Dow Today – Zillow, facing big losses, quits flipping houses and will lay off a quarter of its staff.
Zillow, the real estate website known for estimating house values, said on Tuesday that it would exit the business of rapidly buying and selling houses amid heavy losses and that it planned to let go about nearly 25 percent of its employees.
The announcement was a major strategic retreat and a black eye for Richard Barton, Zillow’s chief executive, who founded the company 16 years ago and has long talked about transitioning Zillow’s popular website into a marketplace. Last year, Mr. Barton predicted Zillow Offers, which made instant offers on homes in a practice known as iBuying, could generate $20 billion a year.
On Tuesday, Zillow, which said it has 8,000 employees, said the division had been the source of huge losses and had made the company’s overall bottom line unpredictable. Zillow Offers lost more than $420 million in the three months ending in September, roughly the same amount that the company had earned in total during the prior 12 months.
“We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated,” Mr. Barton said in a statement accompanying its quarterly financials.
Mr. Barton, speaking on a conference call with analysts on Tuesday afternoon, said the decision had “weighed heavily” on him. “We could blame the current losses on exogenous market events,” Mr. Barton said. “But it would be naïve to predict that unpredictable events won’t happen in the future.”
In all the company lost nearly $330 million in the third quarter, which was far worse than Wall Street analysts had predicted. The company made a $40 million profit in the same period a year ago.
Shares of Zillow have fallen more than 50 percent from a high of nearly $200 in February, when it was still a darling of investors as the housing market heated up. The stock dropped 11.5 percent on Tuesday to about $85.50 before it released its financials, and a further 7.5 percent in after-hours trading. (Even so, Zillow’s shares are worth double what they were at the beginning of the pandemic.)
Three years ago, the company announced plans to employ its pricing estimates to buy and sell houses. Now, Zillow is sitting on thousands of houses worth less than what the company paid for them. Last month, Zillow announced it would temporarily stop buying new homes. At the time, it blamed a lack of workers to fix up and sell the houses it had bought. But on Tuesday, Mr. Barton said using its algorithm to buy and sell houses had not produced predictable profits. It is now looking to offload its remaining 7,000 houses.
It appears the company underestimated the risk of holding houses in between transactions, which was a departure from the low-risk, high-margin ad business. And it tried to quickly ramp up its home-flipping business to 5,000 transactions a month, which Mr. Barton set as a goal, in a housing market that was already low on inventory and was starting to cool off.
Zillow’s stumble also raises questions about its core product, which is built around its value estimates. Aaron Edelheit, who began buying houses in the wake of the Great Recession, tweeted his thanks to Zillow for paying “such an extremely high price” for one of his properties this summer. “It appeared they were panic buying,” Mr. Edelheit, who is leaving the real estate market to focus on cannabis, told The New York Times’s DealBook newsletter. “I didn’t get it. I should have shorted the stock.”
[Update: Deere & Company said on Wednesday that it would not resume talks with the union and that the rejected proposal was its best and final offer.]
For the second time in under one month, workers at the agriculture equipment maker Deere & Company rejected a contract proposal negotiated by their union on Tuesday, extending a strike that began in mid-October.
Roughly 10,000 workers, primarily at plants in Iowa and Illinois, on Oct. 10 voted down an earlier agreement negotiated by the United Automobile Workers union.
“The strike against John Deere & Company will continue as we discuss next steps with the company,” the union said in a statement.
Marc A. Howze, a senior Deere official, said in a statement that the agreement would have included an investment of “an additional $3.5 billion in our employees, and by extension, our communities.”
“With the rejection of the agreement covering our Midwest facilities, we will execute the next phase of our Customer Service Continuation Plan,” the statement continued, alluding to its use of salaried employees to run facilities where workers are striking.
Many workers had complained that wage increases and retirement benefits included in the initial proposal were too weak given that the company — known for its distinctive green-and-yellow John Deere products — was on pace for a record of nearly $6 billion in annual profits.
According to a summary produced by the union, wage increases under the more recent proposal would have been 10 percent this year and 5 percent in the third and fifth years. During each of the even years of the six-year contract, employees would have received a lump-sum payment equivalent to 3 percent of their annual pay.
