Aurora Cannabis: Why Acquiring MedReleaf Was An Upgrade

When we first discussed Aurora’s (OTCQX:ACBFF) acquisition of MedReleaf (OTCPK:MEDFF) in our article “Why Would MedReleaf Sell To Aurora Now?“, we concluded that Aurora was mainly eyeing for MedReleaf’s market position in Ontario, its patient base, and operating and production assets. Now that the transaction is closed and MedReleaf no longer trades as a public company, we would like to discuss the importance of MedReleaf to Aurora. Acquiring MedReleaf was a significant upgrade for Aurora, in our opinion, both in terms of operating capabilities and market positioning. Aurora’s stock price has been stagnant and underperformed certain large-cap names materially in 2018 so far, but we think things could have been worse without MedReleaf.

What Did Aurora Buy?

As the acquisition closed on July 25, 2018, we would like to take a moment to review what exactly did Aurora acquire in this case. The first thing that is obvious to see is the production capacities that MedReleaf brings to the table. Aurora acquired 140,000 in total planned capacity from MedReleaf’s three production facilities, with Exeter being the largest. Aurora has announced significant capacity expansions in the past, and the addition of these facilities will bring its total planned capacity to over 500,000 kg per year, one of the largest in the industry compared Canopy (CGC) and Aphria (OTCQB:APHQF).

(Source: Investor Presentation)

The inclusion of these additional capacities not only helped expand Aurora’s growing operations but also significantly improved its geographic footprint by adding a significant presence in Ontario to Aurora’s existing network of facilities in Western Canada and Quebec. All of MedReleaf’s facilities are located in Ontario, which is highly complementary to Aurora’s existing operations of which none are located in Ontario. Being the largest market in Canada, it was crucial for Aurora to acquire a leading competitor in the province in order to secure access to this important market.

(Source: Investor Presentation)

Besides the production facilities and complementary geographic dispersion, Aurora also acquired a competitor with significant expertise in oils and extracts. Dried cannabis flowers are sold at lower prices and come with lower margin, whereas oils and extracts represent more lucrative markets and are growing faster than the dried cannabis products. MedReleaf brings its existing manufacturing best practices and will help Aurora ramp up oils and extracts offerings by combining its R&D and product developments with CanniMed (OTC:CMMDF), another operator with deep expertise in oils and extracts.

(Investor Presentation)

Another point to be made about the value of MedReleaf is that the company has been executing well during the period between transaction announcement and deal closing. MedReleaf was able to secure multiple provincial supply contracts in the last few months, including:

The most notable win above has to be the success in Ontario, which was announced by Aurora as the deal already closed. Based on the deal announcement, only MedReleaf received a contract from Ontario meaning that Aurora did not receive an order (it is possible that Ontario combined their application since the deal is now closed). Nevertheless, MedReleaf delivered a strong performance in its home market and proved its value as an entry point into Ontario for Aurora. There are risks that Aurora would not have scored as well in Ontario without MedReleaf, given that the company was not able to establish a foothold in the competitive Ontario market. We think the acquisition quickly helped Aurora become one of the largest competitors in the province and provided a significant runway for growth in the province.

It is worth noting that Ontario has also changed its retail model from relying on provincial-run stores exclusively to allow private retailers open physical stores while provinces run the online store. We think the change is a hugely positive development for the cannabis sector because many of them, Aurora included through its subsidiary Alcannaa (OTCPK:LQSIF), have established their retail strategies and will operate physical retail stores. We believe Aurora’s model of vertical integration can be better implemented in Ontario after the acquisition of MedReleaf, given its local production advantage.

The other upgrade that Aurora received from the acquisition of MedReleaf is its enhanced corporate and capital markets profile. The combined company has more than 900 million shares outstanding. Given its share price of $6.78, as of Tuesday, the market capitalization reached more than $6 billion, only behind Canopy. Canopy saw its market value soaring after Constellation (STZ) announced a further $4 billion investment into the company. The combined company has better liquidity and appeal to institutional investors. However, MedReleaf majority shareholders will most likely liquidate their locked-up shares once allowed to do so. On the long term, Aurora has to deliver the promises implied by its share price and make use of the assets it acquired from MedReleaf for a very large premium.

Share Price Performance

Aurora shares have performed in line with Aphria in 2018, but both have significantly underperformed Canopy. We have discussed extensively our preference for Canopy in the large-cap space. The acquisition of MedReleaf caused significant dilution to Aurora shareholders and have caused a strong overhang on its share price. We expect the selling pressure to continue, given that MedReleaf shareholders were eager to liquidate and cash out, to the detriment of Aurora’s share price. The insider shares were locked-up and will enter the market later in 2019, causing another wave of strong selling pressure on Aurora shares. The outperformance of Canopy can be mostly explained by its investment from Constellation and the lack of development at Aurora relating to any potential third-party investments.

(Source: Bloomberg)

Putting Everything Together

We think the acquisition of MedReleaf represents an upgrade for Aurora due to its enhanced production profile, competitiveness in Ontario, and an established presence in the medical cannabis market. The significant dilution and premium paid by Aurora represented an excellent outcome for MedReleaf shareholders, but Aurora shares have since languished relatively and still sit at >20% loss for 2018 YTD. We think the integration risk and dilution caused the stock price to stall, but overall, the transaction was a must-do for Aurora in order for it to become a truly national player in the cannabis space. Looking ahead, Aurora needs to execute on its facilities buildout and start building its ancillary businesses such as beverages, tobacco, and pharma. Until now, Aurora and Aphria are the only two large-cap stocks without an industry spin on it. Canopy has Constellation, Tilray (NASDAQ:TLRY) has Novartis (NYSE:NVS), HEXO (OTCPK:HYYDF) has Molson Coors (TAP). We think Aurora needs to decide whether it wants to partner with an established player or pursue its own growth trajectory.

Author’s Note: “Follow us” to receive our latest publications in the sector. We also publish a widely read Weekly Cannabis Report, which is your best way to stay informed on the cannabis sector.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

5 Ways Apple May Actually Surprise Its Fans at Next Month’s iPhone Event

Apple sent out invitations on Thursday to its annual fall product unveiling. Slated for Sept. 12 on the Apple campus, the event will almost surely focus on new iPhones, with a possibility the company will also debut new iPads or other devices. Apple also typically announces updates to its smartwatch at its September events. But while much has already leaked in news reports, there are a few ways Apple could surprise everyone. Here are some of possibilities along with our educated guess on whether they will actually be unveiled.

