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One of Tesla's largest US Supercharger stations has a plush, private customer lounge in the middle of a folksy California town — take a look inside (TSLA)

Tue, 06/11/2019 - 7:16pm

KETTLEMAN CITY, California — Amid swaths of farmland and a smattering of gas stations, fast-food restaurants, and motels, one of Tesla's largest US Supercharger stations sits tucked away from the main street that runs underneath the 5 Freeway, on a corner lot that used to be a Burger King drive-thru.

Across the street to the east is a gas station and a Carl's Jr., to the south an auto-repair shop, and to the west two budget hotels.

Farther south across State Route 41, there's a recently built strip mall, curiously named Bravo Farms, whose architecture was designed to resemble old Western saloons of generations past.

The Tesla Supercharger station, unlike the Burger King before it, makes use of nearly all the available space. An expanse of covered solar parking shelters the 40 Supercharger stalls on the lot. A private lounge invites Tesla travelers to rest in plush armchairs, plug in their mobile devices, and enjoy soothing music.

There are vending machines, restrooms, and Tesla staff inside the lounge. A separate display section shows off Tesla Energy products: the solar panels and Powerwall battery packs it sells to residential and commercial customers.

On one of the large flat-screen displays inside the lounge is a real-time world map with the locations of every Supercharger station on the planet. There are three numbers at the bottom of the screen — kilowatt-hours delivered, miles enabled, and gallons of gasoline saved — that tick up as you watch.

This is Tesla's domain. Its presence in an otherwise folksy enclave — one of at least seven on the route here from Hawthorne, California, where SpaceX's headquarters and a Tesla design studio are located — is a clear sign that Tesla is gearing up to own the electric-car future.

SEE ALSO: Tesla Model 3s are starting to show up in stores for the first time

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The Kettleman City Supercharger station is one of Tesla's largest charging sites in the US. Another in Baker, California, sits along a major route connecting Los Angeles and Las Vegas.

 

 



This trip served two purposes: to determine whether I could make it to the Kettleman City Supercharger without stopping to top up, and to check out Tesla's newest digs.

I planned to drive from Los Angeles in the red Model S P100D Tesla loaned to me. Before I got on the road, I stopped briefly at the Supercharger station on the SpaceX campus in Hawthorne.

I got there with 46 miles of range left.

About 17 minutes in, I'd already gained 54 miles of range.

I didn't plan to fully charge the Model S in Hawthorne — only enough to know I could comfortably drive to Kettleman City. In the meantime, I went inside with some Starbucks rations I rounded up minutes earlier.

I was on the road to Kettleman City shortly after noon, with about 250 miles of range on the P100D's battery. I used Waze in conjunction with the Model S's navigation system. Waze predicted a 2:53 p.m. arrival.

Here's my route, beginning in Hawthorne.

I drove conservatively, used Autopilot — Tesla's driver-assist feature — some of the way, and resisted the urge to indulge in Ludicrous Mode. It paid off. A little more than halfway to Kettleman City, the Model S P100D still had about 159 miles of range left.

Like all electric cars, the Model S employs regenerative braking when you lift your foot off the accelerator. The energy that would've been lost using the brakes to moderate the car's speed on this hill is instead transferred back to the battery via the electric motor. On one long downhill stretch of Interstate 5, the Model S was in a constant state of energy regeneration. By the time I reached the bottom of the hill, the battery had gained 3 miles of range.

 

 



You can barely see the Kettleman City station from Interstate 5, but it's about a half-mile from the nearest off-ramp.

I reached the Kettleman City Supercharger station at 2:50 p.m., three minutes earlier than Waze predicted — and with 61 miles of range left on the P100D's battery.

This used to be a Burger King.

Here it is today. The transformation is stunning.

When I arrived, I took an open spot close to the entrance.

It was late on a Saturday afternoon in early December — that post-Thanksgiving quiet before the next holiday travel crush. I was the only Tesla driver there for about 20 minutes. I took a second to find the access code for the lounge on Model S's touchscreen.

Let's go inside.

Tesla, being a master of product integration and its own best advertiser, immediately pitches you on its solar panels ...

... and the Powerwall energy-storage solution ...

... and then it gives you estimates of how those products could benefit you.

Next is this handy workstation with chargers for your mobile devices and vending machines for your hunger and thirst. But the best part sits just to the left of this section ...

... the lounge.

Another display shows every Supercharger location on the planet. Numbers at the bottom of the screen show kilowatt-hours delivered, miles enabled, and gallons of gasoline saved. They tick up as you watch.

I sat for a while in the lounge, coffee in hand, while my borrowed Model S sat plugged in. I left the Kettleman City station with a full charge.

And here we are back in Hawthorne. Night was falling by the time I left Kettleman City, but it was an easy drive back home to LA, with about 70 miles of range to spare.

The Kettleman City Supercharger station was everything I expected it to be: comfortable, convenient, and accommodating.

I wasn't terribly surprised by the light traffic when I visited. There will probably be other occasions where Tesla's larger stations are bustling with activity, especially as more of the 400,000-plus people who preordered the Model 3 get their cars.

Something else became abundantly clear after driving the Model S P100D for a week: Tesla's effort to expand the Supercharger network is essential. There were stations on every route between my apartment and the office — and every other place I traveled in my corner of Los Angeles.

There were multiple stations on the route to Kettleman City, too. I never needed to stop, but knowing that I could is what mattered.



Elon Musk says a Tesla with 400 miles of range is coming soon (TSLA)

Tue, 06/11/2019 - 7:00pm

  • Tesla is expecting to introduce a vehicle that can achieve 400 miles of battery range soon.
  • "It won't be long," CEO Elon Musk said during the electric-car company's shareholders' meeting on Tuesday.
  • Musk remarked on producing a longer-range vehicle as he boasted about the success of the Model 3, which itself can travel up to 310 miles on a full charge. He did not say whether one of Tesla's current vehicles or an as-yet-unannounced car will reach that 400-mile number.
  • The longest-range Model S can achieve 370 miles on a full charge, and the forthcoming second-generation Tesla Roadster is expected stretch out to 620 miles.
  • Visit Business Insider's homepage for more stories.

Tesla plans to give its cars even more range. 

"It won't be long before we have a 400-mile range car," Tesla CEO Elon Musk said during the electric-car company's shareholders' meeting on Tuesday.

Musk made that prediction as he highlighted the sales performance of the Model 3, which became the best-selling electric car in the world last year.

The Model 3 can travel up to 310 miles on a full charge. Musk did not say whether one of Tesla's current vehicles or an as-yet-unannounced car will reach that 400-mile range. The longest-range Model S can achieve 370 miles on a full charge, and the forthcoming second-generation Tesla Roadster is expected to stretch out to 620 miles.

Read more: Elon Musk just said Tesla has a good shot of setting a record for deliveries this quarter

A longer-range electric vehicle would likely reduce any lingering anxiety among buyers shopping for plug-in cars, and boost Tesla's profile as the market leader in long-range EVs. The company's biggest competitors like Chevy's Bolt EV and the Nissan Leaf Plus come in second with 238 miles and 226 miles of range, respectively.

Additionally, Musk expressed interest in enabling Teslas to use other high-speed charging networks, which would be an added convenience for Tesla owners, though the company's proprietary Supercharger network is already one of the most robust electric-vehicle charging networks in the world.

Shares of Tesla rose about 3.5% in after-hours trading to $224.82 on Tuesday evening.

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'Hong Kong, Singapore, go hard at it': Morgan Stanley CEO shares his plan to win over wealthy Asians

Tue, 06/11/2019 - 5:42pm

  • Morgan Stanley CEO James Gorman said the Wall Street bank is planning to invest in its wealth-management business in "core Asia" out of offices in Hong Kong and Singapore. 
  • Gorman also said he doesn't see any reason why the number of Morgan Stanley financial advisers should fall below 15,000. The bank ended 2018 with 15,694 wealth representatives, according to an earnings release.   
  • Gorman spoke Tuesday at the firm's financial-services conference, where he was interviewed by the bank analyst Betsy Graseck. 

Morgan Stanley, known for being a top wealth manager in the US, has begun to set its sights on business opportunities outside its home market, according to CEO James Gorman. 

One particular area of focus is in Asia, where Gorman said he sees a lot of opportunity. Speaking at the firm's annual financial-services conference on Tuesday, Gorman said the bank has several partnerships in Japan that it could leverage to grow in that country but that servicing Asian clients outside Japan, from offices in China and Singapore, offers the greatest opportunity. 

"The real opportunity is core Asia," Gorman said. "Most of the clients there, the ultra-high-net worth, are effectively what I call walking institutions. They are people who operate like family offices, endowments, hedge funds, and so on. That business is growing nicely. That's where I'd like to invest; that's the core. Hong Kong, Singapore, go hard at it."

China represents the largest opportunity for global wealth managers because the country's robust and dynamic economy is creating wealth at a staggering scale. In 2017, a new billionaire was created in China once every three days, according to a report from UBS and PricewaterhouseCoopers. In 2006, there were just 16 Chinese billionaires, but in 2017, the tally hit 373 — one-fifth of the global total — including 106 people who became billionaires that year.