That was up from earlier proposed wage increases of 5 or 6 percent this year, depending on a worker’s labor grade, and 3 percent in 2023 and 2025.
The more recent proposal also included traditional pension benefits for future employees and a post-retirement health care fund seeded by $2,000 per year of service, neither of which were included in the initial agreement.
Chris Laursen, a worker at a John Deere plant in Ottumwa, Iowa, who was president of his local there until recently, said he voted in favor of the new agreement after voting to reject the previous one.
“We have the support of the community, we have the support of workers all around the country,” Mr. Laursen said. “If we turned down a 20 percent increase over a six-year period, substantial gains to our pension plan, I’m afraid we would lose that.”
But Mr. Laursen said he still had concerns about the vagueness of the company’s commitment to improving its worker incentive plan, and such concerns appeared to weigh on his co-workers, 55 percent of whom voted to reject the newer contract.
One wrinkle complicating the vote was suspicion among rank-and-file workers toward the union leadership related to a series of corruption scandals, which have led to more than 15 convictions, including two recent U.A.W. presidents.
The work stoppage at Deere was part of an uptick in strikes around the country last month that also included more than 1,000 workers at Kellogg and more than 2,000 hospital workers in upstate New York.
Overall, more than 25,000 workers walked off the job in October, versus an average of about 10,000 in each of the previous three months, according to data collected by researchers at Cornell University.
Tesla’s chief executive, Elon Musk, said Monday that the electric vehicle manufacturer had not yet signed a contract with Hertz to sell the car rental agency 100,000 of its vehicles, a deal that was announced last week as Tesla’s stock value pushed past $1 trillion for the first time.
If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet.
Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers.
Hertz deal has zero effect on our economics.
— Elon Musk (@elonmusk) November 2, 2021
“If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet,” he said. “Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers. Hertz deal has zero effect on our economics.”
Tesla’s shares tumbled on Tuesday, falling as much as 4 percent in afternoon trading.
A Hertz spokeswoman affirmed last week’s announcement.
“Hertz has made an initial order of 100,000 Tesla electric vehicles and is investing in new EV charging infrastructure across the company’s global operations,” Hertz’s communications director, Lauren Luster, said in a statement. “Deliveries of the Teslas already have started. We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles.”
The car rental agency’s order for 100,000 Teslas represented a bold move for a business just out of bankruptcy and a sign of growing momentum behind the shift away from gas-powered vehicles.
The cars were to be sold at list price, Mr. Musk said. Tesla’s share price has continued to rise since that announcement, and stock in the company is now valued at a collective $1.2 trillion.
Stocks on Wall Street rose on Tuesday, with the S&P 500 ending the day with its fourth straight day of gains. The benchmark index ticked up 0.4 percent, while the Nasdaq composite was up 0.3 percent.
The Dow Jones industrial average also pushed further into record territory, closing above 36,000 for the first time. The threshold was made infamous by a 1999 book, “Dow 36,000,” that argued the index should hit the mark in three to five years, if not as soon as “today.”
Shares for Tesla fell 3 percent after Elon Musk, Tesla’s chief executive, tweeted that the company hadn’t yet signed a contract to sell 100,000 cars to Hertz. Last month, the announcement by Hertz to buy the electric vehicles pushed Tesla’s market cap above $1 trillion, and the stock climbed more over the last week. Tesla’s stock is now nearly 30 percent above its price before the Hertz deal was announced.
Shares of another car-rental company, Avis Budget, surged 108 percent on Tuesday after the company reported stronger than expected results for the third quarter. Avis said revenue nearly doubled from a year ago to $3 billion and was 9 percent higher than the third quarter of 2019. The spike in Avis share price, which gained more than 200 percent at one point, was reminiscent of the “short-squeeze” that led shares of AMC Entertainment, GameStop and other companies sharply higher as investors who had bet against the stocks rushed to buy shares and close out their positions.
Under Armour rose more than 16 percent after the activewear company reported that its quarterly revenue was up 8 percent compared with the same period last year.