An Internet video service

Likelihood: Quite possible

Apple isn’t just rumored to be working on its own Netflix (nflx) competitor—the company has been on a hiring and dealmaking spree across Hollywood, snapping up the co-presidents of Sony Pictures Television, Jamie Erlicht and Zack Van Amburg, last year and signing production deals with people like Reese Witherspoon, Jennifer Aniston, and Oprah Winfrey. No one has yet reported many details about the video service, however. It could be packaged with Apple Music and other services like Amazon Prime. Or it could be a standalone subscription. Or it could simply be made available free to, say, all iPhone and iPad owners. Unveiling the service at next month’s iPhone event would certainly get attention.

Lower priced iPhone

Likelihood: Possible

Last year, Apple not only introduced the $1,000 iPhone X, it also modestly raised the prices of the iPhone 8 and 8 Plus compared to 2016’s new models. Thanks to the price hikes, Apple’s revenue from iPhones rose 14% in the first two quarters that the new models went on sale, even as the number of phones sold barely budged. There are mixed signals in the Apple rumor community about prices for 2018, but at least one Wall Street analyst in June forecast a $100 drop in price to the starting price of the updated iPhone X, to $900.

A round-faced Apple Watch

Likelihood: Not very

Through its first three iterations, the screen of Apple Watch has had a square design, even though the company has occasionally filed patents related to a round screen. Although the watch leads the entire category in sales, it has never become the huge hit some analysts expected. Apple has also had no qualms about going back to the drawing board to revamp aspects of its initial approach from 2015, like overhauling the entire app display last year. But so far, all of the rumors for the likely Series 4 version include a square screen, albeit one that’s slightly bigger and brighter.

The all-new Mac Pro

Likelihood: Unlikely

It’s a certainty that Apple is redesigning its aged Mac Pro desktop computer. When last we heard from the company on this topic in April, the revamped computer was said to be delayed until 2019. But with so many customers complaining about Apple’s neglect of the Mac line up, Apple could win plaudits with an early, surprise announcement.

A new MacBook Air with a better screen and no other changes

Likelihood: Unlikely

Apple’s reported best seller in its laptop line is the dated MacBook Air, which starts at less than $1,000 but runs on Intel chips released more than three years ago and still has a low resolution, non-retina screen. Bloomberg reported last week that Apple was finally planning to update the device, or at least offer something with more modern specs at the $1,000 price point. That led some to hope that their beloved Air would simply get a better screen and faster processor while keeping many ports (like USB 3 and an SD card slot) that have long since been eliminated from more recent models. Many also prefer the Air’s keyboard, which has keys with a lot more travel than those on newer models. But Apple (aapl) has killed off so many ports and features and never once brought one back.

As Tesla shares fall, Amazon takes over as most shorted U.S. stock

NEW YORK (Reuters) – With Tesla Inc’s (TSLA.O) shares briefly dipping below the $300 level on Thursday, the electric carmaker ceded its seat as the most shorted U.S. stock to Amazon.com Inc (AMZN.O), according to data from financial technology and analytics firm S3 Partners.

FILE PHOTO: A Tesla logo is seen in Los Angeles, California U.S. January 12, 2018. REUTERS/Lucy Nicholson/File Photo

Tesla short interest in dollars, calculated using the number of shares sold short and the share price, stood at $9.93 billion, on Thursday, just shy of $9.95 billion for Amazon, S3 Partners data showed.

Analysts said investors were still shorting Tesla shares, or taking positions that amounted to bets the stock would keep declining. Short-sellers aim to profit by selling borrowed shares, hoping to buy them back later at a lower price.

The logo of Amazon is seen at the company logistics centre in Boves, France, August 8, 2018. REUTERS/Pascal Rossignol

“While there was some short covering the week after the tweet, there has still not been any significant net Tesla short covering on the Street,” said Ihor Dusaniwsky, head of research at S3 in New York.

“Any traders who have closed down their positions to realize some profits have been replaced by new ones looking for continued price weakness,” he said.

Tesla shares whipsawed this month after Chief Executive Elon Musk on Aug. 7 tweeted he planned to take the company private, only to abandon the idea by Aug. 24.

Tesla closed down 0.6 percent at $303.15, on Thursday. The stock drifted as low as $288.20 in intra-day trade as recently as Aug. 20, but it has not closed below $300 since July 31. Tesla rose as high as $387.46 following Musk’s initial tweet about the going-private plan.

Since the Aug. 7 tweet, the dollar amount of Tesla shares sold short has dropped by 16 percent, while that for Amazon has climbed by 32 percent, S3 Partners data showed.

Amazon shares rose above $2,000 for the first time on Thursday and the company is just shy of a $1 trillion market capitalization.

S3’s Dusaniwsky, however, said that with Tesla shares near the $300 level, the company could reclaim top spot for the most shorted U.S. stock, where it had stood since early May.

“A $300 Tesla price may be a signal of increased short selling since when Tesla’s stock price dipped below $300 per share in March, shares shorted climbed from 30.0 million to 41.6 million in just over two months,” said Dusaniwsky.

Apple Inc (AAPL.O), Alphabet Inc (GOOGL.O), Netflix (NFLX.O), Microsoft (MSFT.O) and Facebook Inc (FB.O), are some other top shorted U.S. stocks, as some investors have bet the high-flying technology names are due for a pullback.

Reporting by Saqib Iqbal Ahmed; Editing by Alden Bentley and David Gregorio

Salesforce reports 27 percent rise in quarterly revenue

(Reuters) – Salesforce.com Inc forecast current-quarter profit below analysts’ estimates on Wednesday, as the cloud-software maker invests heavily to boost sales and fend off rising competition.

FILE PHOTO: The Salesforce logo is pictured on a building in San Francisco, California, U.S. October 12, 2016. REUTERS/Lily Jamali/File Photo

The company’s shares fell 1.3 percent in trading after the bell.

The company forecast third-quarter profit between 49 cents and 50 cents per share, and revenue of $3.36 billion to $3.37 billion.

Analysts on average were expecting a profit of 54 cents and revenue of $3.35 billion, according to Thomson Reuters I/B/E/S.

San Francisco-based Salesforce has been reaping the benefits of a trend where companies are increasingly turning to cloud-based services, but faces stiff competition from Microsoft’s Dynamics 365, which competes with Saleforce’s flagship Sales Cloud offering, and from Oracle.

