Category: Billion Dollar Companies

Facebook says its employees will finally be able to pursue their sexual harassment complaints in open court, joining the likes of Google, Uber, and Microsoft, who have also scrapped the controversial private arbitration rule.

In a post titled “Facebook’s Harassment Policy (US Locations),” published on its site, Facebook stated that it was amending the current “arbitration agreements to make arbitration a choice rather than a requirement in sexual harassment claims” adding that “sexual harassment is something” the Social Media giant takes “very seriously.”

“Facebook may consider an employee’s conduct to be in violation of this Policy even if it falls short of unlawful harassment under applicable law. When determining whether conduct violates this Policy, we consider whether a reasonable person could conclude that the conduct created an intimidating, hostile, degrading, or demeaning environment.”

Facebook went on to warn employees who violate the policy or decide to harass other employees about the possibility of facing disciplinary action including termination of employment.

Private arbitration has long been used by tech companies as a tool to prevent a disgruntled employee from suing them in court, but things have started to change in Silicon Valley.

The sudden change by Facebook comes on the heels of an employee protest at Google, where they complained of how the tech giant had treated cases of sexual harassment, even rewarding executives indicted with large exit packages, including $90 million paid to senior executive Andy Rubin.

Facebook also updated its policy as regarding office dating between employees. Employees who are directors and above now have to file a disclosure when dating a colleague. Prior to this change, Facebook only required disclosures from supervisors or heads of department dating someone they directly manage.

Featured image from Shutterstock.

In 2017 a record 8,000 store closures took place. The annual average is 2,000. As 2018 draws to a close, will the numbers be just as bad, if not worse? The explosion of online retailers and improvements in delivery infrastructure mean that brick-and-mortar retailers have to fight harder than ever to stay afloat as the retail apocalypse takes hold.

And the effects of store closures and retailers going out of business aren’t contained to the company and its shareholders. They have knock-on effects that ripple throughout society like a deck of dominos folding in the wake of the Amazon era. Employees, landlords, customers, shopping malls, and entire neighborhoods stand to lose when key employers shut their doors.

However, according to Lauren Leach, a member of Conway MacKenzie’s Real Estate Vertical, not all retailers are going out of business due to the shift toward online sales. Some have simply fallen victim to bad business practices and acquired too much debt.

Responsible for the overall workout strategy and client relationship of managed portfolios, and specializing in distressed and troubled real-estate properties, Leach knows a thing or two about the retial apocalypse.

Major Bankruptcies so Far in 2018

2018 has made headlines for plenty of household names. Some of the largest ones to file for bankruptcy protection are Sears last month, that will be closing 142 stores in addition to the 46 previously announced before the end of the year. The company listed $6.9 billion in assets and $11.3 billion in liabilities.

Another one failing to compete in the digital age is the Mattress Firm that filed in October and plans to close 700 of its 3,272 stores. The company’s debts are over $3.2 billion. The rise of innovative and cheaper models such as ordering a bed in a box without intermediaries put the final nail in the coffin for the chain.

Shoe store Nine West also joined the stores above listing debts of over $1 billion and even Claire’s, the popular children’s accessory retailer, plans to close 92 stores in the near future, citing lack of foot traffic as responsible for the decline in sales. And the list goes on.

Analysts expect more than 3,800 stores to close in 2018, which is not as high as last year but still nearly double the historical annual average with some of the most notable names among this year’s closures being Gap, Toys ‘R’ Us, and Walgreens (600 stores).

Plenty More Stores on the Verge of Succumbing to the Retail Apocalypse

Leach says that many more stores are on the verge of closure announcements with some major names already on the watch list, including JC Penney, 99 Cents Only Stores, Bebe Stores Inc., and a bunch of others in danger of filing for bankruptcy in 2019.

There’s no doubt that a large portion of mall-based retailers are in trouble as a result of the explosion of online sales. But Leach says that online shopping is not the sole culprit for the demise of all retailers. While many are quick to point the finger at Amazon & Co., others can blame their woes on being saddled with an immense amount of debt.

