Simon Mugo

This is a very timely question given that Twitter Inc. (NYSE: TWTR) recently announced that it had fixed a bug that was sharing some of the location data generated by iOS users. This is the latest in a series of data breaches that have been uncovered at the major social media companies including Twitter. Well, while no company can guarantee the absolute security of your data, it is the duty of the firms that handle your personal data to take all the necessary measures to protect this information. However, even the most robust security systems have weaknesses and it is these weaknesses that are exploited by hackers and other malicious parties to steal or compromise your personal information. In the latest case, Twitter identified the bug in their iOS app and quickly fixed it to stop the app from sharing the location data of unsuspecting users. To conclude, you may not have a say when it comes to how organizations store your personal data, but your representative can hold such organizations accountable for their actions.

Calls for the U.S. government to break up the major tech companies such as Facebook Inc. (NASDAQ: FB) have increased in the past year following the Cambridge Analytica scandal. Many politicians have indicated their support for such a move in order to minimize the influence of such companies, which have a choke hold on their respective industries operating like monopolies. Joe Biden recently indicated his willingness to breakup Facebook if he is elected President, he joins other Presidential candidates from the Democratic Party such as Bernie Sanders who support such policies. The tech companies have not taken these threats lightly and have denied accusations of being virtual monopolies in their respective industries given the high barriers to entry created by their operations. From a consumer’s perspective, breaking up Facebook would limit the amount of influence a single company has on you social media activities as such a move would make Instagram and WhatsApp separate companies. Therefore, breaking up Facebook would theoretically be good for consumers, which is why I think the government should break up the social media giant.

The latest data coming out of Japan indicates that the country’s economy has been slowing down as evidenced by the weak factory data as well as lower exports of its manufactured products. This trend was further confirmed by the Japanese finance ministry today following the release of Japan’s coincident indicator index, which fell by 0.9 in March. The ministry declared that the country’s economy was “worsening,” which was interpreted as a downgrade for the economy given that the government was more positive about the economy in February. The latest coincident index contraction indicates that the Japanese economy could have already slid into a recession, which could get worse in Q2. The recent developments mean that Japan’s government might have to postpone the implementation of a 2% sales tax hike that was planned as this could further derail the economy. It is not clear what the government can do to revive the economy given the decades of easy monetary policy that are yet to bear any fruit.

There is a growing movement of concerned citizens who are worried that the ‘vaping’ culture among teenagers in the U.S. is getting out of hand given the dangers associated with smoking. It is these concerns that have made 12 state government’s raise the legal smoking age in their jurisdictions up to 21 and 450 local governments have also done the same. Three of the biggest US tobacco companies Altria (NYSE: MO), British American Tobacco (NYSE: BTI) and Juul have recently voiced their support for 21 to become the legal smoking age at a national level. This move has attracted both supporters and critics with the latter saying that it is a publicity stunt given that the tobacco companies would lose revenue if such a law came into effect. Regardless of which group you are in, I believe it is import that we protect the youth from making mistakes that are going to affect them for the rest of their lives. This means that if raising the legal smoking age will stop the vaping pandemic, then this is the right course of action.

According to recent news report, SpaceX will launch the first batch of its internet satellites later this month given that Elon Musk recently shared photos of satellites that are ready to launch. The company is leading other tech companies in the race to reduce the cost of an internet connection while increasing the quality of future connections. Some of SpaceX’s competitors include Amazon and Facebook both of which have similar programs in development as the race heats up. According to Elon Musk, the company will launch a batch of 60 satellites that will orbit the earth in space at a lower distance than the International Space Station. The satellites will beam an internet connection to the earth’s surface and the satellites will self-destruct once they are no longer being used to keep them from hurting people on the ground. Elon Musk said that the company plans to launch 6 more batches of 60 satellites to have 720 such satellites in orbit in order to have minimum coverage of the US; he also warned that a lot could go wrong with this first launch.

Well, according to its Q1 results, Rakuten Inc.’s profits quadrupled from the $1 billion profit it booked from Lyft’s IPO. This is not the first huge gain the company has generated from its investments in tech startups as it also made massive profits from its investment in Pinterest and Careem. On the other hand, SoftBank is known for making big investments in tech companies as well with some returning billion dollar profits. However, the main difference between the two firms is that SoftBank Group has more funds at its disposal as compared to Rakuten given the $100 billion it raised from investors for its vision fund. In terms of price, SoftBank Group shares trade at ten times the value of Rakuten shares, which could be a crucial factor to consider before deciding to invest in either company. SoftBank also has a larger debt burden as compared to Rakuten and is planning to keep borrowing amid a rapid expansion strategy, which increases the risk of default and losses.

