Big week for Big Tech as earnings, hearings loom

Big week for Big Tech as earnings, hearings loom
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Updated 25 October 2020

Big week for Big Tech as earnings, hearings loom

Big week for Big Tech as earnings, hearings loom
  • The four giants drawing the most scrutiny — Apple, Amazon, Facebook and Google — have been wildly successful in recent years

SAN FRANCISCO: Big Tech is bracing for a tumultuous week marked by quarterly results likely to show resilience despite the pandemic, and fresh attacks from lawmakers ahead of the Nov. 3 election.

With backlash against Silicon Valley intensifying, the companies will seek to reassure investors while at the same time fend off regulators and activists who claim these firms have become too dominant and powerful.

Earnings reports are due this week from Amazon, Apple, Facebook, Microsoft, Twitter and Google-parent Alphabet, whose combined value has grown to more than $7 trillion.

They have also woven themselves into the very fabric of modern life, from how people share views and get news to shopping, working, and playing.

Robust quarterly earnings results expected from Big Tech will “highlight the outsized strength these tech behemoths are seeing” but “ultimately add fuel to the fire in the Beltway around breakup momentum,” Wedbush analyst Dan Ives said in a note to investors.

The results come amid heightened scrutiny in Washington of tech platforms and follow a landmark antitrust suit filed against Google, which could potentially lead to the breakup of the internet giant, illustrative of the “techlash” in political circles.

Meanwhile, Senate Republicans have voted to subpoena Jack Dorsey and Mark Zuckerberg, the chief executives of Twitter and Facebook respectively, as part of a stepped-up assault on social media’s handling of online political content, notably the downranking of a New York Post article purported to show embarrassing information about Democrat Joe Biden.

CEOs of Twitter, Facebook and Google are already slated to testify at a separate Senate panel on Wednesday examining the so-called Section 230 law, which offers liability protection for content posted by others on their platforms.

The four giants drawing the most scrutiny — Apple, Amazon, Facebook and Google — have been wildly successful in recent years and have weathered the economic impact of the pandemic by offering needed goods and services.

Google and Facebook dominate the lucrative online ad market, while Amazon is an e-commerce king.

Apple has come under fire for its tight grip on the App Store, just as it has made a priority of making money from selling digital content and services to the multitude of iPhone users.

The firms have stepped up lobbying, spending tens of millions this year, and made efforts to show their social contributions as part of their campaign to fend off regulation.

“For the most part, tech companies know how to do this dance,” said analyst Rob Enderle of Enderle Group.

“They don’t spend a lot of time bragging about how well they have done any more.”

Ed Yardeni of Yardeni Research said the outlook for Big Tech may not be as rosy as it appears.

“For one, regulators at home and abroad are gunning to rein in some of the largest US technology names,” Yardeni said in a research note.

Of interest to the market short-term will likely be whether backlash about what kind of content is left up and what is taken down by online titans causes advertisers to cut spending on the platforms.

Economic and social disruption from the pandemic also looms over tech firms, which benefitted early in the pandemic as people turned to the internet to work, learn, shop and socialize from home.

“Performance will be best for those providing solutions for people working at home,” analyst Enderle said.

Amazon, Google and Microsoft each have cloud computing divisions that have been increasingly powering revenue as demand climbs for software, services and storage provided as services from massive datacenters.

Amazon has seen booming sales on its platform during the pandemic, and viewing surge at its Prime streaming television service.

Enderle expressed concern that with the coronavirus disease (COVID-19) cases and a lack of new stimulus money in the US, tech companies could reveal in forecasts that they are bracing for poorer performance in the current quarter.


Russia reiterates its offer to boost EU gas supplies

 Russia reiterates its offer to boost EU gas supplies
Updated 16 October 2021

Russia reiterates its offer to boost EU gas supplies

 Russia reiterates its offer to boost EU gas supplies

MOSCOW: Russian gas consumption is running at a record high but Moscow is still ready to increase supplies to Europe should it receive such requests, Deputy Prime Minister Alexander Novak said on Saturday.

