Good morning and happy Friday. Saw an interesting fact - shared to you. We actually lose up to 30% of our taste buds during flight, due to low pressure. This might explain why airplane food always gets a bad reputation. 😂 But do you sort of miss it when we can’t travel?
Top stories of the day:
- Facebook “unfriended” Australia: banning all Australian news websites from its platform.
- The unexpected turn in the US labor market: its jobless claim rose for a second straight week, hitting four-week high.
- Who’s the biggest winner post-Brexit? Paris, Frankfurt...or Amsterdam?
- The flying taxi maker is a fraud? The short selling report from Wolfpack Research.
Facebook Unfriended Scott Morrison
Source: Tech Connecto
In response to Australia’s new law, Facebook finally decided to click the “unfriend” button and ban all Australian news websites from its platform.
The backstory: To save the local media, the Australian Government is proposing a new law, named News Media Bargaining Code, that could force Google and Facebook to pay for the news clip/link they showed on their websites.
But Facebook and Google eventually moved in opposite directions.
#1 Facebook said no
On Thursday, Facebook said the proposed law is “not clear enough” in defining the scope of the contents. So it banned all Australian local news agencies.
- News from Australian publishers is blocked for all Facebook users globally, including the Government’s official Covid-related information and emergency safety warnings.
- The posting and sharing of Australian news links by foreign users are also restricted.
Facebook is “wrong”, “unnecessary”, and “arrogant”, said Australian government officials while commenting on the removal of government pages. Several human rights organizations also criticized Facebook. As a result, Gov’t pages were restored.
#2 Google said yes
By contrast, Google agreed to pay and struck deals with major Australian journalism, including Rupert Murdoch’s News Corp and the largest Nine. More deals with small-and-mid media firms are yet to come.
- What to note here: News Corp is the global owner of several newspapers including WSJ and MarketWatch. The deal it reached covers its global content.
Under the deal, Google will pay a certain amount for using their news content, while some agencies agreed to develop their content by using Google’s platform. Google is much softer than Facebook though the former once threatened to exit Australia.
Bottom line: Following Facebook’s move, Australian PM Scott Morrison thinks this shows the necessity of antitrust on big techs… So will it retaliate by antitrust?
- US indices retreated on Thursday. Earlier, its employment report showed initial jobless claims rose more than expected.
- Facebook declined following the news blackout move in Australia.
European stocks ended lower on weak earnings and quicker-than-expected increase in inflation. Oil and gas stocks led losses despite higher crude prices.
Both Hong Kong and China blue-chip CSI300 index ended lower as the People’s Bank of China drained 260 bln yuan (USD 40.31 bln) worth of short-term liquidity and triggered worries of tightening monetary policies.
Texas’s big freeze goes global. Around 40% of US crude production is offline, pushing the Brent price above USD 65 a barrel in Asia trading on Thursday. The oil retreated later on Thursday as investors took profits after days of buying.
The US labor market just made an unexpected turn: its jobless claim rose for a second straight week, hitting four-week high. It signals that the labor market is facing new setbacks even though the Covid-19 cases and hospitalizations have plummeted after the January peak.
- US stock futures extended declines after the data release.
What’s behind the fresh labor market setbacks?
Covid side, we see some Covid-19 numbers keep improving - not because of vaccination (only 4% of US population vaccinated), but rather
- Coming off the high numbers from holidays;
- Improvement in social distancing and mask wearing; and
- Some level of population immunity.
Though the pandemic shows signs of ebbing, the fresh setbacks could be related to the temporary closure of automobile plants due to global shortage of semiconductor chips.
- General Motors shut down the whole production at its Fairfax plant in Kansas City in the week of Feb. 8.
- Ford Motor also reduced shifts of its plants in Dearborn and Kansas City.
Incoming rescue? The labor data is closely watched by lawmakers as they are debating on Biden’s proposed stimulus plan. Democrats are on their way to pass the USD 1.9 tln package narrowly - even without Republican’s support.
Looking ahead: The US employment won’t return to the pre-pandemic level before 2024, according to the estimates of the Congressional Budget Office.
Who’s The Biggest Winner After Brexit?
