This week JetBlue announced that it will begin regularly scheduled commercial flights to Cuba on Wednesday, August 31, with fares starting at just $99 each way.
The total cost of a round trip could be as low as $204, with all mandatory taxes and fees included. Availability at such a cheap fare is limited, but we did a search of the route this morning and indeed were able to find a flight departing on August 31 and returning one week later for a grand total of $204. It’s “the lowest Cuba fare announced so far by a commercial airline,” the Miami Herald reported.
JetBlue’s first route to Cuba will connect Fort Lauderdale-Hollywood airport (about an hour north of Miami) to Santa Clara–Abel Santamaría airport (about three hours east of Havana). The airline will fly this route every Monday, Wednesday, and Friday as of August 31, and will launch daily service on October 1. Two other routes are planned for launch with daily service in November, to Camagüey – Ignacio Agramonte Airport and Holguín – Frank País Airport, both from Fort Lauderdale.
When JetBlue’s service between the U.S. and Cuba commences, it will be the first time in decades that regularly scheduled commercial flights connect the two nations. In early 2015, the U.S. government announced the loosening up of travel restrictions for Americans visiting Cuba, and U.S.-based airlines rushed to apply for routes when the option became available earlier this year.
Flying to Cuba, typically accomplished via special charters, has been extraordinarily expensive—easily $400 and more typically $700, for flights that lasts as little as an hour. The advent of commercial flights to Cuba has been expected to make the cost of flying to the island nation much, much cheaper. JetBlue’s $99 one-way fares are special promotional rates, and most flights will wind up costing more. But it looks like it should be much easier for travelers to pay far less to fly to Cuba compared to the past.
By introducing Cuba flights on August 31, JetBlue will sneak in just before its rivals reach the market. Silver Airways will launch flights from Fort Lauderdale to Santa Clara starting September 1, while American Airlines kicks off service from Miami to five destinations in Cuba during the first and second weeks of September.
(CNN)When the New York Post published several nude photos of Melania Trump this week, it wasn't just her body that was exposed -- the shots also revealed a potential discrepancy in her immigration history.
According to Melania Trump, the story of her American arrival is quite simple: "I came to the United States, to New York, in 1996," she told CNN's Anderson Cooper on February 29, 2016.
But Melania posed for those photos, which appeared in the French magazine Max, during a shoot in New York City in 1995 when she was 25 and known as "Melania K," according to Bojan Pozar, the author of the biography "Melania Trump: The Inside Story."
That year is possibly the key to whether or not Melania, now 46, broke immigration law by working in the US without the proper visa.
Melania, who is from Slovenia, has said she came to the United States "the right way," on a visa.
Melania Trump on February 29, 201601:49
"I flew to Slovenia every few months to stamp it. And came back, I applied for green card, and after a few years for citizenship," she told Anderson Cooper. "I obeyed the law. I did it the right way. I didn't just sneak in and stay here. So I think that's what people should do."
If this is accurate, Melania's visa would have been the type that had to be updated periodically, such as a tourist visa. However, this kind of visa doesn't allow for someone to work in the United States, according to New York immigration attorney David Gottfried.
The question is whether Melania was employed as a model before she was issued the H-1B visa, which allows people to work in the country for up to three years, with possible extensions up to six years. With this kind of visa, Melania wouldn't have had to return to Slovenia for updated stamps.
"I flew to Slovenia every few months to stamp it. And came back, I applied for green card, and after a few years for citizenship," she told Anderson Cooper. "I obeyed the law. I did it the right way. I didn't just sneak in and stay here. So I think that's what people should do."
If this is accurate, Melania's visa would have been the type that had to be updated periodically, such as a tourist visa. However, this kind of visa doesn't allow for someone to work in the United States, according to New York immigration attorney David Gottfried.
The question is whether Melania was employed as a model before she was issued the H-1B visa, which allows people to work in the country for up to three years, with possible extensions up to six years. With this kind of visa, Melania wouldn't have had to return to Slovenia for updated stamps.
The man who discovered Melania, Paolo Zampolli, told CNN that he sponsored her H-1B visa through his modeling agency in 1996 -- a year after that racy photo shoot.
But it still may not have been illegal because, according to the photographer, Melania likely wasn't paid for the shoot. Photographer Jarl Ale de Basseville said he and the models did the free work to get exposure in the well-known French magazine.
"You were making this kind of magazine to have exposure, and this exposure was bringing you to the next level to have a catalogue," de Basseville told CNN. "No one was paying. No one was getting paid."
Melania isn't clearing up the timing on her arrival either. Instead, she wrote on Twitter:
"Let me set the record straight: I have at all times been in full compliance with the immigration laws of this country. Period. Any allegation to the contrary is simply untrue. In July 2006, I proudly became a US citizen. Over the past 20 years, I have been fortunate to live, work and raise a family in this great nation and I share my husband's love for our country."
Regardless, Michael Wildes, an immigration attorney who works with the Miss Universe pageant and the Trump Organization, said Melania's upstanding character enabled her to become a citizen in 2006, and any visa problems in the mid-1990s would not have prevented her from gaining citizenship.
