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Big Tech Antitrust Bills Could Hurt Small Businesses Report Says

Big Tech Antitrust Bills Could Hurt Small Businesses, Report Says

June 23, 2021 at 03:10AM
by PYMNTS

Antitrust efforts are gaining traction on Capitol Hill, and tech giants Google and Amazon said those efforts are likely to hurt smaller businesses, CNBC reported.

“As many groups and companies have observed, the bills would require us to degrade our services and prevent us from offering important features used by hundreds of millions of Americans,” Google Vice President of Government Affairs and Public Policy Mark Isakowitz said, per CNBC. “This would all dramatically undermine U.S. technology leadership, damage the way small businesses connect with consumers, and raise serious privacy and security concerns. We respectfully recommend that these consequences receive more thoughtful consideration before Congress takes action.”

There are six bills up for consideration, according to CNBC. Two of them could lead to break-ups or at least structural changes in the companies as they cite prohibitions on business types with conflicts of interest or rules against discriminatory business practices.

Some of the others would bolster the strength of regulators in antitrust proceedings by making the burden of proof in merger cases fall on the dominant platform, raising filing fees and allowing state attorneys general more prominent voices in those types of cases, CNBC reported.

In addition, another bill would let customers take their personal data with them and make it easier for customers to switch platforms, according to CNBC.

Those bills only apply to platforms with over $600 billion in market value and 50 million monthly active users in the U.S. That would make it so only the biggest companies are affected, but even so, companies have warned that passing the regulations could end up rippling outward and affecting customers’ lives.

PYMNTS reported last year about the way Big Tech is seen as monopolistic, positing that in reality, all of the biggest companies actually specialize in different things. Google is often consulted for information, Amazon for online shopping, Apple for computer tech and Facebook for socialization.

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Brazil's Nubank Looks For Underwriters Report Says

Brazil’s Nubank Looks For Underwriters, Report Says

June 22, 2021 at 02:10AM
by PYMNTS

Brazilian digital bank Nubank is looking for investment banks to help support its initial public offering (IPO), U.S. News reported.

The company’s talks with banks are more advanced than anyone previously thought, U.S. News reported. To that effect, company Founder and CEO David Vélez had not even said there were plans to go public, although he said previously it is likely to happen at some point in the future.

Some have hypothesized that Nubank could end up being worth around $40 billion, according to U.S. News, which cited unnamed sources. Nubank is backed by the Warren Buffett company Berkshire Hathaway.

The IPO might happen by the end of this year or early in 2022, U.S. News reported. When it happens, it’s likely to be one of the bigger stock market debuts of a South American company, making it along the same lines as companies like Robinhood, similarly expected to have a big debut.

Earlier this month, Berkshire Hathaway poured $500 million into Nubank alongside a $250 million investment from Sands Capital, Brazil’s Absoluto Partners and Verde Asset Management, PYMNTS reported.

In April, Nubank was communicating with New York advisers on a potential IPO, PYMNTS reported.

“We will probably do an IPO at some point in time, but it is not among our current priorities. We have the support of an amazing group of investors that share a long-term vision on our business,” Nubank told Reuters at the time.

As of April, the company had a valuation of around $25 billion. The company was also the recipient of a $400 million Series G round from January.

In January, Co-Founder Cristina Junqueira said the company was likely to be profitable soon, PYMNTS reported.

“We’re really hopeful that 2021 is a year we’re going to be able to maybe increase our exposure on the credit side tenfold,” Junqueira said at the time.

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Carlyle Agree To Buy Medline Private Equity Firms Blackstone Report Says

Private Equity Firms Blackstone, Carlyle Agree To Buy Medline, Report Says

June 07, 2021 at 02:39AM
by PYMNTS

Medline Industries Inc., which calls itself “the nation’s largest privately-held manufacturer and distributor of healthcare supplies with 2020 revenue of $17.5 billion,” says it is selling a majority stake in itself to a cluster of powerhouse private equity firms.

The buyers, according to a news release from Medline, is a partnership consisting of funds managed by Blackstone, Carlyle, Hellman & Friedman and GIC — Singapore’s sovereign wealth fund.

The news release adds: “Medline will continue to be led by the Mills family, who will remain the largest single shareholder.”

According to Medline, the senior management team will stay in place, and capital raised through the sale will be used to fund new product offerings, internal expansion and infrastructure improvements “to strengthen (its) global supply chain.”

“Making healthcare run better has been our focus for decades. This investment from some of the world’s most experienced and successful private investment firms will enable us to accelerate that strategy while preserving the family-led culture that is core to our success,” Charlie Mills, chief executive officer of Medline, said in a prepared statement.

Medline states it has more than 28,000 employees and operates in more than 110 countries.

Allen Thorpe, Partner at Hellman & Friedman, said in a prepared statement: “Medline is known for its unwavering commitment to its customers, providing high-quality medical products that are used to treat patients every day. We are excited to support that commitment and partner with Medline to continue bringing the broadest and deepest capabilities to the healthcare industry.”

