Netflix Adds Former Obama National Security Advisor and U.N. Ambassador Susan Rice to Board

Netflix’s board now includes Susan Rice, the former United Nations ambassador and National Security Advisor under President Barack Obama.

The appointment, announced on Wednesday, Netflix, gives the video streaming giant a high-profile former government official at a time of increased regulatory scrutiny of some of the nation’s biggest technology companies. Facebook (fb) and Google (goog), for example, face increasing concerns about their influence and handling of consumer data.

While Netflix (nflx) has not been one of the tech giants politicians have singled out in recent months over privacy or antitrust issues, it is generally considered to be among an elite group that includes Facebook, Amazon (amzn), and Google. Shares in the companies have recently reached all-time highs, although they have retreated in recent days.

Rice’s tenure as a U.N. ambassador could also come in handy as Netflix continues to push heavily into international markets.

“We are delighted to welcome Ambassador Rice to the Netflix board,” Netflix CEO Reed Hastings said in a statement. “For decades, she has tackled difficult, complex global issues with intelligence, integrity and insight and we look forward to benefiting from her experience and wisdom.”

Other members of Netflix’s board include Microsoft president and chief legal officer Brad Smith, executive chairman of Zillow Group Richard Barton, and former co-chair of Disney Media Anne Sweeney.

Last year, President Donald Trump insinuated without citing evidence that Rice may have illegally attempted to learn the identities of Trump associates for political purposes, The New York Times reported. In an interview with MSNBC, Rice called the president’s accusations “absolutely false.”

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Netflix’s shares fell about 3.7% in midday trading on Wednesday to $290 as part of a broader sell off of tech stocks.

Waymo Expands Its Robo-Fleet with Electric Jaguar SUVs

The self-driving car industry is in the final miles of a grueling marathon to bring autonomous technology to market. Uber needs autonomous tech to offer ride-hailing services sans human drivers. GM bought Cruise and put autonomous Chevy Bolts on the roads of San Francisco in an effort to remain relevant when people stop buying private cars. If Tesla can cross the line first, it could disrupt the other guys and even offer its own ride-sharing service.

And ahead of them all is Waymo. After nearly a decade of R&D, the company that started life as Google’s self-driving car project has shifted its focus from tech to operations—from development to deployment. The Alphabet subsidiary says it will launch its first commercial, driverless service later this year, in Arizona. It already has the permit. All of which makes it the irritatingly fresh-looking guy, in a dayglow tank-top, taking big bouncing strides at the front of the running pack.

Today, Waymo announced it’s partnering with Jaguar Land Rover to build autonomous versions of the electric I-Pace SUV. “It’s going to be the world’s first premium, electric, fully self-driving car,” says John Krafcik, CEO of Waymo. That sounds like a claim Elon Musk would love to be able to make about Tesla.

Waymo plans to buy 20,000 of the vehicles over the next couple years, do extensive testing and validation, and then fully integration them into its passenger-carrying fleet by 2020. The company says the new cars will be able to offer a million trips per day. It’s a huge expansion for Waymo, which has around 600 vehicles on the roads now, and an existing partnership with Chrysler for “thousands” more minivans.

Waymo is launching its debut service in Arizona, thanks to relaxed legislation and good weather. But Uber’s recent crash in Tempe—one of its cars killed a pedestrian pushing a bike across the street—raises questions about the ethics and wisdom of testing on public roads. Earlier today, Governor Doug Ducey indefinitely barred Uber’s robo-cars from testing in the state.

“We have confidence in our system,” says Krafcik. “We continue to work very closely with regulators, but there should be no question about the care we take, and the redundancy we have.” He cites the five million autonomous miles his firm has driven in 25 cities, plus five billion miles in simulations, when defending the decision to let his vehicles loose on public streets.

This is the sixth vehicle that Waymo has outfitted with sensors, from the Prius, to the most recent Chrysler Pacifica, and it’s getting pretty slick with the styling. The autonomous I-Pace prototype the company unveiled on stage ahead of the New York Auto Show doesn’t ruin the hunky lines of Jaguar’s SUV too much. Waymo and Jaguar have condensed the lidar laser scanners, radar, and cameras, needed to perceive the world around the car, into a streamlined roof box with a black bulge on the top, which looks like the spinning light on a 1970s cop car. The only other giveaways are lumpy sensors over the front wheels, and some less-than-subtle badging.

Jaguar, for its part, gets a large chunk of guaranteed sales and a chance to look like it’s at the forefront of this emerging technology. The company is involved with separate self-driving trials with the UK Autodrive Project, a three year test of connected and autonomous cars.

The British company launched the I-Pace earlier this year. It’s fully electric, with a 95kWh battery, and a range of 240 miles. It can sprint to 60 mph in just 4.5 seconds, and makes a compelling alternative to Tesla’s Model X. (Just don’t expect the robot to floor the accelerator.) The range is enough for any average commuter, but for a self-driving vehicle aiming to offer up to 50 rides a day, it may be a limiting factor. The hardware required to enable robo-driving is also power intensive—all the extra sensors and the chips in the supercomputers on board suck down electrons.

On the other hand, Jaguar advertises an 80 percent top-up in 40 minutes. “One thing that attracted us to the I-Pace is the quick recharge time,” says Kafcik. “We can get through the peak duty cycle of a rush hour, and then do a quick top-off charge to get us through the rest of the day.”

Learning how to manage a fleet of electric vehicles, or who to partner with, is another valuable insight Waymo will gain, and it’s one that other players will need to learn if countries like the UK, India, Norway, and China, go through with plans to ban the sales of internal combustion engines. As well as just needing outlets, self-driving cars will have to be capable of hooking up to power with no human help. That could be achieved with wireless charger (just park over a particular spot, like throwing your phone on a charging pad), or more creepy looking concepts like Tesla’s robotic snake cable charger.

As for the passengers, a ride in a Jag might be fun at first. But dramatic as it currently sounds, a ride in a vehicle with no human in control quickly becomes mundane. People in the back get over the novelty of an empty drivers’ seat quickly and resume normal passenger behavior, like looking at their phones, or napping, even as they cruise down the highway to the future.

Driving on My Own

  • Self-driving cars are coming. Here’s WIRED’s complete guide to the tech

  • Most of the big players are using humans to train and supervise their autonomous cars. But there’s a grim irony in that; humans are terrible drivers

  • Instead of blindly welcoming self-driving cars to their streets, city leaders could prevent tragedies like the Uber fatality from happening again.

This iTunes Store Error Message Suddenly Started Plaguing Apple iOS Users Worldwide

Apple has reported outages for the iTunes Store, the App Store and other systems after customers reported receiving error messages.

Several Apple customers and iOS users tweeted at Apple Support on Tuesday to find out why they were repeatedly receiving messages saying “The iTunes Store is unable to process purchases at this time” — especially when no one was attempting to buy any applications. Users reported getting the pop-up message while trying to open apps on their iPhones.

Apple’s System Status page reports outages for Apple TV, the iBooks Store, the iTunes Store, iTune U, the App Store and the Volume Purchase Program. Each outage report says the ongoing issues started affecting some users at 3:04 p.m. Those affected will be unable to access the platforms and make purchases until the problems are resolved. Apple did not immediately respond to a request for comment.

Apple Support said on Twitter that it will update the System Status page with any new information.

Update: Apple’s System Status page reports that the issues were resolved at 4:49 p.m.

