Where Entrepreneurs Go Wrong When Hiring Big Executives

You’re scaling your company and need a few good people to help you excel in areas outside your realm of expertise. It may seem like finding an experienced executive to join your team is the hard part, but the reality is that successfully integrating them and getting the desired outcomes is the real challenge. 

If you’re a first-time CEO and you’re several years younger than this new professional, you may think, I hired this person and they are the expert–they’ll know what to do. Please, please, resist this temptation. I’ve known many CEOs who’ve practiced this management approach, and I have yet to see it yield great results.

Your job as a leader is to be inspiring, fair, and honest–and to hold people accountable to doing their best work. If you do that, you will not go wrong. Don’t become intimidated by years of experience, a good reputation, or simple bravado. You’re the boss, and while they may be the domain expert, you need to make sure that they (and your company) are successful.

That requires active discussion and engagement on all fronts. A winning recruiting and onboarding strategy entails a lot of dialogue for alignment around:

  • What does success look like?
  • What is expected of the new executive?
  • What authority level does the new executive have? (What authority do they have to hire? What input should they get before they fire anyone?)
  • What are the expected behaviors? What is the appropriate style for the culture?
  • What do the first ninety days look like?
  • What problems will they want to tackle right away? What should be put on hold?
  • What is the cadence for check-ins? How often will you be meeting?

I’m a fan of codifying the above in a document so that there’s something to reference and check against. People interpret goals and expectations differently, so this exercise is especially important. (I ask the new executive to take the lead and document what we’ve discussed, and then to let me edit it.) I recommend having weekly one on ones.

These meetings also offer an opportunity to provide advice and to solicit input on how you can help them become more successful. If something is bothering you, you are not doing anyone any favors by hiding your concerns. When you do articulate your worries, try to do so in a way that’s constructive and truth seeking, rather than blaming.

A couple of other points:

You hired this person for a reason. You therefore know that something needs to be done differently, so expect that there will be some changes. You just need to be aligned about what they are.

There’s a lot to be discussed and much to be imparted, but don’t forget that listening goes a long way. Any new executive should be reminded of the importance of listening to the team. I recommend soliciting input about what is going well and where improvement is needed.

As mentioned earlier, there is likely to be change, and the current team needs to be forewarned about and accepting of the fact that some things might be done differently under new leadership. If (or, more likely, when) people come to you to complain about the changes, you need to listen, but also route them back to have a transparent discussion with the new executive.

Don’t forget the basics. Do everything in your power to make the new hire feel welcome. Assign someone in their department to show them around the first day. Take them to lunch. If you can’t personally do it, be sure to have someone else on the team take them.

Remember, the reason you hired someone is that you needed a change. Now set up the conditions to implement that and to make them wildly successful. This takes active management. If you wait, it takes even more work. Never expect things to magically get better. The better you onboard and acclimate someone, the faster they will deliver impact and the faster you will all earn the results you are striving to achieve.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Where Entrepreneurs Go Wrong When Hiring Big Executives

Spotify says about two million users blocked ads without paying

(Reuters) – Spotify Technology SA (SPOT.N) said on Friday it uncovered 2 million users of its free service who had blocked advertising without paying, highlighting a potential revenue risk for the soon-to-be public company.

FILE PHOTO: Headphones are seen in front of a logo of online music streaming service Spotify, February 18, 2014 REUTERS/Christian Hartmann/File Photo

In an amended version of the share prospectus filed last month, the Swedish company said it continues to be impacted by third-party attempts to gain unauthorized access to its premium service.

The music-streaming company previously included the 2 million users in calculations for some of its key performance indicators, including MAUs, ad-supported users, content hours, and content hours per MAU. More here

Spotify said it currently does not have the data to adjust previously provided key performance indicators, and as a result certain metrics may be ‘overstated’ in its prospectus.

The company had 157 million active users as of Dec. 31, of which about 71 million were paid subscribers who access ad-free versions of the service, according to its website.

Spotify had filed this week for a direct listing of its shares, instead of a traditional IPO.

The direct listing will let investors and employees sell shares without the company raising new capital or hiring a Wall Street bank or broker to underwrite the offering.

Reporting by Arjun Panchadar in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Spotify says about two million users blocked ads without paying

Accenture's revenue, profit top estimates on digital services growth

(Reuters) – Accenture Plc’s (ACN.N) quarterly profit and revenue topped Wall Street targets, as the consulting and outsourcing services provider benefited from investments in digital and cloud services.

FILE PHOTO – Visitors look at devices at Accenture stand at the Mobile World Congress in Barcelona, February 26, 2013. REUTERS/Albert Gea/File Photo

Accenture said on Thursday its digital, cloud and security-related services, which it calls “the New,” made up more than 55 percent of revenue, a record level.

Accenture has spent more than $3 billion over the last three years — nearly half of it in fiscal 2017 — on some 70 acquisitions, as it boosts its digital and cloud-related offerings to compete better with Cognizant (CTSH.O) and IBM (IBM.N).

Net income attributable to the company rose to $863.7 million in the second quarter ended Feb. 28 from $838.8 million a year earlier. It reported earnings of $1.37 per share in the latest quarter.

Results included a $137 million charge related to the new U.S. tax code.

Net revenue jumped 15.2 percent to $9.59 billion.

Excluding one-time items, the company earned $1.58 per share.

Analysts on average had expected revenue of $9.31 billion and earnings of $1.49 per share, according to Thomson Reuters I/B/E/S.

Accenture said it expects current-quarter revenue between $9.90 billion and $10.15 billion, easily topping analysts’ estimates of $9.68 billion.

The company’s shares were down 1.25 percent at $160 in premarket trading.

Reporting by Arjun Panchadar in Bengaluru; Editing by Sai Sachin Ravikumar

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Accenture's revenue, profit top estimates on digital services growth

Self-driving car industry confronts trust issues after Uber crash

DETROIT (Reuters) – The fatal accident involving an Uber self-driving car cranks up pressure on the self-driving vehicle industry to prove its software and sensors are safe in the absence of strong government standards, experts in the field said.

A still frame taken from video released March 21, 2018 shows the exterior view of the self-driving Uber vehicle leading up to the fatal collision in Tempe, Arizona, U.S. on March 18, 2018. Tempe Police Department/Handout via REUTERS

Automakers including General Motors Co (GM.N), technology companies such as Alphabet Inc (GOOGL.O) and ride services providers like Uber Technologies Inc [UBER.UL] have all urged policy makers at the federal and state level not to put a heavy regulatory hand on an industry still in development. They have said their extensive testing demonstrates commitment to safety.

But the Uber accident in Tempe, Arizona – the first death attributed to a self-driving car operating in autonomous mode – has given ammunition to critics of the industry concerned that the lack of clear standards allows manufacturers to test faulty, or partially developed technology on public streets.

Industry executives had begun well before Sunday’s accident to defuse concerns by opening up about their testing methods – without giving away the secrets of their system designs.

Public disclosure of self-driving car testing data is inconsistent and varies by state. California, for example, requires manufacturers to report instances when an autonomous vehicle system disengages. Arizona does not.

“There is no question whatsoever that regulations are coming,” said Doug Mehl, a partner at A.T. Kearney’s automotive practice, based in Detroit. “But right now (automakers), software developers and service providers have an opportunity to shape what those regulations are going to look like.”

Alphabet’s Waymo self-driving car unit, for example, has underscored in a report that its autonomous vehicles have now logged 5 million miles in real-world testing, and billions more in computer simulations. GM’s Cruise Automation unit has highlighted its decision to teach its driving system to navigate San Francisco’s congested streets.

Still, Amnon Shashua, head of Intel Corp’s (INTC.O) Mobileye vision systems unit, said the industry must do more. He has called for the self-driving vehicle industry to develop “provable safety assurances”.

“We need to prove that these vehicles are much, much safer than humans,” Shashua told Reuters. “How do you go and guarantee that you have a technology that the probability of a fatality per one hour of driving is 1,000 times better than a human? Nobody talks about that because nobody knows what to do.”

(Interactive Graphic: Autonomous vehicle performance in California – tmsnrt.rs/2DFUPgA)


Most self-driving vehicles are equipped with radar sensors and lidar sensors, which use lasers to detect obstacles around the vehicle. There are no federal standards yet specifying how such systems should work. Congress and federal regulators are still debating how tightly to regulate such systems.

“There should be vision tests for the sensors they are using, both static and dynamic to see how well they work,” said Missy Cummings, a Duke University mechanical engineering professor.

The short video recorded by cameras in the Uber vehicle that struck pedestrian Elaine Herzberg while crossing a street in Tempe, Arizona late Sunday raises questions about whether the Uber system responded better than a human driver, experts said on Wednesday.

Uber has hired human operators to sit in the driver’s seats of its autonomous vehicles to intervene if necessary. The video released by Tempe police shows a human operator behind the wheel of the Uber vehicle before the impact.

The operator is seen looking down, away from the street, in the seconds before the vehicle struck Herzberg. She was pushing a bicycle across the street from left lane into the right lane where the Uber vehicle was driving.

“It seems it should have detected her,” Daniel Sperling, director of the Institute for Transportation Studies at University of California Davis told Reuters in an email after viewing the video. “It seems unlikely that a human driver would have done better. We do want AVs to do better than us and the potential exists.”

Americans were wary of autonomous vehicle technology even before Sunday’s fatality.

According to a Reuters/Ipsos opinion poll released in late January, two-thirds of Americans are uncomfortable about the idea of riding in self-driving cars.

“The greater risk for the industry is that if people feel it is unsafe, or the testing is unsafe, you’ll see a real backlash against this technology,” Matthew Johnson-Roberson, co-director of the University of Michigan Ford Center for Autonomous Vehicles.

Reporting by Alexandria Sage, Nick Carey, Tina Bellon and Paul Lienert. Editing by Joseph White and Kenneth Maxwell

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Self-driving car industry confronts trust issues after Uber crash

First Microsoft, Now Alphabet. Amazon Passes Another Giant to Become The Second Most Valuable U.S. Company

Amazon continues to climb up the charts.

Rounding out a number of record breaking achievements this year, Amazon (amzn) passed Google parent company Alphabet (googl) for the first time ever, becoming the second most valuable publicly traded company on Tuesday.

Amazon closed up 2.7% with a market value of $768 billion. Meanwhile, Alphabet dropped 0.4%, decreasing its market value to $762.5 billion. This year Amazon has already risen 36% compared to Alphabet’s 4%. The company first passed Microsoft (msft) for the number three spot in mid-February.

Apple continued to hold the top spot, with a value of $889 billion. Microsoft and Berkshire Hathaway (brk-b) came in at fourth and fifth most valuable companies, with $717 billion and $505 billion respectively.

Following revelations that data of millions of Facebook users had been misused by Cambridge Analytica, the social media giant has lost billions in stock value. Facebook (fb) shares have dropped more than 9%, bringing the company down to a $488 billion valuation and dropping it to seventh place.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on First Microsoft, Now Alphabet. Amazon Passes Another Giant to Become The Second Most Valuable U.S. Company

Facebook’s Mark Zuckerberg Is Finally Going to Speak

Facebook Chief Executive Officer Mark Zuckerberg will address employees of the social network on Friday at a previously scheduled all-hands meeting, where he’s likely to face questions about the controversy over user data improperly obtained by political-advertising firm Cambridge Analytica.

He may speak before that, however, as sources have told Axios that Zuckerberg plans to address the controversy within the next 24 hours.

Zuckerberg and Chief Operating Officer Sheryl Sandberg haven’t yet spoken publicly about the data leak, which has set off a firestorm of criticism around the world. On Tuesday, Facebook vice president and deputy general counsel Paul Grewal fielded inquiries from employees on the situation, according to a person familiar with the matter. Workers had questions about what Facebook knew and when, said the person, who asked not to be identified because the meeting was internal.

Grewal’s comments were broadcast from the company’s headquarters in Menlo Park, Calif., to staff around the world via an “FYI Live” video — a common way for Facebook leaders and employees to communicate. Facebook (fb) confirmed that a meeting occurred, without giving details. Zuckerberg and Sandberg, the company’s top executives, didn’t take part on Tuesday.

Grewal authored a Friday evening blog post from Facebook explaining that the company was suspending Cambridge Analytica, the advertising data firm that helped Donald Trump win the U.S. presidential election in 2016. Grewal wrote that Facebook had reason to believe Cambridge Analytica didn’t delete data it obtained from users years ago without their explicit consent. His post was published ahead of reports about the data leak that were set to come out the next day from the New York Times and the Guardian’s Observer.

Facebook, frequently criticized for its public communication tactics, has historically worked to be transparent with its employees, encouraging them not to leak because they receive so much confidential internal information. Aside from the FYI Live videos, Facebook has also been answering questions via an internal group called “Wait What? Ask PR.” In the group, staff are encouraged to ask questions about news reports, and critique decisions about what to say publicly.

“Mark, Sheryl and their teams are working around the clock to get all the facts and take the appropriate action moving forward, because they understand the seriousness of this issue,” a Facebook representative said in a statement following the meeting. “The entire company is outraged we were deceived. We are committed to vigorously enforcing our policies to protect people’s information.”

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Facebook’s Mark Zuckerberg Is Finally Going to Speak

How China's ride-hailing giant Didi plans to challenge Uber in Mexico

MEXICO CITY/SAN FRANCISCO (Reuters) – Working quietly from a shared office space in one of Mexico City’s trendiest neighborhoods, China’s ride-hailing giant Didi Chuxing is planning to hit its archrival Uber where it hurts.

A man walks by under an Uber logo in Mexico City, Mexico February 6, 2018. Picture taken on February 6, 2018. REUTERS/Carlos Jasso

Mexico is one of Uber Technologies Inc’s [UBER.UL] most prized and profitable markets. The San Francisco firm boasts a near monopoly here, with seven million users in more than three dozen cities. Which is precisely why Didi wants to knock Uber from that comfortable perch.

To learn how to conquer Uber, the Chinese firm is going straight to the source. It is poaching Uber employees for its Mexico management team. Didi employees are riding incognito with Uber drivers and chatting up passengers to pinpoint weaknesses, according to people familiar with its strategy. And Didi is thinking bigger than Uber, with ambitions for bike-sharing, scooters and motorcycles in Mexico, the people say.

The Chinese firm has deep pockets, thanks to blue-chip global investors that include Apple Inc and Japan’s SoftBank Group Corp [9984.T]. In the past year alone, it has pulled in nearly $10 billion to help fund global expansion.

“I would not want to go to war with Didi,” said Beijing-based investor and adviser Jeffrey Towson. “They don’t lose.”

But whether Didi can beat its nemesis here is far from certain. Mexico is the Chinese firm’s first attempt at building an operation from scratch outside of Asia – a costly gambit.

What is clear is that Didi is under pressure to keep growing to justify its $56 billion valuation. Latin America is the newest battleground for the old rivals, and Didi will be in enemy territory.

“It’s fundamentally different when you’re jumping across an ocean,” said IHS Markit analyst Jeremy Carlson.


Didi Chuxing Technology Co is the world’s largest ride-hailing firm by number of rides, thanks to its commanding market share in China, where it has 450 million users. It completed more than 7.4 billion rides last year, not quite double Uber’s count.

Uber learned the hard way about Didi’s brawn. After waging an expensive campaign to crack the Chinese market, Uber in 2016 sold its operation to Didi in exchange for a 17.5 percent stake in the Chinese firm, which also made a $1 billion investment in Uber.

The titans continue to butt heads as they race to carve up the rest of the globe. Uber is the top dog in Latin America, where Brazil and Mexico rank among its largest markets outside the United States. In Mexico, Uber held an 87 percent market share as of August, according to Dalia Research, a Berlin-based consumer research firm.

(For a graphic on Uber’s market share in Latin America, see: tmsnrt.rs/2FhfZHo)

Didi wants to change that. Reuters was first to report that Didi had designs on Mexico, where it began recruiting employees last year.

The company declined to talk openly about its plans, but details of its strategy are emerging.

Nestled on the ninth floor of a WeWork shared office building in the capital’s Juarez neighborhood, Didi is building an operation from the ground up. In foreign markets such as India and the Middle East, it purchased stakes in existing companies. But Uber is so dominant in Mexico that there is no clear investment opportunity in a local competitor, according to people familiar with Didi’s thinking.

Hungry for experienced talent, Didi is aggressively recruiting current and former Uber employees, offering to nearly double their salaries in some cases, two people with knowledge of the matter said.

At the helm of Didi’s Mexico operation is Uber veteran Lin Ma, who helped launch Uber’s ill-fated venture in China. Now Didi’s director of international operations, Ma also worked on operations at 99, the Brazilian ride-hailing startup that Didi purchased at the end of last year, according to his LinkedIn profile.