General Electric Co. (NYSE: GE) shareholders approved a $15 million pay package for the company’s CEO Larry Culp as he works to turnaround the conglomerate’s fortunes. However, this is just one of the many endorsements that the new CEO has received given that the company’s bonds have risen 11.73% since January due to higher demand. The company just released its Q1 results and appears to be on the right track as the CEO focusses on reducing GE’s debt burden, which sits at $110 billion. The company’s BBB rated bonds have recovered ever since Larry Culp was appointed CEO announcing that his biggest priority was to deleverage the company’s finances. Since then he has sold several of GE’s assets in efforts to create a leaner more effective organization with a focus on sectors where it has a competitive advantage. Its seems that both the company’s shareholders and creditors are optimistic that Larry Culp will revive the fallen giant and create value for all stakeholders.

Jeff Bezos yesterday launched a prototype of his “Moon lander” spacecraft that targets to transport both humans and equipment to the moon’s surface by 2024. In his speech, he said that it was time for human beings to go back to the moon and live there, which is a big claim that Elon Musk ridiculed in a lewd tweet. The two entrepreneurs are in a fierce fight to dominate the commercial space industry through their rival space companies and Elon Musk has accused Bezos of copying his ideas. Although this might be true to a certain extent, many are watching the two billionaires compete and wondering who of the two will be the first to land on the moon. This is a complicate question to answer given that both men have dedicated billions of dollars to space research, but Bezos has more cash given that he is the world’s richest man. However, no one can tell who will be the first to land on the moon given the multiple variables that contribute to a successful moon landing.

Steinhoff is yet to recover from the accounting scandal unearthed in December 2017, which had been in operation since 2009. The furniture maker started out in South Africa before embarking on major global expansion that saw it operating on four continents at the peak of its glory, only for everything to fall apart in late 2017. The company has since lost over 96% of its share value ever since the accounting fraud was made public in late 2017. This has been a huge blow to the company’s shareholders who helped fund the furniture store’s global expansion, but have watched in horror as the value of their share evaporated in the last year. The firm is listed in Johannesburg South Africa and also in Frankfurt Germany and the shares have lost over 16% this week following the release of fiscal 2017 financial results, which saw the firm book a $4 billion loss. Therefore, the furniture retailer has a long way to go before recovering from the losses incurred after the scandal and it may be a long time before the firm reclaims its lost glory.

In an interview with Jim Cramer the host of Mad Money on CNBC, Under Armour Inc.’s (NYSE: UAA) CEO said that the sportswear company was now focused on growing its North American footprint. This is despite the fact that the American company has expanded its global presence significantly as part of a 3-year transformation strategy, which has been quite successful. Under Armour’s CEO, Kevin Plank said that the company could not afford to neglect its core North American market, which generates about 70% of the company’s sales. However, this is a market with stiff competition from other players such as Nike and Adidas, which is why the company has opened an ultra-modern distribution center in Maryland. The new center will allow it to dispatch customer orders from the U.S within two hours of the order being received, which is a major competitive advantage. Therefore, the main reason why the firm is now focused on growing its US market share is because it is too important a market to be ignored.

Carige Bank, the Italian bank that has been battling bankruptcy for several years is still in trouble as BlackRock Inc., (NYSE: BLK) recently pulled out of a bailout package for the bank. The Italian lender is currently being managed by a team of special administrators appointed by the European Central Bank and is still in danger of bankruptcy. BlackRock’s investment committee rejected the proposal of acquiring half of the new shares to be issued by the lender worth about €360 million ($403 million) as being too risky. The American asset manager’s withdrawal means that the Italian government could be forced to pay for the bailout in order to save the world’s oldest bank from collapsing. News reports just in confirm that the ECB has reached out to the special administrators running the bank following BlackRock’s withdrawal, which could be a sign that the ECB could step in. Carige’s future hangs in the balance after the initial bailout deal collapsed, but it is highly unlikely that the lender will close for business given its importance to Italy.

Commerzbank AG (CBK.DE) today reported that its profits for Q1 dropped by a massive 54% as compared to the figures reported in a similar period last year. The ban blamed the significant drop in profits on lower revenues and suspended businesses as the company battles to stay afloat. The German lender’s performance is a reflection of the challenging environment in which German banks are operating as the country’s economic growth stagnates. The bank recently terminated merger negotiations with Deutsche Bank another troubled German bank as it became clear the deal would be too complicated to execute and generate cost savings. The future outlook for the German bank as well as other European lenders looks shaky amid the sluggish economic growth and the ongoing US-China trade war, which could easily trigger a global recession. It remains to be seen whether the bank’s profits shall recover in the second quarter, but this largely depends on whether the domestic and global economic conditions shall improve.