Tesla: The Moment Of Truth Is Approaching


Tesla’s Moment Of Truth Is Approaching

Tesla (TSLA) is an extraordinarily innovative company that has achieved amazing results in several sectors in a relatively short time frame. Let’s face it, if it weren’t for Tesla, EVs would still be limited to the likes of the Leaf and the Prius. The company also has achieved some remarkable feats in power generation and energy storage. Tesla is a company that looks to the future and shows us that things could be done smarter, more efficiently, and better than the current status quo can offer. But despite Tesla’s drive to continuously move forward and push the envelope on what’s possible, the company remains plagued by numerous problems.

It is easy to write these off as mere transient issues that will easily be offset and eclipsed by the company’s amazing products and stunning growth. However, Tesla is a publicly traded company with a fiduciary duty to its shareholders. Therefore, any significant issues facing the company that could cause the share price to decline significantly should be carefully examined, especially for anyone thinking of investing in the stock.

I have been bullish on Tesla for a long time, have been long its stock for most of the time throughout the last five years, and I continue to think that Tesla will be worth significantly more five years from now. But in the short term, there are some clear concerns that could cause some volatility to transpire in Tesla’s shares.

The stock is trading right around crucial technical support at roughly $300. The most recent decline comes on the back of a scathing Goldman Sachs’ downgrade. Moreover, the stock is technically in bear market territory as Tesla is off by well over 20% from recent highs. There’s an increasing number of fundamental elements weighing on Tesla’s share price, and the all-important Model 3 production appears to be hitting numerous speed bumps. In addition to all these developments, the company will announce delivery numbers for Q1 in the first week of April.


So, will $300 hold, will the stock rebound and move higher from here, or are Tesla shares headed for a breakdown instead? And what about longer term? Is there any hope for the company at all, and why in the world is Tesla worth $50 billion?

Model 3 Rampup

The Model 3 Rampup is likely one of the most important production efforts ever. It is certainly the most crucial manufacturing process in Tesla’s history as a company. A true EV, affordable, capable, and stylish, the likes of which have never been seen before. However, the rollout process has been anything but smooth, plagued by various problems and numerous delays.

Going by the company’s own original estimates, Tesla should be cranking out Model 3s at around 10,000 units per week by now. Even the drastically revised estimates call for about 2,500 units by now. What’s Tesla producing right now? While the true number remains a mystery, going by Bloomberg’s Model 3 tracker, the company is averaging around 750 Model 3 vehicles per week right now. This is drastically lower than even some of the most bearish estimates and suggests the company is on track to produce just 8,000 Model 3s this quarter.


Tesla was originally shooting for 500,000 Model 3s this year, but even with a constructive rampup from here, the company will likely only produce about 100,000. This is a huge difference, revenue-wise, performance-wise, confidence-wise, etc. But perhaps, most important is the increased pressure subpar production efforts of the Model 3 are inflicting on Tesla’s already fragile bottom line.

Tesla has managed to record just one profitable quarter in its near 10-year history as a publicly traded company. Moreover, the latest quarterly results have been showing massive losses, especially since the Model 3s troubled production process began. How much in losses? Well, nearly $1.3 billion in the last two quarters alone. What will the losses look like in Q1? Same ballpark, minus $500 million or worse. Why are the losses so great? Because the Model 3 production process is intended to be highly automated, efficient, and profitable, with an intermediate-term gross margin rate of 25%.

Unfortunately, so far, the production process has proven to be anything but highly efficient and profitable. And the longer Tesla continues to struggle with various “bottlenecks,” automation issues, and other problems associated with the Model 3 assembly, it will continue to burn through cash at an alarming pace. What’s Tesla’s gross margin on the Model 3 right now? Once again, the exact number remains a mystery, but judging by the company’s recent performance and estimates, gross margin on the Model 3 is close to zero, low single digits, or possibly even negative in a worst-case scenario.

When will Model 3 production improve to where the company is producing a profit, or is at least close to producing a profit on the vehicle? This too remains a mystery, but it must happen relatively soon if Tesla is to remain a viable business enterprise. My optimistic view is that the company will have most of the Model 3 issues figured out by the end of this year and will have a Model 3 gross margin close to 20% by early 2019.

Model S/X Sales

Another issue to consider is the apparent slowdown in Model S/X sales this quarter. Tesla said that it aims to deliver roughly 100,000 Model S/X vehicles this year, about the same as last year. The company also claimed that while demand remained strong for these vehicles, production capacity was constrained due to increased resources being diverted to the Model 3 vehicle.


According to, Tesla sold about 8,400 Model S and Model X vehicles in the U.S. in the first two months of this year. This is lower than last year’s figure of 8,800 Model S/X vehicles for the same time frame. Since about 60% of Tesla Model S/X sales come from the U.S., we can assume the company sold around 15,000 Model S/X vehicles in total in the first two months. By adding around 50% to account for March sales, this would give us approximately 22,500 Model S/X units for Q1. This is lower than last year’s 25,000 units and will make it very difficult for Tesla to achieve its target of 100,000 Model S/X vehicles this year.

Goldman Downgrade

This brings us to the recent Goldman Sachs downgrade. Tesla analysts at Goldman led by David Tamberrino recently reiterated their sell rating on Tesla with a $205 price target. The analysts expect Model 3 issues to drag out and call for just 7,000 Model 3 vehicles in Q1. Moreover, analysts predict lower Model S/X sales, a yoy decline of around 12%. Average consensus estimates are much rosier and call for nearly 14,000 Model 3s in Q1 and extremely robust sales of over 25,000 Model S/X sales in Q1.

The stock has gotten hammered since the note. Tesla is down eight out of nine trading days, with the price slumping by roughly 15% in this period alone. Furthermore, some investors could begin to lose a certain degree of confidence in the company, which could result in a further decline for Tesla’s share price. How much of a decline? Let’s look at the chart to get a better idea of where we are at and where we could be headed in Tesla’s stock.

Technical View

TSLA is currently sitting at major support of $290-300. This is a crucial level, as the stock has bounced off this level several times, and has not breached this support since penetrating it to the upside about a year ago. The RSI, CCI, and full stochastic suggest that conditions are approaching oversold levels. However, if the stock falls through this crucial support, a significant leg lower is likely to materialize.

It’s Not All Bad, There’s Some Good News as Well

Autopilot Upgrade

Tesla owners seem to be very pleased with the recent autopilot improvements. The common reaction appears to be that it feels much more natural and is very much akin to a human-like driving experience. Tesla remains at the cutting edge of AI. Therefore, it is not surprising that its self-driving program is yielding increasingly favorable results. Tesla also is one of the top destinations for IT specialists. Therefore, it is likely that the company will continue to be one of the predominant leaders in this space.

Model 3 Sales

There’s so much riding on the Model 3, and the production process could be a double-edged sword, so to say. Meaning that despite the discouraging Bloomberg estimates, they are still estimates. In addition, Tesla shut down Model 3 production for four days recently to make upgrades to the production process. Therefore, despite the overall “low number” of Model 3s produced this quarter, the actual production of the vehicle could be approaching Tesla’s revised target rate of 2,500 vehicles per week.


Does Tesla Deserve a $50 billion Valuation?

Whether Tesla’s stock is grossly overvalued or not remains a hot topic for debate. It depends on if you believe Tesla will ultimately make significant profits on its vehicles. It is often said that it is absurd that Tesla is valued at more than Ford (F). At first glance, this argument makes sense as Tesla sold about 100,000 vehicles in 2017 while Ford sold 6.6 million. Moreover, Tesla delivered just $11.7 billion in sales while Ford clocked in about $145 billion. Finally, Tesla lost nearly $2 billion while Ford reported a net income of about $7.6 billion.

