Monat: August 2020

SoftBank will own just over half of Monet, the new business, while Toyota will hold the rest.

It’s the latest in a series of driverless development partnerships announced by tech companies and carmakers. SoftBank’s $100 billion Vision Fund, its tech-focused investment arm, had already committed $2.3 billion to General Motors‘ self-driving car unit GM Cruise.

On Wednesday, Honda (HMC) and General Motors (GM) said they were teaming up to create a new generation of fully autonomous vehicles. BMW (BMWYY) has joined the board of Apollo, an autonomous driving project from Chinese internet firm Baidu (BIDU).

2. Facebook under investigation: The Irish Data Protection Commission has launched a formal probe into a Facebook (FB) hack that affected as many as 50 million accounts.

The commission will investigate whether the company complied with its obligations under new European data protection laws that came into effect in May. Facebook said last week that it closed the loophole, but 90 million users were forcefully logged out of their accounts as a precaution.

Irish regulators are investigating because Facebook’s international headquarters is in Dublin.

There are still many unanswered questions about the hack: Who carried it out? And what were they trying to access?

3. Bonds sell-off: The yield on 10-year US Treasuries has spiked to the highest level in seven years following the release of positive economic data.

US hiring data published Wednesday was stronger than expected, and momentum could continue Thursday if initial claims numbers add to the optimism. A strong US economy and the expectation of rate hikes by the Federal Reserve are fueling the trend.

„The underlying message is that the US economy isn’t just in fine fettle, it’s on fire,“ said Kit Juckes, strategist at Societe Generale.

4. CNN means business: On Thursday, CNNMoney becomes the all-new CNN Business, covering the companies, personalities, and innovations driving business forward.

This new initiative will focus on the single biggest financial story of our generation: how technology is upending every corner of the global economy, forcing businesses, workers, and society itself to adapt rapidly, or be left behind.

5. Global market overview: US stock futures were lower.

European markets dropped in early trade following a negative trading session in Asia. The Shanghai Composite was closed for a holiday.

The Dow Jones industrial average closed 0.2% higher on Wednesday, while the S&P 500 added 0.1% and the Nasdaq gained 0.3%.

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6. Earnings and economics: Constellation Brands (STZ) will release earnings before the open. Costco (COST) is set to follow after the close.

Shares in Danske Bank (DNKEY) opened 3% lower after the Danish lender said it had received requests for information from the US Department of Justice in connection to its money laundering scandal.

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7. Coming this week:
Thursday — Costco (COST) earnings; CNN Business launches
Friday — US jobs report

CNNMoney (London) First published October 4, 2018: 5:07 AM ET

The high-profile Japanese companies are forming a joint venture called Monet to develop businesses that will use driverless-car technology to offer new services, such as mobile convenience stores and delivery vehicles in which food is prepared en route.

SoftBank (SFTBF) will own just over half of Monet, while Toyota (TM) will hold the rest.

The new company’s name isn’t a reference to Claude Monet, the famous French painter, but rather a shortened version of the words „mobility network.“

Toyota President Akio Toyoda and SoftBank CEO Masayoshi Son attended the announcement of the project Thursday in Tokyo, a rare joint appearance by the heads of two of Japan’s biggest global companies.

Toyota first approached SoftBank with the idea of creating a Japanese alliance to try to catch up with global rivals that are developing autonomous driving tech.

Around the world, top carmakers and tech companies like Google’s parent, Alphabet (GOOGL), and China’s Baidu (BIDU) are pouring resources into self-driving vehicles.

Driverless vehicles have the potential to cause huge disruption in the auto industry and are also likely to transform the ride-hailing business.

Son, SoftBank’s billionaire founder, presides over a sprawling empire of artificial intelligence companies, internet businesses and ride-hailing startups, which can collect huge amounts of data on traffic patterns, passengers‘ requests and other transportation trends.

The new venture taps into SoftBank’s advantages in tech and data, and Toyota’s vehicle-manufacturing expertise. Its aims include developing ways to tackle problems created by Japan’s rapidly aging society and shrinking workforce.

Over the next decade, Monet plans to roll out services like self-driving buses that can drive the elderly to grocery stores, hospital shuttles where medical exams can be done on board, and mobile offices. It will focus initially on Japan with a view to expanding globally.

SoftBank has already put money into autonomous driving. Its $100 billion tech-focused Vision Fund committed $2.3 billion to General Motors‘ self-driving car unit GM Cruise earlier this year.

On Wednesday, another top Japanese company, Honda (HMC), said it would also invest $2.8 billion in GM Cruise.

Toyota has started pumping resources into driverless cars.

It set up a new company in March dedicated to the research and development of self-driving vehicles, with plans to invest $2.8 billion to develop a commercially viable autonomous car.

Both SoftBank and Toyota have invested in or partnered with some of the world’s biggest ride-hailing startups including Uber, China’s Didi Chuxing and Singapore-based Grab.

The new SoftBank-Toyota venture shows how relations between automakers and tech companies have shifted.

Twenty years ago, Son approached Toyota with the idea of connecting the company’s Japanese dealerships on the internet. But Toyoda turned him down.

Back then, Son said, SoftBank was a small company reaching out to the „giant rock“ of Toyota. Today, it’s the carmaker that’s asking him for help.