Among US and European banks, the Swiss banks Credit Suisse and UBS have been most vocal about the opportunity they see for managing wealth in Asia. Though Morgan Stanley doesn't disclose regional figures, the vast majority of its wealth-management revenue is generated in the US. 

Morgan Stanley already offers wealth-management services from offices in Hong Kong and Singapore, not to mention maintaining a small wealth-management business in Australia, Gorman's native country. 

Gorman also added that he doesn't expect to go after growth in Europe, where the bank had a business it sold a few years ago after it lost money in 20 of 21 years. 

"I'd much rather have another 20 people in Paramus than 20 people in Munich with all the regulatory stuff," Gorman said, referring to the city in northern New Jersey. "So we got out of that. Asia is a little different."

The bank also sees growth in the US, where it has a leading market share, according to Gorman. The bank ended 2018 with 15,694 wealth representatives, according to a January statement. That makes it one of the largest wealth managers in the US. 

"I've told the folks I will be disappointed if we saw the numbers drift below 15,000 in the near term," Gorman said. "There's no reason why the business should be shrinking. But the solution isn't to go and find FAs doing $200,000 in production, it's to find a smart young college grad to go work in a team that's doing $10 million in production."

He added: "If you look at where the assets are for the big teams, I'd much rather throw more resources at them than to put another small producer in another small town in America." 

Andy Saperstein, Morgan Stanley's wealth chief, said that as technology helps to make advisers more efficient, they'll become more and more productive. Saperstein spoke with Graseck in a separate conversation earlier on Tuesday. 

"It won't be long before you see teams with production of $50 million and someday even $75 million or $100 million," he said. A spokeswoman declined to disclose the current production figures for teams.  

In what was a wide-ranging discussion, Gorman also said he's beginning to think of the firm's banking unit as its own profit center. In April, he named wealth management cohead Shelley O'Connor chairman and CEO of the firm's two banks and gave her a mandate to hire people. 

"We want to think of the bank now as its own profit center and invest in it for growth. I would really like the bank side to be much bigger," he said, adding that "we're stable, but we're stable around markets. I'd like us to have some stability that is not market tied, and that's really around the bank."

Gorman also said he felt like Wall Street analysts were a little too bullish on the firm's prospects for securities trading in the second quarter. 

"A lot of the analyst models have us beating the first quarter," Gorman said. "I'd be very surprised if that happened."

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Inside Salesforce's $15.7 billion takeover of Tableau, which came together at Marc Benioff's San Francisco mansion and almost died last week amid wild market swings (CRM, DATA)

Tue, 06/11/2019 - 5:31pm

  • Salesforce pursued Tableau for around six months before agreeing a deal to buy it for $15.7 billion in a mega-deal announced Monday, sources familiar with the transaction told Business Insider.
  • Conversations between the two companies started out with a personal text message from Salesforce CEO Marc Benioff and came together at Benioff's San Francisco mansion. 
  • Over the course of six months, it nearly came together three other times, one person said, but volatility on the public markets got in the way of the all-stock deal.
  • Click here for more BI Prime stories.

Salesforce's $15.7 billion acquisition of Tableau announced Monday started with a text, came together over a meeting in a San Francisco mansion, and very nearly fell apart multiple times. 

Around six months ago, Salesforce CEO Marc Benioff was looking for a way to put to use all of the data generated through MuleSoft, the big data platform it acquired for $6.5 billion in May 2018, according to two people familiar with the process. 

Benioff, who's known for his personal involvement in acquisitions, reached out to the team at Tableau over text message to see if there was any way the two companies could work together, the people said.

Over the next six months, there was a lot of push and pull. The tie-up had nearly come together three times before, one person said. But market volatility kept getting in the way.

From December 13 to 24, a few weeks after conversations first started, Salesforce's stock fell 14% and Tableau's stock fell nearly 16%.

At the same time, the CBOE Volatility Index, a measure of market volatility, hit its highest point of 2018. Typically, companies don't want to go through major events such as mergers or public offerings if the VIX has spiked. 

Both companies' stock prices continued to fluctuate around 5% to 10% nearly week-to-week up until the deal was signed.

Since neither company was willing to budge on price, and it was an all stock-deal, the deal was postponed until the market had rebounded, the people said.

On June 3, less than a week before the deal was announced, tech stocks were hit hard on worries that Facebook and Google might face more anti-trust scrutiny. Salesforce shares traded down 4% and Tableau's stock dropped to $108.26, its lowest price in six months.

Until last Friday, it wasn't so clear that the deal would happen.

"I think that we've tried to do something for a long time, and it's just hard to get the stars to align," Benioff said on a conference call Monday. "And I think that we're fortunate that we got there. "

Ultimately, Salesforce agreed to acquire Tableau in all-stock transaction that gave Tableau 1.103 shares of Salesforce for every one share of its own stock. This valued the company at $175 per share, up from where it closed on Friday at $125.22.

If the deal gets approved by shareholders, the acquisition is expected to close by the end of October.

Tableau bounced back from turmoil

Tableau is a data visualization platform that transforms swaths of data into easy to digest graphics. It competes with Microsoft Azure's Power BI, as well Looker, which Google acquired last week for $2.6 billion.

When Salesforce approached the company about an acquisition six months ago, Tableau was on the upswing after a period of turmoil.

The stock hit a high of $128.74 per share in 2015, before plummeting, sinking to just $37.22 per share at one stage in 2016. In an effort to right its course, the company switched to a subscription revenue model in 2017 from a model where customers paid a higher price up front to use it perpetually. In the years since, the stock has slowly gained momentum, and eventually surpassed its previous high last year. 

It was around the time that things picked up financially for Tableau that Benioff initiated discussions.

Read more: From an email to a $6.5 billion deal in 46 days: How Salesforce's bid for MuleSoft came together

With its downward slump in the rear-view mirror, Tableau CEO Adam Selipsky and the board of directors made clear that there would be a high bar for the company to sell, two of the people said. On the other hand, Salesforce was very conscientious about the optics of overspending on an acquisition, they said.

Once the conversations gained momentum, Benioff invited both teams over to his home in one of San Francisco's toniest neighbhorhoods, with large houses and views of the Pacific Ocean. It was there that the teams "put meat on the bones" of the deal, one person said.

Salesforce brought in Bank of America Merrill Lynch to advise financially. The bank had previously worked with the company on its acquisition of MuleSoft.

Tableau worked with Goldman Sachs on the deal. The bank was lead left on Tableau's IPO in 2013, and led their follow on deals later that year and again in 2014. Goldman had also recently sold three other companies to Salesforce, including MuleSoft. 

It's unclear whether Tableau spoke with any other companies during the acquisition discussions.

Salesforce declined to comment.

SEE ALSO: McDonald's, Nvidia and Salesforce all want a bite of the Tel Aviv tech crop. Here's what you need to know about Israel's bustling M&A scene.

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I drove a $50,000 Chrysler Pacifica Hybrid minivan to find out if it's still better than Honda's and Toyota's offerings — here's the verdict (FCAU)

Tue, 06/11/2019 - 5:23pm

  • The Chrysler Pacifica Hybrid is the only plug-in hybrid minivan currently on the market.
  • I tested a $50,000 Limited version, crammed with tech and outfitted with an "S" appearance package.
  • The Chrysler Pacifica Hybrid is our reigning minivan champ, beating out the popular Honda Odyssey and the Toyota Sienna.
  • After my latest test, I can say that the Pacifica is still the king.
  • Visit Business Insider's homepage for more stories.


Believe it or not, all minivans are not created equal.

The Honda Odyssey is an engineering masterpiece, while the Toyota Sienna could get you through a zombie apocalypse. Both can haul lots of kids, pets, and gear.

Read more: We drove 3 of the most popular minivans in the US — and the winner was clear

But the Chrysler Pacifica is special. It's the spiritual descendant of the original minivan, rolled out decades ago. And it continues to lead with a combination of comfort, versatility, technology, and style — even though the Odyssey and Sienna provide stiff competition.

Of course, if you want a plug-in hybrid minivan, the Pacifica is your only choice. I recently re-tested a $50,000, well-equipped 2019 Chrysler Pacifica Hybrid. Read on to find out if the champ continued to impress.

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Behold! The Chrysler Pacifica Hybrid minivan, in Limited trim with a "Velvet Red Pearl-Coat" paint job. This test car was $45,395 before being optioned up to $50,375.

The last time I tested the Pacifica, I concluded that "the key selling feature for the Pacifica is that it's simply a damn pleasant place to spend time." I didn't just favor it over the Honda Odyssey and the Toyota Sienna due to its hybrid-ness.

Read the review.



This is essentially the same minivan I tested a few years back. The Pacifica nameplate replaced the Town & Country, and the hybrid version arrived in 2017.

I think the Pacifica is the best-looking minivan on the road, with a nice, shapely design. Our tester got the aggressive "S" package treatment, hence the blacked-grille, trim, and wheels.

Obviously, you can't do that much with the rear end of what's basically a small bus with a huge liftgate.

See what I mean. The contrast between the front view of the Pacifica and the rear is nothing new, however.

Deploy doors! The Pacifica's dual automated sliders can be operated from the front seat, back seats, or by using the key fob.