Ma and others at Didi have so far poached at least five Uber managers and specialists in Mexico who have experience in operations, logistics, strategy, marketing and driver training, a review of LinkedIn profiles shows.

Ma declined to comment.

An Uber logo is seen outside an Uber car in Mexico City, Mexico February 6, 2018. Picture taken on February 6, 2018. REUTERS/Carlos Jasso

The company has yet to recruit drivers, and it is not clear which cities it will enter first, according to a person familiar with Didi’s strategy.

Rather than compete solely on price, the person said, Didi plans to promote safe drivers and fast response times; the company has built an algorithm to help it predict 15 minutes in advance where it should dispatch vehicles.

Didi is also considering offering bike-sharing, scooters and motorcycles in Mexico, while Uber so far has stuck to ride-hailing. A broad array of transport options helped Didi prevail in China.

But the biggest difference may come down to cash. To protect drivers, the person said, Didi will not handle cash fares in Mexico.

Uber, meanwhile, has pushed Mexican lawmakers hard for the right to accept cash in a region where tens of millions lack bank accounts. The move has generated business, along with controversy.

In Brazil, Uber saw a surge of robberies and murders of its drivers after the company began accepting cash there, according to a 2017 Reuters analysis. Uber says it has added tools to authenticate riders’ identities, better protecting drivers.

An Uber driver checks the route on a mobile phone inside his car in Mexico City, Mexico February 6, 2018. Picture taken on February 6, 2018. REUTERS/Carlos Jasso

Mexico has not seen a similar wave of attacks so far. Nevertheless, Uber’s position puts it at odds with regulators in some Mexican states.

While Didi appears to be sidestepping that obstacle, it faces cultural hurdles in Latin America, according to Daisy Wu, head of international business at Yeahmobi, which helps Chinese startups go global.

Latin American consumers generally prefer U.S. brands to Chinese brands, she said, and Chinese business culture can be off-putting to local employees.

“Most of the Chinese companies that have gone to Latin America are still trying to be successful,” Wu said.

Didi, for example, bewildered Mexico job candidates by trying to schedule interviews the week of Christmas.

“I was very surprised … I was thinking, should I cancel my vacation?” one applicant told Reuters.


Uber’s lead in Latin America, meanwhile, has taken on heightened importance as it prepares for a potential initial public offering next year.

The company, which lost $4.5 billion last year, is facing fierce competition at home and in Asia, and a regulatory crackdown in Europe. It is also recovering from a year of scandals that saw co-founder Travis Kalanick forced out as chief executive in June amid multiple federal criminal probes and a workplace marred by sexual harassment allegations.

Andrew Macdonald, Uber’s vice president of operations for Latin America and Asia Pacific, said Uber is prepared to do what it takes to remain dominant in Mexico, a profitable market amid a sea of losses.

“Whether that’s more spending on customer acquisition or more deeply engaging with our existing customers, that will continue to be our focus,” he said.

Uber is committed to maintaining cheap fares for its basic service to keep its Mexican customers loyal, Macdonald said. But he said the company is considering adding more ride options such as upscale cars that would boost revenue.

If Uber is nervous about Didi stealing its lead in Mexico, it is not showing it. Macdonald said the learning curve is steep, something its rival is about to find out.

“Didi has significant bankroll,” Macdonald said. “But there are significant local complexities.”

Reporting by Julia Love in Mexico City and Heather Somerville in San Francisco; additional reporting by Noe Torres in Mexico City.; Editing by Marla Dickerson

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on How China's ride-hailing giant Didi plans to challenge Uber in Mexico

Green Energy Stock Yields 10%, Opportunistic Buy With 50% Return Potential

This research report was jointly produced with Seeking Alpha Author Long Player.

Pattern Energy (PEGI) is a renewable energy company that generates a fair amount of cash and is growing. The stock recently traded at $17.2/share and its most recent dividend was $0.422 which provides an annualized yield of 9.8%.

Understanding the Business

PEGI is in the business of owning and operating renewable energy projects. So far, these projects are dominantly wind farms. This involves a number of advanced wind turbines located in a desirable area to harvest wind energy. The projects all have long-term Power Supply Agreements (PSAs) – typically with local utilities. The counterparties to such agreements have, in almost every case, very solid credit ratings. There is, thus, very little market risk or price risk associated with the projects. The main variables are the wind itself and downtime due to malfunction or other factors. The relatively low level of risk provides a strong basis for a yield-oriented investment.

PEGI operates its projects (some of which are partially owned by other companies) as somewhat independent entities. Each project is a separate limited liability corporation (‘LLC’), and has substantial debt financing but almost all of the debt is non-recourse (some of it is partial recourse). Thus, the impact of a failure at any one project is limited. PEGI’s 25 existing consolidated projects are in the United States, Canada, Chile, and Japan. PEGI’s PSA contracts average a term of 14+ years with 90% using Siemens and GE equipment. Its fleet of wind turbines is relatively young and has an average age of less than four years. Counterparties to PSA agreements include utilities like PG&E (NYSE:PCG), SDG&E, and Westar (NYSE:WR) and non-utility entities like Morgan Stanley (NYSE:MS), Citigroup Energy, and Amazon (NASDAQ:AMZN).

A Defensive Stock

PEGI provides electricity, which is a basic necessity. Therefore, the company is unlikely to be affected by economic cycles. As an alternative or “green” electric producer, that company stands out for its profitability as well as the growth of that profitability. PEGI is also part of a group of companies that is trying to bring more “green” electricity to the world. As costs for this technology continue to drop, they may succeed with this wind technology far more than many would have foreseen.

Source: PEGI December 2017 Presentation

The company has invested in countries that are relatively stable and value renewable energy sources. As such, political upheaval is generally not a concern. Successful ventures in Japan could yield some long-term competitive advantages. Japan tends to be a notoriously hard market to penetrate. Therefore, the information shown above is a big deal. Japan would like to avoid importing oil and gas to some extent. Wind technology promises the hope of reducing the energy import bills.

Above all, this technology is not dangerous should a volcano erupt or a major earthquake hit the area. A few years back a major earthquake caused all kinds of problems with a nuclear reactor. The cleanup from that earthquake continues. The nuclear reactor may never go back into service. Wind technology has no such issues. In some ways, wind technology to generate electricity is a blessing in a land where mother nature is very active.

A Beaten Down Stock

The stock has tanked recently for two main reasons:

  1. Investors’ fears that U.S. Tax Credits for renewable energy will expire in a few years.
  2. The stock got beaten down some more (down by another 10%) after the company declared that its quarterly dividend will not increase. As a reminder, PEGI had hiked its distribution every quarter for the past 16 quarters prior to this announcement.

Based on 2018 “Cash Available for Distribution” (or CAFD) guidance, PEGI’s is currently trading at just 10 times CAFD (using midpoint CAFD guidance of $166 million and 95.1 million shares outstanding). The yield is now close to 10%. These valuations are bargains for a growing cash flow and distribution. Mr. Market appears to have tossed away everything but a select group of companies. Companies not in that select group keep getting cheaper.

Interestingly, the company is far larger now and has a better yield than at the time of its initial public offering in September 2013 when the stock was trading at $22/share.

Today, the stock is trading at $17.2/share and the distributions have grown by 35% since the IPO, making it a very attractive investment.

Yet, Mr. Market couldn’t care less. Mr. Market is busy sending the stock to new lows. Sooner or later the growth should outweigh the market disdain. The investor is being paid nearly a 10% distribution to wait for that attitude change.

Source: PEGI December, 2017 Presentation

As long as management continues to make only accretive acquisitions, this company should continue to be an attractive investment.

Risks of ‘tax credit’ expiration are overblown

The finalization of the tax bill last December brought greater clarity to Pattern Energy’s future as it has preserved the critical credits for wind and solar for the time being. Still, this did not calm investors’ fear that tax incentives remain at risk in the longer term. Here is our take on this:

  1. A great deal of PEGI’s planned expansion is outside the US and will be completely unaffected by any potential future change in tax benefits.
  2. Within the United States, should tax credits expire, the effects would be primarily on the development side of the business rather than on existing facilities on the operational side. PEGI is primarily an operating company although it has now some participation on the development side. The point to note here is that the profitability of the existing facilities of PEGI in the United States should not be impacted.
  3. In the U.S.A., most states now have renewable portfolio requirements (and in some cases targets) for their utilities which require that certain percentages of power be generated by renewable sources by certain deadlines. So with or without subsidies, wind farms have to be built. They will just cost more to the end user, but they will still have to be built and to operate to meet the minimum required targets.
  4. Renewable energy is growing rapidly, and the cost of producing wind and solar technology is dropping every year. So in a few years, renewable energy operators will be able to compete with other forms of energy without the need of any subsidies.

2018 Guidance

While PEGI did not raise its distribution in the last quarter, a very important aspect is the analysis of next year’s guidance that management has provided:

  • PEGI is expecting a very strong year in 2018 with “Cash Available for Distribution” (or CAFD) to be in the range of $151 million to $181 million, or 14% higher than the 2017 CAFD using the midpoint of the range.
  • During the year 2017, PEGI agreed to acquire 206 MW of owned capacity in 5 Japanese projects which represent the company’s entry into one of the most robust renewable markets in the world. PEGI is now expanding internationally and the income from these projects will kick in during the year 2018.
  • The 2018 guidance includes 24 projects expected to be operating and contributing during 2018, including 4 new projects in Japan and Canada which were not operational during the year 2017. This is encouraging, as we have been saying all along that the growth in PEGI’s earnings will come from outside of the United States.

Price Target

As of March 11, 2018, there are 15 banks and analysts who cover the stock with a consensus rating of “Overweight” on the stock, and an average consensus price target of $24.67, suggesting a ~43% potential upside from the current price (source: wsj.com).

At $24.67/share, this would put the valuation of PEGI at 14 times cash flow, which is very reasonable. We should note that PEGI traded well above $24.67/share in September 2017, just a few months ago.


The shares of this company are in the bargain bin. With a solid outlook and cash flow growth for 2018, combined with a very low valuation, PEGI is set to greatly outperform within the next 12 months. With a 9.8% yield and +40% upside potential, PEGI could very well generate returns of over 50% in the next 12 months. The pullback provides a unique buying opportunity.

If you enjoyed this article and wish to receive updates on our latest research, click “Follow” next to my name at the top of this article.

Disclosure: I am/we are long PEGI.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Green Energy Stock Yields 10%, Opportunistic Buy With 50% Return Potential

Facebook critics want regulation, investigation after data misuse

SAN FRANCISCO (Reuters) – Facebook Inc faced new calls for regulation from within U.S. Congress and was hit with questions about personal data safeguards on Saturday after reports a political consultant gained inappropriate access to 50 million users’ data starting in 2014.

FILE PHOTO: Facebook logo is seen at a start-up companies gathering at Paris’ Station F in Paris, France on January 17, 2017. REUTERS/Philippe Wojazer/File Photo

Facebook disclosed the issue in a blog post on Friday, hours before media reports that conservative-leaning Cambridge Analytica, a data company known for its work on Donald Trump’s 2016 presidential campaign, was given access to the data and may not have deleted it.

The scrutiny presented a new threat to Facebook’s reputation, which was already under attack over Russians’ alleged use of Facebook tools to sway American voters before and after the 2016 U.S. elections.

“It’s clear these platforms can’t police themselves,” Democratic U.S. Senator Amy Klobuchar tweeted.

“They say ‘trust us.’ Mark Zuckerberg needs to testify before Senate Judiciary,” she added, referring to Facebook’s CEO and a committee she sits on.

Facebook said the root of the problem was that researchers and Cambridge Analytica lied to it and abused its policies, but critics on Saturday threw blame at Facebook as well, demanding answers on behalf of users and calling for new regulation.

Facebook insisted the data was misused but not stolen, because users gave permission, sparking a debate about what constitutes a hack that must be disclosed to customers.

“The lid is being opened on the black box of Facebook’s data practices, and the picture is not pretty,” said Frank Pasquale, a University of Maryland law professor who has written about Silicon Valley’s use of data.

Pasquale said Facebook’s response that data had not technically been stolen seemed to obfuscate the central issue that data was apparently used in a way contrary to the expectations of users.

“It amazes me that they are trying to make this about nomenclature. I guess that’s all they have left,” he said.

Democratic U.S. Senator Mark Warner said the episode bolstered the need for new regulations about internet advertising, describing the industry as the “Wild West.”

“Whether it’s allowing Russians to purchase political ads, or extensive micro-targeting based on ill-gotten user data, it’s clear that, left unregulated, this market will continue to be prone to deception and lacking in transparency,” he said.

With Republicans controlling the Senate’s majority, though, it was not clear if Klobuchar and Warner would prevail.

The New York Times and London’s Observer reported on Saturday that private information from more than 50 million Facebook users improperly ended up in the hands of Cambridge Analytica, and the information has not been deleted despite Facebook’s demands beginning in 2015.

Some 270,000 people allowed use of their data by a researcher, who scraped the data of all their friends as well, a move allowed by Facebook until 2015. The researcher sold the data to Cambridge, which was against Facebook rules, the newspapers said.

Cambridge Analytica worked on Trump’s 2016 campaign. A Trump campaign official said, though, that it used Republican data sources, not Cambridge Analytica, for its voter information.

Facebook, in a series of written statements beginning late on Friday, said its policies had been broken by Cambridge Analytica and researchers and that it was exploring legal action.

Cambridge Analytica in turn said it had deleted all the data and that the company supplying it had been responsible for obtaining it.

Andrew Bosworth, a Facebook vice president, hinted the company could make more changes to demonstrate it values privacy. “We must do better and will,” he wrote on Twitter, adding that “our business depends on it at every level.”

Facebook said it asked for the data to be deleted in 2015 and then relied on written certifications by those involved that they had complied.

Nuala O’Connor, president of the Center for Democracy & Technology, an advocacy group in Washington, D.C., said Facebook was relying on the good will of decent people rather than preparing for intentional misuse.

Moreover, she found it puzzling that Facebook knew about the abuse in 2015 but did not disclose it until Friday. “That’s a long time,” she said.

Britain’s data protection authority and the Massachusetts attorney general on Saturday said they were launching investigations into the use of Facebook data.

“It is important that the public are fully aware of how information is used and shared in modern political campaigns and the potential impact on their privacy,” UK Information Commissioner Elizabeth Denham said in a statement.

Massachusetts Attorney General Maura Healey’s office said she wants to understand how the data was used, what policies if any were violated and what the legal implications are.

Reporting by David Ingram; Editing by Peter Henderson and Chris Reese

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Facebook critics want regulation, investigation after data misuse

Hacker Adrian Lamo Has Died at 37

Hacker Adrian Lamo died at the age of 37, according a Facebook post from his father. “With great sadness and a broken heart I have to let know all of Adrian’s friends and acquaintances that he is dead. A bright mind and compassionate soul is gone, he was my beloved son,” Mario Lamo wrote in a post to the 2600: The Hacker Quarterly Facebook Group. The cause of death is not yet known, but a coroner in Sedgwick County, Kansas confirmed the news to ZDNet.

Lamo was born in Boston, Massachusetts in 1981. In the mid 1990s, he volunteered for PlanetOut, a public media company that catered to the LGBTQ community. In 1998, he was appointed to the Lesbian, Gay, Bisexual, Transgender, Queer and Questioning Youth Task Force by the San Francisco Board of Supervisors.

Lamo first gained notoriety online in the early 2000s for hacking companies like Yahoo! and AOL, as well as The New York Times. In 2004, after accepting a plea bargain, Lamo was sentenced for hacking the newspaper, where he had added his name to an internal list of op-ed writers and racked up $300,000 in charges using the organization’s subscription to Lexis-Nexis, a pay-per-use search tool.

He was also known for tipping US government authorities about the actions of whistleblower Chelsea Manning, who was later sentenced to 35 years in prison for providing Wikileaks with 750,000 classified military cables. (President Barack Obama commuted Manning’s sentence in 2017.) In a 2013 interview with the Guardian, Lamo explained his decision to report Manning.

“There was no option to interdict just the documents and put him merely in touch with counseling. There was no way to be both kind to [Chelsea] and mindful of the potential for harm to people I had never known and would never know which the situation posed. The reader might think there was some more moderate choice that I overlooked but I looked closely, and no such choice existed,” Lamo said in the interview.

In a 2002 profile of Lamo, former WIRED editor Noah Shachtman detailed how the hacker lived out of a backpack, and accessed the internet using university libraries and Kinko’s laptop stations. The Colombian-American moved around frequently as a child. The extensive travel provided him a love of adventure. “If I didn’t have computers, I’d be exploring storm drains or mountain caves. Hell, I do, when I don’t have a line to the Net,” Lamo wrote in a Usenet group around 2002. “There have been times my laptop has been the only dry thing I owned.”