Pfizer rose 4.2 percent after stating in its third quarter earnings report that the company is raising its full-year sales forecast for its vaccine against the coronavirus. Pfizer said it expects to raise $36 billion in revenue from its Covid-19 vaccine this year, up from $33.5 billion it previously expected, and deliver about 2.3 billion doses.
Yields on government bonds fell slightly on Tuesday. The yield on 10-year Treasury notes fell two basis points to 1.56 percent from 1.58 percent. The Federal Reserve kicks off its two-day monetary policy meeting on Tuesday, and economists are expecting officials to announce the scaling back of its bond buying program.
European stock indexes were slightly higher, with the Stoxx Europe 600 up 0.1 percent.
Goldman Sachs said on Tuesday that it had promoted 643 employees to the rank of managing director — the biggest and most diverse cohort in the bank’s history to receive the title.
The promotions, which occur every other year, will take the total number of managing directors to 2,667. Underscoring the growing importance of technology on Wall Street, engineering accounted for a fifth of the promotions.
Managing directors sit at the top of the food chain in investment banks. They typically earn salaries of $350,000 to $600,000, with bonuses that can increase their compensation well beyond $1 million depending on the revenue they generate, according to estimates from Wall Street Prep, a company that helps aspiring bankers train for the industry.
Women comprised 30 percent of Goldman’s new managing directors, up slightly from the previous class. The share of other underrepresented groups also rose. Of the staff who were promoted, 28 percent were Asian, 5 percent were Black, 5 percent were Hispanic or Latinx and 3 percent were L.G.B.T.Q. But the progress on diversity comes from a lower baseline in an industry that has long been dominated by white men.
Goldman has already had the most profitable year in its history, earning $17.7 billion in the first nine months of 2021, fueled by hot markets for stocks and corporate deals. The bank has also been on a hiring spree since the start of 2020, increasing head count 22 percent, which partly reflects the large size of this year’s managing director cohort. In 2019, Goldman promoted 465 people to the managing director level.
“Whenever C.E.O. confidence is high, M&A activity increases,” David M. Solomon, Goldman’s chief executive, said in an October interview, referring to mergers and acquisitions. “The world’s resettled a bit coming out of the pandemic, and that is now giving a lot of companies an opportunity to really take note of where they want to go.”
Surging activity also buoyed other U.S. banking giants, which reported third-quarter profits that surpassed analyst expectations.
Goldman elevated leaders in its core investment-banking and trading divisions, but also added managing directors in other areas that are of growing importance to the bank, including asset management and consumer banking. The bank made 72 promotions, or 11 percent of the total class, in locations where it is staffing up, including Bengaluru, India; Salt Lake City; and Dallas.
With its coronavirus vaccine on track this year to generate the biggest single-year sales ever for a medical product, Pfizer on Tuesday disclosed revenue projections indicating that the shot will likely beat that record or come close in 2022.
The company said while reporting its third quarter earnings that it expects its vaccine to bring in $36 billion in revenue this year. Pfizer said it has already reached supply deals worth $29 billion in revenue for its vaccine next year, covering 1.7 billion shots it has already committed to countries around the world. Billions more in sales are likely to come as the company reaches more deals to sell to governments the four billion shots it expects to produce next year.
The company’s chief executive, Dr. Albert Bourla, told analysts on Tuesday that most of the company’s negotiations are with high- and upper-middle-income countries. He said he was concerned that poorer countries and their proxies were not lining up to place orders. “I don’t want to reach a level that again the low- and middle-income countries will be behind in their deliveries because they didn’t place their orders,” he said.
Pfizer says it is selling shots for poorer countries at discounted prices, but many of the world’s poorest countries cannot afford to buy doses directly. They have depended on donations from the United States and other wealthy countries, and on supply from Covax, the United Nations program to vaccinate the globe.
There remain stark differences in vaccine access: Worldwide, about 75 percent of all shots that have gone into arms have been administered in high- and upper-middle-income countries, according to the Our World in Data project at the University of Oxford. Only 0.6 percent of doses have been administered in low-income countries.
The enormous sales figures will translate into billions in profits for Pfizer. The company, which must split its vaccine revenue with development partner BioNTech, said that it expects its profit margins on the vaccine will be in the high 20 percent range next year, the same margin it projected this year.