Gawker Media founder Nick Denton on Monday confirmed that he filed for personal bankruptcy.
The news comes after a Florida judge ruled (and denied Denton’s request to stay said ruling) that former wrestler Terry Bollea, better known as Hulk Hogan, could begin collecting on a judgment against Denton and his company for invasion of privacy.
Denton is personally liable for $10 million of the judgment and jointly liable for an additional $115 million, estimates the Wall Street Journal.
In the wake of that filing, Denton sent the following memo to his staff, entitled “Before the dawn”:
You may have seen the news that I have, as expected, had to join the company in bankruptcy. Peter Thiel’s legal campaign has targeted individual writers like Sam Biddle, editors such as John Cook, and me as publisher. It is a personal vendetta. And yes, it’s a disturbing to live in a world in which a billionaire can bully journalists because he didn’t like the coverage.
Still, I’m in a positive frame of mind, because our influential brands will soon be free to thrive under new ownership, and our very existence as an independent entity has been a triumph. For once, the journalistic cliché is appropriate: We’ve spoken truth to power. Sometimes uncomfortable truths. Sometimes gossipy truths. But truths. There is a price to pay for that, and I am paying it now. But we never gave up our souls in the pursuit of an easy life.
What really lifts my spirits is the way in which we have stood together and just kept on writing, coding, and selling. Our stories reached 12 million more people around the world in July (104m) than they did in April (92m), before the bankruptcy. We were all over the political conventions and Pokémon Go, among other stories.
Eyal just sent round a note saying that last week brought in a million dollars in direct advertising bookings, positioning us well for a further rebound once the future direction of the business is clear. Amazon Prime Day was 63 percent up on last year, with $7m in sales for merchant partners, underlining the unique credibility that brands such as Gizmodo have with consumers.
Every department has kept focus and momentum. The pace of product development is sure and rapid. Our writers are the most productive and effective in digital media. The sales materials are more coherent and professional than they have ever been. Our sites dominate news in categories like technology, cars, and video games.
The brands and the business, which we have built together, are in amazingly robust shape. We’ll go into the final stage of the sale with confidence in our continued momentum, and the knowledge that we’ve all been witnesses to a media miracle.
This is a company founded by a journalist, built around a journalistic mission, beholden only to readers. We can be proud that we survived and prospered as an independent company for more than a decade, and have a second act ahead of us, under the shelter finally of a larger media company.
Gawker endures.
Nick
Gawker Media will be auctioned off next month. Ziff Davis currently leads a pack of at least 15 suitors with a bid of $90 million, according to various reports.
Denton added in a Tweet: “Gawker Media Group’s resilient brands and people will thrive under new ownership, when the sale closes in the next few weeks.” This article originally appeared on Fortune.com
Less than a month after the 47th anniversary of Neil Armstrong‘s first steps on the moon, a private spacefaring firm has overcome a major hurdle on its mission to make a different kind of lunar history. California-based Moon Express is set to announce Wednesday that it has become the first private space company to get U.S. government approval to fly a mission to the moon.
“To me, going to the moon is symbolic of what individuals and small groups of people are capable of doing,” says Naveen Jain, co-founder and chairman of Moon Express. “It’s an inspiration that allows people to think that the things that were only done by the superpowers, a small group of people can now do.” (A controversial figure in the technology world, Jain has settled several suits regarding his business practices and trading activity over the years.)
Moon Express is one of a handful of firms vying for the Google Lunar X Prize, a $20 million award to be granted to the first team to land a robot on the lunar surface, trek 500 meters, then send back the equivalent of very expensive Instagram photos. Along with Israeli rival SpaceIL, it’s seen as a favorite to win that competition, having knowledge-sharing agreements with and office space from NASA as well as a contract with a rocket-launching company.
Moon Express’ lunar lander is a far cry from NASA’s Apollo days. It’s roughly the size of a go-kart, with the overall appearance of a juiced-up interplanetary Roomba. The company’s plan is to hitch a ride to low Earth orbit aboard a small rocket designed to haul tiny satellites. It will then use its own engine for the 200,000-plus mile trip onwards to the moon. Once there, landing thrusters are meant to provide a smooth descent for the firm’s robotic explorer, which is designed to move around via rocket-hops. (Moon Express successfully tested its lander in late 2014.)
That trip, says Moon Express, should happen sometime in 2017. But delays are a part of life when it comes to the highly complex task of flinging stuff into outer space. One problem in particular looms large: The launch vehicle it’s planning to use, Rocket Lab’s Electron, has yet to fly. That’s a bit like a newly engaged couple picking a wedding venue that isn’t done being built. It could work out fine, but it’s inviting trouble.