Shachtman’s 2002 profile closes with an apt moment:

“I’ve had a long day, a long month, and a long year,” he said at the end of a pre-dawn chat.

He follows that with an instant message: “Dream of a warm and safe place.”

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Hacker Adrian Lamo Has Died at 37

The VR Metaverse of 'Ready Player One' Is Just Beyond Our Grasp

Virtual reality, as it’s been promised to us by science fiction, is a singular realm of infinite possibility. Star Trek’s Holodeck, Yu-Gi-Oh!’s Virtual World, Snow Crash’s Metaverse: Each is the all-powerful experience generator of its world, able to accommodate a character’s any desire. Novelist Ernest Cline sharpened this vision in his 2011 debut, Ready Player One, which hits theaters in March courtesy of Steven Spielberg. While the story is set in the strife-torn meatspace of 2045, most of its action unfolds in a vast network of artificial worlds called the OASIS. And in the tradition of reality playing catch-up to sci-fi, the OASIS has become the endgame for real-world VR developers, many of whom are actively trying to replicate its promise. Are they making progress? Absolutely. Are they doing it right? Absolutely not.

The OASIS is saddled with a terrible acronym—hopefully Spielberg never lets one of his characters say “Ontologically Anthropocentric Sensory Immersive Simulation”—but it offers something attractive: breadth. Some of the environments contained in the OASIS are created by users, others by government agencies; they range from educational to recreational (reconstructions of ’80s fantasy novels are popular), nonprofit to commercial.

Today’s real-life multiuser VR experiences, by contrast, are less OASIS and more ­PUDDLE (Provisionally Usable Demonstration of Dazz­ling Lucid Environments). Some of the constraints are aesthetic: In AltspaceVR, users are limited to a narrow range of expressionless human and robot avatars, while the goofy up-with-people charm of Against Gravity’s Rec Room hinges on you not caring that avatars lack noses. Other constraints are experiential: Facebook’s Spaces lets you hang out only with people you’re already Friends with. Startups with OASIS-size ambitions are hampered by still other issues, whether that’s a noob-unfriendly world-building system (Sansar) or a dark-side-of-Reddit vibe that invites trollery (VRchat).

The problem, though, isn’t such metaphorical boundaries—it’s literal ones. None of these PUDDLEs touch. You can’t hop from Rec Room to VRchat; you’re stuck where you started. That’s why it’s hard to feel truly immersed. To reach Cline’s 2045, developers need to start laying the foundation now for an infrastructure that links each of these worlds. If that sounds idealistic, or even dangerous, it’s not. Think of the days before the internet, when various institutions ran their own walled-off networks. Only when computer scientists came together to standardize protocols did the idea of a single network become possible. Now imagine applying that notion to VR—a metaverse in which users can flit between domains without losing their identity or their bearings as they travel.

The OASIS works because it feels like it has no owners, no urgent needs. It’s a utility, a toolkit available for artisans and corporations alike. If we want to realize this potential ourselves—universal freedom and possibility—let’s start thinking about VR the way Cline does: not as a first-to-market commodity, but as an internet all its own.

Peter Rubin (@provenself) is the author of the upcoming book Future Presence.

This article appears in the March issue. Subscribe now.

All photo references by Getty Images
Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on The VR Metaverse of 'Ready Player One' Is Just Beyond Our Grasp

All-flash rules while Brexit slows UK storage spend, says IDC

All-flash storage arrays continue to chart staggering growth and total shipments, with sales accounting for 31% of all external disk systems in Europe, the Middle East and Africa (Emea) and a growth rate in shipments of 35.8%.

These figures – released in IDC’s Quarterly disk storage systems tracker for the last three months of 2017 – form part of a second quarter in succession that has seen storage spend increase. The UK lags behind other areas of Europe, however, which IDC attributes to Brexit worries putting a freeze on budgets.

Another interesting development is that Chinese hardware maker Huawei has supplanted Hitachi Data Systems in IDC’s top five suppliers by market share.

While all-flash storage is the star of the show, hybrid flash storage system shipments also grew by 19.5%, although their share of total shipments remained static.

Spinning disk-based HDD-equipped storage systems continued to decline in market share, with a shrinkage of 18.9%.

In total, the Western European external storage market recorded growth of 9.8% in monetary terms, while capacity grew by 8.7% to 3,043PB (petabytes).

“IT departments in key Emea countries have resumed investments while progressing into their digital transformation plans, or modernising or refreshing their datacentre in an effort to get ready for key workloads, such as big data,” said Silvia Cosso, research manager in European storage and datacentre for IDC.

IDC attributes weaker IT spending in the UK to uncertainty surrounding Brexit. Recent spending forecasts show IT spend to 2020 being driven by the Nordic countries, France and Germany, with the UK expected to be the fourth weakest in terms of growth for 2017-2018.

According to IDC, the hardware market in the UK shows weak positive expected growth for the forecast period, with strong currency fluctuations cited as a factor and “British demand … underperforming other countries”.

Top disk storage system suppliers in Emea by market share in the IDC fourth quarter 2017 report were Dell EMC with 25% (down 8.5% year-on-year), HPE with 16.67% (up 7.5% year-on-year), IBM on 14.88% (up 41.5% year-on-year), NetApp on 13.86% (up 14.56% year-on-year) and Huawei, which recorded market share of 7.65% (up 137.94% year-on-year) and drove HDS out of the Emea top five.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on All-flash rules while Brexit slows UK storage spend, says IDC

Bitcoin exchange reaches deal with Barclays for UK transactions

LONDON (Reuters) – One of the biggest bitcoin exchanges has struck a rare deal which will allow it to open a bank account with Britain’s Barclays, making it easier for UK customers of the exchange to buy and sell cryptocurrencies, the UK boss of the exchange said on Wednesday.

Workers are seen in at Barclays bank offices in the Canary Wharf financial district in London, Britain, November 17, 2017. Picture taken November 17, 2017. REUTERS/Toby Melville

Large global banks have been reluctant to do business with companies that handle bitcoin and other digital coins because of concerns they are used by criminals to launder money and that regulators will soon crack down on them.

San Francisco-based exchange, Coinbase, said its UK subsidiary was the first to be granted an e-money license by the UK’s financial watchdog, a precursor to getting the banking relationship with Barclays.

The Barclays account will make it easier for British customers. Previously, they had to transfer pounds into euros and go through an Estonian bank.

“Having domestic GBP payments with Barclays reduces the cost, improves the customer experience…and makes the transaction faster,” said Zeeshan Feroz, Coinbase’s UK CEO.

The UK is the largest market for Coinbase in Europe, and the exchange said its customer base in the region was growing at twice the rate of elsewhere.

A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration taken December 8, 2017. REUTERS/Benoit Tessier/Illustration

Feroz said that it took considerable time to get a UK bank on board, partly because Barclays needed to be sure that Coinbase had the right systems in place to prevent money laundering.

Regulators across the globe have warned that cryptocurrencies are used by criminals to launder money, and some exchanges have been shut down.

“It’s a completely brand new industry. There’s a lot of understanding and risk management that’s needed,” Feroz said.

Despite growing interest in both digital currencies and the technology behind them, some big lenders have limited their customers ability to buy cryptocurrencies, fearing a plunge in their value will leave customers unable to repay debts.

In February, British banks Lloyds and Virgin Money said they would ban credit card customers from buying cryptocurrencies, following the lead of JP Morgan and Citigroup. [nL8N1PU10Y]

Coinbase said it had also become the first crypto exchange to use Britain’s Faster Payments Scheme, a network used by the traditional financial industry.

Reporting by Tommy Wilkes and Emma Rumney; Editing by Elaine Hardcastle

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Bitcoin exchange reaches deal with Barclays for UK transactions

Hybrid cloud file and object pushes the frontiers of storage

Use of public cloud services have been widely adopted by IT departments around the world. But it has become clear hybrid solutions that span on- and off-premises deployment are often superior, and seem to be on the rise.

However, to get data in and out of the public cloud can be tricky from a performance and consistency point of view. So, could a new wave of distributed file systems and object stores hold the answer?

Hybrid cloud operations require the ability to move data between private and public datacentres. Without data mobility, public and private cloud are nothing more than two separate environments that can’t exploit the benefits of data and application portability.

Looking at the storage that underpins public and private cloud, there are potentially three options available.

Block storage, traditionally used for high-performance input/output (I/O), doesn’t offer practical mobility features. The technology is great on-premise, or across locations operated by the same organisation.

That’s because block access storage depends on the use of a file system above the block level to organise data and provide functionality. For example, snapshots and replication depend on the maintenance of strict consistency between data instances.

Meanwhile, object storage provides high scalability and ubiquitous access, but can lag in terms of data integrity and performance capabilities required by modern applications.

Last writer wins

There’s also no concept of object locking – it’s simply a case of last writer wins. This is great for relatively static content, but not practical for database applications or analytics that need to do partial content reads and updates.

But, object storage is a method of choice for some hybrid cloud storage distributed environments. It can work to provide a single object/file environment across locations with S3 almost a de facto standard for access between sites.

File storage sits between the two extremes. It offers high scalability, data integrity and security and file systems have locking that protect against concurrent updates either locally or globally, depending on how lock management is implemented. Often, file system data security permissions integrate with existing credentials management systems like Active Directory.

File systems, like object storage, implement a single global name space that abstracts from the underlying hardware and provide consistency in accessing content, wherever it is located. Some object storage-based systems also provide file access via network file system (NFS) and server message block protocol (SMB).

In some ways what we’re looking at here are a development of the parallel file system, or its key functionality, for hybrid cloud operations.

Distributed and parallel file systems have been on the market for years. Dell EMC is a market leader with its Isilon hardware platform. Also, DDN offers a hardware solution called Gridscaler and there are also a range of other software solutions like Lustre, Ceph and IBM’s Spectrum Scale (GPFS).

But these are not built for hybrid cloud operations. So, what do new solutions offer over the traditional suppliers?

Distributed file systems 2.0

The new wave of distributed file systems and object stores are built to operate in hybrid cloud environments. In other words, they are designed to work across private and public environments.

Key to this is support for public cloud and the capability to deploy a scale-out file/object cluster in the public cloud and span on/off-premise operations with a hybrid solution.

Native support for public cloud means much more than simply running a software instance in a cloud VM. Solutions need to be deployable with automation, understand the performance characteristics of storage in cloud instances and be lightweight and efficient to reduce costs as much as possible.

New distributed file systems in particular are designed to cover applications that require very low latency to operate efficiently. These include traditional databases, high-performance analytics, financial trading and general high-performance computing applications, such as life sciences and media/entertainment.

By providing data mobility, these new distributed file systems allow end users and IT organisations to take advantage of cheap compute in public cloud, while maintaining data consistency across geographic boundaries.

Supplier roundup

WekaIO was founded in 2013 and has spent almost five years developing a scale-out parallel file system solution called Matrix. Matrix is a POSIX-compliant file system that was specifically designed for NVMe storage.

As a scale-out storage offering, Matrix runs across a cluster of commodity storage servers or can be deployed in the public cloud and run on standard compute instances using local SSD block storage. It also claims hybrid operations are possible, with the ability to tier to public cloud services. WekaIO publishes latency figures as low as 200µs and I/O throughput of 20,000 to 50,000 IOPS per CPU core.

Elastifile was founded in 2014 and has a team with a range of successful storage product developments behind it, including XtremIO and XIV. The Elastifile Cloud File System (ECFS) is a software solution built to scale across thousands of compute nodes, offering file, block and object storage.

ECFS is designed to support heterogeneous environments, including public and private cloud environments under a single global name space. Today, this is achieved using a feature called CloudConnect, which bridges the gap between on-premise and cloud deployments.

Qumulo was founded in 2012 by a team that previously worked on developing the Isilon scale-out NAS platform. The Qumulo File Fabric (QF2) is a scale-out software solution that can be deployed on commodity hardware or in the public cloud.

Cross-platform capabilities are provided through the ability to replicate file shares between physical locations using a feature called Continuous Replication. Although primarily a software solution, QF2 is available as an appliance with a throughput of 4GBps per node (minimum four nodes), although no latency figures are quoted.

Object storage maker Cloudian announced an upgrade in January 2018 to its Hyperstore product which brings true hybrid cloud operations across Microsoft, Amazon and Google cloud environments with data portability between them. Cloudian is based on the Apache Cassandra open source distributed database.

It can come as storage software that customers deploy on commodity hardware, in cloud software format or in hardware appliance form. Hyperfile file access – which is Posix/Windows compliant – can also be deployed on-premise and in the cloud to provide file access.

Multi-cloud data controller

Another object storage specialist, Scality, will release a commercially supported version of its “multi-cloud data controller” Zenko at the end of March. The product promises to allow customers hybrid cloud functionality; to move, replicate, tier, migrate and search data across on-premise, private cloud locations and public cloud, although it’s not that clear how seamless those operations will be.

Zenko is based on Scality’s 2016 launch of its S3 server, which provided S3 access to Scality Ring object storage. The key concept behind Zenko is to allow customers to mix and match Scality on-site storage with storage from different cloud providers, initially Amazon Web Services, Google Cloud Platform and Microsoft Azure.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Hybrid cloud file and object pushes the frontiers of storage

Microsoft women filed 238 discrimination and harassment complaints

SAN FRANCISCO (Reuters) – Women at Microsoft Corp working in U.S.-based technical jobs filed 238 internal complaints about gender discrimination or sexual harassment between 2010 and 2016, according to court filings made public on Monday.

FILE PHOTO: The Microsoft logo is shown on the Microsoft Theatre in Los Angeles, California, U.S., June 13, 2017. REUTERS/Mike Blake/File Photo – RC177D20CF10

The figure was cited by plaintiffs suing Microsoft for systematically denying pay raises or promotions to women at the world’s largest software company. Microsoft denies it had any such policy.

The lawsuit, filed in Seattle federal court in 2015, is attracting wider attention after a series of powerful men have left or been fired from their jobs in entertainment, the media and politics for sexual misconduct.

Plaintiffs’ attorneys are pushing to proceed as a class action lawsuit, which could cover more than 8,000 women.

More details about Microsoft’s human resources practices were made public on Monday in legal filings submitted as part of that process.

The two sides are exchanging documents ahead of trial, which has not been scheduled.

Out of 118 gender discrimination complaints filed by women at Microsoft, only one was deemed“founded” by the company, according to the unsealed court filings.

Attorneys for the women described the number of complaints as“shocking” in the court filings, and said the response by Microsoft’s investigations team was“lackluster.”

Companies generally keep information about internal discrimination complaints private, making it unclear how the number of complaints at Microsoft compares to those at its competitors.

In a statement on Tuesday, Microsoft said it had a robust system to investigate concerns raised by its employees, and that it wanted them to speak up.

Microsoft budgets more than $55 million a year to promote diversity and inclusion, it said in court filings. The company had about 74,000 U.S. employees at the end of 2017.

Microsoft said the plaintiffs cannot cite one example of a pay or promotion problem in which Microsoft’s investigations team should have found a violation of company policy but did not.

U.S. District Judge James Robart has not yet ruled on the plaintiffs’ request for class action status.

A Reuters review of federal lawsuits filed between 2006 and 2016 revealed hundreds containing sexual harassment allegations where companies used common civil litigation tactics to keep potentially damning information under wraps.

Microsoft had argued that the number of womens’ human resources complaints should be secret because publicizing the outcomes could deter employees from reporting future abuses.

A court-appointed official found that scenario“far too remote a competitive or business harm” to justify keeping the information sealed.

Reporting by Dan Levine; Additional reporting by Salvador Rodriguez; Editing by Bill Rigby, Edwina Gibbs and Bernadette Baum

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Microsoft women filed 238 discrimination and harassment complaints

AT&T & Time Warner: Prepare For The Worst

When news broke that AT&T (T) was purchasing Time Warner (TWX) in a cash and stock deal valued at $107.50 for Time Warner holders I felt very confident that the move would improve AT&T’s profitability and widen its moat. AT&T was (and remains) one of my largest positions, so the news was welcome as I previewed the prospective ecosystem where premium original content and provider flowed seamlessly together permitting AT&T to leverage both as a compelling consumer package.

AT&T has a lucrative history marketing ‘bundle deals’ via DirecTV/U-verse, phone and internet. Adding Time Warner’s content to the mix was like adding another weapon to their arsenal. The move would fortify their position in an era where content is king and the average American residence has nearly 3 TVs per household.

With more and more customers embracing OTT services like Netflix (NFLX) and ditching cable, AT&T recognized the writing on the wall and (potentially) acquired Time Warner to help mitigate the impact and diversify them away from their reliance on legacy telecom services.

