AP Business Summary for the week of Nov. 6 – Winston-Salem Journal

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Elon Musk used his Twitter megaphone to appeal to “independent-minded voters” on Monday, urging them to vote Republican in Tuesday’s U.S. midterm elections and stepping into the country’s political debate that tech company executives have largely tried to stay out of — so their platforms wouldn’t be seen as favoring one side over the other.
Musk, who bought Twitter for $44 billion, has expressed political views in the past, on and off the platform. But a direct endorsement of one party over another now that he owns it raises questions about Twitter’s ability to remain neutral under the rule of the world’s richest man.
“Shared power curbs the worst excesses of both parties, therefore I recommend voting for a Republican Congress, given that the Presidency is Democratic,” Musk tweeted.
It’s one thing for the CEO of Wendy’s or Chick-fil-A to endorse a political party, said Jennifer Stromer-Galley, a professor at Syracuse University who studies social media and politics. It’s a whole other thing, though, for the owner of one of the world’s most high-profile information ecosystems to do so.
“These social media platforms are not just companies. It’s not just a business. It is also our digital public sphere. It’s our town square,” Stromer-Galley said. “And it feels like the public sphere is increasingly privatized and owned by these companies — and when the heads of these companies put their finger on the scale — it feels like it’s potentially skewing our democracy in harmful ways.”
Musk’s comments come as he seeks to remake the company and amid widespread concern that recent mass layoffs at the social media platform could leave the company unable to deal with hate speech, misinformation that could impact voter safety and security and actors who seek to cast doubt on the legitimate winners of elections. Though Musk has vowed not to let Twitter become a “free-for-all hellscape,” advertisers have left the platform and Musk himself has amplified misinformation.
It’s not a secret that when it comes to tech workers and executives, the political mix tends to favor the left, with a good amount of Silicon Valley libertarianism thrown in. Facebook CEO Mark Zuckerberg, for instance has donated to candidates on both sides of the political spectrum, but in recent years he’s veered more toward Democrats. Publicly he’s stayed away from pledging allegiance to either party.
But in their platform policies and content moderation, tech companies such as Facebook (now Meta), Google and even Twitter have taken great pains to appear politically neutral, even as they are routinely criticized — largely by conservatives but also by liberals — for favoring one side over the other.
“Now, you might say, look, Rupert Murdoch owns Fox News and that’s his voice amplified,” said Charles Anthony Smith, a professor of political science and law at The University of California at Irvine. “But the difference is that gets filtered through a variety of different script writers and on-air personalities and all this other sort of stuff. So it’s not really Rupert Murdoch. It may be people that agree with him on things, but it’s filtered through other voices. This is an unadulterated direct contact. So it’s an amplification that is unrivaled.”
Musk’s tweets could also stir up trouble in global politics outside of the U.S. elections. On Sunday, the billionaire signaled willingness to explore reversing decisions blocking some accounts of Brazilian right-wing lawmakers. The nation’s electoral court last week ordered their suspension; all are supporters of Brazil’s President Jair Bolsonaro, who on Oct. 30 lost his reelection bid by a narrow margin, and most had aired claims of election fraud.
Paulo Figueiredo Filho, a political analyst who often defends Bolsonaro on social media and is also the grandson of the military dictatorship’s final president, tweeted that Twitter has become a strict and spontaneous censor.
“Your moderators are currently being more dictatorial than our own courts!” Figueiredo wrote.
Musk responded: “I will look into this.”
The suspended accounts include that of Nikolas Ferreira, who garnered more votes in the October race than any other candidate for a seat in the Lower House. According to orders issued by the electoral authority, Ferreira’s account and most others were blocked for sharing a live video from an Argentinian digital influencer questioning the reliability of Brazil’s electronic voting system. The video was largely shared by allies of Bolsonaro, who himself has often claimed the system is susceptible to fraud, without presenting any evidence.
Twitter’s policies, as of Monday, prohibit “manipulating or interfering in elections or other civic processes.”
In a tweet just two days after he agreed to buy Twitter in April, Musk said that for “Twitter to deserve public trust, it must be politically neutral, which effectively means upsetting the far right and the far left equally.”
And to attract the largest possible number of advertisers and users, Big Tech has tried to go this route, with varying degrees of success. For years, it managed to succeed. But the 2016 U.S. presidential elections changed online discourse, fueling the country’s increased political polarization.
In early 2016, a tech blog quoted an anonymous former Facebook contractor who said the site downplayed news that conservatives are interested in and artificially boosted liberal issues such as the “BlackLivesMatter” hashtag. The blog did not name the person, and no evidence was provided for their claim.
But in the explosive political climate that preceded the election of former President Donald Trump, the claim quickly took a life of its own. There was plenty of media coverage, as well as as inquiries from GOP lawmakers, then, later, congressional hearings on the matter. In the years since, as social media companies began to crack down on far-right accounts and conspiracy theories such as QAnon, some conservatives have come to see it as evidence of the platforms’ bias.
Musk himself is at least listening to such claims, and he’s repeatedly engaged with figures on the right and far-right who would like to see a loosening of Twitter’s misinformation and hate speech policies.
Evidence suggests those voices are already being heard. In an October study, for instance, researchers at the University of Pennsylvania found that “Twitter gives greater visibility to politically conservative news than it does content with a liberal bent.”
Musk’s tweet garnered hundreds of thousands of likes and many retweets Monday on the day before the final votes are cast in thousands of races around the country. But in replies and retweets, many prominent (and not so prominent) Twitter personalities expressed criticism for the Tesla CEO — often poking fun at him. For Smith, that’s a sign Musk may not quite be a billionaire political kingmaker that some of his peers, like venture capitalist Peter Thiel, are aspiring to be.
“I wonder if we’re we’re having the emergence of a new type of billionaire, the ones who want to decide what happens and get credit for deciding what happens,” Smith said. “So this more like an oligarchy approach than the old school billionaires who would drop lots of money but then they didn’t want anybody to know their names.”

Associated Press Writer Carla Bridi contributed to this story from Brasilia, Brazil.
Twitter is struggling to respond to political misinformation and other harmful posts on the social media platform after Elon Musk fired roughly half of its workforce just days before the U.S. midterm elections, according to employees who survived the cuts and an outside voting rights group.
The recent mass layoffs spared many of the people whose job it is to keep hate and misinformation off the social-media platform. Musk cut just 15% of those frontline content-moderation workers, compared to roughly 50% job cuts companywide, an executive said last week.
But in preparation for the layoffs, employees said the company also sharply reduced how many employees can look into a specific account’s digital history and behavior — a practice necessary to investigate if it’s been used maliciously and take action to suspend it. The company said it froze access to those tools to reduce “insider risk” at a time of transition.
The developments are causing concern as the U.S. midterm elections culminate on Tuesday. Though millions of Americans have already cast early and absentee ballots, millions more are expected to go to the polls to cast in-person votes. Election watchers fear the platform may not be equipped to handle hate speech, misinformation that could impact voter safety and security, and actors seeking to cast doubt on the legitimate winners of elections around the country.
Researchers tracking misinformation ahead of the midterms notified Twitter on Friday about three posts from well-known far-right figures that advanced debunked claims about election fraud. The posts remain up three days later. When Common Cause asked Twitter for an update on Monday, the platform said the posts were “under review.”
Before Musk took over, Twitter responded much more quickly, said Jesse Littlewood, vice president for campaigns at Common Cause. The group said they had been in regular contact with Twitter staff before Musk took over. Now, they are getting a response from a generic email address.
“We had been getting much faster decisions from them, sometimes within hours,” said Littlewood. Now, he said, “It’s like pushing the button for the walk sign at the stop light, and nothing is happening.”
Musk gutted teams working on marketing, communications and editorial curation of what people see on Twitter. But his decision to retain most of Twitter’s content moderation team came as a welcome surprise to some inside and outside the company. Musk, after all, promised to let free speech flourish by loosening Twitter’s content restrictions and restoring accounts banned for violating those rules. He has also pledged to end the current user verification system in favor of a $7.99 subscription fee.
But the fact that the content moderation team survived could mean that critical misinformation functions such as blocking incitements of political violence will continue, and some of the worst-case scenarios around election misinformation won’t be realized. Some of Musk’s own tweets have been annotated with fact-checked context in recent days.
Two employees who survived the job cuts credit a previously little-known executive Yoel Roth, Twitter’s global head of safety and integrity, for leveraging his team’s importance to Musk’s goals for Twitter while avoiding moves that might anger the mercurial Tesla CEO.
“Yoel Roth singlehandedly saved the company,” said a Twitter employee who spoke on condition of anonymity because of concerns about job security. “On the public side, he appropriately and thoughtfully engaged with Elon Musk in a way that was not subservient, but deferring, because Elon is the king.”
Roth has become the public face of Twitter’s content moderation since Musk took over and has regularly defended Twitter’s ongoing efforts to fight harmful misinformation. Musk, a prolific tweeter with more than 110 million followers, has frequently pointed to Roth’s Twitter feed as the most reliable account of the company’s adherence to integrity standards. And the billionaire, who embraces the idea that Twitter’s past leadership suppressed right-wing views, defended Roth when ardent Musk supporters demanded his firing over past comments they thought showed Roth’s liberal bias.
Roth, who once worked at an Apple store fixing Mac computers, joined Twitter in 2015 after spending a year studying online hate speech at Harvard University’s Berkman Klein Center for Internet and Society, according to his LinkedIn profile. In May, he took on a senior role “responsible for all user, content, and security policies, comprising more than 120 policymakers, threat investigators, data analysts, and operations specialists.”
Roth didn’t respond to requests for comment.
A legal scholar who sits on Twitter’s Trust and Safety Council, an advisory board set up in 2016, said she has long been impressed with Roth’s candor about the challenges of content moderation and the nuances of free speech — such as the importance of curbing abusive content to enable the free speech of women and others more likely to be harassed online.
“If Musk had been able to cut everybody in content moderation and just replace it with his ‘yes’ men, he probably would have,” said Mary Anne Franks, a law professor at the University of Miami and president of the Cyber Civil Rights Initiative. “The only reason why he hasn’t is because he maybe recognizes that would make Twitter unworkable.”
One Twitter employee said Monday that layoff survivors were actively looking for new jobs in part because of Musk’s lack of commitment to keeping the platform free of hate speech and misinformation. Speaking anonymously because of concerns about job security, the employee said the job cuts would make Twitter’s staff less effective in following up and acting on complaints about election-related disinformation, because they included people leading civic integrity teams.
Franks said there’s always been a tension within Twitter and other social media companies between making money and protecting democracy and freedom of expression. She said that’s only getting harder under Musk, who has shown Twitter can act quickly in banning a comedian who made fun of him by impersonating his account, but who has otherwise expressed hostility towards Twitter’s anti-abuse standards.
“I would imagine that someone in a position like Roth’s at Twitter would have to play a pretty delicate game trying not to trip any of the wires, not to trigger a backlash from Musk because he’s incredibly thin-skinned,” Franks said.
AP Technology Writer Frank Bajak contributed to this report.
BOSTON (AP) — Elon Musk tweeted Sunday that Twitter will permanently suspend any account on the social media platform that impersonates another.
The platform’s new owner issued the warning after some celebrities changed their Twitter display names — not their account names — and tweeted as ‘Elon Musk’ in reaction to the billionaire’s decision to offer verified accounts to all comers for $8 month as he simultaneously laid off a big chunk of the workforce.
“Going forward, any Twitter handles engaging in impersonation without clearly specifying “parody” will be permanently suspended,” Musk wrote. While Twitter previously issued warnings before suspensions, now that it is rolling out “widespread verification, there will be no warning.”
In fact, “any name change at all” would compel the temporary loss of a verified checkmark, the world’s richest man said.
Comedian Kathy Griffin had her account suspended Sunday after she switched her screen name to Musk. She told a Bloomberg reporter that she had also used his profile photo.
“I guess not ALL the content moderators were let go? Lol,” Griffin joked afterward on Mastodon, an alternative social media platform where she set up an account last week.
Actor Valerie Bertinelli had similarly appropriated Musk’s screen name — posting a series of tweets in support of Democratic candidates on Saturday before switching back to her true name. “Okey-dokey. I’ve had fun and I think I made my point,” she tweeted afterwards.
Before the stunt, Bertinelli noted the original purpose of the blue verification checkmark. It was granted free of charge to people whose identity Twitter employees had confirmed; with journalists accounting for a big portion of recipients. “It simply meant your identity was verified. Scammers would have a harder time impersonating you,” Bertinelli noted.
“That no longer applies. Good luck out there!” she added.
The $8 verified accounts are Musk’s way of democratizing the service, he claims. On Saturday, a Twitter update for iOS devices listed on Apple’s app store said users who “sign up now” for the new “Twitter Blue with verification” can get the blue check next to their names “just like the celebrities, companies and politicians you already follow.”
It said the service would first be available in the U.S., Canada, Australia, New Zealand and the U.K. However, it was not available Sunday and there was no indication when it would go live. A Twitter employ, Esther Crawford, told The Associated Press it is coming “soon but it hasn’t launched yet.”
Twitter did not respond on Sunday to an email seeking comment on the verified accounts issue and Griffin’s suspension.
Musk later tweeted, “Twitter needs to become by far the most accurate source of information about the world. That’s our mission.”
If the company were to strip current verified users of blue checks — something that hasn’t happened — that could exacerbate disinformation on the platform during Tuesday’s midterm elections.
Like Griffin, some Twitter users have already begun migrating from the platform — Counter Social is another popular alternative — following layoffs that began Friday that reportedly affected about half of Twitter’s 7,500-employee workforce. They fear a breakdown of moderation and verification could create a disinformation free-for-all on what has been the internet’s main conduit for reliable communications from public agencies and other institutions.
Many companies have paused advertising on the platform out of concern it could become more unruly under Musk.
Yoel Roth, Twitter’s head of safety and integrity, sought to assuage such concerns in a tweet Friday. He said the company’s front-line content moderation staff was the group least affected by the job cuts.
Musk tweeted late Friday that there was no choice but to cut jobs “when the company is losing over $4M/day.” He did not provide details on the daily losses at Twitter and said employees who lost their jobs were offered three months’ pay as severance.
SACRAMENTO, Calif. (AP) — California on Monday settled a lawsuit against a German company stemming from the emissions scandal that tarred Volkswagen in 2015 and Fiat Chrysler two years later.
German auto supplier Bosch will pay $25 million to settle allegations by the state and California Air Resources Board under a court complaint and settlement agreement, both filed Monday. A judge will need to sign off on the settlement.
Volkswagen and Fiat Chrysler installed “defeat devices” in nearly 100,000 diesel passenger vehicles sold in California, the state said previously. The devices made it seem like the vehicles were meeting emissions requirements as they were undergoing testing, but on the road they actually polluted at many times the legal limit.
The settlement stems from some Volkswagen and Fiat Chrysler diesel vehicles sold in the U.S. from model year 2016 and earlier.
The complaint filed Monday said Bosch knew or should have known that the automakers were violating environmental and consumer protection laws, and that Bosch broke consumer protection laws through its marketing of Volkswagen and Fiat Chrysler vehicles and its own diesel components.
“Bosch violated consumer trust when it gave Volkswagen and Fiat Chrysler the technology they needed to skirt state and federal emissions tests,” Attorney General Rob Bonta said in announcing the settlement.
The Air Resources Board’s executive officer, Steven Cliff, said the company’s technology “was at the heart of the automobile emissions cheating scandals at Volkswagen and Fiat Chrysler and that has led directly to increased emissions and unhealthful air, especially in neighborhoods suffering from persistent air pollution.”
