“Misleading” — How Yahoo is describing a Reuters report alleging that the tech company monitored all incoming emails at the request of either the FBI or NSA. Not exactly a blistering denial.
Market Snapshot
Calling All Bookworms
…Amazon’s giving Prime members free, unlimited access to thousands of books. Announced yesterday, Prime Reading will allow Prime members to access popular books and magazines like the Harry Potter series, Sports Illustrated and countless others—Netflix style. You don’t even need a separate Kindle device. Pretty sweet. Amazon is continuing to add perks to its Prime program, which started out as a way for customers to get free two-day shipping. Needless to say, there’s quite a bit more in the value chain for Prime members these days, and there’s good reason for it: Prime members drop over four times more money on Amazon than non-Prime members. It all makes sense now.
Ew
…Yum! Brands earnings disappoint the Street. The fast food giant you know and love (or hate) that owns KFC and Taco Bell reported weaker third quarter earnings and revenue than analysts expected. What about fourth meal? What about Live Más? Bottom line: it’s China’s fault. Sales in China fell unexpectedly, explaining why Yum! is spinning off its China unit altogether. But the reason for the China weakness may surprise you: according to management, Chinese customers are boycottingWestern brands to protest an international court ruling made earlier this year that China has no claim to the South China Sea. Whether you believe the explanation or not, Yum! is the biggest Western restaurant operator in China and accounts for over half of the company’s sales, so the weak numbers are indeed a big deal.
Elliott Management Pushes Samsung
…To leave the nest. Yesterday, Elliott—a famous hedge fund known for creative actions like seizing an Argentinian battleship—released a public letter yesterday pushing Samsung to simplify its ownership structure. Wait, what’s wrong with Samsung’s current structure? Samsung Electronics is actually part of the South Korean family-controlled Samsung Group, a giant conglomerate that’s connected by a complex network of cross-company ownership. Elliott wants Samsung Electronics to spin out of this web and become its own company, arguing that the current company is undervalued due to this complexity and poor corporate governance. Bold moves…but it’s not the first time Elliott has gone after Samsung. Stay tuned.
Theranos Puts Down the Beaker
…And drops 40% of employees and 100% of labs. The once $9 billion angel of Silicon Valley fell under the scrutiny of regulators far and wide last year amidst accusations that the blood-testing startup’s technology was highly inaccurate. Couple that with a failure to report test results and other forms of questionable practice, and you’re now looking at a company with a transformed strategy and a CEO (enter Elizabeth Holmes) who has been banned from laboratories for two years. Time for a strategic shift? Now finished with labs altogether (and everybody who worked in them), Theranos will remain focused on miniLab, a new blood-testing device revealed at an August conference, which provides small-volume sample testing specifically in vulnerable populations. The lab-in-a-box can perform 40 tests, including one for Zika.
Other Stories
Economic Calendar
You Can’t Live Forever (Allegedly)
Dr. Jan Vijg, an aging expert at Albert Einstein College of Medicine, says we have reached the upper bound of human longevity, and the magic number is 115 years. In a recently published paper, Vijg predicted it will be nearly impossible for humans to live past age 115. Jeanne Calment, a French woman who lived to the ripe old age of 122, might disagree, but here are some of the facts:
Interview Question of the Day
Can you find the next number in this tricky mathematical series? 111, 113, 117, 119, 123, 137? (Answer)
Startup of the Day
Viv is a machine-learning virtual assistant company started by Siri founder Dag Kittlaus. Samsung acquired the startup yesterday just as Google unveiled its new Pixel smartphones, which will be powered by the all-new AI-based Google Assistant. Sounds like competition to us. Did you hear that, Siri?
Food for Thought
U.S. traffic fatalities rose by an estimated 10.4% in the first half of 2016, federal officials said Wednesday. Luckily for us, Google’s celebrating another milestone in its self-driving car project: the two-million-mile marker. This is equivalent to about 300 years of human driving based on the average person’s yearly total.