“We’re looking at a first test flight in a few months’ time,” says Rocket Lab CEO Peter Beck. That timeframe offers little in terms of leeway, and Moon Express isn’t first in line when the Electron is ready to go. But it’s Beck’s job to make sure the Electron is safe before it starts flying cargo. “Obviously, we don’t want to impact anybody’s mission, and we’re working very hard to ensure that we get through the test flight phases as comfortably and as quickly as we can,” says Beck. Rival SpaceIL, meanwhile, is relying on SpaceX’s proven Falcon rockets. And the clock is ticking—Google’s award expires at the end of 2017, though it has been extended in the past.
Even if Moon Express misses the deadline, its vision extends well beyond winning Google’s money (it has, after all, already raised millions more than the grand prize amount from investors). Moon Express executives see a business in using its lander for tasks from satellite repair to clearing space junk. Jain also spoke of harvesting lunar resources like platinum and helium-3. “We go to the moon not because it is easy, but because it is profitable,” Jain says, echoing John F. Kennedy the way only a tech entrepreneur might. (He also made the case for moon rocks’ potential to become the new diamonds, though it’s unclear how his firm might override decades of extraordinarily effective marketing from the likes of De Beers and Zales.)
Experts say extracting valuable stuff from the moon isn’t as farfetched as it might sound. “Monetizing the moon’s resources should be pretty easy once we figure out where they are . . . and then figuring out the most efficient way to get them back,” says Dr. Justin Karl, assistant professor of commercial space operations at Embry-Riddle Aeronautical University. He adds that helium-3 could be useful for fueling fusion reactors, assuming such devices are ever actually built.
To be sure, getting permission to do something and actually doing that thing are wildly different. The company has a long way to go—roughly 238,900 miles—before it truly makes interplanetary history. But even if it fails, Moon Express has already opened the door for other companies to try and follow suit. Before Wednesday’s announcement, it wasn’t even clear which government agency could give a private company clearance to launch a moon mission—turns out, it’s the Federal Aviation Administration, with blessings from the State Department. If wading through layers of Washington bureaucracy to reach that answer becomes the company’s greatest contribution, it’s a notable accomplishment in its own right.
As athletes fight for a spot on the Olympic podium, another battle is also raging along the margins.
Companies worldwide will be competing for attention at Rio over the next few days. Already, brands such as Coca-Cola, Visa, and Samsung have been deploying ads, rolling out athlete sponsorships, and planting their logos across apparel and stadiums in Brazil.
Most companies use this association with the Olympics to make consumers more open to their brands. Other companies though, are using the Rio Olympics to launch exciting new products on the global stage.
So which stocks come out on top? It certainly helps that markets tend to be more uplifting during the period. On average, the Dow Industrial Average gains in value 69% during the two-week summer Olympic period, according to market analysis firm, Factset.
Here are some companies that have made it work in the past—and may do it again.
McDonald’s
As an official sponsor of the Olympics, McDonald’s has the rights to use the Olympics brand in marketing campaigns. The company has also done well through each of the past four summer games. In the duration of each of the past four summer Olympics, shares of McDonald’s have beat the MSCI Index—a collection of global stocks—by over 1.5%. McDonald’s also tends to beat the benchmark by nearly 6% one year after the games have finished.
Granted, shares of McDonald’s took a dunk earlier this year after the company reported a slowdown in same-stores sales. CEO Stephen Easterbrook also warned that the Olympics would not have a material effect on the company, though the games are likely to help McDonald’s reinforce its brand.
Nike
A big name in the sports apparel industry, Nike’s stock price did not do well during the past two summer Olympics. The stock slid about 2.77% during the game’s two weeks in 2012 and 2008—likely due to the disappointing earnings that preceded the events, according to a note from Wells Fargo Senior Analyst, Tom Nikic.
But there is at least reason to watch the stock through the Olympics. The sporting goods company tends to make the Olympics a “launching pad for innovation,” wrote Nikic. For example, the company launched the Flywire/Lunarlon technology in 2008, and the successful Flyknit style in 2012. Additionally, Nike’s stock has outperformed the S&P 500 during the summer games overtime between 1984 to 2004, according to data compiled by Factset’s Andrew Birstingl. Including the two most recent games, the the stock has risen an average of 6.4% during the Olympics’ two weeks. The S&P 500 has risen just 2.32% in comparison.
“Thus, while we believe the Games are a negative near-term catalyst, the success of the company’s new innovations later this year would play a key role in the company’s ability to grow the top line and fight off intense competitive pressure (from rapidly-growing peers such as Adidas and Under Armour),” he wrote.
During the year following the games, Nike’s stock rises an average of 15.27%, beating the S&P 500’s 9.3% increase during the same period, according to Birstingl.
Comcast
Another potential big winner, Comcast, the parent company to NBC, spent $4.38 billion in 2011 to win the rights to stream four Olympics up until 2020. The company has agreed to stream all events live and on air—equal to roughly 24 hours of programming for 250 days straight. That includes the trials.
About 217 million Americans watched the 2012 London Olympics on NBCUniversal networks. The company has also already surpassed $1 billion in ad sales for the Olympics segments—putting the company on track to secure the most national advertising sales ever for an Olympics game, Comcast said in March.
