Equifax CEO Richard Smith steps down in aftermath of massive breach

Equifax Chairman and CEO Richard Smith stepped down Tuesday in the wake of a massive cybersecurity breach that exposed the birth dates, social security numbers, and other personal information of 143 million Equifax customers, The New York Times reports.

Paulino do Rego Barros Jr. will vacate his post as the company’s president of the Asia-Pacific region to assume the CEO duties in an interim capacity, the Times says. Equifax will consider candidates from both inside and outside the company as permanent replacements.

According to the Times, Mark Feidler will become chairman of the board.

“Speaking for everyone on the board, I sincerely apologize [for failing to protect the seized data],” Feidler said in a statement, per the Times. Feidler said, per the Times, that the board has formed a special committee to handle the breach.

Lawmakers, as well as the general public, have taken issue with Equifax’s failure to secure the data, and some have cast aspersions upon the company’s handling of the fallout that followed the breach.

Equifax set up a special-purpose website to provide information about the attack, and to help customers contain the damage. Among the website’s primary offerings was a tool by which a customer could enter his information and find out whether the breach had affected him. But the tool ran into a number of problems. Moreover, the company struggled to field the myriad calls that flooded its customer support lines.

The Times reports that three Equifax executives sold a combined $1.8 million worth of stock in the company in the days after the breach had been discovered but before it had been disclosed. Equifax said, per the Times, that the executives mentioned were unaware of the breach when they offloaded the shares.

Smith is the third prominent Equifax executive to vacate his post in response to the breach. The company’s chief information officer and chief security officer both stepped down September 14.

“Mr. Smith has been very cooperative and supportive of this approach,” Equifax spokesman Wyatt Jefferies said per the Times.

Smith had served as CEO since 2005. In his 12 years with the company, he more than doubled its annual revenue, the Times notes. He was renowned amongst Wall Street experts for his ability to develop innovative products, and for his sales acumen.

As of now, Equifax has not terminated Mr. Smith, but the terms reached prior to his departure allow the board to retroactively fire him for cause, the Times says. The company will provide neither severance nor accelerated vesting of stock options to Smith, and he will not receive a bonus for 2017 (Equifax awarded him $3-million bonuses in 2015 and 2016).

Smith will retain $18.4 million in pension benefits.

Smith is scheduled to appear at congressional meetings regarding the breach in the coming weeks: one held by the House Energy and Commerce Committee on October 3, the other by the Senate Banking, Housing and Urban Affairs Committee the following day.

Senator Brian Schatz of Hawaii, a leading member of the latter committee, issued a statement ordering Smith to appear for the appointment and admonishing the former executive for shirking his responsibility for the breach.

“A CEO walking out the door just days before he is to appear before Congress is an abdication of his responsibility,” Schatz said, according to the Times.

But, Jefferies, the Equifax spokesman, has indicated that Smith intends to comply with Congress’ demands. “If Congress asks him, he will go,” said Jefferies of Smith.

Schatz is one of the several senators who have, in the wake of the Equifax incident, advocated legislation that would give consumers more latitude to protect their credit information.

The FBI is currently leading a criminal investigation into the breach, the Times says, and attorneys general in 30 states have launched their own probes into the matter. On September 19, the Massachusetts Attorney General sued Equifax seeking civil damages and more compensation.

Featured image via Vimeo

Cryptocurrency mining program Coinhive sparks controversy

Coinhive, a Javascript application that uses website visitors’ computing power to mine cryptocurrency, launched on September 14. Since, the program has generated controversy, as website owners and hackers alike insert it into a number of high-profile websites.

Coinhive markets itself as a legitimate way for websites to make money, but does not endorse the use of the script without user consent.

On September 16, The Pirate Bay, a popular torrent-downloading website, began using the program to mine Monero, a cryptocurrency similar to Bitcoin. Visitors to the site noticed spikes in their CPU usage and complained.

Later that day, The Pirate Bay issued a statement explaining that it was testing the program as an alternative to advertisements on the site.

“This is only a test. We really want to get rid of all the ads. But we also need enough money to keep the site running,” reads the statement.

Though all content on The Pirate Bay is free, the site needs to generate revenue to cover operating costs. Many of the ads that run on Pirate Bay are unseemly and/or contain malware.

The Pirate Bay’s statement says Coinhive “can be blocked by a normal ad-blocker”—AdBlock Plus and AdGuard now combat Coinhive, BleepingComputer notes. A typo in the embedded code originally caused the program to use more of visitors’ processing power than intended.

The Pirate Bay invited users to comment as to whether they would prefer advertisements or mining programs like Coinhive.

The majority of users who responded accepted mining as a viable way for the site to generate revenue, but many took issue with the site’s failure to inform users of the change.

“I think this is an interesting idea,” one user responded. “Keeping users informed is essential though. Giving registered users possibility of choosing between ads and mining might be also viable (though most of them probably block ads). Having more options how to contribute is a great idea! I will gladly contribute by providing part of my CPU when visiting TPB (as opposed to ads, I don’t like these especially due to privacy concerns).”

Other respondents acknowledged that those who downloaded free content had to pay in some way or another.

The Pirate Bay has removed the mining program from its site and has yet to say whether it plans to employ Coinhive in the future.

BleepingComputer reported Monday that it had detected the program in websites run by Showtime, a media company owned by CBS. Showtime’s main site, showtime.com, as well as its streaming domain, showtimeanytime.com, contained the Coinhive script.

It is not known whether a hacker implemented the script on the Showtime sites, or whether the company itself was testing the program. But BleepingComputer notes that the script had been set to “remain dormant” for 97 percent of the time. A hacker, that publication points out, would likely set the script to run far more often, so as to co-opt much processing power as possible before his scam was discovered.

Showtime declined to comment on the matter. The script disappeared from the sites early Monday afternoon.

Using victims’ CPU processing power to mine for cryptocurrency has long been a common practice amongst malware designers, but prior to the inception of programs like Coinhive, hackers had to download an application onto a victim’s hard drive in order to use his computer. Now, hackers can seize the processing power of any user running a Javascript-enabled browser (most browsers enable Javascript by default).

Malware developers have already embraced Coinhive. One embedded it in a Google Chrome extension, so that it ran in the background of the browser. Others have breached WordPress and Magneto sites and inserted the code there.

Some have registered commonly mistyped URLs, such as “twitter.com.com,” as domains, and run Coinhive on those sites. The program only runs until the user realizes he has input the wrong URL and leaves the page, but with enough traffic and enough domains, the engineers of the scam could generate a considerable profit.

EITest, one of the world’s most prominent malware operations, has also employed Coinhive for nefarious purposes.

Coinhive is not the first program of its kind. In 2013, Vice reports, MIT researchers developed a similar script called TidBit. But a court order shut the project down, ruling that using a person’s CPU processing power without his consent was unlawful.

Featured image via Wikimedia Commons

China bans Facebook messaging service WhatsApp

The Chinese government has disabled Facebook-owned messaging service WhatsApp, the New York Times reports.

Nadim Kobeissi, an applied cryptographer at Paris-based research firm Symbolic Software, told the Times his company began noticing slowdowns in the service Wednesday. By Monday, the block had become comprehensive.

Authorities blocked video-chat and file-sharing functions within WhatsApp in mid-July, but the app’s messaging capabilities, which employ a rare and strong form of encryption, remained functional. The government lifted bans on video chat and file sharing later, but has since disabled the app in its entirety, reports say.

WhatsApp’s messaging service uses a renowned end-to-end encryption technique. As the Times explains it, even Facebook itself cannot decode messages sent via the app. The encryption method is not widely used and is therefore difficult to compromise.

But the ban, as the Times points out, indicates that Chinese authorities have developed a means by which to breach WhatsApp messaging encryption.

“This is not the typical technical method in which the Chinese government censors something,” Kobeissi said.

Censorship of various technological communication services is commonplace in the country. If the government does not disable a service entirely, it slows down that service to such a degree that it becomes unusable.

“If you’re only allowed to drive one mile per hour, you’re not going to drive on that road, even if it’s not technically blocked,” Lokman Tsui, an internet communications specialist at the Chinese University of Hong Kong, explained to the Times.

The goal of the censorship is to funnel users toward a handful of communication services that the government can easily monitor. WeChat is one such service. It is similar to WhatsApp except that the former, according to the Times, offers broader functionality.

Tencent, the company that runs WeChat, is based in Shenzhen and has said that it will comply with the government’s requests for information. In total, 963 million people use WeChat, the Times says.

Services like WhatsApp and WeChat have largely replaced e-mail in China, and are vital to many business operations. A large number of China-based businesses were unwilling to use WeChat, whether because of the threat of surveillance or some other reason.

Some former WhatsApp users in China expressed frustration on social media, the Times reports.

“Losing contact with my clients, forced back to the age of telephone and email for work now,” one user complained on Weibo, a Twitter-like microblogging site.

“Even WhatsApp is blocked now? I’m going to be out of business soon,” another person said via the same site.

WhatsApp was the last Facebook product available in mainland China, the Times says. The country banned the company’s main social media site in 2009. Instagram, another Facebook offering, is disabled as well.

