Last week, the Dow Jones gained 4.15%, S&P 500 was up 5.9%, and the Nasdaq rose 8.1%, in its best weekly gain since March, aided by a cooler-than-expected inflation report. The rest of week was defined by seemingly never ending FTX and Twitter headlines. Crypto exchange FTX has filed for Chapter 11 bankruptcy in the U.S. and founder Sam Bankman-Fried has resigned as CEO on Friday. Alameda Research, the trading company founded by Bankman-Fried, has also filed for bankruptcy. Crypto lender BlockFi freezes withdrawals, cites ‘Lack of Clarity’ on FTX. Elon Musk sells at least US$3.95 billion worth of Tesla shares after Twitter deal. Some laid off Twitter employees say they’re being asked to come back to Twitter after mass layoffs. Twitter pauses Twitter Blue as trolls overtake platform. Boosted by Twitter drama, Mastodon reaches 1 million active monthly users. Disney warns on economic impact on Disney+ profit target, and is likely to announce layoffs. TikTok slashes global revenue targets by at least US$2 billion. Netflix is interested in carrying live sports. Meta to lay off more than 11,000 employees, or 13% of staff. Apple warns iPhone 14 Pro availability is limited as COVID-19 restrictions close supply chain factories in China. Roblox stock drops on widening losses in Q3, but other growth metrics remain strong. The U.S.-listed shares of ASML shot up 12.8% toward the biggest one-day gain in 20 years in midday trading Thursday, after the Netherlands-based semiconductor equipment maker set a new 12 billion euro (US$12.2 billion) stock buyback program. MicroStrategy stock tumbles, as bitcoin prices fall well below ‘low watermark’ for carrying value in Q3. In Canada, Xanadu closed US$100 million Series C as the quantum computing firm becomes Canada’s latest unicorn. Hopper closed a US$96 million round from Capital One at more than US$5 billion valuation.

Canadian Technology Capital Markets & Company News

Xanadu closes US$100 million Series C as quantum computing firm becomes Canada’s latest unicorn.

Quantum computing company Xanadu has announced the closing of a US$100 million Series C round that brought its valuation to US$1 billion, crowning the Toronto startup as Canada’s latest unicorn. The funding was led by Georgian with participation from Porsche Automobil Holding SE, Forward Ventures, Alumni Ventures, Pegasus Tech Ventures, Silicon Valley Bank (SVB), along with previous Xanadu investors Bessemer Venture Partners, Capricorn, BDC Capital, and Draper Fisher Jurvetson founding partner Tim Draper. Xanadu reportedly tripled its valuation, which The Globe and Mail reported as an estimate of $400 million last year. This comes amid the continued dip in startup valuations as inflation, geopolitical issues, and changing consumer trends negatively impact the private and public markets. Xanadu claimed it has seen growth this year because it launched the world’s first cloud-deployed photonic quantum computer; leads the development of an open-source software library for quantum computing; and established partnerships with global enterprises. To date, Xanadu has raised US$250 million. This comprises a US$100 million Series B round last year, $32 million in Series A financing in 2019, and $9 million in seed capital in 2018. Xanadu has been active in establishing partnerships with other organizations to advance developments in quantum computing. The company has worked with the likes of Volkswagen Group, the University of Ottawa, NVIDIA, and Menten AI, among others. While Xanadu has increased its valuation in the current market, others in the quantum space have slipped. Burnaby-based D-Wave Systems, another Canadian quantum staple, has seen its stock price decline since the company began trading on the New York Stock Exchange in August. https://tinyurl.com/5e5exfsm

Hopper closes US$96 million from Capital One at more than US$5 billion valuation.

Capital One previously led Hopper’s US$170 million March 2021 Series F round. Last year, Capital One also became the first and “keynote” client of Hopper’s B2B business, Hopper Cloud, as the two firms teamed up to launch Capital One Travel for the latter’s millions of credit cardholders. Hopper’s follow-on investment from Capital One comes as tech valuations have taken a beating amid the market downturn. Hopper president Dakota Smith declined to share Hopper’s exact valuation but said the round values Hopper at over US$5 billion, up slightly since its February secondary financing deal. Over the past year, Hopper claims to have become the fastest-growing travel app in the US, and the third-largest online travel agency in North America, at nearly 80 million downloads. Hopper said it is on track to sell $4.5 billion in travel and travel FinTech this year across flights, hotels, homes, and rental cars. While Smith declined to share exact revenue figures, according to the company its sales are up four to five times year-over-year, and the firm is on pace in 2022 to pull in 25 times the revenue it generated in 2019. https://tinyurl.com/yc78y64s

Customer experience platform Alida secures US$60 million credit facility.