Comcast also has a solution for that deluge of entertainment: X1, a voice-controlled black box that will allow Comcast customers the ability to search for programming using keywords and watch on demand. For Comcast, X1 is a chance to keep its subscribers in the age of cord-cutting.
Shares of Comcast have risen an average of 3.7% during the two-week Olympics, beating the S&P 500’s 2.32% average in the last eight summer games. The stock also rises by an average of 30.3% in the year following the games while the S&P 500 gains 9.3%, according to Birstingl.
Comcast recently signed another deal for $7.65 billion, allowing it to exclusively broadcast and stream future Olympics games until 2032.
Visa
Credit card company Visa is another official sponsor that has used its status to market extensively to consumers.
The company is also the exclusive payment provider for the games this year, meaning Visa will be managing the entire payment system for the game’s stadiums, press centers, the Olympic village, and Olympic superstores.
In terms of marketing, Visa has given its 45 sponsored athletes, including four-time Olympic gold medalist Missy Franklin, Visa payment rings, in a bid to show the company’s tech savvy. The rings allow users to pay with just a tap, and do not require a battery or recharging. It is also water resistant up to a depth of 50 meters.
Visa did however cut its 2016 revenue forecast earlier this year, blaming lower U.S. payment volume of weak gas prices and weaknesses in commodity-based economies such as Brazil.
But who knows—maybe Visa’s overwhelming presence in Rio during the Olympics will help catalyze use of Visa cards in the country.
Under Armour
Although not an official sponsor, Under Armour has ramped up efforts to associate itself with the games on an international scale—after all, it has a relatively weak global presence. During the company’s last earnings call, the team emphasized that Under Armor had four times as many athletes representing them as they did during the London Olympics.
The company is making the uniforms for both the U.S. women’s and men’s gymnastics teams, and has also created a custom pair of shoes for Olympic gold-medalist Michael Phelps.
The company has also rented several outdoor gyms by the beaches in Rio, where it will setup daily workouts for fans during the games, according to Reuters. The sports apparel maker will also host penthouse parties for VIP guests, where they can network with Under Armour’s sponsored athletes.
But watch out. In Rio, it will be a head-to-head between Under Armour and Nike. This article originally appeared on Fortune.com
Don’t look now but Amazon is setting up an airline.
Not content with doing everything from selling groceries, to handling data warehousing to making award winning TV shows, Amazon is taking to the skies with Prime Air.
Don’t get too excited. Hyperactive chief executive Jeff Bezos, who has already been experimenting with drones, isn’t offering passenger flights. Yet.
Prime Air will consist of cargo planes. The first of a 40 strong fleet will make its debut at an air show in the company’s hometown of Seattle.
However, given Amazon’s propensity of entering and disrupting businesses, would you put it past Mr Bezos to launch an experiment with passenger planes in future? Airlines all too frequently offer a miserable service to their customers. Their's is an industry ripe for a bit of disruption from an enterprising new entrant.
For now, however, Prime Air’s job will be to assist with the already rapid deliveries offered to those who sign up to company's Prime service. The fleet will help the company to provide one and two day package delivery in the US.
Such an "insourcing" move, which will tighten Amazon's control over its delivery network, amounts to a reversal of traditional business practice.
More conventional companies typically like to outsource everything outside of their core functions. Why do it ourselves if we can get someone else to do it cheaper for us? What? Customers might suffer? But if we outsource we can blame someone else if anything thing goes wrong. There'll be a bit of tit for tat between us and our service provider before the customer gives up. Result!
It’s this sort of thinking that has made dealing with large businesses such a thoroughly miserable experience. When the customer wants to speak to someone they'll be lucky if they end up getting routed through to a calls centre on the other side of the world. If they ever get past the automated phone menu.
When they do reach a call centre, the chances are they’ll be referred back to the corporate website’s Frequently Asked Questions section. Which will be similarly unhelpful.
Small wonder that Government has been so keen to adopt outsourcing on grounds of “cost” and "efficiency". The cost being any last vestiges of goodwill on the part of the customer (or the taxpayer). The "efficiency" is the speed at which they give up after being driven to distraction.
It’d be nice if I were exaggerating, but I’m not. With the help of Google, you can read any number of horror stories told by people who have had the misfortune of having to deal with companies, or Government departments, that outsource.
Amazon is doing it the other way around. OK it's leasing the planes, a fairly common arrangement, but that’s about as anyone else will be involved with Prime Air. And Prime is a brand which it is keen to protect given its importance to Amazon’s business.
What Amazon is saying is that we can handle our deliveries more cost effectively and efficiently than anyone else can. We’ll also do a better job for customers than those companies that are so keen on outsourcing. I just hope Amazon can achieve this laudable aim without making its workers miserable (hey Jeff, happy workers can make for happy customers).
As for those companies competing with Amazon? They might find that there is a cost to their complacency if they fail to work out that there are efficiencies to be gained by taking control of their own business processes.
