Mon, 12/10

Chinese investors cleat up to buy the owner of Louisville Slugger

Chinese investors offered to buy Amer Sports, the massive Finnish sports company that owns American sports brand staples Louisville Slugger, Wilson and many others, for more than $5B.

The consortium, led by China’s Anta Sports, has offered $45 per share to acquire the sports company — nearly 14% above the stock’s closing price.

The many lives of Amer

The Finnish-based company was established in 1950 as an industrial conglomerate with a wide array of interests in tobacco trading (it held a 75% market share in Finland at its peak), ship owning, and publishing.

Then, in the ’80s, the company moved into the vehicle import industry and dabbled in the textiles and plastics markets before finally settling into sporting goods in 1986, when it first acquired a majority stake in the golf equipment maker MacGregor Golf from Jack Nicklaus.

Aside from Louisville and Wilson, Amer now owns premiere trail running brand Salomon, outdoor brand Arc’teryx, and the ski brand Atomic.

So why is Anta stepping up to the plate?

According to Bloomberg, Anta (which has a market value of about $12.7B), is uppin’ the ante on its business overseas amid the Chinese government’s push to expand in sports ranging from soccer to skiing.

With brands like Salomon and Atomic, Amer could be an attractive prospect for Anta ahead of the upcoming Olympic Games in Asia.

Mon, 12/10

Walmart purchases Art.com to add to its gallery wall of e-commerce acquisitions

Walmart acquired Art.com last week, adding the company’s home decor business to its growing roster of acquisitions. 

To challenge Amazon’s e-commerce dominance, Walmart has spent hundreds of millions acquiring successful companies that enhance the Big W’s e-commerce “category expertise” and “assortment” — and Art.com looks great next to past buys like Shoes.com, ModCloth, and Bonobos.

More than just a pretty domain name

According to Walmart, Art.com does $300m in annual revenue. The 20-year-old company is “the world’s largest online retailer in the art and wall decor category,” according to Walmart’s release.

But more importantly, Art.com gives Walmart a strong (and immediate) foothold in the $10B art and wall decor market. 

Walmart plans to operate Art.com as its own domain and include its products on Walmart’s site, much like its other recent acquisitions.

Amazon kills off its e-tail rivals, Walmart just buys them

Over the next few months, Walmart plans to continue improving its e-commerce sites, especially for home goods and fashion. But Walmart’s acquisition streak is just getting started.

“Just four brands aren’t going to do it, but imagine 40,” Walmart’s head of US e-commerce, Marc Lore, explained to investors earlier this year.

Mon, 12/10

Altria, the owner of Marlboro, takes a $2B drag of the weed biz

Tobacco giant Altria (parent company of Philip Morris) is investing $1.8B into Canadian cannabis company Cronos Group.

The investment will give Altria (also owner of Marlboro), a 45% stake in Cronos, with an option to increase its ownership to 55% over the next 5 years.

Puff, puff… pass?

It was only a matter of time before major cigarette companies got into the budding joint industry. 

As Quartz notes, outlets have speculated since the ’60s that cig companies were waiting patiently to pounce on legalization, alleging that they had already copyrighted names like “Acapulco Gold” and “Tijuana Gold” in anticipation.

However, letters from key tobacco industry players vehemently denied the notion for decades. Of course, now that other companies are smelling the dank (such as Molson Coors and Constellation Brands), big cig is rippin’ and roaring to take a hit. 

Looking for a re-light

Altria’s stock has fallen nearly 25% in 2018, and the company is expected to report a measly revenue growth of 1% this year, with the plateau expected to continue in 2019. 

Bottom line, cigarette companies are fighting tooth-and-tar to remain relevant as people cut back on cancer sticks (Altria is also in talks to invest in Juul).

And, from a revenue standpoint, Altria isn’t in it for a contact high, they’re lookin’ to get stunk from a nearly $2B gravity bong, in hopes that going green will wean the company off its tobacco addiction.

Mon, 12/10

A bitter pill: The day after the largest biotech IPO ever, Moderna’s stock fell more than 19%

Last week, Biotech company Moderna raised $604.3m in an IPO that valued the company at $7.5B. But, the celebration was short-lived: Its stock slumped more than 19% in its first day of trading. 

Moderna’s flashy IPO and historically bad first day send mixed signals about the biotech market, which was breaking records this year until the recent stock slump.