Bosch said in a statement that it “neither acknowledges the validity of the claims … nor does it concede any liability.” But it said its “robust compliance systems, as well as its full cooperation” aided the settlement. It also said that since 2015, the company’s “already existing extensive compliance policies and procedures have been substantially enhanced.”
Aside from the $25 million, the settlement requires Bosch to make changes in its policies and procedures and to tell state officials if it discovers that a manufacturer will use or has used cheating technology.
California previously settled with Volkswagen for nearly $1.5 billion in environmental mitigation payments, investments in zero-emissions technology and other damages. The company also was required to buy back at least 85% of affected vehicles or make emissions modifications on those vehicles.
Fiat Chrysler paid more than $78 million and similarly was required to bring at least 85% of the affected vehicles into compliance.
Walgreens extended its push into more comprehensive health care with its VillageMD unit acquiring another urgent and primary care chain, Summit Health-CityMD, in a deal worth close to $9 billion.
Walgreens and rival CVS, two retail chains with thousands of locations, have evolved in recent years with a greater focus on overall care for customers, trying to help them avoid chronic health conditions and expensive hospital stays. That goes far beyond their historic focus on store sales and filling prescriptions.
The deal to combine VillageMD and CityMD arrives just two months after CVS Health said it would pay about $8 billion to acquire Signify Health, a technology company that sends doctors and other care providers to people’s homes to assess how they are doing and what help they might need.
Walgreens Boots Alliance, which has a 53% controlling interest in VillageMD, will invest $3.5 billion in debt and equity in support of the deal, which is expected to close in the first quarter of 2023.
In what the companies are calling a “strategic collaboration,” Evernorth, a subsidiary of health insurance giant Cigna Health, is also making an undisclosed investment in the deal and will become a minority owner of VillageMD.
Overall health has also taken on more emphasis with insurers and employers, who must foot medical bills.
Walgreens, which has about 13,000 retail pharmacy locations worldwide including 9,000 in the U.S, has invested billions of dollars in Village MD and is opening primary care practices next to its drugstores so that pharmacies and physician offices can more easily work together.
Village Medical provides primary care for patients at its traditional stand-alone practices, through its Village Medical at Walgreens practices, at home and through virtual visits. Chicago’s VillageMD and Village Medical operate in Illinois, Indiana, Michigan, Texas, Nevada, Colorado, Arizona, Florida and Georgia and Kentucky, with more than 1.6 million patients.
Summit Health and CityMD have more than 2,800 providers at more than 370 locations in New York, New Jersey, Connecticut, Pennsylvania and Central Oregon. Summit is based in New Jersey.
Walgreens, which has its headquarters outside of Chicago, also is developing centers across the United States that use automated technology to fill prescriptions and deliver them to pharmacies, giving pharmacists more time to work with customers.
When Walgreens released details of its annual financial performance last month, CEO Rosalind Brewer proclaimed it was the first year of Walgreens’ “transformation to a consumer-centric health care company.”
Citing the combination of VillageMD and CityMD, Walgreens raised its 2025 U.S. health care sales goal to between $14.5 billion and $16 billion, up from the previous forecast range of $11 billion to $12 billion.
Walgreens shares rose more than 2% Monday.
BEIJING (AP) — Apple Inc. is warning customers they’ll have to wait longer to get its latest iPhone models after anti-virus restrictions were imposed on a contractor’s factory in central China.
The company announcement Sunday gave no details but said the factory operated by Foxconn in the central city of Zhengzhou is “operating at significantly reduced capacity.”
“We now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated,” the company said. “Customers will experience longer wait times to receive their new products.”
Foxconn Technology Group said earlier it imposed anti-virus measures on the factory in Zhengzhou following virus outbreaks. Apple and Foxconn previously hadn’t responded to questions about how iPhone production might be affected.
Last week, access to the industrial zone where the factory is located was suspended for one week following a surge in infections in Zhengzhou and the departure of workers from the factory.
The lockdown is expected to cause further disruptions to the plant, which in recent weeks has seen a spate of coronavirus infections and an exodus of workers, some of whom fled the factory on foot.
Foxconn said in a statement that it is revising its outlook for this quarter downward due to the lockdown.
“Foxconn is now working with the government in a concerted effort to stamp out the pandemic and resume production to its full capacity as quickly as possible,” the company said Monday.
It also said that the provincial government has said it will “fully support” Foxconn in managing the plant’s pandemic prevention and operation situation.
In a post on the Zhengzhou plant’s WeChat social media account Sunday, the company said a “closed loop” system would restrict its employees’ travel between their dormitories and the factory area to manage risks of COVID-19 transmission.
The last quarter of the year is typically a busy season for companies like Foxconn as they ramp up production ahead of the end of year holiday rush.
“We are working closely with our supplier to return to normal production levels while ensuring the health and safety of every worker,” Apple said.
TOKYO (AP) — An American father and son convicted in Japan on charges of helping Nissan former Chairman Carlos Ghosn escape to Lebanon, hiding in a box, have been returned to the U.S., their lawyer said Tuesday.
Michael Taylor, a former Green Beret, was sentenced in July last year in Tokyo District Court to two years in prison, while his son Peter Taylor was sentenced to one year and eight months.
They were convicted of helping a criminal for their involvement in the December 2019 escape of Ghosn, who had been awaiting trial on various financial misconduct charges, including under-reporting his compensation.
The Taylors were arrested in Massachusetts in May 2020, and extradited to Japan in March 2021, though they fought against deportation to Japan.
The U.S. and Japan have an extradition treaty, while Lebanon has no extradition treaty with Japan. Ghosn is French-Brazilian of Lebanese ancestry.
The U.S. Federal Bureau of Prisons online site lists Michael Taylor as at the Metropolitan Detention Center in Los Angeles and set for release Jan. 1, 2023.
Paul V. Kelly, the lawyer for the Taylors, said by email that he was in talks with parole officials about an earlier release. Peter Taylor has already been released, and is back with his family in Massachusetts, said Kelly, whose office is based in Boston.
The Japanese Justice Ministry declined comment. Nissan had no comment.
During their trial in Tokyo, Michael and Peter Taylor apologized and acknowledged guilt, saying they had been misled by Ghosn. They denied they had benefited monetarily because the payment just covered expenses.
Ghosn, who led Nissan Motor Co. for two decades, says he is innocent. He says he fled because he could not expect a fair trial in Japan.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
NEW YORK (AP) — Clara Wu Tsai, co-owner of the Brooklyn Nets, launched the largest business accelerator for minority founders of early-stage startups on Monday.
Named BK-XL, the accelerator will invest up to $500,000 each in 12 startups led by Black, Indigenous and other minority founders in 2023.
“Capital is one of the biggest impediments to wealth-building, particularly for BIPOC entrepreneurs,” Wu Tsai told The Associated Press in an interview. “We thought that investing in this segment was how we could create wealth, not only for the entrepreneurs, but also through all the different jobs that they are going to create.”
Increasing investments of venture capital in startups run by minority founders became a priority for many during the racial reckoning that followed the police killing of George Floyd. According to Crunchbase, only 2.4% of all U.S. venture capital raised between 2015 to 2020 was allocated to startups with Black or Latinx founders. Funding to Black entrepreneurs quadrupled in the first half of 2021 to $1.8 billion. However, investments to minority founders this year have dropped steeply.
BK-XL is part of Wu Tsai’s plan to change that. The accelerator is another piece of her racial justice work, with her husband Joe Tsai, to improve economic mobility for minorities. Because of their ownership of the Brooklyn Nets and the Barclays Center arena in Brooklyn, they have decided to focus their economic mobility donations and investments in the New York City borough as well to maximize their impact.
“It will be a mix of grants, loans and investments into this borough which I think ultimately is going to result in strengthening the community and the building up of people,” Wu Tsai said.
Last year, the Tsais’ Social Justice Fund launched the “EXCELerate” initiative that provided no-interest loans to Black-owned small businesses in Brooklyn that needed help recovering from the COVID-19 pandemic shutdowns. Wu Tsai said the investments through BK-XL will help new businesses that are ready to expand.
For startups chosen for the BK-XL program, the first $125,000 investment will be in return for 7% equity in the startups, split between Wu Tsai’s Social Justice Fund and the investment platform Visible Hands.
Daniel Acheampong, general partner at Visible Hands, said BK-XL will offer more than a monetary investment. Founders selected for the program will receive free office space and a 10-week immersion program on building successful businesses, with mentorship help from Visible Hands, Tsai’s investment firm Blue Pool Capital, and other partners.
“Being a founder is a lonely journey,” said Acheampong, adding that it’s even harder for minority founders because there are so few of them. “It helps when you’re doing it in the context of folks who can say, ‘Hey, I’ve been through your experience. I know the challenges of bias in raising capital.’”
Acheampong said that kind of support – which he calls social capital and inspiration capital – is as important as the investment capital. “The partnership here is something I’m really excited about,” he said.
BK-XL will begin taking applications on Dec. 5. Acheampong said any kind of BIPOC-led startup can apply, as long as they will be based in Brooklyn. However, there will be a preference for businesses that are in fields where the Tsais have experience – including e-commerce, since Tsai co-founded the Chinese tech giant Alibaba, and sports media.
With BK-XL, Wu Tsai said she hopes to spotlight untapped business talent in Brooklyn to help revitalize the community. But she also hopes the new accelerator will prove a point across the country.
“We want to show that investing in Black businesses makes money,” she said. “We want to show it’s good business.”
Wu Tsai said any profits from investments into the BK-XL startups will be re-invested into Brooklyn businesses. “I think the best proof of our belief in Brooklyn and Black businesses is by investing in them and showing the world that these are good investments,” she added.
When asked about the Brooklyn Nets’ current turmoil involving the suspension of Nets guard Kyrie Irving for posting a link to an antisemitic work on Twitter, Wu Tsai pointed to previous statements made by the team.
She said BK-XL will soon be followed by a philanthropic grant program to help other businesses in Brooklyn. Like a growing number of philanthropists, including Melinda French Gates and Laurene Powell Jobs, Wu Tsai plans to use a mix of investments and donations to accomplish goals for the community.
“I think that you should just play with all the different arrows that you have in your backpack,” Wu Tsai said. “There’s so many levers. There’s not just one way to impact a community. I think you’re much more effective if you can use different methods to reach different people who need it.”
Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.
NEW YORK (AP) — The cryptocurrency exchange Binance said it plans to buy its rival FTX Trading, in the latest example of how fortunes can change rapidly in the crypto world.
Binance CEO Changpeng Zhao said on Twitter Tuesday that his company had signed a letter of intent to buy FTX because the smaller exchange was experiencing a “significant liquidity crunch.” The deal was pending due diligence, Zhao said on Twitter.
The news shook the cryptocurrency world as the biggest crypto exchange had to apparently bail out the third largest exchange. Prices for major crypto assets plunged, with bitcoin prices falling more than 10% and ethereum dropping more than 15%.
Shares of publicly traded companies with heavy exposes to crypto fell sharply as well, with Coinbase and Robinhood seeing double-digit percentage declines.
Samuel Bankman-Fried, founder and CEO of FTX, also took to Twitter to say the deal with Binance would protect the exchange’s customers. It’s a surprising turn of events after Bankman-Fried was hailed as somewhat of a savior earlier this year when he helped shore up a number of cryptocurrency companies that ran into financial trouble.
FTX is the latest cryptocurrency company this year to come under financial pressure as crypto assets such as bitcoin and ethereum have collapsed in value. Failures include Celsius, a bank-like company that took in crypto deposits in exchange for yield, as well as an Asia-based hedge fund known as Three Arrows Capital.
Coindesk, which specializes in news about digital assets, reported last week that much of the balance sheet of Bankman-Fried’s trading firm Alameda Research was tied up in FTX’s own digital token called FTT. Binance rattled the market over the weekend when it said it planned to liquidate of its holdings in FTT on concerns that FTX was illiquid.
Binance’s public announcement caused a crypto-like bank run at FTX, with major investors trying to pull their money in the last 48 hours.
On Tuesday morning, cryptocurrency investors said they were having trouble withdrawing money from FTX as well. The value of FTT, which had stabilized after the deal was announced, collapsed to around $3 from its previous price over the weekend of around $20.
Cory Klippsten, CEO of the Bitcoin financial services firm Swan Bitcoin, said companies with large amounts of so-called altcoins on their balance sheets are “literally confidence games” and susceptible to collapse.
“The only hope once under pressure is that another player will bail them out, as we’ve seen with Binance and FTX.”
Bankman-Fried said neither the U.S. operations of Binance or FTX are involved in the deal announced Tuesday.
The deal would make Binance, which is already the biggest cryptocurrency exchange by daily volume, an even more dominant player in the cryptocurrency industry. FTX was the third largest exchange as of this week.
Bankman-Fried, better known by his initials SBF, was hailed by the crypto industry earlier this year after pledging to buy certain crypto assets to bolster the balance sheets of other failing crypto companies. That included companies like Voyager Digital, which failed after owning a stake in the failed stable coin Terra.
Bankman-Fried also purchased a stake in the online trading platform Robinhood after that company’s shares plunged as revenue dropped and it lost money.
BRUSSELS (AP) — The European Union has launched an investigation into Microsoft’s planned takeover of video game giant Activision Blizzard, fearing the $69 billion deal would distort fair competition to popular titles like Call of Duty.
Microsoft, maker of the Xbox gaming system, first announced the agreement to buy the California-based game publisher in January, but it still awaits scrutiny by antitrust regulators in the U.S., Europe and elsewhere. If it goes through, the all-cash deal would be the largest in the history of the tech industry.
Members of the European Commission, the 27-nation bloc’s executive arm, said in a statement Tuesday that “the point is to ensure that the gaming ecosystem remains vibrant to the benefit of users in a sector that is evolving at a fast pace.”
“We must ensure that opportunities remain for future and existing distributors of PC and console video games, as well as for rival suppliers of PC operating systems,” the commissioners said. They have until March 23, 2023, to decide whether to approve the deal.
At the heart of the dispute is who gets to control future releases of Activision Blizzard’s most popular games, especially the first-person military shooter franchise Call of Duty. Activision this week said its latest installment, Call of Duty: Modern Warfare 2, has already made more than $1 billion in sales since its Oct. 28 launch.
Microsoft’s console rival Sony, maker of the PlayStation, has brought its concerns about losing access to what it describes as a “must-have” game title to regulators around the world. In response, Microsoft has promised to keep Call of Duty on the PlayStation “for at least several more years” beyond its current contract with Sony. It also has said it might bring it to Nintendo’s Switch console, where the game isn’t currently available.
In a preliminary probe, the EU found potential antitrust issues with the distribution of video games and halting access to Microsoft’s rivals. The bloc said it has concerns that the proposed acquisition could hurt competitors to Microsoft’s Windows operating system, because computers without Windows might not be able to get Xbox’s game-streaming subscription service and growing collection of titles.
Microsoft said it will keep working with the European Commission on next steps “and to address any valid marketplace concerns.”
“Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation,” Microsoft said in a statement Tuesday. “We want people to have more access to games, not less.”
Activision Blizzard CEO Bobby Kotick said in an email to employees Tuesday that global competition in the video game industry makes it “understandable that regulators are trying to better understand the games business.” But he said the “process is moving along as we expected” and foresees the deal closing by June.
“We will continue to cooperate with the European Commission where, in the countries they represent, we have many employees,” Kotick wrote.
He highlighted Brazil’s recent approval, saying the country’s competition authority understood “we operate in a highly dynamic and competitive industry, and that the merger will not harm competition in any way.”