Let’s look at the situation from a slightly different perspective, though. Ford’s average selling price for a car was just $22,000 in 2017. The company had a gross margin of 10%, and a profit margin of about 5%, indicating the company nets about $1,100 per vehicle.

We know that in the intermediate term, Tesla is shooting for a gross margin of 25% on the Model 3. With an average selling price of about $47,500 per vehicle, Tesla would have a gross profit of about $11,875 per vehicle to Ford’s $2,200. Moreover, if we assume Tesla can earn a net income of about 12.5%, (half of its gross margin per vehicle) Tesla would earn about $6,000 per a Model 3, or more than 5 times what Ford makes per a vehicle. This means Tesla could earn nearly as much as Ford by just selling 1 million Model 3s per year. This is not considering Model S/X sales, energy generation/storage, Tesla Semi, or any other future products.

By looking at the situation from this perspective, and by assuming that Tesla will be able to achieve its margin goals, it becomes very clear that Tesla has the potential to become enormously profitable within the next few years. Whether this actually happens remains to be seen, but this should give people an idea why the market is currently valuing Tesla at $50 billion. It is on the assumption that the company will become profitable and will be able to achieve target margin goals at some point in the next few years. Based on the underlying statistics, ultimately (within the next 3-5 years), Tesla could be valued at much more than $50 billion.

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Disclaimer: This article expresses solely my opinions, is produced for informational purposes only, and is not a recommendation to buy or sell any securities. Investing comes with risk to loss of principal. Please always conduct your own research and consider your investment decisions very carefully.

Disclosure: I am/we are long TSLA.

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.

Cambridge Analytica Wasn’t Quite What It Claimed to Be

Much of the past week’s rage at Facebook appears to hinge on the idea that wrongly obtained user data was used to influence the 2016 U.S. election – specifically, in favor of President Donald Trump. After all, dire warnings about mass data gathering have circulated for at least a decade. The public seemed to take little notice until the technology appeared to send politics haywire by using what a whistleblower described as an “arsenal of weapons” to influence voters.

But a series of reports suggest that, however real Facebook’s abuse of its users’ trust, Cambridge Analytica itself was hardly the master manipulator that it claimed to be. In a New York Times report from more than a year ago, Cambridge Analytica executives admitted that the “psychographics” techniques it promoted, supposedly able to profile voters’ deepest emotions, were not used in the Trump campaign. More recently, a political tech executive told the trade publication AdExchanger that the technology CA actually used was fairly standard, and that “Facebook or about any commercial [data management platform] can do that better even if their employees want you to lose.”

So, while psychographics has proven effective in influencing buying behavior in experiments, it’s still unclear whether or how the approach would work in an election. One political micro-targetting expert interviewed by The Verge questioned whether knowing a voter’s mindset based on Facebook “likes” could really have a dramatic influence amid the “overwhelming wave of data going into people’s head” during a political campaign.

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And when Cambridge Analytica made its most ambitious claims, it sometimes fell on its face. According to a new Mother Jones report, the company told the Ted Cruz campaign that a powerful software tool named Ripon could help it target voters, but that tool didn’t exist. It also told the Ben Carson campaign that it was adept in TV advertising, but turned out to be inept. Carson staffers reportedly thought it was possible the company was a sham. Even Trump wasn’t a lock for the firm, which onetime Trump campaign chair (and now indicted money launderer) Paul Manafort once described, according to Mother Jones, as “just full of shit, right?”

The disconnect between Cambridge Analytica’s image and its abilities has been repeatedly pinned on now-suspended CEO Alexander Nix. One former colleague described Nix to Mother Jones as an opportunist, whose sales pitch often amounted to “’Can I sell this to you and work out the details afterward?’” In 2016, the opportunity Nix saw was in Republican politics, where a dearth of political-tech players left an opening. His tendency to oversell may have also proven his undoing when a documentary crew taped him suggesting his company could deploy entrapment tactics to smear clients’ opponents.

It seems fitting, then, that Facebook has been the focus of anger after the discovery of its flawed data policies. But the fact that Cambridge Analytica was little more than a digital marketing firm with a posh British accent shouldn’t defuse anxiety about the impacts of digital profiling. YouTube has been shown, for instance, to algorithmically push viewers towards extreme content, and online propaganda has been tied to a rise in tribalism. Whether or not that dynamic can be steered to the benefit of a particular candidate, the risk to democracy itself is obvious.

Mark Zuckerberg Asks For Forgiveness With A Full-Page Newspaper Ad

Facebook CEO Mark Zuckerberg issued a public apology in an old-school format Sunday — via a full-page newspaper ad in major U.S. and U.K. papers.

The ad, printed in clear type over Zuckerberg’s signature, begins: “We have a responsibility to protect your information. If we can’t, we don’t deserve it.”

It then refers to “a quiz app built by a university researcher that leaked Facebook data of millions of people in 2014. This was a breach of trust, and I’m sorry we didn’t do more at the time. We’re now taking steps to make sure this doesn’t happen again.”

That’s a rather mealy-mouthed summary of the Cambridge Analytica debacle, in which a ‘quiz app’ was only the tip of the spear wielded by political operatives set on influencing the U.S. election.

Nonetheless, the ad continues. Zuckerberg says that Facebook has “already stopped apps like this from getting so much information. Now we’re limiting the data apps get when you sign in using Facebook.” Zuckerberg also writes that Facebook will investigate, ban, and inform users about other apps that had access to similarly large amounts of data. Facebook will also provide better privacy protection by reminding users what apps they’ve granted access to their data.

“Thank you for believing in this community,” Zuckerberg concludes. “I promise to do better for you.”

According to Vanity Fair, the ad appeared in British newspapers The Observer, The Sunday Times, Mail on Sunday, Sunday Mirror, Sunday Express, and Sunday Telegraph. In the U.S., it appeared in print editions of The New York Times, The Washington Post, and The Wall Street Journal.

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The ad is the latest in a weeklong series of public apologies by Zuckerberg and other execs. Such apologies, followed by promises to do better, are getting less convincing every time. And the surge in calls to #deletefacebook suggests users seem to be waking up to the fact that Facebook is less a “community” than an ingenious digital glue trap. Investors certainly seem to doubt that Facebook is going to emerge unscathed. And all the humble apologies in the world seem unlikely to save Zuckerberg’s political ambitions.

The irony of Facebook’s CEO taking out a print ad to apologize for the company’s biggest scandal ever also can’t be overlooked. Facebook grew in part by leveraging the work of established publications, then became a major vector for manipulative “fake news.” Now, Zuckerberg seems to be implicitly acknowledging that print remains a valuable format when you really, actually want to be taken seriously.

The Mysterious DNC Hacker Has Been Confirmed as a Russian Intelligence Front

An online persona “Guccifer 2.0,” which claimed credit for hacking the Democratic National Committee ahead of the 2016 election, has been confirmed as a front for Russian military intelligence. The confirmation has significant implications for Special Counsel Robert Mueller’s ongoing investigation into Russian interference in the 2016 U.S. Presidential election.