Salesforce has been boosting its research and development expenditure, as well as marketing and sales, sending its operating expenses up 27 percent to $2.32 billion in the second quarter.

Revenue in the company’s flagship product, Sales Cloud, rose 12.7 percent to $1 billion, generating more than $1 billion in a quarter for the first time.

The company’s unearned revenue, a key metric used to measure future business for subscription-based software vendors, rose 24 percent to $5.88 billion. Analysts on average expected $5.91 billion, according to financial and data analytics firm FactSet.

Excluding items, the company earned 71 cents per share.

Net income rose to $299 million, or 39 cents per share, in the second quarter ended July 31, from $46 million, or 6 cents per share, a year earlier.

Total revenue rose to $3.28 billion from $2.58 billion.

Reporting by Arjun Panchadar in Bengaluru; Editing by Sriraj Kalluvila

Tesla wins court case against Ontario government over rebate cancellation

TORONTO (Reuters) – A Canadian court has ruled in favor of Tesla Inc (TSLA.O) after the electric carmaker challenged the province of Ontario’s wind-down of an electric vehicle rebate.

Tesla superchargers are installed at the Quinte Mall in Belleville, Ontario, Canada, May 6, 2018. REUTERS/David Lucas/File Photo

In a ruling on Monday, Judge Frederick Myers of Ontario struck down the transition program set up by the new Ontario government, which excluded Tesla customers from qualifying for rebates.

A Tesla spokeswoman welcomed the decision.

“Tesla only sought fair treatment for our customers and we hope the Ministry now does the right thing by delivering on its promise to ensure all [electric vehicle]-owners receive their incentives,” the spokeswoman said in an email on Tuesday.

A spokeswoman for Ontario’s Attorney-General said the government is reviewing the ruling “and will make a decision on how to proceed in the coming days.”

Tesla’s challenge arose after Ontario’s Progressive Conservative government in July canceled a slew of green energy initiatives, including an Electric and Hydrogen Vehicle Incentive Program that provided rebates of up to C$14,000 ($10,640) for people who bought electric cars.

Premier Doug Ford’s government, which came to power the previous month, made provisions for people who had already bought or ordered cars but structured the transition program in such a way as to exclude Tesla, which does not use franchised dealerships.

In challenging the program, Tesla called this an “arbitrary” exclusion.

Myers agreed, calling the exclusion “arbitrary” and “egregious” in his ruling, in part “because the (Transportation) Minister singled out Tesla for reprobation and harm” without providing the company a chance to be heard.

Reporting by Anna Mehler Paperny; Editing by Frances Kerry

Bank of Spain's website hit by cyber attack

MADRID (Reuters) – The Bank of Spain’s website has been hit since Sunday by a cyber attack which has temporarily disrupted access to the site, a spokesman for the central bank said on Monday.

An emblem on an entrance to the Bank of Spain building is seen in Madrid, Spain, May 22, 2018. REUTERS/Juan Medina/File Photo

The spokesman said that the attack has not had any effect on the bank’s services or its communications with the European Central Bank or other institutions and that there was no risk of a data breach.

“It is a denial of service attack that intermittently affects access to our website, but it has had no effect on the normal functioning of the entity,” the spokesman said.

In computing, a denial-of-service attack (DoS attack) is a cyber-attack in which the perpetrator seeks to make a machine or network resource unavailable to its intended users by temporarily or indefinitely disrupting services of a host connected to the Internet.

Reporting By Carlos Ruano; writing by Jesús Aguado; Editing by Toby Chopra

China’s Didi Chuxing Suspends Carpool Service After Woman Is Killed

Didi Chuxing said it will suspend a carpool service and has removed two executives after a second female customer in three months was allegedly killed by a driver in China.

The ride-hailing app company said in an emailed statement on Sunday that it will halt its Hitch service starting Monday and reevaluate the carpool operation’s business model. Didi has removed Huang Jieli as Hitch’s general manager and Huang Jinhong as vice president for customer services, according to the statement.

A driver in the eastern city of Wenzhou suspected of killing a female passenger on Aug. 24 has been detained, Chinese state media reported. Didi came under intense scrutiny in May, when state media reported a driver used his father’s account to pick up and kill a woman in the central city of Zhengzhou.

Didi apologized for the latest incident and said that it would upgrade its processes for handling complaints. The Hitch service, which the company said handled 1 billion trips over the past three years, was being suspended “because of our disappointing mistakes.”

“Growth of our service scale puts our safety management mechanisms under huge pressure, especially in terms of identifying potential risks, designing effective and efficient processes, and rapid response,” Didi said. “We take to our heart all criticisms from the public and the relevant authorities.”

Officials from China’s ministries of transport and public security said in a statement they met with Didi representatives on Sunday. The government said it ordered the firm to immediately rectify its Hitch service, protect the safety and rights of passengers, and publish the details of any progress it makes. Didi agreed to submit a compliance plan and submit it to the government before Sept. 1, and to add more customer service personnel.

The company said the suspect in the second alleged killing provided full and authentic documentation, and had no criminal record. He passed a facial-recognition test before starting work for the day, Didi said.

Hitch has been marketed as a social ride-sharing service, allowing drivers and passengers to label or rate each other by appearance. Such features have attracted criticism because the platform was rife with comments that marked female passengers as “goddesses” and “beauties.”

Didi said in May it was overhauling safety measures across its business after the first killing. One of the changes would involve the redesign of its emergency help button to display it more prominently on the app interface, it said.

Users of carpooling or similar services should send information including the car’s license plate number and the driver’s name to relatives, the Wenzhou Public Security Bureau said in a statement on its WeChat account.

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

Looking for a solid, high-yield niche play? Maybe you should consider Hoegh LNG Partners LP (HMLP), the only publicly traded pure play on FSRUs.

FSRU stands for “Floating Storage & Regasification Unit,” and it’s a rapidly growing presence in the LNG shipping industry. HMLP’s parent/sponsor, Höegh LNG Holdings Ltd., is the largest provider of FSRUs in the market.

FSRU leasing/chartering solves many problems for charterer companies and countries. It’s slow and expensive to build an LNG import terminal, so FSRUs are being increasingly used to give countries access to LNG.

Like many of the firms we cover, HMLP operates on long-term contracts – its current average is 10.75 years for its five-vessel fleet, which includes two JV vessels. This is among the longest contract tenures that we’ve run across in the shipping industry.