The WhatsApp ban represents a setback for the social media behemoth, whose founder and chief executive, Mark Zuckerberg, has been advocating and taking steps toward re-entering the Chinese market.

The handful of American-created communication services China does tolerate include Microsoft’s Skype and Apple’s FaceTime. The former does not employ end-to-end encryption, the Times points out, and is, therefore, easier for the government to monitor. The latter does use end-to-end encryption but is less secure than WhatsApp.

The Times notes that the Office of the United States Trade Representative is investigating whether Chinese authorities have violated the intellectual property rights of American citizens. The Office has not clarified whether it will consider the bans as part of the investigation, or merely look for cases in which China has stolen US technology.

The WhatsApp ban comes just prior to the country’s Communist Party Congress on October 18, during which authorities appoint the leaders of the party, who in turn run the country.

According to the Times, the meeting, which the country holds once every five years, will likely reinstall President Xi Jinping as party leader. The question remains as to who will join Xi on the Standing Committee of Politburo, the party’s highest ranking group.

Under Xi’s leadership, the Times notes, China has tightened censorship, closed several churches and jailed a number of human rights activists.

Featured image via Pixabay

Uber’s success in food delivery sector is a “wonderful surprise,” CEO says

As Uber’s new CEO, Dara Khosrowshahi looks to guide the company back to stability after a flurry of corporate upheaval and operational stumbling blocks. Khosrowshahi says the success of the company’s food delivery arm, UberEats, has been a “wonderful surprise,” The New York Times reports.

According to the Times, Uber’s aid UberEats generates more revenue than its ride-hailing operations in certain markets, including Tokyo; Taipei, Taiwan; and Seoul, South Korea. Average daily deliveries grew by a factor of 24 from March 2016 to March 2017.

Uber’s first forays into the food delivery market came in 2014, when UberEats’ predecessor, UberFresh, launched in Los Angeles. Food quality issues born as a result of the way drivers transported the food, along with the limited selection of available restaurants, checked the success of that operation.

In December 2015, UberEverything, the division that handles food delivery and a number of other projects for the company, launched the UberEats app in Toronto. As the service succeeded, it expanded its sales force, partnered with more restaurants and made inroads in additional locations.

Today, UberEats is available in 120 markets. Uber declined to disclose the amount of revenue the service has generated, but the Times says top executives at the company are excited about growth potential in the food delivery sphere.

Several other companies beat Uber to that market, which is worth $100 billion today. Postmates, a delivery service that launched in 2011, employs more than 100,000 drivers, performs 2.5 million deliveries every month, and has raised over $250 million, according to the Times.

GrubHub, another giant in the food delivery sector, has been operational for 13 years, and reported over $3 billion in “gross food sales” in 2016, the Times says. The company serves 8.17 million customers.

GrubHub’s founder and CEO, Matt Maloney, said Uber has spread itself too thin to pose any real threat to his and other established companies within the food delivery sector.

“Uber has built a great company focused on black car service and human transportation, but succeeding in food delivery is a different game,” Maloney said in a statement, per the Times. “We are known for one thing only — takeout ordering — and we have engineered our entire product around this purpose.”

But Uber believes its experience in ride-hailing can translate into a competitive advantage over single-focus companies like GrubHub.

Uber already employs about two million drivers worldwide, the Times says. As UberEats continues to grow, that network will grow as well. As the Times notes, the potential labor pool from which UberEats can pull its employees is wider than that which is available to the company’s ride-hailing business.

While Uber vehicles that carry passengers must meet a laundry list of regulative criteria, guidelines governing the transport of food are more relaxed. In fact, UberEats delivery people are not required to own a car. Many make their deliveries on bikes via a service called UberBike.

Moreover, Uber has spent the last decade or so identifying the most efficient routes from point A to point B in cities all around the world. The company believes it can harness that knowledge to shorten delivery times.

“What Uber has are the last-mile logistics, and that’s crucial,” James Cakmak, an analyst at the equity research firm Monness, Crespi, Hardt & Company who follows the food delivery space, said per the Times.

UberEats has turned to partnerships to further expand its network of available restaurants. In May, the company inked a deal that allowed it to deliver food from over 1,000 McDonald’s locations, the Times says. Lucy Brady, a McDonald’s executive, said in July that the fast-food chain was pleased with the fruits of the alliance so far.

The already-crowded food delivery sector is preparing for the arrival of Amazon, which acquired Whole Foods earlier this year. Many of Whole Foods’ 460 locations already offer a cafeteria-like buffet stocked with freshly prepared food, and Amazon could hire drivers to deliver that food, the Times points out.

Cakmak adds that Amazon, whose business model is based largely on offering the lowest possible prices, has the resources to match or undercut the prices of competitors in the food delivery sphere.

“The number-one concern for all of these delivery companies is Amazon,” he said, per the Times.  “How could Amazon use its network to crush our business? They have the logistical network and the balance sheet to be able to compete on the price side with all of these players.”

Khosrowshahi plans to take Uber public within the next 18 to 36 months.

Featured image via Flickr/Guillermo Fernandes

Sprint and T-Mobile nearing merger agreement

T-Mobile and Sprint, respectively the third and fourth largest wireless carriers in the U.S., are nearing a merger agreement, undisclosed sources told Reuters Friday. A due diligence period would follow the finalization of the agreement’s terms, but the companies expect a deal by October, according to Reuters’ source.

In August, Reuters says, Sprint CEO Marcelo Claure said an announcement regarding merger talks would come in “the near future.”

The merger proposal would be the first one “with significant antitrust risk” to be submitted to the Federal Trade Commission since President Donald Trump took office, Reuters notes. The President was elected on a platform that included the deregulation of the business environment.

Mayoshi Son, the founder of Japanese venture capital firm SoftBank, which controls the Sprint Corporation, met with Trump in late December, just after the former tycoon won the election.

Son found Trump’s business policy potentially favorable for SoftBank, and promised to invest $50 billion in the U.S. economy and to create 50,000 jobs.

A merger proposal would evince Son’s confidence that the regulatory environment has become laxer since Sprint and T-Mobile abandoned a merger proposal in 2014 amidst pressure from the FTC.

Indeed, the FTC might be more receptive to a transformative merger in the telecom industry now than it was three years ago. Earlier this year, Reuters says, FTC Chairman Ajit Pai said “effective competition [exists] in the marketplace for mobile wireless services.” Thursday, the agency will vote on whether to submit Pai’s report on the state of competition in the wireless services market to the U.S. Congress, which requires such a report annually.

But, the terms of the new merger will likely be less advantageous for Son and Sprint than those reached in 2014. Under the previous deal, Sprint would have controlled the combined company, while T-Mobile’s parent company, Deutsche Telecom, would have become a minority shareholder.

Over the past three years, though, T-Mobile has outperformed Sprint. Accordingly, the terms of the new agreement will likely flip, Reuters’ source said. Deutsche Telecom and T-Mobile stockholders would own a majority of the combined enterprise, while SoftBank and the rest of Sprint’s shareholders would have a minority stake.

T-Mobile CEO John Legere, who took the reins in 2012 and has guided the company’s surge, will likely run the combined company.

The merged enterprise would have 130 million subscribers, Reuters notes, making it the United States’ third-largest wireless carrier, behind AT&T, which had 136.5 million subscribers as of July, and Verizon, which reported 147.2 million subscribers that same month.

Sprint’s market cap of approximately $34 billion, combined with T-Mobile’s $53 billion figure, would give the new company a value of around $87 billion. AT&T’s market cap is about $237 billion; Verizon’s exceeds $205 billion.

Sprint reported annual revenue of $33.3 billion for fiscal 2016, which ended March 31. T-Mobile posted $37.2 billion in annual revenue for calendar 2016. So, the combined company would likely generate over $70 billion annually.

Verizon posted consolidated revenues of $126 billion and wireless revenues of $89.2 billion in 2016. AT&T’s figure came in at $163 billion.

Analysts say the Sprint/T-Mobile merger provides ample opportunity to cut expenses as well.

In their bid for regulatory approval, the companies will likely emphasize that the combined company would create jobs by making investments in the development of 5G, the next generation of mobile internet connectivity.

But the merger will also precipitate layoffs as the new company consolidates its corporate structure, Roger Entner of Recon Analytics told Reuters.

According to Reuters, Sprint briefly pursued a merger with Charter Communications earlier this year.

The FTC continues to review another potential consolidation in the industry: AT&T’s proposed $85.4-billion acquisition of Time Warner.

Sprint shares jumped six percent Friday; T-Mobile stock rose 1.06 percent.

Walmart to test in-home delivery program

Remember when you had to go down to the mailbox or onto your doorstep to pick up items you ordered online?

If a program Walmart is testing takes off, people may be asking that question within the next several years. The program will allow delivery drivers to leave packages inside a customer’s home, and groceries in the fridge or freezer, TechCrunch reports.

“…we want to do more in the future by delivering groceries and other orders in whatever location works best for our customers – inside the house for some and in the fridge/freezer in the garage for others,” said Sloan Eddleston, Vice President of Walmart’s eCommerce Strategy & Business Operations, in the official announcement.