Don’t shoot the messenger RNA

Moderna specializes in messenger RNA therapy, a type of treatment that uses a patient’s own cells to fight diseases. If Moderna’s drugs work, they could provide revolutionary (and valuable) new treatments for cancer. 

But like many biotech companies, Moderna has yet to bring any drugs to market: Moderna is currently running 21 drug research programs (only 10 of which have passed the lab phase and moved on to human trials). 

Investors have pumped $7.1B into 60 biotech companies this year, making 2018 the 2nd largest year of biotech funding (after 2014). So, how can biotech companies raise billions without viable products?

Everyone’s hoping for a miracle (drug)

Biotech investing is like venture capital on steroids: Investors are happy to invest in dozens of experimental drugs because they only need 1 to succeed. 

Because pharmaceutical R&D is so expensive, many promising biotech startups IPO early so they have more money for research. But biotech stocks are still risky. 

Since the trade-war stock slump began, some investors have stopped taking their medicine. The Nasdaq Biotechnology index was up 14% in August: Now it’s up only 0.2% for 2018.

An uncertain prognosis

Moderna’s first day of trading was the 5th-worst performance of any 2018 IPO. Now, it’s uncertain whether the company will make a recovery. 

With its new cash, the company will have enough money to push its drugs through further clinical trials. 

But unless some of them show promising results in the near future, Moderna could be in trouble. Moderna spent $475m in operating expenses in 2017, and its funding will only last so long.

Fri, 12/7

Lyft is on the road to an IPO, after filing with the SEC

Yesterday, ride-hailing giant Lyft announced it filed for an IPO with the SEC.

Lyft, which was last valued at about $15B in a private fundraising round, did not specify the number of shares it will sell or the price range, but sources estimate the company’s valuation to be in the $20-$30B range.

The IPO will serve as a huge test to see how companies that rely heavily on the gig economy fair on the public market.

Lyft speeds past Uber in the IPO chase

If approved, Lyft will beat Uber to the punch. This may seem like good timing, but with Uber’s future IPO expected to value the rideshare giant at around $120B, it’s actually a part of Lyft’s scrappier strategy.

Nonetheless, if Uber’s future IPO is estimated to be almost 5x bigger than Lyft’s, does it really matter who gets there first?

Especially so…

With Uber receiving massive valuation proposals for the past few months, giving Lyft the first crack at public market investors who cry sacrilege anytime it comes to investing in competing companies will be huge for the No. 2.

If Uber stays on track to hit the stock exchange by the middle of next year, that gives Lyft a few months to shine as the one and only option while it speeds to catch up.

Fri, 12/7

The inventor of waterbeds joins the e-commerce mattress wars

Charles Hall, the man who invented the waterbed in his San Francisco State University dorm room during the Summer of Love, will start selling “second-generation” waterbeds online next month through his mattress startup, Afloat

Drowning in a sea of waterbeds

Hall began selling his original bed, the Pleasure Pit, in the late ’60s for $350 per mattress. Though he patent-protected his watery wares, fluid fraudsters filled the market with cheaper iterations. Hall’s company went into bankruptcy in 1975.

By 1991, just 1 in 5 mattresses sold was a waterbed — and by late ’90s, Hall and fellow waterbed believers were left out to dry. 

But recently, the future of mattresses has become less firm. With traditional giants struggling and startups like Casper achieving direct-to-consumer success, the Waterbed Wizard will try to replicate his watery wonder.

All that grooviness — now available online! 

Hall’s original brochure described the Pleasure Pit as “a friend in love with you, beckoning you to grovel in rapturous sensual splendor.” Afloat’s new, e-commerce-optimized website describes “a bed that totally supports and conforms to the shape of your body.”

A queen Afloat bed costs $1,995 to $2,395 and weighs 1.2k lbs when filled. In a retail test in Florida, they sold out quickly.

Afloat advertises both the particular benefits of waterbeds (contoured fit, temperature control) and the general perks of digital mattress startups (online ordering, a 100-night guarantee, free), resulting in a fever dream of the old and new, the shagadelic and the SEO-optimized.

Fri, 12/7

Asian stock market takes a tumble after the arrest of Huawei CFO

Following Wednesday’s news of the arrest of Huawei Technologies CFO Meng Wanzhou, Hong Kong’s Hang Seng Index plunged nearly 2.5%, with tech stocks taking the brunt of the selling frenzy.

