% to NeoPhotonics’ closing stock price on November 3, 2021.

Lumentum intends to finance the transaction through cash from the combined company’s balance sheet.

Related to the transaction, Lumentum will provide up to $50M in term loans to NeoPhotonics to fund anticipated growth, which may require increased working capital and manufacturing capacity.

The transaction is expected to close in the second half of calendar year 2022, subject to approval by NeoPhotonics’ stockholders, receipt of regulatory approvals, and other customary closing conditions.

“With NeoPhotonics, we’re making another important investment in better serving our customers and expanding our photonics capabilities at a time when photonics are at the forefront of favorable long-term market trends. At the center of our strategy is a relentless focus on developing a differentiated portfolio with the most innovative products and technology in our industry so that we can help our customers compete and win in their respective markets.

Adding NeoPhotonics’ differentiated products and technology and innovative R&D team is consistent with this strategy and together, we will better meet the growing need for next generation optical networking solutions. We are confident this transaction will make us an even better partner to our customers, while enabling our team to deliver significant, long-term value to our stockholders. We look forward to welcoming NeoPhotonics’ talented team of employees to Lumentum,” said Alan Lowe, Lumentum President and CEO.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

October 20, 2021

Flying Prescriptions Are Coming!

Walgreens to deploy Wing drone deliveries in Dallas-Fort Worth area

In a blog post by Alphabet’s (GOOG, GOOGL) Wing, the company said, ” Today we’re unveiling a new model for drone delivery that will allow us to expand into densely-populated metropolitan areas in the United States.

Wing will stage delivery drones at retail locations; ready to fly directly to customers.

The aircraft will arrive in small containers that serve as tiny hangars, allowing each store to quickly and easily deploy a small, dedicated fleet from its parking lot, on its roof, or in small spaces adjacent to the building.

When this model launches, Walgreens (WBA) will be the first U.S. retailer to use this new approach.

Walgreens team members will process orders and load packages onto the delivery drones, and Wing will oversee operation of the delivery service.

Our first lightweight, co-located operation will be set up at a Dallas-Fort Worth area Walgreens store in its parking lot, serving parts of the city of Frisco and town of Little Elm.

In addition to the Walgreens store, Wing has teamed up with Hillwood to prepare a separate drone delivery facility within Frisco Station, an urban, mixed-used development located in Frisco.

Hillwood has a long track record supporting forward-thinking, innovative transportation initiatives across the region, most notably at its Alliance Texas development and its designated Mobility Innovation Zone.

We look forward to working with Hillwood as we deploy a facility at Frisco Station that has all the usual delivery capabilities, but will be dedicated to exploring new use cases, community demonstrations, school field trips and public tours…

In preparation for this launch, we’ve been conducting test flights since June at Hillwood’s AllianceTexas Flight Test Center, a drone testing facility in Fort Worth.

We’ll begin a small number of practice flights next week in Frisco and Little Elm, and hope to set up delivery demonstrations to get feedback from the community in the coming weeks.

In the coming months, we expect to launch a commercial service there that would be the first of its kind in a major U.S. metro.”

Wing is a subsidiary of Alphabet Inc. that develops technology of drone-based delivery of freight. The company completed their first real-world deliveries in 2014. The company has operations in Australia, the United States, and Finland.

In July 2018, Project Wing graduated from Google X to become an independent Alphabet company. As of January 2019, Wing began delivering take-out food and beverages out of its test facility in Bonython, Australia as part of a pilot program. In April 2019 Wing became the first drone delivery company to receive an Air operator’s certificate from the Federal Aviation Administration to allow it to operate as an airline in the USA.

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September 22, 2021

When It rains, It pours!

Workhorse Group suspends deliveries of C-1000 vehicles, recalls 41 that it had delivered

Workhorse Group Inc. (WKHS) shares plunged on Wednesday to their lowest in fifteen months after the beleaguered electric-vehicle maker said it will suspend deliveries of its vans and recall units it has already delivered.

Workhorse Group (WKHS) provided an update to its ongoing review of the Company’s business and go-forward operating and commercial plans to transition from an advanced technology start-up to an efficient manufacturing company.