Minivans absolutely kill it on cargo capacity, and the Pacifica is no exception. You have 32 cubic feet with all the seats up ...

... And about 90 cubic feet with the third row dropped. With all seats except the fronts out of the picture, you're working with a cavernous 140 cubic feet.

Our tester came with a black interior, dressed up with piping. The second row had captain's-style seats.

And they were kid approved!

Overall, seating comfort was exceptional.

The front seats are heated and cooled and would be a joy on a long journey.

The dual-pane moonroof floods the cabin with natural light.

The bucket seats with "S" logos are crafted from Nappa leather.

The leather-wrapped and heated steering wheel is downright lovely, and the instrumentation is tech-y without being off-putting.

Again, what we have here is a minivan, and that's mean maxi-storage and lots of cupholders.

The sliding side doors can be controlled or locked using these buttons.

Push-button ignition is the industry standard and ...

The Pacifica's fob has remote start as well as sliding-door control and liftgate activation.

The Pacifica makes use of Chrysler's quite good Uconnect infotainment system. It covers all bases, from Bluetooth pairing to GPS navigation to USB/AUX connectivity.

The system runs off a seven-inch touchscreen that's responsive and easy to use.

Throughout the vehicle, there are places to plug in devices.

Our Pacifica also tester included a pair of rear-seat entertain screens ...

... as well as wireless headphones and a remote. Passengers can access their own entertainment while the driver can continue to listen to music.

The Harman/Kardon audio system is a wonderful 20-speaker setup with a 760-watt amplifier.

Let's check out that hybrid powertrain!

The Pacifica's eHybrid system has a 3.6-liter V6 yoked to a hybrid electric system whose two electric motors provide 260 total horsepower. It's hooked up to a continuously variable transmission or CVT.

Here's the hatch for the plug-in charger.

It's very straightforward.

A charging cable is supplied. It will take over 12 hours to replenish the 16 kWh battery from a wall outlet with 120-volts. Level 2 charging at 240 volts will get the job done in around two hours.

The hybrid powertrain can run on electricity only for about 33 miles. On gas alone, the Pacifica's combined city/highway number is 30 mpg, while "MPGe" is 82. Those are good numbers for a minivan.

And remember, there's no range anxiety if you have a gas motor!

So what's the verdict?

The Chrysler Pacifica Hybrid is still my favorite minivan. I'd like it even if it weren't in hybrid trim - but the bump up in MPGs with the plug-in tech is certainly a selling point. The $50,000 price tag is also justified by the Pacifica's near-luxury interior and graceful exterior styling.

When I last reviewed the vehicle, I wrote:

I'm not going to say that the Pacifica is exhilarating to drive; it isn't. The 0-60 mph run consumes about 8 seconds, which is actually respectable considering the Pacifica weighs almost 5,000 pounds. Take that bulk into a corner with any spiritedness and you can feel the suspension protesting.

Guess what? That hasn't changed! To be honest, the Odyssey still drives better. But the Pacifica is simply nicer. Will it outlive the tank-like Sienna? Probably not.

But if you'd like your minivan to have just a bit extra, to be the highest expression of the genre, the Pacifica should be your choice. The hybrid adds frosting on the cake, in the form of better fuel economy and lower emissions. And the "S" package adds a menacing flavor to the Chrysler.

The Pacifica is our reigning minivan-comparison champion, and now that I've once again checked in with this dandy vehicle, I can safely say that the king remains at the top of the hill.

 



WATCH: Executives from Morgan Stanley, Citi, and Barclays explain how they encourage innovation within big, unwieldy banks

Tue, 06/11/2019 - 5:22pm

 

  • Like a large cruise ship, big banks aren't know for their ability to move quickly or change direction at a moment's notice. Banks' size and regulatory requirements means fostering change is often times a marathon, not a sprint.
  • Executives at Barclays, Morgan Stanley and Citi spoke on Monday at Business Insider's IGNITION: Transforming Finance event about how they navigate these challenges and encourage innovation within big, unwieldy banks. 

As Amazon and Uber have raised the bar around what people expect from digital-centric companies, it presents banks with a unique technical challenge: How do they provide similar conveniences, while also remaining just as safe and reliable as they have always been?

Megan Brewer, executive director and head of the technology innovation office at Morgan Stanley, Mariquit Corcoran, managing director and head of partnerships and programmes for group innovation at Barclays, and Gavin Michael, head of technology at the Global Consumer Bank at Citi, spoke Monday at Business Insider's IGNITION: Transforming Finance event. Their discussion touched on the ways they entice technologists to work with their firms, how they encourage innovation within all parts of their companies, and the endless cycle of technological innovation.

You can watch the full discussion here. 

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Top antitrust enforcer at DOJ reveals 3 ways the agency could make a case against big tech companies like Google and Apple (AMZN, AAPL, GOOGL, FB)

Tue, 06/11/2019 - 5:20pm

  • The head of antitrust at the Department of Justice said Tuesday enforcement officials will be scrutinizing the big tech companies for signs of at least three broad categories of anticompetitive conduct.
  • Conduct that could raise red flags include signs of collusion, exclusive arrangements, and certain mergers and acquisitions, Assistant Attorney General Makan Delrahim said.
  • Taking issue with the notion that the antitrust laws are inadequate to deal with the tech giants, Delrahim cited numerous examples of how the DOJ has targeted anticompetitive practices in the industry in the past.
  • Visit Business Insider's homepage for more stories.

The Justice Department's top antitrust official on Tuesday laid out the types of behavior the agency's going to be looking for as it scrutinizes the big tech companies for antitrust concerns.

The department will be looking for signs of three broad categories of potentially anticompetitive behavior, Assistant Attorney General Makan Delrahim said in a speech at a conference in Tel Aviv, Israel. Those categories include collusion among particular companies; exclusivity arrangements; and acquisitions, particularly of nascent competitors, he said. 

"As we think about antitrust enforcement in the digital economy, the key issues that antitrust enforcers must untangle are whether a company is growing due to superior price, quality, and innovation, or whether some transaction or business practice is, on balance, anticompetitive in purpose and effect," Delrahim said in his speech, which CNBC previously reported.

The Department of Justice and the Federal Trade Commission have agreed to divvy up responsibility for the big tech companies, according to recent reports. The DOJ will oversee antitrust scrutiny of Google and Apple, while the FTC will look into Amazon and Facebook, according to the reports.

The DOJ has targeted tech before

Delrahim did not discuss the current inquiries into those companies. But he did dispute claims by some critics that the current antitrust laws either can't be applied or would be difficult to use against today's tech giants, citing numerous examples of how enforcement officials have taken action to stop anticompetitive behavior in the tech industry.  

Companies can violate antitrust laws when they coordinate with other companies to fix prices or dominate markets. In 2008, the DOJ quashed Google's planned deal with Yahoo to take over the sale of search ads on Yahoo's sites, Delrahim noted. It also filed a series of complaints between 2010 and 2012 against a collection of tech companies, including Apple, Intel, and Google, alleging that they had conspired to artificial keep salaries of tech workers in check by agreeing not to poach each other's employees, he said.

"The [DOJ's] Antitrust Division may look askance at coordinated conduct that creates or enhances market power," he said.

Corporations have also gotten into trouble over exclusivity deals, which can bar partners from offering customers competing products or suppliers from dealing with rival firms. The Microsoft antitrust trial was largely about its effort to bar computer makers from pre-installing any web browser on their devices other than its Internet Explorer software, Delrahim noted.

"The Microsoft case ... is a useful illustration of how problematic exclusive tying arrangements may occur in technology markets," he said. "This theory is broadly applicable to other technology markets," he continued.

Read this: Here's why the failed attempt to break up Microsoft will make or break the crackdown on Facebook, Amazon, and Google, according to 2 top lawyers in the Microsoft case

The other area Delrahim discussed where companies can run afoul of antitrust law is through mergers and acquisitions. Acquisitions can be beneficial for competition in certain cases, he said. But in other cases it can serve to throttle competition and stymie innovation, he said.

Standard Oil and AT&T show how mergers can hurt competition

Standard Oil, the archetype of the early 19th and 20th-century monopolist, amassed its power in part through acquiring rivals, Delrahim noted. So too did AT&T, the once-dominant telephone company, he said. 

"It is not possible to describe here each way that a transaction may harm competition in a digital market," he said, "but I will note the potential for mischief if the purpose and effect of an acquisition is to block potential competitors, protect a monopoly, or otherwise harm competition by reducing consumer choice, increasing prices, diminishing or slowing innovation, or reducing quality."

At least on the face of things, the big tech companies would seem to be most vulnerable on the exclusivity and acquisition fronts.

Google already was fined $5 billion by the European Union for requiring phone makers that wanted to use its version of the Android operating system and its Google Play store to include with them its search and Chrome browser apps. Apple is under fire for its control of the iOS App Store, which is the only authorized way to get applications on iPhones and iPads.

Meanwhile, there have been growing calls for Facebook to be forced to unwind its acquisitions of Instagram and WhatsApp, which some have argued were represented potential competitors to the social-networking giant. 

