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  • Zoom sued for overstating, not disclosing privacy, security flaws
    on 08/04/2020 at 8:46 am

    Shareholder Michael Drieu claimed in a court filing that a string of recent media reports highlighting the privacy flaws in Zoom's application have led to the company's stock, which had rallied for several days in the beginning of the year, to plummet. Zoom has been trying to plug security issues, as it signs up millions of new users from across the world as people are forced to work from home after lockdowns were enforced to slow the spread of the coronavirus.

  • EU Finance Deal Fails; U.K. Premier Remains in ICU: Virus Update
    on 08/04/2020 at 8:27 am
  • Two Accounting Scandals in China in One Week Burn Investors
    on 08/04/2020 at 8:13 am

    (Bloomberg) -- China’s second accounting scandal in less than a week is underscoring concern over lax corporate governance at some of the country’s fastest-growing companies.TAL Education Group, a tutoring business whose success turned founder Zhang Bangxin into one of China’s richest people, delivered the latest bombshell on Tuesday after saying a routine internal audit found an employee had inflated sales by forging contracts. The company’s American depositary receipts sank as much as 18% in late U.S. trading.The sell-off follows the 83% slump in Nasdaq-listed Luckin Coffee Inc. since the company announced that its chief operating officer and some underlings may have fabricated billions of yuan in sales for 2019. Accounting firm Ernst & Young later said it discovered the fabrications when it audited the firm’s financial statements. Trading in the ADRs was suspended Tuesday.While China Inc. is no stranger to claims of financial irregularities -- particularly from short sellers who have targeted both TAL and Luckin in the recent past -- the fresh wave of revelations is once again putting the spotlight on corporate malpractice at U.S.-listed Chinese firms. The fallout has already affected other listings from the nation and is likely to deter some overseas investors from buying into future initial public offerings.The cases are “reviving the big question for investors in Chinese firms: the financial data may look pretty, but can you trust it?” said Alvin Cheung, associate director at Prudential Brokerage Ltd. “The latest case has further fueled anxiety over Chinese firms’ financials, especially under a slowing economy and a difficult business environment.”Moves in other education stocks shows how investor nerves can quickly spread: New Oriental Education & Technology Group Inc. lost 4.6% in U.S. post-market trading. Hope Education Group Co. fell 3.3% in Hong Kong Wednesday, while CAR Inc., a car-rental firm founded by Luckin’s chairman, dropped another 17%.The declines vindicate short sellers like Carson Block’s Muddy Waters, which has for years targeted Chinese firms listed on U.S. exchanges.Peer Wolfpack Research released a new critical report on Iqiyi Inc. Tuesday, alleging that the Chinese video-streaming company overstates revenue and subscriber numbers. Muddy Waters assisted Wolfpack in its research and said it’s also short the company. Iqiyi denied the claims. ADRs in the company fell 3% in extended trading.(Updates with Hong Kong’s close of trading in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Pinterest Shares Surge 14% in After-Hours Trading On Positive Q1 Guidance
    on 08/04/2020 at 7:14 am

    Photo-sharing site Pinterest (PINS) has released first quarter revenue guidance of $269- $272 million, bracketing the Street’s estimated $270 million, causing shares to jump in after-hours trading on April 7.For the quarter ended March 31, 2020, the company is now looking for global monthly active users in the range of 365-367 million- implying a record-high 30 million+ Net Additions and dramatically exceeding Street estimates of 353 million.PINS also withdrew financial guidance for the full year 2020 citing the growing uncertainty of the impact of COVID-19 on the economic environment, and the resulting effect on advertiser demand.“First-quarter revenue performance was consistent with our expectations through the middle of March, when we began to see a sharp deceleration.” commented Todd Morgenfeld, CFO, Pinterest. “Fortunately, despite weakness across nearly the entire advertising market, our exposure to some of the most affected segments like travel, automotive, and restaurants has not been significant.”However, despite the recent deceleration in ad revenue, engagement on Pinterest has been strong. Ben Silbermann, CEO and co-founder believes that, more than ever, people need great ideas on everything from building a home office to activities to do with their kids.“In the last two weeks, we’ve seen record levels of engagement in Pinners searching for and saving ideas, and creating new boards to organize their projects” he told investors.Separately, Pinterest also announced that Françoise Brougher, the company’s Chief Operating Officer, would be leaving Pinterest, effective as of April 7, 2020, with CFO Todd Morgenfeld taking over her responsibilities.The stock shows a Moderate Buy analyst consensus on TipRanks, with a $28 average analyst price target (83% upside potential). (See PINS stock analysis on TipRanks)Related News: Put Amazon (AMZN) Stock on Your Grocery List, Says Top Analyst GenMark Sees 80% Q1 Revenue Boost on Covid-19 Tests Exxon Mobil Slashes Capital Spending by 30% to Combat Oil Price Collapse   More recent articles from Smarter Analyst: * SAGE Announces Massive Restructuring To Focus On Failed Depression Drug * Amazon Halts New Delivery Service To Focus On Demand Surge * GenMark Sees 80% Q1 Revenue Boost on Covid-19 Tests * Tactile Systems Pre-Releases 1Q; Pulls FY20 Guidance on Covid-19