The electric van, called the C-1000, would require additional testing and modifications to existing vehicles in order to certify them under federal motor vehicle safety standards, the company said in a statement.

The Company stopped delivery of its C-1000

The Company has identified a number of enhancements in the production process and design of the C-1000 to address customer feedback, primarily related to vehicle dynamics to increase the vehicles’ payload capacity.

As Workhorse has identified these enhancements and continued its review and redesign of the C-1000, the Company has decided to suspend deliveries of C-1000 vehicles and recall 41 vehicles it has already delivered.

As part of these efforts, the new leadership team has determined that additional testing and modifications to existing vehicles are required to certify the C-1000 vehicles under Federal Motor Vehicle Safety Standard.

The Company expects to complete testing in the fourth quarter of 2021.

Workhorse intends to provide an update on its operating and commercial plans on its upcoming third quarter 2021 earnings call.

The Company has filed a report with the National Highway Traffic Safety Administration regarding the need for additional testing and vehicle modifications to certify its C-1000 vehicles under FMVSS, and intends to fully coordinate with NHTSA.

The Company has not received any customer reports of safety issues related to this matter in any of the C-1000 vehicles previously delivered by Workhorse.

Additional details will be available in the Company’s filing with NHTSA.

Accordingly, the Company’s previous statements related to the C-1000’s compliance with NHTSA standards cannot be relied upon and the Company has so notified the Securities and Exchange Commission.

#Cowen analyst Jeffrey #Osborne lowered his price target on the company to $7.50 from $8.50, and also reduced his estimates for 2021 and 2022 after the announcement, saying a “turnaround appears more challenging.” The analyst also expects working capital to likely be challenged due to prepayments for batteries and other critical materials.

According to some reports, the company is being investigated by the U.S. Securities and Exchange Commission, as well as disappointment related to losing out on a U.S. Postal Service contract that many had expected Workhorse to win.

WKHS closed at $7.41. Shares have a 52-week high of $42.96.

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July 23, 2021

Veoneer sold for $3.8B

Magna to acquire Veoneer for $31.25 per share in cash

Magna (MGA) and Veoneer (VNE) announced that they have entered into a definitive merger agreement under which Magna will acquire Veoneer.

The Swedish auto parts maker sold for $3.8B

Pursuant to the agreement, Magna will acquire all of the issued and outstanding shares of Veoneer for $31.25 per share in cash, representing a total value of $3.8B, and an enterprise value of $3.3B, inclusive of Veoneer’s cash, net of debt and other debt-like items as of March 31.

Magna expects to operate Veoneer’s Arriver sensor perception and drive policy software platform as an independent business unit, consistent with Veoneer’s current practice.

In addition, Magna will acquire Veoneer’s global position in restraint control systems.

Following the closing of the transaction, Veoneer will be combined with Magna’s existing ADAS business and integrated into Magna’s electronics operating unit.

The transaction has been unanimously approved by the Veoneer and Magna boards of directors, and Veoneer’s board of directors unanimously recommends that Veoneer stockholders approve the proposed merger and merger agreement.

In addition, Veoneer stockholders AMF, Cevian, AP4 and Alecta, which collectively represent approximately 40% of Veoneer’s outstanding shares of common stock, have either entered into support agreements with Magna or provided indications of support, pursuant to which they have agreed, among other things and subject to certain conditions, to vote their shares of Veoneer common stock in favor of the transaction.

A special meeting of Veoneer’s stockholders will be convened in connection with the transaction as soon as practicable after the mailing to Veoneer’s stockholders of the proxy statement in connection with the merger.

Magna is rumored to be making the Apple Car

The transaction is expected to close near the end of 2021, subject to the approval of Veoneer’s stockholders, certain regulatory approvals and other customary closing conditions. The transaction is not subject to any financing conditions.

Veoneer, Inc. engages in the design, development, manufacture, and sale of automotive safety electronics primarily in North America, Europe, and Asia. It offers automotive radars, mono-and stereo-vision cameras, night driving assist systems, advanced driver assist systems (ADAS), electronic control units, airbag control units, crash sensors, seat belt pre-tensioner electronic controllers, and ADAS software for highly automated driving (HAD) and autonomous driving (AD). Veoneer, Inc. is headquartered in Stockholm, Sweden.