(Source: HMLP site)

Common Distributions:

HMLP pays in a Feb-May-Aug-Nov. cycle and should go ex-dividend again in early November. At $18.25, the common units yield 9.64%.

Common unit coverage rose to 1.22X in Q2 ’18, which is the highest coverage level since HMLP’s IPO. Coverage has averaged 1.16X over the past four quarters:

Taxes:

Since it’s a C-Corp, HMLP issues a 1099 at tax time:

“The Partnership has elected to be treated as a C-Corporation for tax purposes (our investors receive the standard 1099 form and not a K-1 form).”

“Distributions we pay to U.S. unit holders will be treated as a dividend for U.S. federal income tax purposes, to the extent the distributions come from earnings and profits (“E&P”) and as a non-dividend distribution or a return of capital (“ROC”) to the extent the distributions exceed E&P.” (Source: HMLP site)

In 2017, HMLP’s ROC ranged between $.188 and $.1979 per quarterly payout. Investors get the benefit of sheltered income, but ROC does decrease your basis, so take a look at this if you’re thinking of selling at some point down the road.

Management has had distribution increases of 4.2% and 2.3% over the past two years, while coverage has been over 1X since Q2 ’16:

(Source: HMLP site)

Preferred Distributions:

HMLP also has a preferred series, Hoegh LNG Partners LP 8.75% Cumulative Perpetual Redeemable Units Series A (HMLP.PA). These are cumulative preferred units which offer you the additional protection of knowing that management must pay you any skipped distributions before it pays the common units. These units also rank senior to the common units in the event of a liquidation.

At $25.55, these preferred units yield 8.56%.

There’s no maturity date, but the call date is 10/5/22, after which HMLP can redeem if they so desire. This table details the annualized yield to this call date, if they were to be redeemed on 10/5/22. That yield is 7.79%, a bit lower than the current yield, since these units are $.55 above the $25.00 call value:

As is usually the case, these preferred units have a much higher coverage factor than the common units. Coverage has averaged 7.59 so far in 2018, on a net income basis, and 6.42X on a DCF basis:

Earnings:

HMLP has had strong growth in EBITDA, DCF, and net income over the past three quarters, with EBITDA up 24.72%, DCF up 17.81%, and net income up 56.07% in Q2 ’18. The 56% jump in net income is due to HMLP owning 100% of the Höegh Grace vessel in 2018, vs. only 51% in 2017.

Sequentially, HMLP also had record EBITDA, in Q2 ’18, Q1 ’18, and Q4 ’17, with DCF hitting records in Q3 ’17 through Q2 ’18:

With the unit count flat, and distributions/unit rising just 3.24%, HMLP’s coverage expanded by 9.11% over the past four quarters, as DCF grew 21.34%:

HMLP has two operating segments – majority held FSRUs, which contributed $58.58M in segment EBITDA for Q1 -2 ’18; and joint venture FSRUs, which contributed $16.39M in segment EBITDA for the same period.

Risks:

Boil-off issue – As we reported previously, HMLP has a “boil-off” problem. This still hadn’t been resolved, as of 5/31/18, when they reported Q1 2018 earnings. The charterer of the Neptune and Suez Cape Ann vessels filed a claim vs. these vessels, for excessive, past “boil-off.” The vessels are allowed a certain amount of LNG boil-off, (it’s related to gas which is ultimately being lost during a passage – in this case, it was when the vessels were being used for LNG transport years ago, before they were converted to FSRUs), but the charterer claims that they didn’t meet the performance standards for their contracts. HMLP’s 50% share of the accrual was approximately $11.9 million as of June 30, 2018.

However, HMLP is being indemnified by its parent company HLNG.

Management updated this info on the Q2 ’18 earnings call:

“The process has been a bit in limbo during the transition between NG and Total, but I think now Total have closed that transaction. We should be able to come to some kind of agreement on that in relatively short order.

But just to repeat again it’s not something will have an impact on the MLP.”

EGAS Gallant contract:

“EGAS has requested to start a discussion with Hoegh LNG over terms for the termination of the Gallant contract in advance of its April 2020 maturity. And that’s something that would require HLNG consent and compensation. From an HMLP point of view, should HLNG discontinue the charter of Gallant through its Egyptian subsidiary for the purposes of serving the EGAS contract, HMLP has the options to charter the Gallant to HLNG until 2025 at a rate, which is equal to 90% of its current rate. Whether it would in April 2020 or sooner, HMLP current exercised its options. If it does, the impact would negatively impact results over the current levels of distributable cash flow of over $17 million per quarter. The impact will be small enough to maintain a comfortable coverage ratio.”

Management updated this issue on the Q2 earnings call:

“I’d say that at least at the moment the discussions are quite good spirited. And I’m sure we’ll come to something, some kind of agreement. I mean they – I do want to take down to one FSRU that was clear they have got a lot of gas coming online. So that’s their need. And we’ve obviously got a contract in place.”

Tailwinds:

HMLP’s parent, HLNG, has additional FSRUs which it could eventually drop down to HMLP. However, it has been involved in lengthy contracting talks for some of its vessels. Management has previously indicated that they’d like to acquire a dropdown asset at least once each year.

The Independence vessel appears to be the next dropdown candidate. However, on the Q2 ’18 call, management said that,

“it’s difficult to see another drop down this year, not impossible, but difficult. Beyond that we’re obviously working very hard to make a few things come together. The Independence is possible. The projects in Australia, which the parents have been working on, that one solidifies, is possible. And then there is also a few other things out there which aren’t in the public domain that also would be possible.”

(Source: HMLP site)

Analysts’ Price Targets:

At $18.25, HMLP common units are 4.45% below the lowest price target of $19.10, and 12.09% below the average $20.76 price target.

Performance:

Like many other shipping stocks, HMLP has been underperforming the market in 2018, although it has outperformed the benchmark Claymore/Delta Global Shipping ETF (SEA).

Valuations:

HMLP has a slightly lower, but still very attractive yield, and better distribution coverage than other LNG carriers. It seems to be getting a slight premium for its better coverage in its price/DCF and price/book valuations.

Financials:

This is good to see – HMLP’s ROA, ROE, current ratio, and operating margin have all improved over the past few quarters, while its debt leverage has become much lower.

Management has chopped net debt/EBITDA down from a 5.1X level as of 9/30/17, to a 3.5X level, which is much lower than the 5.41X industry average.