When the delivery driver arrives at a participant’s home, he will enter a one-time passcode on an August Home smart lock to gain entry. Walmart says customers will be able to watch the driver enter and move around in their houses via a video feed on their smartphones. When the driver exits the home, the door will lock automatically.

Walmart has hired same-day delivery service Deliv to perform the deliveries themselves. Sam’s Club, a Walmart affiliate, partnered with Deliv in March 2016 to test a grocery delivery program.

This most recent pilot program will be available in Silicon Valley to a select group of August Home users who have chosen to participate. As TechCrunch points out, if the program is successful, Walmart may expand the list of supported smart-home providers beyond August Home.

TechCrunch further notes that Walmart has not indicated how long the program will run, nor whether the company intends to expand the trial to locales outside of Silicon Valley.

Walmart says it has designed the test to gauge how much customers are willing to pay for the service. The company has yet to disclose a pricing model.

Walmart has partnered with smart-home companies to enhance delivery operations in the past. In June, online retailer jet.com, which Walmart acquired in August 2016, teamed with Latch to install high-tech lockboxes on the front doors of 1,000 apartment buildings. Among other functions, the system allows customers to remotely grant access to their apartment complex so that drivers can deliver packages even when the customer is not home.

In its continued effort to keep pace with online retail giants like Amazon, Walmart has experimented with other augmentations to its delivery operations, TechCrunch notes. The company offered a discount to customers who had online orders shipped to Walmart stores, and tried allowing in-store employees to deliver packages from the store to customers’ homes.

In emulation of Amazon Prime, Walmart instituted a two-day shipping option that is free for rewards members.

In June 2016, the company tested a system whereby Uber and Lyft drivers delivered groceries to customers’ homes. Customers ordered groceries online, paying a $7 to $10 delivery fee. Then, a Walmart employee culled the requested items from the shelves, placed them in a bag, and called an Uber or Lyft driver to pick the order up from the store and deliver it to the customer’s home.

Meanwhile, Amazon—arguably Walmart’s chief competitor—is making its own efforts to cut delivery times. Through that company’s Prime Now program, customers can have tens of thousands of items delivered to their doors in less than an hour.

Amazon also offers grocery delivery and one-hour restaurant delivery through its Prime membership program

Moreover, the company is testing autonomous drones that can deliver items weighing under five pounds in 30 minutes or less. Last December, as part of a pilot program in the UK, Amazon completed its first drone delivery. The company says it is working with regulators to get Prime Air, as the service is called, off the ground around the world.

Featured image via Hurlburt Field

Silicon Valley startup Aeva aims to give driverless cars better vision

In January, with funding from Lux Capital and other venture capital firms, two former members of Apple’s Special Projects Group, Soroush Salehian and Mina Rezk, started Aeva.

The company aims to improve the ability of self-driving cars to see their surroundings, according to New York Times report. Salehian and Rezk are reimagining Lidar—that is, Light Detection and Ranging—technology, which today’s self-driving cars use along with cameras, radar, GPS antennas, and other implements to create a picture of the world around them.

Aeva’s lidar, the company says, measures distances more accurately than other such systems. And, unlike other lidar systems, Aeva’s judges velocity. It is also smaller and less expensive than today’s lidar technology.

Aeva aims to have it on the market by 2018.

Traditional lidar devices emit pulses of light and measure their wavelength and return times to determine how far away a given object is. Then, computers use the data to construct three-dimensional models of the surrounding world.

But, today’s lidar systems can only detect objects that are relatively close, and cannot always differentiate between one object and another, the Times notes. As a result, they do not perform well in bad weather or when moving at high speeds.

Radar, which uses electromagnetic waves rather than light waves to map the world, can detect objects at greater distances, making it more suitable when traveling at high speeds, and cameras can “read” street signs and differentiate between, say, a pedestrian and a crosswalk.

So, cameras, radar, lidar and other devices work together to “drive” today’s autonomous vehicles. Driverless cars will likely continue to employ this combination for the foreseeable future, as multiple detection systems represent multiple layers of security.

Lidar devices, along with the rest of the ensemble, are expensive. It costs hundreds of thousands of dollars to outfit a self-driving car with the necessary hardware. The prohibitive cost of production prevents companies from marketing self-driving cars to average consumers. So, the first self-driving cars are not privately owned; rather, they have debuted in the fleets of companies like Lyft and Uber.

But, the Times cites a report by the Boston Consulting Group that projects that the self-driving car market will be worth $42 billion by 2025. For that to happen, companies must find ways to produce the vehicles more affordably.

The Times equates Aeva’s system to a cross between lidar—which is ideal for judging distances—and radar, which is best at detecting speed. Rather than emitting a series of light pulses, the device sends out a constant wave of light. This approach, Rzek told the Times, allows Aeva lidar to produce a better resolution, work better in inclement weather, and handle reflective surfaces better than standard systems do.

“I don’t even think of this as a new kind of lidar,” Tarin Ziyaee, co-founder and chief technology officer at the self-driving taxi start-up Voyage, who has seen the Aeva prototype, told the Times. “It’s a whole different animal.”

Researchers at the University of California, Berkeley, developed a similar continuous-wave lidar system back in 2014, the Times notes. Other companies that develop lira technology, such as Velodyne and Oryx Vision, are exploring similar options, according to said publication.

Lidar’s applications go well beyond driverless cars. Law enforcement uses the technology to create automated speed traps. Lidar may one day track a user’s movements for virtual-reality environments.

Today, video game systems like the Xbox Kinect do not use Lidar, because Lidar devices are too expensive, too bulky, and too power-consumptive for the purpose. But, continuous-wave Lidar systems are cheaper and lighter than pulse-based ones.

Behnam Behroozpour of U.C. Berkeley told phys.org in 2014 that he envisions that Lidar can be used for “a host of new applications that have not even been invented yet.” For instance, cell phones could use the technology to recognize a user and detect his hand motions from across the room, allowing him to control the device with simple hand gestures.

BMW’s first level-5 self-driving offering, which the company plans to release by 2021, will allow human riders to use hand gestures to order Amazon packages, make a dinner reservation, and perform a range of other actions.

Featured image via Wikimedia Commons

Toshiba board agrees to sell memory business to Bain-led group

Wednesday, the board of reeling technology giant Toshiba announced that it has approved the $18 billion sale of the company’s flash memory operation, Toshiba Memory Corporation (TMC), to a group of buyers that includes American venture capital firm Bain Capital, and a pair of government-owned Japanese organizations, the Innovation Network Corporation of Japan, the New York Times reports.

The Financial Times says the Japanese government’s involvement in the deal evinces the integrality of Toshiba’s success to the Japanese economy.

Toshiba is fighting to stay afloat after its nuclear power subsidiary, Westinghouse Electric Company, lost money on a number of ill-fated American nuclear projects. Westinghouse, which Toshiba acquired for $5.4 billion in Spring 2006, filed for bankruptcy protection in March.

Toshiba has entered survival mode, draining its cash reserves to remain operational. With the sale of TMC, the company is seeking to generate a short-term cash infusion that will facilitate a recovery.

According to the New York Times, Toshiba was in danger in March of being barred from the Tokyo Stock Exchange unless the company generated new capital.

Though Toshiba just created TMC in April, the company has been a major player in the flash memory sector since the inception of the technology.

A Toshiba engineer invented flash memory in 1980, and the company introduced the technology to the world in 1987. Since, Toshiba’s memory business has provided an integral revenue stream. Today, the company is the world’s second-largest producer of microchips, by volume, second only to South Korean competitor Samsung.

Flash memory is solid-state, meaning it stores data electronically rather than mechanically. Unlike RAM, another solid-state storage system, flash memory does not require power to preserve data, making it ideal for use in portable devices like digital cameras, video game consoles, smartphones, etc.

Even after the sale, Toshiba will likely maintain a significant amount of control over the business, though the buyers will take the lion’s share of the profits.

Toshiba has indicated plans to partner with Bain to create the special purpose company that will purchase TMC.

The new company—which Bain has dubbed Pangea, according to the Financial Timeshas received financial support from Apple, Dell, and others.

Analysts expect Toshiba to hold a minority stake in the new company, and to have considerable decision-making power.

The shareholder structure, the New York Times says, could allow Toshiba to maintain control of the new company’s operations. Buyers will get “a mix of regular shares, preferred shares — which normally do not carry voting rights — and bonds that could eventually be converted into shares.”

The sale awaits antitrust review and has attracted legal opposition from Western Digital, an American company that co-runs a joint microchip-production operation with Toshiba in Japan.

Western Digital claims that the partnership gives it a vested interest in Toshiba’s memory business and that Toshiba is not authorized to sell TMC without Western Digital’s approval. The American firm has initiated legal action to block the sale. The International Court of Arbitration is now reviewing the case.

Western Digital issued a statement Wednesday calling Toshiba’s pursuit of the selloff “troubling” and expressing confidence that the court would side with Western Digital.

Because the sale has yet to be finalized, the door remains open for Toshiba to negotiate with and field offers from other buyers.

A bidding war has been ongoing for the past several months.

Earlier this month, Taiwanese tech behemoth Foxconn, with the support of Apple, venture capital firm SoftBank and others, made a bid to buy TMC. The New York Times’ source says Foxconn offered a healthy sum, but that Japanese authorities feared selling to Foxconn would compromise the country’s leadership in the global technology market.