J. Crew, for example, currently has some $1.7 billion of debt racked up while JC Penney is carrying debts of around $4.2 billion. Earlier this year, the company refinanced over $300 million of debt that was set to mature in 2019 and 2020.

What does this mean for the real estate market and the landlords that rent the locations?

Impact on Real Estate and Landlords

Leach explains that many store closures have a domino effect on real estate and its landlords. Many sophisticated retailers negotiate to include co-tenancy clauses in its leases with landlords. A co-tenancy clause is a requirement that either certain named key tenants (often anchor tenants or department stores) or a percentage of the gross leasable area remains occupied.

If that requirement is violated, the tenant with a co-tenancy clause has the right to reduce rent; usually to a nominal percentage of its gross sales. For example, when a department store closes, it will likely trigger a co-tenancy violation for a number of other stores within the mall.

The more stores that close, especially those with larger footprints, the more the landlord will be impacted. Not only does the landlord lose the revenue from that specific tenant who closed, but several other tenants have the ability to reduce their rental payments as well. This can send a mall into a tailspin.

The Takeaway

The record-breaking number of store closures and bankruptcy filings by some of the biggest brands in the world is alarming, although there is also cause for hope by using the technologies available to online retailers to drive foot traffic into stores.

Making use of big data, online avenues, fast and free delivery, and a personalized shopping experience will be key to surviving in the retail apocalypse. As well as using intuitive tactics to build communities and make their stores an environment in which customers want to be.

Images from Shutterstock.

Two of the largest tech giants Amazon and Google are planning major expansions in New York, which could make the Big Apple America’s next big tech hub. The city is already home to almost 7,500 active tech startups, and is the second largest startup ecosystem in the world, behind Silicon Valley.

The New York tech sector has revenues over $125 billion a year and provides around 291,000 tech and related non-tech jobs.

The initiative of turning the city into a tech hub started almost 10 years ago and belonged to Michael Bloomberg, entrepreneur and ex-mayor of New York.

Over 35,000 New Tech Jobs

Amazon alone can create almost 25,000 jobs by settling its second corporate headquarters in New York. The company had made public its plans for the HQ2 expansion in September 2017.

A few days ago, the New York Times wrote that the company would invest in two locations instead of one. One of them could be in the neighborhood of Queens. Coincidence or not, the local administration had announced the city would spend $180 million for infrastructure, resiliency, transportation, and housing.

A couple of days later, the Wall Street Journal announced Google’s expansion in New York. According to the journalists, this move would create space for other 12,000 new jobs, almost double what the company has at the moment in the city.

Google hasn’t confirmed the news but spent $2.4 billion for a Chelsea Market building in Manhattan. The company has already set up some of its New York offices here.

New York Tech Startups Got $3 Billion from Investors

Besides the tech giants, investors are turning their attention to New York as well. According to a report by the New York City Economic Development Corp, in Q2 of 2018, venture capital investment in the city reached $2.97 billion a 28% increase from last year.

Among the most appreciated New York startups, some firms that work with artificial intelligence. Other promising startups that raked in over $100 million from investors were a cryptocurrency app and a wedding planning service.

Nick Beim, a known New York software investor, explained the evolution of the city in an interview for the New York Post:

“The city has strong tech talent pools, including university data science labs and a lot of financial quants.”

The startup ecosystem in New York hasn’t reached its real potential and is still in the early stages of its development. However, many of the giants in the industry have been consolidating their attendance in the city.

Facebook has increased its New York presence this year as well. The company took additional 78,000 square feet of space at their current office building. Microsoft also owns a research lab in the city.

Featured image from Shutterstock.

In what seems to have become a malaise in large corporations, a recent sexual allegation against a senior executive at Google’s parent company Alphabet has burst its seams, per a Fortune report. There were rumbles of discontent among employees at Google following the huge payoffs given to Alphabet’s senior executives who were eased out of the company for sexual harassment.