Debt and Liquidity:

The balance on HMLP’s revolving credit facility line will be further reduced in Q3 ’18, as a result of a $6M repayment made after the close of Q2 ’18.

As of June 30, 2018, HMLP had cash and cash equivalents of $21.0M and an undrawn portion of $39.7M of the $85M revolving credit facility.

(The left column is as of 6/30/18, and the right column is as of 12/31/17.)

(Source: HMLP site)

Options:

HMLP doesn’t have options, but you can see over 25 other trades daily in our public Covered Calls Table and over 30 trades in our Cash Secured Puts Table.

Summary:

We rate HMLP a buy, based upon its attractive, well-covered yield, and conservative debt management.

All tables furnished by DoubleDividendStocks.com, unless otherwise noted.

Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.

CLARIFICATION: We have two investing services. Our legacy service, DoubleDividendStocks, has focused on selling options on dividend stocks since 2009.

Disclosure: I am/we are long HMLP.

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.

T-Mobile Says Hackers Accessed Data on Millions of Customers

T-Mobile has alerted its U.S. wireless customers to a recent hack that exposed some of their personal information.

In a letter posted to its website, the telecommunications company revealed that personal information, including customer names, phone numbers, e-mail addresses, and account numbers, were recently exposed to hackers. The carrier said that it discovered the breach on Monday, closed the hole that allowed hackers in, and informed authorities. It’s unclear, however, whether the exposed data was actually stolen.

“We take the security of your information very seriously and have a number of safeguards in place to protect your personal information from unauthorized access,” T-Mobile wrote on its website. “We truly regret that this incident occurred and are so sorry for any inconvenience this has caused you.”

T-Mobile didn’t say in the letter how many of its 77 million customers were affected. The carrier revealed to Motherboard that 3% of its customers were affected, or about 2 million to 2.5 million people.

Of course, hacking and corporate security breaches have become all too commonplace. In many cases, hackers obtain records to sell on the so-called Dark Web, a corner of the Internet where illegal goods are readily available for purchase. In other cases, hackers simply breach companies to make a point about corporate security and embarrass their targets.

T-Mobile’s letter didn’t say what the hackers’ motivation might have been.

According to T-Mobile, it has notified its affected customers, so those who do not receive a notification are not believed to have been involved in the breach. Some of its MetroPCS customers were also affected by the breach and were similarly notified.

T-Mobile declined to comment further in response to Fortune inquiry.

Study Shows How Google Tracks People Even When They’re Not Deliberately Using Its Services

Even if you don’t interact with Google on purpose, odds are the advertising giant has built a digital profile of you, according to a report by media industry group Digital Content Next.

Google, part of Alphabet, has settled lawsuits over privacy abuses before and is facing new ones now, in the wake of an Associated Press investigation of Google location tracking. Earlier this month, Google tweaked some of the language it uses to describe its location tracking, in response to the AP investigation.

The report, conducted by computer scientist Douglas Schmidt at Vanderbilt University with support from Digital Content Next—a trade body that regularly criticizes Google—noted that Google collected twice as much “passive” data as active data.

Passive data refers to information gathered in the background while someone uses Google’s Android or a Google app such as Maps, or browses a webpage that relies on Google-owned tools. Active data would include the contents of a search sent through Google.com, for example.

Schmidt reset Android and iOS mobile phones and set them up with a new Google account to record typical tracking behavior on a brand-new user. He found that the Android operating system sent location information 340 times in the first 24 hours, even when the the test user did not touch the phone. The iOS operating system sent no “appreciable” data if the user did not interact with the phone.

Once the test user began a normal day, such as dropping kids off at school and going to work, the iOS device sent Google about half as much information as did the Android device. Website publishers and advertisers collected most of that information through tools such as Google Analytics and AdWords.

Schmidt also wrote in the report that Google can connect activity from so-called anonymous browsing modes with signed-in activity. He did not accuse it of doing so, though, and in a statement provided to The Washington Post, Google denied that it connects anonymous activity with identifiable advertising cookies.

Data Sheet—How ‘Crazy Rich Asians’ Illustrates Asia’s Mobile Messaging Obsession

Worser and worser. A study released on Tuesday found a correlation between anti-refugee violence in Germany and Facebook usage. Towns where Facebook use was higher had more attacks on refugees, even after accounting for local political orientation, size, and wealth (analyst Ben Thompson has raised some serious questions about the study’s methodology, however). The headline conclusion puts even more importance on Facebook’s efforts to fight fake news. In that realm, the company has begun assigning users a secret reputation score on a scale from one to zero. Facebook product manager Tessa Lyons talked to the Washington Post about the system but wouldn’t reveal in detail how scores are calculated. “I like to make the joke that, if people only reported things that were false, this job would be so easy! (But) people often report things that they just disagree with,” she said.

Time suck. The average person spends more than three hours each day on their work email, according to a survey of white collar workers by Adobe. Adobe also asked which common e-mail phrases were most annoying. “Not sure if you saw my last e-mail” was the most hated, followed by “per my last e-mail.”

Time suck, the sequel. While not in email, the rest of the average worker’s day is probably spent in a messaging app like Slack. That popularity helped Slack raise another $427 million of private backing in a deal that valued the company at $7.1 billion. Also on the fundraising hunt, peer-to-peer car rental service Getaround raised $300 million from SoftBank, though at just an $800 million valuation.

Start your Xerox machines. Copying small startup Robinhood, mega-bank J.P. Morgan Chase said it will offer a new service called You Invest that will let customers make up to 100 stock trades in one year for free via the bank’s existing mobile app. But after the first year, customers must hold at least $15,000 at the bank to qualify for another 100 free trades. Customers with at least $100,000 will get unlimited free trades per year.

Crazy rich Asians. Chinese phone and gadget maker Xiaomi said its revenue jumped 68% in the second quarter to $6.6 billion and adjusted profit rose 25% to $310 million. Xiaomi sold 32 million smartphones in the quarter, a 44% increase from last year.

Meet cute. The popular dating app Tinder announced a new college-only version of its service. Called Tinder U, it will be offered exclusively to active students and will only display prospective dates who are also college students.

How to Prove That the Earth Orbits the Sun

One of my favorite classes to teach is Physics for Elementary Education. It’s a physics class designed to address the needs of future elementary school teachers—grades 1 through 6 or so. To guide the class, I’ve been using a version of Next Gen Physical Science and Everyday Thinking for a long time, maybe 13 years or so, and it is super awesome.

