Off the Wires

Ireland Considers Closing Corporate-Tax Loophole

October 12th, 2014  |  Source: WSJ

Multinationals Gird for Possible ‘Double Irish’ Changes; Google, Facebook Would Be Affected

Multinational companies are bracing for their last serving of the “Double Irish.”

Ireland is expected on Tuesday to announce changes to its tax code that could eventually close one of the world’s most famous corporate-tax loopholes, dubbed the Double Irish, after heavy pressure from governments and the European Union, tax experts say. Already, companies particularly in the technology and pharmaceutical sectors are setting up battle plans to cope with potential changes.

“A lot of companies are starting to plan now,” said Francesca Lagerberg, global leader for tax services at Grant Thornton International. “You can’t afford to wait.”

The Double Irish uses a twist in Irish laws to funnel royalty payments for intellectual property from one Irish-registered subsidiary to another that resides for tax purposes in a country with no corporate income taxes. It is often paired with a related tax structure that planners call the “Dutch Sandwich,” which uses a Netherlands-based structure to avoid certain taxes. The Double Irish structure allows companies to legally shift billions of euros in profit to tax havens each year.

Companies using the structure or variants include Google Inc., Facebook Inc.FB -3.95% and cloud-computing firm VMware Inc., VMW -2.44% according to corporate filings. Google and Facebook have said they pay all the taxes they owe. VMware declined to comment.

Icahn Gazes Beyond Known World With $1.2 Trillion Apple Valuation

October 9th, 2014  |  Source: Bloomberg

Carl Icahn’s forecast for Apple Inc. (AAPL) would swell the world’s biggest market capitalization beyond the economy of Argentina to heights never seen in public markets.

The billionaire activist says Apple should trade at $203, twice its current price, an estimate that would push it to $1.2 trillion. He’s asking that of a stock that has gained more than 3,500 percent in the past decade and became the most valuable company in U.S. history two years ago, before adjusting for inflation.

Based on profits, Icahn envisions an unusual though not unprecedented valuation for the Cupertino, California-based company. Boosting Apple’s price-earnings ratio to match the average in the Nasdaq 100 Index would send its stock to $147 and its value to $880 billion. Going by history, it’s another story. Only one company has ever topped $1 trillion, PetroChina (601857) Co., which tripled after its November 2007 debut in Shanghai. The 13-digit sojourn lasted exactly one day.

“That doesn’t happen very often,” Jon Burnham, a New York-based fund manager for Burnham Asset Management Corp., which oversees about $2 billion, including Apple shares, said by phone. At the same time, “this is a very cheap stock in earnings and revenues or any other way you’d want to look at it. I own it and I expect to make much more money over the next coming years so I agree with everything that’s being said.”

J.P.Morgan Hackers Said to Probe 13 Financial Firms

October 9th, 2014  |  Source: Bloomberg

The hackers who raided the data banks ofJPMorgan Chase & Co. (JPM) used computers now linked to possible attacks on at least 13 more financial companies, according to a person familiar with the investigation.

More than a month after the JPMorgan hack was made public, it’s now clear that the perpetrators had attempted a broad campaign aimed at a payroll-servicing company, a popular stock brokerage and some of the world’s biggest banks. The depth of the JPMorgan breach and the scope of the intended targets have sent a shudder throughWall Street, even if the attackers had mixed success.

The group set its sights on companies including Citigroup Inc. (C)HSBC Holdings Plc (HSBA)E*Trade Financial Corp. (ETFC)Regions Financial Corp. (RF) and Automatic Data Processing Inc. (ADP), the payroll firm, according to several people familiar with those companies’ internal probes who said the signs of intruders were found in the computers or logged by protective technology that effectively stopped the hackers.

U.S. intelligence agencies, attorneys general from at least two states, as well as federal prosecutors including from New York are conducting their own investigations, reflecting the urgent concern around the JPMorgan breach, worries over the precise motive of the attack and its ripples throughout the financial system.

Wal-Mart Health Cuts Reopen Debate Over Obamacare Costs, Savings

October 8th, 2014  |  Source: Bloomberg

Wal-Mart Stores Inc. (WMT)’s move to eliminate health insurance for about 30,000 part-time workers underscores the mixed benefits of Obamacare for companies and their employees.

Wal-Mart said yesterday it would no longer provide health coverage to employees who work less than 30 hours a week, following similar moves by retailers such as Target Corp. (TGT)Home Depot Inc. (HD) andWalgreen Co. (WAG) Wal-Mart had already dropped benefits for many new part-time workers in 2012.

The U.S. Patient Protection and Affordable Care Act, known as Obamacare, has brought more health-care options for employees pushed out of corporate benefit plans. That may have made it more palatable for Wal-Mart to make the change, which could save the company about $50 million in premiums this year.

VC Tim Draper Wins Entire Cache in Bitcoin Auction

July 2nd, 2014  |  Source: Bloomberg

Venture capitalist Tim Draper was the single winning bidder for a cache of bitcoins at a U.S. government auction, part of a larger pool of the virtual currency seized from the Silk Road website.

Draper, the co-founder of investment firm Draper Fisher Jurvetson, will work with startup Vaurum to help provide access to bitcoins in developing economies and use the about 30,000 bitcoins won in the auction as a source of liquidity, according to a statement that Vaurum posted on publishing service Medium today.

“Bitcoin frees people from trying to operate in a modern market economy with weak currencies,” Draper said in the statement. “With the help of Vaurum and this newly purchased bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies.”