During the U.S. election, Guccifer 2.0 presented itself online as an independent Romanian hacker. The name was supposedly an homage to Guccifer, an actual Romanian hacker who targeted U.S. politicians and uncovered Hillary Clinton’s private email server. Guccifer 2.0 obtained email archives from the Democratic National Committee, then released them to outlets including WikiLeaks. Those emails appeared to show DNC efforts to thwart Clinton primary challenger Bernie Sanders, likely damaging her support among progressive Democrats.

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But skepticism about Guccifer 2.0’s identity has been widespread, and U.S. intelligence authorities have previously said it was likely a Russian operation. But there has been little hard evidence, because the persona generally went online using a VPN, or Virtual Private Network, to mask the origin of its activities. Now, The Daily Beast reports that investigators have found a single instance in which that VPN was not activated, and have identified Guccifer 2.0 as a front run by a specific but unnamed Russian military intelligence officer within the military intelligence agency known as the GRU.

That’s an important confirmation for one clear reason: Guccifer 2.0 has communicated directly with members of Donald Trump’s inner circle. Roger Stone, one of the most flamboyant of Trump’s allies and a onetime campaign adviser, admitted in March that he had exchanged congratulatory messages with Guccifer 2.0 on Twitter during the election.

Stone’s known communications came after the release of hacked DNC emails, but Stone also made statements suggesting he knew about some parts of the hacked DNC emails before they were made public. According to The Daily Beast, the FBI agents who tracked Guccifer 2.0 have now become part of Mueller’s team.

Exxon Mobil: The Time Has Come

Article Thesis

Exxon Mobil (XOM) is trading at a low valuation despite oil prices being well above the lows formed over the last couple of years. The company offers a juicy dividend yield and the growth outlook for the oil giant is positive.

Investors are poised to see compelling returns going forward, as production growth, rising cash flows, and dividend increases will lead to ample total returns.

Exxon Mobil’s share price has been battered over the last couple of months, despite the fact that the fundamental picture for oil & gas companies remains positive:


XOM data by YCharts

Shares of Exxon Mobil trade at $74 right now, down double digits year to date. WTI and Brent, however, trade at more than twice the price they traded for at the nadir of the oil price decline.

The most recent share price decline was largely driven by the fact that the market wasn’t happy with Exxon Mobil’s growth strategy. The company announced a plan to more than double its earnings and cash flows through 2025. This requires heavy investments into new projects, Exxon Mobil will, therefore, increase its capex spending to $30 billion in the 2020s from $24 billion this year.

These growth investments make it less likely that Exxon Mobil will pursue a meaningful reduction of its share count via buybacks in the near future. The market had hoped for such an announcement, the lack thereof made the share price decline.

Aggressive Growth Plan Is A Win In The Long Run

Exxon Mobil will likely not shrink the share count aggressively going forward, a strategy the company has pursued in the past:


XOM Average Diluted Shares Outstanding (Quarterly) data by YCharts

Since 2000, Exxon Mobil’s share count has dropped by ~40%, this alone has increased each individual share’s portion of the company’s earnings and cash flows by 67%.

In that time frame, Exxon Mobil has diverted a huge amount of its cash flows towards buybacks, but production did not grow very much as capital expenditures were not at a very high level. Exxon Mobil has now chosen to pursue another strategy going forward. The growth investments will take years to impact Exxon Mobil’s cash flow and earnings statements, due to the long time for new projects to ramp up production.

The market with its short-term view didn’t appreciate this strategic shift, despite the fact that long-term oriented investors will benefit a lot if everything works as planned: CEO Woods has stated that production is poised to grow to five million barrels of oil equivalent per day in 2025, which will result in earnings of $31 billion with oil prices remaining at the current level.

In 2017, Exxon Mobil has reported adjusted earnings of $15 billion, thus profits are forecasted to double over the coming seven years. Even if Exxon Mobil does not repurchase any shares during that time period, its EPS would more than double as well. Compared to an approach where Exxon Mobil focuses on buybacks and keeps its profits flat, that looks like a good move: The buyback strategy has made Exxon Mobil’s EPS grow by 67% in 17 years since 2000 (all else equal).

More than doubling the company’s EPS through 2025 thanks to heavy investments into shale projects, refining, and deepwater projects looks like a compelling growth plan. Higher profitability will also lead to rising cash flows for Exxon Mobil:

(source: Exxon Mobil 10-K)

Exxon Mobil produced operating cash flows of $30 billion in 2017, with net profits increasing by $16 billion, the company’s cash generation is poised to hit $46 billion annually by the mid-2020s. Even without asset sales and when we adjust for higher capex spending, Exxon Mobil’s free cash flows are poised to hit $16 billion plus by 2025.

In 2017, Exxon Mobil produced $30 billion of operating cash flows and spent $23 billion on capex, thus producing free cash flows (before asset sales) of just $7 billion. Exxon Mobil is, therefore, on track to more than double its free cash flows over the coming years, despite the fact that the amount of money the company invests will increase significantly.

Exxon Mobil Is An Attractive Income Investment And Its Valuation Has Come Down Significantly

Right now Exxon Mobil’s dividend yield stands at 4.2%:


XOM Dividend Yield (TTM) data by YCharts

Exxon Mobil’s dividend yield hasn’t been this high since Exxon merged with Mobil in 1999.


XOM Dividend Yield (TTM) data by YCharts

The last time Exxon Mobil’s dividend yield was as high as it is right now was in July 1995. The company’s shares have returned 656% since, which equals an annual total return of 9.2%. The S&P 500 index has returned 640% since, thus Exxon Mobil was the better performer despite being a lower risk investment (Exxon Mobil’s beta is 0.92).

The last time Exxon Mobil’s dividend yield has been this high thus was a good time to buy shares of the company, as its returns outpaced those of the broad market whilst being less volatile at the same time.

On top of that, Exxon Mobil will likely increase its dividend once again in the foreseeable future:


Exxon Mobil usually announces its dividend raise in April, thus investors will likely hear about another hike in about five weeks. Due to significantly higher oil prices (compared to one year ago), which means higher profits and cash flows, there is a good chance of a somewhat bigger dividend increase. Exxon Mobil increased its payout by two cents quarterly for two years in a row, as the oil industry is recovering now, the dividend increase could be bigger this time.

Even with another $0.02 raise, Exxon Mobil’s dividend yield would rise to 4.3% though, which is well above twice the broad market’s yield of 1.8%.


XOM Price to Book Value data by YCharts

Exxon Mobil’s price to book multiple of 1.67 isn’t low compared to its peer group, but Exxon Mobil’s valuation has declined a lot over the last three years. Exxon Mobil has gotten 17% cheaper, whilst the other oil majors all got 12-21% more expensive.

From a relative valuation standpoint, Exxon Mobil, thus, looks like the right pick right here, as it has gotten a lot cheaper compared to the peer group.


XOM EV to EBITDA (Forward) data by YCharts

Exxon Mobil trades at a seven times EV to EBITDA multiple, which isn’t an expensive valuation at all, and Exxon Mobil’s price to cash flow multiple of 10.5 is well below the historic median of 12.

Bottom Line

Exxon Mobil is investing heavily into the future and has stopped focusing on buybacks for now. The market misses the immediate gratification of share repurchases and did not like the fact that it will take a while for the investments to play out. For long-term focused investors, this isn’t bad news at all, though, as Exxon Mobil’s investments are poised to increase profits and cash flows immensely.

Shares of Exxon Mobil offer a high dividend yield, and the last time the yield has been this high, Exxon Mobil’s shares were a great investment. Shares of the oil major have also gotten significantly cheaper over the last couple of years, both on an absolute basis as well as relative to the peer group.