Perhaps it was not only adding a weapon to their arsenal but adding a shield to insulate them from the evolving landscape. I credit the management team led by CEO Randall Stephenson for their proactive approach getting ahead of the curve.

Obviously Time Warner’s stock popped immediately on the news while AT&T’s gyrated as investors digested the antitrust risks and whether or not AT&T overpaid.

Let’s take a look at those risks now.

Did AT&T Overpay?

The buyout offer did not come cheap ($85B) and some analysts groaned that while Time Warner was a nice asset, it came at too high a cost. But obtaining regulatory approval would be no walk in the park and AT&T knew they were in for protracted litigation. Let’s look at the EPS and Revenue numbers for the last two FYs for Time Warner:


You will note that on an EPS basis, Time Warner jumped about 9% year over year from $5.86 to $6.41. Time Warner grew EPS over 20% the year before that. When the $107.5 price tag was initially applied to the prior 4 quarters of earnings in October 2016, the P/E ratio stood at approximately 21.

That did look a bit steep.

However, the deal has not closed and when applying today’s earnings to the buyout price, the P/E ratio dips to 16.7. That looks much healthier. You have to tip your hat to AT&T’s management here since they had the prescience to realize that while the initial premium to Warner shareholders seemed lofty, it allowed them to garner unanimous approval from both boards by offering a rich enough premium to Warner holders while not seeming reckless to AT&T holders.

Stephenson and company knew earnings would continue to rise for the content king and before (IF) the deal closes, they will look like geniuses as earning would have grown into the multiple applied at the time of the offer.

Regulatory Risk

And that brings us to the elephant in the room: whether AT&T can out-litigate the DOJ in their pending antitrust case. President Trump has been vocal in his opposition to the buyout and may see it as fulfilling a campaign promise to defeat the deal. But Trump will not have the final word, it will be adjudicated in the courtroom not the political arena, however you would be naïve to believe that those worlds don’t intersect despite our system of checks and balances.

In the interim, AT&T has tried to curry favor with the Trump Administration by announcing bonuses to its employees and lauding the President for the tax bill. Nevertheless, the antitrust team is pushing ahead with bluster and bravado to paint the government as underdogs thwarting corporate strong-arming.

In November of last year I penned a post in the immediate aftermath of DOJ filing suit recommending purchasing shares of Time Warner during the turmoil called, “Time Warner: Heads I Win, Tails You Lose”. In just two days TWX share price plummeted from $95 to below $87. I quickly logged into my brokerage account to pick up shares of Time Warner in the $80’s.

In the post I explained why the volatility generated a perfect arbitrage opportunity, in summary:

This remains mostly true today, however Time Warner’s share price has since rebounded near $95 thereby shrinking some of the potential returns if the buyout is approved. While I have contacts within the antitrust division of the DOJ from my Washington days, they are not at liberty to speak about the case and therefore I know only as much as the public announcements trickling out on a daily basis.

And it is my opinion that the deal looks less likely to succeed now than it did 4 months ago when I wrote that post. But that reminds me of a saying by Clive Davis:


Prepare To Take Action:

During the previous dip, I was on vacation with my wife refilling the gas tank when I checked the market news to find out that Time Warner was selling off. We waited at that pit stop probably longer than she preferred so I could buy shares since I knew that the dip was an overreaction and would not last.

This time, I am planning ahead by placing limit buy orders at $85 and below that are good-til-cancelled in the scenario where the DOJ wins and/or impactful news hits the stock causing a knee-jerk reaction. In essence the hypothetical case looks like this:


In the portion of the chart above circled, you will see a red candlestick where news adversely impacted a stock sending it cascading into free-fall. But you will also notice the rapid rebound where the stock recovered quickly above that price.

The window to pounce and take advantage of the dip was small. That is why I am preparing to maximize the opportunity if it presents itself again. I believe that owning Time Warner shares at $85 and below provides a margin of safety if the two parties are forced to go their separate ways.

Time Warner Flying Solo?

Will I be saddled with overvalued shares of Time Warner purchased at $85? I doubt it. Here’s why:

Growth for Time Warner shows no signs of abatement as each operating division increased revenue and profits in the latest quarter (yet again). HBO’s subscription revenues increased 11% and its unparalleled show Game of Thrones is not due back until 2019. I expect an even larger increase in the months building up to the premiere.

Additionally, on the heels (pun intended) of Wonder Woman’s success, and in the backdrop of the #metoo movement, I believe Warner Bros. has incentive to continue to produce content with powerful heroines. HBO produced an amazing women focused hit with Big Little Lies and it’s due back for a second season featuring Meryl Streep. HBO made a savvy move by riding the coattails of Reese Witherspoon’s success.

On the cable news front, CNN was rated the #1 network in primetime and total day viewership among young adults and tops in digital news as well (from their 4Q earnings release). Whether you believe the treatment of the Trump Administration is favorable or not, it has been favorable to the bottom line of CNN.

And those are just a few samples of the many reasons why I remain bullish on Time Warner.

No one knows for certain how the trial will shake out, but I am positioning myself for success no matter the outcome.

Disclosure: I am/we are long T, TWX.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on AT&T & Time Warner: Prepare For The Worst

How WhatsApp Could Worsen Brazil’s Yellow Fever Outbreak

In remote areas of Brazil’s Amazon basin, yellow fever used to be a rare, if regular visitor. Every six to ten years, during the hot season, mosquitoes would pick it up from infected monkeys and spread it to a few loggers, hunters, and farmers at the forests’ edges in the northwestern part of the country. But in 2016, perhaps driven by climate change or deforestation or both, the deadly virus broke its pattern.

Yellow fever began expanding south, even through the winter months, infecting more than 1,500 people and killing nearly 500. The mosquito-borne virus attacks the liver, causing its signature jaundice and internal hemorrhaging (the Mayans called it xekik, or “blood vomit”). Today, that pestilence is racing toward Rio de Janeiro and Sao Paolo at the rate of more than a mile a day, turning Brazil’s coastal megacities into mega-ticking-timebombs. The only thing spreading faster is misinformation about the dangers of a yellow fever vaccine—the very thing that could halt the virus’s advance. And nowhere is it happening faster than on WhatsApp.

In recent weeks, rumors of fatal vaccine reactions, mercury preservatives, and government conspiracies have surfaced with alarming speed on the Facebook-owned encrypted messaging service, which is used by 120 million of Brazil’s roughly 200 million residents. The platform has long incubated and proliferated fake news, in Brazil in particular. With its modest data requirements, WhatsApp is especially popular among middle and lower income individuals there, many of whom rely on it as their primary news consumption platform. But as the country’s health authorities scramble to contain the worst outbreak in decades, WhatsApp’s misinformation trade threatens to go from destabilizing to deadly.

On January 25, Brazilian health officials launched a mass campaign to vaccinate 95 percent of residents in the 69 municipalities directly in the disease’s path—a total of 23 million people. A yellow fever vaccine has been mandatory since 2002 for any Brazilian born in regions where the virus is endemic. But in the last two years the disease has pushed beyond its normal range into territories where fewer than a quarter of people are immune, including the urban areas of Rio and Sao Paulo.

By the time of the announcement, the fake news cycle was already underway. Earlier in the month an audio message from a woman claiming to be a doctor at a well-known research institute began circulating on WhatsApp, warning that the vaccine is dangerous. (The institute denied that the recording came from any of its employees). A few weeks later it was a story linking the death of a university student to the vaccine. (That too proved to be a false report). In February, Igor Sacramento’s mother-in-law messaged him a pair of videos suggesting that the yellow fever vaccine was actually a scam aimed at reducing the world population. A health communication researcher at Fiocruz, one of Brazil’s largest scientific institutions, Sacramento recognized a scam when he saw one. And no, it wasn’t a global illuminati plot to kill off his countrymen. But he could understand why people would be taken in by it.

“These videos are very sophisticated, with good editing, testimonials from experts, and personal experiences,” Sacramento says. It’s the same journalistic format people see on TV, so it bears the shape of truth. And when people share these videos or news stories within their social networks as personal messages, it changes the calculus of trust. “We are transitioning from a society that experienced truth based on facts to a society based on its experience of truth in intimacy, in emotion, in closeness,” says Sacramento.

People are more likely to believe rumours from family and friends. There’s no algorithm mediating the experience. And when that misinformation comes in the form of forwarded texts and videos—which look the same as personal messages in WhatsApp—they’re lent another layer of legitimacy. Then you get the network compounding effect; if you’re in multiple group chats that all receive the fake news, the repetition makes them more believable still.

Of course, these are all just theories. Because of WhatsApp’s end-to-end encryption and the closed nature of its networks, it’s nearly impossible to study how misinformation moves through it. For users in countries with a history of state-sponsored violence, like Brazil, that secrecy is a feature. But it’s a bug for anyone trying to study them. “I think WhatsApp hoaxes and disinformation campaigns are a bit more pernicious [than Facebook] because their diffusion cannot be monitored,” says Pablo Ortellado, a fake news researcher and professor of public policy at the University of Sao Paulo. Misinformation on WhatsApp can only be identified when it jumps to other social media sites or bleeds into the real world.

In Brazil, it’s starting to do both. One of the videos Sacramento received from his mother-in-law is still up on YouTube, where it’s been viewed over a million times. Other stories circulated on WhatsApp are now being shared in Facebook groups with thousands of users, mostly worried mothers exchanging stories and fears. And in the streets of Rio and Sao Paulo, some people are staying away from the health workers in white coats. As of February 27, only 5.5 million people had received the shot, though it’s difficult to say how much of the slow start is due to fake news as opposed to logistical delays. A spokeswoman for the Brazilian Ministry of Health said in an email that the agency has seen an uptick in concern from residents regarding post-vaccination adverse events since the start of the year and acknowledged that the spread of false news through social media can interfere with vaccination coverage, but did not comment on its specific impact on this latest campaign.

While the Ministry has engaged in a very active pro-vaccine education operation—publishing weekly newsletters, posting on social media, and getting people on the ground at churches, temples, trade unions, and clinics—health communication researchers like Sacramento say health officials made one glaring mistake. They didn’t pay close enough attention to language.

You see, on top of all this, there’s a global yellow fever vaccine shortage going on at the moment. The vaccine is available at a limited number of clinics in the US, but it’s only used here as a travel shot. So far this year, the Centers for Disease Control and Prevention has registered no cases of the virus within US borders, though in light of the outbreak it did issue a Level 2 travel notice in January, urging all Americans traveling to the affected states in Brazil to get vaccinated first.

Because it’s endemic in the country, Brazil makes its own vaccine, and is currently ramping up production from 5 million to 10 million doses per month by June. But in the interim, authorities are administering smaller doses of what they have on hand, known as a “fractional dose.” It’s a well-demonstrated emergency maneuver, which staved off a yellow fever outbreak in the Democratic Republic of the Congo in 2016. According to the WHO, it’s “the best way to stretch vaccine supplies and protect against as many people as possible.” But a partial dose, one that’s guaranteed for only 12 months, has been met by mistrust in Brazil, where a single vaccination had always been good for a lifetime of protection.

“The population in general understood the wording of ‘fractionated’ to mean weak,” says Sacramento. Although technically correct, the word took on a more sinister meaning as it spread through social media circles. Some videos even claimed the fractionated vaccine could cause renal failure. And while they may be unscientific, they’re not completely wrong.

Like any medicine, the yellow fever vaccine can cause side effects. Between 2 and 4 percent of people experience mild headaches, low-grade fevers, or pain at the site of injection. But there have also been rare reports of life-threatening allergic reactions and damage to the nervous system and other internal organs. According to the Health Ministry, six people died in 2017 on account of an adverse reaction to the vaccine. The agency estimates that one in 76,000 will have an anaphylactic reaction, one in 125,000 will experience a severe nervous system reaction, and one in 250,000 will suffer a life-threatening illness with organ failure. Which means that if 5 million people get vaccinated, you’ll wind up with about 20 organ failures, 50 nervous system issues, and 70 allergic shocks. Of course, if yellow fever infected 5 million people, 333,000 people could die.

Not every fake news story is 100 percent false. But they are out of proportion with reality. That’s the thing about social media. It can amplify real but statistically unlikely things just as much as it spreads totally made up stuff. What you wind up with is a murky mix of information that has just enough truth to be credible.

And that makes it a whole lot harder to fight. You can’t just start by shouting it all down. Sacramento says too often health officials opt to frame these rumors as a dichotomy: “Is this true or is this a myth?” That alienates people from the science. Instead, the institution where he works has begun to produce social media-specific videos that start a dialogue about the importance of vaccines, while remaining open to people’s fears. “Brazil is a country full of social inequalities and contradictions,” he says. “The only way to understand what is happening is to talk to people who are different from you.” Unfortunately, that’s the one thing WhatsApp is designed not to let you do.

Viral Falsehoods

  • WhatsApp isn’t the only closed social network where online rumors can lead to real-world consequences. Here’s how China’s WeChat helped elect President Trump.

  • It’s not just elections that bring out the bots. Last month, Twitter was flooded with them following the Parkland shooting.](https://www.wired.com/story/pro-gun-russian-bots-flood-twitter-after-parkland-shooting/)

  • Want to see how all this misinformation gets made? Take a look inside Leves, Macedonia, the fake news factory for the world.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on How WhatsApp Could Worsen Brazil’s Yellow Fever Outbreak

‘Black Panther’ Should Become Marvel’s Latest Billion-Dollar Movie This Weekend

Black Panther is already the biggest movie of 2018, and now the latest superhero blockbuster from Marvel and Walt Disney is on the precipice of cracking $1 billion in worldwide box-office revenue.

Entering its fourth weekend in movie theaters, the movie still has its claws dug into the top spot at the box office as it debuts in China, the world’s second-largest movie market, for this first time. Black Panther should climb past the $1 billion mark this weekend, having reached $940 million in global grosses during the week, including $22.7 million in its opening-day haul in China on Friday. That gave Black Panther the best opening day gross in China for a Marvel movie since 2016’s Captain America: Civil War, which took in over $30 million on its first day in Chinese theaters on its way to grossing a whopping $180 million in that country overall.

Black Panther would also be the first Marvel movie to reach $1 billion since Civil War cleared $1.15 billion two years ago, and the fifth so far from Disney’s Marvel Cinematic Universe. The movie is already the second highest-grossing Marvel film domestically, with its $520 million haul in North America trailing only 2012’s The Avengers, at $623 million domestically ($1.5 billion worldwide), according to Box Office Mojo.

Get Data Sheet, Fortune’s technology newsletter.

Black Panther only needs roughly $60 million worldwide at this weekend’s box office to reach $1 billion after pulling in roughly $122 million globally last weekend. Barring a larger-than-expected drop-off, the film should coast past that milestone.

However, Black Panther could still lose its box-office crown this weekend to newcomer (and fellow Disney film) A Wrinkle in Time. Director Ava DuVernay‘s adaptation of the popular young-adult novel of the same name has been highly-anticipated since Disney made her the first-ever black woman to direct a movie with a budget over $100 million. Disney has been promoting the film heavily for months, though its recent mixed reviews from critics could dampen A Wrinkle in Time‘s opening weekend box-office performance. Variety reports that the film is forecasted to gross roughly $35 million domestically this weekend, which may not quite be enough to stop Black Panther from a fourth weekend of dominance.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on ‘Black Panther’ Should Become Marvel’s Latest Billion-Dollar Movie This Weekend

A1 Austria Telekom accused of violating data privacy rules

VIENNA (Reuters) – A1 Telekom Austria (TELA.VI), part of Mexican tycoon Carlos Slim’s America Movil (AMXL.MX), has been accused of violating the privacy of tens of thousands of its customers, Austria’s data protection authority said on Thursday.

FILE PHOTO: The headquarters of Telekom Austria with its brand name A1 is seen in Vienna, Austria, July 25, 2016. REUTERS/Leonhard Foeger/File Photo /File Photo

Austria’s leading telecommunications and data services provider allegedly illegally stored user data of its own A1 mobile and fixed line services and its low-cost brand Bob as well as of Red Bull mobile customers, an authority’s spokesman said, confirming an earlier report by Austrian daily Kurier.

A1 Telekom has been storing phone numbers, connection data and websites visited by the affected customers for an indefinite period of time with some data ranging back to as far as 2013, lawyer Ewald Scheucher said.

Scheucher flagged the issue to the data protection authority.

FILE PHOTO: The logo of Austrian telekom provider A1 is seen outside its headquarters in Vienna, Austria, July 25, 2016. REUTERS/Leonhard Foeger /File Photo

Private and business customers including the country’s rail network provider and political parties were affected, Scheucher added.