The doses that will be delivered next year include booster shots, mostly for wealthier countries, and primary immunizations, with an emphasis on second doses, for poorer countries.
A small chunk of the doses will be given to children. The company won authorization last week for its vaccine to be given in the United States to children between the ages of 5 and 11. An advisory panel to the Centers for Disease Control and Prevention voted unanimously on Tuesday to recommend pediatric doses for that age group, and if the director signs off, children could begin receiving it this week.
Pfizer expects to have initial data from its studies evaluating its vaccine in children between the ages of 2 and 4 by the end of December and in children between the ages of six months and 1 by the end of March, the company’s research chief, Dr. Mikael Dolsten, told analysts on Tuesday.
Pfizer could get another revenue boost next year from an antiviral pill it is developing for high-risk Covid patients early in their infections. Results are expected within the next few months from a key clinical trial evaluating whether the drug can cut the risk of hospitalizations and death.
A Pfizer executive, Angela Hwang, said the company sees a market of up to 150 million people for the pill. She called it a “durable opportunity,” saying that governments may be interested in stockpiling the drug.
A rival pill from Merck, known as molnupiravir, has already been shown to halve the risk of hospitalization in similar patients. Merck said last week that it expects molnupiravir to generate between $5 and $7 billion in revenue globally through the end of next year.
BP said Tuesday that higher oil and natural gas prices had led to sharply higher earnings in the third quarter. The company said that its “underlying replacement cost profit” for July through September was $3.3 billion, compared with $86 million in the period a year earlier.
Prices for oil have steadily risen over the last year as economies have expanded since pandemic lockdowns, and BP joined other oil companies in reporting a big jump in quarterly earnings.
BP, which is based in London, said that it received about $66.39 on average for a barrel of oil in the quarter, compared with $37.77 in the earlier period. BP also said it earned $868 million from its minority holding in the Russian oil giant, Rosneft, compared with a $278 million loss a year ago.
Analysts said the results were slightly better than forecasts.
“Rising commodity prices certainly helped,” the chief executive, Bernard Looney, said in a statement.
Acknowledging the role that the Organization of the Petroleum Exporting Countries and its allies have played in lifting prices in recent months, BP said that the producers’ “decision making on production levels continues to be a key factor in oil prices.”
OPEC and its allies, including Russia, are expected to meet on Thursday to discuss production levels. President Biden is leaning on them to accelerate their pace of increasing output to bring down gasoline prices for consumers. Brent crude, the international benchmark, is now selling for about $85 a barrel.
BP held its dividend steady for the quarter at 5.46 cents per share, and announced a $1.25 billion share buyback.
On a call with analysts, Mr. Looney shrugged off what may be growing pressures to break up big oil companies. Recently, Third Point, a New York-based fund management firm, suggested that Royal Dutch Shell, BP’s rival, could be substantially more valuable if broken up into an oil business and a lower carbon energy business.
“We are not hearing that call from our investors,” Mr. Looney said.
Millions of dollars vanished in a matter of minutes after investors piled into a new cryptocurrency inspired by “Squid Game,” the popular Netflix survival series, only to watch its value plunge to nearly zero in a few short hours.
The cryptocurrency, called Squid, began trading early last week at a price of just one penny per token. In the following days, it drew attention from a number of mainstream media outlets. By early Monday, it was trading at $38 a token on a cryptocurrency exchange called Pancakeswap.
Then Squid went on a roller-coaster ride. In a 10-minute span later on Monday, the token’s value grew from $628.33 to $2,856.65, according to CoinMarketCap, a crypto data tracking website. Then, five minutes later, it traded at $0.0007.
More than 40,000 people still held the token after the crash, according to BscScan, a blockchain search engine and analytics platform. One of them was John Lee, 30, of Manila. He said he had spent $1,000 on the Squid tokens, thinking “somewhat instinctively” that the token had been authorized by the Netflix show.
Mr. Lee said he was surprised when he learned that he was not be able to sell the token immediately. He can sell the tokens now, but he’d be left with “almost nothing,” he said.
Sharon Chan, a spokeswoman for Netflix, declined to comment.
