Trump’s ban against WeChat owner Tencent could have huge implications for U.S. companies


Did President Donald Trump just blow up the U.S. videogame industry?

That was the question on a lot of minds after Trump issued executive orders Thursday night banning “transactions” with the Chinese owners of the TikTok and WeChat apps starting Sept. 20. While the move against TikTok’s owner — Beijing-based Bytedance — was not a huge surprise, action against WeChat’s owner — Shenzhen-based tech giant Tencent Holdings Inc. — was.

That’s because Tencent is one of the world’s largest and most valuable companies, with ownership stakes in a number of U.S. videogame companies, including Riot Games, which makes “League of Legends”; Epic Games, which makes “Fortnite”; and Activision Blizzard
ATVI,
+2.98%

, which makes “World of Warcraft.”

Tencent also has significant stakes in Tesla Inc.
TSLA,
+0.30%

and Snap Inc.
SNAP,
-1.61%

, the maker of Snapchat, and the Chinese company has streaming deals in place with the NBA, the NFL and Major League Baseball. The order could potentially also affect Apple Inc.
AAPL,
+3.48%

and Alphabet’s
GOOGL,
+1.74%

GOOG,
+1.79%

Google app stores, which feature Tencent-owned apps.

The executive order took aim directly at WeChat, which has more than 1 billion users worldwide, and whose “data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information,” the order said.

But the wording of the order made it unclear if the ban affected just WeChat or all of Tencent’s holdings, saying: “any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. … Shenzhen, China, or any subsidiary of that entity.”

Either way, the order is likely to be challenged in court.

Tencent shares
700,
-4.41%

in Hong Kong sank in Friday trading after the announcement. The news broke after the extended trading session in the U.S. closed, but traders will likely keep a close eye on how shares of Tesla, Activision Blizzard and others fare in the morning.

Banning all business by U.S. companies with WeChat’s parent — if that is the case — could prove to have much farther-reaching effects than Trump may have anticipated.

“Likely he had no idea,” tech journalist Kara Swisher tweeted Thursday night.

Many on social media Thursday night expressed surprise and alarm:





Original source link

Exclusive: TikTok’s Chinese owner offers to forego stake to clinch U.S. deal


© Reuters. FILE PHOTO: TikTok logos are seen on smartphones in front of displayed ByteDance logo in this illustration

By Echo Wang and Alexandra Alper

NEW YORK/WASHINGTON (Reuters) – China’s ByteDance has agreed to divest the U.S. operations of TikTok completely in a bid to save a deal with the White House, after President Donald Trump said on Friday he had decided to ban the popular short-video app, two people familiar with the matter said on Saturday.

U.S. officials have said TikTok under its Chinese parent poses a national risk because of the personal data it handles. ByteDance’s concession will test whether Trump’s threat to ban TikTok is a negotiating tactic or whether he is intent on cracking down on a social media app that has up to 80 million daily active users in the United States.

Trump told reporters onboard Air Force One late on Friday that he would issue an order for TikTok to be banned in the United States as early as Saturday. “Not the deal that you have been hearing about, that they are going to buy and sell… We are not an M&A (mergers and acquisitions) country,” Trump said.

ByteDance was previously seeking to keep a minority stake in the U.S. business of TikTok, which the White House had rejected. Under the new proposed deal, ByteDance would exit completely and Microsoft Corp (NASDAQ:) would take over TikTok in the United States, the sources said.

Some ByteDance investors that are based in the United States may be given the opportunity to take minority stakes in the business, the sources added. About 70% of ByteDance’s outside investors come from the United States.

The White House declined to comment on whether Trump would accept ByteDance’s concession. ByteDance in Beijing did not respond to a request for comment

Under ByteDance’s new proposal, Microsoft will be in charge of protecting all U.S. user data, the sources said. The plan allows for another U.S. company other than Microsoft to take over TikTok in the United States, the sources added.

Microsoft did not respond to a request for comment.

As relations between the United States and China deteriorate over trade, Hong Kong’s autonomy, cyber security and the spread of the novel coronavirus, TikTok has emerged as a flashpoint in the dispute between the world’s two largest economies.

ByteDance has been considering a range of options for TikTok amid U.S. pressure to relinquish control of the app, which allows users to create short videos with special effects and has become wildly popular with U.S. teenagers.

ByteDance had received a proposal from some of its investors, including Sequoia and General Atlantic, to transfer majority ownership of TikTok to them, Reuters reported on Wednesday. The proposal valued TikTok at about $50 billion, but some ByteDance executives believe the app is worth more than that.

ByteDance acquired Shanghai-based video app Musical.ly in a $1 billion deal in 2017 and relaunched it as TikTok the following year. ByteDance did not seek approval for the acquisition from the Committee on Foreign Investment in the United States (CFIUS), which reviews deals for potential national security risks. Reuters reported last year that CFIUS had opened an investigation into TikTok.

APP SCRUTINY

The United States has been increasingly scrutinizing app developers over the personal data they handle, especially if some of it involves U.S. military or intelligence personnel. Ordering the divestment of TikTok would not be the first time the White House has taken action over such concerns.

Earlier this year, Chinese gaming company Beijing Kunlun Tech Co Ltd sold Grindr LLC, a popular gay dating app it bought in 2016, for $620 million after being ordered by CFIUS to divest.

In 2018, CFIUS forced China’s Ant Financial to scrap plans to buy MoneyGram International Inc over concerns about the safety of data that could identify U.S. citizens.

ByteDance was valued at as much as $140 billion earlier this year when one of its shareholders, Cheetah Mobile (NYSE:), sold a small stake in a private deal, Reuters has reported. The startup’s investors include Japan’s SoftBank Group Corp.