A1 Telekom said it took the allegations very seriously and had set up an internal task force to deal with it.

“We are analysing the corresponding internal processes and will, if necessary, take the necessary measures,” it said in a statement.

Connection data may only be collected for charging purposes and should be deleted within three months according to Austrian law, the lawyer said. If customers appeal an invoice or in cases of pending legal disputes, data can be stored longer.

A1 Telekom has about two weeks to submit an opinion and depending on that further steps will be considered, the data protection authority said.

Reporting by Kirsti Knolle; Editing by Keith Weir

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on A1 Austria Telekom accused of violating data privacy rules

How Dutch Police Took Over Hansa, a Top Dark Web Market

For anyone who has watched the last few years of cat-and-mouse games on the dark web’s black markets, the pattern is familiar: A contraband bazaar like the Silk Road attracts thousands of drug dealers and their customers, along with intense scrutiny from police and three-letter agencies. Authorities hunt down its administrators, and tear the site offline in a dramatic takedown—only to find that its buyers and sellers have simply migrated to the next dark-web market on their list.

So when Dutch police got onto the trail of the popular dark-web marketplace Hansa in the fall of 2016, they decided on a different approach: Not a mere takedown, but a takeover.

In interviews with WIRED, ahead of a talk they plan to give at Kaspersky Security Analyst Summit Thursday, two Netherlands National High Tech Crime Unit officers detailed their 10-month investigation into Hansa, once the largest dark-web market in Europe. At its height, Hansa’s 3,600 dealers offered more than 24,000 drug product listings, from cocaine to MDMA to heroin, as well as a smaller trade in fraud tools and counterfeit documents. In their probe into that free-trade zone, which would come to be known as Operation Bayonet, the Dutch investigators not only identified the two alleged administrators of Hansa’s black market operation in Germany, but went so far as to hijack the two arrested men’s accounts to take full control of the site itself.

The NHTCU officers explained how, in the undercover work that followed, they surveilled Hansa’s buyers and sellers, discreetly altered the site’s code to grab more identifying information of those users, and even tricked dozens of Hansa’s anonymous sellers into opening a beacon file on their computers that revealed their locations. The fallout of that law enforcement coup, the officers claim, has been one of the most successful blows against the dark web in its short history: millions of dollars worth of confiscated bitcoins, more than a dozen arrests and counting of the site’s top drug dealers, and a vast database of Hansa user information that authorities say should haunt anyone who bought or sold on the site during its last month online.

“When a dark market is taken down, everyone goes to the next one. It’s a whack-a-mole effect,” says Marinus Boekelo, one of the NHTCU investigators who worked on the Hansa operation. By secretly seizing control of Hansa rather than merely unplugging it from the internet, Boekelo says he and his Dutch police colleagues aimed not only to uncover more about Hansa’s unsuspecting users, but to deal a psychological blow to the broader dark-web drug trade. “We thought maybe we could really damage the trust in this whole system,” he says.

While the Hansa takeover at times involved the close cooperation of American and German law enforcement, neither the US Department of Justice nor the German Bundespolizei responded to WIRED’s requests for comment, leaving some elements of the NHTCU’s account without independent confirmation. What follows is the Dutch police’s own, candid description of their experience digging into—and ultimately running—one of the world’s top online narcotics trafficking operations.

Pulling Loose Threads

Despite its dramatic turns, the Hansa investigation started in a traditional fashion: with a tip. Security researchers believed they had found a Hansa server in the Netherlands data center of a web-hosting firm. (Security firm BitDefender has claimed some involvement in the Hansa operation. But the NHTCU declined to reveal the name of the security company or the web-hosting firm, along with several other details they say they’re keeping under wraps to protect methods and sources. Even the names of the two German men charged with running Hansa remain secret, since German law protects the names of prosecuted individuals until their trial.)

As Boekelo tells it, the security firm had somehow found Hansa’s development server, a version of the site where it tested new features before deploying them in the live version that handled its formidable load of thousands of visits from drug shoppers every day. While the live Hansa site was protected by Tor, the development server had somehow been exposed online, where the security firm discovered it and recorded its IP address.

Gert Ras (left) and Marinus Boekelo (right).

Manuel Velásquez Figueroa

The Dutch police quickly contacted the web host, demanded access to its data center, and installed network-monitoring equipment that allowed them to spy on all traffic to and from the machine. They immediately found that the development server also connected to a Tor-protected server at the same location that ran Hansa’s live site, as well as a pair of servers in another data center in Germany. They then made a copy of each server’s entire drive, including records of every transaction performed in Hansa’s history, and every conversation that took place through its anonymized messaging system.

Even that massive security breach shouldn’t have necessarily exposed any of the site’s vendors or administrators, since all of Hansa’s visitors and admins used pseudonyms, and sites protected by Tor can only be accessed by users running Tor, too, anonymizing their web connections. But after poring through the archived messages of the site’s two alleged founders, the police found a major operational slip-up: One of the German servers contained the pair’s chat logs on the antiquated messaging protocol IRC. The conversations stretched back years, and amazingly, included both admins’ full names and, for one man, his home address.

Setting the Trap

Hansa’s two suspected admins, the Dutch cops had discovered, were across the border in Germany—one 30-year-old man in the city of Siegen, and another 31-year-old in Cologne. But when the NHTCU contacted the German authorities to request their arrest and extradition, they discovered the pair were already on the radar of German authorities, and under investigation for the creation of Lul.to, a site selling pirated ebooks and audiobooks.

That gave the Dutch investigators an idea: Perhaps they could use the existing German investigation as cover for their own operation, letting the German police nab their suspects for e-book piracy and then secretly taking over Hansa without tipping off the market’s users. “We came up with this plan to take over. We could use that arrest,” says Gert Ras, the head of the NHTCU. “We had to get rid of the real administrators to become the administrators ourselves.”

Just as the NHTCU’s elaborate trap started to take shape, however, it was also falling apart: The Hansa servers the Dutch cops were watching suddenly went silent. Ras and Boekelo say they suspect that their copying of the servers somehow tipped off the site’s admins. As a result, they had moved the market to another Tor-protected location, shuffling it in Tor’s vast deck of anonymized machines around the globe. “That was a setback,” Ras says.

Even then, remarkably, the Dutch cops didn’t simply cut their losses, ask the Germans to arrest Hansa’s administrators, and likely used clues from their computers to find the site’s servers and shut them down. Instead, they decided to stick with their stealthy takeover plan, and spent the ensuing months poring over evidence—even as the site continued its brisk narcotics trade—in an attempt to locate the Hansa servers again and quietly hijack them. Finally in April 2017, they got another lucky break: The alleged administrators had made a bitcoin payment from an address that had been included in those same IRC chatlogs. Using the blockchain analysis software Chainalysis, the police could see that payment went to a bitcoin payment provider with an office in the Netherlands. And when the police sent that bitcoin payment firm a legal demand to cough up more information, it identified the recipient of that transaction as another hosting company, this time in Lithuania.

Two For One

Not long after pinpointing those servers for the second time, the NHTCU learned of another surprising windfall: The FBI contacted them to tell them that they’d located one of the servers for AlphaBay, the world’s most popular dark-web drug market at the time—far larger than Hansa—in the Netherlands. American investigators were closing in and wanted to pull the plug, just as the Dutch were planning to commandeer Hansa.

The Dutch police quickly realized that after AlphaBay was shut down, its refugees would go searching for a new marketplace. If their scheme worked, AlphaBay’s users would flood to Hansa, which would secretly be under police control. “Not only would we get this effect of undermining the trust in dark markets, we’d also get this influx of people,” Ras says. They’d be able to surveil a far larger portion of the dark-web economy, he says, and instill a sense in users that there was nowhere to hide. Even fleeing to another marketplace wouldn’t let them escape law enforcement’s reach.

With the pieces of the takeover plan in place, the Dutch police sent a pair of agents to the Lithuanian data center, taking advantage of the two countries’ mutual legal assistance treaty. On June 20, in a carefully timed move designed to catch the two German suspects at the keyboard, the German police raided the two men’s homes, arrested them, and seized their computers with their hard drives unencrypted. The Germans then signaled the Dutch police, who immediately began the migration of all of Hansa’s data to a new set of servers under full police control in the Netherlands.

“We coordinated with the Germans, so that when they busted in the door we immediately started our action,” says Boekelo. “We didn’t want to have any downtime.”

Under questioning in a German jail, the two men handed over credentials to their accounts, including the Tox peer-to-peer chat system they had used to communicate with the site’s four moderators. After three days, Hansa was fully migrated to the Netherlands and under Dutch police control. No users—or even those moderators—appeared to have noticed the change.

Total Control

For the next month, the Dutch police would use their position at the top of Europe’s largest dark-web market to pull off increasingly aggressive surveillance of its users. They rewrote the site’s code, they say, to log every user’s password, rather than store them as encrypted hashes. They tweaked a feature designed to automatically encrypt messages with users’ PGP keys, so that it secretly logged each message’s full text before encrypting it, which in many cases allowed them to capture buyers’ home addresses as they sent the information to sellers. The site had been set up to automatically removed metadata from photos of products uploaded to the site; they altered that function so that it first recorded a copy of the image with metadata intact. That enabled them to pull geolocation data from many photos that sellers had taken of their illegal wares.

The administrators’ internal control panel for Hansa, showing a list of disputed sales that had been escalated from the site’s four moderators.


As they tell it, the police eventually became so brazen that they staged a fake server glitch that deleted all the photos from the site, forcing sellers to re-upload photos and giving Dutch authorities another chance to capture the metadata. That ruse alone snagged the geolocated coordinates of more than 50 dealers.

In perhaps its most intrusive move of all, the NHTCU says it essentially tricked users into downloading and running a homing beacon. Hansa offered sellers a file to serve as a backup key, designed to let them recover bitcoin sent to them after 90 days even if the sites were to go down. The cops replaced that harmless text document with a carefully crafted Excel file, says Boekelo. When a seller opened it, their device would connect to a unique url, revealing the seller’s IP address to the police. Boekelo says that 64 sellers fell for that trap.

Throughout the trickery, Hansa thrived under the NCHTU’s secret control. The undercover agents had studied the logs of the real admins’ conversations with their moderators and the site’s users long enough to convincingly impersonate them, Ras and Boekelo say. In fact, a whole team of officers took turns impersonating the two admins, so that when disputes between buyers and sellers escalated beyond the moderators’ authority, undercover agents were ready to deal with them even more efficiently than the real admins had. “The quality really went up,” says Ras. “Everyone was very satisfied with the level of service they got.”

Springing the Trap

That competence also made Hansa the natural destination when AlphaBay suddenly winked out of existence in early July of last year. As drug buyers became impatient, eventually more than 5,000 a day of them flocked to Hansa, eight times the normal registration rate, the NHTCU says—all of whom immediately fell under police surveillance.

One week after Alphabay first went down, the Wall Street Journal reported that the site’s servers had been seized in a law enforcement raid and that its founder, Canadian Alexandre Cazès, had apparently committed suicide in a Thai prison. The news threw the dark web community into chaos. The resulting flood of Alphabay refugees became so large that the NHTCU shut down new registrations for ten days. The police were bound by Dutch law to track and report every transaction occurring on the site under their control to Europol; with roughly 1,000 illegal transactions occurring every day on their watch, the paperwork was becoming unmanageable.

After AlphaBay’s shutdown, users poured into Hansa, which was under the Dutch police’s full control.


During their time as black market administrators, the Dutch police only banned one product on Hansa: the highly dangerous opioid Fentanyl. All other drugs on the site continued to flow freely, a circumstance over which Ras and Boekelo seem surprisingly unconflicted. “They would have taken place anyway,” says Ras without hesitation, “but on a different market.”

After 27 days and about 27,000 transactions, however, the NHTCU decided to hang up its ledger. It unplugged Hansa, replacing the site with a seizure notice and a link to the NHTCU’s own Tor site showing a list of identified and arrested dark-web drug buyers and sellers. “We trace people who are active at Dark Markets and offer illicit goods or services,” the site read. “Are you one of them? Then you have our attention.”


The Dutch police came away from their Hansa takeover with concrete rewards: They obtained at least some data on 420,000 users, including at least 10,000 home addresses, which they’ve turned over to Europol to be distributed to other police agencies around Europe and the world. Since the takedown, Ras says, they’ve arrested a dozen of Hansa’s top vendors, with more arrests planned for coming weeks. They seized 1,200 bitcoins from Hansa, worth about $12 million by today’s exchange rates. Since Hansa used bitcoin’s multi-signature transaction function to protect funds from police seizure, that confiscation was only possible because the NHTCU had taken over the site and sabotaged its code to disable that feature during Hansa’s last month online.

The Dutch police say they’ve also performed roughly 50 “knock-and-talks,” in-person visits to buyers’ homes to let them know they’ve been identified by their dark-web drug purchases, though they say only one high-volume buyer has been arrested so far. “We want people to be aware,” says Ras. “We have the data. It’s here, and it’s not going away.”

As for the operation’s impact on the overall drug trade, the police point to a study by the Netherlands Organization for Applied Scientific Research, which found that the Hansa hijacking did have a significantly different outcome from previous dark-web takedowns. While most drug vendors who fled AlphaBay showed up soon after on other dark web drug sites, those who fled Hansa didn’t—or if they did, they recreated their online identities thoroughly enough to escape recognition. “Compared to both the Silk Road takedowns, or even the AlphaBay takedown, the Hansa Market shut down stands out in a positive way,” the report reads. “We see the first signs of game-changing police intervention.”

Other dark-web trackers aren’t so sure. Nicolas Christin, a researcher at Carnegie Mellon, says it’s tough to measure the long-term impact of the Hansa operation, as drug buyers and sellers still flock to alternative sites like Dream Market, the new top dark-web drug site after Hansa and AlphaBay’s desmise, and even to invite-only sites created by individual sellers. “I think in the short term, it created a lot of upheaval,” Christin says. “Whether it was sustained, I really don’t know.”

As for Hansa’s users themselves, opinion seems split. “Looks like I’ll be sober for a while. Not trusting any markets,” one user wrote on Reddit’s darknet-focused forum the day the Hansa takedown was announced last summer.

But some insisted that the dark web would bounce back, even from the most elaborate sting operation it had ever seen. “Things will stabilize, they always do,” that anonymous user wrote. “The Great Game of whack-a-mole never ends.”

Caught in the Dark Web

This story has been updated to include BitDefender’s claim of involvement.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on How Dutch Police Took Over Hansa, a Top Dark Web Market

BlackBerry V. Facebook: A Patent Battle

On March 6, 2018, BlackBerry (BB) filed suit against Facebook (FB) in the U.S. District Court for the Central District of California in Los Angeles. In its 117 page complaint, BlackBerry alleges that Facebook (including Facebook Messenger, WhatsApp, and Instagram) infringed seven BlackBerry-owned patents.

Here, I give a brief overview of a few of the patents at suit. In my opinion, many of BlackBerry’s patents are extremely broad. Because of this, Facebook infringes many of the asserted claims. Facebook’s primary defenses will be to challenge that the patents are invalid, because they were anticipated or were obvious at the time they were filed. Facebook is likely to fight BlackBerry both in district court and before the Patent and Trademark Office.

I expect litigation to be drawn out, unless the parties decide to settle. Because of the scale of both companies, the litigation will be much more important for BlackBerry than for Facebook.

If BlackBerry were to prevail, damages could be very high for Facebook since the patents cover core elements of many Facebook apps. In that scenario, BlackBerry would also be able to pursue many other violators for patent licenses – these are very broad patents that would be violated by many companies.

Patent Suit

The suit alleges that Facebook apps co-opt BlackBerry’s messaging innovations, including innovations related to security improvements, user interfaces (message notifications, displays of timestamps, and tagging in photos), combining mobile gaming and messaging, and battery-efficient status updates.

The seven patents at suit are:

  1. U.S. Patent No. 7,372,961 (“the ‘961 patent”), entitled “Method of public key generation.”
  2. U.S. Patent No. 8,279,173 (“the ‘173 patent”), entitled “User interface for selecting a photo tag.”
  3. U.S. Patent No. 8,209,634 (“the ‘634 patent”), entitled “Previewing a new event on a small screen device.”
  4. U.S. Patent No. 8,301,713 (“the ‘713 patent”), entitled “Handheld electronic device and associated method providing time data in a messaging environment.”
  5. U.S. Patent No. 8,429,236 (“the ‘236 patent”), entitled “Transmission of status updates responsive to status of recipient application.”
  6. U.S. Patent No. 8,677,250 (“the ‘250 patent”), entitled “System and method for switching between an instant messaging conversation and a game in progress.”
  7. U.S. Patent No. 9,349,120 (“the ‘120 patent”), entitled “System and method for silencing notifications for a message thread.”