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May 17, 2021

Consolidation in the media space!

AT&T, Discovery to create global DTC business through Reverse Morris Trust

AT&T (T) and Discovery (DISCA) announced a definitive agreement to combine WarnerMedia’s premium entertainment, sports and news assets with Discovery’s nonfiction and international entertainment and sports businesses to create a standalone global entertainment company.

ATT to merge it’s media assets with Discovery

Under the terms of the agreement, which is structured as an all-stock, Reverse Morris Trust transaction, AT&T would receive $43B in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt, and AT&T’s shareholders would receive stock representing 71% of the new company; Discovery shareholders would own 29% of the new company.

The boards of both AT&T and Discovery have approved the transaction.

Bringing together the leadership teams, content creators, and series and film libraries.

The new company is projected for 2023 revenue of approximately $52B, adjusted EBITDA of approximately $14B, and free cash flow conversion rate of approximately 60%.

The transaction is expected to create at least $3B in expected cost synergies annually for the new company.

The new company will compete globally in the direct-to-consumer business bringing content to DTC subscribers across its portfolio, including HBO Max and the recently launched discovery+.

The transaction will combine WarnerMedia’s content library of IP with Discovery’s global footprint, local-language content and regional expertise across more than 200 countries and territories.

The companies announced that Discovery president and CEO David Zaslav will lead the proposed new company with a management team and operational and creative leadership from both companies.

Discovery’s current multiple classes of shares will be consolidated to a single class with one vote per share.

The new company’s board will consist of 13 members, seven initially appointed by AT&T, including the chairperson of the board; Discovery will initially appoint six members, including CEO David Zaslav.

The combination will be executed through a Reverse Morris Trust, under which WarnerMedia will be spun or split off to AT&T’s shareholders via dividend or through an exchange offer or a combination of both and simultaneously combined with Discovery.

The transaction is expected to be tax-free to AT&T and AT&T’s shareholders. In connection with the spin-off or split-off of WarnerMedia, AT&T will receive $43B in a combination of cash, debt securities and WarnerMedia’s retention of certain debt.

**David Zaslav** to head the new company

The new company expects to maintain investment grade rating and utilize the significant cash flow of the combined company to rapidly de-lever to approximately 3.0x within 24 months, and to target a new, longer term gross leverage target of 2.5x-3.0x.

WarnerMedia has secured fully committed financing for the purposes of funding the distribution.

The transaction is anticipated to close in mid-2022, subject to approval by Discovery shareholders and customary closing conditions, including receipt of regulatory approvals.

No vote is required by AT&T shareholders. Agreements are in place with John Malone and Advance to vote in favor of the transaction.

Elliott Management

Elliott Investment Management released a statement on behalf of Managing Partner Jesse Cohn and Portfolio Manager Marc Steinberg regarding AT&T’s plan to merge media assets with Discovery:

“It has been a transformational year at AT&T year since John Stankey took over as CEO, and today’s announcement represents another impressive step in the Company’s recent evolution.

AT&T has now executed on its promise to streamline operations and re-focus on its core businesses, all while improving operational execution, enhancing its financial position and advancing its corporate governance. As investors, Elliott supports AT&T in its efforts to best position the company for future success.”

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March 1, 2021March 1, 2021

Berkshire Hathaway reports record profit

Buffett also said in his annual shareholder letter to “never bet against America.”

Warren Buffett Berkshire Hathaway’s (BRK.A, BRK.B) fourth quarter profits rose, with its net earnings rising to $38.5B, or $23,015 a Class A share equivalent, up almost 23% from the previous year’s profit of $29.2B, or $17,909 a share.

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Operating earnings, which exclude some investment results, rose to $5 billion from $4.4 billion the year before.

Buffett also said in his annual shareholder letter to “never bet against America.”

“In its brief 232 years of existence… there has been no incubator for unleashing human potential like America,” he added.

“Despite some severe interruptions, our country’s economic progress has been breathtaking. Our unwavering conclusion: Never bet against America.” Buffett said the conglomerate owns the biggest amount of U.S. assets by value than any other company in the country.