Overall, it looks like Exxon Mobil will be a solid investment over the coming years, providing strong income generation and production growth at an inexpensive valuation.

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Disclosure: I am/we are long RDS.A.

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.

Geron's Negative Imetelstat Data Has Been Misinterpreted By Investors

We believe the recent update from Geron (NASDAQ:GERN) was definitely negative. Despite Geron’s claim that the overall survival seen so far in the IMbark trial is very promising, we believe the median overall survival (mOS) for the imetelstat group is not unusual given the baseline health of the IMbark patients. We also believe that Geron provided evidence that imetelstat has no impact on survival by disclosing that there was no difference in median survival detected so far in either dosing arm. The update only served to confirm our view of imetelstat’s likely failure and our expectation that partner Janssen (NYSE:JNJ) will terminate its licensing agreement.

IMbark enrolled a population which benefited survival when compared to historical literature

The big takeaway that investors seemed to have had from Geron’s recent update was that with a median follow up of 19 months at the time of the January 2018 data cut, median overall survival had not been reached in either dosing arm in the IMbark trial. Geron further stated the greater than 19 months of median overall survival looked promising since published clinical and real-world studies estimate that median overall survival after discontinuing JAK inhibition therapy is approximately 14-16 months. Analysts such as from Stifel went further and stated, “As the 19 month follow-up was conducted in January, this suggests a potential ~22-24 month median overall survival in patients taking imetelstat.” Investors ate up the news, driving the shares up over 50% to 52-week highs.

We think investors are overlooking the fact that the patients in the IMbark trial are healthier than the trials to which Geron compared them. The IMbark trial’s inclusion and exclusion criteria explicitly state that only ECOG 0-2 patients can be enrolled and that patients with a peripheral blood blast count of >= 10% are to be excluded. The trial excluded ECOG 3 patients, who are capable of only limited self-care and are confined to a bed or chair for more than 50% of their waking hours. We also know that myelofibrosis (MF) patients with peripheral blood blast count of >=10% have shorter overall survival. Based on stated trial criteria, we have concluded that the IMbark trial did not include very sick patients.

Geron provided additional information on the 4Q 2017 conference call when in response to a question, Geron revealed that IMbark patients “required at least 75,000 platelets” per microliter. This point is crucial because when stratified by platelet count, the historical MF trials show that patients with higher platelet counts live substantially longer than the overall population of patients who discontinue JAK inhibitors.

A well-known trial for MF patients after discontinuation of ruxolitinib (Jakafi) is a recently published paper in the 130 edition of medical journal Blood by researchers at MD Anderson. The researchers state that patients after discontinuation of Jakafi had a “median survival time of 14 months (95% CI, 10-18 months).”

At face value, the IMbark results look very promising versus the MD Anderson results: at least 19 months mOS in IMbark vs. an expected mOS of 14 months. However, the MD Anderson trial was actually a chart review on an essentially all-comers basis and followed patients from the start of Jakafi and after discontinuation. In other words, it included all patients who discontinued Jakafi regardless of health. This can be seen in Table 1 where it shows that the median platelet count in the post-Jakafi population was 91,000/ul with a range of 11,000/ul to 922,000/ul. Because the median platelet count in the paper was so close to the allowed lower bound in the IMbark trial, a substantial portion of the patients followed in the MD Anderson paper would have been ineligible for IMbark. For reference, a normal level of platelets is 150,000-400,000/ul and mild bleeding can occur if platelets drop below 50,000/ul. We can also see that one of the patients in the MD Anderson paper had a platelet count of 11,000/ul, which is considered very low.

We can see later in the Blood article in Figure 2B that patients with platelet counts <100,000/ul did significantly worse in terms of survival. It appears this population had a median survival closer to 10 months. They accounted for 33 of the 56 total patients, more than half of the population, which we believe skewed the overall results negatively. Conversely, for the patients with a platelet count of >100,000/ul, it appears the mOS was closer to 36 months! We believe the IMbark patient population was more similar to the >100,000/ul population in the MD Anderson trial than the <100,000/ul population. Keep in mind that IMbark already excluded patients with ECOG scores greater than 2 and patients who had peripheral blood blasts of >10%.

If IMbark, which as we showed above had a relatively healthy population, enrolled one-third of patients that should have an expected mOS of 10 months and two-thirds of patients that should have an expected mOS of 36 months, then we would expect the blended average to be around 24 months. As a result, we believe that the median OS of 22-23 months that Stifel estimates Geron is observing currently is neither impressive nor unprecedented. In fact, it’s completely expected.

IMbark high-dose arm is not outperforming the low-dose arm which was determined to be ineffective

Furthermore, Geron disclosed that neither arm of the IMbark had reached median OS. The IMbark trial had two arms, a low-dose 4.7mg/kg arm and a high-dose 9.4mg/kg arm. In September 2016, Geron announced that enrollment in the 4.7mg/kg dosing arm would be discontinued because the dose was determined to be ineffective and did not “warrant further investigation.”

In addition, because the low-dose arm was essentially shut down, Janssen amended the trial protocol so that the 4.7mg/kg arm patients were allowed to crossover to the 9.4mg/kg arm at the investigator’s discretion. However, Geron stated on the recent fourth quarter 2017 earnings call that “there were a meaningful number of patients who remained on 4.7 mg/kg.” Therefore, we believe the 4.7mg/kg is a good proxy for a placebo or control arm.

Since Geron and Janssen determined the 4.7mg/kg arm was ineffective, then we should expect the 9.4mg/kg arm to outperform on a survival basis, but we haven’t seen that yet, as indicated in their press release which stated: “the median overall survival has not been reached in either dosing arm.” Since the 4.7mg/kg arm was enrolled on average earlier than the 9.4mg/kg arm, a best case would be equivalent survival rates between the arms.

This indicates to us that imetelstat has not had a positive impact on survival. This lack of survival efficacy matches the lack of efficacy in traditional endpoints associated with MF like spleen volume, which Geron and Janssen announced in April 2017, and we believe it corroborates our view that imetelstat is not effective in MF.

Janssen is no fool

Lastly, we point out that Janssen has essentially delayed its decision on imetelstat multiple times. A decision was originally expected in 2016 and then in 2017. If imetelstat truly offered a 4-6 month or greater survival benefit, we believe Janssen would have opted into imetelstat by now. Instead, Janssen stopped enrollment in September 2016 and has been waiting until the last moment to make a decision. To us, this seems like more of a Hail Mary than a strong indicator of efficacy.

We are short Geron

We are short Geron with a price target of $0.51. We believe imetelstat will be returned by Janssen and value it at $0.

Disclosure: I am/we are short GERN.

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

The Night $1 Million in Crypto Began Raining From the Sky

HONG KONG—The crowd, most of them wearing masks, squinted up at the raft of multicolored balloons floating near the ceiling, trying to make out the silhouettes of the coins suspended inside each one. And then, against the backdrop of Hong Kong’s neon-rainbow skyline, they raised their hands as the countdown began: “10, 9, 8…FREEDOM!” they screamed, amid a shower of confetti. Suddenly, the loud popping of a fireworks show filled the room as the balloons exploded, and the crypto tokens they contained fell into eager hands.

The spectacle Tuesday evening, held at the inaugural Token 2049 conference, released tens of thousands of dollars’ worth of free digital money. But it was just the first of 25 events in which a Utah-based secure messaging startup called Mainframe will give away about $1 million of its cryptocurrency—by literally making it rain crypto coins upon the heads of enthusiasts.