Got a tip about the tech industry? Contact this reporter via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Elizabeth Warren pulled a ninja move to turn tech angst into a crackdown with real teeth, and tech is going to suffer even if she's not president

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We talked to some of the smartest minds on Wall Street about how tech is transforming finance. Here's what they had to say.

Tue, 06/11/2019 - 5:08pm

The world's biggest financial institutions are spending billions on technology.

And, as I wrote in a weekly note to BI Prime subscribers on Sunday, the industry is reaching an inflection point where those massive investments are starting to pay off.

But challenges remain. There are new startups posing fresh competition. There's a talent war with Silicon Valley. Customer expectations are evolving. And there's the cultural challenge of driving innovation in huge organizations that have been around for decades and operate in a tightly regulated industry.

Business Insider hosted IGNITION: Transforming Finance at the New York Stock Exchange on Monday to discuss all of this and more. Here are the highlights. 

Meghan Morris, senior financial reporter at Business Insider, talked to Huw Richards, global head of digital investment banking at JPMorgan, and Lucien Foster, global head of digital partnerships at BNY Mellon.

Alyson Shontell, Business Insider's US editor-in-chief, talked to Gavin Michael, head of tech for the global consumer bank at Citigroup, Mariquit Corcoran, head of partnerships and programmes for group innovation at Barclays, and Megan Brewer, head of the technology innovation office at Morgan Stanley.

Dakin Campbell, senior finance correspondent at Business Insider, talked to Omer Ismail, head of consumer digital finance in the Americas for Goldman Sachs' Marcus division.

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MARY MEEKER'S TECH STATE OF THE UNION: Everything happening on the internet in 2019

Tue, 06/11/2019 - 5:03pm

Legendary analyst and investor Mary Meeker unveiled her 2019 Internet Trends Report on Tuesday at Vox Media's Code Conference.

The report, now in its 24th year, compiles and crunches data from a wide range of sources to provide insights into the biggest trends in digital. This year, Meeker focused on trends that have kept Silicon Valley and lawmakers in Washington, D.C. busy, such as the future of work, education, and immigration.

Read More: Brex, the credit card for startups, raised $100 million at a $2.6 billion valuation — more than double what it was worth nine months ago

Meeker's 2018 report heavily emphasized data and personalization, e-commerce innovation, and China's rising intensity and leadership in internet-related markets.

Here's what's happening on the internet in 2019, according to Meeker:

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FedEx ditching Amazon is a 'watershed moment' that has huge implications for the future of logistics (AMZN, FDX)

Tue, 06/11/2019 - 4:14pm

  • FedEx on Friday severed its US air package-delivery contract with Amazon.
  • The carrier will continue to deliver packages for Amazon internationally.
  • Watch FedEx trade live.

The US logistics industry may be on the verge of further disruption from the online-retailing juggernaut Amazon. Amazon has increasingly set its sights on the segment, which is critical for its core business, threatening the prospects of the incumbents UPS and FedEx.

FedEx said on Friday that it was severing its US air package-delivery contract with Amazon as the battle for e-commerce shipping heats up. The carrier will continue to deliver packages for Amazon for US ground services as well as international air and ground delivery.

The announcement comes as the online-retailing giant has increasingly used its own parcel carrier, Amazon Air, to serve its customers directly. In addition, Amazon is pushing the frontier of delivery services through its highly anticipated rollout of drone-delivered packages.

The ramifications for the parcel industry would be huge if Amazon decided to also serve third-party customers. This strategy has driven the growth of the company's cloud-computing segment, Amazon Web Services, which is by far the leading player in the red-hot industry.

"We believe FDX's strategic break-up with AMZN is a watershed moment for the Parcel industry that signals AMZN's emergence as a significant player in the industry and brings a new level of risk to numbers at both UPS and FDX," the Morgan Stanley equity analyst Ravi Shanker wrote.

Still, FedEx won't be crushed by its contract with Amazon ending. In a statement released on Friday, FedEx said Amazon accounts for less than 1.3% of its revenue. Still, Amazon paid FedEx $200 million in 2018 alone. 

The delivery industry has long been dominated by rivals FedEx and UPS, who have struggled with how to best deal with the Amazon, which is both a large customer and a threat.

"It is possible that UPS may benefit in the near-term from AMZN moving some business from FDX to UPS," Shanker added. "But we note that FDX gave up the business for a reason and UPS may not want to take it on for the same reason."

Shankar holds an "equal-weight" rating on FedEx shares, as well as a "cautious" view on the US freight-transportation industry. His FedEx price target is $143 a share — 15% below where it's trading.

FedEx is up less than 2% this year.

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Uber's first air-travel market outside of the United States will be Melbourne, Australia (UBER)

Tue, 06/11/2019 - 3:50pm

  • Uber will launch passenger air services in Melbourne, Australia, the company said Tuesday.
  • The city will be the third, after Dallas, Texas, and Los Angeles, California, in the US, to get the pilot projects.
  • Uber also unveiled its first passenger drone prototypes at a conference this week. See those here.
  • Visit Business Insider's homepage for more stories.

WASHINGTON, DC — Uber's first air-travel market outside of the United States will be in Melbourne, Australia, the company announced Tuesday.

Test flights will begin in 2020 with commercial operations happening by 2023, the company said. Melbourne will be the first international city to join Dallas, Texas, and Los Angeles, California, as pilot cities.

"Australian governments have adopted a forward-looking approach to ridesharing and future transport technology," Susan Anderson, Uber's general manager for Australia, New Zealand, and North Asia, said in a press release.

"This, coupled with Melbourne's unique demographic and geospatial factors, and culture of innovation and technology, makes Melbourne the perfect third launch city for Uber Air. We will see other Australian cities following soon after."

Uber is touting the urban air mobility offering as a way to help alleviate traffic congestion, which it estimates costs the country $16.5 billion annually. By 2030, Uber says, that cost could hit $30 billion.

"As major cities grow, the heavy reliance on private car ownership will not be sustainable," Eric Allison, head of Uber Elevate, said in a press release. "Uber Air holds enormous potential to help reduce road congestion. For example, the 19 kilometre journey from the CBD to Melbourne airport can take anywhere from 25 minutes to around an hour by car in peak hour but with Uber Air this will take around 10 minutes."

More from Uber's Elevate conference:

SEE ALSO: See inside Uber's first passenger drone, which could eventually fly passengers at 150 mph while burning no fossil fuels

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Take a look inside the pair of twisting glass towers in NYC that's drawing attention from international billionaire buyers, from Jeff Bezos to New Zealand's richest person

Tue, 06/11/2019 - 3:46pm

A set of luxury twisting towers in New York City is drawing the attention of billionaire buyers, including Amazon CEO Jeff Bezos and New Zealand's richest man. 

The XI — "The Eleventh" — is a double-tower development that spans an entire city block in Chelsea, on Manhattan's west side. It will include 236 luxury residences and the first US location of Six Senses Hotels Resorts Spas.

Jeff Bezos reportedly considered a penthouse in the XI before dropping about $80 million on a spread near Madison Square Park, The Wall Street Journal reported.

Read more: Jeff Bezos is spending $80 million on 3 NYC condos, but he already owns 4 apartments in the city. Take a look inside the building where he owns $13 million worth of real estate

And New Zealand's richest person, Graeme Hart, just paid $34 million for one of the XI's five-bedroom penthouses, according to Mansion Global.

The development, which was designed by Bjarke Ingels, is expected to be ready for occupancy in 2020. The remaining condos for sale range from $2.5 million to $14.5 million.

Residents of the XI will have access to an 18,000-square-foot amenities club, including a 75-foot sunlit swimming pool with a hot tub and poolside cabanas, as well as the 45,000 square feet of wellness amenities at Six Senses.

Take a look at the luxury development. 

SEE ALSO: Jeff Bezos is spending $80 million on 3 NYC condos, but he already owns 4 apartments in the city. Take a look inside the building where he owns $13 million worth of real estate

DON'T MISS: I toured the most expensive condo for sale in a Billionaires' Row skyscraper in NYC, a $58.5 million residence that spans the entire 87th floor. Here's what it looks like inside.

The XI — "The Eleventh" — is a set of two twisting towers in New York City that will include 236 luxury condominium residences as well as the first US location of Six Senses Hotels Resorts Spas.

Source: The XI



The development takes up an entire city block between 10th and 11th avenues in Chelsea on Manhattan's west side.

Source: Google Maps



Residents of the XI will have access to the array of amenities at Six Senses Hotels Resorts Spas, which is opening its first location in the US in the XI's East Tower.

Source: The XI



The development, which is expected to be ready for occupancy in 2020, has already attracted the attention of international billionaire buyers.

Source: The XI, Wall Street Journal, Mansion Global



Amazon CEO Jeff Bezos reportedly looked at one of the XI's penthouses before dropping about $80 million on a spread near Madison Square Park instead.

Source: The XI, Wall Street Journal, Mansion Global



And New Zealand's richest man, billionaire Graeme Hart, just spent $34 million on one of the XI's five-bedroom penthouses.

Source: The XI, Wall Street Journal, Mansion Global



No. I, the West Tower, which stands at 400 feet tall, will include 149 condominium residences. The 87 residences in the 300-foot tall East Tower, No. X, start at 100 feet above Six Senses New York.