  • Zoom Sued for Fraud Over Privacy, Security Flaws
    on 08/04/2020 at 6:11 am

    (Bloomberg) -- Zoom Video Communications Inc. was accused by a shareholder of hiding flaws in its video-conferencing app, part of a growing backlash against security loopholes that were laid bare after an explosion in worldwide usage.In a complaint filed Tuesday in San Francisco federal court, the company and its top officers were accused of concealing the truth about shortcomings in the app’s software encryption, including its alleged vulnerability to hackers, as well as the unauthorized disclosure of personal information to third parties including Facebook Inc.Investor Michael Drieu, who filed the suit as a class action, claims a series of public revelations about the app’s deficiencies starting last year have dented Zoom’s stock price -- though the shares are still up 67% this year as investors bet that the teleconferencing company would be one of the rare winners from the coronavirus pandemic.Read More: Zoom Grapples With Security Flaws That Sour Users on AppFrom Elon Musk’s SpaceX and Tesla Inc. to New York City’s Department of Education, agencies around the world have begun to ban usage of an app that’s risen during the coronavirus lockdown as a home for everything from virtual cocktail hours to cabinet meetings and classroom learning. On Tuesday, Taiwan barred all official use of Zoom, becoming one of the first governments to do so.Zoom Chief Executive Officer Eric Yuan has apologized for the lapses, acknowledging in a blog post last week the company had fallen short of expectations over privacy and security. Cybersecurity researchers warn that hackers can exploit vulnerabilities in the software to eavesdrop on meetings or commandeer machines to access secure files. Weak encryption technology has given rise to the phenomenon of “Zoombombing”, where uninvited trolls gain access to a video conference to harass the other participants. Recordings of meetings have also shown up on public internet servers.The company also routed data through servers in China and used developers there, Citizen Lab said in a report last week. Any official data routed through China poses a major risk for Taiwan, a self-ruled island that Beijing claims as part of its territory. Taiwan’s government rejects China’s assertion, viewing the island as a sovereign nation.“The rapid uptake of teleconference platforms such as Zoom, without proper vetting, potentially puts trade secrets, state secrets, and human rights defenders at risk,” researchers at the University of Toronto’s Citizen Lab wrote.Read more: Taiwan Bans Official Use of Zoom Over Cybersecurity ConcernsThe company said it had mistakenly sent traffic through Chinese data centers as it was dealing with a “massive increase” in demand. It said it has stopped using that capacity as backup for non-Chinese clients.Zoom is working on adding end-to-end encryption but that’s still months away, Yuan has said. Many of the problems stem from the fact that the app was geared toward enterprise clients with their own IT security teams, instead of the broad consumer app it’s become. The number of daily meeting participants across Zoom’s paid and free services has gone from around 10 million at the end of last year to 200 million now, the company said. Most of those people are using its free service.(Updates with Taiwan’s ban from the fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Morgan Stanley, Credit Suisse Among Lenders to Luckin Boss
    on 08/04/2020 at 6:07 am