It’s also an example of the creative lengths to which blockchain companies are going in order to stay in-bounds of a threatened crackdown by the U.S. Securities or Exchange Commission on initial coin offerings, or ICOs. The SEC has said ICOs—in which companies sell digital tokens in order to raise startup capital—could constitute an illegal sale of securities. But Mainframe and others have found a way to dodge that dreaded label: Just give the crypto away for free.

Enter the so-called “airdrop,” in which companies bestow a sprinkling of their crypto coins upon select supporters via the Internet. Now, Mainframe is pioneering a version of that concept in the real-life, physical world.

“We are taking it literally,” Mick Hagen, Mainframe’s CEO and founder, told Fortune just moments before the tokens splashed down like it was Times Square on New Year’s Eve. “We thought, what if we do a real airdrop?”

It’s believed to be the first time anyone has introduced a brand new cryptocurrency via physical distribution (though in actuality, Mainframe’s tokens were to be exchanged for codes, which could then be redeemed online for virtual “MFT” coins). Mainframe initially sold its tokens in a private pre-sale exclusively for accredited investors (several of whom witnessed the airdrop), raising 27,000 of Ethereum cryptocurrency that’s currently worth some $15 million.

The capital will fund Mainframe’s development of a messaging service that is not only encrypted, but masks the trajectory of messages using “dark routing,” in order to be “censorship-resistant and surveillance-resistant.” Such technology, the company argues, will better preserve users’ freedom.

But while Mainframe had originally considered holding an ICO, it felt it unwise “given the regulatory environment.” SEC chairman Jay Clayton said in November that he had “yet to see an ICO that doesn’t have a sufficient number of hallmarks of a security,” and testified in a Senate hearing last month that he believed ICOs were in violation of the law. In a separate hearing on ICOs in Congress last week, Mike Lempres, chief legal and risk officer for cryptocurrency exchange Coinbase, said the company does not trade ICO tokens because it “cannot take the risk of inadvertently trading an asset that is later found to be a security.”

It’s unclear if Mainframe’s literal “air drop” would pass legal muster in the United States, or if regulators in other countries will agree the gimmick does not violate securities laws.

Whereas the SEC has mostly been concerned with protecting investors from financial harm, Mainframe also wanted to make sure its token recipients would be safe from physical injury. “There were a lot of different logistics to work through. We don’t want anyone to get hurt,” added Hagen, who describes himself as a Princeton drop-out and Mormon on his Twitter profile. After all, the tokens, roughly the same size and weight as poker chips (and valued at 0.1 Ether, or about $56 apiece), could be dangerous if dropped from high.

So Mainframe opted to insulate the tokens with inflatables. “When the balloons fall it shouldn’t hurt because of the balloon,” Hagen said. “We want people to walk away thinking, this was a fun airdrop.”

The display conjured visuals of the economic idea, advocated by former Federal Reserve chairman Ben Bernanke, of “helicopter money.” A metaphorical term for how a central bank could stimulate the economy by creating money from thin air, Bernanke wasn’t literally suggesting dropping it from a helicopter.

Mainframe, however, did consider that possibility. “We were thinking drones, but if [the token] hits somebody’s head, it might hurt,” Hagen said.

For those who missed the first-ever live airdrop, Mainframe will bring the show to four more cities in the next two weeks—Shanghai, Beijing, Seoul, and Tokyo—with more to follow. The company is calling this method of distribution “proof of being,” a play on Bitcoin’s method of verifying transactions, known as proof of work.

There are also two other ways to scoop up the free tokens if you can’t attend in person: “Proof of freedom,” which Hagen said could be some form of expression about Mainframe such as an essay, video or blog; and “proof of heart,” which the company is not yet willing to explain in detail.

But Hagen is envisioning it as an antidote to the “get rich quick” mindset that has pervaded the crypto world, a way to ensure Mainframe token holders aren’t just in it for the money. After all, the airdrops strictly limit attendees to leaving with just a single token. “We wanted to have methods to make sure we have true believers in technology, and true believers in Mainframe,” Hagen said.

U.S. FTC to question Facebook over consultancy's access to user data

SAN FRANCISCO/LONDON (Reuters) – Facebook Inc said Tuesday it faced questions from the lead U.S. consumer regulator about how its users’ personal data was mined by a political consultancy hired by Donald Trump’s campaign.

U.S. and European lawmakers have demanded an explanation of how the consultancy, Cambridge Analytica, gained access to the data in 2014 and why Facebook failed to inform its users, raising broader industry questions about consumer privacy.

Facebook said on Tuesday it had been told by the Federal Trade Commission (FTC) that it would receive a letter this week with questions about the data acquired by Cambridge Analytica. It said it had no indication of a formal investigation.

“We remain strongly committed to protecting people’s information. We appreciate the opportunity to answer questions the FTC may have,” Facebook Deputy Chief Privacy Officer Rob Sherman said.

The FTC, the regulatory agency in charge of consumer protection, is reviewing whether Facebook violated a 2011 consent decree it reached with the authority over its privacy practices, a person briefed on the matter told Reuters.

“We are aware of the issues that have been raised but cannot comment on whether we are investigating. We take any allegations of violations of our consent decrees very seriously as we did in 2012 in a privacy case involving Google,” an FTC spokesman said.

Under the 2011 settlement, Facebook agreed to get user consent for certain changes to privacy settings as part of a settlement of federal charges that it deceived consumers and forced them to share more personal information than they intended, Bloomberg reported.

If the FTC finds Facebook violated terms of the consent decree, it has the power to fine the company thousands of dollars a day per violation.

Facebook will brief U.S. Senate and House aides on Wednesday, congressional staff said.

Facebook shares lost 5.7 percent in heavy trading to a six-month low, extending Monday’s 7-percent fall, and was set for its worst two-day drop since July 2012. Its market capitalization was down by another $25 billion as investors fretted the world’s largest social media network could face massive fines and that its dented reputation could scare off users and advertisers.

Shares of Snap Inc fell 4 percent and Twitter Inc was down 9.6 percent.

Facebook and its peers Alphabet Inc’s Google and Twitter face a backlash over their role during the U.S. presidential election by allowing the spread of false information that might have swayed voters toward Trump.

A Congressional official said House Intelligence Committee Democrats plan to interview Cambridge Analytica whistleblower Christopher Wylie. The committee has already interviewed by video teleconference Cambridge Analytica chief Alexander Nix, according to the Congressional official, but a transcript of that interview has not yet been made public.

People walk past the building housing the offices of Cambridge Analytica in central London, Britain, March 20, 2018. REUTERS/Henry Nicholls

The White House said the President believes that Americans’ privacy should be protected.

“If Congress wants to look into the matter or other agencies want to look into the matter, we welcome that,” White House Deputy Press Secretary Raj Shah told Fox News Channel.


In Britain, the Information Commissioner’s Office, an independent authority set up to uphold information rights in the public interest, was seeking a warrant on Tuesday from a judge to search the offices of London-based Cambridge Analytica.

Slideshow (6 Images)

Created in 2013, Cambridge Analytica markets itself as a source of consumer research, targeted advertising and other data-related services to both political and corporate clients.

According to the New York Times, it was launched with $15 million in backing from billionaire Republican donor Robert Mercer and a name chosen by the-then future Trump White House adviser Steve Bannon.