This perhaps was not the best time for such controversy to occur at Alphabet. The ill-feeling has been buoyed by the coverup of the harassment case involving Richard DeVaul; an executive whom employees believe should have been dealt with for his actions back in 2015 when the case occurred.

Employees perceive an air of injustice in the way such matters are being handled and took it upon themselves to stage a protest.

In an effort to pacify the staff, Google Chief Executive Officer Sundar Pichai sent a public message to employees on Thursday saying:

“Going forward, we will provide more transparency on how we handle concerns. We’ll give better support and care to the people who raise them. And we will double our commitment to be a representative, equitable, and respectful workplace.”

Google has been able to keep its clout as one of the most influential companies globally. Beyond its overwhelming presence within the business circle, regulatory authorities are now keeping a close tab on the company’s operations.

The permissive culture in the company’s inner workings is something which many employees are not comfortable with. They think executives have taken the relaxed atmosphere a tad further in their relationship with coworkers.

Against this backdrop, the protesters demanded more flexibility in the measures available for reporting harassment.

Employee Walkout at Google Serves to Change Policies

While the company ceded to some of the changes demanded, Pichai did not address the demand to have an employee as one of the board representatives. The company has nevertheless succumbed to making arbitration in sexual harassment and claims of assault an optional requisite.

Other commitments which Google has agreed to include the provision of regular, detailed reports about the occurrence of harassment claims and whether they led to the dismissal of staff members involved, and the publication of an internal guide on the investigation processes of harassment cases in the company and others.

The demands are also expected to cater to thousands of contractors working with Google. The “excessive” consumption of alcohol will also be discouraged by managers especially at work.

Featured image from Shutterstock.

As if it wasn’t bad enough that our online footprint increasingly leaves us exposed to breaches and hacks. Now those pesky things flying above our heads have become a target as well. The Internet of Things is taking so long to get off the ground because it’s simply way too insecure and easy for hackers to breach any device–from a cardiac monitor to a self-driving car. And now DJI drones are thrust into the spotlight.

Cybersecurity experts Check Point found major vulnerabilities in DJI drones that leave usage patterns and user data at risk from intruders. While the company claims that the bug in its software has now been fixed, the cat has been let out of the bag, alerting people to the fact that drones in the sky may be potential targets of criminal wrongdoing.

DJI Drones Had Already Been Prohibited by the US Army

The Chinese manufacturer DJI drones had already been prohibited by the US army in August of last year after discovering multiple flaws with the software. The Shenzhen-based company is best known for creating drones for photography and videos for consumers and professionals but is also branching out into corporate solutions.

US-based security firm Check Point said the DJI software made it easy for introducers to see user data, photos and videos taken by them (of other people) and even track their flight paths.

The cybersecurity firm undertook its own investigation into DJI drones after the US Army cited vulnerabilities last year. DJI itself had also initiated a bug bounty program for white hat hackers to look for possible loopholes and vulnerabilities in the system.

Check Point informed the Chinese drone maker in March this year of the problems. The company finally resolved them in September, double the time needed to resolve such an issue according to Check Point experts.

In a statement, DJI applauded the cybersecurity firm and also reassured customers that there was no evidence that these vulnerabilities had been exploited. But it has to make you wonder how safe the things flying above our heads really are.

Featured image from Shutterstock.

Data about Amex India customers was exposed online via an unsecured MongoDB server. The 689,272 records included details like the customers’ names, phone numbers, email addresses, PAN card numbers, and the “type of card” description fields.

The breach was discovered by the cybersecurity firm Hacken on October 23 and announced by Bob Diachenko, Director of Cyber Risk Research, who contacted the American Express incident response team. The company has promptly secured the database from public access.