Berkshire Hathaway also bought back a record amount of company stock last year. During the fourth quarter, the company bought back about $9B shares for a total 2020 repurchase of $24.7B.

Buffett said in his annual shareholder letter that repurchases have continued since year-end and “is likely to further reduce its share count in the future.”

“That action increased your ownership in all of Berkshire’s businesses by 5.2% without requiring you to so much as touch your wallet,” the letter reads.

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October 28, 2020

Spotify reports tomorrow

What to watch in Spotify earnings report

Spotify (SPOT) is scheduled to report third quarter results before market open on Thursday, October 29, with a conference call scheduled for 8:00 am ET. What to watch:

1. USER METRICS: Spotify’s monthly active users, or MAUs, are a measure of its popularity and growth potential. In the second quarter, Spotify reported 299M MAUs, up 29% year-over-year and 5% quarter-over-quarter.

The company also reported 170M ad-supported MAUs, up 31% year-over-year and 4% quarter-over-quarter. In addition, the company reported that Premium Subscribers grew to 138M, up 27% year-over-year and 6% quarter-over-quarter.

Along with the report, the company said, “Early in the quarter, we observed some COVID related softness in several countries across our emerging regions. Parts of Latin America and Rest of World saw slower than expected growth in April and May as we saw lower intake, an increase in churn, and increases in payment failures from our Premium users.

Spotify is now available in Russia and most of Eastern Europe

Encouragingly, things rebounded significantly in June as we saw increased reactivations and a step down in churn. While we finished below forecast in aggregate across these regions, our strength in North America and other areas more than offset the slow start to the quarter.”

2. GUIDANCE: With its last report, Spotify guided to Q3 revenue of EUR1.85B-EUR2.05B. The company also forecast Q3 total MAUs of 312M-317M and total Premium Subscribers of 140M-144M.

3. INITIATIVES, PARTNERSHIPS: In July, Spotify launched in 13 new markets across Europe, including Russia and the Ukraine. The company also announced in July a podcast with former first lady Michelle Obama and the launch of video podcasts with select creators.

Additionally in July, Spotify signed a multi-year global license agreement with Universal Music Group, a Vivendi (VIVHY) company. In August, the company announced a multi-year deal with Riot Games, a subsidiary of Tencent (TCEHY), as its exclusive audio streaming partner for League of Legends events.

Spotify uses partnerships to expand its footprint

In September, the company launched virtual event listings on artist profiles and in the Concerts hub and also announced it was testing a new Polls feature for podcasts. Additionally in September, Spotify announced a multi-year first look partnership with Chernin Entertainment.

4. ANALYST VIEW: On Tuesday, Deutsche Bank analyst Lloyd Walmsley raised the firm’s price target on Spotify to $250 from $240 and kept a Hold rating on the shares. The analyst said he expects “solid” Q3 results for Spotify with strong monthly active user growth driven by new markets and podcast launches as well as improving churn.

Meanwhile, Morgan Stanley analyst Benjamin Swinburne raised the firm’s price target on Spotify to $300 from $275 and kept an Overweight rating on the shares.

Results from U.S. digital audio competitor Pandora last week were “encouraging” and suggest his current 5%-6% growth estimate for Spotify’s ad revenue could be conservative, Swinburne said. He also pointed to recent data that suggest Spotify is taking market share and evaluating price increases.

SPOT last traded at $276.70

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September 16, 2020

FOMC leaves rates unchanged near zero

Fed members project Federal funds rate near zero until end 2023

There were some important shifts in the statement versus July’s, however, that further support the ZIRP posture.

Indeed, the Fed will “aim” for an inflation rate “moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%.

The Fed reiterated from June that it will in coming months increase its holdings of Treasuries and MBS “to sustain smooth market functioning and help foster accommodative financial conditions.” There were two dissents. Kaplan approved of the current target range, but wanted to retain a “greater policy flexibility.” Kashkari wanted the statement to indicate the current target range on rates will be maintained until core inflation has reached 2% on a sustained basis. The Fed’s SEP reflected an improved outlook on 2020 growth, as expected.

The Federal Reserve said in today’s statement,

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved.

The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses.”