Facebook says the data were harvested by a British academic, Aleksandr Kogan, who created an app on the platform that was downloaded by 270,000 people, providing access not only to their own personal data but also their friends’.

Facebook said Kogan then violated its policies by passing the data to Cambridge Analytica. Facebook has since suspended both the consulting firm and SCL (Strategic Communication Laboratories), a government and military contractor.

Facebook said it had been told that the data were destroyed.

Kogan says he changed the terms and conditions of his personality-test app on Facebook from academic to commercial part way through the project, according to an email to Cambridge University colleagues obtained and cited by CNN.

Kogan says Facebook made no objection, but Facebook says it was not informed of the change, CNN reported. Kogan was not immediately reachable for comment.

“If this data still exists, it would be a grave violation of Facebook’s policies and an unacceptable violation of trust and the commitments these groups made,” Facebook said.

Cambridge Analytica has denied all the media claims and said it deleted the data after learning the information did not adhere to data protection rules.

Reporting by David Ingram in San Francisco, Kate Holton and Paul Sandle in London, David Shephardson and Susan Heavey in Washington; Additional reporting by Munsif Vengattil; Writing by Susan Thomas, Editing by Nick Zieminski

Dropbox IPO oversubscribed: sources

(Reuters) – Cloud storage company Dropbox Inc’s [DBX.O] initial public offering was oversubscribed, two people familiar with the matter said on Monday, indicating healthy demand for the first big tech IPO this year even as tech stocks opened the week on sour note.

The Dropbox app logo seen on a mobile phone in this illustration photo October 16, 2017. REUTERS/Thomas White/Illustration

While investor appetite looked encouraging with three days to go before final pricing, it was not clear if that would be strong enough to lift the deal above of the initial range of $16 to $18 a share that Dropbox set last week. The offering is expected to price Thursday, and the stock will start trading on the Nasdaq on Friday.

“It is early to predict the pricing. But what I can say is that from the conversations it seems the market is interested in it and IPO seems to be bright,” a separate source told Reuters. The three sources asked not to be named as the IPO pricing process was still underway.

Dropbox’s IPO comes in what is sizing up to be a challenging week for stocks, with the U.S. Federal Reserve set to raise interest rates on Wednesday, a day before the Dropbox deal is set to close.

Tech shares also fell hard to open the week, with Nasdaq down more than 2 percent on reports of Facebook Inc’s (FB.O) latest data privacy problems.

Dropbox’s IPO also comes on the heels of an upsized deal last week from cyber security firm Zscaler Inc (ZS.O) and is being watched as a barometer of investor enthusiasm for tech unicorns – young companies valued at more than $1 billion – after Snapchat owner Snap Inc’s (SNAP.N) shares cratered following a much-touted IPO a year ago.

Dropbox is selling 36 million shares, and the offering could be increased by 5.4 million if underwriters exercise their right to buy more stock. At the high end of the indicated pricing, it could raise nearly $650 million, making it the largest tech IPO since Snap hit the market just over a year ago.

The current price range suggests the San Francisco company, co-founded in 2007 by Andrew Houston and Arash Ferdowsi, will hit the public market valued at roughly $7 billion, a hefty discount to the $10 billion implied by its last funding round in 2014.

The company has 500 million users and competes with Alphabet Inc’s (GOOGL.O) Google, Microsoft Corp (MSFT.O), Inc (AMZN.O) and has Box Inc (BOX.N) as its main rival.

Reporting by Sweta Singh, Nikhil Subba and Diptendu Lahiri in Bengaluru, Editing by Dan Burns and Saumyadeb Chakrabarty

Woman dies in Arizona after being hit by Uber self-driving car

SAN FRANCISCO (Reuters) – A woman died of her injuries after being struck by a Uber self-driving vehicle in Arizona, police said on Monday, and the ride hailing company said it had suspended its autonomous vehicle program across the United States and Canada.

FILE PHOTO: Uber’s logo is pictured at its office in Tokyo, Japan, November 27, 2017. REUTERS/Kim Kyung-Hoon

The accident in Tempe, Arizona, marked the first fatality from a self-driving vehicle, which are still being tested around the globe, and could derail efforts to fast-track the introduction of the new technology in the United States.

FILE PHOTO: A fleet of Uber’s Ford Fusion self driving cars are shown during a demonstration of self-driving automotive technology in Pittsburgh, Pennsylvania, U.S. September 13, 2016. REUTERS/Aaron Josefczyk/File Photo

At the time of the accident, which occurred overnight Sunday to Monday, the car was in autonomous mode with a vehicle operator behind the wheel, Tempe police said.

“The vehicle was traveling northbound … when a female walking outside of the crosswalk crossed the road from west to east when she was struck by the Uber vehicle,” police said in a statement.

A spokesman for Uber Technologies Inc said the company was suspending its North American tests. In a tweet, Uber expressed its condolences and said the company was fully cooperating with authorities.

Reporting by Alexandria Sage; Editing by Jonathan Oatis

Trump's Call to Start a Space Force Tops This Week's Internet News Roundup

People look for inspiration and happiness in a vast array of places. Some see school kids walking out of class across America to take a stand for gun control and find hope. Others note that 7-Eleven now has customizable tater tots and are filled with joy. What do they get when they look at the internet? All that and a lot of bickering and tweets about calzones. Here, dear friends, is what everyone was talking about online last week when they weren’t talking about the new Avengers: Infinity War trailer.


What Happened: President Trump announced Rex Tillerson was being replaced as secretary of state on Twitter.

What Really Happened: Folks like to make jokes about Donald Trump running America via Twitter, but last week he announced an executive decision on the platform that was definitely not funny—at least not to the head of the State Department.

Yes, the change in Secretary of State—one of the most important, if not the most important, cabinet positions—was announced via social media, as if Trump was every parody of himself imaginable. For those who wanted more than just a tweet of notice about the new state of affairs, that was forthcoming … also via Twitter, of course.

Those around Tillerson, who had just arrived back in the country, were surprised by the news, suggesting that Tillerson himself wasn’t entirely prepared for what had just happened.

There might, it turns out, have been a reason for that, if one response from the State Department is to be believed.

OK, perhaps it was a little disingenuous to say that no one saw this coming, as some pointed out.

Unsurprisingly, the White House has a different take on the way everything went down.

Except, it turned out, chief of staff John Kelly’s message might not have been entirely clear.

There really is something to be said about Twitter’s role in all of this, isn’t there? Still, things couldn’t have been that bad, because Tillerson did make an appearance later that day to talk about his firing and smooth everything over.

OK, maybe it was kinda bad. (Tillerson’s failure to thank the president did not go unnoticed by, well, anyone.) Still, perhaps the split between Trump and Tillerson was for the best.

This is worth noting, as well. The State Department aide who put out the earlier statement saying that Tillerson didn’t know why he’d been fired? Yeah, there was a price to pay for saying that.

The Takeaway: Quick, we need a catchy way of talking about former Exxon CEO Tillerson now that he’s been ousted!

That’ll do.

Move Along, Nothing to See Here

What Happened: House Republicans announced they were closing their investigation into collusion between the Trump campaign and Russia during the 2016 election, saying there was no evidence of such actions.

What Really Happened: Last week, with little warning, the House Intelligence Committee’s investigation into Russian interference in the 2016 election just … stopped.

“Case closed”? Sure, if you say so. And, it turns out, they really did say so.

There are others who might disagree with that take, of course…

As news of the surprise closure started to go wide, it was perhaps worth turning to the ranking Democrat on the committee to see if he had anything to say about the whole thing.