Saudi Arabia also has signed off on the deal, but it still awaits important decisions from the U.S. Federal Trade Commission and authorities in the U.K. and EU.
Tuesday’s decision was another example of how the EU has led the way on regulating Big Tech companies, opening antitrust investigations, enacting strict regulations on data privacy and pushing through landmark rules that threaten online platforms with billions in fines unless they respect fair market conditions and crack down on harmful content like hate speech and disinformation.
It’s possible regulators could impose conditions on the gaming deal that force Microsoft to keep access open to Call of Duty for longer and ensure that its rivals aren’t getting a lesser version.
Among those listening to Sony’s concerns are antitrust regulators in the United Kingdom. Last month, they escalated their investigation into whether Microsoft could make Call of Duty and other titles exclusive to its Xbox platform or “otherwise degrade its rivals’ access” by delaying releases or imposing licensing price increases.
“These titles require thousands of game developers and several years to complete, and there are very few other games of similar caliber or popularity,” according to a September report from the U.K.’s Competition and Markets Authority.
O’Brien reported from Providence, Rhode Island.
The Walt Disney Co. on Tuesday posted lower-than-expected profit and revenue for its fiscal fourth quarter even as its streaming services did well, sending its shares lower in after-hours trading.
The company said it earned $162 million, or 9 cents per share, in the July-September quarter, nearly flat compared to $160 million, or 9 cents a share, a year earlier.
Excluding one-time items, Disney earned 30 cents per share. Analysts, on average, were expecting earnings of 56 cents per share on that basis, according to FactSet.
Revenue grew 9% to $20.15 billion from $18.53 billion. Analysts were expecting revenue of $21.27 billion.
Disney said it ended its fiscal year with more than 235 million subscribers to its streaming services. That’s above analysts’ expectations of 231.5 million.
The company plans to increase prices at Disney+ next month and also introduce a lower-priced version that includes advertisements. Currently, Disney+ is ad-free.
Disney+ added 12.1 million subscribers to bring the total 164.2 million as of Oct. 1. In comparison, Netflix — which is also adding an ad-supported tier to its streaming service — has about 223 million subscribers.
CEO Bob Chapek said the company still expects Disney+ to be profitable in 2024 “assuming we don not see a meaningful shift in the economic climate.”
Shares in Disney, which is based in Burbank, California, fell almost 8% in after-hours trading.
BEIJING (AP) — A state-owned Chinese commercial jet manufacturer set up to try to compete with Boeing and Airbus says it has secured orders for 300 of its first long-range jetliners from Chinese leasing companies.
Orders for the single-aisle C919 were announced Thursday by Commercial Aircraft Corp. of China during the Zhuhai air show in southern China. COMAC also announced 30 orders for its shorter-range ARJ21 jet.
COMAC was established in 2008 as part of government efforts to transform China into a creator of profitable technologies and reduce reliance on foreign products.
The C919, which is meant to compete with the Airbus A320 and Boeing 737, has a layout of 158 to 168 seats and a range of 4,075 to 5,555 kilometers (2,530 to 3,450 miles), according to the manufacturer. The plane made its first flight in May 2017.
The latest buyers include leasing units of Bank of China Ltd., Industrial and Commercial Bank of China Ltd. and China Construction Bank Ltd.
Before Thursday’s sales announcement, COMAC said it had received 815 orders for the C919 from 28 customers. Most are Chinese, but COMAC also has announced orders from GE Capital Aviation Services and Thailand’s City Airways.
BANGKOK (AP) — Asian shares were mixed on Wednesday as investors awaited the outcome of the U.S. midterm elections and a major inflation update due later in the week.
Tokyo’s Nikkei 225 index slipped 0.2% and the Hang Seng in Hong Kong also shed 0.2%, to 16,517.04. The Shanghai Composite index edged 0.1% higher to 3,066.99, while the S&P/ASX 200 in Sydney climbed 0.7% to 7,006.70.
The Kospi in Seoul surged 1% to 2,424.02.
All eyes were on the elections, which could determine how much is done in the next several years in Washington, and possibly beyond. Markets tend to abhor uncertainty.
With Americans heading to the polls across the country amid high inflation and worries about a possible recession, analysts say investors appear to be betting that Republicans will gain control of at least one house of Congress. That combined with a Democratic White House could lead to little getting done in Washington, which may be bad for society but could also keep the status quo on economic policy.
On Wall Street, trading was tentative through the day, and Wall Street’s benchmark index flipped between an even bigger gain and a modest loss during the afternoon.
The S&P 500 rose 0.6% to 3,828.11, while the Dow Jones Industrial Average climbed 1% to 33,160.83 and the Nasdaq composite gained 0.5%, to 10,616.20.
If Republicans do end up wining control of at least the House of Representatives, the ensuing reaction in financial markets could be modest, according to economists at Goldman Sachs. Stocks have already rallied in anticipation of it, with two straight gains of at least 1% before Election Day. But a surprise win by Democrats could upset the market if it leads investors to expect higher corporate taxes and other policy changes.
But a Republican win could also mean less help from Congress during a possible recession than under a Congress controlled by Democrats. And economists are forecasting a sharp downturn in coming months as interest rate hikes meant to tame inflation put the brakes on business activity and spending.
The important milestone for markets this week than U.S. Election Day may be Thursday’s report on inflation, which will affect the swift interest-rate hikes the Federal Reserve is pushing through to get it under control.
By raising rates, the Fed is intentionally slowing the economy by making it more expensive to borrow money. High rates also tend to drag down prices for stocks and other investments while raising the risk of a recession.
The Fed has already hiked its key overnight rate to a range of 3.75% to 4%, up from virtually zero in March, and more investors are expecting it to top 5% next year.
A softer reading than expected on Thursday could give the Fed leeway to loosen up a bit. Economists expect the report to show a continued, slight moderation from a peak set during the summer. But a worse-than-expected reading could have the opposite effect.
Stocks are also moving on corporate profit reports, as earnings season enters its tail end. Take-Two Interactive sank 13.7% after reporting weaker results for the latest quarter than expected.
Shares of companies entwined with the cryptocurrency economy also fell sharply, with Coinbase Global losing 10.8% and Robinhood Markets falling 19%.
They dropped with crypto prices after the world’s biggest crypto exchange by daily volume, Binance, said it intends to buy one of its bigger rivals, FTX.
Binance is making the purchase to help FTX manage a crunch where users have been pulling money out amid fears about its financial strength. It’s the latest crisis of confidence to slam the crypto industry this year, as prices have tumbled in part on worries about higher interest rates.
Bitcoin at one point sank below $17,500 before pulling back to $18,267, down 12.2% from a day earlier, according to CoinDesk.
In other trading Wednesday, U.S. benchmark crude oil gave up 19 cents to $88.72 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international pricing standard, lost 9 cents to $95.27 per barrel in London.
The dollar slipped to 145.31 Japanese yen from 145.34 yen. The euro rose to $1.0082 from $1.0074.
NEW YORK (AP) — Michelle Gass, CEO of department store chain Kohl’s, is stepping down from her role early next month and will become the president of denim giant Levi Strauss & Co.
Levi’s said Tuesday in a release that Gass will start on Jan. 2, and the board of directors has put in motion a succession plan for her to succeed Chip Bergh as president and CEO in the next 18 months. She is expected to join the board of directors on that date. Gass, who joined Kohl’s in June 2013 as chief merchandising and customer officer, became CEO in May 2018.
Bergh joined Levi Strauss’s helm in September 2011, having served in top roles at Procter & Gamble during his 21-year tenure.
Kohl’s said in a separate release that Gass plans to step down on Dec. 2 and Tom Kingsbury, a board director, will serve as interim CEO.
The moves come as Kohl’s have been under pressure by activist investors to shake up management amid weak sales.
Kohl’s announced preliminary figures for its third-quarter period. It said that same-store sales will be down 6.9%, while net sales will be down 7.2 % compared to the year-ago period. The company is expected to release its results on Nov. 17.
Kohl’s struggled with anemic sales before the pandemic. Sales and profits rebounded in 2021, but the department store is now battling higher costs and a pullback from its price-conscious shoppers who are being more cautious with their spending in the face of rising prices for gas, food, and just about everything else.
In July, Kohl’s called off buyout talks with Franchise Group, t he owner of Vitamin Shoppe, citing economic conditions.
In August, the Menomonee, Wisconsin, chain slashed its sales and profit expectations for the year after being forced to cut prices to shed unwanted merchandise. The department store also cut back on orders ahead of the critical holiday period.
“It is unsurprising that Michelle Gass is to relinquish her role as CEO,” said Neil Saunders, managing director at GlobalData Retail, in a report published on Tuesday. “This will be seen as a sacrificial offering to investors, who have long pushed for widespread change in the management suite.”
But Saunders said that despite presiding over sales declines, Gass did improve fashion assortments and helped oversee a key partnership with Sephora, which is rolling out shops at Kohl’s stores. That partnership has attracted younger shoppers who are buying other items at the store. She also oversaw the partnership with Amazon where customers can return items purchased at the online retailer at its store locations. So Saunders believes her legacy should be “viewed favorably.”
Saunders, however, added that Kohl’s needs to find a permanent replacement as quick as possible as retailers face a challenging year.
Ancora owns 2.5% of outstanding shares in Kohl’s and had pushed for the removal of Gass and Chairman Peter Boneparth. It said Tuesday it was pleased that Kohl’s had nominated retail sector veteran Kingsbury, nominated by its shareholder group in 2021, as its interim CEO. Its other board nominee Margaret Jenkins will be part of the new committee tasked with identifying the right permanent leader for the business, Ancora said.
“Ancora has been a long-term shareholder of Kohl’s and believes that under the right leadership, the company can be a source of tremendous value for investors, customers, suppliers and employees, ” said Fredrick D. DiSanto, chairman and CEO of Ancora, and James Chadwick, president of Ancora Alternatives LLC.
Shares of Kohl’s gained more than 8%, or $2.25, to $29.10 in morning trading, while shares of Levi’s lost more than 1%, or 21 cents, to $15.13.
Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio
Elon Musk sought to reassure big companies that advertise on Twitter on Wednesday that his chaotic takeover of the social media platform won’t harm their brands, acknowledging that some “dumb things” might happen on his way to creating what he says will be a better, safer user experience.
The latest erratic move on the minds of major advertisers — that the company depends on for revenue — was Musk’s decision to abolish a new “official” label on high-profile Twitter accounts just hours after introducing it.
Twitter began adding gray labels to prominent accounts Wednesday, including brands like Coca-Cola, Nike and Apple, to indicate that they are authentic. A few hours later, the labels started disappearing.
“Apart from being an aesthetic nightmare when looking at the Twitter feed, it was simply another way of creating a two-class system,” the billionaire Tesla CEO told advertisers in an hour-long conversation broadcast live on Twitter. “It wasn’t addressing the core problem.”
Musk’s comments were his most expansive about Twitter’s future since he closed a $44 billion deal to buy the company late last month, dismissed its top executives almost immediately and, on Friday, fired roughly half of its workforce. Major brands including General Motors, United Airlines, General Mills and others have temporarily halted buying ads on the platform as they watch whether Musk’s plans to loosen its guardrails against hate speech will lead to a rise in online toxicity.
Scores of companies big and small made their presence known among the more than 100,000 Twitter Space listeners by signing in with their brand Twitter accounts. The brand accounts for companies including banks Deutsche Bank, TD Ameritrade, gas company Chevron, automaker Nissan, airline Air Canada and many others appeared. Car brand Audi, which has paused Twitter ads, was there, as was retailer R.E.I., which said after the call its ads were still paused.
Musk said he’s still planning a “content moderation council” representing diverse viewpoints that will tackle inappropriate content and reassure advertisers, but it would take “a few months” to put together. He said it will be advisory and “not a command council.”
Lou Paskalis, longtime marketing and media executive and former Bank of America head of global media, said the briefing raised questions that will likely leave Fortune 500 advertisers uneasy.
The biggest concern for big advertisers is brand safety and risk avoidance, he said. And Musk seems uninterested in reining in his Twitter persona that can be divisive — such as his tweet ahead of the election advising Americans to vote Republican.
“To come out like Elon did … and say ‘vote Republican since there’s a Democrat in the White House’ — I don’t know what marketer wants to go near that,” he said.
One solution could be to hire a CEO to run the company and create stability while Musk continues to be his “Chief Twit” persona, Paskalis said.
Musk had earlier threatened by tweet a “thermonuclear name & shame” on advertisers that quit Twitter. But he took a more measured approach Wednesday, asking them to “give it a minute and kind of see how things are evolving.”
“The best way to understand what’s going on with Twitter is use Twitter,” he told the group, which was represented mostly by the head of the Interactive Advertising Bureau, a trade association.
However, the confusion on Twitter continued Wednesday. The rollout hours earlier of the “official” labels appeared arbitrary, with some politicians, news outlets and well-known personalities getting the label and others not. In some cases, whether users could see an account’s “official” label appeared to depend on what country they were in.
Then the labels started disappearing.
YouTube personality and author John Green got the label but his younger brother and “vlogging” partner Hank Green didn’t make the cut. Then John Green’s label was gone. Another popular YouTuber, Marques Brownlee, who posts videos on technology, tweeted he got the label, then tweeted again that it disappeared.
“I just killed it,” Musk responded, though at first it wasn’t clear if he was referring specifically to Brownlee’s label or the entire project.
The site’s current system of using “blue checks” to confirm an account’s authenticity will soon go away for those who don’t pay a monthly fee. The checkmarks will be available for anyone willing to pay a $7.99-a-month subscription, which will also include some bonus features, such as fewer ads and the ability to have tweets given greater visibility than those coming from non-subscribers.
The platform’s current verification system has been in place since 2009 and was created to ensure high-profile and public-facing accounts are who they say they are.
Experts have expressed concern that making the checkmark available to anyone for a fee could lead to impersonations and the spreading of misinformation and scams.
The gray label — a color that tends to blend into the background whether you use light or dark mode to scroll Twitter — was an apparent compromise.
Esther Crawford, a Twitter employee who has been working on the verification overhaul, had said Tuesday on Twitter that the “official” label would be added to “select accounts” when the new system launches.
“Not all previously verified accounts will get the ‘Official’ label and the label is not available for purchase,” said Crawford.
But after the labels started disappearing Wednesday, she again took to Twitter to say “there are no sacred cows in product at Twitter anymore.”
“Elon is willing to try lots of things — many will fail, some will succeed,” she said.
There are about 423,000 verified accounts under the outgoing system. Many of those belong to celebrities, businesses and politicians.
But a large chunk of verified accounts belong to individual journalists, some with tiny followings at local newspapers and news sites around the world. The idea was to verify reporters so their identities couldn’t be used to push false information on Twitter.
Musk, who often bristles at critical news coverage, pushed back against that use of the tool Wednesday, saying he wanted to elevate “citizen journalism” and the “voice of the people” over publications he suggested had too much influence in defining the “Western narrative.” Journalism professionals generally consider Musk’s concept of elevating “citizen journalists” dangerous because it ignores the need for standards, including fact-checking, that responsible news organizations enforce.

AP Technology Writer Frank Bajak contributed to this story.
NEW YORK (AP) — Cryptocurrency prices plunged for a second-straight day after crypto exchange Binance said it was pulling out of a deal to purchase failing rival FTX Trading.
Bitcoin sank to a two-year low after Binance confirmed earlier rumors and news reports that it was ready to back out of the FTX deal, struck between the CEOs of the two exchanges on Tuesday. The deal was pending Binance’s due diligence on FTX’s balance sheet.