Source: The XI



Residents of the XI will have access to an 18,000-square-foot amenities club, including a 75-foot swimming pool with a hot tub and poolside cabanas, as well as the 45,000 square feet of wellness amenities at Six Senses.

Source: The XI



Owners at the XI also get access to Six Senses' club and spa, preferred reservations at the hotel's two restaurants, and services such as valet parking, room service, housekeeping, and laundry service.

Source: The XI



The remaining condos in the development range from $2.5 million to $14.5 million.

Source: StreetEasy



Inside Amazon's robot conference, which started as a Jeff Bezos private party (AMZN)

Tue, 06/11/2019 - 3:42pm

  • Amazon held a conference this month in Las Vegas dedicated to robots and AI.
  • Amazon CEO Jeff Bezos was there, inspecting the menagerie of droids on display.
  • The show provided a valuable look at how advanced robots have become — and some of the shortcomings that need to be fixed before they become ubiquitous.
  • Visit Business Insider's homepage for more stories.

From June 3 to 7, a couple thousand people landed in Las Vegas to get a peek at how Amazon uses robots and AI tech in its business and to mingle with some of the leading robotics and AI experts.

It was Amazon's first Machine learning, AI, Robotics, and Space conference, known as re:MARS. The conference was born out of an invite-only conference hosted by Amazon CEO Jeff Bezos every year in Palm Springs.

The private party still takes place, and it's the conference that's yielded some iconic photos, like Bezos appearing in a giant exoskeleton a few years ago. This year he famously played beer pong with a robot.

But the public version of the conference, where Bezos also made an appearance, was every bit as eye-opening. It also included celebrities, keynote talks from experts, and lots and lots of robots.

Take a look.

SEE ALSO: Iron Man star Robert Downey Jr. has vowed to use robotics and AI to significantly clean up the Earth in the next decade

The first realization that you've entered the world of Amazon MARS is at the hotel where this hotel robot was wandering around.

The second sign was the Blue Original capsule in the lobby of the conference area, which was open for tours.

Blue Origin is a space exploration company founded by Bezos, but separate from Amazon. It has shown off its capsules before, such as the video that showed Mannequin Skywalker's ride aboard the Crew Capsule 2.0 as the space company gets ready to fly humans.



Amazon Re:MARs included an expo that was, naturally full of robots, too. A lot of universities were showing off their wares and many of them are working on robots that can work in warehouses, moving boxes. Here's the UNLV robotics research team showing off their warehouse robot.

UNLV was also showing off a robotic arm that can move boxes.

Robots moving boxes was a big topic at the show and it's harder than it looks. In order to lift and move things, a robot has to adjust its balance to accommodate the weight of the object it's lifting, for one thing.



For another thing, robots are still not reliably good at grasping different kinds of objects. They struggle with slippery items or with tiny things like paperclips, according to a keynote talk by Ken Goldberg, engineering professor, UC Berkeley and chief scientist, Ambidextrous Robotics.

Goldberg points out that Bill Gates named robot dexterity as one of the 10 breakthrough technologies he expects in 2019. 

But it points to why Amazon is still employing 300,000 people in its warehouses, a statistic shared on stage by Amazon Jeff Wilke, CEO of Amazon's global consumer operations. 



The star of the expo was a tactile touch device built by HaptX and Shadow Robot. When CEO Jeff Bezos roamed the conference floor, this is the demo he did.

A special pair of haptic gloves allows the wearer to control a separate robotic arm and hands. Jeff Bezos described the sensation of controlling the robotic hands as "weirdly natural."



The device also transmits human touch. Stroke the finger tip of the robot's hands and the human will feel that stroke in the haptic gloves.

Amazon's billionaire CEO was not the only celebrity in attendance. The show attracted other famous guests like basketball legend Magic Johnson ...

pic.twitter.com/NDB3bqiuKJ

Today I got to check something off my bucket list when I had the chance to meet and chat with Founder and CEO of Amazon Jeff Bezos! Thank you for inviting me to the 1st annual Amazon re:Mars conference. I learned about a new drone, robotics, & all of the new Alexa features. pic.twitter.com/NDB3bqiuKJ

— Earvin Magic Johnson (@MagicJohnson) June 6, 2019



and Adam Savage. Savage was speaking at the show, too, discussing his new book. He often attends the invite only conference in Palm Springs as well.

Adam Savage: Every Tool's A Hammer #reMARS #amazon @ServicesLoud pic.twitter.com/SPNRaY30gt

— Elio Capelati Jr (@eliocapelati) June 6, 2019



And the show was filled with oddly unsettling things like this robotic leg laying on a treadmill.

It's an open source robotic leg, a project showed off by a professor at the University of Michigan and a director from the Center for Bionic Medicine.

Then there was this creepy spider-looking robot.

Some robots were not so much terrifying as they were just plain annoying.

This one, for example, functions as sort of mobile iPad and it insisted on following me around. It can access Alexa, make video calls and do other such stuff.



This transport robot can carry objects around (but was empty and just roaming around a contained area).

Amazon's robots, in particular, were everywhere. Amazon uses 200,000 robots in its warehouses, execs at the show said.

Amazon's robots don't have arms and legs. They are used to transport products from shelves to the areas where items will be packed and shipped.

Amazon got into warehouse robots when it bought a company called Kiva back in 2012. But it is inventing new robots all the time. New models can carry heavier boxes and the tops can be outfitted for different functions.

Amazon's newest crop of warehouse robots will soon work with the autonomous driving technology it gained from its recent acquisition of Canvas Technology.

These new robots will eventually be able to roam an entire warehouse campus, even outside, instead of being confined to the strict robotics boundary used in warehouses today, Amazon execs say.



Amazon was showing off its "Scout" robot, too, which Amazon envisions as rolling around neighborhoods delivering packages.

Here's the promo video Amazon showed for Scout. Notice that Scout doesn't try to maneuver over front steps.



Using robots in warehouses lets Amazon stack inventory shelving closer together and higher, packing more inventory into every warehouse. Human workers wear these vests that help the robots to "see" them and stay safely out of a human's way.

But the show stopper was the new Amazon drone revealed at the show. It will eventually deliver packages by air, as part of Amazon's Prime Air program.

Here's another view of the drone as it looks from above. Amazon execs said they hope to start delivering packages with the drones soon but wouldn't say where or when.

Amazon's drone will be self-flying thanks to an array of sensors. These sensors can detect wires, people, pets, objects and know not to land if the landing zone isn't clear and safe, execs say.

 



Amazon's cloud — Amazon Web Services — underpins all of its internal AI and much of its robotics systems. Amazon trains people to use its machine learning/AI tools for free.

It's a program called DeepRacer where people learn the tools by training a fully autonomous 1/18th scale race car to drive around a track. Amazon then throws DeepRacer competitions. Leagues have sprouted up, complete with prizes.

The league and races were in action at re:MARS. Some cars were definitely trained better than others, driving laps around the track without going off course much.



Other robots on display were ones that are in production today like the Cruzr by Ubtech Robots. It's used in hotels to take food and beverage but it can't deliver them itself as its hands can't reliably grasp objects.

Another unresolved problem: many people who see the robot think it's funny to try and shake its hands, which tends to break the droid's hands, a Ubtech rep said.

Canadian smart glasses company North was there showing off its custom-built glasses called Focals. These are Alexa-enabled and they project holographic images that only the wearer can see. They cost $600 or $800 if you want them with prescription lenses.

The Rivian electric truck was on full display too.

 

 



Amazon earlier this year led a $700 million investment into the electric truck and SUV startup, Rivian.

Rivian is integrated with Alexa, which can do everything from manage the temperature to change the shading of the moon roof. The truck will be in production in 2020 and is scheduled to be available by 2021, a rep said.

Inside, it features "vegan" leather upholstery (aka pleather) ...

and has little touches like a flashlight embedded in the door...

... and a compartment for skis or golf-clubs. Electric plugs and a bike rack sensor in the back that will alert you if someone tries to steel your bike AND take a picture of the would-be thief.

It doesn't have an engine so the engine compartment is a trunk. The first models are expected to cost between $69,000 - $80,000, depending on the battery size and options.

If electric trucks aren't your thing, here's an Alexa-enabled electric bike by Cybic.

Amazon also showed off many Alexa smart home products, too, like its Amazon smart plug.

Plug this electric tea kettle into the Amazon smart plug and then you can turn it on and off by voice command.

The Amazon Alexa smart home team also invented their own $60 Amazon Basics Alexa microwave. You can tell Alexa to defrost something, say two pounds of chicken, or reheat your coffee.

There's also the Alexa Roomba robot vacuum. This one, the i7, has a docking station robot that also empties itself automatically. It costs about $1,100.

Or the Alexa iRobot Braava Mop, which will wash the floor. You can use Alexa to tell it to clean up a spill in the dining room.

Alexa is powering everything these days from a Schlage smart door lock ...

to a Moen Alexa-enabled shower, which you can turn on with voice command.

Intel is also working on a smart mirror, which can look at your face, decipher your mood and have Alexa play you appropriate music.