Western Digital been among TMC’s suitors.

Toshiba stock has dropped about 50 percent since April 2013. As of Thursday afternoon, shares are down 2.9 percent on the news.

Featured image via Wikimedia Commons

Crocs, Inc. is making a resurgence

After a series of struggles, most recently an abysmal fourth quarter of 2016, Crocs, Inc. and its iconic foam clog are making a comeback, the Washington Post reports.

The company posted a 28.4 percent year-over-year increase in net profit over the first six months of 2017, and according to the Post. Foot traffic in Crocs stores jumped 12 percent during the back to school season.

Founded in Niwot, CO in 2002, Crocs quickly jumped to prominence (or, some might say, infamy) around the world. Former U.S. president George W. Bush, actor Al Pacino, and former model Brooke Shields were all among the shoe’s early adopters, the Post says.

From 2003 through 2007, the company’s annual revenue grew from $1.17 million to $847.35 million.

But in 2008, amidst the recession, Crocs suffered its first annual revenue decrease since 2002, lost over $185 million and, according to the Post, laid off 2,000 workers. A $67.7-billion annual loss followed in 2009, but the company returned to profitability in 2010 and reported continuous profit growth from 2010-2012.

From 2012 to 2013, though, net income declined 92 percent.

In December 2013, Blackstone Group LP invested $200 million in Crocs. The company installed a new permanent CEO, Gregg Ribatt, the following year.

But the bottom line continued to drop. In 2014, Crocs posted a net loss of $4.9 million. The following year, the company lost over $83 million.

In 2016, profits began moving in a positive direction. Crocs cut its annual loss by 80 percent to $16.5 million.

But, the company lost $44.5 million in the fourth quarter of the year.

Back in March, in conjunction with the release of the earnings results for the fourth quarter of 2016, the company announced plans to close almost 160 stores and appointed then-president Andrew Rees to replace Ribatt as CEO.

Since, Crocs has recovered, reporting net income of $11 million in the first quarter of 2017—a 7.8 percent year-over-year increase—and of just under $22 million in quarter two—a 37.8 percent year-over-year spike.

“Crocs is starting to turn itself around, even in these very difficult times,” said Steven Marotta, an analyst at CL King & Associates, per the Post. “This is a company that has successfully gone back to the basics.”

Crocs discontinued a number of unpopular lines, the Post says, and is redoubling its focus on its flagship product, the foam clog.

That shoe, which sells for $35 a pair, now accounts for half of the company’s sales, according to the Post. “The classic clog has re-emerged as our hero,” said Crocs’ chief marketing officer, Terence Reilly, per the Post. “Certainly in 2017, there’s been a resurgence.”

The signature Crocs, which the company originally marketed as boating shoes, are slip resistant and easy to clean, and as a result, have garnered popularity amongst medical professionals and restaurant workers, the Post says. Targeting the latter group, the company has developed classic Crocs featuring prints of eggs and bacon, sushi, and chili peppers.

The culinary angle is one of a number of new augmentations to the classic shoe. Others include glitter-covered Crocs, and Crocs bearing prints of Batman, Spider-Man and Minnie Mouse.

“New colors and prints are selling well,” Rees said in last month’s earnings call, according to the Post. “We’re striking the right balance of comfort and style, and consumers are responding favorably.”

In December 2016, Crocs signed Drew Berrymore as a spokesperson, and in August, Berrymore agreed to collaborate with the company to create two Crocs designs. The first will launch next February; the second will appear next May.

Wrestler John Cena signed on with Crocs in June.

Both celebrities, along with a few others, are promoting Crocs as part of the Come As You Are campaign, which the company calls a “celebration of the rebellious, the impossible to categorize, the uniquely defined in all of us.”

Crocs may not be cool, but that’s exactly what so many new adopters find cool about them. The new marketing campaign is aimed at the alternative crowd, but the appeal is so great that Crocs are climbing back into the mainstream.

The shoe made three appearances at London Fashion Week, the Post says. Fashion designer Christopher Kane, a long-time proponent, featured an accessorized version of the shoe—replete with mink fur and gems—at his Spring 2018 show.

“Whether or not they’re actually cool — well, that’s up for debate,” said Cameron Peebles, chief marketing officer of inMarket, per the Post. “But our data shows that they’re popular again.”

Featured image via Pxhere

Amazon glitch gives customers big news

Amazon sent several customers e-mail alerts Tuesday notifying them that items on their baby registries had been purchased and were on the way, MarketWatch reports.

But, many who received the e-mails did not have registries and were not expecting babies. Some such customers assumed the messages were spam and did not click the link provided. Those who followed the link were directed to a broken page, according to MarketWatch.

An informal poll conducted in the Fortune office indicated that most people who received the e-mail did have registries via Amazon. MarketWatch says such customers clicked the link to find that nothing on their registries had in fact been purchased.

“A technical glitch caused us to inadvertently send a gift alert e-mail earlier today,” Amazon said in an e-mail to affected customers. “We apologize for any confusion this may have caused.”

Customers who received the e-mail in error took to social media. All were baffled. Some were amused. Others were offended.

Several hoped their non-existent babies had received alcoholic beverages.

“It better be wine cause I’m definitely not pregnant,” one woman tweeted.

A man who received the email expressed a similar wish. “Amazon notified me that someone bought a gift from my baby registry. Shocked to learn I’m a father; hope his wishlist was mostly bourbon,” he wrote.

Washington Post reporter Karen Tumulty, who also received the e-mail in error, tweeted: “My baby is 21, and hopes it’s a keg.”

Some took sheer delight in Amazon’s miscue. In a tweet directed at the company, one woman wrote: “Please don’t fire the person who accidentally sent all those baby registry emails, it was really funny and made my day.”

Of course, Amazon’s statement implies the culprit was not a person but a misguided piece of software.

Some have joked that Amazon’s software, which collects extensive data on customers, perhaps knew users were pregnant before users themselves did.

One woman tweeted: “Me: *opens email* Amazon baby registry gift? But I’m not pregnant. Amazon’s new AI program: that’s what you think.”

Some women who are infertile or have miscarried took offense at the blunder.

“Pro tip @amazon & @amazonregistry,” one woman wrote. “Don’t send infertile women who’ve miscarried notices for gifts for a baby registry they don’t have.” The woman asked for an apology and an explanation from Amazon.

Glitches are rare for Amazon but do happen. In mid-July, on Prime Day, a 30-hour sales event during which Amazon offers promotions to members of its benefits program, the company’s website fell victim to slowdowns and other quirks.

Some customers saw error messages when they tried to add items to their digital “carts.” Others reported getting multiple “Prime Savings” discounts on a single item.

Amazon’s system unintentionally discounted several video games. Some PlayStation 4 games were listed for as little as $12.

The sale is among Amazon’s busiest events of the year. Mehdi Daoudi, CEO of Catchpoint, a firm that collects traffic and speed data for websites, said that, overall, Amazon, which is renowned for its ability to accommodate spikes in site traffic, managed the frenzy well.

“As usual, Amazon is handling the extra load very well, despite the fact that their web pages got heavier than usual with all the Prime Day product images,” he said per Digital Commerce 360.

While Tuesday’s Amazon glitch concerned the gift of new life, a blunder by Facebook last November involved the other end of the life cycle. The social media giant erroneously flagged some profiles with messages saying their owners were dead.

The bug even killed off Facebook founder Mark Zuckerberg, Engadget notes. A banner on his profile read: “We hope people who love Mark will find comfort in the things others share to remember and celebrate his life.”

Here in the 21st century, of course, we live and die by technology.

Featured image via Pixabay

More and more Amish businesses are using technology

There are 2,000 thriving Amish businesses in the Lancaster, PA area, Donald B. Kraybill, a retired professor at Elizabethtown’s Young Center for Anabaptist and Pietist Studies, told the New York Times. Many are worth several million dollars.

More and more of those businesses are not strictly agrarian. Many now function with the aid of technology, which the Amish traditionally shun.

Amish communities are growing rapidly, the Times notes, citing an August report by researchers at Elizabethtown College near Lancaster that estimates the Amish population in the U.S. at 313,000. That figure represents a 150 percent increase from 25 years ago.

Most of the growth occurs internally. On average, the Times says, an Amish married-woman has seven children. Marriage is more common in their tight-knit communities than in America as a whole, and they tend to marry younger than the average American does.

With the population growth, farmland has become scarce and more expensive, compelling many Amish people to relocate to rural areas in places like upstate New York, and/or to adopt business trades. In many cases, the move toward such trades necessitates increased interaction with the non-Amish community and requires the Amish to commute into cities for work.

Both of those demands entail the use of modern conveniences and technology traditionally prohibited within the sect.

Moses Smucker, an Amish man who lives in Lancaster, runs a food store and sandwich shop, Smuckers Quality Meats and Grill, in Philadelphia, which lies 80 miles east of Lancaster. Six days a week, a non-Amish driver to takes Smucker, who does not drive a car, into the city.