ABB Ltd (NYSE: ABB) today announced that it had a fully operational manufacturing facility that had achieved CO2 neutral status. The factory located in Luedenscheid, Germany is now 100% powered by a solar energy system during sunny days, but has backup green energy sources for less sunny days. This is part of the Swiss-Swedish multinational engineering firm’s goal of reducing its carbon emissions by 40% before the end of 2020. Therefore, it is highly unlikely that the engineering firm will be fully CO2 neutral within that time; however, if the company keeps incorporating green energy into its operations at this rate, then this goal may be achievable in a few years. This is a bold step by the multinational company and should be an excellent example that manufacturing facilities can become CO2 neutral with the right strategies. Given the adverse effects of greenhouse gas emissions on global climate patterns, it is my hope that more companies shall implement strategies to make their facilities CO2 neutral.

According to recent news reports, Oracle Corp. (NYSE: ORCL) is planning to lay off over 900 employees working in its offices located in China. This move comes at the time when the tech company has shifted its focus to cloud-based products and services amid dwindling revenues from on-site installations. The employees set to be fired are working in the company’s research and development division, which begs the question why the firing, yet the company is investing heavily in research? Well, the company refused to confirm the rumors, but issued a statement saying it continues to restructure its business in line with the push into cloud services. While it may be hard for people not privy to the company’s inner workings, I believe the real reason why the employees are being fired is because they are redundant. It is highly likely that the push into cloud-based products might have rendered their current roles irrelevant, which is why the company has decided to let them go.

Well, news reports from Total SA (EPA: FP) earlier today clarified that the French oil major had agreed to purchase Anadarko’s assets that are located in Africa if Occidental’s bid for Anadarko is approved. This makes occidental’s offer more acceptable to Anadarko’s shareholders given that even legendary investor Warren Buffett supports the deal. Total has a major presence on the African continent with upstream, mid-stream and downstream operations in many African countries. Given the multiple challenges that companies face when trying to launch successful operations in most African countries, this could be a boon for Total shareholders given the firm’s broad footprint across the continent. Total has agreed to take over operations in countries such as Algeria, Mozambique, Ghana and South Africa with over a billion barrels of oil equivalent in reserves. The company will also benefit from over 2 billion barrels of oil equivalent in natural gas reserves available in Mozambique.

Well, this is quite a hard question to answer as Apple (NASDAQ: AAPL) never discloses its acquisitions, but it is a well-established fact that the company has a massive cash hoard of over $225.4 billion. Therefore, it only makes sense that the company would be looking to deploy that cash in investments that create value for its shareholders such as strategic acquisitions. However, Apple CEO Tim Cook recently revealed that the company buys a company every 2-3 weeks, which is quite impressive for a company of its size. According to Cook, the company targets smaller companies that have talented employees or those with valuable intellectual property rights. He further added that the company had acquired about 20 to 25 new companies in the past six months, which gives us a good estimate of the number of new companies acquired. This is another reason why Apple is one of the largest tech companies in the world given its constant drive to deliver better products and services to its customers.

Microsoft (NASDAQ: MSFT) just launched a new open-source software named ElectionGuard that has the capability to alert voters once their votes have been counted. The new software is the company’s answers to the multiple allegations of election rigging that plagued the 2016 US Presidential election, which was won by Donald Trump. The company plans to partner with the manufacturers and vendors of voting equipment to roll out the software as part of the standards software bundled with such equipment. One of its current partners is Election Systems & Software, which is the largest manufacturer of voting equipment in the US. It remains to be seen whether industry players shall embrace the new software, but this is still a smart move by the company given the acrimony that has surrounded the 2016 election results. This is exactly what entrepreneurship is all about, identifying unmet needs and gaps in the current marketplace and creating products that address such needs, which is why Microsoft is such a successful company.

Japanese markets are set to reopen on Tuesday May 7, 2019 after a 10-day holiday that begun on April 27 in honor of the installment of a new emperor. This is the longest market holiday in modern history that was triggered by the abdication of Emperor Akihito to pave way for his son Crown Prince Naruhito to become emperor. Despite the government’s noble intention to provide a holiday for its citizens, not many were pleased with the long holiday as they were stressed about other important aspects of their lives. Japan has one of the most overworked populations in the world and many workers who were off-duty were worried that they would have to deal with a bigger workload when they got back to work. Other workers in the service industry were complaining because they would not be on holiday given that many hotels and restaurants would be fully booked. Workers in the transport industry would also be at work the whole time, which is why most Japanese workers were not pleased at the extended holiday.

According to data released today by HIS Markit and Caixin Media Co., China’s services sector expanded more than expected in April. The services PMI gauge came in at 54.5 for the month, which was slightly higher than the 54.4 recorded in March. Today’s data was a major boost to investor confidence in the country, which has experienced an economic slowdown recently, especially evident in the manufacturing sector. The manufacturing sector has contracted since the start of the year, which has raised concerns among investors as to the stability of the Chinese economy. However, companies operating in the services sector remained burdened with high costs and appealed to the government to consider structural policies to minimize these costs. The Chinese economy may have to deal with a new set of problems this month as President Trump is set to increase the tariffs imposed on Chinese exports, which is bad sign for the ongoing trade talks.