Vancouver-founded SaaS startup Alida has secured a US$60 million syndicated credit facility in its aim for long-term growth. The debt financing was led by the National Bank of Canada through its Technology and Innovation Banking Group. Co-lenders include BMO, Comerica, and Silicon Valley Bank. Founded in 2000, Alida (formerly Vision Critical) touts it has created the world’s first combined customer experience management (CXM) and insights platform. The startup’s offering allows brands to access direct and indirect customer data, identify areas of opportunity, and transform customer feedback into actionable insights. Last year, Alida secured around $33 million which includes $10 million in debt financing, and a cumulative $23 million raise for its Series D round. The company also secured US$20 million in growth debt financing in 2020, the same year that the company adopted the name Alida. https://tinyurl.com/38nsrp22

Wyvern raises $9.45 million in seed-plus round.

Edmonton-based hyperspectral satellite imaging startup Wyvern has raised $9.45 million in a “seed-plus” round. The funding was led by Uncork Capital with participation from MaC Venture Capital and Y Combinator. After graduating Y Combinator in the Winter 2022 cohort, Wyvern was able to close its round in April. The US$7 million is all equity financing, bringing Wyvern’s total funding to US$15 million between a pre-seed round and an investment from the federal government’s Sustainable Development Technology Canada a month later. Wyvern will use the additional funding to send its first three satellites into space. https://tinyurl.com/yc686vap

Mednow (MNOW-TSXV) announces senior secured convertible debenture financing of up to $3,000,000 led by Gravitas Securities.

The Company has engaged Gravitas Securities Inc. (the “Agent”) to offer on a “commercially reasonable efforts” basis senior secured convertible debentures of the Company (each, a “Convertible Debenture”) at a price of $1,000 per Convertible Debenture for gross proceeds to the Company of up to $3,000,000 (the “Offering”). The Company has further agreed to grant the Agent an option to increase the size of the Offering by up to 15% (the “Over-Allotment Option”), exercisable in whole or in part at any time for a period of 30 days after closing of the Offering. Each Convertible Debenture will bear interest at a rate of 12.0% per annum and mature thirty-six (36) months following the date of issuance (the “Maturity Date”). The principal amount of each Convertible Debenture (the “Principal Amount”) will be convertible into 2,857 units (each a “Unit”) at a conversion price of $0.35 per Unit (the “Conversion Price”) at the option of the holder at any time prior to the earlier of: (i) the close of business on the Maturity Date; and (ii) the business day immediately preceding the date specified by the Company for the redemption of the Convertible Debentures. https://bwnews.pr/3UMOM2h

Marble Financial (MRBL-CSE) announces non-brokered private placement and first tranche.

The Company announced that it intends to conduct a non-brokered private placement of up to 28,571,429 units of the Company (each a “Unit”) at a price of $0.07 per Unit for aggregate gross proceeds of up to $2,000,000(the “Proposed Offering”). Each Unit will be comprised of one common share of the Company (each a “Common Share”)and one-half Common Share purchase warrant, with each full warrant (each a “Warrant”) entitling the holder thereof to acquire one Common Share at a price of $0.11 per Common Share for a period of 24 months from the closing date of the Proposed Offering. The Units (including the underlying securities) will be subject to a hold period of four months plus one day following the closing of the Proposed Offering. https://tinyurl.com/2p9btbkr

Lite Access (LTE-TSXV) announces fully subscribed $1,052,000 financing.

The Company announced a fully subscribed non-brokered private placement financing of $1,052,000 (the “Offering”).  The Offering consists of: (i) a private placement of secured convertible debentures (“Debentures”) in the principal amount of $500,000 (the “Debenture Offering”); and (ii) 11,040,000 common shares (“Shares”) at $0.05 per share for gross proceeds of up to $552,000 (the “Share Offering”). The Offering was subscribed for by insiders and key stakeholders of the Company. https://tinyurl.com/f9eyr9at

Global Markets: IPOs, Venture Capital, M&A

SoftBank posts profit as Alibaba share sale offsets Vision Fund’s loss.