Facebook has been trying to copy Snapchat for so long it has become a kind of running gag in tech circles. The social networking giant started trying to duplicate the ephemeral-messaging app’s core features even before it offered $3 billion in a failed bid to buy the company in 2013. And the reason why says a lot about what makes the service so powerful.
The latest copy cat attempt came on Tuesday, when Facebook-owned Instagram introduced a new feature called Stories that lets users share a collection of photos and videos that disappears after 24 hours. The new offering is fundamentally identical to Snapchat’s Stories, right down to the name.
Depending on how you count, this is the fourth or fifth such move by Facebook. The first was an app called Poke, which offered messages that disappeared automatically. It was released in 2012 and shut down in 2014. In 2013, Instagram premiered Instagram Direct, a private-messaging feature, and in 2014 Facebook debuted an app called Slingshot, which it also later mothballed.
Each of these attempts has tried to imitate one or more of Snapchat’s core features: 1) It is private, and therefore there are no public likes or favorites or comments, and 2) Its messages are “ephemeral,” which means that they automatically disappear after a specified period of time.
In the early days, those attributes meant Snapchat was dismissed by many observers as a “sexting” app, designed to allow teens or twenty-somethings to send intimate photos. But it turned out to be far more powerful than just that, which in turn has helped the company raise multiple rounds of funding, to the point where its theoretical market value is now $19 billion.
In an interview with the Wall Street Journal, Instagram CEO Kevin Systrom put his finger on one of the things that has made Snapchat’s features so appealing to younger users. He admitted that his company’s new feature was essentially a copy of Snapchat, and said that this was because “we need to have a place where you feel free to post whatever you want without the nagging fear of, did someone like that or not?”
Although the Instagram CEO didn’t provide any figures on Instagram sharing, the Journal quoted from internal documents that said more than half of all teen users of the app delete their posts if they don’t get enough likes or favorites. In other words, the fact that updates are public creates a kind of performance anxiety for many users, something Facebook and Twitter users have also mentioned.
Snapchat you used far more per day; once you shared a single Instagram photo, that was it, you didn't want to overdo. Insta had to fix this.
Posts on Snapchat, by contrast, don’t have any public likes or favorites or comments, or follower counts. Justin Kan, who sold his streaming-video startup Twitch to Amazon for $1 billion in 2014, pointed out in a Medium post earlier this year that a lot of the social and psychological friction that other services have simply isn’t there with Snapchat. And as a result, engagement levels are much higher.
On Snapchat, the frictional cost is low: the content doesn’t have to be that good, because it is going to disappear anyways, and everyone else’s content isn’t that great either. There’s no public view count, follower count, likes count, or any other social dick-measuring contest.
The only problem for Snapchat is that messages that disappear automatically aren’t a great environment for advertising, or for creating content that is engaging across a broader cross-section of users—something that Instagram has proven to be very good at. That’s why Snapchat has created newer features such as Discover, which features media content; and Memories, where users can save posts and stories.
Many younger users don’t seem to have any interest in these other features, however. They simply want to continue sharing their private photo and video messages without any pressure to perform or to rack up likes and followers. Can Instagram convince them that its new Stories feature is good for that as well, or will it just seem like a shameless copy-cat with no ideas of its own?
In a sense, Snapchat wants to become a little more like Instagram so that it can appeal to advertisers, while Instagram wants to become a bit more like Snapchat so that it can lure younger users who don’t like the social pressure of a public feed. Which one reaches its goal first remains to be seen—and there are tens of billions of dollars in value resting on the outcome. This article originally appeared on Fortune.com
Nike announced on Wednesday that it will transition out of the golf equipment business, another sign that the sport is failing to draw new participants.
The company said in a statement that it will “accelerate innovation” in its golf footwear and apparel business. At the same time, it will move away from selling equipment for the pastime, including clubs, balls, and bags.
Nike golf gear rocketed in popularity in the late 1990s and the 2000s, thanks to the dominance of Tiger Woods, whom Nike sponsors, but the segment has also declined alongside Woods’ personal and professional struggles. It was Nike’s worst-performing division last year, with sales of $706 million.
“We’re committed to being the undisputed leader in golf footwear and apparel,” Trevor Edwards, president of Nike Brand, said in the statement. “We will achieve this by investing in performance innovation for athletes and delivering sustainable profitable growth for Nike Golf.”
A steep decline in participation rates among younger generations, namely millennials, has dogged golf and the retailers that sell its apparel and gear. The number of people playing golf in the United States, which accounts for about half the global golf market, has shrunk from nearly 30 million in 2000 to an estimated 23 million, according to Reuters.
Nike rival Adidas—which has been on a roll of late, having raised its 2016 guidance for a fourth time in July—reported a rare piece of good news for the golf industry on Thursday. It said revenues at its golf business rose 7% in the second quarter, buoyed by double-digit growth at the TaylorMade golf brand. That’s notable since Adidas announced in May that it, too, was getting out of the golf business to focus on sneakers. It’s looking for a buyer for the unit. This article originally appeared on Fortune.com
Like Apple under Steve Jobs and Amazon under Jeff Bezos, Tesla Motors has an image deeply entangled with that of its founder. Only with Tesla, which on Wednesday reported a $293 million loss for the second quarter of 2016, success still lies in an often-delayed future. And so Musk is even more crucial to what Tesla is, because that future must be filtered through his vision.