The Fed released the economic projections of Federal Reserve Board members and Federal Reserve Bank presidents under their individual assessments of projected appropriate monetary policy, which shows that the median projection for Federal funds rate is 0.1% for the end of 2020, the end of 2021, and the end of 2022. The group’s projections in June were also for a Federal funds rate of 0.1% at the end of 2020, the end of 2021 and the end of 2022. The Fed group has extended its projection out to 2023, and still sees a Federal funds rate of 0.1% at the end of 2023.

FOMC will continue to pump money into economy

FOMC Forecast revisions, released with the FOMC statement, show the huge boosts in the official 2020 GDP forecasts that analysts had assumed, followed by a more restrained 2021-23 bounce.

The jobless rate estimates were lowered by much more than expected across the forecast horizon, and inflation was boosted as expected.

The median Fed funds rates sit at 0.1% through 2023, though the range of estimates show expectations of hikes by some starting in 2022.

The 2020 GDP central tendency was boosted sharply to the -4.0% to -3.0% from the prior central tendency of -7.6% to -5.5%, versus our own -2.4% forecast.

Analysts saw a huge trimming the jobless rate central tendency to 7.0%-8.0% from 9.0%-10.0%, versus our own higher 8.2% figure. Analysts saw boosts in the PCE chain price central tendencies to 1.1%-1.3% from 0.6%-1.0% for the headline and to 1.3%-1.5% from 0.9%-1.1% for the core, versus our respective estimates of 1.2% and 1.6%.

The central tendency for the Fed funds rate rises to 0.1%-0.4% in 2023 after unanimous 0.1% figures in 2020 and 2021. The range rises to 0.1%-0.6% in 2022, and to 0.1%-1.4% in 2023. page for a table of assumptions for the Fed’s revised forecasts.

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August 24, 2020

TikTok suing Trump Administration

TikTok suing Trump Administration over efforts to ban TikTok in U.S.

TikTok stated in a post to its corporate website:

“Today we are filing a complaint in federal court challenging the Administration’s efforts to ban TikTok in the US…

Today, 100 million Americans turn to TikTok for entertainment, inspiration, and connection; countless creators rely on our platform to express their creativity, reach broad audiences, and generate income; our more than 1,500 employees across the US pour their hearts into building this platform every day, with 10,000 more jobs planned in California, Texas, New York, Tennessee, Florida, Michigan, Illinois, and Washington State; and

On August 6th, Trump issued an executive order giving TikTok 90 days to sell

many of the country’s leading brands are on TikTok to connect with consumers more authentically and directly than they can elsewhere.

Put simply, we have a thriving community and we are grateful – and responsible – to them.

The Executive Order issued by the Administration on August 6, 2020 has the potential to strip the rights of that community without any evidence to justify such an extreme action, and without any due process.

We strongly disagree with the Administration’s position that TikTok is a national security threat and we have articulated these objections previously.”

ByteDance has reportedly been making progress in talks with potential acquirers of the U.S. operations of the short video app, including Microsoft (MSFT) and Oracle (ORCL), media reports have indicated. Reports have also indicated that Twitter (TWTR) is exploring a bid for TikTok.

Other publicly traded companies in the social media space include Facebook (FB) and Snap (SNAP).

TikTok/Douyin is a Chinese video-sharing social networking service owned by ByteDance, a Beijing-based Internet technology company founded in 2012 by Zhang Yiming.

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August 3, 2020

FTC to fine Twitter over misuse of data

Twitter faces FTC fine of up to $250M over alleged misuse of email, phone data

On July 28, 2020, Twitter (TWTR) received a draft complaint from the Federal Trade Commission alleging violations of the company’s 2011 consent order with the FTC and the FTC Act, the company said in a regulatory filing.

Twitter books a $150M charge., Stockwinners

The allegations relate to the company’s use of phone number and/or email address data provided for safety and security purposes for targeted advertising during periods between 2013 and 2019.

The company estimates that the range of probable loss in this matter is $150M to $250M and has recorded an accrual of $150M.

The accrual is included in accrued and other current liabilities in the consolidated balance sheet and in general and administrative expenses in the consolidated statements of operations.

FTC complaint relates to misuse of phone number and email addresses

The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.