The reasons behind Squid’s collapse, reported earlier by Gizmodo, weren’t clear. Neither were the identities of its creators. Its website appeared to have been taken offline. An email sent to its developers bounced back. Its social media channels appeared to have been shut down. Its Twitter account was not accepting direct messages or replies.
Pancakeswap, the trading platform, did not respond to a request for comment.
In the aftermath, the cryptocurrency world is mulling whether Squid was what Molly Jane Zuckerman, head of content at CoinMarketCap, called a “rug pull,” in which a cryptocurrency’s backers effectively leave the market and take their investors’ funds with them.
“I’m not seeing the developers coming online and saying, ‘Hold with us, so sorry, we’ll figure this out,’ which is what happens when there’s some sort of non-malicious problem,” she said.
Squid’s crash highlights the regulatory gaps over cryptocurrencies, as government agencies and private firms rush to get a grip on the volatile yet increasingly popular investment.
Developers of meme coins like Squid rarely identify themselves, said Yousra Anwar, an editor at CoinMarketCap. If investors suspect financial wrongdoing, they could get passed from country to country, or from regulator to regulator, to investigate.
Squid came with some unusual features that might have alarmed investors, Ms. Anwar said. The developers required that buyers outnumber sellers two-to-one to allow a sale.
The developers called the sales limit an “anti-dump” mechanism, according to a white paper — the document in which developers describe the features and technical underpinnings of their cryptocurrency — that had once been online. Ms. Anwar said such mechanisms were meant to stem crashes, not prevent holders from selling in the normal course of trading.
The developers also required users to obtain tokens of a second cryptocurrency, called Marbles, to sell their Squid tokens, according to the white paper. Marbles could be earned only by participating in an online game inspired by the show. To participate in the first game, for example, players needed to pay a steep entry fee of 456 Squid tokens. The subsequent levels cost thousands of tokens to enter.
Those features prevented many holders from selling as the value plunged, Ms. Zuckerman said.
The amount of money invested and lost in the tokens is difficult to quantify, she said. But BscScan labeled two crypto addresses as being associated with what it called a “rug pull” of Squid. One of them swapped $3.38 million worth of Squid into a popular crypto called BNB, the BscScan page showed. To complete transactions, both addresses used Tornado Cash, which is a “coin mixer,” or a software company that serves as a middleman between parties and makes it hard to trace transactions, Ms. Zuckerman said.
“Anyone can make up the name of any cryptocurrency,” she said. “You could make up a ‘Mad Men’ token, a ‘Succession’ token. So it’s really important to do your own research.”
Surviving members of same-sex couples who weren’t able to marry because it wasn’t yet legal may now be eligible for survivor benefits from Social Security.
Even after winning the right to marry across the United States more than six years ago, some same-sex couples have faced challenges obtaining certain benefits. To qualify for survivor benefits, for example, couples need to have been married for at least nine months.
But some survivors lost their spouses before meeting that threshold, even though they legalized their unions as soon as they were eligible. Others lost their partners before they were able to marry at all.
Recent developments ensure that both groups of survivors — those who were able to marry and those who were not — will have access to benefits: On Monday, the Justice Department and the Social Security Administration dropped Trump-era appeals of two class-action suits in the Ninth Circuit.
“There are a significant amount of people for whom this could make a significant difference,” said Peter Renn, counsel at Lambda Legal, an advocacy group that represented plaintiffs in the two lawsuits. “Survivor benefits are now equally available to everyone, including potentially thousands of same-sex partners who could not marry their loved ones and may have thought it was futile to apply.”
The group filed the two suits in 2018. One was filed on behalf of Helen Thornton, now 66, who tried to receive benefits on the record of Marge Brown, her partner of 27 years. But Ms. Brown died in 2006, before they were permitted to marry in Washington State, where they lived. The district court in Washington ruled in her favor, but the lawsuit’s protections were limited to people who had applied by Nov. 25, 2020, according to Mr. Renn.
Mr. Renn said that the dropped appeal opened a pathway for more surviving partners to begin applying. Neither the Social Security Administration nor the Justice Department commented after dropping the appeals.