Canadian authorities arrested Meng on Saturday for allegedly violating US trade controls, under charges that Huawei continued to ship products to Iran despite US sanctions for its nuclear program. 

What the Huawei is going on?!

The Shenzhen-based Huawei (pronounced: wah-way) is the world’s #2 largest phone seller, trailing only Samsung.

In 2012, US lawmakers grew wary of the company’s close ties with the Chinese government and worked to prevent American wireless carriers from buying equipment from both Huawei and fellow manufacturer, ZTE. 

(Turns out, the fears had some merit: ZTE was later found guilty of spying activities and was ordered to pay $2B in fines.)

And Huawei?

Investigators have suspected Huawei knowingly sabotaged its products to allow Chinese surveillance since 2016, and the allegations have inspired many nations — not just the US — to bar the firm’s equipment from use in telecom projects (as of a few hours ago, Japan also joined the ban party).

According to Reuters, the US was in the process of looking into whether Huawei broke American trade controls on Iran in April; now, those suspicions seem to have been on point.

The trade war may be taking its first hostage

Meng faces extradition to the US, which some officials view as an opportunity to gain leverage with China in further trade talks.

According to James Lewis, director of technology policy at the Center for Strategic and International Studies, if that happens, it could have massive implications on global technology sales, with the fear that China will retaliate.

Just when we were kinda starting to make progress

Fri, 12/7

Apple Watch now does ECG — but will an Apple a day really keep the doctor away?

Apple rolled out its updated health app yesterday, offering a tool that enables American Apple customers to read electrical heart signals simply by pressing a finger against a smartwatch.

But with Apple’s future as a world-leading tech giant on the line, Apple may need heart monitoring more than its customers do.

Apple really wants your health data

Apple has been raising the prices on its hardware (which is still its bread and butter) for years. But the time will come when consumers won’t be willing to pay $6k for the iPhone 19Z.

This reliance on hardware is already a problem: After hitting a $1T market cap, Apple has lost more than $295B in value since August.

So Apple has already started to focus on services to wean itself off of hardware — and it seems to be pinning its hopes on health.

But do you really want Apple’s health services?

It’s clear why Apple wants to kick-start sales of its healthcare services. But doctors are divided on the usefulness of the watch.

Apple’s Watch is now FDA-approved to catch irregular heartbeats (a definite win for people who don’t know they have them), but some doctors think they could do more harm than good in the short term by causing misdiagnosis and anxiety.

But more importantly, this FDA approval opens the door for Apple to become what it calls an “intelligent health guardian” — a hardware company that also collects medically sensitive healthcare data.

Thu, 12/6

China claims it will crack down on IP-thieves

After nearly 6 months of a trade war waged by the US, China said it will finally punish companies and individuals who conduct intellectual property theft against foreign companies.

As Bloomberg reports, the Chinese government has laid out a total of 38 different punishments regarding IP violations, which could be a “positive step” toward mending the contentious trade relations between the US and China.

Mess with the spray tan you get the tariffs

In early 2017, the US completed a 7-month investigation finding “hard evidence” that China uses foreign-ownership restrictions on American companies to conduct cyber attacks, with the intent of accessing trade secrets.

The Trump administration began levying tariffs on China in July after the investigation, alleging that China’s policies were causing “multiple billions of dollars” in damage to US companies.

Concession? Or smoke screen?

Over the years, China has dismissed claims of government-backed IP-thievery as heresay (even after F-35 fighter jet and US submarine supersonic warfare secrets were confirmed stolen and sold to China), so the vowed crackdown must mean… we’re making some progress… right?

Meh. Experts from the Center for Strategic and International Studies remain skeptical, noting that IP violations have increased since the investigation. The crackdowns, in a sense, feel like the same ol’ song and dance.

According to the center’s own Jim Lewis, “What they’ve done in the past is fail to enforce or, when they have to enforce, find somebody they don’t like, blame them, and then say to the Americans, ‘See?’”

Thu, 12/6

Lie detectors are BS — and eye-scanning technology won’t make them any better

More than 100 years ago, The New York Times imagined a future where a machine would be able to tell if people were lying or telling the truth.