One of the major goals in this course is to help students understand the nature of science—in particular the idea that science is all about building and testing models. Throughout the course, the students collect data and build models of their own, but they also learn about existing scientific models, like the heliocentric (sun-centered) model of the solar system.

But there’s a problem with just going ahead and assuming that the Earth orbits the sun. For a long time, humans believed in a different model of the solar system: the geocentric, or Earth-centered model. How do we know today which model is correct—or importantly, how can you know it’s the best model? Do we just have to rely on what the textbooks tell us?

The answer is no. I am going to go over three things you can observe (using simple tools) to support the idea of a heliocentric model of the solar system. Who needs to depend on those silly textbooks when you can figure stuff out yourself?

Phases of Venus

Jamie Cooper/SSPL/Getty Images

For this observation, you are going to need a pair of binoculars and some time. Step one is to find out when Venus (the planet) is visible from your location. A quick Google search should give you the answer. If it’s not up in the sky right now, just wait a few weeks and you should be able to see it again (without having to get up at 4 AM).

When you look at Venus with the binoculars, you should notice something. First, it’s clearly not a star. Second, it’s not even circular. The shape of Venus should be similar to the phases of the moon—that’s because Venus has phases. Yes, you can have a “crescent” looking shape to Venus.

But what does this mean about the geocentric and heliocentric models of the solar system? First, let’s recall what causes the phases of the moon—here is a refresher. In short, half of the moon is illuminated by the sun. Since we look at the moon from different angles, we only see part of the illuminated half of the moon and this causes the phases. The exact same thing is true for Venus.

So, if Venus has a crescent-shaped phases, that means that we are looking at the “back side” of Venus. If Venus has a full phase, we are looking at the “front side.” The only way for this to happen is if Venus orbits the sun. But wait! That doesn’t mean the solar system has to be heliocentric. It’s still possible that the Earth is at the center and the sun orbits the Earth but Venus orbits the sun. It would be weird—but it’s possible.

Moons of Jupiter

NASA Goddard

Here is another thing you can see with a pair of binoculars. Take a look at Jupiter (when it’s visible in the sky). If you haven’t ever tried this—you need to do this. Trust me. It’s pretty awesome. You won’t really be able to make out details about the planet Jupiter, but you can see the four big moons. Yes, you can see the moons of Jupiter with binoculars.

But what do these Jupiter moons say about the model of the solar system? Just like the phases of Venus, this doesn’t prove that the geocentric model is wrong. However, it is obvious that these moons are orbiting Jupiter and not the Earth. So, Earth isn’t the center of everything.

Retrograde Motion of Mars

This one is classic—and you don’t even need a telescope or anything. You only need some patience. Here’s what you do. Go outside at night and notice the location of Mars with respect to the background stars. Do this again the next night and you will notice that it is in a different location (with respect to the background stars). In fact, all of the planets do this—that’s how we know they aren’t stars.

But if you keep tracking the motion of Mars you will notice that it moves to the east—except for some special times. Occasionally Mars will move west for short time before once again moving east. This is called retrograde motion.

Now, let’s consider the geocentric model with Mars orbiting the Earth. Every night it would move farther to the east. That makes sense. But how do you explain the times when it moves to the west? That’s just crazy.

OK, just for fun I’m going to make a model of the Mars retrograde motion. If you plot the position of the planet every day, it would look something like this. Note: These aren’t real numbers, it’s just an example.

The angular position of Mars (fake Mars) keeps increasing from -90 degrees to 90 degrees (and then back to negative 90). This happens until around fake time of 10 (fake time units). Notice that for a short time Mars moves back the other way—boom. That’s retrograde motion.

Now here is the planetary motion that would make this plot. If you need to re-run this model (in python), just click the “play button.”

In this model, both the Earth and Mars orbit a sun—please realize that this model is not to scale. Really, nothing is correct except that the force that causes the orbit is an inverse square law force (just like real gravity). This means that the angular velocity for the planets decreases with orbital distance. The Earth orbits “faster” than Mars. It is this region in which the Earth overtakes Mars that we get retrograde motion.

Using a heliocentric model makes for a simple explanation of the retrograde motion of Mars. But again, that doesn’t “prove” the heliocentric model. But if you take all three of these experiments together you have two options (OK, you could find even more options if you wanted). Option A: The Earth and Mars both orbit the sun. Option B: Mars and the sun orbit the Earth but Mars has a non-circular or some type of funky orbit. Also, Venus still orbits the sun. Option A just seems simpler. Let’s go with a heliocentric model of the solar system.

An Argument for Geocentric

Just to be clear. Before you did these three experiments (which I’m sure you did), it’s not such a crazy idea to stick with the geocentric model. If you had never looked at a textbook or watched a YouTube video, would you think the Earth orbits the sun? I think not. It certainly doesn’t seem that the Earth is both spinning on its axis once a day as well as moving at 30 kilometers per second (the speed needed to get all the way around the sun in just one year).

Wouldn’t we fly off a spinning Earth? Wouldn’t birds have trouble flying to keep up with the Earth? In fact, it just doesn’t feel like the Earth is moving. The geocentric model of the solar system is completely reasonable until you start to collect better data. Or, to say this with respect to the Nature of Science: Some models are pretty good until you collect more data that says they aren’t good. That is the way science works.

Even though there is evidence to support a heliocentric model, historically, there was still one very big problem with it. If the Earth is moving around the sun, then there should be an apparent shift of the positions of stars. This is called stellar parallax. Parallax is the thing your phone uses to place virtual objects in the camera view (like ARkit in Apple’s iOS). It turns out that it is super difficult to detect stellar parallax. Stars are very far away so that their shift is too small to notice with crappy telescopes. Better telescopes got us better data, which got us a better model of the solar system.

Another example: the Foucault pendulum. This is basically a long pendulum that changes its plane of oscillation due to the rotation of the Earth. It’s difficult to set up so I skipped it up above. But if you bother to build one, you’ll get even better data supporting the heliocentric model of the solar system.


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FiftyThree, Maker of Popular Paper and Paste Apps, Gets Acquired

Back in 2012, a Seattle-based startup named FiftyThree launched a drawing app designed for iPad, with a name that sounded like it was designed specifically for an Apple crowd: Paper. Despite its simplicity and also because of it, Apple crowned the iPad App of the Year. Tech writers described it as “the next great iPad app”, “a superbly designed sketching app,” and “a fresh canvas ready and waiting for your ideas, inspiration, and art.” FiftyThree later expanded to include an iPhone app, an optional subscription called Paper Pro, and Paste, a collaboration app.