After an initial review, Binance said in a statement Wednesday that it had significant concerns that convinced it to back out of the deal.
“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance said in a statement.
The price of bitcoin plunged more than 13% to $15,840, according to CoinDesk, its lowest level since November 2020. It had been above $20,000 earlier in the week. The other major cryptocurrency, Ethereum, dropped 13%.
FTX had agreed to sell itself to Binance after experiencing the cryptocurrency equivalent of a bank run. Customers fled the exchange after becoming concerned about whether FTX had sufficient capital. The sudden sale was a shocking turn of events for FTX CEO and founder Sam Bankman-Fried, who was hailed as somewhat of a savior earlier this year when he helped shore up a number of cryptocurrency companies that ran into financial trouble.
FTX’s own crypto token, known as FTT, plunged more than 50% on the reports. The token, now worth around $2.50, was worth 10 times that amount only a week ago. Many of crypto investors’ concerns centered on whether the balance sheet of an affiliated company of FTX known as Alameda Research was saturated with increasingly worthless FTT tokens, whose total value would not exceed the exchange’s liabilities, effectively making FTX insolvent.
After Binance had a chance to look at the books of FTX, it became clear that the problem was too big to solve. A person familiar with the matter, who couldn’t speak publicly because he was not authorized, described the books as a “black hole” in which it was impossible to differentiate between the assets and liabilities of FTX the exchange and those of the Alameda Research hedge fund.
“The books were a nightmare, and the relationship between FTX and Alameda was incestuous at best,” the person familiar with the matter said.
In a further illustration of FTX’s financial straits, Bankman-Fried asked his investors Wednesday for $8 billion to cover withdrawal requests, according to The Wall Street Journal, citing unnamed sources.
FTX is now reportedly under investigation by U.S. authorities for how it handled customers’ deposits, according to Bloomberg News and other media outlets.
Shares of publicly traded exchanges exposed to crypto also plunged on the developments. Robinhood shares closed down roughly 14% and Coinbase shares lost around 10%.
FTX is the latest cryptocurrency company this year to come under financial pressure as crypto assets have collapsed in value. Other failures include Celsius, a bank-like company that took in crypto deposits in exchange for yield, as well as an Asia-based hedge fund known as Three Arrows Capital.
Twitter’s new owner and Tesla CEO Elon Musk sold nearly $4 billion worth of Tesla shares, according to regulatory filings.
Musk, who bought Twitter for $44 billion, sold 19.5 million shares of the electric car company from Nov. 4 to Nov. 8, according to Tuesday’s filings with the Securities and Exchange Commission.
He sold $7 billion of his Tesla stock in August as he worked to finance the Twitter purchase he was trying to get out of at the time. In all, Musk has sold more than $19 billion worth of Tesla stock since April, including those in Tuesday’s filings, likely to fund his share of the Twitter purchase.
The takeover of Twitter has not been smooth and the social media platform has seen the exodus of some big advertisers in recent weeks in including United Airlines, General Motors, REI, General Mills and Audi.
Musk acknowledged “a massive drop in revenue” at Twitter, which heavily relies on advertising to make money.
Musk had signaled that he was done selling Tesla shares and the revelation that those sales continue left some industry analysts exasperated.
“Our fear heading into the final days of the deal was that Musk was going to be forced to sell more Tesla stock to fund the disaster Twitter deal and ultimately those fears came true which speaks to some of the massive selling pressures on the stock of late,” wrote Daniel Ives at Wedbush. “For Musk who multiple times over the past year has said he is ‘done selling Tesla stock’ yet again loses more credibility with investors and his loyalists in a boy who cried wolf moment.”
Most of Musk’s wealth is tied up in shares of Tesla Inc. On Tuesday, his personal net worth dropped below $200 billion, according to Forbes, but he is still the world’s richest person.
Shares of Tesla Inc., down almost 50% this year, tumbled another 6% Wednesday.
Musk had lined up banks including Morgan Stanley to help finance the Twitter deal. His original share of the deal was about $15.5 billion, Ives estimated . But if equity investors dropped out, Musk would be on the hook to replace them or throw in more of his own money.
“The Twitter circus show has been an absolute debacle from all angles since Musk bought the platform for all the world to see: from the 50% layoffs and then bringing back some workers, to the head scratching verification roll-out to users which many are pushing back on, to the constant tweeting in this political firestorm backdrop, and now…..selling more TSLA stock,” Ives wrote. “When does it end?”
ATHENS, Greece (AP) — Workers walked off the job in Greece and Belgium on Wednesday during nationwide strikes against increasing consumer prices, disrupting transportation, forcing flight cancellations and shutting down public services in the latest European protests over the rising cost of living.
In Greece, where workers were holding a 24-hour general strike, thousands of protesters marched through the streets of Athens and the northern city of Thessaloniki. Brief clashes broke out at the end of demonstrations in both cities, with small groups of protesters breaking off from the main march to throw Molotov cocktails and rocks at police, who responded with tear gas and stun grenades.
The clashes were over within minutes. Police said one officer was injured in Athens, while two people were arrested in the capital and another eight arrested in Thessaloniki.
The strike disrupted services around the country, with ferries tied up in port, severing connections to Greece’s islands, state-run schools shut, public hospitals running with reduced staff and most public transport grinding to a standstill.
Belgium’s nationwide strike over cost-of-living increases snarled traffic through much of the country and disrupted businesses as workers set up picket lines at supermarkets and shopping centers.
As the country’s main trade unions called for wage increases, the action led most trains and public urban traffic to be reduced to a minimum and 60% of flights to be canceled at Brussels airport. Staff in about two-thirds of hospitals in the French-speaking Wallonia region and Brussels joined in, with non-urgent appointments and operations postponed, the CSC union said.
Europe has faced a series of protests and strikes in recent months over soaring inflation. As Russia’s war in Ukraine has driven up energy and food prices, workers from nurses to pilots to railway staff have walked off the job, seeking wages that keep pace with inflation. Others have joined in by taking to the streets to pressure governments to do more to ease rising bills even as European leaders have passed energy relief packages.
And more are ahead. Half the Paris subway system will shut down Thursday during a strike for higher wages, part of a nationwide day of walkouts and protests by train drivers, teachers and other public-sector workers.
It builds on multiple actions in recent months by French workers demanding wage hikes to keep up with high inflation. Last month, a pay strike by oil refinery workers caused nationwide fuel shortages that disrupted lives and businesses, prompting the government to intervene to force them back to work.
Britain’s largest nursing union, the Royal College of Nursing, said Wednesday that its members had voted to strike at a majority of hospitals and health centers across the country. No dates have been set for the walkout, which will be the first nationwide strike in the union’s 106-year history.
The U.K. has not had a general strike for almost a century, but labor unrest has been spreading across both public and private sector workplaces as inflation has crept above 10%. Railway staff, postal workers, lawyers, British Telecom staff, dockworkers and garbage collectors have all staged walkouts.
In Greece’s capital on Wednesday, no buses or trolleys were running, while only one of the three subway lines was operating, running a limited service only until the afternoon.
Flight traffic controllers had been due to participate in the strike with a six-hour work stoppage but had to reverse that decision late Tuesday after a court deemed their participation illegal. However, airlines had already canceled dozens of flights, which they could not all reschedule at the last minute.
Passengers arriving at Athens’ international airport had extremely limited options to get into town, with no bus, regular taxi, subway or suburban railway services available. Crowds gathered at car rental agencies, while others tried to leave on intercity buses, which were the only form of public transport still running.
“Workers along with unions are fighting against increased prices that are drowning Greek households,” said GSEE, a confederation of private sector trade unions, citing price hikes for energy and basic goods.
Unions called for an increase in salaries and in the minimum wage, which is just over 700 euros (dollars) per month for salaried workers, and bolder measures to tackle inflation.
Annual inflation in the 19 countries that use the euro currency, including Greece and Belgium, hit a record 10.7% last month, largely driven by higher energy prices. Inflation was a bit lower in Greece at 9.8% in October — a drop from 12.1% in September — and higher in Belgium at 13.1%, according to EU statistics agency Eurostat.
Belgian trade unions say gas prices have gone up by 130% in just one year, electricity by 85% and fuel by 57%, while food prices also have increased.
AP reporters Costas Kantouris in Thessaloniki, Greece; Samuel Petrequin and Raf Casert in Brussels; and Jill Lawless in London and Angela Charlton in Paris contributed to this report.
FRANKFURT, Germany (AP) — Adidas on Wednesday lowered its earnings forecast for the year to account for losses from ending its partnership with the rapper formerly known as Kanye West over his antisemitic remarks.
The German shoe and sportswear maker cut its sales and profit outlook for the year as part of its third-quarter earnings statement, even as the company’s chief financial officer said the profitability of the Yeezy shoe collaboration with Ye had been “overstated.” The company would largely offset the impact of the breakup next year by no longer having to pay royalties and marketing fees for the brand, CFO Harm Ohlmeyer said.
The company halved its expectations for net profit from continuing operations to 250 million euros ($252 million) this year from 500 million euros. That matched its earlier statement that ending the partnership with Ye would cost it 250 million euros in profits.
Adidas also lowered its revenue forecast for the year to a low single-digit increase from a mid-single-digit increase.
The Oct. 25 split with Ye, with production of all Yeezy products halted and royalty payments ended, will leave Adidas searching for another star to help it compete with ever-larger rival Nike. Adidas also is facing internal upheaval, with its CEO Kasper Rorsted stepping down Friday. He was previously expected to hand over next year, but the company announced the quicker change on Tuesday as it named Puma CEO Bjørn Gulden as his replacement.
Adidas faced pressure to split with Ye as other brands did earlier over the rapper’s antisemitic comments in interviews and social media, including a Twitter post earlier this month that he would soon go “death con 3 on JEWISH PEOPLE,” an apparent reference to the U.S. defense readiness condition scale known as DEFCON. He was suspended from both Twitter and Instagram.
Adidas owns the rights to product designs except for the Yeezy name and is developing plans for what to do with existing inventory.
Ohlmeyer said on a conference call with reporters that the profitability of the Yeezy business had been overstated because its costs only included expenses directly related to the products and not central overhead costs borne by the company.
“In other words, it does not include any further central cost allocation for sourcing, digital, retail, or any other services that this part of our business has been benefitting from and that were essential for its success,” Ohlmeyer said.
“At the same time, we will save around 300 million euros related to royalties and marketing fees; in combination, this will help us to compensate the majority of the top and bottom line impact in 2023,” he said.
The Yeezy brand accounted for up to 15% of Adidas’ net income, Morningstar analyst David Swartz said in a note Oct. 26.
The company had already cut its full-year earnings forecasts five days before announcing its split with Ye. The earlier outlook revision cited slowing activity in China, where severe restrictions aimed at limiting the spread of COVID-19 have held back the economy, and clearance of elevated inventory levels.
Net income for the third quarter from continuing operations was 66 million euros, down from 479 million euros in the same quarter a year ago.
The decrease largely reflected 300 million euros in one-time costs, the majority of it from winding down the company’s business in Russia.
WASHINGTON (AP) — Two Dutch nationals, an Englishman and their nine companies were targeted for sanctions by the U.S. government this week, for operating an illegal fentanyl ring that generated millions of dollars in virtual currency.
Alex Adrianus Martinus Peijnenburg and Martinus Pterus Henri De Koning from the Netherlands and Matthew Simon Grimm from the United Kingdom are accused of using their firms to sell illegal substances to U.S. customers and receive payment through digital assets.
The Treasury Department said that between November 2018 and February 2021, Peijnenburg and De Koning generated millions of dollars in virtual currency from illicit drug proceeds through a synthetic drug sales website.
Grimm’s Netherlands-based companies, Natural Gifts B.V. and UK-based Erjm Limited, were designated for sanctions.
The Drug Enforcement Administration and Department of Homeland Security assisted in the investigations.
Synthetic opioids, including fentanyl, have become the most common drugs involved in drug overdose deaths in the U.S. In 2017, 59.8% of opioid-related deaths involved fentanyl, compared to 14.3% in 2010, according to the National Institute on Drug Abuse.
“The Treasury Department will continue to deploy its counternarcotics authorities to disrupt those involved in the fentanyl global supply chain,” said Brian Nelson, Treasury’s under secretary for terrorism and financial intelligence said in a statement.
Nelson said Treasury was tracking down additional sources of virtual currency associated with the network’s drug trafficking activities “as we take further action to counter the abuse of virtual currency.”
Also Wednesday, Treasury separately sanctioned two people, Sri Lanka-based Mohamad Irshad Mohamad Haris Nizar and Turkey-based Musab Turkmen, who allegedly helped a sanctioned al-Qaida financier known to plot “incursions into foreign states for the purpose of engaging in hostile activities.”
ATLANTIC CITY, N.J. (AP) — Inflation? High gas prices? American gamblers are shrugging them off — and losing money at casinos at a record pace.
Figures released Wednesday show the U.S. commercial casino industry had its best quarter ever, winning over $15 billion from gamblers in the third quarter of this year.
The American Gaming Association, the trade organization for the casino industry, says the gambling halls are on track to have their best year ever in 2022.
Out of 33 states in which gambling was operational a year ago, 16 reported quarterly highs in overall gambling revenue, including five of the six largest markets: Indiana, Michigan, Nevada, New York and Pennsylvania.
“While business challenges remain, high consumer demand continues to fuel our industry’s record success,” said Bill Miller, the association’s president and CEO. “Our sustained momentum in the face of broader economic volatility points to gaming’s overall health today and provides confidence as we look to the future.”
David Schwartz, a gambling historian at the University of Nevada Las Vegas, said people are clearly still willing to lay their money down at casinos, regardless of economic conditions.
“I think it speaks to the continuing appeal of gambling, and that there may be even more appetite for it in uncertain times,” he said, citing the recent Powerball jackpot which exceeded $2 billion and drew wide interest from people across the country.
The commercial casinos (excluding tribal casinos, which report revenue separately) won $15.17 billion from gamblers in July, August and September of this year. That exceeded the previous record of $14.81 billion, set in the second quarter of this year, by 2%.
Miller said the casinos’ year-over-year growth rate in the third quarter of 8.8% outperformed the broader U.S. economy’s growth rate of 2.6% in the same period.
Land-based slots and table games continue to be the foundation for the industry’s revenue growth, generating a record $12.27 billion in the third quarter, an increase of 1.8% percent from the same period a year ago.
Sports betting also set a quarterly revenue record of $1.68 billion, up nearly 81% from a year ago. Seven new sports betting markets were added since Sept. 2021. The association cited a higher than usual sportsbook win percentage, and solid growth in existing markets as factors in the increase.
Sports betting revenue through September has already reached an all-time annual high of $4.78 billion, beating 2021’s full-year record of $4.34 billion.
Internet gambling came close to setting a new quarterly record, but was less than 1% away from doing so, with $1.21 billion in revenue.
Follow Wayne Parry on Twitter at www.twitter.com/WayneParryAC
When the financier Jeff Yabuki and his wife, Gail, announced last year they would give $20 million to the Children’s Wisconsin health system, they become one of a growing number of wealthy donors awarding large contributions to programs that focus on mental health.
They also became one of many philanthropists who are growing increasingly comfortable talking about their personal experiences with mental health challenges and engaging in efforts to attract more resources to organizations that help people facing similar issues.
Among the steps the Yabukis took: They worked with fundraisers at Children’s Wisconsin to create a video that could be shared with other potential donors.
In the video, Jeff Yabuki tells the heartbreaking story of the evening in 2017 when his brother Craig Yabuki drove to Zuma Beach in Malibu, California, and killed himself.