The company is also currently involved in, and may in the future be involved in, legal proceedings, claims, investigations, and government inquiries and investigations arising in the ordinary course of business.

These proceedings, which include both individual and class action litigation and administrative proceedings, have included, but are not limited to matters involving content on the platform, intellectual property, privacy, data protection, securities, employment and contractual rights.

Class Action suits have been filed against Twitter

Legal fees and other costs associated with such actions are expensed as incurred.

The company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies.

Litigation accruals are recorded when and if it is determined that a loss related matter is both probable and reasonably estimable.

Material loss contingencies that are reasonably possible of occurrence, if any, are subject to disclosure.

Twitter used customer phone numbers for marketing purposes, Stockwinners

As of June 30, 2020, except for the referenced class actions, derivative actions and FTC matter, there was no litigation or contingency with at least a reasonable possibility of a material loss.

Except for the aforementioned accrual of $150M recorded in relation to the FTC matter, no other material losses were recorded during the three and six months ended June 30, 2020 and 2019 with respect to litigation or loss contingencies.

TWTR closed at $36.39.

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June 24, 2020

IMF warns of global slowdown

International Monetary Fund cuts global growth forecast

IMF cuts global growth forecast and warns that the rebound in global financial markets “appears disconnected from shifts in underlying economic prospects”.

The fund now expects global GDP to shrink -4.9% this year, from -3.0% expected in April.

For next year, the IMF sees a rebound of 5.4%, also lower than the 5.8% projected two months ago with downward revisions reflecting the deep scars from a larger than expected supply shock during lockdowns as well as a continued hit to demand from social distancing and other virus measures.

Orange color designates economic downgrades

The IMF warned that for nations struggling to control the spread of the virus a longer lockdown will also take a toll on growth.

“With the relentless spread of the pandemic, prospects of long lasting negative consequences for livelihoods, job security and inequality have grown more daunting”, according to the fund’s update to the World Economic Outlook.

Advanced economies are expected to lead the downdraft with a -8.0% rate, versus -6.1% in the prior forecast.

The outlook on the U.S. was downgraded to -8.0% from -5.9%.

The projection on the Euro Area was knocked down to -10.2% from -7.5%. The UK is also seen posting a -10.2% contraction versus -6.5% previously. Japan was revised to -5.8% from -5.2%.

Emerging market and developing economies are seen falling -3.0% versus -1.0% in the April forecast. China is expected to expand 1.0%, though down from the prior 1.2%.

The largest revision was seen with India where the prior 1.9% growth rate was revised to a -4.5% contraction. World trade volume is projected tumbling at a -11.9% pace this year, a downgrade from -11.0% previously, though is expected to bounce back to an 8.0% growth rate in 2021.

Consumer prices in Advanced economies is seen slowing to 0.3% versus the prior estimate of 0.5%, and is down from a 1.4% pace in 2019.

Several central bank officials have also tried to reign in optimism about the recovery as markets seem to run away with the recovery story.

India’s economy is expected to hit hard with Covid-19

Massive monetary and fiscal support may help to kick-start a rebound, but as ECB chief economist Lane warned today, it will take a long time to reach pre-crisis levels.

The Bank o Japan’s summary of opinion warned that a prolonged negative impact of virus developments on the economic outlook looks unavoidable. And China’s Beige Book expects a contraction for China’s economy this year.

New York Governor Andrew Cuomo, along with Governor Phil Murphy of New Jersey and Governor Ned Lamont of Connecticut, announced a joint travel advisory.

All individuals traveling from states with significant community spread of COVID-19 into any of the three states must quarantine for 14 days, the governors announced.

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June 17, 2020

DOJ issues guideline for online content

DOJ issues recommendations for Section 230 reform

The Department of Justice has released a set of reform proposals to update the outdated immunity for online platforms under Section 230 of the Communications Decency Act of 1996.

Responding to bipartisan concerns about the scope of 230 immunity, the department identified a set of concrete reform proposals to provide stronger incentives for online platforms to address illicit material on their services while continuing to foster innovation and free speech.

The department’s review of Section 230 over the last ten months arose in the context of its broader review of market-leading online platforms and their practices, which were announced in July 2019.