Today, that machine exists: It’s called a lie detector — it’s a $2B-per-year industry, and it’s based almost entirely on shoddy pseudoscience.

In a recent feature, Wired went deep on a new device, Converus EyeDetect, that’s trying to change this by enlisting eye-scanning technology. But is tech really any better at detecting lies?

Why do lie detectors suck?

A traditional polygraph test rests on the premise that when a person lies, she will produce a unique physiological response. Basic “indicators” like blood pressure, pulse, and breathing rate are measured during a round of questions; if there’s a spike, it’s interpreted as deception.

These tests have been discredited by numerous studies, even Supreme Court cases — yet 2.5m of them are still conducted in the US every year.

One company thinks it can do better…

The Converus EyeDetect promises to boost the accuracy of lie detection from 65% to 86% by “capturing imperceptible changes in a participant’s eyes.” It already boasts 500 paying customers in 40 countries.

But according to Wired reporter Mark Harris, who tested the device, the EyeDetect falls back on the same assumption as the polygraph, that deception can be physically measured in a scientifically sound way.

What’s really being measured here is fear and anxiety. And as we all know, sh*tting your pants is not an indication of guilt.

Thu, 12/6

Updates: The good, the bad, and the autonomous

Been hankering for an update on your fav non-productive EV company? How about a primer on how the world’s best only paper straw company is doing?

Here are a few updates on some old gems:

The good: Aardvark is killing the paper straw game

In August, Aardvark, the great crusader against plastic straws, was acquired by Hoffmaster Group — because when you’re the only paper straw maker in an industry currently catching like wildfire, sometimes you need a hand.

As promised by the Hoffmaster Group, Aardvark is building a new factory to further stay ahead of booming demand (which has grown 50x), and a question looms: What’s Aardvark’s carbon footprint gonna look like once the new digs are up and running?

The bad: Faraday Future still on hard times

What’s worse than a company with arguably one of the most revolutionary EV concepts in the past 5 years but still no product to show for it? Answer: A company that, nearly 5 years later, still has no product to show for it. And what do you know, it’s the employees who continue to suffer.

According to the Verge, EV company Faraday Future has furloughed at least 250 more employees since reducing staff from 1k to 600 back in October. Their reasoning: A “financial crisis.”

Of course, the company is pointing its finger at Evergrande Health, who agreed to a $2B bailout back in June so Faraday could keep the lights on.

Now, the company claims the investor is “refusing to make its scheduled payments,” and employees are getting the ax because of it. Basically, Faraday is the kid who repeatedly wrecks his car, then blames Mom and Dad for cutting him off.

The autonomous: Waymo’s new self-driving taxi launches

Last month, Alphabet’s self-driving arm, Waymo, announced its new self-driving taxi, the Waymo One, would hit the streets in December.

Well, the holiday season is here, and they did not disappoint: Yesterday, Waymo became the first autonomous ride-hailing company to hit the streets without the restraints of a closed course, or engineers riding shotty. 

Now, it’s just the car, you, and nothing behind the wheel.

Thu, 12/6

In the age of Alexa, Pindrop raises another $90m to prevent voice fraud

While everyone and their mother is building a smart voice assistant (Facebook’s Aloha and Salesforce’s Einstein Voice, to name a few newcomers), Pindrop is building the software they’ll all need to protect our vocal identities.

The company just raised a $90m Series D ($212m to date) to develop voice “fingerprinting” tech that analyzes “1,400 acoustic attributes” to verify a call or a voice command.

Why does this matter?

It’s not just to keep kids from ordering 10 lbs of gummy worms on their parents’ Alexas… it’s to stop hackers from ordering 10 lbs of gummy worms on our Alexas.

Pindrop claims that the rate of voice fraud grew 350% from 2013 to 2017. As we use phones and voice assistants to do more and more complex tasks — from opening a credit card to disabling a home security system — hackers have all the more opportunity to infiltrate our private info. 

Pindrop currently works with call centers in eight of the top 10 US banks to identify phone scams using unique audio characteristics, and signifiers like type of device, carrier, and location to identify repeat callers — and repeat scammers.

The best part?

Not having to rattle off your mother’s maiden name, high school mascot, and Social Security number.

Ultimately, this kind of tech could allow us to use our voices in lieu of passwords or fingerprints — and that puts Pindrop in a pretty sweet position.

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