— CNN’s Yoko Wakatsuki contributed to this report.

CNNMoney (Hong Kong) First published October 4, 2018: 1:32 AM ET

The favorite carmaker of fictional British secret service agent James Bond priced its shares at £19.00 ($24.70), giving it a valuation of £4.3 billion ($5.6 billion).

The final listing price is 16% below the top of the range that Aston Martin had targeted, reflecting investor doubts about whether the carmaker should be valued in the same league as Italian rival Ferrari.

Shares dipped nearly 5% in London trading.

In going public, the British company is asking investors to overcome fears about US threats to tax foreign autos and the potential for Britain’s planned exit from the European Union to disrupt supply chains and markets.

Aston Martin, which has a history of bankruptcy filings, is now producing healthy profits.

It sold more than 5,000 cars in 2017, its best performance in nine years. That generated record revenue of £876 million ($1.1 billion), an increase of nearly 50% over the previous year.

Earnings for the first half of this year show that momentum has continued. Revenue was up 8% over the same period a year earlier, while profit increased 14%, according to the numbers that were published last month.

Aston Martin has in recent years sought to capitalize on its high-end brand. But analysts at Bernstein see several potential problems.

They argue the Aston Martin brand is not as strong as that of Ferrari (RACE), which is bolstered by decades of racing history and a slew of Formula 1 championships. The British automaker also has much tighter margins than its Italian rival and a worrying history of uneven sales.

With money raised from the IPO earmarked for existing shareholders rather than investment in the company, Aston Martin executives could be pinning too much hope on the success of a planned SUV.

„Given its current financials and apparently rather less robust demand, it’s a big stretch for us to see how it can possibly match Ferrari’s profitability,“ analysts at Bernstein wrote recently. „We can’t see it getting anywhere close.“

Aston Martin’s owners include Mercedes-Benz parent Daimler (DDAIF), private equity firm Investindustrial and investors based in Kuwait.

CNNMoney (London) First published October 3, 2018: 4:38 AM ET

The lawsuit, filed on Wednesday by major trade groups representing broadband companies, is the second major lawsuit filed against the state over the law — the first was brought by the Justice Department.

On Sunday evening, California Governor Jerry Brown signed what is considered to be the strictest net neutrality law in the country. Under the law, internet service providers will not be allowed to block or slow specific types of content or applications, or charge apps or companies fees for faster access to customers.

Hours later, the federal government filed a lawsuit in which it alleged that California was „attempting to subvert the Federal Government’s deregulatory approach“ to the internet. The DOJ argues states can’t pass their own laws governing internet companies, because broadband services cross state lines. It is fighting the state over a clause in the 2017 order repealing Obama-era federal net neutrality protections. In that order, the FCC said it could pre-empt state-level net neutrality laws.

The impending legal battle could drag on for many months if not longer, Daniel Lyons, an associate professor at Boston College Law School who specializes in telecommunications and Internet regulation, told CNN.

A lot is riding on the outcome. The California law is considered the most thorough state-level net neutrality legislation yet passed, and other states are expected to use it as a blueprint for their own laws.

If California wins in court, it would open the door for those other states to take similar actions. However, the FCC could try to come back with an order to block their efforts again, Lyons said.

California will likely claim that the pre-emption provision is invalid, Lyons said, while the federal government will attempt to get an injunction to stop the law from taking effect. in doing so, it will claim that the law will cause harm if allowed to take effect.

„These attempts at getting a preliminary injunction seem weak and are likely to fail for the same reasons that the Internet Service Provider [ISP] industry was unable to obtain a stay of the FCC’s former net neutrality rules in 2015,“ said telecommunications attorney Pantelis Michalopoulos, a partner at Steptoe & Johnson LLP who has argued net neutrality cases. „The Internet Service Providers offer speculative theories about why they will suffer irreparable injury. These theories do not appear to satisfy the test for a preliminary injunction.“

The industry groups taking part in the new lawsuit represent major companies including AT&T, Comcast and Verizon, as well as other cable companies and wireless providers across the US. The groups had previously lobbied against the state law. (CNN is owned by AT&T.)

„We oppose California’s action to regulate internet access because it threatens to negatively affect services for millions of consumers and harm new investment and economic growth. Republican and Democratic administrations, time and again, have embraced the notion that actions like this are preempted by federal law,“ the trade groups USTelecom, CTIA — The Wireless Association, The Internet & Television Association, and the American Cable Association said in a statement. „We will continue our work to ensure Congress adopts bipartisan legislation to create a permanent framework for protecting the open internet that consumers expect and deserve.“

In a statement Wednesday afternoon, Attorney General Xavier Becerra indicated the state would fight to protect its new law.

„This suit was brought by power brokers who have an obvious financial interest in maintaining their stronghold on the public’s access to online content. California, the country’s economic engine, has the right to exercise its sovereign powers under the Constitution and we will do everything we can to protect the right of our 40 million consumers to access information by defending a free and open Internet,“ Becerra said in a statement.

State Senator Scott Wiener, a co-author of the bill, previously told CNN he expected the ISPs to sue over the law.

„The internet service providers have every right to sue California, just like California has every right—indeed an obligation—to protect our residents‘ access to an open internet,“ Wiener said after the trade groups filed their suit.

CNNMoney (San Francisco) First published October 3, 2018: 5:46 PM ET