Apparently, Boeing Co (NYSE: BA) knew about the safety issues plaguing the 737 Max jets for over a year before the latest crash triggered the grounding of the planes. Executives at the company discovered in 2017 that the plane’s “AOA Disagree alert” as the design mandated, but classified it as not being critical. Although investigations are still underway, it is quite evident that Boeing failed to disclose this information to the public including the airlines and the Federal Aviation Authority. The FAA concurred with the company’s assertion that indeed the software error was not critical to the safe operation of the flight, but faulted it for not disclosing the information. However, this new revelation does not bode well for Boeing as it works to fix the software bugs that caused the two 737 MAX planes to crash and led to the grounding of the aircraft across the globe. It appears that the company was at fault for both crashes, which has raised public concern about corporate practices in the US, which is one of the most regulated countries in the world.

According to a report by the Wall Street Journal, Facebook Inc., (NASDAQ: FB) is in the process of recruiting financial services firms and internet merchants to help it launch its cryptocurrency. It is now clear that Facebook intends to issue a stable coin whose value shall be back by actual fiat currency in order to minimize the volatility of its price. The WSJ reports that the social media giant is in negotiations with Mastercard (NYSE: MA), Visa (NYSE:V) and First Data (NYSE: FDC) to secure about $1 billion in funding for the project. The report also suggests that Facebook users would be able to send coins to other users and to make purchases on other websites using the company’s crypto, which is why it is seeking the support of other firms and merchants. Given the volatility and trust issues associated with most cryptocurrencies, it remains to be seen whether Facebook’s stable coin shall fall prey to these flaws. However, the company has a huge advantage in that it has a user base of over 2 billion users, hence, it won’t be starting from scratch.

The Reserve Bank of Australia is set to meet on Tuesday next week to discuss monetary policy and to set the bank’s lending rate. Investors are split into two camps on whether the central bank will cut rates with about 50% seeing rate cut as being probable, while the other half believe a rate cut is unlikely. However, these figures might change given the latest Australian housing data, which indicated that the issuance of building permits in March dropped drastically. The building approvals issued for single family homes dropped by over 15%, while building permits for apartment buildings declined by over 30%. Given the recent weak data, the probability of the RBA cutting rates has risen since the bank wants to boost the country’s housing sector, which has not been performing well. House prices in Australia have been steadily declining from 2017 and the RBA has expressed concern about this in the recent past, which is why I think that it will cut rates next week.

In an investor call yesterday, Elon Musk claimed that Tesla Inc., (NASDAQ: TSLA) was developing self-driving technology that could see the company’s market capitalization shoot to $500 billion. This is quite a big claim given that as of yesterday, Tesla’s market cap was $42 billion, which means that to reach a half-trillion dollar valuation the company would have to more than 10 X its current valuation. Well, it is no surprise than not many believed Musk’s prediction given that he has been known to make huge claims that were not baked by any proof. However, we cannot dismiss his claims given that Tesla is a trailblazer in the automotive fields and is years ahead of other major auto companies in terms of developing 'driverless' cars. We will adopt a wait and see approach to Musk’s claims as only time will tell whether he is right or not. At the same time, the company was seeking to raise an additional $2 billion to keep funding its operations even as costs mounts, yet the automaker remains unprofitable.

Sanofi SA’s (EPA: SAN) dengue fever vaccine has had a rocky path ever since the company started selling it in different countries across the world. For example, Mexico was the first country to authorize its distribution in the country, but was faced with safety concerns as to the long-term effects of the vaccine. The Philippines had allowed wide distribution of the vaccine, but later revoked the company’s license after some deaths were linked to the drug. However, the company’s efforts to improve the vaccine seem to have worked as the Food and Drug Administration recently approved it for use in the U.S. According to the World Health Organization, about half of the global population is exposed in some way to dengue fever, yet there was no approved vaccine for the drug. Creating a vaccine for the disease was hard because it is caused by four strains of the same virus, but the good news is that Sanofi’s vaccine targets all the four strains.

Apparently, it appears that Hugo Boss AG (ETR: BOSS) is no longer that popular in the US given its first quarter results, which indicated that sales in North America have plummeted. The company, which makes luxury clothes reported that its profits in Q1 were lower than expected despite growth in overall sales. According to the CEO of Hugo Boss, Mark Langer: "The ongoing momentum in our strategic growth market China and in the important online business shows that our strategy is taking effect. At the same time, the U.S. market proved to be weaker than expected." It appears that the German firm has to make efforts to capture more of the US market, which is a very competitive market for luxury goods. Some of the company’s biggest competitors include Tom Ford, Gucci and Versace among other brands. However, the firm sees a lot of opportunity in other markets such as China where the competition may not be as steep as in the US.