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Regulators Aiming to Break of Big Tech Are Receiving “Help” from COVID-19

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So far, little regulation has been imposed on the tech industry at the federal level, but that could very soon change as regulators have been trying hard to cripple the Big Tech companies. Early Facebook executive and Social Capital Founder Chamath Palihapitiya said Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) could be “broken up within the decade” if these efforts are successful. Now, the COVID-19 epidemics will only make a stronger case for less globalization and more restrictive borders and trade agreements as these companies have already limited travel of their employees and advised them to work from home, with Twitter (NYSE:TWTR) even making it mandatory. Cities and even countries are on lockdown and technology remains as the only way to connect. But there are several ways that these companies can be broken up as the congress lawmakers are thinking of new ways to protect consumer’s privacy and limit the influence of these companies that greatly shape our everyday lives.

Breaking up the companies into smaller and separate  firms

Palihapitiya predicts that all these companies such as Gmail and Google Cloud or Facebook and its Whatsapp and Instagram could all be separated and prohibited from sharing data with one another. According to him, this would stimulate competition and stop “talent hoarding”. This way, talented tech workers that are drained by Big Tech will be more likely to build their own businesses and therefore  stimulate an entirely new wave of entrepreneurship that has great odds of success or they would pursue jobs in the public interest, benefiting the economy both on a macro and micro scale. This move would also “allow” the ‘demand’ side of the internet economy to more effectively compete with the ‘supply’ side.”

Imposing taxes

It is almost certain that governments will impose greater taxes on Big Tech from revenues and profits generated “inside of their borders from their citizens.” This could be similar to the digital tax that Europe wants to impose on US tech giants.  A growing sense of nationalism around the world only increases the likelihood this will happen and the COVID-19 pandemic will further make the need to create more resilient national economies who can handle such Black Swan events as many companies are struggling with paid sick-leaves.

Halting mergers and acquisitions as well as deceptive practices

Governments could also prevent M&A and the so-called Silicon Valley ‘acqui-hiring’. This refers to the common practice when Big Tech acquires a company to use (hire) its talent rather than employ its technology as they have plenty of that already. Essentially, by making the incremental engineer more costly for Big Tech while making that same engineer less expensive for startups, there is another opportunity for the above-mentioned gold mine of new entrepreneurship.

The end of the Modern Gilded Age 2.0?

Many believe that breaking up Big Tech will reduce wealth inequality and stimulate competition as it will make it fair, giving a chance to entrepreneurship and small business. And dissolving these companies (trust-busting) could be the most realistic way of making capitalism work for everyone versus the few, yet history has always been made by the rare-few and don’t they deserve the credit? But all that aside, the coronavirus is set out to weaken the global economy as its peak is yet to be expected in April but financial consequences to the global supply chain and corporation are already immense causing stocks to plunge. Moreover, U.S. stock prices on Thursday suffered their worst beating since the 1987 crash so things are not looking good as we are reminded that despite all our achievements, nature has the last word.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

BenzingaEditorial

Detroit’s Big 3 Report Sales Declines but Outperform the Market

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US auto producers announced sales figures for the US market for Q1 2020. As expected, sales numbers fell due to the COVID-19 outbreak. A strong year start was fully offset by terrible last month’s results. According to industry research firm Wards Intelligence’s data, approximately 1 million light vehicles were sold in March in the US alone. On the other side, St. Louis FRED’s data reveals that approximately 1,6 million light vehicles were sold in March 2019. In other words, sales data for March shows a serious decline of approximately 37% on a month-on-month basis. Numbers are better than in Europe but don’t forget that the crisis has hit the US two weeks later.

Results are bad

Passenger car registration plunged in March in France and Spain approximately 70%. Maybe this is a good approximation of what we can expect in April.

If we extend our analysis on first-quarter results, we can see that overall US car sales dipped approximately 13%, down from 4 million to 3.5 million vehicles. Sales results in the first two months i.e. in January and February combined were approximately 5% better than during the same time frame previous year, but March hammered the results and pushed growth rates onto a negative territory.

Ford Motor Co

Ford (NYSE: F) presented a 12.5% sales drop in Q1 2020. It sold 516,330 vehicles. Passenger cars were hit the most. They plunged 36% compared to the same time a year ago. It can be partly explained by Ford’s plan to abandon the production of sedans and focus more on sport utility vehicles and trucks. They also fell but less than average. SUV sales dropped 11%, while truck sales plummeted 5%. But what is most concerning is that Ford’s best-selling vehicle F-150 pickup truck dipped 13%. It was partly compensated by the fact that Lincoln brand sales were up 2%. Ford’s decline is even worse than that of GM and Fiat Chrysler.