The department held a large public workshop and expert roundtable in February 2020, as well as dozens of listening sessions with industry, thought leaders, and policy makers, to gain a better understanding of the uses and problems surrounding Section 230.

The first category of recommendations is aimed at incentivizing platforms to address the growing amount of illicit content online, while preserving the core of Section 230’s immunity for defamation claims.

These reforms include a carve-out for bad actors who purposefully facilitate or solicit content that violates federal criminal law or are willfully blind to criminal content on their own services.

Additionally, the department recommends a case-specific carve out where a platform has actual knowledge that content violated federal criminal law and does not act on it within a reasonable time, or where a platform was provided with a court judgment that the content is unlawful, and does not take appropriate action.

A second category of proposed reforms is intended to clarify the text and revive the original purpose of the statute in order to promote free and open discourse online and encourage greater transparency between platforms and users.

One of these recommended reforms is to provide a statutory definition of “good faith” to clarify its original purpose.

The new statutory definition would limit immunity for content moderation decisions to those done in accordance with plain and particular terms of service and consistent with public representations. These measures would encourage platforms to be more transparent and accountable to their users.

The third category of recommendations would increase the ability of the government to protect citizens from unlawful conduct, by making it clear that Section 230 does not apply to civil enforcement actions brought by the federal government.

A fourth category of reform is to make clear that federal antitrust claims are not, and were never intended to be, covered by Section 230 immunity.

Over time, the avenues for engaging in both online commerce and speech have concentrated in the hands of a few key players.

It makes little sense to enable large online platforms (particularly dominant ones) to invoke Section 230 immunity in antitrust cases, where liability is based on harm to competition, not on third-party speech.

The action follows President Trump’s executive order seeking to weaken broad immunity enjoyed by Facebook (FB), Twitter (TWTR) and Google (GOOGL).

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May 6, 2020

Paypal is expected to report strong results

What to watch in PayPal earnings report

PayPal (PYPL) is scheduled to report results of its first fiscal quarter after market close on May 6, with a conference call scheduled for 5:00 pm EDT.

PayPal international business hurt by Covid -19

What to watch for:

1. OUTLOOK: On February 27, PayPal said that it had been “carefully assessing the effect of COVID-19 as conditions continue to evolve… PayPal’s business trends remain strong; however, international cross-border e-commerce activity has been negatively impacted by COVID-19.

We currently estimate the negative impact from COVID-19 to be an approximate one percentage point reduction, on both a spot and foreign currency-neutral basis, to PayPal’s year-over-year revenue growth for the first quarter, as compared to the revenue guidance provided on January 29, 2020.

PayPal domestic business remains strong, Stockwinners

Stronger performance quarter-to-date across our diversified business is partially offsetting this one percentage point negative impact. We now expect to report first quarter 2020 revenue toward the lower end of our previously guided range of $4.78B-$4.84B.”

The company also reaffirmed its Q1 GAAP and non-GAAP EPS guidance.

During the company’s last earnings call in late January, PayPal said it expected Q1 adjusted EPS between 76c-78c, and FY20 adjusted EPS of $3.39-$3.46.

2. ‘RAPID ADOPTION INCREASE’: In a research note to investors last month, Deutsche Bank analyst Bryan #Keane raised the firm’s price target on #PayPal to $147 from $127, while keeping a Buy rating on the shares.

The analyst believes the Street is underappreciating the “rapid adoption increase” toward e-commerce in the new COVID-19 world, with PayPal as one of the main beneficiaries of this trend. The surge in new online shoppers should drive “strong” net new active customers for the company, he contended.

3. TO WAIVE CERTAIN FEES, DEFER PAYMENTS: PayPal announced on March 31 a set of relief measures to help its more than 24M merchants around the world impacted by the coronavirus.

e-Commerce continues to fuel Paypal’s growth, Stockwinners

The company said it was waiving certain fees and deferring repayments on business loans for some of its most affected small business customers.

4. LENDING TO SMALL BUSINESSES: PayPal, Square (SQ), and Intuit (INTU) started lending to small businesses that couldn’t get access to COVID-19 relief funds through large U.S. banks, Bloomberg’s Olivia Rockeman and Edward Ludlow reported last month.