The bulk of ByteDance’s revenue comes from advertising on apps under its Chinese operations including Douyin – a Chinese version of TikTok – and news aggregator app Jinri Toutiao, as well as video-streaming app Xigua and Pipixia, an app for jokes and humorous videos.





Original source link

Calvin Klein owner PVH to cut 450 jobs in North America, shut 162 outlets By Reuters


© Reuters. The logo of Calvin Klein watches is seen at the Baselworld fair in Basel

(Reuters) – PVH Corp (N:) said on Tuesday it would cut 450 jobs in North America and shutter 162 retail stores of its business that houses brands such as Van Heusen and IZOD, as the coronavirus crisis wreaks havoc on the apparel industry.

The Tommy Hilfiger and Calvin Klein owner said the lay offs, affecting 12% of its office workforce, would impact all three brands and save about $80 million annually.

“The COVID-19 crisis is dramatically reshaping the retail landscape in ways that we believe will be long-term in nature and far-reaching in terms of consumer purchasing behavior,” President Stefan Larsson said.

PVH estimated pre-tax charges of about $80 million over the next 12 months from costs associated with exit of its heritage brand retail business, which sells the three brands and accounted for 2.6% of its overall revenue in 2019.

“Overall, we see this as a positive development for PVH as the company exits a declining business and reduces costs,” Bernstein analyst Jamie Merriman said.

Spain’s Zara, Nordstrom (N:) and Bath & Body Works have also closed stores in response to the COVID-19 pandemic.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Original source link

Greyhound owner says Trump rhetoric caused less immigration, forcing $156 million write-down


President Donald Trump’s comments on immigration contributed to a £124 million ($156 million ) hit for the budget intercity coach operator Greyhound, an executive at its parent company FirstGroup says.

President Trump’s comments on immigration, including about building a wall between Mexico and the U.S., caused a drop in immigrants crossing the border, which is a significant source of income for the company, FirstGroup’s finance director told MarketWatch.

Greyhound is the only national intercity coach operator in the U.S. and immigration is an important profit driver for it as new arrivals often use Greyhound coaches to travel to their final destinations.

“At the back end of 2019 into the start of 2020, the immigration flows coming out of Mexico into the U.S. were incredibly strong,” said Ryan Mangold. FirstGroup’s financial year ends in March.

“Donald Trump’s rhetoric then on anti-immigration and the wall that he wants to build across the across the border of Mexico had meant that a huge number of those immigration flows…coming out of the south and going into the U.S. almost evaporated over a very short period of time based on U.S. policy,” he said.

FirstGroup said it had reduced Greyhound’s value by £124.4 million in November at its half year results.

“This principally reflects the decline in immigration related flows on the Southern U.S. border states in the second quarter,” it said, also citing increased competition on some routes.

Read:Opinion: Why bashing immigrants helps Trump but hurts America

Releasing its full-year results on Wednesday it restated the reduction in Greyhound’s value and said it devalued the division by a further £62.5 million in the second half owing to poor performance and a change in its internal valuation process.

Once immigrants arrive in the U.S. they don’t just stop in Texas, Mangold said, taking long distance journeys to cities such as Seattle and Chicago.

“And they use Greyhound, I think, in preference to airlines, because it’s much cheaper to do,” he said.

More than 1 million foreign nationals obtained legal permanent resident status in the U.S. in 2019, according to the Department for Homeland Security, of whom 459,000 entered as new arrivals.

Compared with a year earlier, the DHS said, immigration by new arrivals decreased by 13%.

Read:Kanye West sheds MAGA hat, takes aim at White House: ‘If I win in 2020, then it was God’s appointment’

FirstGroup has previously announced it was looking to sell Greyhound.

FirstGroup’s
FGP,
+2.04%

share price fell 23% on Wednesday after it announced a £300 million loss for the year to March, including the write-down on Greyhound.



Original source link

Kuehne+Nagel owner sees about 20,000 job cuts: Die Welt By Reuters


© Reuters. FILE PHOTO: Logo of Swiss logistics group Kuehne + Nagel is seen at its headquarters in Schindellegi

ZURICH (Reuters) – Freight-forwarder Kuehne+Nagel (S:) may cut more than 20,000 jobs, with warehouse workers most affected, as the coronavirus-caused economic crisis hits shipping, controlling shareholder Klaus-Michael Kuehne said in an interview.

Kuehne+Nagel, which employs 83,000 people, will likely cut jobs in locations such as the United States that unlike some European countries does not have a system of short-time working to fall back on to prevent massive layoffs, he told Germany’s Die Welt in an article published on Saturday.

He sees globalisation slowing, with a trend towards regionalisation.

“The group could have 20-25% fewer workers than before the crisis,” he said. “We will emerge from the crisis smaller.”

The 2020 result will definitely be worse than a year ago, said Kuehne, adding nobody knows how long the crisis will last and how deep it will be. The company has already scrapped its dividend.

“The moments of truth come in the April to June period,” he said. “Transport volumes have declined significantly. The decisive question is, will the world economy begin a gradual recovery in June.”

“I expect that economic production will be lower for years to come,” Kuehne told the newspaper.

China is unlikely to emerge weakened from the crisis, he said, even though it is the origin of the coronavirus, likely in a seafood and live animal market in Wuhan.

“This crisis was started by carelessness within the Chinese food supply. For me it is unbelievable such primitive conditions still exist,” he said. “And still, China — with its readiness to invest in projects like the new Silk Road — has an unbelievable strength. I wish we had a strong United States as a counterweight, but it is poorly governed by Donald Trump. This could be an opportunity for a strong, courageous Europe.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Original source link