To prevail, BlackBerry will need to demonstrate that Facebook has satisfied each element of at least one asserted independent claim – that is, that Facebook has infringed one of BlackBerry’s asserted patents. Facebook will have 21 days to respond to (“answer”) this complaint, although that deadline may be extended by agreement of the parties.

In their answer, Facebook will argue noninfringement – that their software does not infringe the claims because it does not satisfy at least one element/step of each asserted claim.

Facebook will also argue invalidity – that the patents at suit should not have been issued by the U.S. Patent and Trademark Office (“USPTO”). This argument will be based on finding a combination of published documents and other materials (“prior art”) which pre-date the asserted patents. Facebook will argue that the prior art shows the entire subject matter of the asserted claims (that the claims are “anticipated”), or that the prior art renders the subject matter “obvious” to one of skill in the relevant art.

The claims at suit in these patents have not been tested in court. (Update 03/07/18 11:47 AM ET: SA Reader BigZ has alerted me that the ‘961 patent has been used before. BlackBerry sued Avaya in 2016 based on the ‘961 patent and other patents. That case was eventually settled, with undisclosed terms, prior to trial.)

Because of that, Facebook will have a higher chance of success in their invalidity arguments. Courts routinely find patents obvious, despite the USPTO agreeing to grant those patents. Patent examiners at the USPTO conduct only a cursory search for prior art compared to that which will be conducted by Facebook (provided the case does not settle quickly). Thus, Facebook is very likely to present a much stronger combination of prior art than was available to the patent examiner. If the claims had previously been tested in court, and were successful, this task might be a bit more difficult, since it would mean that another party had already tried and failed to prove invalidity.

Facebook is likely to challenge the patent claims both in court and before the USPTO. Statistics from the USPTO show that at least one-third of cases there strike down some or all claims of the challenged patents.

The ‘634 Patent

Some of BlackBerry’s asserted claims are very broad. For example, the ‘634 patent claims:

Source: BlackBerry Complaint at 39 (highlighting by the author).

Claim 1 here covers a method of showing notifications of messages. It required displaying an icon on a GUI, receiving messages from at least two other devices, and modifying the icon to show the number of unread messages. This is an exceptionally broad claim – it covers merely showing an icon with the number of unread messages in it and changing that number based on receiving a new message.

BlackBerry’s complaint goes through a relatively thorough infringement analysis of this claim for Facebook Messenger, Instagram, WhatsApp Messenger, and other Facebook apps (pp. 42-50).

Against a claim of this nature, Facebook is unlikely to have any plausible non-infringement argument. Instead, Facebook will need to argue that the patented claim – and its extremely expansive language – was either anticipated or obvious at the time the patent was filed (its “priority date”). The priority date for the ‘634 patent is December 1, 2003.

I would be surprised if this claim withstands serious scrutiny. Instant messaging applications were popularized years earlier (the first version of ICQ was released in 1996, AOL Instant Messenger in 1997, and MSN Messenger in 1999), and both instant messaging and email applications could potentially be found to contain notifications about the number of unread messages.

Even laptop computers could infringe these claims, given that Wi-Fi was introduced in 1998. While the preamble to the claim restricts it to “wireless communication devices,” nothing in the specification of the patent describes “wireless communication devices” in a narrow manner to exclude laptops using Wi-Fi. Indeed, the phrase “wireless communications device” only appears once in the specification, in the “Field of the Invention.” The ‘634 patent even specifically mentions that a computer could be the “mobile station” in its Figure 1:

Mobile station 102 may consist of a single unit, such as a data communication device, a multiple-function communication device with data and voice communication capabilities, a personal digital assistant (PDA) enabled for wireless communication, or a computer incorporating an internal modem.”

Based on this, I would expect that Facebook will be able to present a very strong invalidity defense. BlackBerry may be able to amend claim 1 to make the claim narrower – and less obvious – but such that Facebook still infringes, depending on the strength of BlackBerry’s disclosure in the specification of the ‘634 patent compared to the breadth of the prior art. I would not be confident in BlackBerry’s chances of winning on this claim, however.

Other Patents

Other patents in the suit also appear quite broad but may be able to withstand more scrutiny than the ‘634 patent. For example, the ‘173 patent claims:

1. A method of selecting a photo tag for a tagged photo, comprising:

displaying a tag list including tags from one or more tag sources matching a search string;

displaying a tag type indicator for each tag appearing in the tag list, said tag type being indicative of a tag source associated with the tag.”

Essentially, when tagging a photo, a tag list is displayed that lets you search for a string (a person’s name). Each of the list of results includes a “tag type indicator.” The complaint describes this as the innovation – it helps you tag photos correctly with the right person, rather than with a stranger or famous person who happens to share the same name. The complaint states that Facebook infringes since its photo tagging tool includes information such as an indication of mutual friends shared with a person or a count of likes/followers that that person has. Similarly, Instagram allegedly infringes since its tagging tool includes as indication that an account is verified. (Complaint at 59-60.)

The ‘713 patent describes selectively displaying a time stamp on messages based on the time between messages. (Complaint at 63). Facebook, and other messaging platforms, selectively display a time stamp only when a certain amount of time has passed between messages. When messages are sent consecutively, there’s no need to individually timestamp each message. However, when a new message is sent hours or days later, that message is time stamped.

Other patents relate to integrating certain game play elements with messaging applications (the ‘250 patent; complaint at 87) and methods for silencing individual message threads (the ‘120 patent; complaint at 100), among other claims.


In my opinion, BlackBerry has strong infringement arguments for most of these asserted patents. However, Facebook is likely to have strong defenses that the patents are invalid. Many of the asserted claims are extremely broad, and Facebook is likely to be able to find similar prior art for many of these claims.

I expect that Facebook will argue both non-infringement and invalidity on each of the asserted claims when they file an answer in a few weeks. Facebook is also likely to challenge the patents at the USPTO, in addition to fighting in the U.S. District Court.

Unless the case settles, I would expect litigation to be lengthy, especially if the case is held pending USPTO review.

The case will ultimately be much more important for BlackBerry than it is for Facebook, simply as a matter of scale – as per YCharts, Facebook’s revenues (past twelve months) are more than 40x those of BlackBerry, and Facebook’s operating profit is over 80x those of BlackBerry. As a result, the impact of this case is likely to have a much larger effect on BlackBerry than it will on Facebook.

If BlackBerry were to prevail, damages could be very large. The patents cover core elements of a wide variety of Facebook platforms, including Facebook, Facebook Messenger, WhatsApp, and Instagram. Further, if BlackBerry’s patents withstand court scrutiny, this could open up the door for BlackBerry to aggressively pursue licensing deals with other companies as well – the broad features described in these patents are used by many companies in addition to Facebook.

** Author’s note: If you enjoyed this article, please hit “Follow” next to my name at the top of the page. This helps me build my readership and increases my visibility on Seeking Alpha. Please also leave questions, comments, feedback, and suggestions below.

Disclosure: I am/we are long FB.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on BlackBerry V. Facebook: A Patent Battle

Pick Up Park For Peanuts

Last week, Chinese conglomerate HNA Group, a 25% shareholder of Park Hotels & Resorts (PK), announced that it was seeking to sell all or part of its ownership (more than 53 million shares). As Floris van Dijkum, equity analyst with Boenning & Scattergood, wrote in a research report,

The HNA situation should continue to depress PK’s stock performance until the overhang is lifted. New of the pending sale helped to send PK’s share price down 5.8% on Friday.”

HNA was founded in 2000 and is involved in a variety of industries such as aviation, real estate, financial services, tourism, logistics, and more. In addition to PK, HNA also has substantial stakes in Grand China Air and Hilton Worldwide (NYSE:HLT). In July 2017, HNA was ranked #170 in Fortune Global 500 companies with more than $53.335 billion. (Source: Wikipedia)

According to Bloomberg, HNA is selling assets because of a “liquidity squeeze” in which more than $9 billion in HNA asset sales have emerged:

A screenshot of a cell phone Description generated with very high confidence

Reuters cites “HNA’s leverage” and “aggressive financing policy” for the aggressive actions and said that “in recent weeks (HNA has) also has raised additional financing by selling expensive short-term debt and pledging more of its shares for loans.”

Since the HNA news on Friday (March 2nd), PK shares have declined ~5%:

A close up of a map Description generated with very high confidence

In my last PK article (on Seeking Alpha) I wrote that “when you invest in Park you are essentially investing in the premium Hilton brand. Conrad Hilton knew a thing or two about branding and the value proposition for owning shares in Park today is that you are essentially getting a slice of one of the best hotel brands in the world, at a discount.”

Conrad Hilton said,

The buyer is entitled to a bargain. The seller is entitled to a profit. So there is a fine margin in between where the price is right. I have found this to be true to this day whether dealing in paper hats, winter underwear or hotels.”

Well, that “fine line” is not as “fine” now, thanks to HNA Group’s announcement that it is unloading shares in Park Hotels. As Benjamin Graham wrote in The Intelligent Investor, the value investor’s purpose is to capitalize upon “a favorable difference between price on the one hand and indicated or appraised value on the other” and that is why I am “picking up Park for peanuts.”

A close up of a piece of paper Description generated with high confidence

Photo Credit

Why Park?

Based in McLean, Virginia, Park Hotels & Resorts was formed when Hilton Worldwide spun off most of its owned real estate into a separate public REIT. Park is the latest entrant in the Lodging REIT sector long dominated by Host (HST), which still dwarfs all other stock exchange-listed hotel REITs in terms of size. Park is the second-largest publicly traded Lodging REIT:

A screenshot of a cell phone Description generated with high confidence

Park is among the Top 25 largest REITs out of 130 REITs based on TTM Adjusted EBITDA and Park ranks among the Top 25 Largest REITs in the US:

A screenshot of a cell phone Description generated with very high confidence

Park Hotels owns a $9 billion portfolio of 67 large-scale, high-end hotels, including iconic properties stretching from coast to coast. Its trophy properties include the New York Hilton, which spans an entire city block in Midtown Manhattan; the landmark, 1,544-room Hilton Chicago Downtown, boasting nearly 200,000 square feet of meeting space; and the oceanfront, 2,860-room Hilton Hawaiian Village in Honolulu.

A close up of a building Description generated with very high confidence

There is strong potential in the 35,000-room portfolio of upper-upscale and luxury hotels, and Park Hotels, through acquisitions of like properties in leading hotel and resort markets, already has holdings in 14 of the top 25 U.S. hotel markets.

A screenshot of a cell phone Description generated with very high confidence

Park is one-brand concentrated right now, but the company says it “seeks brand and operator diversity over time.” This is similar to what happened in 1993, after Marriott International (NYSE:MAR) spun off what is now Host Hotels.

The pictures below illustrate Park’s diversified exposure to attractive markets:

A screenshot of a cell phone Description generated with very high confidence

Around 74% of Hotel EBITDA comes from coastal markets, and 91% of Hotel EBITDA is from Top 25 Markets and resort destinations:

A close up of a map Description generated with high confidence

While Park lacks diversified brand affiliations, the company mitigates the risk by owning such a diversified portfolio:

A close up of a map Description generated with high confidence

Its portfolio’s strong group positioning increases visibility into forward bookings and reduces operating volatility by enhancing the stability and predictability of revenue throughout the lodging cycle.

Top 25 Hotels: Group/Transient Mix: 31%/63%. Park’s strategy will be to “Group Up” and drive that mix up another 400 bps to 35% Group demand. The portfolio contains 26 properties with over 25,000 sq. ft. of meeting space and 6 properties with over 125,000 sq. ft. of meeting space in top convention markets, generating robust corporate meeting and group business. Supply and demand trends favor large, group-oriented hotels for the foreseeable future.

Iconic Assets Valued at Well Below Replacement Cost

The REIT’s focus is on building a portfolio of Upper Upscale and Luxury branded assets in Top 25 markets and premium resort destinations. It pursues larger-scale deals (assets and portfolios) that offer significant value-add opportunities.

The company seeks to diversify its brand (beyond Hilton) and operator mix to include other global manager/franchisors. Park will opportunistically recycle capital, selling out of slower-growth, non-core assets and reinvesting in higher-growth markets.

Less competition exists on larger transactions, as only a limited number of investors have access to the equity needed to pursue $250+ million single assets.

Consequently, the share of deals pre-empted and executed off-market increases in conjunction with deal size, thereby enhancing the price negotiation leverage for an eligible buyer. Park’s balance sheet and operating platform are well positioned to execute these larger transactions.

Park focuses on owning hotels and resorts in the Luxury and Upper Upscale segments. The company focuses on recognizable products compared to independent hotels struggling to differentiate their offerings. Loyalty programs help to drive recurring sales, while lowering new customer acquisition costs. Hilton (~60 million members) and Marriott, including Starwood (NYSE:STWD) (~100 million members), have ~50% of sales stemming from customers within their loyalty programs.

Park has the ability to achieve increased direct-to-consumer sales, minimizing OTA/wholesale commissions and increasing revenue to the company. This means significantly lower distribution costs for the OTA business, given the negotiating power of brands.

Park can more effectively compete against Airbnb (Private:AIRB), particularly with respect to frequent travelers who appreciate the reliability and security of branded hotels.

A palm tree in front of a building Description generated with very high confidence

Active Asset Management: Hands-on Approach

Hilton continues to manage the vast majority of Park’s properties it spun off. Oversight of operations under Park creates a system of checks and balances that should eventually translate into higher profits.

Hilton, like most brand owners, doesn’t have corporate oversight of property-level management to make sure they are maximizing profits for the owner.

Park is able to maximize each asset’s full potential through a focused approach on revenue management and cost containment initiatives, while purposefully addressing capital needs, including ROI opportunities.

CapEx: Over $1.3 Billion Has Been Reinvested in Park’s Hotels

Park has invested heavily to drive market share and ensure strong competitive positioning of its portfolio. The company continues to consistently renovate to adapt to evolving customer preferences and the latest technology.

Renovations have been focused on guestroom design, open and activated lobby areas, food and beverage and public spaces, and modernized meeting spaces. Park creates value through repositioning select hotels across brands or chain scale segments, and exploring adaptive reuse opportunities for highest and best use. (No major deferred maintenance.)

A screenshot of a cell phone Description generated with very high confidence

A screenshot of a cell phone Description generated with very high confidence

The Balance Sheet & Fundamentals

In December, PK repaid $55 million in maturing high-yield bonds, which carried a 7.5% coupon, leaving the company with a forward debt maturity schedule that is well-balanced and very manageable with no major maturities until 2021.

A screenshot of a cell phone Description generated with very high confidence

As of Q4-17, net leverage stood at just 3.7x with ample liquidity to execute on PK’s strategic plan. At year-end PK had $2.8 billion of net debt outstanding:

A screenshot of a cell phone Description generated with high confidence

On the recent earnings call PK’s management team said that it would be able to buy back shares with disposition proceeds. Since the last quarterly call, PK has sold a total of 12 noncore hotels in 4 separate transactions, including 9 international assets accounting for approximately $379 million of gross proceeds at an average cap rate of 5.5%.

A screenshot of a cell phone Description generated with very high confidence

The Latest Earnings Results

For Q4-17, PK reported total revenues of $686 million and adjusted EBITDA of $180 million, and adjusted FFO was $145 million (or $0.68 per diluted share). On a full-year basis, PK reported total revenues of approximately $2.8 billion, adjusted EBITDA of $757 million and adjusted FFO of $596 million (or $2.78 per diluted share).

For the full year 2017, PK’s comparable portfolio produced a RevPAR of $163 or an increase of 0.7%. The company’s occupancy for the year was 81.1% or a slight decrease of 20 basis points.

PK’s average daily rate was $202 or an increase of 0.9% versus the prior year. These top-line trends resulted in hotel-adjusted EBITDA of $709 million for the comparable portfolio, while the hotel-adjusted EBITDA margin was 28.1% or a 20 basis point decrease from the prior year.

For Q4-17, PK reported comparable RevPAR of $160 or an increase of 1.7% versus the prior year. The company’s occupancy for the quarter was 78.7% or 40 basis points higher, while the average daily rate ended the quarter at $203 or an increase of 1.1% year-over-year. These top-line trends resulted in comparable hotel-adjusted EBITDA of $175 million, while margins increased 70 basis points to 27.8%.

The Bottom Line: PK beat consensus quarterly FFO by $.06 per share.

It is PK’s intention to pay out an annualized 65% to 70% of adjusted FFO for the year. With Q4 earnings coming in line with expectations, the company paid out a Q4-17 step-up dividend of $0.55 per share in January.