Smucker told the Times he enjoys escaping the city after his work is done. “Philadelphia is very fast-paced,” he said. “Then I go home, and I can drive my horse. I enjoy horses. Some people don’t, but I do. It slows everything down.”

With regard to technology, Smucker said: “You have to do what you have to do to stay in business. People are starting to understand that.”

Smucker’s shop, which gets four and a half stars on 80 reviews on Yelp!, accepts credit cards as payment.

Amish Country Gazebos, which supplies landscaping structures for the Marriott, the Hilton, Harrah’s and other notable chains, operates online and makes deliveries using its own trucks.

John, an Amish man in his late 60s, cuts wood for the gazebo company using a computer-driven crosscut saw. (Like many people who appear in the Times article, John, in deference to Amish values of humility, declined to provide his surname.)

“We call him the computer geek sometimes,” John’s son, Junior, told the Times.

Sam, a 29-year-old Amish man, used to make deliveries for Amish Country Gazebos, but now works on a computer in the company’s shop. It was difficult for him to learn how to interact with the machine, but once he did, he saw how it could facilitate business operations.

“I thought, I need to know how this computer thinks, or the computer needs to know how I think—we need to get along!” he said, per the Times.

Now, he appreciates the efficiency of the machine. “I can easily see it helping as far as numbers go — oh my goodness — to get rid of all these papers.”

But, Sam told the Times he has “never thought about bringing a computer” onto his property in Lancaster. Like many in his community, he draws a sharp line between business and home life, especially with respect to technology.

Still, technology is becoming part of the fabric of Amish life even at home. Many members of the community use lawnmowers and other electric yard-care equipment.

Though hooking into a public utility feed remains unheard of, some Amish people electrify their homes using power generators and solar panels.

Smartphones are becoming increasingly common in the community. The opening of the Pandora’s box that is the internet has given rise to fears about pornography and excessive influence from the outside world.

Through social media, for instance, Amish children may develop romantic attachments toward non-Amish peers—Amish rules frown upon such relationships.

“There’s always a concern about what would lead our young folk out of the church and into the world,” said John.

“Amish life is about recognizing the value of agreed-upon limits,” Erik Wesner, an author who studies the Amish way of life and runs a blog called Amish America, “and the spirit of the internet cuts against the idea of limits.”

While Marilyn, an 18-year-old Amish woman, values limits—she said she made an effort to respect church leaders’ wishes by limiting her cell phone usage in church—she says there must be a limit to the Amish’s resistance to technology.

“We can’t live like we did 50 years ago because so much has changed,” she said. “You can’t expect us to stay the same way. We love our way of life, but a bit of change is good.”

John’s wife, Lizzie, was disturbed by people’s obsession with their phones. “People are treating those phones like they are gods,” she told the Times. “They’re bowing down to it at the table, bowing down to it when they’re walking. Here we say we don’t bow down to idols, and that’s getting dangerously close, I think.”

Having lived without technology for so long, the Amish are more sensitive to its effect on human interaction than others are, Kraybill said per the Times.

Despite the concerns it raises in the community, technology is becoming more and more necessary as the Amish adapt what Kraybill calls their ““very entrepreneurial, very capitalistic” spirit for the 21st century.

“We’re not supposed to have computers; we’re not supposed to have cell phones,” said John. “We’re allowed to have a phone, but not in the house. But to do business, you need a computer, or access to one, and that phone moves into the house. So how do you balance that?”

Featured image via Wikimedia Commons

Proterra bus sets range record for electric vehicles

Proterra, the California-based manufacturer of electric buses, said Tuesday that its new, 100 percent electric Catalyst E2 model set a range record at a test track in New Carlisle, Indiana, traveling 1,102.76 miles on a single charge, the LA Times reports.

Navistar International, a bus and truck manufacturer that owns the track, verified the test.

The previous record belonged to the Schluckspecht-E, a lightweight, single-seat car that demonstrated a range of 1,013.76 miles six years ago.

The Catalyst E2 is 40 feet long and weighs almost 20 tons—46 times the weight of the Schluckspecht-E, according to Proterra’s statement. It packs 660 kilowatt-hours worth of energy, as opposed to the Schluckspecht-E’s battery capacity of 23-kilowatt hours.

Proterra declined to disclose the speed at which the Catalyst E2 traveled during the test, but a company spokeswoman said per the Times that the vehicle’s trips around the track were “slow and steady.” The Schluckspecht-E, for reference, performed its test run at an average speed of 28 miles per hour.

The test demonstrates the progress electric propulsion technology has made in recent years. Proterra expects all-electric buses and trucks with ranges in excess of 1,000 miles to be commonplace within a decade or so, the Times notes.

Range has long been the limiting factor that has prevented electric vehicles from emerging as viable options for long-haul and mass-transit applications. Diesel trucks and buses routinely travel more than 1,000 miles on a single tank of fuel.

By comparison, the range of Proterra’s current Catalyst E2 model tops out at 350 miles. Moreover, that vehicle takes up to five hours to charge completely, while it takes just minutes to refill a diesel tank.

But, Proterra CEO Ryan Popple says electric vehicles will soon be capable of exceeding the range of their diesel-powered counterparts.

“We’re entering an era where electric vehicles are simply better than internal combustion engines on range,” he said, per the Times.

Electric buses are already far easier and cheaper to maintain than conventional diesel ones, Proterra says. An electric bus requires 30 percent fewer parts and 75 percent fewer brake repairs than a diesel one. Over the vehicle’s lifetime, an electric bus costs $151,000 less to maintain than a diesel bus does, the company says.

Other companies are developing large electric vehicles for long-haul rather than mass-transit applications. Cummins unveiled a 100 percent electric semi cab earlier this month. It boasts a payload of 22 tons. The base model has a range of 100 miles, but the truck can achieve a 300-mile range if additional battery packs are installed.

That vehicle is still in the prototype stage, and the company has offered no firm commitment as to when or whether it will be available on the mass market.

Mercedes has built a fully-electric semi capable of hauling 12.8 tons. Its range is 120 miles. The company will allow 20 drivers to test the vehicle this year and plans to mass produce it by 2020.

Tesla is set to reveal an electric semi in late October. CEO Elon Musk originally scheduled the unveiling for September, but announced last Wednesday that it is now “tentatively scheduled for Oct 26 in Hawthorne.”

Rumor has it Tesla’s truck will boast a range of up to 300 miles, and Musk has made characteristically bold claims regarding the vehicle’s torque.

“With the Tesla Semi, we want to show that an electric truck actually can out-torque any diesel semi,” he said during a TED event, according to drive.com.. “If you had a tug of war competition, the Tesla Semi will tug the diesel semi uphill.”

It may take a while, but electric power is becoming a viable alternative to diesel as a fuel source for large vehicles.

Featured image via Wikimedia Commons

Best Buy is quietly thriving in an Amazon world

In an eCommerce age in which every brick-and-mortar enterprise is expected to roll over and die, Best Buy is adapting to the changing market. Under the guidance of CEO Hubert Joly, Best Buy is engineering an impressive turnaround, the New York Times reports.

According to the Times, Best Buy’s revenue has exceeded analysts’ expectations in six of the last seven quarters. The company’s stock has climbed more than 50 percent over the last 12 months.

Joly took the reins at Best Buy in 2012, as Amazon was capturing an increasing share of the retail market, and the iconic brick-and-mortar chain was struggling to keep up. The practice of “showrooming,” which involves customers testing and trying a product in a physical store, then buying it at a lower price online, was increasingly cutting into Best Buy’s sales.

So, the Times says, Joly instituted a price-matching guarantee so that customers who came in to check out a given product could feel comfortable buying it in-store.

“Until I match Amazon’s prices, the customers are ours to lose,” Mr. Joly said.

In order to slash prices, of course, one must cut costs. In fact, as the Times says, cutting costs is integral to the recovery of almost any struggling business. But, rather than induce a huge, public wave of layoffs, which would have crippled morale amongst employees and given shareholders the impression that the company was on thin ice, Joly quietly let go of extraneous employees at the middle management level. Rather than closing a massive number of stores, he waited for leases to run out at unprofitable locations.

Joly eliminated 400 Geek Squad positions that involved assisting customers remotely, via phone or internet chat. Rather than firing the employees who filled those positions, though, he offered them reassignment within the company.

“Taking people out is the last resort,” said Joly in 2015, according to the Times. “Because you need to capture the hearts and minds of the employees.”

One measure he took to recapture those hearts and minds was to reinstate an employee discount, the Times says.

Joly knows that Best Buy’s employees—and their ability to provide human interaction at the point of sale—give the company a competitive advantage over Amazon. Best Buy representatives serve as approachable, flesh-and-blood intermediaries between customers and the often-intimidating world of consumer electronics.

In an effort to double down on customer service, Joly retrained employees to improve their knowledge of cutting-edge devices like smart home appliances and virtual reality headsets. He expanded the Geek Squad overall, reassigning many of the aforementioned remote employees to roles in which they provide in-home consultations to customers, recommending products and installation techniques.

Best Buy tested the in-home program in select locales last year; now, it is going nationwide.

The company has also revamped its eCommerce operations, making shipping more efficient. Before Joly stepped in as CEO, Best Buy shipped all items ordered online from centralized warehouses. Joly gave stores themselves the means to ship products. Effectually, Best Buy stores are now also miniature shipping warehouses.