“5 Days in The Wild”

Seems like @AmexIndia exposed its #MongoDB for a while, with some really sensitive data (base64 encrypted). Now secured (just when I was preparing responsible disclosure), but question remains how long it was open. Found with @binaryedgeio engine. pic.twitter.com/3kbXaS4cIz

— Bob Diachenko (@MayhemDayOne) October 25, 2018

Amex’s MongoDB database was easy to access using the search engine Shodan and the BinaryEdge tool, a platform that scans data and exposes available databases. According to the cybersecurity expert, the data had been available for at least five days when he discovered the breach.

Bob Diachenko gave all the details of his discovery on the company’s blog:

“According to the search results from BinaryEdge.io, the database had been first indexed on 20th October meaning it had been in the wild for 5 days before I had spotted it!”

Diachenko added that the encrypted data included over 2.3 million records, most of them containing sensitive data, such as names, Aadhar numbers (the Indian equivalent of the SSN), PAN card numbers, addresses, and phone numbers.

A Subcontractor Caused the Breach

According to Bob Diachenko’s research, Amex India wasn’t directly in charge of the database, but one of the company’s subcontractors responsible for SEO or lead generation. Amex India told Hacken that there was:

“no evidence of unauthorized access.”

And that the database was securely encrypted.

Diachenko has a long history of unveiling MongoDB databases. Last December, he discovered a leak that exposed data belonging to 31 million users of Ai.type, a virtual keyboard for smartphones.

Bod Diachenko stated in 2017:

“The danger of having [an] unprotected MongoDB [database] is huge. In January 2017, 27,000—or roughly a quarter—of MongoDB databases left open to the internet were hit by ransomware, and again in September 2017 three groups of hackers wiped out an estimated 26,000 MongoDB databases. The cybercriminals demanded that the owners of those databases pay around $650 in Bitcoin to regain their data.”

India Has the Highest Number of Breaches

Data breaches happen more often than you think. Every hour, almost 262,000 data records are lost or stolen, according to the Breach Level Index.

In 2017, India was the country that registered the highest number of breaches in the world, with over 33,000 breached records. Despite the large number, the effects of a data breach in India cost less than in Western countries.

The Ponemon Institute’s 2017 Cost of Data Breach Study also revealed that the estimated probabilities of a data breach in India are 40.1%.

Featured image from Shutterstock.

Harley Davidson this week revealed a production-ready electric motorcycle, the Harley Davidson LiveWire, four years after its concept bike emerged. After overall price losses of 18.78% this year, Harley’s share price is beginning to rise. Could its new electric motorbike mean future success is secured for Harley?

The Harley-Davidson LiveWire will be available in 2019. Harley hopes the electric models of its iconic, more than a century old, motorcycle brand will revive the company. The LiveWire is the first in a portfolio of electric Harley’s likely to be available by 2022.

Harley plans to install Level 2 public electric vehicle chargers at the dealers that will retail the bikes. The LiveWire can also be charged via its under-the-seat-stored power cord and a Level 1 charger that plugs into a standard household socket. It’s also compatible with Level 3 or DC Fast Charge.

The Roar of the Harley LiveWire

The bike is powered by a magnetic electric motor and will have two batteries, one for main power and a second to power lights, controls and displays. Missing the gas-powered roar of Harley’s conventional bikes, Harley has added a tone that changes in pitch and volume with the speed of the bike.

Whether this will satisfy Harley’s historic base of serious bikers or will encourage a more environmentally aware younger generation remains to be seen.

Harley’s aren’t just for Hells Angels, Harley Owners Groups (HOGs). encompass serious and hobby bikers, men and women. and span generations. Harley’s Softtails and Sportsters are seen on highways alongside its Touring bikes, so an electric version might have a shot if there are enough charging stations.

Harley’s Senior Vice President, Mark Hans-Richer answered concerns over replacing Harley’s roar when the prototype was released in 2014 saying the LiveWire will have a noise of its own:

“The sound is a distinct part of the thrill…think fighter jet on an aircraft carrier. Project LiveWire’s unique sound was designed to differentiate it from internal combustion and other electric motorcycles on the market.”