A successful businessman who founded his own accounting firm, Craig was 52 and a much-beloved son, brother, husband, and father. His suicide shocked many in his orbit who knew him as fun loving, joyful, and family focused, says Jeff Yabuki.
“He loved to read, he loved to ski, and before he started to suffer, he was the center of lots of interesting discussions and fun. He just had this incredible life and joy in his eyes,” Jeff Yabuki says. “It was one of the things that was so enlightening to me because I saw that change and go away.”
Telling Craig’s story publicly did not come easily for Jeff. But after talking it over with confidants, Yabuki decided it was time to tell Craig’s story — especially if it encouraged others to talk about their or their loved ones’ mental-health struggles.
“Until more of us share our stories and make it OK for others to share their stories, we’re going to continue to fight this problem,” he says. “It was very difficult to do this, but the good that came out of it, the literally hundreds if not thousands of people who have said thank you and we’re sorry for your loss — every time someone says that, it’s healing.”
It hasn’t always been easy for fundraisers to bring up topics like depression or suicide with rich donors — but that might be changing. Today, more sports figures and other celebrities are speaking up about their own mental-health struggles. The taboo against talking about mental health is losing its power, and that’s leading to more big gifts.
Wealthy donors publicly gave more to mental health last year than in any other year over the past decade: According to a Chronicle of Philanthropy tally of publicized donations of $1 million or more, 15 donors gave 16 such gifts totaling nearly $767 million in 2021.
Raising money for mental-health programs has become increasingly important as more Americans are experiencing anxiety, depression, and other mental-health disorders. Nearly 20% of U.S. adults, 50 million people, experienced some form of mental illness in 2019, according to a recent report by Mental Health America, and suicidal ideation, thinking seriously about ending one’s own life, is on the rise.
Severe depression among U.S. youths is also growing, with 15 percent experiencing major depression in the last year.
Police violence and pandemic-related illness, death, isolation, and economic fallout have been especially tough on people of color and other marginalized groups. Andrea Brown, executive director of the Black Mental Health Alliance, says these crises have heightened anxiety among Black people, especially Black youths. If there’s a silver lining, Brown says, it’s that today’s Black youths are much more comfortable acknowledging their mental-health struggles than their elders were.
“Young people are more apt to want to have a conversation around how they feel,” Brown says. “Then they become these ambassadors for having conversations around mental health and wellness, but we need to do much, much more.”
TACKMA sportswear founder Jeffrey Schottenstein and his parents, Jay and Jeanie, gave $10 million to Ohio State University for a new mental-health program to build students’ emotional resiliency and better equip them to cope with mental-health challenges. The gift grew out of conversations Jeffrey Schottenstein had with university officials about his struggle with depression and anxiety during his freshman year there and how keeping it to himself made it worse.
“No one can see what you’re going through inside; you have to say it out loud,” Schottenstein says. “For a long time, I was ashamed of what my mind did to me. Shame and fear are among the top reasons why more than half of people facing mental-health challenges don’t seek the help they need. For me, the biggest motivator in speaking openly is remembering how alone and isolated I felt. I never want anyone to feel that way.”
Ian Adair is a rarity among nonprofit executives: He writes and speaks extensively about his mental-health challenges as well as those of his family. Adair served as executive director of the Gracepoint Foundation from 2017 until he left recently for a senior role at the Association of Fundraising Professionals. When he was hired at the Gracepoint Foundation, the small nonprofit was bringing in little money for the much larger mental-health service provider it supports. Adair says the organization didn’t know how to connect with wealthy donors. Five years on, however, the nonprofit has raised a total of $2.3 million and has a much more active set of wealthy supporters.
Adair says that success stems partly from his slowly encouraging some senior staff and board members to speak openly about their mental-health struggles or how those experienced by family and friends affected them and eventually led them to the Gracepoint Foundation. Most had never been asked why they joined. When Adair inquired, he learned that several trustees had lost family members to suicide, while others had struggled with mental illness themselves or witnessed their employees’ mental-health struggles.
He used what he learned to create one of the organization’s most successful fundraising efforts to date. Adair and his team helped trustees, senior staff, and others who were willing to share their experiences create social-media posts they could send out to their followers, which helped the organization capture donors’ attention and build trust with them.
Says Adair: “When you have people willing to authentically and genuinely give something of themselves, it just resonates.”
This article was provided to The Associated Press by the Chronicle of Philanthropy. Maria Di Mento is a senior reporter at the Chronicle. Email: maria.dimento@philanthropy.com. The AP and the Chronicle receive support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP and the Chronicle are solely responsible for all content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.
BEIJING (AP) — Asian stock markets surged Friday after U.S. inflation eased by more than expected, spurring hopes the Federal Reserve might scale down plans for more interest rate hikes.
Hong Kong’s market benchmark jumped 5.4%. Seoul and Sydney rose almost 3%. Shanghai and Tokyo also advanced. Oil prices edged higher.
Wall Street’s benchmark S&P 500 index soared 5.5% on Thursday for its best day in 2 1/2 years after the government reported consumer prices rose 7.7% over a year ago in October. That was lower than the 8% expected by economists and the fourth month of decline.
The announcement “drove a ‘more dovish’ calibration of interest rate expectations,” said Yeap Jun Rong of IG in a report.
The Fed and central banks in Europe and Asia are raising rates to cool inflation that is at multi-decade highs. Investors worry they might tip the global economy into recession. They hope lower inflation might prompt the Fed to ease off plans for more increases.
Forecasters warned Thursday it was too early to be certain prices are under control. Fed officials have said rates might have to stay elevated for some time.
Hong Kong’s Hang Seng index soared to 16,948.96 and the Nikkei 225 in Tokyo gained 2.7% to 28,186.34.
The Shanghai Composite Index added 1.2% to 3,073.36 after the ruling Communist Party promised to alter quarantine and other anti-virus tactics to reduce the cost of China’s severe “zero-COVID” strategy that has disrupted the economy.
The Kospi in Seoul rose 2.8% to 2,471.10 and Sydney’s S&P-ASX 200 was 2.4% higher at 7,128.40. New Zealand, Singapore and Jakarta gained while Bangkok declined.
On Wall Street, the S&P gained to 3,956.37, propelled by big gains for tech heavyweights. Amazon soared 12.2%, Apple rose 8.9% and Microsoft climbed 8.2%.
The Dow Jones Industrial Average gained 3.7%, or more than 1,200 points, to 33,715.37.
The Nasdaq composite, dominated by tech stocks, shot up 7.4% to 11,114.15 for its best day since March 2020, when Wall Street was rebounding from a crash at the start of the coronavirus pandemic.
Investors were reassured that U.S. inflation was declining from its June peak of 9.1%, though forecasters said the Fed’s campaign to cool price rises was far from over.
Traders expect the Fed to raise its benchmark lending rate in December but by a smaller margin of half a percent following four increases of 0.75 percentage points, triple its usual margin. That benchmark stands at a range of 3.75% to 4%, up from close to zero in March.
The Fed is trying to slow economic activity to reduce pressure for prices to rise.
The latest figures are a sign the Fed is “on the right path,” but it will face “a lot of variables” over the next few quarters, said Edward Moya of Oanda in a report. He said the benchmark rate could be raised to 5% and “if inflation proves to be sticker, it could be as high as 5.50%.”
Core inflation, which strips out volatile food and energy prices and is more closely watched by the Fed, was 6.3% over a year earlier, down from September’s 6.6% and below the consensus forecast of 6.5%. Core prices rose 0.3% month on month, half of September’s 0.6% gain.
The yield on the 10-year Treasury, which helps set rates for mortgages and other loans, fell to 3.82% from 4.15%. The two-year yield, which more closely follows expectations for Fed action, fell to 4.32% from 4.62% and was on pace for its sharpest fall since 2008.
In energy markets, benchmark U.S. crude gained 29 cents to $86.76 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 64 cents to $86.47 on Thursday. Brent crude, the price basis for international oil trading, advanced 27 cents to $93.94 per barrel in London.
The dollar rose to 142.08 yen from Thursday’s 141.83 yen. The euro edged up to $1.0186 from $1.0180.
Elon Musk warned Twitter employees Thursday to brace for “difficult times ahead” that might end with the collapse of the social media platform if they can’t find new ways of making money.
Workers who survived last week’s mass layoffs are facing harsher work conditions and growing uncertainty about their ability to keep Twitter running safely as it continues to lose high-level leaders responsible for data privacy, cybersecurity and complying with regulations.
That includes Yoel Roth, Twitter’s head of trust and safety — a previously little-known executive who became the public face of Twitter’s content moderation after Musk took over and who had been praised by Musk for defending Twitter’s ongoing efforts to fight harmful misinformation and hate speech. An executive confirmed Roth’s resignation to coworkers on an internal messaging board seen by The Associated Press.
The developments were part of another whirlwind day in Musk’s acquisition of the social media platform. It began with an email to employees from Musk on Wednesday night ordering workers to stop working from home and show up in the office Thursday morning. He called his first “all-hands” meeting Thursday afternoon. Before that, many were relying on the billionaire Tesla CEO’s public tweets for clues about Twitter’s future.
“Sorry that this is my first email to the whole company, but there is no way to sugarcoat the message,” wrote Musk, before he described a dire economic climate for businesses like Twitter that rely almost entirely on advertising to make money.
“Without significant subscription revenue, there is a good chance Twitter will not survive the upcoming economic downturn,” Musk said. “We need roughly half of our revenue to be subscription.”
At the staff meeting, Musk said some “exceptional” employees could seek an exemption from his return-to-office order but that others who didn’t like it could quit, according to an employee at the meeting who spoke on condition of anonymity out of a concern for job security.
The employee also said Musk appeared to downplay employee concerns about how a pared-back Twitter workforce was handling its obligations to maintain privacy and data security standards, saying as CEO of Tesla he knew how that worked.
Musk’s memo and staff meeting echoed a livestreamed conversation trying to assuage major advertisers Wednesday, his most expansive public comments about Twitter’s direction since he closed a $44 billion deal to buy the social media platform late last month and dismissed its top executives. A number of well-known brands have paused advertising on Twitter.
Musk told employees the “priority over the past 10 days” was to develop and launch Twitter’s new subscription service for $7.99 a month that includes a blue check mark next to the name of paid members — the mark was previously only for verified accounts. Musk’s project has had a rocky rollout with an onslaught of newly bought fake accounts this week impersonating high-profile figures such as basketball star LeBron James and the drug company Eli Lilly to post false information or offensive jokes.
In a second email to employees, Musk said the “absolute top priority” over the coming days is to suspend “bots/trolls/spam” exploiting the verified accounts. But Twitter now employs far fewer people to help him do that.
An executive last week said Twitter was cutting roughly 50% of its workforce, which numbered 7,500 earlier this year.
Musk told employees in the email that “remote work is no longer allowed” and the road ahead is “arduous and will require intense work to succeed,” and that they will need to be in the office at least 40 hours per week.
Twitter’s ongoing exodus includes the company’s chief privacy officer, Damien Kieran, and chief information security officer Lea Kissner, who tweeted Thursday that “I’ve made the hard decision to leave Twitter.”
Roth’s resignation is a “huge loss” for Twitter’s reliability and integrity, said his former coworker and friend Emily Horne.
“He’s worked incredibly hard under very challenging circumstances, including being personally targeted by some of the most vicious trolls who were active on the platform,” said Horne, who oversaw global policy communications at Twitter until 2018. “He stayed through all of that because he believed so deeply in the work his team was doing to promote a public conversation and improve the health of that conversation.”
Cybersecurity expert Alex Stamos, a former Facebook security chief, tweeted Thursday that there is a “serious risk of a breach with drastically reduced staff” that could also put Twitter at odds with a 2011 order from the Federal Trade Commission that required it to address serious data security lapses.
“Twitter made huge strides towards a more rational internal security model and backsliding will put them in trouble with the FTC” and other regulators in the U.S. and Europe, Stamos said.
The FTC said in a statement Thursday that it is “tracking recent developments at Twitter with deep concern.”
“No CEO or company is above the law, and companies must follow our consent decrees,” said the agency’s statement. “Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”
The FTC would not say whether it was investigating Twitter for potential violations. If it were, it is empowered to demand documents and depose employees.
In an email to employees seen by the AP, Musk said “Twitter will do whatever it takes to adhere to both the letter and spirit of the FTC consent decree.”
“Anything you read to the contrary is absolutely false. The same goes for any other government regulatory matters where Twitter operates,” Musk wrote.
Twitter paid a $150 million penalty in May for violating the 2011 consent order and its updated version established new procedures requiring the company to implement an enhanced privacy protection program as well as beefing up info security.
Those new procedures include an exhaustive list of disclosures Twitter must make to the FTC when introducing new products and services — particularly when they affect personal data collected on users.
Musk is fundamentally overhauling the platform’s offerings and it’s not known if he is telling the FTC about it. Twitter, which gutted its communications department, didn’t respond to a request for comment Thursday.
Musk has a history of tangling with regulators. “I do not respect the SEC,” Musk declared in a 2018 tweet.
The Securities and Exchange Commission recently examined for possible tardiness his disclosures to the agency of his purchases of Twitter stock to amass a major stake. In 2018, Musk and Tesla each agreed to pay $20 million in fines over Musk’s allegedly misleading tweets saying he’d secured the funding to take the electric car maker private for $420 a share. Musk has fought the SEC in court over compliance with the agreement.
The consequences for not meeting FTC’s requirements can be severe — such as when Facebook had to pay $5 billion for privacy violations.
“If Twitter so much as sneezes, it has to do a privacy review beforehand,” tweeted Riana Pfefferkorn, a Stanford University researcher who said she previously provided Twitter outside legal counsel. “There are periodic outside audits, and the FTC can monitor compliance.”
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AP reporters Frank Bajak and Marcy Gordon contributed to this report.
NEW YORK (AP) — The swift collapse of cryptocurrency exchange FTX sent more shockwaves through the crypto world on Thursday, with authorities now investigating the firm for potential securities violations and analysts bracing for a further downturn in crypto prices.
FTX had agreed earlier this week to sell itself to bigger rival Binance after experiencing the cryptocurrency equivalent of a bank run. Customers fled the exchange after becoming concerned about whether FTX had sufficient capital.
A person familiar with matter said that the Department of Justice and the Securities and Exchange Commission are examining FTX to determine whether any criminal activity or securities offenses were committed. The person could not discuss details of the investigations publicly and spoke to The Associated Press on condition of anonymity.
This week’s developments marked a shocking turn of events for FTX CEO and founder Sam Bankman-Fried, who was hailed as somewhat of a savior earlier this year when he helped shore up a number of cryptocurrency companies that ran into financial trouble.
The investigation into Bankman-Fried and FTX by those in the crypto world as well as securities regulators is centering on the possibility that the firm may have used customers’ deposits to fund bets at Bankman-Fried’s hedge fund, Alameda Research. In traditional markets, brokers are expected to separate client funds from other company assets. Violations can be punished by regulators.
Meanwhile, investors in popular digital currencies got some relief from the latest crypto crisis Thursday after days of selling. Bitcoin rose to $17,691 after dropping as low as $15,512 on Wednesday. Ethereum rose 12%. The gains came after a government report showing inflation cooled a bit last month gave a lift to riskier assets.
The crypto world had hoped that Binance, the world’s largest crypto exchange, might be able to rescue FTX and its depositors. However, after Binance had a chance to look at the books of FTX, it became clear that the smaller exchange’s problems were too big to solve.