When a customer orders a product online, it is shipped from whichever location will provide the fastest delivery, whether that location is a nearby store or a traditional warehouse.

In an effort to turn the “showrooming” phenomenon to his advantage, Joly reimagined the manner in which items were displayed in his stores. He gave iconic electronics manufacturers like Apple, Microsoft and even Amazon their own kiosks in Best Buy stores. High-demand items are prominently displayed, and customers are excited about browsing the store.

Many factors beyond the company’s control have further spurred its revival. With competitors including Circuit City, Radio Shack, and HH Gregg having gone bankrupt or closing their doors, Best Buy is among the only brick-and-mortar electronics retailers left, the Times notes.

Many people remain reluctant to make big-ticket purchases online, so Best Buy’s highest-priced products are still in demand.

The company depends on manufacturers to continue to make products that create a buzz amongst customers. As Joly implied on the August earnings call, that dependence means Best Buy’s performance will ebb and flow with the popularity of new gadgets.

“They’re at the mercy of the product cycles,” said Stephen Baker, a tech industry analyst at NPD Group, per the Times. “If people stop buying PCs or they don’t care about big-screen TVs anymore, they have a challenge.”

Featured image via Flickr/Mike Mozart

Equifax could have prevented breach with a simple patch, experts say

Last Thursday, credit-monitoring firm Equifax announced that hackers had breached its computer systems and compromised the data of as many as 143 million Americans. Thursday, the company confirmed that the perpetrators of the attack did, as rumored, exploit a weakness in Apache STRUTS.

Equifax identified the exploited vulnerability as Apache Struts CVE-2017-5638.

In March, industry experts pinpointed the CVE-2017-5368 vulnerability. That same month, Apache released a patch to correct it, the New York Times notes. Apache also published instructions describing how to implement the patch.

Three days after the Apache STRUTS weakness was discovered, reports surfaced indicating that hackers had begun taking advantage of it. At that point, it was clear that the Apache vulnerability presented a considerable security threat.

Therefore, many are scratching their heads as to why Equifax neglected to install the patch before hackers accessed the company’s systems in mid-May. Ars Technica notes that implementing the update would have been labor-intensive because after downloading the patch, one would need to rebuild all applications built with older, vulnerable versions of the software.

Still, Bas van Schaik, a product manager and researcher at Semmle, an analytics security firm, points out, it is Equifax’s responsibility to take the measures necessary to protect its customers’ data.

“This vulnerability was disclosed back in March. There were clear and simple instructions of how to remedy the situation. The responsibility is then on companies to have procedures in place to follow such advice promptly,” says per WIRED. “The fact that Equifax was subsequently attacked in May means that Equifax did not follow that advice. Had they done so this breach would not have occurred.”

But, Avivah Litan, a security analyst with the research firm Gartner, told the Times a high-profile company like Equifax needs a multi-faceted security system so that if one aspect fails, others provide reinforcement.

“You have to have layered security controls,” she said. “You have to assume that your prevention methods are going to fail.”

Apache STRUTS is an open-source web development framework used to create Java applications that run Web servers, Ars Technica explains. The software is free, and about 65 percent of Fortune 100 companies, including Lockheed Martin, Citigroup, Vodafone, Virgin Atlantic, Reader’s Digest, Office Depot, and Showtime, use it, per the New York Post. Banks and government agencies—including the IRS—also use the software.

Generally speaking, though, open-source software is particularly vulnerable to hacks.

Developers use Apache STRUTS to develop applications for front-end as well as back-end servers. Front-end servers contain code that translates the website’s content into something the user can see, while back-end ones contain the building blocks of a website and are only accessible to site administrators.

Equifax has not said whether the hackers exploited the company’s back-end or its front-end servers. Accessing the back-end would have required access to the company’s private network, the Times notes.

Several hacking experts have already noted the sophistication of the attack—the sheer amount of data stolen is sufficient to indicate the intricacy of the operation.

Investigators have yet to identify the perpetrators of the attack. A group calling itself the PastHole Hacking Team has claimed responsibility and threatened to release the seized data Friday unless a 600-bitcoin ($2.5-million) ransom is paid.

Several people have concluded that PastHole’s claiming responsibility was a hoax. The leading theory among investigators, the Times says, holds that a nation-state, or a group of hackers sponsored by a nation-state, carried out the attack. A government holding animosity toward the U.S. could cull the stolen data in search of information that could be used for espionage or blackmail.

Investigators note that the amount of data stolen casts further doubt on the notion that a small, financially motivated group of hackers perpetrated the attack.

Such a group would likely sell the information on the Dark Web. While there is a market amongst cyber-criminals for sensitive data, particularly permanent information, like birth dates and social security numbers one can use to access a victim’s bank account, medical records, etc., the market likely would not support such a massive amount of data.

“Are cybercriminals going to try and sell circa 150 million records in dark web auctions? That’s nearly half the population of the United States,” said Thomas Boyden, president of GRA Quantum, a company that specialized in cyberattack incident response, per the Times. “Are there standard cybercriminals out there with the purchasing power for that type of data?”

Equifax said in a statement Wednesday: “We continue to work with law enforcement as part of our criminal investigation, and have shared indicators of compromise with law enforcement.”

Featured image via Pexels

Walgreens to revise proposal to buy over 2,000 Rite Aid stores

In yet another effort to appease the Federal Trade Commission (FTC), U.S. pharmacy chain Walgreens will likely revise its June proposal to acquire 2,186 individual Rite Aid stores for $5.18 billion, sources told Bloomberg Monday.

Walgreens’ announcement could come early this week, the sources said.

The two chains have been pursuing a deal for almost two years, but the three proposals they have submitted thus far have met resistance from the FTC. In October 2015, Walgreens proposed an outright takeover of Rite-Aid. Under that deal, the former company would have purchased the latter for $9 per share—that amounts to a total of $9.4 billion.

Walgreens offer represented a 48 percent premium on Rite Aid’s closing price on October 26, the day before the proposal was announced.

The FTC reportedly worried that Walgreens’ purchase of Rite Aid would compromise competition.

A report by the Drug Channels Institute indicates that at the close of 2016, Walgreens controlled 13.8 percent of the U.S. prescription market, in terms of revenue. Under five percent of that market belonged to Rite Aid. The takeover would have given the combined company 18.4 percent of the market.

CVS, the nation’s largest pharmacy chain in terms of revenue, holds 23.4 percent of the prescription market.

This January, in response to the FTC’s concerns, Walgreens revised the price per share to between $6.50 and $7—putting the total value of the purchase between $6.84 billion and $7.37 billion—and pledged to sell as many as 1,200 of its newly acquired Rite Aid stores (about a quarter of the 4,600 or so Rite Aid locations Walgreens would have acquired) to Fred’s, a regional pharmacy chain.

In June, amidst continued skepticism from the FTC, Walgreens took a different tack. Rather than taking over Rite Aid, Walgreens proposed buying 2,186 individual Rite Aid stores—roughly 48 percent of the total number of Rite Aids—for a total of $5.18 billion, leaving Rite Aid to operate as a stand-alone entity.

Because it abandoned the original takeover plan, Walgreens was obligated to pay Rite Aid a termination fee of $325 million in addition to the purchase price.

Rite Aid stock plunged about 30 percent on news of the abandoned takeover, Fortune notes.

The Fortune piece casts doubt on whether the FTC was set to block the merger, citing a CTFN report that in turn cites antitrust lawyers and a former DOJ official as saying in late June that the FTC was “more likely than not” to approve the deal.

Prior to the companies’ withdrawal of the proposal, the FTC had taken no action to block the agreement. Following the withdrawal, Fortune says, the FTC released a statement calling the companies’ action “voluntary” and saying it came before the companies “would have been free to close their transaction absent Commission action.”

But, Walgreens Chief Executive Officer Stefano Pessina implies that he amended the deal in the face of regulatory pressure

“This deal [the one announced in June] is much simpler,” said per Bloomberg, of the June proposal. “It is an asset deal so it is less controversial.”

The FTC has allegedly frowned upon that deal as well, so Walgreens is set to amend its proposal for the fourth time. Sources told Bloomberg the “number of stores involved in the deal would not change dramatically” (Bloomberg’s paraphrasing).

The deadline by which the FTC was required to complete its review of the June proposal is nearing, Bloomberg notes. When that deadline arrives, the agency will either approve the deal or request additional information.

If Walgreens submits a revised plan prior to the deadline, though, the FTC would have 30 more days to consider that new proposal, and investigation of the previous one would end.

Rite Aid shares jumped 3.8 percent to a two-and-a-half-year high Monday on news that Walgreens was considering revising the deal. Walgreens surged in early trading but quickly modulated. At the market’s close, the company’s shares had risen marginally (0.12 percent).

Featured image via Wikimedia Commons

Strike begins at GM manufacturing plant in Canada

At 11:00 p.m. Sunday night, workers at General Motors’ CAMI  Assembly Plant in Ingersoll, Ontario, Canada left their posts and began picketing in front of the facility, Canadian news agency Global News reports.