That makes the quarterly calls where Musk discusses Tesla’s earnings as important to investors as the earnings numbers themselves. And Wednesday’s call was no exception. Tesla closed the books on a wild quarter that featured a $2.6 billion bid to buy Solar City, a high-profile and fatal crash of a Tesla in autopilot mode, and production problems that Musk described this way: “Man, it was hell.”
But analysts were focused instead on what lies ahead. The clearest evidence of that came from the first question, which didn’t concern the $35,000 Model 3 due next year or even solar panels, but came rather from left field: Was Tesla going to merge with SpaceX, where Musk also serves as CEO? Musk, who earlier ruled out this idea on Twitter, politely said that the “little cooperation” between the companies didn’t justify a merger.
The question highlights an issue facing Tesla and Musk alike. People understand that Elon Musk has a bold vision, but they have a harder time understanding how he’ll achieve it. Musk has tried to spell things out, most explicitly in the Master Plan, Part Deux he posted two weeks ago. And yet the how-will-he-get-there conundrum not only persists, it stands at the heart of the debate raging between the bulls and bears.
That debate is no closer to being resolved. During Wednesday’s call, Tesla’s stock seesawed between a gain and a decline in after-hours trading, ending up essentially unchanged from the official closing price of $225.79 a share. That pattern echoes what’s been playing out in Tesla’s stock for some time. Since August 2014, shares in the automaker have risen as high as $280 and fallen as low as $150, and yet today sit unchanged from two years ago.
Investors have essentially chosen to give Musk a pass this quarter, even though Tesla’s loss of $1.06 a share was 54 cents worse than Wall Street had expected. Tesla offered some silver linings around that disappointment. Gross margins were improving and could be as high as 25% or 30% in the final weeks of 2016. Tesla is also producing 2,000 Model X and Model S vehicles a week and aims to steadily increase that figure to 2,400 by the fourth quarter.
But the company is also spending heavily to prepare for the production of the Model 3, a more affordable model that could deliver enough volume to make its car operations profitable. On the call, Musk said that unit volumes of its cars could triple or even quadruple from current levels by the end of next year as the Model 3 ships. Meanwhile, mini-SUVs and small buses built on the Model X platform will move toward production as well.
That sounds enticing for patient investors. But Tesla has a history of not meeting its ambitious targets. Asked about the July 1, 2017 production date for the Model 3, Musk said, “I don’t expect us to be at full production on July 1, but I have to drive all suppliers and internal efforts to that date, knowing that some will fall short.” In other words, July 1 is a soft target, an internal yardstick for suppliers to meet or else. Not so much a date when antsy consumers can expect to start receiving their orders.
Musk also held court on a variety of topics, such as autonomous driving (“What we have under development is going to blow people away. It blows my mind, and I see it all the time.”), the machinery that manufactures Teslas (“When it looks more like an alien dreadnought, that’s when you know you’ve won.”), energy-storage sales (“I think it’s really going to go ballistic.”), and the pesky media (“Tesla can’t sneeze without there being a national headline.”)
If the Tesla sneeze-watch is relentless, it’s because Tesla sits at the center of two emerging industries, clean energy and self-driving cars, often propelling both forward. Should the company fail to deliver on its promises or run out of money trying, it would hurt investment in both initiatives. It’s hardly new that Musk’s vision is taking more time and money than expected to achieve, but there’s some encouragement to be found in his refusal to compromise on that vision.
In a summer of big tech deals, this could be counted as the most unexpected. Uber is selling its China operations to its bitter – and more successful – rival, Didi Chuxing, which controls 80% of China’s ride-sharing market. The repercussions of the deal will be felt far beyond China, affecting everything from Uber’s prospects for an IPO to the fate of its competitors in other markets.
The transaction will involve merging Uber China, mostly owned by Uber but also owned by search giant Baidu and others, with Didi’s operations. It resolves a costly battle for users that led Uber to burn through $2 billion in the past two years. Uber gets an 18% financial stake in Didi plus a $1 billion investment from the company. Both companies will hold a seat on each other’s boards.
Didi Chuxing isn’t a household name among consumers outside China, but the company has quickly emerged as a formidable player in the country’s technology industry. Formed by a merger of China’s two largest ride-sharing apps and boasting investments from Alibaba and integration with WeChat’s messaging app, Didi proved to be a juggernaut that blunted Uber’s ability to gain market share.
The news has left the tech world discussing what it all means. Here are some key outcomes from the Didi-Uber deal, which could be unfolding for the next several months.
Uber waves a white flag
Uber isn’t a company accustomed to defeat, yet this deal marks a clear capitulation in one of its most important markets. “As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart,” CEO Travis Kalanick wrote in a blog post about the deal. That is, Kalanick didn’t want this, but he realized he had little choice. Perhaps because of board pressure. Bloomberg, which broke the news of the Didi-Uber deal, said last week that investors were pushing for a truce between the two companies.