A person familiar with the dealings between FTX and Binance described the books as a “black hole” where it was impossible to differentiate between the assets and liabilities of FTX the exchange and those of Alameda Research. This person spoke on condition of anonymity because they weren’t authorized to speak publicly about the matter.
This person said Bankman-Fried committed the “ultimate sin” by tapping into FTX’s custodial assets to fund Alameda Research.
In a further illustration of FTX’s financial straits, Bankman-Fried asked his investors Wednesday for $8 billion to cover withdrawal requests, according to The Wall Street Journal, citing unnamed sources.
In a series of Tweets on Thursday, the FTX founder and CEO said that he did not have enough liquidity to cover withdrawals and that he was more leveraged than he had thought.
“I f(asterisk)(asterisk)(asterisk)ed up, and should have done better,” he said.
The latest crisis in the crypto industry prompted renewed calls for stricter regulation. White House press secretary Karine Jean-Pierre said the FTX developments “highlights why prudent regulation of cryptocurrencies is indeed needed. The White House, along with the relevant agencies, will again closely monitor the situation as it develops.”
The collapse of the cryptocurrency’s third largest exchange is likely to cause further disruption across the entire crypto world, analysts say, meaning Thursday’s rally could be temporary.
“The unwinding of FTX, as well as its shock of confidence to the system, will cause crypto prices to fall even further leading to “a new cascade of margin calls,” said analysts at J.P. Morgan in a note to investors. This would be similar to the selloff that happened after the collapse of the stable coin Terra earlier this year, where prices continued to decline weeks after its failure.
“This deleveraging is likely to last for at least a few weeks unless a rescue for Alameda Research and FTX is agreed quickly,” J.P. Morgan analysts wrote.
The crypto industry is waiting to see what other companies are impacted by the FTX collapse. The venture capital fund Sequoia Capital said Thursday it is writing down its total investment of nearly $215 million n FTX.
Balsamo reported from Washington.
NEW YORK (AP) — One of Donald Trump’s top moneymen admitted Thursday to breaking the law to help fellow Trump Organization executives avoid taxes on company-paid apartments and other perks, including by preparing misleading tax returns and failing to report the benefits to tax authorities.
Senior Vice President and Controller Jeffrey McConney testified at the company’s criminal tax fraud trial that he filed false tax returns on behalf of a father-son executive duo whose Manhattan apartment rents were paid by the Trump Organization.
McConney, who was granted immunity to testify as a prosecution witness, also testified that a few years before Trump became president, the company’s accountant raised concerns about the way it paid out holiday bonuses — a topic that has consumed hours of trial testimony.
According to McConney, the accountant warned that the Trump Organization’s dubious and since-discontinued practice of splitting bonus payments between an executive’s salary and one-time independent contractor payments from subsidiaries could jeopardize the law license of one such executive: its top lawyer.
The Trump Organization, the entity through which Trump owns hotels, golf courses and other assets, is accused of helping some top executives avoid income taxes on compensation they got in addition to their salaries.
The company, which could be fined more than $1 million if convicted, has denied wrongdoing. Its lawyers allege that another executive — longtime finance chief Allen Weisselberg — went rogue, concocted the scheme without Trump or the Trump family’s knowledge and lied to the company about what he’d done.
Trump Organization lawyer Susan Necheles kept the jury’s attention on Weisselberg as she questioned McConney on cross-examination Thursday afternoon, showing emails indicating that McConney needed to get permission from Weisselberg to complete even simple tasks, such as approving a $100 expenditure or writing a few sentences to describe the ice rinks the company managed in Central Park.
McConney said that Weisselberg, his boss for years, had wide latitude over the company’s operations and even quoted him as saying that Trump hired him to essentially run the company. Weisselberg has pleaded guilty to taking $1.7 million in off-the-books compensation and agreed to testify as a prosecution witness, possibly next week, in exchange for a five-month jail sentence.
The Trump Organization trial resumed Thursday after an eight-day delay while McConney and the judge, Juan Manuel Merchan recovered from COVID-19. The trial was abruptly interrupted on Nov. 1, just the second day of testimony, when McConney tested positive for the virus during a lunch break.
Merchan wore a blue surgical mask on the bench. About half the jurors also wore masks. McConney, who had been coughing off and on during his testimony last week, didn’t do so nearly as much on Thursday and testified that he was feeling “much better.”
McConney, who said he prepares taxes on the side for a handful of clients, told jurors that he checked “no” on state tax form questions asking if Chief Operating Officer Matthew Calamari Sr. maintained New York City living quarters despite knowing that he had, allowing them both to avoid paying city wage taxes
McConney said he did the same on Matthew Calamari Jr.’s tax forms and did not submit amended tax returns when he learned that he too was living in a company-paid Big Apple apartment.
“Did you intentionally try to help people evade their income taxes?” prosecutor Joshua Steinglass asked.
“Evade is a very strong word,” McConney responded. “I tried to help them any way I could, with some suggestions.”
The Trump Organization also paid for Weisselberg’s Manhattan apartment, Mercedes-Benz cars for him and his wife, furnishings and utilities. Trump personally paid his grandchildren’s school tuition.
McConney, in his third day on the witness stand, testified that he deducted the cost of some executives’ perks from their salaries, reducing their tax liability further. Trump signed off on the salary reductions. Prosecutors showed a 2012 memo noting one such arrangement for Calamari Sr. bearing the former president’s initial — a D resembling a treble clef — and the handwritten notation, “OK.”
A message seeking comment was left with a lawyer for the Calamaris.
McConney, picking up where he left off before the COVID interruption, testified that the Trump Organization altered some pay practices and financial arrangements after bringing in a Washington lawyer to audit its tax practices following Trump’s election in 2016.
Steinglass referred to the changes as a “cleanup.”
But McConney testified that the company was warned years earlier by its own accountant, Donald Bender, that its decades-old way of doling out holiday bonuses — saving money on taxes by paying full-time employees as freelance workers, and possibly writing the payoff as an expense — could imperil then-general counsel Jason Greenblatt’s ability to practice law.
“It had something to do with, he could lose his legal license,” McConney testified.
In 2015, after Bender spoke up, Greenblatt’s bonus was paid entirely as salary.
A message seeking comment was left with Greenblatt, who from 2017-2019 served as an assistant to the president and Trump’s special representative for Middle East negotiations.
McConney tried to justify the split-pay arrangement by saying the company would apportion its bonuses based on work that an executive did for that entity, such as Trump’s Mar-a-Lago estate in Florida. But later he acknowledged such work falls under the normal duties of a CFO like Weisselberg.
Asked why the company didn’t scrap the bonus-pay scheme entirely after Bender said it could cost Greenblatt his career, McConney said: “He’s telling me to stop on one and not stop on the other, it didn’t even enter my mind. … If Donald Bender had reason to tell us to stop, we would’ve stopped.”
Follow Michael Sisak on Twitter at twitter.com/mikesisak. Send confidential tips by visiting https://www.ap.org/tips/.
SACRAMENTO, Calif. (AP) — California regulators on Thursday proposed changes to the state’s residential solar market designed to encourage more at-home battery systems that can help the electrical grid rely less on fossil fuels in the evenings, especially during heat waves.
It’s the California Public Utilities Commission’s second attempt at updating the state’s incentive program for home solar systems. Last December, the commission proposed new charges for solar customers and lessened the subsidies for installing rooftop panels, which utilities wanted but solar companies warned would cripple the booming industry and hinder the state’s move to clean energy.
Solar panels are on 1.5 million California homes, creating by far the nation’s largest home solar market. The state has set ambitious goals for transitioning away from fossil fuels and to renewable energy sources like solar and wind to power homes, businesses and cars.
Under existing rules, solar customers can sell extra energy they aren’t using back to their power company for credit on their bill.
California’s three major utilities — Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric — have argued the payment is so generous that solar customers aren’t paying their fair share for the overall cost of the electric grid, which they still rely on when their panels aren’t generating power. Power rates include other costs like electric transmission and wildfire prevention work.
About $4 billion in costs are shifted from solar to non-solar customers, according to an estimate from a utility-backed coalition called Affordable Clean Energy for All. When solar customers pay very low bills, due to credits, they are paying less into the overall energy grid. The solar industry argues that number doesn’t take into account the contributions to grid reliability and other benefits that rooftop solar provides.
Kelly Hymes, the administrative law judge who wrote the commission’s proposal, acknowledged that shift, noting the state’s current system harms non-solar customers, with a disproportionately negative impact on low-income utility customers, and “is not cost-effective.”
The new proposal lessens how much money people get for selling their extra energy. But it doesn’t include a solar-specific fee that utilities wanted. It creates new financial incentives for people to install home storage systems to capture extra solar energy during the day. It also changes electric rates to encourage people to export stored energy to the grid in the late afternoon and early evening, when the grid typically transitions from renewable sources to fossil fuels.
“These changes will help meet California’s climate goals and increase reliability, while promoting affordability across all income levels,” Hymes wrote.
The five-member public utilities commission has until mid-December to discuss the proposal. If they approve it, it wouldn’t take effect until at least April 2023.
People who already have solar panels and storage systems would not see a change to their bill credits; the plan would only affect new customers. It also locks in a better rate for people who install in the next five years in an attempt to encourage more homeowners to get into the solar market now, though the solar industry argues its too minimal to matter.
The public utilities commission estimates the average customer with only solar panels would save $100 a month and that people with rooftop solar panels and storage systems would save $136. Those savings would make up the cost of the system with or without storage in no more than nine years. With storage, customers would recoup their costs in as little as five to seven years, the proposal estimates.
Today is takes about five to seven years for bill credits to cover the cost of installing solar panels, and longer for storage systems, said Bernadette Del Chiaro, executive director of the California Solar & Storage Association. The average solar and storage system costs about $26,000 when taking into account new federal tax credits that cover 30% of the cost, she said.
About 150,000 people add solar panels annually, and between 16% and 20% of those installations include battery storage, she said.
The latest attempt to strike a balance between the utilities and the solar industry brought more criticism than praise. The utility-backed coalition said it “fails to make the meaningful reform necessary” to ensure costs are fairly spread, while the California Solar & Storage Association said the proposal would “really hurt” the industry by making home solar panels less affordable.
“It is extremely disappointing that under this proposal, low-income families and all customers without solar will continue to pay a hidden tax on their electricity bills to subsidize rooftop solar for mostly wealthier Californians,” Kathy Fairbanks, a spokeswoman for the utility-backed Affordable Clean Energy for All, said in a statement.
She further chided the commission for not further reducing state payments for solar consumers at a time when there is more federal money flowing toward solar panels and other clean energy. The federal spending law signed by President Joe Biden in August includes a 30% federal tax credit — estimated to be about $7,500 — for installing solar panels within the next decade, according to the U.S. Department of Energy.
While Del Chiaro supports battery storage, she said she’s skeptical that lowering bill credits for solar customers will incentivize enough people to add batteries.
“The overnight, drastic change assumes that every consumer going solar today is going to, snap of the finger, add a battery,” she said.
The changes, if adopted, would only apply to customers of Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric.
College athletic programs are reacting to soaring inflation the same way as everyone else — they’re looking for ways big and small to save money.
In the Power Five, home of college sports’ biggest budgets and most considerable resources, schools are working with boosters and other partners to try to bridge the financial gap. Working down the line to smaller institutions, where budgets and resources are smaller, creativity is a must.
For schools of all sizes, travel and food are the most challenging issues.
Nebraska, with 24 sports programs and an athletic budget of $168 million this year, hopes to work with its beef and chicken vendors to find more cost-effective ways to order food for the training table. It’s also lining up more nonprofit groups to work concession stands to reduce labor costs.
The school expects the cost of doing business to be about $3 million more than it would be if the U.S. inflation rate hadn’t risen to more than 8%.
Arizona, which has a $101.6 million budget and 21 sports, projects costs could increase by $4 million, according to Derek van der Merwe, an assistant vice president and chief operating officer for administration and athletics at the Pac-12 school.
“You have to work real closely with all your teams to take a look at what changes you can make to absorb that cost within your operating budgets, or you have to look at other opportunities to increase revenues to offset those costs,” van der Merwe said. “The post-pandemic economy and insecurity is around a lot of the budgets we have to manage and makes it challenging because we don’t know what to anticipate.”
Those Power Five schools, though, have deep-pocketed boosters they can often rely on in times of need, an insurance policy for budgetary concerns.
At Mary Baldwin University, a private school with about 1,000 undergraduate students in Staunton, Virginia, it’s a far different story. The school competes in Division III in the USA South Athletic Conference, and most of its members are in North Carolina, anywhere from 3½ to 6 hours away.
Besides the cost of travel, there are overnight stays and food expenses.
The Fighting Squirrels do not field a football team, having only started admitting men in 2017, but added baseball and men’s basketball last year. The new programs began just as the athletic budget, cut 20% during the pandemic, was restored to its previous level before those additions, athletic director Tom Byrnes said.
“So we’re doing things here on a shoestring,” he told The Associated Press. “And we’re getting it done, you know, as best we can. But inflation is not helping us.”
The school is banking on its creativity and some local generosity.
Men’s basketball, 8-13 in its inaugural season, will play exhibitions against two Division I programs, rather than a couple scrimmages that might be more helpful for player development, hoping to bring in $3,000-$4,000 for each to pay for the team’s basketball shoes.
“Baseball, softball and women’s basketball teams all work in concession stands or as ushers at James Madison football games,” Byrnes said, traveling in a bus provided by a local company at cost. The school also is negotiating with a used car dealer to have it provide a car for coaches to use on recruiting trips for free, and has local restaurants that sometimes provide food at a discount.
“So those are the kind of things we have to do. We do nickel and dime stuff, too. The women’s soccer team has a Kona ice truck at games, so stuff like that,” Byrnes said.
While unlikely to have to resort to such measures, the biggest schools are not immune to belt-tightening wherever possible. Coaches’ requests for equipment are scrutinized, and they are sometimes asked to give up something in return.
But they all still have to travel, and eat.
Nebraska expects to spend $9.2 million on athletic department travel this year, executive associate athletic director and CFO Doug Ewald said. That’s a 17% increase, or $1.3 million. Arizona, meanwhile, expects its athletic travel costs to increase 20%-25% over last year, van der Merwe said.
Foresight helped Iowa State avoid some of the increases, senior associate athletic director Chris Jorgensen said, by locking in charter flight costs months or even years ago, while rival Iowa’s football travel will increase appreciably.
Charter flights for the Hawkeyes will be 8.5% higher and charter bus costs are up 12%, associate athletic director and CFO Greg Davies told the AP.
The Nebraska training table will see food costs rise about 20% this year, from $3.2 million to $3.8 million. Nebraska athletes consume 2,200 pounds of beef each month, and Ewald said the athletic department hopes to work with vendors to find ways to get better deals for buying in greater bulk.
Arizona, like Nebraska, is trying to absorb the added costs due to inflation by tightening belts. One thing is not negotiable, van der Merwe said.
“Our philosophy is that we make sure the student-athlete experience is the priority for everything we budget and plan for,” he said, “and everything around that is curtailed in order to make sure we maintain the integrity of that priority.”
The philosophy is the same at Randolph-Macon College, another Division III school in Virginia. Athletic director Jeff Burns credits the school’s athletic success for having allowed it to dip into reserves to maintain that standard.
“There’s really a spectrum across Division III. You’re going to see a lot of different ways where the haves are going to be able to handle it and the have nots are probably going to be forced to make some changes,” Burns said.
After more than three decades in sports, it’s not how Mary Baldwin’s Byrnes imagined things. He took the job six months before the pandemic began.
“It’s challenging,” he said. “But you know what? It keeps every day interesting.”