Here’s a demonstration of that new sound on a dynamometer (Source: Consumer Reports):

The Future for Harley Davidson?

Market Research firm TechNavio predicts the electric motorcycle industry is expected to grow 42% by 2021 creating an opportunity for Harley.

Though there are other electric bikes already on the market they are from smaller manufacturers. Harley invested in one of them–Silicon Valley startup Alta Motors, in March 2019.

Harley has committed between $25 and $50 million to electric motorcycle development, a sign Harley clearly expects electric bikes to be part of its future success.

Harley’s share price has struggled this year, its third-quarter earnings beat estimates, but sales of its bikes fell over 13% prompting investors to sell shared in late October. Since then, Harley’s share price has recovered up to $40.96 per share today from $35.99 on October 26, 2018.

Despite the slight upturn, Harley’s bet on electric bikes might take longer to prove successful. And, with US sales declining and production costs increasing due to trade-war tariffs Harley likely won’t see immediate success from its current range of bikes.

The company is, however, focused on a ten-year turnaround plan to convert younger riders to the brand and increase sales. New markets and electric bikes like the LiveWire are part of this strategy and if Harley can overcome its competitors and lead in the electric motorcycle market, the brand could still dominate its second century. Matt Levatich, president and CEO confirmed to CNBC recently:

“As we manage our business with resilience in a challenging time in our history, we are leveraging our strengths for a more promising road ahead…We are investing to build the next generation of Harley-Davidson riders and we are optimizing our business to drive profitability and cash flow.”

The move to electric-powered vehicles is beginning to accelerate, soon we’ll be able to ride our electric Harley’s home and have pizza cooked and delivered by a Pizza Hut autonomous robot and its electric Toyota truck.

Featured image from Shutterstock.

Chinese mobile phone manufacturer Xiamoi has been garnering a reputation for its accessories as much as its mobile phones lately. And its most recent announcement of the release of its $30 AirPods may be one of the most interesting yet.

As some analysts advise people to steer away from Apple stock since its affluent market is eroding while the competition steps up its efforts, manufacturers like Xiamoi are gaining ground.

While the Chinese tech company’s AirDots are unlikely to match Apple’s technology when it comes to sound quality, with a price tag of under $30, they may capture a sizable market.

Xiamoi AirDots Are Clones of AirPods

The wireless earbuds look exactly like their much more expensive rival’s and offer similar functionality, including a compact charging case and tappable controls. They even come equipped with silicone tips to ensure a secure fit and supposed improved sound isolation. They also support Bluetooth 5.0.

For around $29 (199 yuan), the AirDots are available for pre-order in China, although, according to the Verge, those people looking for a similar quality experience offered by Apple are likely to be left disappointed.

Nevertheless, the Chinese have proven themselves to be particularly prolific at making things, improving in quality each time. It’s quite probable that it will only be a question of time before the technology improves and Apple is forced to do something about its high price tag.

Featured image from Xiaomi.

Papa John’s earnings are down 15.7% from last year, from $431.7 million to $364 million in revenue. Analysts were expecting a bad quarter for the pizza restaurant chain and projected a 9% drop, but no one foresaw the epic proportions of the disaster.

The company’s terrible earnings may complicate a possible sale process. Papa John’s has been going through a major crisis since May 2017 when the forced-out founder, chairman, and CEO John Schnatter generated a media scandal with racial comments during a conference call.

Papa John’s Lost 41 Cents per Share

The third quarter brought Papa John’s a loss of 41 cents per share (or $13 million). This is a huge difference from last year when the company registered a profit of $21.8 million during the same period.

The company earned 20 cents a share, 2 cents less than the average estimates compiled by Refinitiv.

Finding buyers will be challenging for Papa John’s, as the company saw a 13.2% drop in sales for its owned locations. Franchisers did a bit better, with same-store sales down 8.6% while the forecast predicted a 10.5% drop.