General Motors 

General Motors (NYSE: GM) also reported negative numbers. Sales fell 7% this year. But having in mind what happened in March, this is an excellent result. Less severe drops were the result of sales promotions like no-interest loans that helped automakers to sell more vehicles than others and reduce inventory level for approximately 18%.

Fiat Chrysler

Fiat Chrysler (NYSE: FCAU) sales fell approximately 10% down to 498,425 vehicles. The numbers are mixed. Dodge brand sales were down about 20%, Jeep sales plunged 14%, while Ram sales were up 3%. On an even brighter note, sales of Ram pickup trucks increased 7% to almost 129,000 vehicles.

A piece of good news

Yes, the results are very bad, but there is one piece of good news for Detroit’s Big 3. They outperformed the market, and that even goes for Ford Motor. All three also reported sales drops, but those falls are in line or below average. Last year, they sold approximately 1.75 million in the first quarter and this year that number amounted to 1.58 million, and that is a drop of approximately 10%. Yes, results are poor considering that March is usually the best sales month of the first quarter but at least they are better than average. And considering what the world has to deal with right now – it could have been worse.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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The Upcoming Tesla Report- Can It Restore Its Former Glory Anytime Soon?

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The investors are impatiently waiting for the first-quarter results from Tesla, Inc. (NASDAQ:TSLA) to see just how much trouble this electric vehicle maker had to absorb during the COVID-19 pandemic. Traditionally, Tesla announces the results in the first week after the quarter ends. So, at least, we will have the delivery numbers, which should give us a good idea of the full picture. This picture should not be only applicable to Tesla as similar will apply for Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM). All of these companies are also being asked by the U.S. Government to mobilize and use their expertise to produce medical ventilators in their big production plants. A step like that will definitely add its own spectre of colors to the overall picture.

The plan was 500,000 vehicles, but…

Tesla’s plan for 2020 was to further increase the number of delivered units to more than 500,000 vehicles. This target now seems very questionable, since the company had to face many supply-chain disruptions, factory shutdowns and lower demand in general. The goal of 500,000 delivered vehicles in 2020 has driven the investors quite high from the beginning of the year. Tesla’s stock started the year at a price of $418.33 and reached an incredible $917.42 on February 19th. That is when the coronavirus made its stronger appearance, and markets started to decline, so Tesla’s stock started losing its value. And it went down to $361.22, only to recover to around $500, which is still a nice growth after the price roller coaster. The fact that Tesla won’t be able to meet the analysts’ expectations for the first quarter also might mean that the second quarter will have a faulty start, pushing the 2020 target of 500,000 units only further out of reach.

Expected problems from lower delivery

Instead of the much wanted 500,000 vehicles in 2020, the analysts are now expecting Tesla to deliver around 414,000 units, which is a drop of 22%. So, sales are also expected to drop by 22%, which is around $26.2 billion in 2020 revenues. On the other hand, the analysts are not expecting Tesla to face any liquidity issues, and the company’s long-term prospects should be safe. In short terms, this pandemic has hit all the automakers, and Tesla is no exception. Chinese Gigafactory was the first to be temporarily shut down during the outbreak. The next one to shut down was Tesla’s main factory in Fremont, California. The factory only kept the most essential operations. And this shutdown is expected to last until May, at least. That will only cause new supply issues.

Outlook

While talking about the demand, even if supply could stay intact, demand is seriously affected since many potential buyers will be in self-quarantine, trying to avoid physical contact as much as possible, worrying about the main essentials like health and food, and surely not thinking about getting a new Tesla Model 3 in the near future. And despite the April Fools joke regarding the redesign of the eagerly awaited Cybertruck, it is not optimistic to hear that the most popular pickup truck there is, also being Ford’s best-selling vehicle, F-150 pickup truck sales dipped 13%. Once the situation with the outbreak is under control, that is when we can try to estimate when will the demand for Tesla’s vehicles return – and will it be able to restore its former glory considering the expected drop in consumer buying power.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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Roland Garros Is Giving Us Hope – Shall We Dare to Dream?