AP sports: https://apnews.com/hub/sports and https://twitter.com/AP_Sports
WASHINGTON (AP) —
The number of Americans applying for jobless benefits rose slightly last week, but the labor market remains healthy despite job cuts that have begun to spread across industries most affected by soaring interest rates, such as housing and technology.
Unemployment claims for the week ending Nov. 5 rose by 7,000 to 225,000 from 218,000 the previous week, the Labor Department reported Thursday. The four-week moving average declined by 250 to 218,750.
Applications for jobless claims, which generally track layoffs, have remained historically low this year, even as the Federal Reserve has cranked up its benchmark borrowing rate six times in its effort to cool the economy and tame inflation.
A strong job market is deepening the challenges the Federal Reserve faces as it raises interest rates at the fastest pace since the 1980s to try to bring inflation down from near a 40-year high. Steady hiring, solid pay growth and low unemployment have been good for workers, but have contributed to rising prices.
The government reported Thursday that consumer inflation reached 7.7% in October from a year earlier, the smallest year-over-year gain since January. Excluding volatile food and energy prices, “core” inflation rose 6.3% in the past 12 months and 0.3% from September.
Those number are still high, but came in lower than economists expected, giving a sliver of hope that the Fed will ease up on future rate hikes.
Last week, the Fed raised its short-term lending rate by another 0.75 percentage points, three times its usual margin, for a fourth time this year. Its key rate now stands in a range of 3.75% to 4%, the highest in 15 years.
Fed officials have admitted that part of their strategy is to loosen up the U.S. job market, which has been adding jobs at a furious pace the past two years after COVID-19 hit the U.S. and wiped out more than 20 million jobs.
The Labor Department reported last week that American employers added a healthy 261,000 jobs in October and that the unemployment rate rose from a five-decade low of 3.5% to 3.7%. Fed officials have signaled that the unemployment rate needs to be at least 4% to slow inflation, a threshold that could be met soon as more and more high-profile companies announce layoffs.
Facebook parent Meta said this week it was laying off 11,000 people, about 13% of its workforce, amid slumping revenue and broader tech industry woes. Twitter laid off about half of its 7,500-person staff after Elon Musk took over the company last week. The online real estate broker Redfin announced that it was laying off another 862 employees on Wednesday — after slashing 470 jobs in June — with the housing market in an eight-months-long slump. Redfin has shrunk its workforce by more than 25% since April and rival online broker Compass has also laid off hundreds of workers this year.
The Labor Department reported Thursday that total number of Americans collecting unemployment aid rose by 6,000 to 1.49 million for the week ending Oct. 29, a seven-month high, but still not a troubling level.
Twitter’s relaunched premium service — which grants blue-check “verification” labels to anyone willing to pay $8 a month — was unavailable Friday after the social media platform was flooded by a wave of imposter accounts it itself had approved.
It’s the latest whiplash-inducing change to the service where uncertainty has become the norm since billionaire Elon Musk took control two weeks ago. Prior to that, the blue check was granted to government entities, corporations, celebrities and journalists verified by the platform — precisely to prevent impersonation. Now, anyone can get one as long as they have a phone, a credit card and $8 a month.
An impostor account posing as pharmaceutical giant Eli Lilly & Co. and registered under the revamped Twitter Blue system tweeted that insulin was free, forcing the Indianapolis company to post an apology. Nintendo, Lockheed Martin, Musk’s own companies Tesla and SpaceX were also impersonated, as well as the accounts of various professional sports and political figures.
For advertisers who have put their business with Twitter on hold, the fake accounts could be the last straw: Musk’s rocky run atop the platform — laying off half its workforce and triggering high-profile departures — has raised questions about its survivability.
The impostors can cause big problems, even if they’re taken down quickly.
They have created “overwhelming reputational risk for placing advertising investments on the platform,” said Lou Paskalis, longtime marketing and media executive and former Bank of America head of global media. Adding that with the fake “verified” brand accounts, “a picture emerges of a platform in disarray that no media professional would risk their career by continuing to make advertising investments on, and no governance apparatus or senior executive would condone if they did.”
Adding to the confusion, Twitter now has two categories of “blue checks,” and they look identical. One includes the accounts verified before Musk took helm. It notes that “This account is verified because it’s notable in government, news, entertainment, or another designated category.” The other notes that the account subscribes to Twitter Blue.
But as of midday Friday, Twitter Blue was not available for subscription.
On Thursday, Musk tweeted that “too many corrupt legacy Blue ‘verification’ checkmarks exist, so no choice but to remove legacy Blue in coming months.”
An email sent to Twitter’s press address went unanswered. The company’s communications department was gutted in the layoffs and Twitter has not responded to queries from The Associated Press since Oct. 27 when Musk took the helm.
Thursday night, Twitter also once again began adding gray “official” labels to some prominent accounts. It had rolled out the labels earlier this week, only to kill them a few hours later.
They returned Thursday night, at least for some accounts — including Twitter’s own, as well as big companies like Amazon, Nike and Coca-Cola, before many vanished again.
Celebrities also did not appear to be getting the “official” label.
Twitter is heavily dependent on ads and about 90% of its revenue comes from advertisers. But each change that Musk is rolling out — or rolling back — makes the site less appealing for big brands.
“It has become chaos,” said Richard Levick, CEO of public relations firm Levick. “Who buys into chaos?”
A bigger issue for Musk might be the risk to his reputation as a model tech executive, since the rollout of different types of verifications and other changes have been botched, Levick added.
“It’s another example something not very well thought out, and that’s what happens when you rush,” Levick said. “Musk has been known as a trusted visionary and magician — he can’t lose that moniker and that’s what’s at risk right now,” Levick said.
Twitter is a small part of total ad spending for the biggest companies that advertise on the platform. Google, Amazon and Meta account for about 75% of digital ads globally, with all other platforms combined making up the other 25%. Twitter accounts for about 0.9% of global digital ad spending, according to Insider Intelligence.
“For most marketers on budgets, Twitter has always been that thing that is potentially too big to totally ignore but not quite big enough to care about,” said Mark DiMassimo, creative chief of marketing agency DiGo.
“None of this is a forever moral or ethical stand on the point of advertisers,” he added. “If Musk proves to be a civilizing force in the long run advertisers will come back — if Twitter is still there. It’s a ‘for now’ decision — why be there now?”
AP Technology Writer Frank Bajak in Boston contributed to this report.
ALBUQUERQUE, N.M. (AP) — The U.S. Interior Department’s plan to withdraw hundreds of square miles in New Mexico from oil and gas production for the next 20 years is expected to result in only a few dozen wells not being drilled on federal land surrounding Chaco Culture National Historical Park, according to an environmental assessment.
Land managers have scheduled two public meetings next week to take comments on the assessment made public Thursday.
The withdrawal plan was first outlined by Interior Secretary Deb Haaland in 2021 in response to the concerns of Native American tribes in New Mexico and Arizona that development was going unchecked across a wide swath of northwestern New Mexico and that tribal officials did not have a seat at the table.
In addition to the proposed withdrawal, Haaland — who is from Laguna Pueblo and is the first Native American to lead a Cabinet agency — also committed to taking a broader look at how federal land across the region can be better managed while taking into account environmental effects and cultural preservation.
Indigenous leaders and environmental groups reiterated this week that the broader look would be a more meaningful step toward permanent protections for cultural resources in the San Juan Basin.
The environmental assessment bolsters that argument since it notes that the proposed withdrawal would not affect existing leases and that much of the interest by the industry for future development already is under lease or falls outside the boundary of what would be withdrawn.
The Bureau of Land Management has estimated, based on 2018 data, that not quite 100 new oil and gas wells likely would be drilled over the next 20 years within the withdrawal area. It’s estimated that less than half of those likely would not be drilled if the withdrawal were approved.
With only a few dozen wells expected in the area, natural gas production for the area would decrease by half of 1% and oil production could see a 2.5% reduction.
However, the New Mexico Oil and Gas Association argued that even though the withdrawal would not affect leases on Navajo land or allotments owned by individual Navajos, those leases essentially become landlocked by taking federal mineral holdings off the board.
Navajo Nation officials have made similar arguments, saying millions of dollars in annual oil and gas revenues benefit the tribe and individual tribal members Some leaders have advocated for a smaller buffer around Chaco park to be protected due to the economic implications.
The industry group said there are more than 418 unleased allotments in the buffer zone associated with over 22,000 allottees.
Environmentalists say the potential development for the withdrawal area represents just a fraction of the 3,200 wells overall that the region could see over the next two decades.
Mike Eisenfeld of the San Juan Citizens Alliance has been monitoring and protesting development throughout the region for years. He said Friday that the larger issue is the expansive area beyond the withdrawal zone and that federal land managers need to evaluate requests for permitting within Haaland’s bigger “Honoring Chaco” initiative.
“We think that requires extensive consultation on protecting this region from industrialization of the landscape,” he said.
In June, the All Pueblo Council of Governors traveled from New Mexico to Washington to urge the Interior Department to finalize its proposal to protect the Chaco area, arguing that public land management should better reflect the value of sacred sites, cultural resources and traditional stories that are tied to the region.
A World Heritage site, Chaco Culture National Historical Park is thought to be the center of what was once a hub of Indigenous civilization with many tribes from the Southwest tracing their roots to the high desert outpost.
Within the park, walls of stacked stone rise up from the canyon bottom, some perfectly aligned with the seasonal movements of the sun and moon. Archaeologists also have found evidence of great roads that stretched across what is now New Mexico, Arizona, Utah and Colorado.
NEW YORK (AP) — Wall Street piled more gains Friday onto its mammoth rally from a day earlier to close out its best week since the summer.
The S&P 500 rose 0.9% a day after soaring 5.5% for its best day in more than two years. The Dow Jones Industrial Average added 32 points to its surge of more than 1,200 from a day earlier, while the Nasdaq composite jumped 1.9%.
Markets got a boost after China relaxed some of its strict anti-COVID measures, which have been hurting the world’s second-largest economy. Hopes for more growth from China helped not only stocks but also oil prices to rise, with U.S. crude gaining 2.9% to $88.96 per barrel.
The main reason for this week’s euphoria in markets was a report on Thursday showing inflation in the United States slowed by more than expected last month. That raised hopes the worst of inflation may have passed and the Federal Reserve can be less aggressive about raising interest rates to get it under control, though analysts cautioned high inflation could be slow to fall and some called Wall Street’s big rally overdone.
What the Fed does with rates is crucial for Wall Street because hikes slow the economy and can cause a recession, all while dragging down on stock prices. They’ve been the main reason for markets’ struggles this year.
Perhaps just as important as how bad inflation is at the moment is how high U.S. households see it being in future years. That’s because too-high expectations can trigger a vicious cycle where people accelerate purchases and make other moves that inflame inflation further.
The Fed has said preventing such a doom loop is one of the reasons it’s moved so aggressively on rate hikes. Inflation expectations are currently high relative to history, but a preliminary report on Friday suggested they’re not moving very much.
The median expectation for inflation in the coming year among households rose to 5.1% from 5% a month earlier, according to a survey by the University of Michigan. Expectations for long-run inflation, meanwhile, ticked up to 3%. But that’s still within the same 2.9% to 3.1% range where they’ve been for 15 of the last 16 months.
High inflation helped knock down the survey’s reading for overall consumer sentiment by more than economists expected.
“The consumer is laser-focused on inflation and they’re feeling it every day,” said Brian Price, head of investment management at Commonwealth Financial Network. “I wouldn’t expect that we see any upside with regard to consumer sentiment until inflation comes under control.”
The Fed has already lifted its key overnight interest rate to a range of 3.75% to 4%, up from basically zero in March. The likely scenario is still for it to hike further into next year, and then to hold rates at that high level for some time.
The hope for markets is that a softening in inflation could mean the Fed will hold the line at a lower, less painful level for investors than it would have otherwise.
“They’ve been pretty clear all along they were going to front-load the interest rate increases,” Price said. “They need some time to evaluate the data over the next few months.”
Traders are increasingly betting the federal funds rate could top out around a range of 4.75% to 5% by early next year, according to CME Group. A week ago, they saw a higher ultimate rate as more likely, with a sizable chunk expecting something like 5.25% to 5.50%.
Bond markets were closed for trading in observance of Veterans Day. On Thursday, yields plunged as investors pared back their expectations for how aggressively the Fed will raise rates.
The S&P 500 rose 36.56 points to 3,992.93, and its 5.9% gain for the week was its third in the last four and its biggest since June. The Dow rose 32.49, or 0.1%, to 33,747.86, and the Nasdaq climbed 209.18, or 1.9%, to 11.323.33. Both also notched hefty gains for the week.
The market has routinely reacted with exaggerated swings following each month’s inflation data report, according to Jonathan Golub, chief U.S. equity strategist at Credit Suisse. And while Thursday’s report “was clearly a big positive, the market’s response appears out of sync with the size of the surprise.”
Companies that do a lot of business in China and around the region were particularly strong Friday following the relaxation of anti-COVID restrictions. Wynn Resorts rose 8.3%, and Las Vegas Sands gained 5.5%.
Tapestry rose 8.7% and Ralph Lauren rose 9.4% to also help lead the S&P 500 higher. Both companies reported stronger profits for the latest quarter than expected.
On the losing end were health care companies. Elevance Health dropped 5.8%, and Cigna fell 6%.
In the crypto market, meanwhile, prices sank again amid the industry’s latest crisis of confidence. One of the bigger trading platforms, FTX, filed for bankruptcy protection after its users began scrambling to pull out their money on fears about its financial strength and after a bigger rival nixed a deal to buy the troubled company.
The exchange and its founder are under investigation by the Department of Justice and Securities and Exchange Commission, and rivals have said FTX’s failure could dent confidence in the broader industry.
Bitcoin fell below $16,800, down 6% from a day earlier, according to CoinDesk. It set its record of nearly $69,000 almost exactly a year ago, and it was above $21,000 a week ago.
AP Business Writers Damian J. Troise, Joe McDonald and Matt Ott contributed.
SHARM EL-SHEIKH, Egypt (AP) — Members of a Republican Congressional delegation took the stage at this year’s U.N. climate talks Friday to tout the benefits of fossil fuels — a bold move at a meeting that’s all about curbing carbon emissions for the good of humanity.
Scientists overwhelmingly agree that heat-trapping gases such as those released from the combustion of coal, oil and gas are pushing up global temperatures, thereby causing sea-level rise, extreme weather and species extinctions.
Yet Rep. John Curtis, R-Utah, said it would be wrong to demonize fossil fuels.
“I think we need to decide as a world: Do we hate greenhouse gas emissions or do we hate fossil fuels,” said Curtis, who is known for founding the Conservative Climate Caucus. “It’s not the same thing.”
Like Curtis, Rep. Garret Graves, R-La., suggested fossil fuels can be a form of clean energy, if only the carbon released by extracting and burning them could be captured and stored safely.
“One of the things we ought to be doing is not attacking oil and gas, it’s to be attacking the emissions associated with it, to where it can be indistinguishable from other renewable energy technologies,” he told an audience in the U.S. pavilion at the climate talks in Sharm el-Sheikh.
This, Graves argued, would make fossil fuels “an arrow in the quiver as we try to address our objectives of energy affordability, reliability, cleanliness, exportability and security of supply chain.”
House Republicans’ views are likely to become more important given the expected turnover of the House to Republican control. The comments echo industry efforts in recent years to separate carbon dioxide emissions from fossil fuels in public perception.
Andrea Dutton, a professor of geoscience and MacArthur Fellow at the University of Wisconsin-Madison, said that’s not possible.