Also, PK paid out its first-quarter dividend of $0.43 per share (to be paid on April 16 to stockholders of record as of March 30). Similar to 2017, PK is targeting a full-year payout ratio of 65% to 70% of adjusted FFO, with a potential top-up dividend to be paid in the fourth quarter (That may explain the reason that F.A.S.T. Graphs illustrates PK’s dividend yield at 9%+).

A screenshot of a cell phone Description generated with very high confidence

PK has established RevPAR guidance of 0 to plus 2% for full-year 2018, with a comparable hotel-adjusted EBITDA margin range of -80 basis points to a +20 basis points, which will take into account many of the asset management initiatives.

For the full year 2018, PK anticipates adjusted EBITDA to be in the range of $705 million to $745 million, while adjusted FFO per share will be in the range of $2.59 to $2.75. Note that our earnings guidance does not include redeployment of proceeds from asset sales.

A screenshot of a cell phone Description generated with very high confidence

Here is a snapshot of the FFO per share forecaster (using F.A.S.T. Graphs data):

A screenshot of a cell phone Description generated with very high confidence

Pick Up Park For Peanuts

As noted, PK shares have declined by over 5% as a result of the recent HNA news, and as illustrated below, PK has returned -14% YTD:

A screenshot of a cell phone Description generated with very high confidence

The last time I wrote on PK (December 2017) shares were yielding 6.1% and now they are yielding 7.4%:

A screenshot of a cell phone Description generated with very high confidence

Given PK’s high-quality portfolio, it’s surprising to see such a high yield (with a sound payout ratio) and as you can see below, PK is trading at a discount to the closest peers – LHO (10.4x) and PEB (13.4x).

In fact, Park is trading at almost the same multiple as Chatham (NYSE:CLDT) (8.6x), suggesting that Park is getting absolutely no credit for its diversified platform and premium brand flags.

A screenshot of a cell phone Description generated with very high confidence

Park has continued to report solid earnings momentum and the dividend true-up in 2017 suggests that this Lodging REIT is aligned with investors. Recognizing that HNA Group is in a “forced sell” mode, I plan to take advantage of the overhang and pick up a few more shares for peanuts. Clearly, Mr. Market does not recognize the value of this premium hotel REIT, but I know I am buying shares in Park Place not Pennsylvania Avenue.

I am upgrading Park from a Buy to Strong Buy (as noted: I am forecasting annual returns of at least 25%).

A screenshot of a social media post Description generated with very high confidence

Note: Brad Thomas is a Wall Street writer, and that means he is not always right with his predictions or recommendations. That also applies to his grammar. Please excuse any typos, and be assured that he will do his best to correct any errors if they are overlooked.

Finally, this article is free, and the sole purpose for writing it is to assist with research, while also providing a forum for second-level thinking. If you have not followed him, please take five seconds and click his name above (top of the page).

Source: F.A.S.T. Graphs and PK Investor Presentation.



I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Pick Up Park For Peanuts

World Economic Forum leads creation of fintech cybersecurity consortium

NEW YORK (Reuters) – The World Economic Forum has led the creation of an industry consortium focused on improving the cybersecurity of financial technology companies, as collaboration between fintechs and financial institutions grows.

FILE PHOTO: A logo of the World Economic Forum (WEF) is seen as people attend the WEF annual meeting in Davos, Switzerland January 24, 2018. REUTERS/Denis Balibouse

The consortium’s founding members include Citigroup Inc (C.N), online lender Kabbage, the Depository Trust & Clearing Corporation, Zurich Insurance Group (ZURN.S) and Hewlett Packard Enterprise (HPE.N), the companies said on Tuesday.

The group will create a framework to assess the security level of fintech companies and data aggregators, whose preparedness against hacks is seen as increasingly important to the stability of the wider financial industry, the companies said.

The financial services sector is among the most vulnerable to cyber crime because of the vast amount of money and valuable data that banks and investment firms process each day.

Over the past few years, banks and other finance firms have been strengthening their ties with young tech-savvy startups which are aiming to revamp the way financial services are created and consumed. The growth in collaboration is occurring either voluntarily, with banks looking to remain competitive, or due to new regulation such as the European Union’s revised Payment Services Directive.

This has heightened the need for fintech companies to implement sturdy cybersecurity measures, said Matthew Blake, head of the Financial and Monetary System Initiative at the WEF.

“Many partnerships are forming between financial technology companies and incumbent institutions,” Blake said in an interview. “Through those linkages there is a potential introduction of risk.”

The need for better cybersecurity assessment mechanisms was identified in a WEF report published on Tuesday as one of the solutions to the security challenges posed by the increased use of digital services in finance.

The report noted that the use of technology innovations such as robotics and biometrics was expanding the amount of customer data at risk.

“While we are excited by the innovation of fintech, it also creates risks that I think need to be identified and worked on to establish standards,” Michael Dodson, president and CEO of DTCC, said in an interview.

The new consortium, which will be managed by the WEF and work with the organization’s new Geneva-based Global Centre of Cybersecurity, will develop a point-based scoring system for fintech firms.

Reporting by Anna Irrera; Editing by Phil Berlowitz

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on World Economic Forum leads creation of fintech cybersecurity consortium

With a Single, Insulting Tweet, Uber's CEO Just Destroyed Months of Hard Work

I’m a fan of Uber CEO Dara Khosrowshahi. In a few months, he’s worked hard to transform Uber’s image from a company known for bad behavior to one that is eager to learn from its mistakes and play nice with others.

But a recent tweet from Khosrowshahi threatens to destroy the image he’s worked so hard to establish. In response to a critical study by MIT’s Center for Energy and Environmental Policy Research (CEEPR), Khosrowshahi mocked the famed research university, tweeting that: “MIT = Mathematically Incompetent Theories (at least as it pertains to ride-sharing).”


The fact is, Khosrowshahi may be correct in his assertion that the study is basically flawed. But the mocking tone of this tweet demonstrates a lack of emotional intelligence. Before I explain why, let’s take a closer look at the context.

The (potential) problem with MIT’s study

It all began when MIT recently published a study that shared some alarming numbers in the ridesharing industry.

The study, entitled The Economics of Ride-Hailing: Driver Revenue, Expenses and Taxes, was carried out by the MIT Center for Energy and Environmental Policy Research. The team paired survey data of more than 1,100 drivers working for Uber and Lyft with information regarding the current costs of operating a vehicle (e.g., fuel, insurance, maintenance, and repairs) to help determine driver wages per hour.

Initially, researchers found that:

  • median profit from driving is $3.37/hour before taxes;
  • 74% of drivers earn less than the minimum wage in their state; and, 
  • 30% of drivers are actually losing money once vehicle expenses are included.

Uber was quick to respond to these claims.

Jonathan Hall, the company’s chief economist, published a lengthy and thoughtful criticism of the study on Medium. Hall believes that drivers’ hourly earnings should be listed as much higher. He estimates the problem comes down to the authors’ methodology, which he believes demonstrates inconsistent logic and a possible misinterpretation of the data. According to Hall, this error led to findings that “[differ] markedly from previous academic studies on the topic of driver earnings.”

Actually, Hall makes some good points. In fact, the MIT study’s lead author, Stephen Zoepf, admitted as much in a statement he made to Reuters via email. “I can see how the question on revenue might have been interpreted differently by respondents,” wrote Zoepf. “I’m re-running the analysis this weekend using Uber’s more optimistic assumptions and should have new results and a public response acknowledging the discrepancy by Monday.”

What emotional intelligence has to do with it

I praise Hall’s rebuttal as not only thoughtful, but also respectful. Hall strikes a conciliatory tone when he shares that his team has “reached out to the paper’s authors to share [their] concerns and to suggest ways we might work together to refine their approach.” Hall also acknowledges he has no issue with how the MIT researchers estimate the costs of operating a car; in doing so, he implies there may be problems that need to be addressed.

In contrast, Khosrowshahi’s sarcastic, attacking tweet is not only disrespectful, it shows a lack of ability to benefit from criticism. It brings back memories of “the old Uber,” which was marked by hubris and a “fight-picking” mentality.

To be clear, the researchers only released a brief on the study; the full results haven’t yet been published. But the questions being risen are by no means new. For example, are ridesharing drivers grossly underestimating their profits, failing to factor in costs for additional fuel, maintenance, and repairs for their cars? How will tax and insurance laws need to change to accommodate the ridesharing economy? These are questions that Uber will eventually be forced to answer.

Of course, nobody’s perfect, and Khosrowshahi will continue to make his share of mistakes. But while I continue to applaud his efforts to improve Uber’s culture and image, this tweet reminds us that there is still a long, difficult road ahead.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on With a Single, Insulting Tweet, Uber's CEO Just Destroyed Months of Hard Work

Two 11%+ Yielders To Buy After Earnings Reports (REITs/MLPs)

This research report was jointly produced with High Dividend Opportunities co-author Jussi Askola.

We are currently in a raging bull market, and since November 2016, “growth and momentum stocks” have strongly outperformed “value stocks”. Many high-yield sectors, notably Property REITs, BDCs, and Midstream MLPs, were out of favor and became value sectors.

There is plenty of good news that income investors should take into account:

  1. High Dividend Sectors are Cheap! The good news is that today, several high-yield sectors are trading at their lowest valuations in years and currently offer investors a unique entry point.

  2. Value Stocks outperform growth stocks over the long term: Investors should note that over the long term, “value stocks” tend to outperform “growth stocks”. Based on a study by Bank of America/Merrill Lynch over a 90-year period, growth stocks returned an average of 12.6% annually since 1926. At the same time, value stocks generated an average return of 17% per year over the same time frame. “Value has outperformed Growth in roughly three out of every five years over this period”.

  3. Downside Risk is Limited: In a world where equity markets keep trading at “all-time highs” and looking “expensive”, value dividend stocks, such as REITs, MLPs, and BDCs, still trade at very cheap valuations. Therefore, in case of any market turbulence or market correction, the downside potential should be very limited.

Currently, the high yield space is offering some unique buying opportunities. At “High Dividend Opportunities“, we focus on stocks trading at low valuations, or in other words “value stocks”. Today, we highlight two cheap stocks that investors should consider after they reported their 4th quarter earnings – with yields above 11%.

ETP Earnings Report: A Stellar Quarter – Yield 11.8%

Energy Transfer Partners (NYSE:ETP), a stock we recently covered on Seeking Alpha, reported its 4th quarter earnings, swinging to huge profits.

  • Revenue came in at $8.61 billion, up 32% year over year.
  • Adjusted EBITDA totaled $1.94 billion for the 4th quarter, up more than 30%.
  • Distributable cash flow increased by $240 million to $1.2 billion, or 25% higher compared to the same quarter a year ago.
  • The dividend coverage ratio soared to 130% for the quarter and 120% for the year.

In addition, the company raised nearly $2 billion in two transactions that significantly increased parent liquidity. These two transactions included the sale of Sunoco LP common units for $540 million and the sale of the compression business to USA Compression Partners LP (NYSE:USAC) for $1.7 billion (of which $1.3 billion was in cash and the rest in equity). In the meantime, these shares will demonstrate to the market that ETP, as the new partner, is aligned with the limited partner interests of USA Compression Partners LP.

Investors can look forward to more good news this year. Many capital projects have come on-line. That once-ambitious schedule of growth will now result in a lot of cash flow. The acquisition of the general partnership of USA Compression Partners by ETP’s parent company Energy Transfer Equity (NYSE:ETE) opens another avenue of growth. There is great chance that more good earning news is on the way this next fiscal year. ETP’s credit line with the banks now has about $4 billion unused. This could provide an excellent way to acquire more assets and grow in the future.


Source: Q4 ETP Presentation

In order to conduct an accurate valuation (using full-year numbers), it is best to back out any “distribution incentive rights” (including relinquishment) and any general partner interest from the “distributable cash flows” (“DCF”). DCF for the 12 months was at $3,494 million; less IDR relinquishment and GP interest of $672 million, we get $2,822 million in DCF.

At the most recent price of $19.21 per share, we get a valuation of 8.0 times DCF, which is a real bargain considering that ETP is one of the largest and fastest-growing midstream MLPs.

The outlook of the midstream sector seems to be solid, with many midstream MLPs having reported solid quarters, including Enterprise Products Partners (NYSE:EPD) and Buckeye Partners (BPL). This can be attributed to record crude oil and natural gas production in the United States.

The future looks bright for the midstream sector. At the current cheap price and yield of 11.8%, ETP is one of our favorite midstream MLPs to own for the year 2018.


WPG Earnings Report: Operational Resilience vs. Strategic Challenges – Yield 14.6%

Washington Prime Group (NYSE:WPG), a Retail Property REIT, reported its 4th-quarter and full-year 2017 results, and while the market keeps focusing on strategic challenges, we are encouraged to see continued resilience in operational figures.

To give a little bit of context here, we need to keep in mind that we are discussing about a firm that is trading at 4.0x its cash flow, which is extremely cheap in today’s market place. In this sense, the expectations of the market are very negative and the sentiment very low. WPG, just like CBL, is a class B mall owner, and as such, it is widely expected to eventually become obsolete due to the growth of e-commerce.

The perception is that no one goes to class B malls anymore; and yet, the NOI went down by just 1%, the average sales per square foot remains at close to all-time-highs, and the leasing performance suggests strong demand for space by retailers.

A 1% drop in NOI is really nothing for a firm selling at such a ridiculously low valuation, and shows once again that class B malls remain relevant even in today’s highly digitalized marketplace. What the market seems to ignore is that unlike CBL, WPG owns on average higher-quality properties. In fact, Tier One and Open Air properties accounted for as much as 81.2% of the NOI in 2017, and these properties even showed a 0.9% increase in NOI for the year! It is the remaining 18.8% which are causing the temporary dilution in FFO, but clearly, the large majority of the portfolio has great value which is highly sustainable.

This was the main news to us: Operationally, the great majority of the properties are performing just fine. Therefore, the reason why the FFO is dropping year over year is not due to problems at the property level, but rather, strategic decisions such as dispositions and continued deleveraging.

As the CEO notes:

“Very simply, the $0.12 of annual dilution was attributable to our unsecured notes offering, the second joint venture with O’Connor Capital Partners and the disposition of six noncore assets. As the result was an overall reduction in indebtedness of approximately $400 million, it’s silly to question the prudency of such actions.”

Put in other words, the company is improving its portfolio and balance sheet quality to lower its risk profile at the expense of some short-term dilution in FFO figures. Short term-oriented investors may not like it, but this is the best approach to maximize and sustain long-term value. Eventually, as WPG ends its disposition and deleveraging plan, the FFO will stabilize and the market will realize the progress made and reward the firm with a higher FFO multiple. Given that it stands currently at 4.0 times FFO (using 12-month adjusted FFO of $1.63), even a small bump would result in material upside.

Other relevant highlights

  • WPG is making a new acquisition, which was rather unexpected! It suggests that we are approaching the end of the deleveraging plan. Moreover, the property appears to be an attractive investment as a dominant hybrid format retail venue situated in Missoula, Montana. The asset features a Lucky’s Market and a nine-screen dine-in AMC Theater – both newly built – and yields about 10%.
  • The dividend is maintained and remains well-covered.
  • Redevelopments continue, with 36 projects underway ranging between $1 million and $60 million with an average estimated yield of 10%.
  • Property NOI is expected to continue show resilience in 2018.

Bottom Line

Overall, we are happy with the news and glad that the market seems to, for once, agree with us – rewarding WPG with a huge bump after earnings. This is the story of short-term dilution versus long-term potential reward to patient investors. Just like in the case of CBL, we remain optimistic long-term holders and are happy to keep cashing a yield of 14.6% while we wait for upside to materialize.

If you enjoyed this article and wish to receive updates on our latest research, click “Follow” next to my name at the top of this article.

Disclosure: I am/we are long ETP, WPG, CBL, EPD, BPL.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Two 11%+ Yielders To Buy After Earnings Reports (REITs/MLPs)

Being A Freelancer Is Not The Same As Being An Entrepreneur. Here's Why

The dream before you take the leap to become a full-time entrepreneur is to have “work-life balance.”

I remember back when I was working my 9-5, a little over a year ago. I had to commute an hour to work each way, which made my commitment closer to an 8-6. And then some days I would need to work late, which meant I wouldn’t leave until 7, or sometimes 8. I’d finally make it home, throw my backpack onto my bed, and sit in my desk chair with the sullen realization that the day was over. I had enough time to cook dinner and do a little late-night writing before passing out and repeating the same dance all over again.

Becoming an entrepreneur, I thought, would give me more time to enjoy some of my other passions.