Source: Culture Trip
Many thought it’ll be Frankfurt or Paris. As Britain leaves the bloc, these two are strong candidates to lure London’s financial businesses. But surprisingly, Amsterdam turns out to be the visible early winner.
How attractive Amsterdam is:
- Trading powerhouse: It has displaced London as Europe’s biggest share trading centre in January, seizing a fifth of the daily volume, up from below a tenth of trading before Brexit. It also becomes the leader in euro-denominated interest rate swaps.
- Listing venue: It also overtook London to become Europe’s No.1 corporate listing venue this year (so far).
- Businesses: It is also quietly courting British trading and finance, medicine and agriculture, as well as logistics and distribution companies.
Why Amsterdam, rather than Paris/Frankfurt? 🤔
Some possible reasons to explain why businesses choose Amsterdam, the capital of Netherlands, over Paris and Frankfurt as post-Brexit hub:
- It already has a culture of trading, with some big institutional banks, specialist trading firms, and also a dynamic retail investor group.
- It sits in the heart of the continental Europe.
- Relatively wide use of English.
- More friendly regulations to global investors compared to the domestic-focused rules in some other European countries.
Finally, jobs and headcounts that you care about: It could be disappointing, as there’s no job boom yet in the city. The newly-come firms are mostly highly specialized with smaller employers.
The Flying Taxi Is A Fraud…?
Source: sUAS News
The short seller Wolfpack Research thinks the US-listed flying taxi maker EHang is a fraud. While the battle is almost over, here’s what happened in the past few days.
- EHang (ticker: EH) is a Chinese flying taxi producer. It develops a passenger-carrying autonomous vehicle, just like a huge drone.
- Wolfpack Research is a short seller founded in 2019 with support from the renowned peer Muddy Waters. It makes money from the stock price plunge by “sell high, buy low”.
In its 33-page short-selling report, Wolfpack thinks EHang is an "elaborate stock promotion" with fabricated sales. Here are the main claims that you should know.
- Client is fake: Wolfpack claims that the sales contract made with one of EH’s major clients KX is fake. What’s more, Wolfpack believes EH’s surging accounts receivable is a sign of manipulating sales.
- Product is fake: Wolfpack claims the engine EH uses is just “hobby-grade motors”, which is not an aerospace product and cannot be used to carry passengers. EH’s low R&D expense is also a shred of strong evidence.
- Factory is fake: Wolfpack claims that it visited EH’s factory secretly. What it saw is just a simple production line without advanced equipment and workers.
EH: That’s not true
EH pushed back by describing the short-selling report “deceptive” with “numerous errors” and “misinterpretation of information”. It backed its statement by releasing an interview with its chairman Hu. Here are the main arguments.
- To client: Hu said the large client KX is a client as well as an investor of EH. He claims KX is totally independent and authentic.
- To product: Hu said he is the first passenger of EH’s large drone. With thousands of pilots having tried, he believes Wolfpack’s view on the product does not hold.
- To factory: Hu said the company’s CCTV actually captured the secret visit 😂. But the image he saw from CCTV looks different from Wolfpack’s claim.
How did the stock price react? After the short-selling report, EHang’s share price fell 63% on Tuesday. However, it rebounded 62% following the Company’s clarification.
Fraud or not? What do you think…
Wrapping Up Other Important News for You
- US Congress is holding a hearing to investigate the Gamestop frenzy, with Robinhood, Citadel, Reddit Executives testifying.
- Biden’s proposed immigration overhaul will be introduced in Congress, including an eight-year path to citizenship 11 mln illegal immigrants.
- Texas’ power gradually came back online, while governors banned gas from leaving the state.
- Singapore opens the travel bubble program for business travelers.
- Hong Kong’s unemployment rate hit a 16-year high of 7%.
- Volkswagen is considering separately listing its Porsche sports-car unit.
- Bosch partners with Microsoft to develop a vehicle software platform, following suit after Volkswagen.
- Marriot, the world’s largest hotel operator posted its first annual loss since 2009 as the pandemic sapped demand
- Tesla cuts prices of cheaper versions of model 3 and model Y SUV.