The evening party was Amazon-robot themed as well. It took place at the Las Vegas Motor Speedway NASCAR track. Some of the most famous Battlebots fought in the re:MARS Challenge, broadcast live on Twitch.

Here's the replay.



And one of the biggest demos at the show took place at the party, too: a huge and unwieldy exoskeleton called the Furrion Exo-Bionics Mech.

It's 15-feet tall and 8,000 pounds and looks like the Tarantula robot in the 1990's steampunk film Wild, Wild West. The Mech's pilot walked it over a concrete barrier. Had he missed and fallen, he could have been seriously hurt. Take a look:

Youtube Embed:
//www.youtube.com/embed/95AOyWYXKXQ
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Height: 450px

 



All in all, its clear that robots are coming, but they really aren't quite ready to infiltrate our lives just yet.

Artificial intelligence really isn't that smart yet. People are still working on how to train machines and how to make AI technology easier for the average programmer to use. 

Today's robots still can't do things like climb stairs very well, balance when picking up heavy objects or grasp tiny or odd shaped items.

But some of the smartest people in the world are working on making self-learning robots and other machines. It is all definitely coming and Amazon is already using this tech in its warehouse and delivery operations.



National Beverage craters after a new lawsuit alleges the company made false claims about chemicals in LaCroix cans (FIZZ)

Tue, 06/11/2019 - 3:13pm

  • National Beverage Corp. shares slid on the news that a lawsuit has been filed against its beverage company LaCroix. 
  • The lawsuit claims the president of National Beverage planned to prematurely state LaCroix cans were BPA free. National Beverage denied the claims. 
  • This is the second lawsuit filed against LaCroix that has damaged the company. 
  • Watch National Beverage trade live. 

Another lawsuit filed against LaCroix is taking the fizz out of its stock. 

Shares of National Beverage Corp., the parent company of LaCroix, fell more than 10% Tuesday after a new lawsuit alleged that the president of National Beverage planned to falsely state that LaCroix's cans were free of Bisphenol A, the toxic chemical commonly known as BPA.

The suit, filed Thursday in Passaic Superior Court, claims that Albert Dejewski, a former LaCroix executive, was wrongly fired after he wrote an email to National Beverage President Joseph Caporella raising objections to the company's plan to announce that its cans were BPA free. National Beverage denied the claims in a statement to Business Insider.

"As of April 2019, all cans produced for LaCroix products were produced without BPA liners," the statement said. "The FDA has stated BPA liners are safe and pose no risk at the trace levels found from its use in can linings of food and beverage products."

The lawsuit is the second leveled against LaCroix in the past year. In October, a suit alleged the company was lying about its claims that LaCroix was "all-natural" and that it in fact contained artificial ingredients, which LaCroix has denied.

Laurent Grandet, an analyst at Guggenheim Securities, wrote in May that the brand is "unlikely to rebound," and that the company is "effectively in a free fall."

LaCroix sales have plummeted 9.4% over a 12-week period that ended in May, according to Nielsen data, as customers have opted for one of many other competing sparkling-water brands. 

In March, the company reported that profits declined 40% to $24.8 million while revenue fell 2.9% to $220.9 million.

National Beverage was down 34% this year through Monday.  

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Stocks are popping on Trump's Mexico tariff suspension. But the market's still littered with major risks, experts warn.

Mon, 06/10/2019 - 10:31pm

  • Ongoing US-China trade tensions are still a major wildcard that investors have to grapple with, strategists and economists warn, even as markets respond positively to the Mexico tariff suspension.
  • "Potent risks" surrounding trade talks around the G-20 summit later this month are still on the table, one strategist said Monday. 
  • Visit Markets Insider's homepage for more stories.

President Trump's announcement that his administration suspended tariffs on Mexican goods shouldn't be interpreted as a sign risk has evaporated from the marketplace, strategists and economists warned clients Monday.

Trump's late Friday announcement boosted global stocks and depressed traditionally safe-haven assets like gold and US Treasurys. Equity markets in the US jumped, with the Dow Jones Industrial Average rising 170 points, while popular exchange-traded funds tracking the price of gold underperformed the market.

Auto stocks like General Motors and Ford, highly exposed to volatility across the US-Mexico supply chain, outperformed, along with the semiconductor space. 

But trade tensions with key trading partner China remain a headwind, investment advisors said. In addition, consumer confidence has already taken a hit. And uncertainty tied to how talks at the G-20 summit in Japan later this month will pan out looms over the market.

"Potent risks are still on the horizon," Vinay Viswanathan, a derivatives strategist at Macro Risk Advisors, told investors Monday in a note, pointing to trade talks around the summit later this month. 

Those risks, combined with the VIX — the market's "fear gauge" — rising alongside stocks Friday, led Viswanathan to recommend investors hedge their exposure to stocks with a strategy that would protect against downside.

Read more: Global stocks are surging after Trump cancels Mexico tariffs

His recommendation was emblematic of other warnings sent out across Wall Street.

"Policy volatility has not dissipated over the weekend," Sam Rines, the chief economist at Avalon Advisors, told clients on Monday. "With Mexico scratched off the list (for now), it is worth remembering that China and the EU are still in the tariff mix."

Domestically focused small-cap stocks are particularly vulnerable at this juncture despite the absence of an immediate Mexico tariff threat, said Lori Calvasina, the head of US equity strategy at RBC Capital Markets in New York.

"Though tariffs on Mexico appear to be off the table, thanks to a deal with Mexico over the weekend, we still see risk of downward revisions to Small Cap estimates due to the escalation of the tariffs on China and the damage that has likely been done to corporate confidence over the past month due to uncertainty over the direction of trade policy generally," she said in a Monday note to clients.

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The stock market will "remain choppy" until the next corporate earnings season when businesses have taken tariffs into consideration, Calvasina added.

On an industry-specific level, select stocks in the energy space could benefit from the tariffs' suspension as US gasoline exports to Mexico comprise 60% of total exported gasoline, Credit Suisse told investors. US refiners like Valero and PBF Energy, which both surged Monday, are two names on which the firm is particularly bullish.

Other investment experts expressed skepticism Monday that markets could sustain more Trump- and trade war-induced volatility. 

"Phew, a self-imposed supply chain crisis averted," Peter Boockvar, the chief investment officer at Bleakley Advisory Group in New Jersey, told investors Monday.

"What a relief but I gotta tell ya, now that the threat of tariffs can be thrown around like nothing, I don't believe a multinational business with factories and supply needs globally can ever rest easy until this stops."

Now read more markets coverage from Markets Insider and Business Insider:

'We're going to get rolled': Billionaire investor Stanley Druckenmiller breaks down why the US is headed for devastating losses to China in the trade and tech wars

The job market is so hot that one restaurant 'moved to counter service and disposable utensils' to stay open

We just got the latest evidence Trump's trade war is throwing a wrench in business plans

 

Join the conversation about this story »

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Intel is buying Barefoot Networks, a challenger to Cisco that had raised over $150 million from giants like Google and Alibaba (INTC, CSCO, AVGO)

Mon, 06/10/2019 - 8:56pm

  • Intel is buying Barefoot Networks, a Silicon Valley startup with over $150 million in funding. Terms of the deal were not disclosed.
  • Barefoot Networks sells networking equipment, with its main differentiator being that developers can write code for its hardware that runs directly on the processor — a technical, but important, difference that allows for more customization than you often find on Cisco or Broadcom gear.
  • The deal comes as Intel faces new challenges, as its data center revenues recently faltered for the first time in a long time.
  • Visit Business Insider's homepage for more stories.

Intel is acquiring Barefoot Networks, a Silicon Valley startup that had raised over $150 million from giants like Google, Dell Technologies Capital, Alibaba, and Goldman Sachs. 

Terms of the deal weren't disclosed, but Intel says that Dr. Craig Barratt, the CEO, and his team will be joining the chip giant after the deal closes, which it expects will happen in the third quarter of 2019. 

"Upon close, the addition of Barefoot Networks will support our focus on end-to-end cloud networking and infrastructure leadership, and will allow Intel to continue to deliver on new workloads, experiences and capabilities for our data center customers," Intel data center boss Navin Shenoy said in a blog entry announcing the deal.

Barefoot Networks is a data center networking startup that's taking on the likes of Cisco and Broadcom with an unconventional approach to the market — an approach that focuses on Tofino, its proprietary line of processors that power its lineup of hardware products.  

Specifically, Barefoot boasts that Tofino allows developers to program right on the processor itself, the lowest technical level possible, which means that customers can do things with its products that were never originally intended.

For instance, Barefoot says, a Tofino-powered switch can be used to analyze and diagnose network traffic as it travels through the data center, with the developer free to apply fine-tuned controls over exactly what they're looking out for, and add to the model as they go.

A nice talent grab, too

This approach stands in contrast to how it usually works: Cisco, Broadcom, and the like usually offer software that lets users install new applications and put their networking gear to use in new and novel ways — but without giving programmers access to the processor itself, which limits what can be done with it. 

This philosophy seems to have caught on, however, with Cisco and smaller competitors like Arista Networks both reportedly deciding to use Barefoot's Tofino chips to power some of their newest products.