Being a freelancer is not the same as being an entrepreneur–and here’s why:

Right after taking the leap, and making it known that I was a freelance writer open for business, I quadrupled my income–I am not exaggerating. After building a strong personal brand on the Internet, and mastering the “fast-paced voice” that have driven many of my articles to viral status (100,000 views or more), finding clients wasn’t an issue. Part ghostwriter for CEOs, part copywriter for big brands, and I could work 2-3 hours per day and out earn my previous 9-5 job by a large margin. 

That lifestyle lasted all of 3 weeks.

“You have to take the leap,” I said to one of my closest friends. “Let’s build a company.”

I was under the (naive) impression that building a company was something I could do in those same 2-3 hours each day–except with more upside. 

Not even close.

When my friend (who is my co-founder) took the leap, our first venture failed. And while we kept looking for our next idea, I worked 14-hour days to support both of our overheads. Suddenly, all those things I had originally wanted out of my leap–the freedom to wake up and enjoy the morning sunrise with a warm cup of coffee–were thrown out the window. Instead, I was up waiting impatiently at Starbucks for them to refill my coffee so I could get back to working so we could both eat that month. 

I felt personally responsible for the both of us.

About 4 (exhausting) months later, we found it. We called it Digital Press, and finally, finally, things started falling into place. We made our first hire. And then our second. And with every hire I just kept wondering when that 2-3 hour per day schedule was going to come back around.

Until we hired our 5th person–and I realized I was lying to myself. I wasn’t a freelancer anymore. I was a founder of a rapidly-growing company. And I had just signed myself up for a building process that would take years, not months.

I share this because I notice every aspiring entrepreneur has the same faulty expectations.

You think entrepreneurship is going to be easier than having a 9-5. It’s not.

You think entrepreneurship is going to give you more time to yourself. It’s not.

You think entrepreneurship is going to make you more money, faster. It’s not. (You’re going to end up reinvesting it all into your business.)

You think entrepreneurship is going to give you more freedom. It is, and it’s not.

And your biggest challenge is going to be the thing you assume will be the easiest thing of all, which is work-life balance. 

Instead of starting your work day at 9 a.m. when you walk into the office, it’s going to start at 6:30 a.m. the moment you refresh your email on your phone.

Instead of your work day ending at 5 p.m. when you leave the office, it’s going to end at 1:00 a.m. after you’ve just worked through another chunk on your never-ending To Do list.

And instead of you having some semblance of separation between your “work” and the rest of your life, that line is going to become blurred entirely. You’re going to work on the weekends. You’re going to think about clients while you’re with your family. You’re going to have trouble being present with your significant other. Your entire life is going to be thrown upside-down, and it’s going to be on you to do the hardest thing you’ve ever done in your entire life.

“I’m not working right now.”

Every entrepreneur struggles with this. I see it now more than ever–since I’ve become one. It sounds so easy to draw that line in the sand, but the truth is, we all struggle with it. And we struggle because we care. We care about the work we do, about our partners and our employees and our clients and the future of the company. We care to the point where it becomes obsessive, and eventually that caring starts to turn stressful. 

If you want to become, or are about to become, or have already become an entrepreneur, then you need to admit to yourself that you have no work-life balance. That is the definition of entrepreneurship: you are your work. Without you, the company wouldn’t exist, your clients would buy from someone else, and your employees would work elsewhere. 

Which means, as difficult as it might be, you need to intentionally create that space between yourself and your work–and trust that in doing so, it will actually make the work you do, better.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Being A Freelancer Is Not The Same As Being An Entrepreneur. Here's Why

Here's the Story of the Stanford PhD Who Allegedly Gamed the Texas Lottery (and Won $20 Million)

I wrote recently about the husband and wife team out of Michigan who figured out how to game the lottery, and walked away with almost $27 million over the course of nine years.

But it turns out there’s a greater mystery in the world of lottery watchers. 

Her name is Joan Ginther, and she won the Texas Lottery at least four times in 10 years, while apparently buying thousands if not millions of dollars wroth of tickets.

Oh, did we mention she has a Stanford PhD in statistics, lives in Las Vegas, and yet repeatedly made the trip to a single store in rural Texas to make many of her purchases?

Yes, the plot thickens. And so far at least, nobody knows exactly how she did it.

There are several differences between Ginther’s lucrative story in Texas and that of Marge and Jerry Selbee in Michigan and Massachusetts.

For starters, there’s the fact that while the Selbees are now very upfront about how they made their millions, and were the subject of a very well written report recently on HuffPost, Ginther apparently went underground.

At last report, she lives in Las Vegas, but I can’t find that she’s ever given an interview. My attempts to track her down for this story amounted to nothing.

So, we’re left with reverse-engineering and speculation. 

By far the best attempt to decipher her strategy that I can find came from the work of Peter Murca, a reporter with Philly.com, who wrote about her at length in 2014.

As Murca tells the story, Ginther likely won her first jackpot in Texas the traditional way: blind, dumb luck, walking away with a $5.4 million jackpot in 1993, payable in annual installments over 20 years.

But Murca’s report suggests the experience led her to turn her Stanford training toward the goal of winning the lottery over and over.

And, after spending a considerable amount of time trying to unpack what she did, he comes to several conclusions.

First, he says, she figured out that while the lottery is ultimately a game of chance, logistics made it possible to ease the odds.

In sum, the fact that the Texas lottery had to ship thousands of scratch off cards to stores all over the state, made it possible for people who pay close attention to track how many tickets had shipped, how many prizes were left, and in which stores the likely winners might wind up.

Second, she may have had help. As Murca wrote:

Anna Morales, a worker in the local water department, filed claims for 23 prizes worth $1,000 to $10,000 in seven games from 2009 through 2012 — about as many as Ginther claimed but in half the time. Another $1,000 ticket was cashed by Morales’ husband, Noe, in 2011.

Pure coincidence seems implausible.

Since neither woman consented to be interviewed, and records don’t show who physically bought each winning ticket, let alone whose money was used, explanations for both women claiming so many winners range from generosity to imitation to teamwork.

Third, she apparently played the game of large numbers.

Meaning that over time, Murca concludes she bought a total of $3.3 million worth of tickets in order to win her total $20 million in winnings.

To be clear, that’s an amazing margin, if she figured this out. But it suggests she had figured out a statistical truth that required scale to come to fruition.

And, Murca says, she likely bit hard into her cost of goods, because many of those $3.3 million worth of lottery tickets were winners– just not for the massive multimillion dollar prizes that make headlines.

A few dollars here, a few hundred there, even a few thousand now and again–and Murca concluded the $3.3 million in tickets might have cost her only about $1 million.

To be clear, we don’t know exactly what happened.

The frustrating part about Ginther’s story is that we can’t wrap it up with a nice bow the way we can with the Selbees, or with the MIT students who also figured out how to game the Massachusetts lottery.

Ginther apparently hasn’t given interviews. (If you change your mind, Ms. Ginther, contact me!)

But I think there’s a lesson, even if it’s one I’d never put into personally with something like the lottery.

In every successful business, the founders either have unique access to private information, or else a unique application that can be executed with public information.

The question for any of us in business is: which strategy works best for you?

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Here's the Story of the Stanford PhD Who Allegedly Gamed the Texas Lottery (and Won $20 Million)

Microchip to buy Microsemi for about $8.35 billion

(Reuters) – Microchip Technology Inc said on Thursday it would buy Microsemi Corp, the largest U.S. commercial supplier of military and aerospace semiconductor equipment, for about $8.35 billion.

The deal comes amid a new wave of consolidation in the semiconductor industry that included Singapore-based chipmaker Broadcom Ltd unveiling a $117 billion bid to acquire U.S. rival Qualcomm Inc.

Aliso Viejo, California-based Microsemi supplies high-performance analog and mixed signal integrated circuits and semiconductors to the aerospace and defense, communications, data center and industrial sectors.

Microsemi, which has grown in the last few years through a wave of acquisitions, has said it wants to expand further in aerospace and defense.

Microchip currently gets about 2 percent of its annual sales from the aerospace and defense markets.

The deal would also strengthen Microchip’s base in the computing and communications sectors, which together accounted for less than 15 percent of its full-year sales.

The transaction includes a $68.78 per share cash offer, representing a premium of about 7 percent to Microsemi’s closing price on Thursday.

Shares of Microchip were up about 5 percent at $93.40 in extended trading, while that of Microsemi rose about 5 percent to $67.55, shy of the offer price.

Earlier this week, the Wall Street Journal reported that Arizona-based Microchip was in talks to buy Microsemi.

Microchip said on Thursday the deal, which is expected to close in the second quarter of 2018, would immediately add to its adjusted earnings per share.

The chipmaker expects an estimated savings of $300 million in the third year after the deal close.

J.P. Morgan, which is providing $5.6 billion in committed financing for the deal, was Microchip’s financial adviser, and Qatalyst Partners advised Microsemi.

Microchip on Thursday also narrowed its net sales forecast for the fourth quarter ending March to a range of flat to down 2 percent, from up 1 percent to down 3 percent.

The company said it now expects adjusted earnings per share for the quarter to be at between $1.32 and $1.37, compared with $1.30 to $1.39 per share previously.

Reporting by Ankit Ajmera in Bengaluru; Editing by Maju Samuel

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on Microchip to buy Microsemi for about $8.35 billion

NOAA's New GOES-S Satellite Is a Game Changer for Severe Weather Forecasts

2017 was a grievously good year for cataclysms.

Infernos engulfed not just California, which suffered its most destructive wildfire season on record, but the greater American West. A hyperactive hurricane season delivered the Gulf Coast its costliest thrashing in history. And those hurricanes also triggered tornado outbreaks across the southern United States, contributing to one of the most active and prolonged tornado seasons ever documented.

It could be a sign of things to come: Climate models project that rising CO2 levels will stoke more violent tempests, fires, and floods. Fortunately, confronted by the planet’s increasingly crazypants forecast, scientists have developed an arsenal of tools for observing, understanding, and anticipating severe weather.

Chief among these are the National Oceanic and Atmospheric Administration’s GOES-R (pronounced “goes-are” or “Gozer,” like the Ghostbusters villain, depending on who you ask) weather satellites. The acronym stands for Geostationary Operational Environmental Satellite. The “R” at the end has to do with a convoluted naming convention: NOAA assigns each GOES satellite a letter before launch and a number when it achieves orbit. Thus, in 1975, GOES-A became GOES-1 when it parked itself 22,300 feet above the Earth, whereas GOES-G, which was destroyed in a failed launch, never received a number. Complicating things further is the fact that GOES-R is both the name for NOAA’s latest series of environmental satellites as well as one of the satellites in that series. The first, GOES-R, launched successfully in November 2016, thereby becoming GOES-16. The second, GOES-S, is slated to launch March 1 aboard an Atlas V rocket from Cape Canaveral Air Force Station. The two hour launch window opens at 5:02 pm Eastern, and assuming the 11,500-pound spacecraft makes it into geostationary orbit safely, it’ll go by GOES-17.

Got it? Good. NOAA’s inscrutable satellite nomenclature aside, the important thing to know about GOES-16 and (fingers crossed) -17 is that they are the most sophisticated environmental forecasting spacecraft ever to ride a rocket to orbit. They’ll monitor the eastern and western portions of the US, respectively, and their adjoining oceans, spanning an area that extends from the west coast of Africa to the eastern reaches of New Zealand. Together, they’ll provide researchers and meteorologists with valuable data on weather systems—including violent storms, wildfires, lightning, and dense fog—in close to real time. The upshot: more accurate forecasts on your weather app, for one. More robust climate models, for another. But most consequentially: more advance warning, the next time local conditions turn cataclysmic.

The United Launch Alliance Atlas V booster and Centaur stage for NOAA’s GOES-S are offloaded from the Mariner transport ship at the Army Wharf at Cape Canaveral Air Force Station in Florida.

NASA/Leif Heimbold

Assuming it achieves orbit, the satellite formerly known as GOES-S will provide that warning with the help of powerful instruments like the Advanced Baseline Imager. Its 70 megapixel camera will scan the planet along 16 spectral channels tuned to detect visible, infrared, and near-infrared signals at four times the resolution and five times faster than GOES-15, the satellite GOES-S is destined to replace. Translation: This sentinel in the sky can simultaneously image the Western hemisphere once every 15 minutes, the continental US every five, and smaller areas of interest every 30 seconds.

That includes nascent wildfires, which show up clearest at infrared wavelengths. They’ll register at a resolution of 2×2 km per pixel (compared to GOES-15 resolution of 4×4 km per pixel). “That increased resolution lets you see smaller fires, and the improved temporal resolution lets you see how they’re developing and where they’re moving,” says GOES-R flight project manager Pam Sullivan. And when you combine the visible channels with the infrared, you can see and track smoke, as well, “which gives people on the ground an idea of where the wind’s blowing, and where they should deploy their firefighters.”

Also aboard GOES-S is the excellently named Geostationary Lightning Mapper, which will dramatically improve the tracking of violent storm systems. Studies have shown that spikes in lightning activity can predict the onset of more severe weather. “Today, the average lead time for tornado warnings is between 10 and 15 minutes,” says Tim Walsh, acting director for the GOES-R Series program. “With the help of GLM, the hope is to see a big increase in that lead time—maybe even doubling it.”

The first such instrument flown in geostationary orbit, the mapper will detect lightning by looking at one very narrow spectral band, at 777.4 nm. The reason? Lightning strikes trigger the emission of ozone in Earth’s atmosphere, which registers at this very specific wavelength. “It’s the perfect thing to monitor when you want to look for lightning without being fooled by other light in that field of view,” Sullivan says. The GLM will transmit those spectral readings to Earth, where processing algorithms will convert the data into near real-time data that forecasters can use.

Lightning, fire, and storm detection not good enough for you? These next-generation satellites will also improve fog detection around airports, enhance the detection of emergency beacon signals, improve planning for aviation routes, and boost the detection of geomagnetic storms emanating from the sun, buying communications and navigations systems valuable time to prepare for disruption by inbound solar particles.

“The key here is we’re completing our picture of the west coast,” says Walsh. The weather in Hawaii and Alaska, and along the Pacific Coast, originates farther west than researchers and forecasters could ever see with GOES-16. Its sibling satellite, assuming all goes well, will give researchers, forecasters, and the public a better sense of what’s coming—from the everyday, to the extreme.

Space Weather

  • Last November, NASA and NOAA also launched their JPSS-1 weather satellite; you can learn more about it here.

  • But the United States isn’t the only country with good orbital infrastructure; check out this Japanese weather satellite.

  • Just because your big brother is launching doesn’t mean we’re going to forget about you, GOES-R. You still have the better name.

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on NOAA's New GOES-S Satellite Is a Game Changer for Severe Weather Forecasts

House passes bill to penalize websites for sex trafficking

WASHINGTON (Reuters) – The U.S. House of Representatives on Tuesday overwhelmingly passed legislation to make it easier to penalize operators of websites that facilitate online sex trafficking, chipping away at a bedrock legal shield for the technology industry.

The bill’s passage marks one of the most concrete actions in recent years from the U.S. Congress to tighten regulation of internet firms, which have drawn heavy scrutiny from lawmakers in both parties over the past year due to an array of concerns regarding the size and influence of their platforms.

The House passed the measure 388-25. It still needs to pass the U.S. Senate, where similar legislation has already gained substantial support, and then be signed by President Donald Trump before it can become law.

Speaker Paul Ryan, in a statement before the vote, said the bill would help “put an end to modern-day slavery here in the United States.”

Several major internet companies, including Alphabet Inc’s Google and Facebook Inc, had been reluctant to support any congressional effort to dent what is known as Section 230 of the Communications Decency Act, a decades-old law that protects them from liability for the activities of their users.

But facing political pressure, the internet industry slowly warmed to a proposal that gained traction in the Senate last year, and eventually endorsed it after it gained sizeable bipartisan support.

Republican Senator Rob Portman, a chief architect of the Senate proposal, said in a statement he supported the House’s similar version and called on the Senate to quickly pass it.

The legislation is a result of years of law-enforcement lobbying for a crackdown on the online classified site backpage.com, which is used for sex advertising.

It would make it easier for states and sex-trafficking victims to sue social media networks, advertisers and others that fail to keep exploitative material off their platforms.

Some critics warned that the House measure would weaken Section 230 in a way that would only serve to further help established internet giants, who possess larger resources to police their content, and not adequately address the problem.

“This bill will only prop up the entrenched players who are rapidly losing the public’s trust,” Democratic Senator Ron Wyden, an original author of Section 230, said. “The failure to understand the technological side effects of this bill – specifically that it will become harder to expose sex-traffickers, while hamstringing innovation – will be something that this Congress will regret.”

Reporting by Dustin Volz; editing by Sandra Maler and Lisa Shumaker

Posted in Cloud Computing, Web Hosting, Web Hosting Comparison Review, Web Hosting News | Comments Off on House passes bill to penalize websites for sex trafficking