    (Bloomberg) -- Morgan Stanley, Credit Suisse Group AG and Haitong International Securities Group were among the biggest participants in a series of margin loans to Luckin Coffee Inc.’s founder before accounting fraud allegations at the high-flying Chinese company triggered a collapse in the stock and caused him to default, a person with knowledge of the matter said.The banks were part of a group that extended margin debt to Luckin Chairman Lu Zhengyao across three funding rounds, said the person, who asked not to be identified as the matter is private. Haitong put up $140 million, while Morgan Stanley and Credit Suisse lent about $100 million each, the person said. Barclays Plc, Goldman Sachs Group Inc. and China International Capital Corp. also had smaller exposures, the person said, adding that a portion of the loans were repaid before the default.Goldman Sachs said in a statement on Monday that an entity controlled by Lu’s family trust reneged on $518 million of margin debt and that lenders had seized as many as 76.4 million Luckin shares. The stake was worth about $335 million based on the closing price Monday, down from more than $2 billion before the scandal broke. It’s unclear whether the banks have sold the shares or whether they’ll be forced to book losses on their loans. Goldman, which didn’t elaborate on individual banks’ exposures, was given the role of handling the share disposal.Barclays’ and Goldman’s exposure to the margin loan was about $70 million each, people familiar who asked not to be identified said.Haitong International didn’t respond to emailed questions from Bloomberg News, while the rest of the banks declined to comment.Luckin, the biggest challenger to Starbucks Corp. in China, has lost $5.5 billion of market value since last week after saying its chief operating officer and some of its employees may have fabricated billions of yuan in sales, upending what was supposed to be one of the country’s best growth stories.The episode has dealt another blow to banks that worked closely with Luckin on its expansion over the past years, including arranging its initial public offering. Credit Suisse, which also led a group raising convertible debt for the coffee chain, has been sued over its role in Luckin’s U.S. share sale.Shares of CICC and Haitong International, which also helped underwrite Luckin’s IPO, fell more than 4% in Hong Kong on Tuesday. Trading in Luckin’s stock was suspended in New York.Goldman Sachs said lenders have full recourse to claim money back from Lu and his spouse, but it’s unclear whether the couple still has enough assets to make up for any potential shortfall. The scandal has erased most of Lu’s wealth, knocking him out of the ranks of China’s billionaires(Adds exposure of Goldman in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Tesla to Cut Pay as Much as 30% While Virus Idles Production
    on 08/04/2020 at 5:22 am

    (Bloomberg) -- Tesla Inc. will temporarily cut employee salaries by as much as 30% starting Monday to save costs while the coronavirus pandemic forces the company to shut down some operations.In the U.S., those ranked vice president or above will see the steepest salary reductions, followed by a 20% cut for directors, and 10% for everyone else, according to an internal memo seen by Bloomberg. Workers outside the U.S. will see similar reductions. For the exception of those being assigned to critical tasks, employees who can’t work from home will be furloughed without pay, though they’ll keep health-care benefits.The move adds to the growing number of companies slashing labor costs to weather the pandemic. The outbreak hit just as Tesla was ramping up the production of its Model Y crossover, accelerating output at its new Shanghai plant and forging ahead with plans to build a new facility near Berlin.“This is a shared sacrifice across the company that will allow us to progress during these challenging times,” Tesla said in the memo.A Tesla representative declined to comment.Tesla agreed to idle U.S. production last month amid orders to do so from authorities. The electric-vehicle maker expects to resume normal production at its U.S. facilities on May 4, according to the memo.Even after re-opening its facilities, Tesla will probably need about two weeks to ramp up production again, analysts at Credit Suisse Group AG said in a note. Tesla had about 30,000 cars in inventory at the end of the first quarter, sufficient to meet weakened demand, the analysts wrote.The company has about 56,000 employees, according to a recent company email. Its sole U.S. car production facility is in Fremont, California, where current stay-at-home orders extend until May 3.Wage adjustments and equity grants will be put on hold, according to the memo. The pay cuts are expected to last until the end of the second quarter and those furloughed are likely to be asked to return on May 4, Tesla told employees.At its Nevada gigafactory, Tesla is reducing on-site staff by 75%, according to the county where the plant is located. The facility produces battery packs and electric motors with partner Panasonic Corp.Tesla’s Shanghai plant, meanwhile, recovered from a virus-related shutdown faster than many in the industry, helped by aid from local authorities. After resuming operations in February, the factory -- Tesla’s only outside the U.S. -- surpassed the capacity it had before the shutdown, reaching a weekly production of 3,000 cars, the company said last month. Tesla is also planning to expand its lineup in China by introducing a locally built Model 3 sedan with a longer driving range from as early as this week, people familiar with the matter have said.Though down from a February peak, shares of Tesla are still up 30% this year.(Updates with more details in ninth paragraph, reference to longer range China-made Model 3 debut in penultimate paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Tesla to Cut Pay as Much as 30% While Virus Idles Production
    on 08/04/2020 at 5:22 am