The strike began after GM and Unifor Local 88, a Canadian labor union that represents 3,000 workers, including those at the CAMI facility, failed to reach an agreement by the 10:59 p.m. deadline Sunday.

In August, 99.8 percent of the plant’s workers voted in favor of going on strike in such a scenario. The walkout is the first at a Canadian GM facility in more than 20 years, according to Global News.

Both GM and Unifor Local 88 expressed willingness to continue pursuing a workable arrangement.

“While General Motors of Canada and our Unifor partners have made very positive progress on several issues over the past weeks, the company is disappointed that we were not able to complete a new agreement. We encourage Unifor to resume negotiations and to continue working together to secure a competitive agreement,” the auto giant said in a statement.

Unifor Local 88 chair Mike Van Boekel told Global News the union, likewise, remains open to hearing proposals from GM. He said workers would resume working mid-week if the two parties could reach a “tentative agreement.” However, if GM fails to finalize such an agreement the following Sunday, Van Boekel says, the strike will continue.

The union is negotiating for higher wages, improved benefits, and a commitment by GM to keep production of the Chevy Equinox at the CAMI plant. The facility formerly produced Terrain as well as Equinox vehicles, but in January, GM moved production of the Terrain to Mexico.

“We build [built] the Terrain and the Equinox. The Terrain left, they moved it to Mexico. We were number one in every area for quality, the sales are huge, our profits for the company are huge, and they moved the truck to Mexico anyway,” said Van Boekel, per Global News.

The union wants reassurance that the automaker will not similarly outsource Equinox production.

“If we don’t have a product we can yell all we want, but if the plants are empty, there’s nothing to gain. So we are looking for product, we are looking for commitment, we are looking for investment. Before money, before language, we have to guarantee our jobs are there and that we can support our families,” said Van Boekel.

The product the CAMI plant currently has—the Chevy Equinox—is increasingly vital to GM’s success. As sales of new vehicles decline in the U.S. and around the world, SUVs and crossovers—the Equinox belongs to the latter category—remain in high demand.

Sales of the Equinox are soaring accordingly. Following the release of an updated 2018 Equinox model earlier this year, sales of the vehicle rose 67 percent year-over-year in August.

GM employs more than 2,700 people at the CAMI plant, which opened in 1989 as part of a joint venture between the American automaker and Suzuki Motor Corporation. The two companies split ownership of the facility until 2011 when GM acquired full ownership.

Over the years, the plant has produced seven different General Motors vehicles. The Equinox, which the plant has produced since 2009, and the Terrain, which the plant produced from 2009 until early 2017, are the best-selling vehicles ever to be manufactured there.

Ingersol’s CAMI plant is one of three GM manufacturing facilities in Canada. Oshawa Assembly, located roughly 200 km (125 miles) northeast of Ingersoll, has been operational since 1953. It currently employs over 2,600 people. Like the Ingersoll facility, the one in Oshawa exclusively produces the Equinox.

Van Boekel told Global News the union wants CAMI “to be at least the lead producer of the Equinox.”

A third GM manufacturing facility employs 1,500 people. The propulsion plant in Saint Catherines builds engines and other components.

In addition to the manufacturing operations, GM has an auxiliary headquarters in Oshawa (the company’s primary headquarters are in Detroit) and numerous technology centers throughout Canada. The company’s Canadian operations as a whole employ about 9,000. 225,000 people work for the company worldwide.

As of 2:15 p.m. EST, GM’s stock has dipped 0.66 percent in Monday trading.

Featured image via Wikimedia Commons

Boeing wins $600 million deal to design the next Air Force One

The U.S. Air Force announced Wednesday that on Tuesday it awarded Boeing a $600 million contract to design two new aircraft for the President’s Air Force One fleet. Both planes will be 747-8 models; they will replace a pair of aging VC-25A (747-200B) aircraft. President Obama ordered the replacement during his second term, according to LiveScience.com.

The Air Force expects the new planes to be operational by 2024.

The VC-25As have been in use since 1990, and have carried five different presidents.

The Air Force agreed to purchase the replacement planes from Boeing in early August. The la Times quotes a Boeing spokeswoman as saying at the time that the company sold the planes to the Air Force “at a substantial discount from the company’s existing inventory.”

“Following the award of the contract to purchase two commercial 747-8 aircraft, this [i.e. Tuesday’s] contract award is the next major step forward toward ensuring an overall affordable program,” said Maj. Gen. Duke Richardson, Presidential Airlift Recapitalization program executive officer.

Under the contract, Boeing will “complete the initial design of the future Air Force One,” according to the Air Force’s statement.” The design will need to meet “presidential airlift mission requirements,” and the cost of the contract cannot exceed a ceiling President Trump will define.

According to the Times, Trump said via Twitter in December that the then-$4-billion budget for the design and implementation of the new Air Force One aircraft was “out of control.” In January, Defense Secretary James Mattis ordered a review of the Air Force One budget.

The Air Force has asked Boeing to incorporate the following elements into the design: “a mission communication system, electrical power upgrades, a medical facility, an executive interior, a self-defense system and autonomous ground operations capabilities.”

The current contract covers only the design of the Presidential planes. The Air Force says it is working with Boeing on a follow-up contract, which will govern additional design efforts, as well as the modification, testing and delivery of the aircraft. The military expects to award that contract in Summer 2018.

The 747-8 models feature numerous upgrades over the 747-200Bs the President uses now, Boeing says. The new planes boast a range of 7730 nautical miles (8895.53 miles), meaning they can fly from Washington D.C. to Hong Kong without refueling. The 747-200Bs had a range of 6735 nautical miles (7750.5 miles)—roughly the distance from D.C. to Tokyo.

The new planes also emit 16 tons less CO2 than the current models.

The current planes cruise at a speed of .84 Mach (644.5 mph)—the new ones do so at .855 Mach (656 mph). Mach One, the speed of sound, is 767.269 mph.

The new planes are six yards longer than their predecessors from head-to-tail and almost 29 feet longer in terms of wingspan.

They can support 987,000 pounds at takeoff; 154,000 (18.5 percent) more than their predecessors.

That last attribute is important given that today’s Air Force One includes a conference/dining room, two offices (one of which converts into a medical facility), and two galleys (kitchens) that can accommodate 100 guests.

The new Air Force One will be the seventh Boeing has designed since 1942.

The company routinely partners with the U.S. military to develop weapons and other defense implements. In late August, the Air Force announced that it had awarded Boeing, as well as Northrop Grumman, contracts to design new, land-based, nuclear ICBMs. The Air Force will likely choose the better of the two designs, or take elements from both.

Boeing’s defense operations represent a significant portion of its revenue. In 2016, the company generated over $12.5 billion through the sale of military aircraft. In 2015, the figure was $13.4 billion.

By comparison, Boeing generated over $65 billion through the sale of commercial planes in 2016 and more than $66 billion a year earlier.

So, in 2016, 16 percent of the revenue Boeing generated through the sale of commercial and military aircraft came from sales of the latter. In 2015, that figure was marginally higher.

At the market’s close Thursday, Boeing stock was up more than 3 percent since Wednesday morning.

Featured image via Wikimedia Commons

High-tech retail startup Bodega raises $2.5 million in funding round

Bodega, a San Francisco-based startup that operates fully-automated kiosks roughly the size of vending machines, introduced itself to the world Wednesday. The company has raised $2.5 million in a funding round led by venture capital firms Homebrew and First Round Capital, TechCrunch reports.

Thirty Bodega kiosks (which the company calls “bodegas”) are already operational in apartment buildings, gyms and office buildings throughout the Bay Area. The company will presumably use the seed money to expand.

Bodega users create an account on the company’s smartphone app and input their credit card information. As a customer approaches a kiosk, he/she inputs a three-digit, kiosk-specific code via the app. The code unlocks the kiosk so the customer can reach in and grab what he/she needs.

Cameras track the movement of the customer’s hand to determine what he has picked out, and then automatically charge the customer’s credit card.

Though the eight-square-foot cabinets may sound like high-tech vending machines (essentially, they are), Bodega kiosks stock a wider and more customized range of products than traditional vending machines do. The particular items stocked at a given kiosk are tailored to the demands of the customers who use that kiosk. A Bodega in an apartment building, for instance, may offer everything from toothbrushes to Solo cups. A kiosk located in a gym might have health food, sportswear, etc.

Depending on its location, a kiosk will come stocked with a “base set of products” (TechCrunch’s words). As customers begin to buy things, the Bodega system tracks the purchases to gauge which products are in demand at a given kiosk, and surveys repeat customers to ask what they would like to see added. The company refines the offerings accordingly.

The kiosks bring “the relevant slice of a store” to within 100 feet of a customer, the company’s website says

“Retailers are contouring their business around this fact that users want convenience,” said Paul McDonald, a thirteen-year Google veteran who now runs the startup. “There’s really only been two options: you can go to the store, or you can order something online. What we’re trying to do is introduce a third option, a new way of buying things. Shrink the store, bring the best parts in a smaller form factor and bring it to where you are.”

Some have criticized the “Bodega” name and its implication that the company intends to compete with local corner stores like the bodegas in New York and Los Angeles, which are often centerpieces in their communities.