The Social Security Administration has encouraged survivors who have been denied benefits to contact the agency, according to notices on its website. Legal experts said the agency had already begun updating its policies last month.
In the other case, Michael Ely, now 68, married his partner, James Taylor, shortly after Arizona’s same-sex marriage ban was struck down in 2014. Mr. Taylor died just six months after they married, according to legal documents. Mr. Ely was unable to collect survivor benefits on Mr. Taylor’s earnings record, the legal complaint said, even though they were partners for more than four decades and Mr. Taylor was the primary earner for the couple.
“I can finally breathe a sigh of relief that these benefits are now finally secure,” Mr. Ely said in a statement, “not only for me but for everyone else who found themselves in the same boat.”
The protections provided by these cases may also help people like Jim Obergefell, who was married for only three months. In 2015, he was at the center of the monumental Supreme Court ruling — Obergefell v. Hodges — that declared that the Constitution guaranteed a right to same-sex marriage, enabling couples across the country to marry even if their states had banned it. That followed a 2013 ruling, in United States v. Windsor, in which the court found that same-sex couples were entitled to federal benefits.
Mr. Obergefell, 55, said he would consider applying for survivor’s benefits when he reaches the eligible filing age, because his spouse, John Arthur — who died of A.L.S. in 2013 — may have earned slightly more than him. “I still remember the sting of being denied the minimal death benefit payout when John died,” he said, referring to the one-time lump-sum death payment of $255 from Social Security. “Not because I needed the money, but because it was a slap in the face to be told I wasn’t a valid surviving spouse.”
Surviving spouses or partners in these situations will have to illustrate to the Social Security Administration that they would have been married if the laws would have permitted it, legal experts said. The agency will also generally have to conclude that the marriage would have lasted at least nine months at the time of the partner’s death.
“It is sort of a necessary consequence of having wiped out the unconstitutional marriage restrictions that existed for so long,” said Mary L. Bonauto, civil rights director at advocacy group GLAD. “This is actually consistent with the kind of tasks that federal agencies have to do sometimes to get it right — they have to look into the individual circumstances sometimes, and this is one that really cries out for it.”
Legal experts said the agency might ask the survivor about a variety of issues. That could include whether they would have married if the laws didn’t bar same-sex unions, their living arrangements and whether they relied on each other for financial support. The agency may also ask whether they were named in one another’s wills, shared insurance policies or if they were registered as domestic partners.
As long as a deceased person worked long enough, widows and widowers generally may receive survivor benefits as early as age 60. (Disabled survivors may be eligible at age 50.) Survivors can collect on their partner’s earnings record if it is higher than their own retirement or disability benefit — or they can collect the benefits as a way to delay their own benefits, which they can collect later when they are worth more.
Last year, venture capital funding for companies founded by women in the U.S. dropped substantially. But new research from PitchBook suggests that change is afoot.
U.S. venture capital raised by female-founded companies
The start of the pandemic had a disproportionate affect on investments in companies with at least one female founder. The number of deals involving companies with all-male founders dipped 5.4 percent in June 2020 compared with March, then rose again through the end of the year. But investment activity in companies with a female founder dropped almost 30 percent and remained suppressed for much of the year, PitchBook data shows.
This year, start-ups with female founders have fared much better. They have raised more venture capital dollars and have executed more exits at greater values than at any point in the last decade. Start-ups with a female founder raised more than $40 billion through September, almost double the amount invested in companies founded by women in all of 2020 or 2019.
Much of the investment surge was concentrated in the tech, health care and retail industries.
Still, those investments represented a small slice of the overall market, amounting to roughly 18 percent of the $239 billion raised by all venture capital-backed companies through September.
The PitchBook report suggests there is a growing pool of female angel investors and general partners at funds who are actively looking to support female founders. At the end of 2019, 12 percent of general partners at venture capital firms were women and there were 740 female angel investors. Today, women make up 15 percent of general partners at venture capital firms, and there are now about 1,000 female angel investors.
A Chicago company called Catch Co. had a deal to sell an advent calendar for fishing enthusiasts in 2,650 Walmart stores nationwide. But like so many products this holiday season, the calendars, “12 Days of Fishmas,” were stuck in a huge supply-chain traffic jam.