    (Bloomberg) -- Tesla Inc. will temporarily cut employee salaries by as much as 30% starting Monday to save costs while the coronavirus pandemic forces the company to shut down some operations.In the U.S., those ranked vice president or above will see the steepest salary reductions, followed by a 20% cut for directors, and 10% for everyone else, according to an internal memo seen by Bloomberg. Workers outside the U.S. will see similar reductions. For the exception of those being assigned to critical tasks, employees who can’t work from home will be furloughed without pay, though they’ll keep health-care benefits.The move adds to the growing number of companies slashing labor costs to weather the pandemic. The outbreak hit just as Tesla was ramping up the production of its Model Y crossover, accelerating output at its new Shanghai plant and forging ahead with plans to build a new facility near Berlin.“This is a shared sacrifice across the company that will allow us to progress during these challenging times,” Tesla said in the memo.A Tesla representative declined to comment.Tesla agreed to idle U.S. production last month amid orders to do so from authorities. The electric-vehicle maker expects to resume normal production at its U.S. facilities on May 4, according to the memo.Even after re-opening its facilities, Tesla will probably need about two weeks to ramp up production again, analysts at Credit Suisse Group AG said in a note. Tesla had about 30,000 cars in inventory at the end of the first quarter, sufficient to meet weakened demand, the analysts wrote.The company has about 56,000 employees, according to a recent company email. Its sole U.S. car production facility is in Fremont, California, where current stay-at-home orders extend until May 3.Wage adjustments and equity grants will be put on hold, according to the memo. The pay cuts are expected to last until the end of the second quarter and those furloughed are likely to be asked to return on May 4, Tesla told employees.At its Nevada gigafactory, Tesla is reducing on-site staff by 75%, according to the county where the plant is located. The facility produces battery packs and electric motors with partner Panasonic Corp.Tesla’s Shanghai plant, meanwhile, recovered from a virus-related shutdown faster than many in the industry, helped by aid from local authorities. After resuming operations in February, the factory -- Tesla’s only outside the U.S. -- surpassed the capacity it had before the shutdown, reaching a weekly production of 3,000 cars, the company said last month. Tesla is also planning to expand its lineup in China by introducing a locally built Model 3 sedan with a longer driving range from as early as this week, people familiar with the matter have said.Though down from a February peak, shares of Tesla are still up 30% this year.(Updates with more details in ninth paragraph, reference to longer range China-made Model 3 debut in penultimate paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Iran doesn't agree with OPEC+ meet without clear outcome - minister
    on 08/04/2020 at 4:16 am

    Iran does not agree with holding any OPEC+ meeting in the absence of a clear proposal and expected outcome from such talks for the oil market, its oil minister said in a letter to OPEC and seen by Reuters. "The vague circumstances around which the upcoming OPEC and non-OPEC ministerial (meeting) is being organised is of grave concern to me," the minister, Bijan Zanganeh, wrote in the letter dated April 7 and addressed to the Algerian oil minister, who holds the presidency of OPEC. Zanganeh said that organising a meeting "in the absence of any clear and consensual outcome (to) convey to the market" would be a message of failure even before it starts, which "may aggravate the current low price environment even further".

  • Global Oil Deal Gains Traction With U.S. Predicting Big Drop
    on 08/04/2020 at 4:08 am