“Burning fossil fuels releases greenhouse gases that are causing temperatures to rise rapidly, and this is the major contributor to the global warming we are experiencing,” she said in an email. “This is not a matter of belief but rather a matter of scientific evidence.”
While the fossil fuel industry has made some advances in reducing emissions per unit of fuel burned — largely due to government regulation and pressure from those concerned about climate change — neither coal, oil nor gas are anywhere near being a clean source of energy.
One solution promoted by industry is the idea of carbon capture, to prevent emissions from reaching the atmosphere, usually storing the exhaust gases underground. There is also “direct air capture,” in a nascent stage, that would be able to remove emissions once they are in the air.
Nobody has demonstrated a cost-effective way of doing either at scale, said Andrew Dessler, a professor of atmospheric sciences at Texas A&M University.
“Renewables are presently the cheapest energy — even without carbon capture on fossil fuels — so adding carbon capture is never going to be the economically superior solution,” he said.
Rep. Dan Crenshaw, R-Texas, said that replacing one fossil fuel — coal — with a slightly cleaner one — natural gas — would already result in big emissions cuts.
In the United States natural gas has already displaced coal in many cases and is responsible for substantial reductions of one main greehouse gas, carbon dioxide, in recent years.
“Let them build the pipelines they need, let them build the export terminals they need,” Crenshaw told the audience in Egypt, adding that the effect would be “the equivalent of giving every American solar panels, giving every American a Tesla, and doubling our wind capacity.”
Several experts contacted by The Associated Press said that was not an ideal solution. Natural gas is made up mostly of methane. Satelites show the powerful greenhouse gas leaking from equipment at every stage of production.
“To solve the climate crisis we have to stop emitting carbon dioxide and methane into the atmosphere,” said Jonathan T. Overpeck, dean of the University of Michigan School for Environment and Sustainability. “The production and use of natural gas does both, so we have to stop using natural gas as soon as we can.”
Overpeck warned that all fossil fuel infrastructure now being built, including for natural gas, risks becoming a stranded asset if governments want to make good on their pledges to curb climate change.
“This is why we must leapfrog the gas-based solutions to renewable energy-based solutions, plus battery storage, plus hydrogen,” he said in an email to The AP.
Crenshaw, the lawmaker from Texas, accused “radical environmentalists” of exaggerating the threat posed by climate change and misstating the science.
“Let’s not lie to our children and scare them to death, then tell them they’re going to burn alive because of this,” he said.
Donald Wuebbles, a University of Illinois professor of atmospheric sciences, past assistant director of the Office of Science, Technology and Policy at the White House and former lead author on the U.N.’s independent climate science panel, said the allegation was misplaced.
“Nobody’s out there saying children are going to burn to death,” Wuebbles wrote. “What we are saying is this is an extremely serious problem, perhaps the most serious problem humanity has ever faced and we need to deal with it.”
The Republican delegation spoke shortly before U.S. President Joe Biden delivered a speech in a packed hall at the same venue, where he announced additional measures to crack down on methane emissions and promoted his administration’s recent climate bill that’s designed to boost rooftop solar and electric car uptake.
FRANKFURT, Germany (AP) — The European Union’s executive commission slashed its forecast for economic growth next year, saying the 19 countries that use the euro currency will slide into recession over the winter as peak inflation hangs on for longer than expected and high fuel and heating costs erode consumer purchasing power.
The European Commission’s autumn forecast released Friday predicts falling economic output in the last three months of this year and the first months of 2023.
The commission says high energy prices, a rising cost of living, higher interest rates and slowing global trade “are expected to tip the EU, the euro area and most member states into recession in the last quarter of the year.”
Going forward, the growth forecast for all of 2023 was lowered to 0.3% from 1.4% expected in the previous forecast from July.
“The EU economy is at a turning point,” said Paolo Gentiloni, European commissioner for economy.
“After a surprisingly strong first half of the year, the EU economy lost momentum in the third quarter and recent survey data point to a contraction for the winter,” he told reporters in Brussels. “The outlook for next year has weakened significantly.”
The worst performer next year is likely to be Germany, Europe’s largest economy and one of the most dependent on Russian natural gas before the war in Ukraine. Germany was expected to see output shrink by 0.6% over the next year.
Natural gas and electricity prices have soared as Russia has slashed gas supplies to Europe used for heating, electricity and industrial processes. European officials have accused Russia of energy warfare to punish EU countries for supporting Ukraine, while state-owned supplier Gazprom has cited technical reasons and a refusal by some customers to pay for gas in rubles.
In response, EU countries have rolled out cash support for consumers facing rising bills and lined up new supplies of natural gas by pipeline from Norway and Azerbaijan and in liquefied form that comes by ship from the U.S. and Qatar.
While gas storage is full for now, an exceptionally cold winter and the loss of remaining Russian gas could easily extend the gas crunch until winter 2023-24. In the meantime, consumers are businesses are facing sharply higher utility bills that have led to some companies simply shutting down unprofitable production in energy intensive areas such as fertilizer and steel.
Inflation will peak later than expected, near the end of the year, and will lift the average rate to 8.5% for 2022 and to 6.1% for 2023 in the eurozone, the EU forecast said. That is an upward revision of nearly 1 percentage point for 2022 and more than 2 points for 2023.
Two consecutive quarters of falling output is one common definition of recession, although the economists on the eurozone business cycle dating committee use a broader set of data including employment figures.
The commission indicated the job market was likely to hold up relatively well despite shrinking output over the winter, forecasting an increase in the unemployment rate from 6.8% this year to 7.2% next and a decrease to 7% in 2024.
Gentiloni said the forecast was subject to risks from unexpected events like a complete cutoff of remaining Russian gas but that the economy could do better than expected if EU governments act together in dealing with the economy and the energy crisis. He cited a discussion over revising EU rules on limiting excessive government debt and deficits.
The downbeat numbers “are not only subject to huge uncertainty, but crucially policy dependent,” Gentiloni said. “If we are able to show, based also on the experience of the pandemic, that we are able to agree on a common policy strategy, this will have confidence on markets, on investments and may change the outlook for the better.”
GENEVA (AP) — Top U.N. officials updated a high-level Russian delegation Friday on progress to facilitate Russia’s exports of food and fertilizer to global markets which have faced obstacles under an expiring wartime deal that has enabled Ukraine to ship over 10 million metric tons of grain from three Black Sea ports.
U.N. humanitarian chief Martin Griffiths and U.N. trade chief Rebeca Grynspan, who has been in charge of the Russian side of the agreement, informed the Russian team led by Deputy Foreign Minister Sergey Vershinin on steps taken to address key Russian issues — facilitating payments, shipping, insurance for shipments of its grain and fertilizer and getting access to European Union ports, U.N. associate spokeswoman Stephanie Tremblay said in a statement.
The meeting took place ahead of the Nov. 19 expiration of the separate agreements with Russia and Ukraine brokered by the U.N. and Turkey and signed in Istanbul on July 22.
Russia briefly suspended its participation in the deal two weeks ago, alleging a Ukrainian drone attack on its Black Sea fleet in Crimea and Russian authorities have said they are dissatisfied with the implementation of its side of the accord and haven’t yet decided whether to extend the agreement, which was aimed at easing a global food crisis sparked by shortages of grain and fertilizer and escalating prices.
The U.N. also briefed the Russians on “recently issued General Licenses and shipments of fertilizer to developing countries’ destinations and its ongoing engagement with private sector and member states,” Tremblay said.
Russia’s TASS news agency reported on Nov. 1 that Russian fertilizer producer Uralchem-Uralkali was prepared to donate 240,000 ton of fertilizer that has been stuck in EU warehouses and blocked from export for months to needy developing countries, with a first shipment destined for Malawi.
Tremblay said, “It is anticipated that the first shipment of donated fertilizers will depart for Malawi in the coming week.”
“The U.N. remains committed to address the global fertilizer market crunch where farmers, especially smallholder farmers from the developing world are priced out of production due to high inputs costs,” she said. “The world cannot afford to let global fertilizer accessibility problems become a global food shortage.”
The United Nations calls on all parties to expedite the removal of all remaining obstacle to the export and transportation of fertilizer to countries most in need, Tremblay said.
There are no U.S. or European Union sanctions on food and fertilizer shipments, but Russian diplomats have cited problems getting financing and insurance for ships and finding ports where Russian vessels can dock.
“We need to resolve a number of issues related to the well-known part of the so-called grain deal that concerns us,” Kremlin spokesperson Dmitry Peskov told reporters before the meeting. “Here, there is a mutual understanding on the part of our counterparts in the U.N. Therefore, work is underway in this direction.”
Grynspan, who heads the U.N. Conference on Trade and Development, told the Security Council last week that Ukraine and Russia provide around 30% of the world’s exported wheat and barley, 20% of its corn, and over 50% of its sunflower oil. Russia is also the world’s largest exporter of fertilizers, accounting for 15% share of global exports.
The U.N. has warned that an end to the deal could have a ripple effect on food prices, availability and security in many parts of the world.
“Nobody, I think, wants to see that there is a termination of the deal. I think the situation would be really difficult, and the implications would be very serious,” said Boubaker Ben Belhassen, who heads the trade and markets division of the U.N.’s Food and Agricultural Organization.
“In the short term, certainly prices will have to respond, and they will increase, especially, for example, for wheat, for maize, and also for sunflower seed oil,” he told reporters during a U.N. briefing Friday.
Follow all of AP’s coverage on the food crisis at https://apnews.com/hub/food-crisis and the war in Ukraine at https://apnews.com/hub/russia-ukraine.
BERLIN (AP) — KFC has apologized for accidentally sending an automated push alert to its app users in Germany that appeared to urge people to order food to commemorate the 84th anniversary of Kristallnacht — the “Night of Broken Glass” — when Nazis terrorized Jews throughout Germany and Austria.
The company faced an outcry for the alert that went out Wednesday at a time when Jewish groups are warning of rising antisemitism. According to screenshots shared online, the app alert said, “Memorial day for the Reich pogrom night. Treat yourself to more tender cheese on your crispy chicken. Now at KFCheese!”
KFC Germany said the notification was an “unplanned, insensitive and unacceptable message and for this we sincerely apologize.”
“We use a semi-automated content creation process linked to calendars that include national observances. In this instance, our internal review process was not properly followed, resulting in a non-approved notification being shared,” the company said in a statement Thursday.
The chicken chain says it’s halted app communications and is reviewing its policies to avoid similar notifications in the future, adding that “we understand and respect the gravity and history of this day, and remain committed to equity, inclusion and belonging for all.”
The notification led to outcry from Jewish groups, with Dalia Grinfeld, associate director of European affairs at the Anti-Defamation League, tweeting in German: “How wrong can you get on Reich pogrom night, @KFCDeutschland (@kfc)?! Shame on you!”
The alert came on the anniversary of Nov. 9, 1938, when the Nazis, among them many ordinary Germans, killed at least 91 people and vandalized 7,500 Jewish businesses during Kristallnacht pogroms across Germany and Austria. They also burned more than 1,400 synagogues, according to Israel’s Yad Vashem Holocaust memorial. In Germany, the event is more commonly known as Reich pogrom night.
To mark the day, Holocaust survivors from around the world warned about the reemergence of antisemitism in a campaign called #ItStartedWithWords. Jewish groups say attacks and incidents of bias and hate speech have been rising.
Brands have recently cut ties with celebrities over antisemitic comments, including German sportswear company Adidas and others with the rapper formerly known as Kanye West and Nike with NBA player Kyrie Irving.
Disgraced Theranos CEO Elizabeth Holmes is casting herself as a Silicon Valley scapegoat who overcame an abusive relationship to become a loving mother in an effort to avoid a lengthy prison sentence for duping investors in her failed blood-testing company.
In an 82-page document filed late Thursday, Holmes’ lawyers tried to persuade U.S. District Judge Edward Davila that sending Holmes to prison is unnecessary, partly because she has already been stigmatized by intense media coverage that has turned her into a “caricature to be mocked and vilified.”
If Davila decides she send her to prison, Holmes’ lawyers argued she should be sentenced to no more than 18 months — a fraction of the maximum of 20 years she is facing after being convicted on four felony counts of investor fraud and conspiracy earlier this year.
“We acknowledge that this may seem a tall order given the public perception of this case—especially when Ms. Holmes is viewed as the caricature, not the person,” the filing said.
Prosecutors are expected to seek a much harsher sentence when they file their own sentencing recommendations ahead of Holmes’ scheduled Nov. 18 sentencing. Holmes, 38, will learn her fate in the same San Jose California, courtroom where her high-profile trial cast a glaring spotlight on Silicon Valley’s penchant for hype and hubris.
After starting Theranos as a 19-year-old, Holmes proceeded to raise nearly $1 billion from investors swayed by what turned out to be bogus promises.
Holmes became lionized as a visionary while touting a compact device that was supposed to be able to scan for hundreds of diseases and other potential health problems with a few drops of blood taken with a finger prick. Theranos’ tests instead produced wildly unreliable results, flaws that Holmes tried to conceal until the problems were exposed in the media and regulatory audits.
Although Holmes’ convictions were limited to about $140 million of the investments in Theranos, legal experts say the magnitude of just those losses make it unlikely that her push for a relatively short prison sentence or home confinement will succeed.
Two former federal prosecutors, Duncan Levin and Amanda Kramer, told The Associated Press Holmes seems likely to get a sentence of nine years to 17 years, although both acknowledged Davila has the discretion to be more lenient.
“There is an argument to be made, particularly in white collar cases, that you don’t need a very long prison sentence to deter people who never have been in prison,” Kramer said.
Holmes’ lawyer repeatedly hammered on that point in the memo to Davila. “Ms. Holmes is no danger to the public,” the filing asserted. “She has no criminal history, has a perfect pretrial services compliance record, and is described by the people who know her repeatedly as a gentle and loving person who tries to do the right thing.”
The filing also cited her motherhood to a 1-year-old son she had with her current partner, William “Billy” Evans, shortly before the start of last year’s trial. Former Theranos lab director Adam Rosendorff, a key prosecution witness in that trial, said he understood that Holmes is currently pregnant when he was summoned back to court last month for further sworn testimony in Holmes’ failed bid for a new trial.
Neither Holmes nor Evans responded when asked if she was pregnant again after that Oct. 17 hearing, and pregnancy wasn’t mentioned in the sentencing memo.
Evans was among more than 130 people who submitted letters to Davila extolling Holmes’ character. One came from Sen. Cory Booker, a Democrat from New Jersey, who described her as a friend who “holds onto the hope that she can make contributions to the lives of others, and that she can, despite mistakes, make the world a better place.”
In their memo, Holmes’ lawyers also pointed out some of her past trauma, echoing Holmes’ testimony about being raped while she was still a student at Stanford. After that, Holmes testified she endured years of emotional and sexual abuse that affected her decision-making while in a romantic relationship with Ramesh “Sunny” Balwani, who was also Theranos’ chief operating officer.
Balwani, 57, was convicted on 12 felony counts of investor and patient fraud in July during separate trial. He is scheduled to be sentenced Dec. 7. His lawyers have denied Holmes’ abuse accusations.
The documents also asserted that Holmes was unfairly singled out by a federal government looking to crack down on Silicon Valley excesses, suggesting part of the reason may have been because she became a successful woman in a technology industry that has been dominated by men. Although she once was worth $4.5 billion based on the value of her stake in privately held Theranos, the lawyers stressed she never sold any shares in the company and now has few future prospects.
“Ms. Holmes will never be able to seek another job or meet a new friend without the negative caricature acting as a barrier,” the filing said.

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