Also of note is that Barefoot Networks carries something of a pedigree: Nick McKeown, co-founder of Barefoot Networks, was also a founder of Nicira, a networking startup that VMware purchased for $1.26 billion in 2012. 

As for Intel, the acquisition of Barefoot Networks makes a certain amount of sense, given that both companies are focused on chips, especially for the data center. However, the deal also comes as Intel faces a rough patch, with revenues in its data center segment recently sliding for the first time in a long time.

While Intel already sells networking products, this is clearly a bet that having Barefoot's technology on its side will open some doors, and perhaps lead it to a stronger market position. 

SEE ALSO: Intel’s new CEO used to be CFO, and analysts worry he may not have the technical chops to lead the company through the stormy waters ahead: ‘Intel needs a strong technical leader’

Join the conversation about this story »

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Salesforce's surprise $15.7 billion acquisition of Tableau is a shot at Microsoft and SAP (CRM, DATA)

Mon, 06/10/2019 - 8:50pm

  • On Monday, Salesforce announced it would acquire data analytics company Tableau for $15.7 billion, the company's largest deal since its acquisition of MuleSoft last year.
  • The news comes less than a week after Google announced that it would acquire data analytics startup Looker.  The back-to-back deals underscore that the future of analytics is in the cloud.
  • Analysts say that Salesforce's Tableau acquisition is also a shot at Microsoft, which has a competing data analytics product, and at SAP's acquisition of Qualtrics.
  • Visit Business Insider's homepage for more stories.

The big cloud vendors are locked in an arms race to bulk up their analytics tools, and Salesforce's surprise $15.7 billion purchase of Tableau is an indication of how heated the contest has become, according to industry observers. 

Salesforce announced the deal on Monday, and said it would expand its operations into Tableau's hometown of Seattle to build a second headquarters. 

With this acquisition, analysts say Salesforce instantly becomes a major player in the so-called Business Intelligence market. Meanwhile, the other cloud vendors like Amazon, Microsoft, and Google have been working to improve their own analytics offerings. Just last week, Google announced it would acquire Looker, also an analytics company, for $2.6 billion.

"It's reflective of a world where data and analytics are becoming increasingly important. The cloud vendors ignore that at their own peril," said Joseph Antelmi, an analyst at industry research firm Gartner. 

For Salesforce, which paid $6.5 billion last year to acquire MuleSoft, the Tableau deal is a logical next step. MuleSoft's technology allows Salesforce's platform to suck in more data from various sources and Tableau will help Salesforce users make sense of it. 

"It's putting data into the hands of users," Rebecca Wettemann, vice president at Nucleus Research, told Business Insider. "It's not just analytics. It's that sort of visualization that Tableau is really strong in. I think it's an overall part of Salesforce's messaging since they started investing in Einstein. It gives them a broader and deeper analytics sense."

Tableau can enhance two of Salesforce's existing analytics products Customer 360 Platform and Einstein Analytics. What's more, many of Salesforce's customers are already using Tableau, which should make integration easier.

Salesforce said it expects Tableau to add $350 million to $400 million to its fiscal 2020 revenue.

Tableau's roster of marquee customers, including Netflix and Verizon, are "certainly not going to hurt," noted Brian Pirri, a principal at New England Investment & Retirement Group, told Business Insider.

Competing against Google and Microsoft

The rapid fire succession of analytics deals by Salesforce and Google highlight an increasing competition between the two tech giants. 

But it's not just Google that Salesforce needs to look out for. Steve Koenig, managing director at Wedbush securities, calls this acquisition "a shot across Microsoft's bow."

Microsoft had been rising up to the challenge to face off Salesforce, considered the market leader in customer relationship software, while legacy vendors like SAP and Oracle have not kept up in terms of cloud software.

Now, Salesforce is acquiring Tableau, which works on both cloud and on-premise data centers, to compete with Microsoft's own analytics product Power BI and make sure it stays at the top.

"Basically the dynamic is they're trying to defend their market leadership in CRM," Koenig told Business Insider. "Now they're trying to fight back. They're highly competitive in a fairly important area for Microsoft."

Competing against SAP

Allen Bonde, an analyst at Forrester, compares this to when SAP announced it would acquire Qualtrics for $8 billion. The Tableau deal was likely in the works for a long time, and if anything, may be a response to SAP.

"You could see that this is both Salesforce saying, 'We see your deal, SAP,' and up it with Tableau," Bonde told Business Insider. "It's more recognized company and larger and widely adopted...If I'm a Salesforce customer, certainly that means there's more toys in the toy box."

Read more: Despite the tech Cold War with China, Wall Street says Salesforce is in a strong position and will see little impact

Maribel Lopez, founder and principal analyst of Lopez Research, says that before, companies were focused on moving their applications to the cloud and connecting their data to that application.  Now, it's all about analytics, which companies need to make sense of that data.

It's a win for Tableau as well, Lopez says. She says it can be difficult for a public company to keep growing exponentially each quarter.

"You have to ask yourself it the growth would have slowed," Lopez said. "I think now is a very strategic time for Tableau to exit because they can exit, they can get a decent premium...This is a time when analytics is becoming the most interesting of plays for a lot of organizations."

Lopez expects other companies take a similar path as Salesforce and Google as well.

"I think you'll see other companies go deep in analytics from an acquisition standpoint," Lopez said. "There's still Oracle. There's still AWS. There will be other companies looking at, what else should I be putting into my portfolio?"

SEE ALSO: Experts say that Google Cloud's $2.6 billion acquisition of Looker could give it more of a competitive edge against Microsoft, Amazon, and Oracle

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Larry Page and Sergey Brin spoke at a Google all-hands meeting for the first time in 6 months (GOOG, GOOGL)

Mon, 06/10/2019 - 8:01pm

  • Google co-founders Larry Page and Sergey Brin recently ended their 6-month, internal quiet period, according to a CNET report on Monday. 
  • Page and Brin attended the company's town hall meeting (known as "TGIF") on May 30th and spoke about the company's cloud strategy, according to sources who spoke to CNET.
  • The duo — who regularly attended in the past and often answered questions during these meetings — had reportedly not shown up to a TGIF in 2019, their longest absence in company history.
  • Their "MIA" status came at a time when the company faced an onslaught of internal pressures from employee organizers over its business decisions and practices. 
  • Visit Business Insider's homepage for more stories.

Google co-founders Larry Page and Sergey Brin recently ended their 6-month, self-imposed quiet period within the company, according to a CNET report on Monday. 

Page and Brin attended the company's weekly all-hands meeting (known as "TGIF") on May 30th and spoke about the company's cloud strategy, according to sources who spoke to CNET. A Google spokesperson confirmed with Business Insider that the co-founders were on-stage at the meeting, alongside Google CEO Sundar Pichai. 

The duo — who regularly attended in the past and often answered questions during these meetings — had reportedly not shown up to a TGIF in 2019, their longest absence in company history. 

Page and Brin's "MIA" status came at a time when the company faced an onslaught of internal pressures from employee organizers over its business decisions and practices, including its handling of harassment cases, involvement in military contracts, and building a censored search engine for China. 

Questions reportedly arose during the May 30th meeting about alleged cases of retaliation against these employee organizers, though that section was handled by Eileen Naughton, Google's Head of People Operations, not Page or Brin. 

Read more: One of the main organizers of the Google Walkout has left the company over fears of 'public flogging, shunning, and stress' if she stayed

Google told Business Insider on Monday that part of the reason why the Alphabet umbrella was created back in 2015 was so that it's co-founders could focus more on the company's "Other Bets," like its self-driving car company Waymo. 

TGIF is an all-hands meeting for Google, which oversees Alphabet's core business of search, YouTube, and Android. Pichai is the CEO of Google, while Page is the CEO of Alphabet. The spokesperson would not confirm which projects Brin is currently working on. 

Still, the spokesperson said, the co-founders like to "pop in" to TGIF meetings from time-to-time. 

Do you work at Google? Got a tip? Contact this reporter via Signal or WhatsApp at +1 (209) 730-3387 using a non-work phone, email at nbastone@businessinsider.com, Telegram at nickbastone, or Twitter DM at @nickbastone.

SEE ALSO: Meet the 14 top executives who lead Alphabet's 'Other Bets,' helping the company go beyond just Google

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Here's why the failed attempt to break up Microsoft will make or break the crackdown on Facebook, Amazon, and Google, according to two top lawyers in the Microsoft case (MSFT, AMZN, AAPL, FB, GOOGL)

Mon, 06/10/2019 - 7:37pm

  • The Microsoft antitrust trial of the 1990s has important lessons for government regulators as they decide what to do about companies that dominant the tech industry today, two central players in the Microsoft case said.
  • The Microsoft case shows how important it is to enforce antitrust laws, even if such an action doesn't lead to a breakup of the targeted company, said Harvard professor Lawrence Lessig and antitrust lawyer Alan Kusinitz.
  • The situation the tech industry was facing before the trial has parallels to today, they said.
  • The case also illustrates how important it is for enforcement officials to essentially do field research by talking with affected market participants and to be clear about what violations they need to prosecute, Lessig and Kusinitz said.
  • Visit Business Insider's homepage for more stories.