    (Bloomberg) -- The world’s largest oil producers are inching closer to an unprecedented global deal to rescue the energy industry from collapse after the U.S. said production will drop dramatically.While the forecast reflects what President Donald Trump has called an “automatic” reduction by U.S. explorers, not a commitment from the world’s top producer, it helps pave the way for Saudi Arabia and Russia to coordinate output cuts at Thursday’s virtual OPEC+ meeting. On Friday, they’ll seek cooperation from other nations in a Group of 20 conference.Their actions will determine whether the world continues to drown in a flood of oil that’s starting to overwhelm storage tanks and force a wave of abrupt production shutdowns at a time when the Covid-19 pandemic is destroying demand. Concerns that coordinated output cuts may not be enough to clear a global supply glut sent U.S. oil futures tumbling 9% on Tuesday, but failure to reach an agreement could plunge prices much lower.A deal hinges on some form of cooperation with America, according to delegates involved in the talks. The production drop forecast by the U.S. government on Tuesday could be enough to satisfy Saudi Arabia and Russia. Trump said in an interview with Fox News on Tuesday night in the U.S. that he’s spoken to the Russian and Saudi leaders about the negotiations and that “it’s all going to work out.”The U.S. Energy Information Administration slashed its oil output forecast by almost 10%, saying it now expects the nation to pump an average of 11.8 million barrels a day in 2020, and just over 11 million next year. The country is currently producing 13 million barrels a day. The production drop forecast by the U.S. government on Tuesday could be enough to satisfy Saudi Arabia and Russia.The report demonstrates that there are already projected cuts of 2 million barrels a day, without any intervention from the federal government, an official at the Energy Department said.“I think there is already an understanding between Saudi Arabia, Russia and the U.S.,” Ed Morse, head of global commodities at Citigroup Inc., said before the American production estimate was cut. “The U.S. is a party to the agreement, in effect, because the price of oil is already reducing drilling activity to an extent that production will likely be down 1 million barrels a day by the end of the third quarter.”Directly mandating production curtailments in a deal with the cartel that he’s vilified for years would not only be politically challenging for Trump, but also hard to do in a free-market economy with thousands of producers. But the collapse in crude prices to 18-year lows has triggered deep reductions in U.S. drilling that mean a drop in production is inevitable.“Nobody’s asked me, so if they ask I’ll make a decision,” Trump said on whether the U.S. would participate in cutbacks. American producers are “already cutting back and they’re cutting back very seriously. I think it’s happening automatically.”Virtual MeetingsThe Organization of Petroleum Exporting Countries and its allies are set to meet by video link at 4 p.m. Vienna time on April 9.Whatever emerges from those talks could depend on what happens next. At the virtual meeting of G-20 energy ministers the following day, the U.S., Canada and Brazil will have the opportunity to show how they’ll contribute to curtailing the global oil surplus. The video conference is scheduled to start at 3 p.m. Riyadh time and last for about 2 1/2 hours, according to a diplomat involved.Brazil’s Petrobras is paring production by 200,000 barrels a day. Alberta, the Canadian province that holds the world’s third-largest crude reserves, already has output curtailment measures in place. Both the province and the Canadian federal government plan to take part in the discussions.Global DealA final global deal could reduce supplies by 10 million barrels a day or more, a level Trump first invoked last week.A report prepared for OPEC members ahead of their meeting considers such a cut to the end of this year, according to a delegate. But the analysis also considers a no-cut option, the delegate said.However, even a cut by 10 million barrels a day may only dent the supply glut caused by the lockdown of billions of people around the world to slow the spread of the virus, which is estimated to have reduced demand by as much as 35 million barrels a day.The EIA forecasts a global supply surplus of 11.4 million barrels a day in the second quarter. The OPEC analysis shows global demand falling 11.9 million barrels a day in the quarter, the delegate said.“Even if a fudge can be found, some very creative maths is required to deliver the desired headline cut figure,” said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd. “We struggle to see how we get to 10 million barrels a day of actual production cuts, even using inflated April baseline numbers.”Plus, U.S. shale is ailing but it’s far from dead. While some explorers like Whiting Petroleum Corp. have gone under, Exxon Mobil Corp. still expects its production in the Permian Basin of West Texas and New Mexico to rise, even after slashing $10 billion in spending. And like after the 2014-2016 oil crash, the most efficient explorers might come back to haunt OPEC again in the future with rapid production growth.Also see: Shale Cutbacks to Fall on Weakest Drillers as Glut Drowns MarketMeanwhile, the top two oil-exporting countries still had disagreements to settle. Russia so far has favored using an average of the first quarter output as the baseline from which to cut production, while Saudi Arabia wants to use its current April production, according to people familiar with the discussions. The difference is huge: the kingdom pumped 9.8 million barrels a day on average between January and March. In April -- as it unleashed a shock and awe price war against its former ally -- it’s been pumping more than 12 million barrels a day.Given the severity of the breakdown in Saudi-Russia relations after the failure of OPEC+ talks in March, getting all sides back to the table constitutes an achievement in itself. It has required a whirl of international diplomacy to overcome the mutual recriminations over who’s to blame for the industry’s crisis.Trading BarbsAfter Trump first spoke about the prospect of a deal on Friday, Moscow and Riyadh traded barbs about who started a price war that is dumping even more unwanted crude onto world markets. A “productive discussion” between U.S. Energy Secretary Dan Brouillette with his Saudi counterpart Prince Abdulaziz bin Salman appeared to move the process forward.Also see, Russia’s Minimal Oil Storage Weakens Its Hand in OPEC TalksBrent crude futures have rebounded by almost 30% since Trump first floated the idea of Saudi and Russian production cuts in a tweet on Thursday, and traded above $30 a barrel in London on Tuesday. But prices are still down by more than 50% for the year. In the U.S., West Texas Intermediate crude is down 60% year-to-date, at less than $25 a barrel.The market for actual barrels of crude is still weak because of the large oversupply. Prices have already turned negative in some corners of the world, and traders have been putting oil into tankers at a record pace to store it at sea.(Updates with Trump comments in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • FedEX, UPS Shares Surge As Amazon To Suspend Delivery Service For Third-Party Sellers Due To Increased Demand
    on 08/04/2020 at 3:59 am