FiftyThree also managed to do what few app startups have done: make and sell hardware. Its $60, soft-nibbed, walnut stylus, called Pencil, presaged Apple’s eventual entry into the world of stylii.

Today FiftyThree announced its apps and team have been acquired by WeTransfer, a cloud-based file transfer company with headquarters in Amsterdam and Los Angeles. Terms of the deal weren’t disclosed, but WeTransfer said it had acquired the company’s entire patent portfolio and all assets for its apps. FiftyThree’s executive team and product teams will stay on board for now. As for the future of FiftyThree’s suite of apps, including Paper, which has 25 million users, the company says the apps will live on with “increased investment and support.”

WIRED spoke to FiftyThree cofounder and CEO Georg Petschnigg about why he sold FiftyThree, the biggest changes he’s observed in the app economy over the past several years, and why he and his team ignored the words of Steve Jobs and made a stylus anyway. The interview has been condensed for length.

WIRED: Talk about why you sold FiftyThree. How long have you been in acquisition talks for?

Georg Petschnigg: We’d been in each other’s orbits for a long time, because Troy Carter and Suzy Ryoo are shared investors and advisors. But then the conversations started in earnest a few months after we launched Paste, our team collaboration product [in November 2017].

I went on a very, very long walk with Gordon [Willoughby], their CEO, in New York. We walked from first the East Side to West Side, and then the West Side all the way over DUMBO. We crossed Manhattan several times. Then a few days later, I met with cofounding shareholder Damian [Bradfield] in London. And it was very clear that this was meant to happen.

They have this unique business model where they’re able to offer a free, ad-supported version and a subscription version, and what’s unique about their free version is they do this by respecting people’s privacy and their data. And at the same time we were looking at expanding our Paste app on the desktop, and that’s where WeTransfer has a very strong business and a much more active user base.

WIRED: Had you been talking to any other companies about acquisition?

GP: Over the last seven years? Oh, jeez. (Laughs.) There have been various talks in different forms and different phases. But the thing that has always given us the most joy is figuring out how to put technology in service for creativity, and it turns out there are a lot of people who say they provide those services, and a lot of people who truly believe in it and do it every day. We felt that was the case here.

WIRED: Let’s go back to the beginning when you first started FiftyThree. What was your goal then, and how did that reflect what apps and the App Store were like at that point in time time?

GP: When you look at the founding team at FiftyThree, we came from two very different parts of Microsoft. One hand was working on productivity tools—Word, Powerpoint, Excel—essentially making people more efficient, squeezing more performance out of the brain. And the other hand you had folks from Xbox and a lot of entertainment products, ensuring that people went back to their leisure time. And somehow, you’re sort of wasting people’s time on one hand, and on the other hand you’re making them a better, faster cog in the machine. Something about the human experience was lost between those two.

And then when iPad launched, it wasn’t clear what iPad was going to be for. Maybe it was going to be the next-generation magazine, with publishers creating new magazine formats. Maybe it was going to be the next big video service. People really didn’t know. When we looked at it, we clearly saw the iPad for creativity. That lead to the Paper app, where you could take the ideas in your head and quickly translate them via your fingertips into ink strokes. It really changed people’s perception of the iPad, but for us, it also put FiftyThree on the map.

The next step for us then, which really started in 2012, was to think through the stylus as a tool. That ended up leading to the development of Pencil.

WIRED: What strikes me is that it sounds like you’re saying that transition to hardware was a pretty natural thing. But at the same time hardware is really hard, especially in the startup world if you don’t have the supply chain or product management expertise. So what was it that made you say, let’s make hardware?

GP: Yes, hardware is hard but when you look at our founding hardware team…I mean John Ikeda was part of the development team that created the original Xbox 360 controller; our head of engineering led engineering at Sonos; our product manager who was running the program ran the supply chain for Sonos as well. So in a way, yes, hardware is hard and I absolutely wouldn’t do that if you didn’t have a great network and team. But in our case, many people at FiftyThree had reached levels in their careers where they were comfortable with it. So it wasn’t, ‘Can we build the product?’ but instead, ‘Are we building the right product?’

WIRED: How many Pencils did you sell? Was it profitable for FiftyThree?

GP: Oh yeah. This was also the very unusual part: It was a profitable hardware program. I don’t think we ever disclosed how many we sold.

WIRED: So what’s interesting is that your app Paper was, from the beginning, considered to be an Apple darling. And then Apple came out with something called…Pencil. What was that moment like for you and your team?

GP: That was…We…(long pause)…Look, when we were out starting FiftyThree in 2011, I can’t tell you the number of people who told us that proverbial Steve Jobs story about styluses. People would just tell me over and over again, ‘A stylus is bad; don’t do it.’

What our team really believed is that we had to develop new technology that allowed us to move creativity forward on devices. Today, when you look at the stylus landscape, it’s clear what a deep impact Pencil—in particular the design of Pencil—had. Stylii today are buttonless, they have a fine tip to write, they have a side to shade, they emphasize expressiveness and creation. The design language of that was created through Pencil. [Writer’s note: FiftyThree discontinued its hardware business at the end of 2016.]

FiftyThree

WIRED: Your software also evolved along with the App Store. At first your app was free; that was maybe part of the assumption then, during App 1.0, that things would be free. And then you started offering something more advanced as a subscription, which seems like it was hitting this curve of app makers trying to monetize what they were doing and not in spammy, gross ways. So talk a little bit about that evolution of software.

GP: When we first launched Paper with in-app purchases, that was phenomenal. As someone coming from the world of shrink-wrapped software sales, very large software sales, the idea that you could sell an in-app purchase or productivity tool and only sell as much software as people needed was hugely appealing. That worked very well initially. The only challenge is that you quickly realize that the first version of your software is the cheapest to develop. Software, especially that’s used by millions of people, the support and ongoing maintenance is way more expensive than the initial development.

What muddled the picture over the years, though, is actually the introduction of free software that is financed by the sale of data. And it wasn’t until Cambridge Analytica that I would say consumers really started becoming more aware of what is happening when you use free software. Like, something is truly being sold. You are being targeted. And that’s happening because people are selling interpretations or analyses on top of your data. And it’s not just Facebook. But that did lead to somewhat of a warped price perspective on how much software ought to cost.