Two veterans of the Microsoft antitrust battle that raged 20 years ago have some advice for government regulators seeking to curb the power of today's tech giants.

In conversations with Business Insider, Lawrence Lessig, who briefly served as a special master in the Microsoft case, and Alan Kusinitz, who headed up the legal team representing state governments, stressed the importance of policing anticompetitive behavior even if it falls short of a company break-up, the outcome that never materialized  in the Microsoft case.

The objective of venture capital and innovators is to get big enough to be eaten. Nobody really believes they can take on Facebook and win — Lawrence Lessig

They also pointed to strategic decisions that, in hindsight, were critical to bolstering the case against Microsoft, as well to some of the miscalculations that would hurt their cause.  

The lessons of Microsoft could prove to be invaluable amid a growing debate — from Washington, DC to Silicon Valley — over what to do about Amazon, Alphabet, Apple, and Facebook, and their dominance of certain markets. At least part of the debate has focused on whether the government should attempt to bring antitrust cases against the companies and maybe even try to split them up.

The Microsoft case was "extremely successful in creating the conditions for the Silicon Valley boom in the beginning of this century," said Lessig, who served first as a special master — the judge's designated fact finder — in the case and later submitted a "friend of the court" brief in it laying out his assessment of the law and facts. "And we ought to learn that lesson."

Regulators are starting to look again at the power of tech giants

To the extent that the Microsoft case is remembered today, it's often portrayed as having been a waste of time. The judge's order to breakup the company into two parts was blocked and then overturned on appeal.

After George Bush replaced Bill Clinton as president, his administration decided to settle the case rather to go back to court to try to reinstate the breakup order. The case ended with what many believed was little more than a wrist slap. And when Microsoft struggled to compete in the new tech markets — search, mobile, social networking, ecommerce — the case seemed to many people to have been all about nothing.

The tech industry's fast pace of innovation and fierce competition mean that it's always several steps ahead of whatever the government is trying to regulate, the argument went.  The best way to regulate tech, in other words, was simply to let the market do its thing. 

But many inside and outside of Silicon Valley and Washington are re-examining that line of thinking today as the next generation of tech giants has come to hold more and more sway not only over their particular markets, but over the public sphere. The companies have amassed not only massive economic power — they are some of the most valuable and profitable companies on the planet — but also tremendous political power.

Read this: Elizabeth Warren pulled a ninja move to turn tech angst into a crackdown with real teeth, and tech is going to suffer even if she's not president

To a large extent, Facebook, Google-owned YouTube, and Twitter have become the arbiters of free speech. Changes in Facebook's algorithms can make or break media companies that depend on it for distribution, imperiling the health of a free press. The social networks have been hijacked by miscreants to spread misinformation and propaganda, which has influenced elections and in some cases has led to violence and deaths.

What we've seen over the last 20 years is that monopolies have increased — Alan Kusinitz

Small retailers and goods makers can thrive or die depending on how Amazon treats them and whether it decides to target their markets. Developers and content providers alike can find themselves unable to reach their customers due to to an opaque policy decision by one of the big tech companies.

The market alone won't solve the tech industry's problems

The idea that the market will just solve these problems on its own with no government intervention is deeply mistaken, the veterans of the Microsoft case said. While that view has held sway, the problems have gotten worse, not better.

"What we've seen over the last 20 years is that monopolies have increased," said Alan Kusinitz, a longtime antitrust lawyer who headed up the legal team representing state governments in the Microsoft case. "It's always a mistake to do nothing," he continued.

The laissez-faire view is also mistaken about just how important the Microsoft case was to the tech industry, Kusinitz and Lessig said. It wasn't an accident that competition flourished in the wake of the case, they said.

The case forced Microsoft to change its behavior towards competitors. Prior to the trial, the company was absolutely ruthless, going to lengths to crush any rivals that stood in its way. Microsoft emerged from the case a company that was much less aggressive, partly because of the settlement and partly because it was gun shy after having just been through that battle.

The case "was extraordinarily important in creating an environment where people felt free to innovate without the fear of being destroyed by Microsoft," said Lessig, a professor at Harvard Law School.

Amazon and Google's actions resemble Microsoft's 

There's something similar going on in the tech industry today to how things were before the Microsoft trial, Lessig and Kusinitz said. The big tech companies dominate their areas in similar ways that Microsoft ruled the PC operating system market.

Google's practice of forcing phone makers to sign contracts that required the manufacturers to install its search and other apps if they wanted to use its version of the Android operating system looks like a page right from Microsoft's playbook, Kusinitz said. Amazon's ruthlessness in dealing with its competitors is similar to Microsoft's as is its alleged practice of abusing its platform.

Amazon has been accused of gleaning sales data from sellers in its marketplace and using that information to undermine those sellers by offering similar products and promoting them on its site in ways its rivals can't.

"Bezos is a bad actor," said Kusinitz. Such practices, he continued, "have to be dealt with in some way."

The immense power of the big tech firms discourages the emergence of any competition. Startups generally avoid the areas in which the firms are dominant. Or entrepreneurs build their companies with the express idea that they'll one day be acquired by one of the tech behemoths.

"The objective of venture capital and innovators is to get big enough to be eaten," said Lessig. "Nobody," he continued, "really believes they can take on Facebook and win."

Research is important, as is defining the problem

But government regulators can draw other lessons from the Microsoft case, Lessig and Kusinitz said, particularly in how the state and federal governments pursued it. One is that enforcement officials should essentially do field research, Lessig said. It's one thing to have economic theories about how markets are supposed to work. It's another to talk with real market participants about how things are working in practice.

That kind of research was how enforcement officials came to understand how Microsoft's dominance in the 1990s was distorting the startup ecosystem and tech industry in Silicon Valley, Lessig said. It also led to some crucial trial testimony, he said.

Prosecutors today, similarly, "ought to be really keen to understand exactly how the system works," he said.

It's also important for regulators to focus any potential enforcement action on clear and supportable antitrust charges and to have a good idea of how those violations could be addressed, Kusinitz said.

The Microsoft case focused on the web browser market and the steps the company took to box out Netscape, the first web browser. The states built a strong case that Microsoft had prohibited PC manufacturers from pre-installing Netscape's Navigator and rival browsers on the machines they sold, he said. Such exclusionary conduct is clearly anticompetitive, a finding that was upheld on appeal, Kusinitz noted.

By contrast, the federal government focused its case on Microsoft's efforts to bundle Internet Explorer browser with Windows. That move wasn't as clearly anticompetitive and the rulings against the company on the counts that related to that conduct were overturned on appeal along with the ruling that Microsoft would be broken up.

The federal government made a mistake in focusing on the bundling issue and not the broader issue of how Microsoft was abusing its dominant platform, Kusinitz said.

"You've got to focus in on the problem," Kusinitz said. The federal government's decision to focus on the browser bundling and not Microsoft's abuse of its platform "was a huge failure," he said.

Got a tip about the tech industry? Contact this reporter via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Europe's competition czar is wrong — it's long past time to break up Google

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A Goldman Sachs exec explains why the bank isn't sweating concerns over the Apple Card's profitability

Mon, 06/10/2019 - 7:03pm

  • Credit-card industry observers and competitors have cast doubt on the Apple Card's profit potential. 
  • The card, a partnership with Goldman Sachs, boasts some consumer friendly features, including no fees and tools to keep interest payments at bay, which could stymie revenues. 
  • Goldman Sachs isn't sweating the profit concerns, according to Omer Ismail, head of consumer digital finance in the Americas for Goldman's Marcus division.
  • At Business Insider's IGNITION: Transforming Finance event Monday, Ismail said they view card's features as tools to build customer loyalty and a long-term advantage.
  • Visit Business Insider's homepage for more stories

Not long after the Apple and Goldman Sachs credit-card collaboration was announced to great fanfare, industry observers — some of which bid on but did not win the deal to work with Apple — came out of the woodwork to voice their concern

The problem, as they see it: Goldman's profitability outlook for the Apple Card, which charges no fees and boasts consumer friendly features that help customers avoid paying costly interest, is dim. 

Omer Ismail, head of consumer digital finance in the Americas for Goldman's Marcus division, isn't sweating it.

When asked about the credit-card's prospects Monday at Business Insider's IGNITION: Transforming Finance event Monday, Ismail threw cold water on the notion that providing value and protection for customers wasn't in their best interest.

"When I think about Marcus overall, the idea that doing right by the customer means being less profitable is just not an idea we subscribe to," Ismail said during a conversation with BI's Dakin Campbell.

Ismail said they take the opposite view: the only way Goldman, a new entrant in the consumer finance world, is going to build a sustainable competitive advantage is by taking care of and winning over customers.

"If you do right by the customer, you're going to ultimately win their loyalty," Ismail said.

Being the new bank on the block gives Goldman advantages, as well. While industry veterans are having to tangle with and spend money revamping ancient systems designed to serve a different era, Goldman is building its consumer business from scratch on the back of modern technology.

"We don't have any legacy business models and we don't have any legacy technology," Ismail said. 

In theory, this should mean Goldman can operate a credit-card business more efficiently and at lower costs than some of its competitors. 

We'll get more clues about the Apple Card's potential and popularity with customers when it launches later this summer. 

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