European spot gas prices have surged by 800 percent this year as demand has recovered after the coronavirus pandemic. Prices eased earlier this month after Russia, Europe’s key gas supplier, said it could deliver more, but these supplies have yet to materialize.

“I want to underline that we in Russia have record high gas consumption figures this year, which is also due to active economic recovery,” Novak said in an interview with the Rossiya 1 TV channel broadcast, according to Russian news agencies.

Russia, whose gas production and exports to EU are already near record highs, has said it needs to finish filling its own gas storage reserves before it increases supplies to Europe’s spot market. It plans to complete this by the end of October.

Novak did not say how large Russia’s gas reserves were but estimated that European underground facilities were short of around 25 billion cubic meters of gas.

He insisted high domestic demand would not stop Russia offering more supplies to Europe if it received such requests.


China’s central bank says Evergrande risks ‘controllable’

China’s central bank says Evergrande risks ‘controllable’
Updated 16 October 2021

China’s central bank says Evergrande risks ‘controllable’

China’s central bank says Evergrande risks ‘controllable’

BEIJING: China's central bank said on Friday that financial risks from China Evergrande Group’s debt problems are “controllable” and unlikely to spill over, amid growing investor concerns that the crisis could ripple through other developers.
Evergrande is the world's most indebted developer, with over $300 billion in liabilities. The company missed a third round of interest payments on its offshore bonds this week, spooking investors globally and sparking concern that other companies in the sector may also default on payments.
“Of the total liabilities of Evergrande Group, financial liabilities are less than one-third. Creditors are also relatively dispersed, and individual financial institutions have little risk exposure,” People’s Bank of China official Zou Lan said at a news briefing on Friday.
“Overall, the risk of the spillover to the financial industry is controllable,” he added.
Evergrande came under pressure after Chinese authorities ordered property developers to reduce their debt levels. The authorities are trying to direct the industry toward a more sustainable pace of development after many years of stimulus-fueled growth.


PIF to use oil platforms to attract tourists through ‘THE RIG.’ project

PIF to use oil platforms to attract tourists through ‘THE RIG.’ project
Updated 28 min 40 sec ago

PIF to use oil platforms to attract tourists through ‘THE RIG.’ project

PIF to use oil platforms to attract tourists through ‘THE RIG.’ project

RIYADH: Saudi Arabia’s Public Investment Fund on Saturday launched “THE RIG.”, first-of-its-kind tourism destination inspired by offshore oil platforms.

Located in the Arabian Gulf, the project will span a combined area of more than 150,000 square meters, said a statement issued by the sovereign wealth fund.

“THE RIG.” will feature a number of touristic attractions, including three hotels, world-class restaurants, helipads, and a range of adventurous activities, including extreme sports, the PIF said.

The PIF said to ensure sustainable preservation of the environment, the project will follow global standards and best practices in line with the Kingdom’s efforts to ensure preservation of environment.

The project is in line with PIF’s strategy 2021-2025 to modernize Saudi Arabia’s tourism and entertainment sectors and introduce innovative ideas to boost the number of local, regional and international tourists in the Kingdom.


El Salvador explores bitcoin mining powered by volcanoes

 El Salvador explores bitcoin mining powered by volcanoes
Updated 16 October 2021

El Salvador explores bitcoin mining powered by volcanoes

 El Salvador explores bitcoin mining powered by volcanoes
  • Geothermal power accounts for about a quarter of the country’s total energy mix