The company has already been forced to spend some $3.6 million in an attempt to remove John Schnatter’s image from all its marketing materials, a desperate last-ditch attempt to regain some of its lost popularity.

Steve Ritchie, the new CEO of Papa John’s stated:

“During the quarter, we took important actions resulting in improved consumer sentiment and North America comp sales that were slightly ahead of expectations.”

The CEO also mentioned a “positive response” to the company’s new marketing strategy, pointing out an increase in sales in September, compared to July and August.

A PR Nightmare for Papa John’s

The restaurant chain is facing two lawsuits, both filed by former CEO John Schnatter, who accuses the board of forcing his exit from the company and drags the brand into one media scandal after another.

In July, the board decided to ban Schnatter from buying any more shares through a procedure called “poison pill.” The founder has a 30% stake, and the board is trying to keep him from gaining control over the company, by not allowing him to buy any more shares until next summer.

Papa John’s hoped to repair the damage by hiring Lazard LAZ and Bank of America BAC as financial advisors. The company’s looking for a buyer, while Schnatter hopes to get some capital through equity firms, to consolidate his position inside the Papa John’s.

However, no company seems ready to associate its image with the entrepreneur after his racist statements, although he has admitted he was wrong and apologized for his words.

Featured image from Shutterstock.

Tesla’s expansion plans include India, as well as Africa and South America. Elon Musk announced the company’s intent to build a partial presence in these regions by the end of 2019 on the 2nd of November, via Twitter.

The entrepreneur wants to make pricing affordable, through a strategy that focuses on local production for local markets at a continental level.

After setting a partial presence in India, Tesla plans to expand operations to India by 2020.

 

To clarify further, the long-term goal for Tesla mass market products is local production for local markets (at least at the continent level). This is critical to make pricing as affordable as possible.

— Elon Musk (@elonmusk) November 2, 2018

 

Hopefully, partial presence in India, Africa & South America end of next year, with broader expansion in 2020

— Elon Musk (@elonmusk) November 2, 2018

Musk Divulged Supply Chain Difficulties in India

This isn’t the first time that Elon Musk brought up the company’s plans for development in the Indian market. When Tesla launched its entry-level Model 3 back in 2017, the controversial entrepreneur justified the company’s absence from India by invoking supply chain issues.

He wrote on Twitter in 2017:

“I was told that 30% of parts must be locally sourced and the supply doesn’t yet exist in India to support that.”

In the absence of a reliable supply chain and with no local factory to assemble the cars, Model 3 hasn’t yet been launched in India. This is also to avoid an eye-watering 110% duty.

In the future, the US-based company also needs to settle a country-wide charger network for Tesla owners in India.

At the beginning of this year, however, the entrepreneur expressed the company’s interest in the Indian market one more time. Again, he blamed local regulations for Tesla’s difficulties in launching its products in the South Asian country.

 

Would love to be in India. Some challenging government regulations, unfortunately. Deepak Ahuja, our CFO, is from India. Tesla will be there as soon as he believes we should.

— Elon Musk (@elonmusk) May 30, 2018

India Is an Attractive Investment Destination

India lost a good deal last year when Tesla agreed to build its first factory outside the US in Shanghai, China, despite the fact that the company had been exploring the possibilities of setting up a plant in India for months.

The decision came as a shock for the Indian authorities, who repeatedly talked about switching to electric cars by 2030. However, the country is still open to a collaboration with Musk’s company for a local factory.

Indian Transport Minister stated in January 2018:

“If they are coming, if they are ready to come, we will welcome. We are ready to offer them land and all type of help.”

Tesla can’t afford to ignore the Indian market for too long. India has the fifth largest economy in the world, which will double to $5 trillion by 2025. Even if it is a challenging market, the advantages of investing here are well worth the effort.

India’s investment in infrastructure, together with a growing middle class, makes the country attractive to investors and a market with high potential.

India is also home to many tech startups that are likely to become the next generation of Unicorns.

Featured image from Tesla Motors.