Hellman & Friedman states it has assets under management of about $70 billion; Carlyle reports $260 billion in assets under management; Blackstone reports $649 billion in assets under management.

The Wall Street Journal stated that the deal is another sign that private equity firms are regaining their interest in major buyouts.

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Possible Porsche IPO Could Put Carmaker In Family Hands Report Says

Possible Porsche IPO Could Put Carmaker In Family Hands, Report Says

June 01, 2021 at 04:06AM
by PYMNTS

The Porsche and Piech families, which are in control of the largest Volkswagen shareholder, are ready to take a direct stake in Porsche AG, U.S. News reported.

If Porsche AG is going to be listed separately in a possible initial public offering (IPO), the move would make the families’ grip on the Volkswagen empire less tight, according to U.S. News. There hasn’t been a decision yet on whether to list Porsche separately. That move also may not happen.

But if it happens, it would signify the families’ direct ownership of Porsche AG, which was founded by Ferdinand Porsche in the early 1930s, U.S. News reported.

The valuation of Porsche AG could range from around 45 billion euros to 90 billion euros (about $55 billion to $110 billion), the report stated. The valuation of Volkswagen could be around 135 billion euros (about $165 billion).

There probably won’t be an IPO for Porsche at this time, according to U.S. News, due to the complex stakeholder setup at Volkswagen, which was created meticulously in the wake of the failed takeover of Volkswagen by Porsche in 2009. That led to Volkswagen buying Porsche and the two families becoming the most well-known investors in Volkswagen.

Today, the families hold all of the ordinary shares of Porsche and own over half the rights to vote, along with a 31.4 percent equity stake in Volkswagen, U.S. News reported.

One of the ways for the families to get direct ownership of the namesake brand, while keeping activist investors out, would be selling some voter rights to co-shareholder Lower Saxony, which has a 20 percent voting stake, according to the report.

In other news, Porsche drivers in Australia can now access new parking options, like being guided to available parking, gaining entry to parking and making contactless payments for parking, via vehicle touchscreens and the vehicle maker’s smart parking app.

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Report Says US Eyes ‘Regulatory Perimeter’ For Cryptos

US Eyes ‘Regulatory Perimeter’ For Cryptos, Report Says

June 01, 2021 at 02:09AM
by PYMNTS

Senior officials at a handful of U.S. financial regulatory agencies are exploring new ways to regulate the cryptocurrency market but have yet to decide how to do so, the Financial Times (FT) reported on Sunday (May 30).

FT put the size of the cryptocurrency market at $1.5 trillion and reported that any effort to increase regulation of the sector would represent something of a reversal of policies advanced by the Trump administration.

FT based its report on an interview with Michael Hsu, acting comptroller of the currency, who said per the report that he would like to see U.S. regulatory agencies establish a “regulatory perimeter” around cryptocurrencies.

“It really comes down to co-ordinating across the agencies,” said Hsu, the top regulator of domestic banks in the Treasury Department. “Just in talking to some of my peers, there is interest in co-ordinating a lot more of these things.”

Any additional steps the agencies take will come as investors continue to weather what has been a wild year for the sector.

Bitcoin, for example, started the year at $29,413.29, according to the Coinbase exchange, rising to $64,899.00 on April 13 and sitting at $37,052.66 as of 7:15 p.m. EST on May 31. Experts attributed the cryptocurrency’s rise to purchases of large quantities by Elon Musk’s Tesla and its fall to the imposition of new restrictions on it by regulators in China.

Another major cryptocurrency, Ethereum, started the year at $730.97 on the Coinbase exchange, rising to $4,384.43 on May 11 and falling to $2,677.57 as of 7:20 p.m. on May 31.

FT reported that another sign of a new approach to cryptocurrency regulation in the United States came earlier this month when officials from the Comptroller of the Currency, Federal Reserve and Federal Deposit Insurance Corporation met for what Hsu reportedly told the paper was a session to “put some ideas in front of the agencies to consider” as they respond to the growth of cryptocurrencies.

“It’s small and it’s senior,” Hsu reportedly said, describing the group. “The idea is that time is of the essence and if it’s too big that gets harder.”

According to FT, Securities and Exchange Commission Chair Gary Gensler told House lawmakers last week that there are “gaps in our current system” when it comes to regulating cryptocurrency exchanges.

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Old Tech Makes US Infrastructure Vulnerable To Hackers Report Says

Old Tech Makes US Infrastructure Vulnerable To Hackers, Report Says

May 24, 2021 at 02:56AM
by PYMNTS

U.S. companies that deal in critical infrastructure are especially vulnerable to ransomware and other cyberattacks because they have moved too slowly and spent too little to defend themselves, the Financial Times (FT) reported.

Officials and private sector experts said the Colonial Pipeline shutdown in response to ransomware attackers who received $4.5 million from the company was just one example of the types of attacks likely in the immediate future, according to FT.