Fintech companies have been pushing to provide emergency loans since mid-March, over a week before the passage of a federal bill that crated the Paycheck Protection Program, the authors noted.

“The PPP program has manual checks and processes that require time, and we’re doing the best we can despite having tech that can operate at scale and efficiency,” said Brian Peters, executive director of Financial Innovation Now, an industry group whose membership includes PayPal and Square.

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March 23, 2020

Microsoft acknowledges security flaw in its new Windows operating system

Microsoft says aware of new security flaw found in Microsoft Windows

Microsoft (MSFT) said it is aware of limited targeted attacks that could leverage un-patched vulnerabilities in the Adobe Type Manager Library, and is providing the following guidance to help reduce customer risk until the security update is released.

A security flaw is discovered in Windows, Stockwinners

Two remote code execution vulnerabilities exist in Microsoft Windows when the Windows Adobe Type Manager Library improperly handles a specially-crafted multi-master font – Adobe Type 1 PostScript format.

There are multiple ways an attacker could exploit the vulnerability, such as convincing a user to open a specially crafted document or viewing it in the Windows Preview pane.

Vulnerability exists on Adobe Type Manager, Stockwinners

Microsoft is aware of this vulnerability and working on a fix.

Updates that address security vulnerabilities in Microsoft software are typically released on Update Tuesday, the second Tuesday of each month.

This predictable schedule allows for partner quality assurance and IT planning, which helps maintain the Windows ecosystem as a reliable, secure choice for our customers.

The operating system versions that are affected by this vulnerability are listed below. Please see the mitigation and workarounds for guidance on how to reduce the risk.

The security flaw, which Microsoft deems “critical” — its highest severity rating — is found in how Windows handles and renders fonts, according to the advisory posted.

Although Windows 7 is also affected, only enterprise users with extended security support will receive patches. In the meantime, the advisory offered a temporary workaround for affected Windows users to mitigate the flaw until a fix is available.

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November 13, 2019

Tech Data sold for $5.4 billion

Tech Data to be acquired by Apollo Global for $130 per share in cash

Tech Data (TECD) announced it has entered into a definitive agreement to be acquired by an affiliate of funds managed by affiliates of Apollo Global Management (APO).

Tech Data is taken private at $130 per share, Stockwinners

Through the agreement, the affiliate of the Apollo Funds will acquire all of the outstanding shares of Tech Data common stock for $130 per share in a transaction with an enterprise value of approximately $5.4B.

Apollo buys Tech Data for $5.4B, Stockwinners

The purchase price represents a 24.5% premium to the unaffected 30-day volume weighted average closing share price of Tech Data’s common stock ended October 15, the last trading day prior to published market speculation regarding a potential transaction involving the company.

The Tech Data Board of Directors has unanimously approved the transaction and recommends that Tech Data shareholders vote in favor of the transaction.

The transaction is not subject to a financing condition and is expected to close in the first half of calendar year 2020, subject to the satisfaction of customary closing conditions including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, foreign regulatory approvals and approval by the holders of a majority of the outstanding Tech Data shares.

Tech Data expects to hold a Special Meeting of Shareholders to consider and vote on the transaction agreement as soon as feasible after the mailing of the proxy statement to shareholders.

Consistent with the Board’s commitment to maximizing shareholder value, the terms of the agreement provide that Tech Data will be permitted to actively solicit alternative acquisition proposals from third parties during a “go-shop” period from the date of the agreement until December 9.

There is no guarantee that this process will result in a superior proposal. Following the close of the transaction, Rich Hume will continue to lead Tech Data as CEO, and the company will continue to be headquartered in Clearwater, Florida.

Tech Data will become a privately held company, and Tech Data’s common shares will no longer be publicly listed.

Tech Data Corporation operates as an IT distribution and solutions company. The company offers endpoint portfolio solutions, including personal computer systems, mobile phones and accessories, printers, peripherals, supplies, endpoint technology software, and consumer electronics. It also provides advanced portfolio solutions, such as data center technologies comprising storage, networking, servers, advanced technology software, and converged and hyper-converged infrastructure, as well as specialized solutions.

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