    Amazon.com Inc. (NASDAQ: AMZN) is suspending the delivery service for third-party sellers on its platform starting June, the Wall Street Journal reported Tuesday.What Happened The service called "Amazon Shipping" was available in only a few handful cities in the United States, the Journal noted.Ahead of the novel coronavirus (COVID-19) pandemic, the e-commerce giant was seemingly looking to establish it as a competitor to prominent delivery companies likes United Parcel Service Inc. (NYSE: UPS) and FedEx Corporation (NYSE: FDX)."We understand this is a change to your business, and we did not take this decision lightly," Amazon is said to have told shippers, according to the Journal. "We will work with you over the next several weeks so there is as little disruption to your business as possible."The pandemic significantly increased the demand for Amazon services as widespread lockdowns imposed to curb the spread of the virus forced a majority of people to stay home.Amazon said in March it was looking to hire 100,000 additional workers to meet the increased workload. The Seattle-based company's warehouses across the country remain functional at full capacity despite some protests by workers at multiple sites.Price Action Amazon shares closed 0.7% higher at $2,011.60 on Tuesday. The shares traded slightly lower at $2,010 in the after-hours session.The shares of FedEx and UPS surged in the after-hours session following the news.FedEx traded nearly 3.5% higher at $120 after closing the regular session 2.56% lower at $115.95. UPS traded 3.2% higher at $95.88 after closing the regular session 2.9% lower at $92.91.See more from Benzinga * 'The Netflix Of China' Inflating Numbers Since Before IPO, Short Seller That Warned Against Luckin Coffee Says * Uber Launches Tool To Help Drivers Affected By Coronavirus Find Work * Luckin Stock Drops Further As Lenders Seek To Seize 76.4M Shares For Defaulted Loan(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Tesla to furlough workers, cut employee salaries due to coronavirus
    on 08/04/2020 at 3:44 am

    Tesla said it planned to resume normal operations on May 4, barring any significant changes, according to an email sent to U.S. employees by in-house counsel Valerie Capers Workman, which was viewed by Reuters. Tesla did not immediately respond to a request for comment. The coronavirus pandemic has slashed U.S. demand for cars and forced several other automakers to furlough U.S. workers.

  • China orders Baidu to clean up 'low-brow content'
    on 08/04/2020 at 3:31 am

    China'a internet regulator ordered search engine Baidu to clean up improper information and halt the spread of "low-brow content." China's powerful internet regulator, Cyberspace Administration of China, said in a post published on Wednesday on its official WeChat account that Baidu's content review on some of its news feed channels is not "strict," therefore "it has exerted bad influence to the society."

  • 'The Netflix Of China' Inflating Numbers Since Before IPO, Short Seller That Warned Against Luckin Coffee Says
    on 08/04/2020 at 3:21 am

    Chinese video-on-demand service company iQIYI Inc. (NASDAQ: IQ) has been fudging user numbers since before its initial public offering in 2018 in New York, and has continued to do so, short seller Wolfpack Research said in a report Tuesday.What Happened According to Wolfpack, iQIYI inflated 2019 revenue by about $1.1 billion to $1.8 billion, 27% to 44% over its actual revenue.The Baidu Inc.-owned (NASDAQ: BIDU) company did this by inflating the actual number of users on its platform by 42% to 60%.Wolfpack said it surveyed 1,563 people among iQIYI's "target demographic" in China and found that about one-third of the company's users acquired their memberships through partner companies such as JD.com Inc. (NASDAQ: JD) or Xiaomi Corp. (OTC: XIACF).About half of these memberships were acquired for free or "near-free" under some "buy-one-get-one" offers.iQIYI counts the entire revenue from these memberships but writes off their partners' revenue as expenses. "This allows IQ to inflate its revenues and burn off fake cash at the same time," Wolfpack said.Muddy Waters Backs, iQIYI Rubbishes Report Muddy Waters Research, an early investor in Wolfpack, backed the research."[We] believe it's a fraud," Muddy Waters said in a tweet. "We assisted Wolfpack with comprehensive research into iQIYI...[It] fraudulently and materially overstates its users, revenues, acquisition consideration, and value of its 'barter' content."iQIYI responded to the short seller report, saying it contains "numerous errors, unsubstantiated statements and misleading conclusions and interpretations regarding information relating to the Company."The Wolfgang report comes days after Luckin Coffee Inc. (NASDAQ: LK) admitted to chief operating officer inflating sales numbers in its previous filings with the United States Securities and Exchange Commission.In a report in January, Muddy Waters had similarly suggested that Luckin was fudging sales and inventory numbers, among others.Price Action iQIYI stock closed 3.22% higher at $17.30 on Tuesday. The shares traded 3.6% lower at $16.68 in the after-hours session.Baidu closed 1.1% lower at $101.79 and traded another 1.3% lower in after-hours at $100.49.See more from Benzinga * Uber Launches Tool To Help Drivers Affected By Coronavirus Find Work * Luckin Stock Drops Further As Lenders Seek To Seize 76.4M Shares For Defaulted Loan * NYSE Asks SEC To Ease Listing Requirements Due To Coronavirus-Caused Market Wipeout(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • China Streaming Platform iQIYI Accused of Fraud by Activist Investor Wolfpack
    on 08/04/2020 at 2:56 am