Old-school companies have been able to increase efficiency by bolting digital tools onto existing infrastructure, FT reported. The issue with that is that creating effective security for such hybrid systems is difficult.

“The problem is that attacks move a lot faster than industries that are quote-unquote ‘old school’ are used to moving,” Matias Katz, CEO of the cybersecurity company Byos, told FT. “So, the speeds are different, and before slower-moving industries can catch on, there’s already a new attack out there and new threats.”

Companies should do better to install all-new digital systems to run their operations with higher security, Padraic O’Reilly, who cofounded cyber risk firm CyberSaint Security, told FT.

“The problem with that is that it’s very expensive,” he said, per the report

Making matters even more complicated, Amy Myers Jaffe, professor at The Fletcher School at Tufts University, told FT that investors highly interested in cutting costs are playing a growing role in the energy sector.

“Over time, as we get more financially based players investing in energy infrastructure, replacing energy companies themselves, the higher the impulse will be to cut costs,” she said, according to the report. “And that will be dangerous if cutting costs are done without enough care to the huge requirements for security.”

PYMNTS reported that another factor noted by experts is that hackers are finding ways to attack the supply chains upon which companies depend rather than the companies directly.

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Report Says Robinhood May Release IPO Filings Next Week

Robinhood May Release IPO Filings Next Week, Report Says

May 19, 2021 at 02:37AM
by PYMNTS

Robinhood has announced plans to reveal its initial public offering (IPO) filings as soon as next week, with the popular mobile brokerage app looking at the end of June for its debut, Bloomberg reported.

That filing could give prospective investors their first look at the company’s financials, including the associated risks, the report stated.

Robinhood had previously submitted documents to the Securities and Exchange Commission (SEC), which will let the regulator look into the changes that could be needed before being approved, according to Bloomberg.

The May securities filing for the company showed that Robinhood’s payment for order flow, which is its largest revenue source, more than tripled in the first quarter, Bloomberg reported. It came out to $331 million, which was a result of its popularity with younger investors as they became more invested in the meme stock frenzy in early 2021, focused on stocks like GameStop and AMC.

Robinhood’s IPO plans are in the advanced stages, although the timing and details could change, Bloomberg reported.

The Robinhood platform allows a sort of “game-like” nature for trading, which especially shows up amidst the more inexperienced traders, regulators have said, according to Bloomberg. SEC Chairman Gary Gensler said at a congressional hearing May 6, many regulations related to trading were written prior to the recent tech that has changed the way services are used.

He said there is a “need to evaluate our rules, and we may find that we need to freshen up our rule set,” per the report.

The SEC has said it plans to look into retail brokerage apps, intending to see how those apps encourage stock trading and earn money when the trades are executed, PYMNTS reported.

According to Gensler, the chief issue is the gamification of the apps, which could be using flashy and unorthodox ways of getting individuals to trade more.

While he didn’t expound on what might need to be done, he said “disclosure alone” might not be enough.

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AT&T's Media Group Discovery In Merger Talks Report Says

AT&T’s Media Group, Discovery In Merger Talks, Report Says

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PYMNTS.com
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https://www.pymnts.com/news/partnerships-acquisitions/2021/atts-media-group-discovery-in-merger-talks-report-says/
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PYMNTS
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AT&T might spin off its media business to merge it with Discovery, according to Bloomberg.

This would be “surprising” for the company, Bloomberg noted, given that it just spent $85 million acquiring those assets a few years back, which include its Warner Media unit in which it owns CNN, HBO, Cartoon Network, TNT, TBS and the Warner Bros. studio.

Meanwhile, Discovery owns networks such as HGTV, Food Network and the Animal Planet.

According to the report, the companies’ idea is to combine the Discovery reality TV slate with AT&T’s large amount of media holdings.

A deal, according to sources Bloomberg spoke to, could be reached by the end of this week, though the companies have been negotiating the structure of the possible transaction.

AT&T CEO John Stankey has been selling off assets as well as cutting staff and underperforming assets. The company has been channeling funding toward its 5G developments, which will cost billions. It has also been working on its fiber-optic footprint. And the company needs money to pay off debt, which it acquired a lot of after an acquisition spree. While the company has been paying some of it off, it also has bills from a recent spectrum auction.

And with the Discovery deal, that company could gain enough of a foothold in the media to compete with Netflix and other streaming services, as the future of entertainment broadcasting begins to take shape. Discovery, along with WarnerMedia, have both made their ways into the streaming pool as of late, with Discovery putting out its Discovery+, which has a slate of unscripted reality shows.

And AT&T has put out HBOMax, which has continued adding content since debuting last year.

In regards to 5G, PYMNTS writes that AT&T has been looking toward the future of connectivity and how it will be used. AT&T Director of 5G Center of Excellence Jason Inskeep spoke with Karen Webster recently and said it would be good to look at the various brand new ways to apply it that may not have existed just a few years ago.

The 5G technology will offer new connectivity options for things like access to healthcare in remote areas.

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May 17, 2021 at 03:29AM
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