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Considering that The Olympics Games in Tokyo got postponed for a whole year, it was to be expected that nothing less than a ‘world’s end’ will fall upon the global event industry which was forecasted reach $2,330 billion in value by 2026. But that was before COVID-19 struck. However, just like the UK, France has always had a mind of its own and French Open, Roland Garros is no exception. Unlike the prudent Wimbledon which is officially cancelled for 2020, Roland Garros is postponed but to be held this year, on September 20th .

Desperate move

This made some tennis players angry as not only does the new timeframe clash with other events but it makes the physical demand quite challenging. Even the king of red clay, Rafael Nadal, who probably stands to gain the most from this announcement considering he needs to defend 4,000 ranking points from last year’s US Open and Roland Garros titles, will have to do both in only five weeks. This also means that players will be forced to transition from one surface to another in only a week. This surely is cruel to them but unlike Wimbledon which seems shielded to bear the cancellation losses, French Open bosses admitted their tournament could face losses of $284 million if the tournament was not played this year. And unlike Wimbledon which  simply cannot be played after late-summer, September in Paris is even warmer than in May- just ask anyone who survived the August sauna in Paris. And viewers as well as sponsors are surely having their fingers crossed that our battle with COVID-19 will be won by then!

Sponsors

BNP Paribas (OTC:BNPQY), one of the world’s largest banking groups with operations in over 70 countries, is the latest among the big guys to announce the suspension of its dividend as it already started jumping in with many industries needing to be rescued.

On the other hand, Mastercard Incorporated (NYSE:MA) is expecting short-term headwinds that will be followed by long-term tailwinds. The company is confident in amortizing the COVID-19 blows due to the trend of consumers shifting away from cash to cashless payments. So despite a negative hit to its top and bottom lines due to the global shutdowns as consumers will not only spend less but also have less money to spend, Mastercard is expected to  grow as we head into economic recovery. And while almost half of the world’s population is isolated, they will still be paying for their Netflix (NASDAQ:NFLX), Disney Plus (NYSE:DIS), Apple TV+ and its services (NASDAQ:AAPL), along with groceries, take-outs and all kinds of ‘stay home’ products. And all of these will be paid via credit cards. So, on a brighter note, if anything, COVID-19 will only speed-up the use of cashless payments in the long term.

On the other hand, retailers such as Lacoste have their hands tied but they are doing what they can to help the community. Besides maintaining 100 percent of the salaries of its employees worldwide during March and April this year, it has reopened one factory to produce face masks. High-end retailers are surely better off to withstand the economic standstill in comparison to its lower-end counterparts.

And there’s Peugeot SA (OTC:PUGOY) which announced on April 2 it is postponing its annual shareholder meeting. Analysts believe that it might rethink the conditions of its merger with Fiat Chrysler Automobiles (OTC:FCAU) due to the recession that is upon the economy as this was after all a very expensive deal for Peugeot and the future is promised to one.

Even the elite such as Rolex has shut down its plants, and along with Omega owned by Swatch Group AG (OTC:SWAGY) and Cartier owned by Swiss Richemont Group (OTC:CFRUY), it’s rolling with the punches. But at least business is somewhat returning to normal in Asia, the most prospective market. But the reality is that Swatch and Richemont have both lost about a third of their value this year. Hope is never lost.  Swatch’s Tissot brand unveiled its first smartwatch during the webcast in March and although this was four years later than planned thanks to intense competition from Apple Inc. (NASDAQ:AAPL) which has demolished the demand for timepieces. Although now its plans to start selling it in Switzerland  by July are now uncertain due to Europe being the epicentre of the outbreak, it still means they are not ready to give up as they joined forces with Huawei Technologies’ with the watch being compatible with its Harmony operating system.

Outlook – we’re all desperate to return to normal

Even art fans are shocked to hear that Carnegie Hall won’t open until October- this is yet another headline we didn’t think we’d see. And there will be many more headlines we never thought we’d see. And maybe there even won’t be any Roland Garros in 2020 in the end, no one can be certain about anything these days. But at least the stubborn France has given us hope that the world will be back to normal again by fall. And if tennis Gods make that happen, sponsors and viewers will thank them! Maybe even players considering how devastated Roger Federer and Serena Williams were by the cancellation of Wimbledon.  So just ignore what the songs about Paris say- it is perhaps even more beautiful in the fall, as long as it’s coronavirus-free.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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