    U.S.-based securities analysis firm and activist investor Wolfpack Research has publicly accused Chinese streaming platform iQIYI of fraud. iQIYI “massively [inflated] its user numbers and revenue while at the same time hiding the fraud from auditors and investors by overpaying for content, acquisitions and other assets,” Wolfpack said. “IQIYI is nearing its 10-year anniversary and

  • U.S. pushes back on call by OPEC+ to join big oil output cuts
    on 08/04/2020 at 2:13 am

    Saudi Arabia, Russia and allied oil producers will agree to deep cuts to their crude output at talks this week only if the United States and several others join in with curbs to help prop up prices that have been hammered by the coronavirus crisis. Global oil demand has dropped by as much as 30%, or about 30 million barrels per day (bpd), as measures to reduce the virus' spread have caused demand for jet fuel, gasoline and diesel to crash. While Saudi Arabia, Russia and other members of the group known as OPEC+ have expressed willingness to return to the bargaining table, they have made their response conditional upon actions by the United States and other countries that are not members of OPEC.

  • With Singapore lockdown underway, 'essential' chipmakers count on less disruption
    on 08/04/2020 at 2:10 am

    In the United States, chipmakers are considered essential businesses and allowed to operate. Chip firms hope Singapore, where officials explicitly named semiconductors as an essential business, will cause fewer disruptions.

  • Coronavirus update: New York sees surge of deaths after brief respite; Trump says WHO 'really blew it'
    on 08/04/2020 at 1:15 am

    The global coronavirus outbreak showed few signs of abating on Tuesday, as the U.S. added to its status as the world’s epicenter of new infections, while New York suffered its worst day yet of new fatalities.

  • Roku: Covid-19 to Impact Ad Revenue, Top Analyst Reduces Estimates
    on 08/04/2020 at 12:49 am

    Bear markets are usually bad news for growth stocks. As sentiment in the market changes, these hotshots often tend to crash harder. Roku (ROKU) is a good case in point. Following a massive run up in 2019, the stock shed 34% of its share price year-to-date. In mid-March, the stock was down as much as 55%, so if you sold there, you sold at the bottom.The severe drop is a tad surprising, as during these stay-at-home times, Roku should be one of the few names to reap the rewards of extra engagement on its platform. However, most companies have suffered from the impact of COVID-19, and Roku hasn’t been spared.The beating is acknowledged at investment firm Oppenheimer, where analyst Jason Helfstein has made some adjustments to his Roku model. The Outperform rating remains, but along with revised estimates, Helfstein lowered his price target from $165 to $110. Yet, investors can expect returns in the shape of a 25%, should the target be met over the next 12 months. (To watch Helfstein’s track record, click here)The slashing of ad budgets across the board will hit Roku the hardest this month, say Helfstein. The analyst forecasts 2Q ad Platform revenue will be up by 18% year-over-year, instead of the previous call for 62% growth. The dampened advertising climate means the benefits expected from the recent acquisition of demand-side platform Dataxu, won’t be felt until later in the year.Nevertheless, despite the severe macro headwinds of the first quarter, there were a number of positives. Helfstein estimates that on some services, AVOD viewers increased by more than 50%, along with streaming hours increasing by 22% year-over-year. And despite the current climate, the 5-star analyst believes Roku is “well positioned to gain long-term share of viewing and SVOD activations.”Helfstein concluded, “Our checks suggest FY20 OTT advertising growth could be negatively impacted by 20%, with April and May being the most impacted. Per retail checks, we see potential upside to active account net adds, and we forecast strong streaming hour growth given shelter in place mandates. Though we see upside to KPIs, we are lowering FY20 Platform revenue 12% (assuming Platform is 65% advertising), now suggesting +41% y/y vs. +60% previously, resulting in Platform GP +16% y/y vs. +49% prior.”What does the rest of the Street make of Roku’s prospects? 5 Buys, 3 Holds and 2 Sell ratings coalesce into a Moderate Buy consensus rating. The average price target is $131.10, and suggests possible upside of nearly 50%. (See Roku stock analysis on TipRanks) More recent articles from Smarter Analyst: * SAGE Announces Massive Restructuring To Focus On Failed Depression Drug * Amazon Halts New Delivery Service To Focus On Demand Surge * GenMark Sees 80% Q1 Revenue Boost on Covid-19 Tests * Is Apple Stock a Buy Right Now? This Is What You Need to Know

  • Luckin May Put Lasting Stain on China Inc. Listings
    on 08/04/2020 at 12:20 am