With Black Friday rapidly approaching, many of the calendars were sitting in a 40-foot steel box in the yard at the Port of Long Beach, blocked by other containers stuffed with toys, furniture and car parts, Ana Swanson reports for The New York Times. Truckers had come several times to pick up the Catch Co. container but been turned away. Dozens more ships sat in the harbor, waiting their turn to dock.
“There’s delays in every single piece of the supply chain,” said Tim MacGuidwin, the chief operations officer for Catch Co. “You’re very much not in control.”
Catch Co. is one of the countless companies at the mercy of global supply chain disruptions this year. Worker shortages, pandemic shutdowns, strong consumer demand and other factors have fractured the global conveyor belt that shuffles consumer goods from Chinese factories, through American ports and along railways and freeways to households and stores around the United States.
Financial regulators have urged lawmakers to act fast on legislation to address the rising risk of stablecoins.
This type of cryptocurrency — ostensibly backed one-to-one by a stable asset like the dollar, making it more practical as a means for trades and transactions — is booming, with some $130 billion now in circulation, up from less than $30 billion at the start of the year.
Stablecoin issuers, such as Tether and Circle, are not banks and they are not simply tech companies that sell online services: They operate as both and have few rules to guide them.
In an eagerly anticipated report that the Treasury Department released Monday, officials warned that without more oversight, the rise in reliance on stablecoins could result in bank runs, consumer abuse and payment snafus, and potentially threaten the wider financial system, Ephrat Livni and Eric Lipton report for The New York Times.
Stablecoin issuers should be treated like banks, the report recommended, subjecting them to the same reserve requirements as traditional financial institutions to ensure they can meet the demands of customers to cash out quickly.
Others involved in the stablecoin transfer process should be subject to more rules, too, regulators said. Currently, federal law cannot prevent retailers and other commercial companies from issuing their own stablecoins, potentially creating risky overlaps between commerce and banking.
Delay is dangerous, the regulators said. Stablecoins have not always been as securely backed as issuers claim. Agencies have the power to police certain stablecoin issuers, but the report identified regulatory gaps that only legislators could address.
Lyft said on Tuesday that its drivers started to return to its ride-hailing service in the company’s most recent quarter, a welcome change after many of them had stayed away during the pandemic. Riders were also re-emerging from lockdown, Lyft said. The company had almost 19 million active riders in the quarter, a 51 percent increase from the same period a year ago.
The ride-hailing company reported revenue of $864.4 million, a 73 percent increase from the same period last year, and a loss of $71.5 million, an 84 percent decrease.
“Driver supply materially improved in Q3, up nearly 45 percent versus last year, reflecting strong new driver trends,” said Logan Green, co-founder and chief executive officer of Lyft. “We are well positioned for a continued recovery and I’m excited to build on the momentum in our business.”
Lyft’s shares were up about 3 percent in after-hours trading.
Here’s what else is happening today:
Facebook plans to shut down its decade-old facial recognition system this month, deleting the face scan data of more than one billion users and effectively eliminating a feature that has fueled privacy concerns, government investigations, a class-action lawsuit and regulatory woes. Jerome Pesenti, vice president of artificial intelligence at Meta, Facebook’s newly named parent company, said in a blog post on Tuesday that the social network was making the change because of “many concerns about the place of facial recognition technology in society.” READ MORE →
Janneke Parrish, a former Apple Maps program manager, accused Apple and Tim Cook, Apple’s chief executive, of violating federal labor law by firing her in retaliation for forming the employee group, known as #AppleToo. Ms. Parrish’s complaint, in a legal filing with the N.L.R.B., is the latest in a series made by Apple employees. One former Apple employee, Ashley Gjovik, has made at least 10 complaints to state and federal agencies claiming misconduct by her former employer. Cher Scarlett, another leader of #AppleToo, has been on leave and has been talking to federal regulators about whether Apple prohibits its workers from speaking out. READ MORE →
Today in the On Tech newsletter, Shira Ovide writes that Huawei is a test of how the U.S. government is trying to keep the country strong, safe and on the cutting edge as the future of technology becomes less American.