That would be a yes, then. And, sure, it seems suspicious to say the least that the Republicans just shut down the investigation unfinished with so much still out there unanswered, but surely the Democrats on the committee were given adequate warning that the investigation was being closed, right?

OK, but at least all the Republicans are agreed that this move was the smart one?

Well, fine, yes, that’s a little awkward. Still, at least one of the leading Republicans on the committee didn’t disagree.

Oh, come on. As the week continued, it eventually started to become clear even to the Republicans that this had been a mistake, with this headline putting it best: “Republicans Fear They Botched Russia Report Rollout.” Gee, you think?

The Takeaway: In what could only be described as a spectacular piece of timing, the Republicans announced that there was nothing Russians had done in regards to the 2016 election in the same week that the Trump administration finally signed sanctions into law against 16 Russians for their efforts to interfere with the 2016 election. There’s nothing like being consistent.

Meanwhile, Over at the Department of Justice…

What Happened: Special counsel Robert Mueller’s investigation took aim at the Trump Organization.

What Really Happened: Meanwhile, you might be thinking, “I wonder how special council Robert Mueller’s Russia collusion investigation is going? I’m sure that, if the House Republicans were right and there’s certainly nothing going on, he’ll be wrapping everything up too, right?” Funny story: He’s not wrapping everything up.

Yes, in what is pretty much the opposite of wrapping things up, Mueller is subpoenaing the Trump Organization’s records, which is … kind of a big deal, to say the least. Certainly, that’s what people on social media seemed to think.

But what could it all mean? Some people had theories.

And how is this going down with those targeted?

Somewhere, Devin Nunes is wandering around the halls of Congress, muttering to himself, “But I said nothing happened…!”

The Takeaway: It’s worth pointing out that the Mueller news dropped on March 15, which amused certain people online.

Oh, Canada

What Happened: Forget “Commander in Chief,” perhaps President Trump’s title could be “Gaslighter in Chief.” Or, maybe, “Man Who Should Perhaps Never Talk in Front of a Tape Recorder Ever.”

What Really Happened: This might sound like the kind of old-fashioned, unnecessary posturing of people stuck in the past, but once upon a time it was widely expected that the President of the United States wouldn’t be the kind of person who would boast about lying to the head of state of a friendly nation.

Those days, dear readers, are long gone.

Yes, the Washington Post obtained audio from a fundraising speech in which Trump boasted that he’d made up information that he used in an argument with Canadian Prime Minister Justin Trudeau over whether or not the US runs a trade deficit with Trudeau’s country. (It doesn’t.) “I had no idea,” Trump can be heard to say on the tape. “I just said, ‘You’re wrong.’ You know why? Because we’re so stupid.” As you might expect, people were thrilled about this display of, uh, political maneuvering? Sure, let’s go with that.

As the media struggled to understand what was happening, the White House press secretary attempted to smooth out the situation by, well, repeating the lie.

There is, also, a surreal second story to this audio of Trump that has nothing to do with lying to Justin Trudeau. Instead, it had to do with the “bowling ball test.”

As multiple outlets looked into the matter, it slowly emerged that it was probably all made up. Not to worry, though; according to the White House, it was just a joke.

The Takeaway: There’s really only response to this entire exchange, isn’t there?

Space Force? Space Force!

What Happened: When it comes to America’s manifest destiny, there’s only one direction left to go: To infinity… and beyond?

What Really Happened: With all the bad news going around the the White House, you can’t blame the president for wanting to change the narrative somehow. And you only get to do that, he knows, by thinking big and reaching for the stars. Last week, Trump gave a speech that showed just how literally he took that advice.

Sure, going to Mars is definitely thinking big, but is it thinking big enough? Not to worry, however; Trump was right there with the next big thing.

Space Force! Just the very idea got the media excited, and asking questions like, “For real?” and “What does that even mean?”, not to mention “Do we have to?” Sure, not every outlet took the idea seriously, but that’s the lamestream media for you. Everyone else was into the idea, or calling the president a laughingstock. It’s hard to be a leader. But at least Twitter understood the potential of Space Force.


The Takeaway: Make no mistake, people may joke now, but Space Force is the future.

Amazon Did Not Kill Toys &quot;R&quot; Us — It Was a Giraffe

The sad closing of a beloved retailer can be pinned on a number of factors, but here is one theory that everyone has overlooked.

This past week saw the sad end to the slow, lingering demise of one of the most beloved retailers of our generation, Toys “R” Us.

The company announced that it will close all 735 US stores, leaving over 30,000 employees without jobs and effectively ending its 70-year run as America’s favorite toy store — and most expensive playground on earth.

For most, the closure came as no surprise. The company filed bankruptcy in September of last year in order to restructure debt and introduce changes to be more competitive. The advances, which included in-store augmented reality games and children’s playrooms, proved to be ineffective — not to mention a few years too late — in attracting more shoppers from the comforts of their couches this past holiday season.

Most believe it was Walmart and Target, the two leading toy retailers in the US, who slowly and steadily eroded market share from Toys “R” Us. Others believe it was the rise of Amazon and consumers’ move to online shopping that has and continues to be the bain of all traditional retailers.

Other more sophisticated analysts will point to massive debt the company carried as a result of being taken private in 2005, saddling it with over $5 billion and yearly interest payments of over $400 million.

The sad truth is, however, that the reason that Toys “R” Us failed is much less obvious. I believe it was because of the company’s mascot: Geoffrey the giraffe.

Think about it — what do we really know about giraffes? They have abnormally long necks, which figuratively puts their heads in the clouds and literally makes them too tall to have any meaningful relationships. They make almost no sound and are herbivores, typically preyed on by more aggressive hunters like lions, hyenas and Jeff Bezos.

Moreover, according to National Geographic, giraffes spend up to 20 hours a day eating and sleeping as little as five to 30 minutes. How can any marketing mascot be productive and creative with that routine?

Let us also look at TRU’s competitors. Target once boasted Bullseye, a lovable bull terrier with a conveniently placed red target “birthmark” over his left eye. But Bullseye last appeared in 2015 and is reported to be retired and enjoying a life on a ranch without the speculating eyes of investors, according to Globe and Mail.

On the other hand, the closest thing Walmart has to a mascot is a boring, yellow, never-flinching smiley face, which harkens more to the drugs and rock and roll era of the 1960’s than a wholesome family retailer.  But here’s the thing — Walmart is Walmart, a force that long ago took the reigns of the nation’s top retailer and can pretty much do what it likes.

And lastly, Amazon. Amazon has no known mascot — unless you count its Dr. Evil-resembling and highly visible founder, Jeff Bezos. More appropriate perhaps is Amazon’s in-home personal assistant, Alexa, which had remarkably found itself in 22 million homes by the end of 2017, according to Forbes.

A personal assistant, I might add, that sits in your house and is constantly listening to every conversation you are having. That sounds more like a villainous piece of spy technology than a mascot.

So, while we all mourn the fall of a retail giant, one that provided countless wonderful memories for generations of Toys “R” Us kids, I hope we don’t overlook the valuable lesson that derived from this sad fall.

Far more critical than adapting to a quickly advancing and globalizing business world, staying ahead of rapidly progressing technology, and understanding the changing preferences and buying habits of new digital generations, you simply need to have a more lovable or maniacal mascot. Take your pick.

What do you think? What other reasons do you believe led to the demise of Toys “R” Us? Share your thoughts with others in the comments below.