Uber’s defeat is its investors’ gain
Uber is departing China with a dazzling door prize: a sizable stake in a de-facto monopoly of China’s ride-sharing market. Uber’s China expedition echoes Yahoo’s experience there. After years of struggling for a foothold in China, Yahoo bought a stake in Alibaba for $1.7 billion in cash and assets, an investment which shored up Yahoo’s profits for years. Uber has swapped the losing end of a costly battle for future profits of a promising tech giant.
Uber could finally go public
With nearly $6 billion in capital raised in the past year alone, Uber may not need an IPO, a fate Kalanick has worked to avoid. But if private investors are beginning to assert their will, Uber could be going public soon enough. Uber’s losses in developing markets like China have been a key reason the company wasn’t ready for public scrutiny. Selling Uber China eliminates part of those losses and frees up resources to invest elsewhere. Uber could be the huge offering Wall Street has craved to reignite the tech-IPO market.
Tech’s China syndrome
Uber is only the latest U.S. tech giant to either stumble while pushing into China’s market or to decide early on to forego such an effort. Yahoo’s Alibaba investment marked the end of its active presence there. eBay was elbowed aside by Alibaba-owned TaoBao. Facebook and Google have little presence there because of the government’s censorship policies. Chip companies like Intel and enterprise businesses like that of Microsoft’s have fared slightly better, but the consumer Internet in China remains a domestic industry.
Bad news for Lyft
Last September, Didi invested $100 million in Lyft as part of a so-called anti-Uber alliance, a move that boosted Lyft’s prospects. Didi also forged partnerships with Uber rivals in others areas, such as Ola in India and Grab in Southeast Asia. It’s not clear where those partnerships stand right now, but if Kalanick sits on Didi’s board, there will either be some severing of those older ties or some interesting conflicts among Didi’s various partners.
It gets (even more) complicated
With Didi investing $1 billion in Uber, Apple, which in May invested $1 billion in Didi, becomes an indirect investor in Uber. Google also invested in Uber in 2013, even though Uber is now spurning Google Maps for its own technology. All three companies are racing to develop self-driving cars. Even odder, with its investment in Didi, Uber now owns part of a company with a $100 million investment in Lyft.
What next?
All of this sets the stage for some interesting potential outcomes. Will Uber’s capitulation inspire venture capitalists to take hard stands on other unicorns? Could an Uber IPO break the logjam of unicorn IPOs? Will this deal increase the pace of tech mergers? And how are all these increasingly tangled tech giants going to compete with each other when they invest in each other? The ripples from this deal will be playing out for some time.
Donald Trump spent much of his campaign breaking political norms. Depending on whom you ask, it's either one of his most endearing qualities or the greatest threat his candidacy poses.
Now, however, he's calling into question one of the foundations of US democracy - the legitimacy of its electoral process.
In the fever swamps on the left and the right, plenty of Americans have doubted the integrity of US elections.
They've levelled accusations of voter fraud. Or hacked voting machines. Or polling-place intimidation.
Some of the allegations even contain kernels of truth.
Many US voting electronic machines are woefully unsecure and produce no hard-copy backup. There have been instances of voter impersonation - although they're extremely isolated and usually involve absentee balloting. New Black Panther activity around Pennsylvania polling sites in 2008 inflamed conservatives, although a US Justice Department investigation found no illegal activity.
You don't have to dig too deep into social media or the partisan commentariat to find a thorough rehashing of any of these particular concerns. What you don't hear - at least not until now - is such accusations coming from the top of a presidential ticket.
At a rally on Monday Mr Trump said he was afraid that the November election "is going to be rigged" - backing up his statement by saying it was something he was hearing "more and more".
In a television interview, he repeated the warning.
"November 8th, we'd better be careful, because that election is going to be rigged," he said. "And I hope the Republicans are watching closely, or it's going to be taken away from us."
The "rigging" accusation isn't particularly new for Mr Trump, although he'd previously only levelled it toward the sometimes Byzantine candidate nomination process. It's much easier to question party systems that rely on state-by-state primaries and often poorly managed caucuses, as well as frequently altered delegate allocation procedures.
Mr Trump has said Hillary Clinton benefitted from a rigged Democratic Party apparatus to defeat Vermont Senator Bernie Sanders. (Mrs Clinton received roughly 3.7 million more votes than Mr Sanders, but recently released hacked emails indicate that the Democratic National Committee was manoeuvring to support the former secretary of state behind the scenes during the final months of the primary season).
Mr Trump also accused Republican Party officials of attempting to deny him the nomination, after presidential rival Ted Cruz took advantage of delegate rules to position himself to upset Mr Trump - who had a significant advantage in the popular vote - in a contested convention.
Calling the US presidential nomination system "rigged" can be overheated rhetoric, but that playing field is often tilted toward the establishment. US politics isn't too far from removed a time when nominees were picked by party bosses, while rank-and-file voters had little or no say in the process.