So when Apple started that shift to software subscriptions, it was a really important and very big shift. But the consumer understanding of, ‘How many subscriptions should I have?’, or ‘Why should I buy a subscription?’ and ‘How does that work?’ I think that will take a few more years for it to really take hold.

WIRED: Would you say that subscriptions have been successful for you?

GP: Yes, they have been.

WIRED: So one of the things I’m hearing you say is Paper is a profitable program, Pencil was profitable for you…is FiftyThree profitable at this point in time?

GP: Well, FiftyThree as a company no longer exists, but, WeTransfer is a profitable company. FiftyThree was not profitable at the time of the acquisition.^superscript text^

WIRED: Why sell?

GP: In our case it’s because we wanted to be part of a larger offering, and from a brand and culture perspective, and a business perspective, it was a great fit.

WIRED: What would you say has been the biggest change you’ve seen in the app economy over the past seven years?

GP: There have been so many things. One thing is, iPad Pro and the introduction of Apple Pencil has transformed that computing experience.

There’s also that channel fatigue and people not wanting to install new apps, and I think people are having a much more mature and healthy relationship, or at least, the beginnings of a much more healthy relationship with technology where we’re all realizing how much it can distract you. I don’t think it’s surprising that the most successful applications right now are meditation applications.

Also, our relationship with data is changing. The business economics around subscription models are still forming.

Another thing that’s changed is that people have become such great photographers. To me that’s kind of incredible. Where we are today, looking at the visual fluency people have, and how they’ve gotten there through technology, that’s been an incredible shift. So yeah, seven years of working through and around the App Store, it’s been quite the journey.

WIRED: So the first thing you mentioned just now is iPad Pro and the introduction of Pencil. I’m just so curious as to how your team reacted to that. Did Apple call and say, ‘Hey, we’re making a Pencil!’ I mean really, what’s the story behind that?

GP: What I can tell you right now is that it had a material effect on our business. But not a materially positive effect, let’s put it that way.

^superscript text^Correction: An earlier version of this article quoted Petschnigg as saying, “We transferred as a profitable company.” The correct statement is, “WeTransfer is a profitable company.”


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Tesla shares head for three-month low as deal doubts grow

(Reuters) – Tesla Inc (TSLA.O) shares fell 7 percent early on Monday as a $113 cut in JPMorgan Chase’s (JPM.N) price target for the electric carmaker added to growing doubts among market players about a plan to take the company private.

A Tesla electric car supercharger station is seen in Los Angeles, California, U.S. August 2, 2018. REUTERS/Lucy Nicholson

Slashing its price target for Tesla Inc (TSLA.O) from $308 to $195, the brokerage said it did not believe Chief Executive Officer Elon Musk had the funding for a plan announced by tweet just under two weeks ago.

Analysts from the U.S. bank had upped its forecast from $198 to $308 after a surge in Tesla stock following Musk’s tweets on Aug. 7 but its analysts said they now thought the deal was a long way from completion.

It now targets the stock, which it continues to value at underweight, back at $195, versus Friday’s close of $305.50. The median price target of the Wall Street analysts covering Tesla is $336.

“Our interpretation of subsequent events leads us to believe that funding was not secured for a going private transaction, nor was there any formal proposal,” analyst Ryan Brinkman wrote in a client note.

“Tesla does appear to be exploring a going private transaction, but we now believe that such a process appears much less developed than we had earlier presumed, suggesting formal incorporation into our valuation analysis seems premature at this time,” Brinkman said.

At $286 in premarket trading on Monday, Tesla was set to open at its lowest since the start of June.

Tesla stock fell nearly 9 percent on Friday after Musk gave an hour-long emotional interview to the New York Times saying he was under major emotional stress and “this past year has been the most difficult and painful year of my career. It was excruciating.”

People familiar with the matter said on Sunday that PIF, the Saudi Arabian sovereign wealth fund that Musk has said could help find the billions of dollars needed for the buyout, is in talks to invest in aspiring Tesla rival Lucid Motors Inc.

Reporting by Sonam Rai and Jasmine I S in Bengaluru; editing by Patrick Graham

This Week in Cars: Elon Musk and the Future of Tesla

If any one thing launched Tesla’s meteoric rise from a small Silicon Valley startup to one of the world’s most famous and exciting companies, it’s Elon Musk. Every scrap of news about the company now makes headlines, as its outspoken, tweeting CEO struggles to turn a profit. But, whew, even by his standards, this week was a biggie for Musk … again. After a questionable announcement via Twitter that he’s considering taking Tesla private, the Securities and Exchange Commission is reportedly investigating him. Investors have filed four lawsuits, so far. Rapper Azealia Banks is somehow involved, and furious.

None of that, though, stopped Musk’s Boring Company from announcing plans to build a tunnel to LA’s Dodger Stadium. And amid the noise, Google sister company Sidewalk Labs revealed more details about its scheme for building the city of the future, starting with Toronto. It was a doozy of a week, and not just for Elon. Let’s get you caught. up.

Headlines

Stories you might have missed from WIRED this week

Ummmm, What’s Azealia Got to Do With This? Of the Week

Not a whole lot, but more than anybody expected at the start of this week. Until the rapper began recounting a very strange weekend in Elon Musk’s mansion, waiting to record a song with Musk’s girlfriend, the musician Grimes. The Times breaks down a very strange saga.

Required Reading

News from elsewhere on the internet

  • Remember when Uber dominated the headlines? It may have lost its place as media favorite to Tesla, but it’s still working to refresh its image with new hires, as Reuters reports, and actually make a profit ahead of a public offering, due next year.

  • Residents and tourists in Santa Monica had a taste of life in the olden “pre-scooter” days on Tuesday, when Bird and Lime deactivated their services in protest at city plans to prefer Jump for an official pilot program. (Jump is owned by Uber.) “Don’t let a #LifeWithoutScooters be the future.” Lime tweeted.

  • Los Angeles became the first US city to install body scanners on its subway this week. The portable devices are designed to catch weapons and explosives.

  • Forbes speculates that NYC’s cap on Uber style ridesharing might not work in other cities, as The Guardian reports that London’s mayor wants the power to do so in his jurisdiction.

  • Is Elon Musk crazy? No, according to Kara Swisher’s latest in The New York Times. He is just an “impulsive and driven boss who runs a very hot and messy kitchen and does not spend a lot of time apologizing for it.”