BERLIN, EL SALVADOR: At a geothermal power plant near El Salvador’s Tecapa volcano, 300 computers whir inside a trailer as they make complex mathematical calculations day and night verifying transactions for the cryptocurrency bitcoin.
The pilot project has inspired a rash of volcano emojis from President Nayib Bukele, who made bitcoin legal tender in September, and promises of cheap, renewable energy for so-called bitcoin “mining.” Bukele and others say El Salvador’s geothermal resources — generating electricity from high-pressure steam produced by the volcano’s subterranean heat — could be a solution. But the picture in the tiny Central American country is more complicated.
“We don’t spend resources that contaminate the environment, we don’t depend on oil, we don’t depend on natural gas, on any resource that isn’t renewable,” Daniel Alvarez, president of the Rio Lempa Hydroelectric Executive Commission, which oversees the plant, said during a tour on Friday.
Cheap power and a supportive government are the two critical factors for attracting bitcoin mining operations, said Brandon Arvanaghi, a bitcoin mining consultant.
Two years ago, China provided about three-quarters of all the electricity used for crypto mining, with operations flocking to take advantage of its cheap hydroelectric power. But the government began restricting mining and in September declared all transactions involving bitcoin and other cryptocurrencies illegal.
That has led to a scramble to set up mining operations in other countries.
It would appear to be fortuitous for Bukele, who shocked the nation and many around the world with his announcement last summer that bitcoin would become legal tender beside the US dollar in El Salvador. The president sold the plan in part as a way for Salvadorans living overseas — mostly in the US — to send money home to their families more cheaply. It also made him a darling of the bitcoin world.
Bitcoin mining in El Salvador would appear to have a supportive government in Bukele, but cheap electricity is so far just a promise.
El Salvador imports about one-fifth to one-quarter of its electricity. The rest of production is divided among hydroelectric, geothermal and plants fired by fossil fuels.
Geothermal accounts for about a quarter of the country’s energy. El Salvador has 23 volcanoes.
“When you add these renewable sources like these vast abundant areas, a ton of renewable sources and a friendly regime it can be very attractive and El Salvador may very well fit that model,” Arvanaghi said.
Right now, El Salvador’s electricity is not considered particularly cheap.
The website GlobalPetrolPrices.com, which publishes retail energy prices around the world, puts electric costs to households and businesses in El Salvador well above the global average.
Arvanaghi said that bitcoin mining incentivizes the expansion of renewable energy production by providing high demand for cheap power and that miners have shown themselves to be willing to pause a portion of their machines at times when there is less power available from the grid.
Bukele’s promise of cheap power for bitcoin mining then would have to involve a subsidy, at least until renewable capacity expanded and rates declined.
 


US regulators slap $41m fine on company behind Tether ‘token’

US regulators slap $41m fine on company behind Tether ‘token’
Updated 16 October 2021

US regulators slap $41m fine on company behind Tether ‘token’

US regulators slap $41m fine on company behind Tether ‘token’

NEW YORK:The company behind a digital token called Tether has agreed to pay $41 million to settle charges that it misled investors by claiming the token was fully backed at all times by US dollars and other fiat currencies.

The Commodity Futures Trading Commission said on Friday it charged Tether Holdings Limited with making untrue or misleading statements and omissions in relation to its claims. Specifically, the US regulator found that since launching the token in 2014, Tether Holdings represented that its was a “stablecoin” with its value pegged to fiat currency, including US dollars and euros.

A stablecoin is a digital currency backed by real-world assets such as national currencies or other commodities. Unlike Bitcoin and other cryptocurrencies, stablecoins are designed to not fluctuate wildly in value.

However, the CFTC determined that at least from June 1, 2016 through Feb. 25, 2019, Tether misrepresented to customers and the market that it maintained sufficient US dollar reserves to back every Tether token in circulation with the equivalent amount of “corresponding fiat currency.”

The agency also found that Tether failed to disclose that it included unsecured receivables and non-fiat assets in its reserves, and that the company falsely represented it would undergo regular audits to prove it was maintaining the fiat currency reserves it needed to back Tether tokens.

In a statement, Tether, which is headquartered Hong Kong and maintains an office in Santa Monica, California, said the CFTC’s findings pertained to certain disclosures about the company’s reserves that were “fully resolved” in February 2019, when the company updated its terms of service.

“As to the Tether reserves, there is no finding that Tether tokens were not fully backed at all times — simply that the reserves were not all in cash and all in a bank account titled in Tether’s name, at all times,” the company said, noting that it has “always maintained adequate reserves and has never failed to satisfy a redemption request.”

Separately, the CFTC also ordered Bitfinex to pay a $1.5 million civil penalty after finding that the cryptocurrency trading platform made illegal, off-exchange retail commodity transactions involving digital assets with US investors and operated as a futures commission merchant without registering to do so.