General elections are different. Their rules are set forth in state and federal law, overseen by courts and governed by provisions enshrined in the US Constitution.
"National elections have a clear cut set of rules," writes Josh Marshall of Talking Points Memo. "The only way to rig them is to change the vote numbers."
For Mr Trump to call the fairness of US elections into question - months before Americans head to the polls, no less - is a significant break with the tradition of presidential candidates paying respect to the electoral process, win or lose.
Image copyrightGETTY IMAGES
Donald Trump spent much of his campaign breaking political norms. Depending on whom you ask, it's either one of his most endearing qualities or the greatest threat his candidacy poses.
Now, however, he's calling into question one of the foundations of US democracy - the legitimacy of its electoral process.
In the fever swamps on the left and the right, plenty of Americans have doubted the integrity of US elections.
They've levelled accusations of voter fraud. Or hacked voting machines. Or polling-place intimidation.
Some of the allegations even contain kernels of truth.
Many US voting electronic machines are woefully unsecure and produce no hard-copy backup. There have been instances of voter impersonation - although they're extremely isolated and usually involve absentee balloting. New Black Panther activity around Pennsylvania polling sites in 2008 inflamed conservatives, although a US Justice Department investigation found no illegal activity.
You don't have to dig too deep into social media or the partisan commentariat to find a thorough rehashing of any of these particular concerns. What you don't hear - at least not until now - is such accusations coming from the top of a presidential ticket.
At a rally on Monday Mr Trump said he was afraid that the November election "is going to be rigged" - backing up his statement by saying it was something he was hearing "more and more".
In a television interview, he repeated the warning.
"November 8th, we'd better be careful, because that election is going to be rigged," he said. "And I hope the Republicans are watching closely, or it's going to be taken away from us."
The "rigging" accusation isn't particularly new for Mr Trump, although he'd previously only levelled it toward the sometimes Byzantine candidate nomination process. It's much easier to question party systems that rely on state-by-state primaries and often poorly managed caucuses, as well as frequently altered delegate allocation procedures.
Image copyrightGETTY IMAGESImage captionAl Gore calls for his supporters to respect the results of the 2000 presidential election
Mr Trump has said Hillary Clinton benefitted from a rigged Democratic Party apparatus to defeat Vermont Senator Bernie Sanders. (Mrs Clinton received roughly 3.7 million more votes than Mr Sanders, but recently released hacked emails indicate that the Democratic National Committee was manoeuvring to support the former secretary of state behind the scenes during the final months of the primary season).
Mr Trump also accused Republican Party officials of attempting to deny him the nomination, after presidential rival Ted Cruz took advantage of delegate rules to position himself to upset Mr Trump - who had a significant advantage in the popular vote - in a contested convention.
Calling the US presidential nomination system "rigged" can be overheated rhetoric, but that playing field is often tilted toward the establishment. US politics isn't too far from removed a time when nominees were picked by party bosses, while rank-and-file voters had little or no say in the process.
General elections are different. Their rules are set forth in state and federal law, overseen by courts and governed by provisions enshrined in the US Constitution.
"National elections have a clear cut set of rules," writes Josh Marshall of Talking Points Memo. "The only way to rig them is to change the vote numbers."
For Mr Trump to call the fairness of US elections into question - months before Americans head to the polls, no less - is a significant break with the tradition of presidential candidates paying respect to the electoral process, win or lose.
Image copyrightGETTY IMAGESImage captionDonald Trump supporters could view the defeat of their candidate in November as evidence of a "rigged" system
In 2000, after a contentious presidential contest that careened past election day and into an extended recount of the Florida vote and multiple rounds of lawsuits only settled by the US Supreme Court, Democrat Al Gore conceded defeat and called for unity.
"This is America," he said. "Just as we fight hard when the stakes are high, we close ranks and come together when the contest is done."
Eight years later, Republican nominee John McCain did his part to tamp down unrest within his own party following Barack Obama's election. When the audience booed his every mention of his opponent during his concession speech, he rebuked them.
"Please, please," he said to quiet the crowd.
"I urge all Americans who supported me to join me in not just congratulating him," he continued, "but offering our next president our good will and earnest effort to find ways to come together to find the necessary compromises to bridge our differences and help restore our prosperity, defend our security in a dangerous world, and leave our children and grandchildren a stronger, better country than we inherited."
Mr Trump's "rigged" language may simply be a rhetorical flourish from a candidate prone to extemporaneous musings - but it's already making the rounds among his supporters
In a podcast last week, long-time Trump advisor Roger Stone said that if the election results in November don't match opinion polls, the Republican nominee should challenge the validity of the election and warned that the unrest could end in a "bloodbath".
"If there's voter fraud, this election will be illegitimate," he said. "The election of the winner will be illegitimate, we will have a constitutional crisis, widespread civil disobedience, and the government will no longer be the government."
Such upheaval may be painfully familiar to those living in the world's less established democracies. It would be uncharted territory for the United States.
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