The auction attracted 45 bidders, including New York brokerage SecondMarket Inc., and 63 bids were submitted during the 12 hours of the auction on June 27, according to the U.S. Marshals Service. The agency, which didn’t disclose the winner’s identity, said yesterday that it notified the bidder and transferred the money.

Stamp with history of intrigue could fetch $20 million

June 17th, 2014  |  Source: CS Monitor

A British Guiana One-Cent stamp could fetch $20 million at an auction, which would make it the most valuable artifact by weight in history. Billionaires are salivating.

In 1856, if you were looking for a long-term investment, a British Guiana 1-Cent Magenta postage stamp would’ve been a pretty good buy.

The last known stamp of this kind will go up for auction at Sotheby’s Tuesday, and experts say it will likely fetch around $20 million. Not only would this make the Magenta the most expensive stamp ever sold by a factor of 10 – it would also make it the most valuable human artifact by weight in recorded history.

A growing global class of the über-rich, combined with the Magenta’s rarity and its colorful history – peppered by war, murder, and aristocratic intrigue – has led to the high price tag, say economists and stamp experts, known as philatelists.

U.S. Projects $179 Billion Profit From Fannie Mae, Freddie Mac

March 10th, 2014  |  Source: Bloomberg

Fannie Mae and Freddie Mac could return $179.2 billion in profits to taxpayers over the next 10 years if they continue operating under federal conservatorship, according to White House budget analysts.

The U.S.-owned mortgage-finance companies, seized by regulators during the 2008 credit crisis, have returned to profitability as the housing market recovers. By the end of this month, they will have sent $202.9 billion back to the Treasury, which counts as dividends on the U.S. investment and not repayment of the $187.5 billion they got in taxpayer aid.

The projections, released today as part of an annual analysis prepared by the Office of Management and Budget, show an increase from last year, when budget writers forecast a $51 billion profit from Washington-based Fannie Mae (FNMA) and McLean, Virginia-based Freddie Mac (FMCC) through 2023.

Super Bowl Prostitution Digitally Mapped by Data Trackers

February 1st, 2014  |  Source: Bloomberg

Sitting in an operations center outside Washington, Josh Gearheart and his team have spent the last week tracing the digital footprints of Super Bowl sex traffickers with the same technology he once used to hunt insurgents in Afghanistan.

A former Army intelligence officer, Gearheart is part of a two-year partnership between trafficking researchers and a defense contractor called Praescient Analytics, whose 100 employees normally provide intelligence analysis to the U.S. Special Operations Command, the Federal Bureau of Investigation and others from the company’s headquarters in Alexandria, Va.

The group’s goal is to discern how gangs and traffickers operate as 400,000 fans descend on New Jersey and New York for the country’s biggest sports-themed bacchanal and then apply that knowledge to next year’s game in Arizona. A separate coalition of law enforcement agencies arrested 18 people today, breaking up a cocaine and sex ring that was operating in the shadows of the championship game, according to New York Attorney General Eric Schneiderman.

“Any sports venue and especially the Super Bowl acts as a sex trafficking magnet,” said Representative Chris Smith, a New Jersey Republican, at a Jan. 27 House Foreign Affairs Committee hearing on trafficking and sports events. “Along with welcoming enthusiastic fans, the state also is preparing for the likely influx of both domestic and international traffickers.”

Musk Says China Possible Top Market for Tesla

January 23rd, 2014  |  Source: Bloomberg

Tesla Motors Inc. (TSLA)’s Elon Musk said sales of electric Model S cars in China should match U.S. levels as early as next year, with demand from the world’s largest auto market eventually requiring a local plant.

The electric-car maker said yesterday the Model S will be priced from 734,000 yuan ($121,280) in China when deliveries begin. Musk, Tesla’s billionaire co-founder and chief executive officer, will travel to China in late March to inaugurate the company’s entry there, he said in a phone interview.

For Tesla, “it could be as big as the U.S. market, maybe bigger. I don’t want to get overexcited about it,” Musk said yesterday. “Even without building there locally, it’s always going to be the second-biggest market after the U.S.”

After a rocky start ramping up Model S assembly in 2012, Palo Alto, California-based Tesla surprised analysts and investors this month when it said fourth-quarter deliveries were 20 percent above its target. Musk, 42, has pinned his goal of selling hundreds of thousands of electric autos annually to a global strategy in which China, EuropeJapan and other markets bolster its U.S. business.

If all goes well, Model S shipments to China can match U.S. sales by 2015, Musk said. “It’s not my firm prediction -- it’s more like a low-fidelity guess.”

Will Users’ Class-Action Lawsuit Be The End Of Facebook?

January 14th, 2014  |  Source: Adotas

Facebook, the popular social network with over a billion users worldwide, has just been hit with a class-action lawsuit. The allegations, revealed in the FT, are that Facebook systematically scans the content of private messages so it can sell the data to third parties such as advertisers.

Facebook’s entire business model is based on the fact that it monitors what users write, “like” and upload in order to sell this information on to others. I have covered some of the concerns about this in my articles ‘How Facebook Exploits Your Private Information’ and ‘How Facebook Likes Reveal Your Intimate Secrets’. In principle, there is nothing wrong with Facebook using our data to make commercial gains. In the end, the service is free and Facebook has to make money somehow. However, my biggest concern is that the data mining activities are not as transparent as they should be.

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