    (Bloomberg Opinion) -- Investors have been scalded by Luckin Coffee Inc.’s news this month that it inflated revenue numbers, a revelation that came less than a year after the chain went public on the Nasdaq exchange. Shares in the company — whose $645 million IPO was the second largest in the U.S. by a Chinese firm in the last 12 months — have swooned 74%. Suddenly, Chinese companies’ opaque numbers are dinner-table conversation again, with the scandal sending other listings from the nation into a tailspin and threatening to close off the overseas market for new issuers. We have been here before. After short sellers such as Muddy Waters, which bet against Luckin,  spotted Toronto-listed Sino-Forest’s overstated timber assets in 2011, Chinese listings in the U.S. evaporated. But they eventually came back  as tighter standards were put in place. By 2014, Chinese company IPOs in the U.S. hit an all-time high of $29 billion, buoyed by Alibaba Group Holding Ltd.’s record-breaking $25 billion deal — and reached its second-highest level in 2018 with $9 billion in listings, including that of Netflix-like video service iQiyi Inc. Should we expect a repeat of that comeback? Don’t count on it. This time, a deeper freeze beckons for Chinese firms, one that will be hard to thaw even when the coronavirus outbreak opens up the U.S. IPO market again. Here’s why.First, Chinese IPOs aren’t the winning tickets they once were. China-based companies that listed in the U.S. this year are trading at 12% below their IPO price on average, while other new issues are down 7.5%, according to Bloomberg data earlier this week. That underperformance makes it harder for investors to ignore the low accounting bar set on these listings in the U.S. that has been tolerated for so long. That underperformance, which predated the Luckin scandal, makes it harder for investors to ignore the low accounting bar set on these listings in the U.S.The U.S. Public Company Accounting Oversight Board, which was set up as a watchdog for audit firms in the wake of Enron Corp.’s collapse, can’t access the books of Chinese companies because Beijing deems that data to involve sensitive state secrets. That hadn’t been a problem for shareholders as long as they were being compensated for taking on the extra risk of accepting the lack of transparency. Now, though, investors will be less likely to take companies on faith. That’s especially the case in light of Luckin’s situation. Luckin’s rapid expansion, which allowed the three-year old company to reach 4,500 outlets and overtake Starbucks Inc. —  a presence in the country since 1999 — had captured the imagination of not just retail investors in the U.S. but a slew of big names including Singapore’s sovereign wealth fund, GIC Pte, and crop-trading giant Louis Dreyfus Co. Its inflated numbers are going to lead investors to question all unprofitable Chinese firms with unsustainable models.Second, Chinese listing hopefuls have alternative funding routes now: In 2018, Hong Kong eased profitability requirements for new-economy listings, while Shanghai did so for candidates on its fledgling Star Market last year. Meanwhile, index provider MSCI Inc.’s inclusion last year of mainland Chinese shares in its emerging-markets index means domestically listed firms no longer have to go to Hong Kong or the U.S. to access American money.By staying close to home, Chinese listing hopefuls also are shielded from both the class-action lawsuits Luckin now faces as well as the risk of getting caught in any trade war or other cross fire between Beijing and Washington, especially now with the virus outbreak escalating tensions. In November, New York-traded Alibaba began what many are expecting to be the start of a wave with a $11.3 billion secondary listing in Hong Kong.Lastly, the gatekeepers of IPO due diligence — the big audit firms and the Wall Street banks and others — are under pressure like never before. Luckin’s unreliable revenue numbers for the nine months to Sept. 30 last year include those presented to investors during the May IPO. Few will be assuaged by Ernst & Young’s statement that it tipped off the board to the fraudulent numbers while auditing the coffee chain’s 2019 figures. Banks, too, will be ramping up their due diligence as the reputational risk they incur from advising Chinese company listings comes into focus. Many of them face lawsuits, and underwriters will be keen to distance themselves from the Luckin fiasco.Credit Suisse Group AG dropped off the $500 million-to-$1 billion IPO slated for later this year of WeDoctor — one of China’s top online health-care startups, backed by Tencent Holdings Ltd. — after the Swiss bank was sued for its role on Luckin’s U.S. share sale, Bloomberg News reported Monday. Investment banks that dole out loans in the hopes of winning more IPO business will also think twice. Six banks, including Goldman Sachs Group Inc. and Morgan Stanley, extended a $518 million margin loan to Luckin Chairman Lu Zhengyao and are now seizing and selling the stock after shares collapsed in the past week. The banks stand to lose more than $100 million from that loan, according to the Wall Street Journal.Beijing is also taking notice. The China Securities Regulatory Commission has said it will  investigate Luckin “regardless of listing location,” a rare move by the regulator, which tends to stick to its shores.About 400 Chinese companies are listed in the U.S. with a total market value of $1 trillion, led by Alibaba, JD.com Inc. and Pinduoduo Inc. Luckin’s fake sales could easily cause that number to shrink.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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