“Bodega” is a Spanish word meaning, more or less, “local shop.” McDonald says, per GQ.com, that his company surveyed the Latin American community as to whether the name was a misappropriation of the term, and 97 percent of respondents said “no.”

“But it’s clear that we may not have been asking the right questions of the right people,” McDonald admits. 

“Despite our best intentions and our admiration for traditional bodegas, we clearly hit a nerve this morning, we apologize. Rather than disrespect to traditional corner stores — or worse yet, a threat — we intended only admiration.”

McDonald said the company would review the criticism and consider changing the name.

Many are concerned Bodega, whatever it is called, will threaten traditional bodegas.  The company indicated Wednesday that it intends to offer the “same ease and convenience” the ubiquity of corner stores in places like New York City affords.

Bodega clarified that it does not intend to compete with tradition bodegas, which, McDonald says, stock more products than a Bodega kiosk ever could, and offer “integral human connection” between patrons and clerks. Rather than challenge established bodegas, the company says it wants to “bring commerce to places where commerce currently doesn’t exist.”

Still, it seems that, in the places where they do appear, the high-tech Bodegas might siphon a certain amount of business away from local shops. For instance, a person who generally goes to the local bodega when he/she needs milk at 2 a.m., might be inclined to get that milk at a Bodega kiosk were one available in his/her apartment building.

Bodega notes the grocery market is but one of many markets it is targeting. The company envisions itself a competitor more to huge chains like Wal-Mart than small, local shops.

“The market we’re going after is some combination of the grocery, gym market, and everyday essentials. Eventually, what we see is a world where you don’t have to go to the 30,000 square foot stores. Instead, we distribute the store based on products you buy once a week or month,” said McDonald.

The autonomy of Bodega kiosks may threaten retail jobs. “Retail in The U.S. is huge, 10% of Americans work in retail,” McDonald himself notes. “The folks who are retailers want technology to reduce their costs and bring products closer [to consumers].”

In reducing employers’ costs, one may infer, Bodega may take employees’ jobs.

But, McDonald says: “Rather than take away jobs, we hope Bodega will help create them. We see a future where anyone can own and operate a Bodega—delivering relevant items and a great retail experience to places no corner store would ever open.”

Featured image via http://observatoriodainternet.br

Bitcoin plummets as economists, regulators express skepticism of cryptocurrency boom

Bitcoin’s value, which nearly quintupled from the first of the year through the first of September, peaking at $4,950.72 per coin on the latter date, has fallen more than 20 percent this month and over 15 percent in the past seven days, as of 4:15 p.m. EST Wednesday.

The decline comes as a number of regulatory agencies and economic experts around the globe express skepticism regarding Bitcoin and other cryptocurrencies.

China banned Initial Coin Offerings (ICOs)—the means by which creators introduce and raise capital for new cryptocurrency projects—earlier this month, and Chinese news outlet Caixin reported Friday that the country might prohibit cryptocurrency exchanges entirely in the near future, Business Insider notes. 

But, Bloomberg’s Lulu Yilun Chen tweeted Friday that the Chinese government had yet to mandate the shutdown of Okcoin and Huobi PRs, two of the country’s most prominent cryptocurrency exchange platforms.

Some say China will relax the pressure it has placed on the cryptocurrency market once the government has found a viable means of regulating that market.

“China [is] saying, ok, we need to push back on these for now until we figure out how to deal with them,” said Zennon Kapron, director of the Shanghai-based financial technology consultancy Kapronasia, per Reuters, in reference to the country’s ICO ban. Kapron added that he expects the country’s government to eventually ease the ban.

Previous Chinese regulations against cryptocurrencies have proved temporary. The country prohibited the withdrawal of Bitcoin investments in February, but allowed withdrawals to resume in June, Business Insider points out.

Chinese regulators are not the only ones wary of the cryptocurrency boom.

Tuesday, the U.K.’s Financial Conduct Authority released a statement cautioning investors about the risks of ICO investors, Business Insider reports. These risks, according to the FCA, include the lack of regulation governing the cryptocurrency market, the volatility of cryptocurrencies, the potential for fraudulent ICOs, and the experimental nature of cryptocurrency projects.

“ICOs are very high-risk, speculative investments,” the FCA’s warning reads. “You should be conscious of the risks involved … and fully research the specific project if you are thinking about buying digital tokens. You should only invest in an ICO project if you are an experienced investor, confident in the quality of the ICO project itself (e.g., business plan, technology, people involved) and prepared to lose your entire stake.”

Also on Tuesday, Business Insider says, JP Morgan CEO Jamie Dimon predicted an imminent crash of what he sees as the Bitcoin bubble. His prediction, so far, has been self-fulfilling. Dimon said he “would fire any trader that transacted Bitcoin for being stupid” (Business Insider’s paraphrasing).

As of 5:15 p.m. EST, Bitcoin’s value has fallen six percent on Tuesday’s news.

Business Insider notes that early this month, in an interview with Quartz, Yale economics professor and Nobel Prize winning author Robert Shiller, who predicted the crash of the housing and technology markets in his 2000 book “Irrational Exuberance,” called Bitcoin the best example in today’s market of a speculative bubble.

A “speculative bubble” occurs when unrealistic expectations amongst investors of an asset’s future performance drive the market value of that asset beyond any real gains it is capable of accruing.

In the aforementioned book, Shiller argues that the tech bubble formed because “a fundamental deep angst of our digitization and computers” compelled investors to seek a false sense of understanding and comfort by gobbling up tech stocks.

“Somehow Bitcoin…gives a [similar] sense of empowerment: I understand what’s happening! I can speculate and I can be rich from understanding this! That kind of is a solution to the fundamental angst,” Shiller told Quartz.

There is no question that investors have been exuberant about cryptocurrencies this year. ICOs have raised over $2 billion in 2017. The question is whether the exuberance is irrational. As a number of financial experts answer that question in the affirmative, once-exuberant cryptocurrency backers are growing skittish.

Featured image via Wikimedia Commons

Centene to acquire Fidelis Care for $3.75 billion

Centene, the United States’ largest Medicaid managed care provider, announced Tuesday that it has reached a “definitive agreement” to acquire Fidelis care for $3.75 billion, USA Today reports. 

The deal is scheduled to close in early 2018. It awaits the approval of various New York regulators, who will, among other things, evaluate it for compliance with the NY Not-for-Profit Corporation Law.

With the acquisition, Centene expects to generate $60 billion in annual revenue in 2018 and $100 million in savings by 2019. The firm reported $40.6 billion in annual revenue in 2016. Based in St. Louis, the company ranks among the largest publicly held companies in Missouri in terms of revenue.

Centene hopes to maintain a debt-to-capital ratio of 40 percent in the 18 months following the acquisition.

Managed care providers like Centene and Fidelis Care function as intermediaries between federal and state governments—which fund Medicaid programs—and Medicaid beneficiaries. The State pays such companies a premium in exchange for providing the services to which a beneficiary is entitled. USA Today describes managed care providers as the “private market option for Medicaid recipients.”

Fidelis works with 70,000 health care providers to provide health insurance plans to 1.6 million New York residents. The company brought in $4.8 billion in revenue in the first six months of 2017, according to Centene’s announcement.

Centene serves more than 12.2 million members in 28 states, but prior to the Fidelis acquisition has no presence in New York state. The deal will give Centene a leadership position in that state’s managed care market, the second-largest such market in the nation, according to Centene’s statement. The company is already the leading Managed Care Organization (MCO) in the other three largest MCO markets in the country: California, Florida and Texas.

Centene partners with healthcare providers at the state level to offer care tailored toward the needs of a given community.

“We believe our over 30 years of experience, our local approach to the provision of healthcare, and our expertise and capabilities in caring for underserved populations will support the next generation of leadership in government programs in New York State,” said Michael F. Neidorff, chairman, president and CEO of Centene. “We look forward to partnering with the state of New York’s healthcare professionals as we continue to deliver on our mission of transforming the health of the community, one person at a time.”

Fidelis shares Centene’s emphasis on local involvement and affordable care for as many people as possible. The former company’s website says: “From the beginning, Fidelis Care has worked to be part of the social fabric of local communities, impacting people’s lives with one of the most basic human rights – access to quality, affordable health coverage and care.”

“Centene’s and Fidelis Care’s missions are fully aligned in terms of promoting health through high quality, accessible care and services for all and advocating for health policy that accords true dignity and respect for all people, especially the underserved,” says Neidorff.

Fidelis Care CEO Patrick J. Frawley says his company’s “mission and values” are its “foundation,” and that Centene shares those values.

According to a CBSNews report, The Archdiocese of New York, a key Fidelis backer, said the “uncertain regulatory environment” in the U.S. in part motivated the sale. Washington’s sluggishness in replacing the Affordable Care Act has been widely publicized. 

CBS further notes that the Archdiocese plans to use proceeds from the sale to establish a healthcare foundation that will “operate in conformity with Catholic values.”

Founded in Milwaukee in 1984, Centene has been publicly traded since December 2001. Its market capitalization is $14.2 billion.

As of 2:34 EST Monday, the company’s shares have risen 7.2 percent on news of the Fidelis acquisition.

Featured image via Pixabay