SoftBank Group reported a net profit of more than US$21 billion for the three months through September, as the Japanese company sold some of its shares in China’s Alibaba to offset hefty losses from its Vision Fund investment business. SoftBank said the gains from its Alibaba share sale amounted to 5.37 trillion yen (US$38 billion). Those gains more than cancelled out Vision Fund’s investment loss, which deepened to 1.43 trillion yen in the quarter. Vision Fund, whose vast portfolio includes many publicly listed tech companies as well as unlisted startups, continued to suffer from the weakness of Asian tech stocks such as Indonesian ride-hailing and e-commerce firm GoTo and Chinese artificial intelligence firm SenseTime. This year’s global stock market rout has dealt a severe blow to SoftBank, the world’s largest tech investment firm led by founder and CEO Masayoshi Son. SoftBank said it’s stake in Alibaba, based on voting rights, has now fallen below 20%. SoftBank made its first investment in Alibaba in 2020, when the Chinese e-commerce company was a tiny startup just a year old. https://tinyurl.com/43jn76km

FTX files for bankruptcy, Sam Bankman-Fried resigns.

Crypto exchange FTX has filed for Chapter 11 bankruptcy in the U.S. and founder Sam Bankman-Fried has resigned as CEO, the company said on Friday. Alameda Research, the trading company founded by Bankman-Fried, has also filed for bankruptcy. The company said John J. Ray III, a lawyer best known for leading the collapsed Enron through bankruptcy proceedings, will take over as CEO of the company. FTX US, the U.S. affiliate of FTX, was included in a list of 130 affiliated companies that have begun bankruptcy proceedings. FTX has crumbled in a matter of days, following a report from CoinDesk outlining the extent to which Alameda Research is closely intertwined with the company. A dramatic selloff in FTX’s native token FTT caused customers to pull billions of dollars out of the exchange, prompting it to freeze withdrawals. https://tinyurl.com/4wxsncjz

Crypto lender BlockFi freezes withdrawals, cites ‘Lack of Clarity’ on FTX.

Crypto lender BlockFi halted customer withdrawals Thursday evening, citing “a lack of clarity” on the status of FTX.com, FTX US and closely tied trading house Alameda. In the statement shared on Twitter, BlockFi also told customers to halt deposits to their wallets and interest accounts. FTX was a one-time rescuer for BlockFi, which struggled to allow customer withdrawals after crypto hedge fund Three Arrows Capital, a big borrower from the firm, blew up earlier this year. In July, BlockFi’s CEO Zac Prince said the firm signed a deal with FTX’s U.S. arm for a $400 million revolving credit facility, plus the option for FTX US to buy the lender at a price of up to $240 million. On Tuesday, BlockFi’s chief operating officer and co-founder Flori Marquez said BlockFi will remain independent until at least July 2023 and that the company was still processing withdrawals. Bloomberg News reported that BlockFi is no longer certain about where the funding for the credit line, as well as collateral for loans that BlockFi had given Alameda, came from, citing concerns the funding could have originated from FTX customer funds. “We are shocked and dismayed by the news regarding FTX and Alameda,” BlockFi’s Thursday statement said. “We, like the rest of the world, found out about this situation through Twitter.” Previous deals FTX had inked with other struggling crypto firms also have an uncertain fate as more FTX issues come to light, The Information reported on Thursday. https://tinyurl.com/mwz4mmwn

Some laid off Twitter employees say they’re being asked to come back to Twitter after mass layoffs.

Some Twitter staff said the company has asked them to come back to work after the mass layoffs. Insider sources indicate that Twitter contacted at least five people about a return to work. Insider surveyed the Blind app, where one user said he’d been told to “come back Saturday morning.” https://tinyurl.com/2sf4axvz

Elon Musk sells at least US$3.95 billion worth of Tesla shares after Twitter deal.

Elon Musk has sold at least another US$3.95 billion worth of shares in his electric car company Tesla after closing his US$44 billion acquisition of Twitter. According to filings with the Securities and Exchange Commission published Tuesday, Musk sold 19.5 million more shares of Tesla. Musk sold almost US$22 billion worth of Tesla shares in 2021, a year when the stock jumped over 50%. This year, he sold over US$8 billion worth of stock in April and roughly US$7 billion worth in August. https://tinyurl.com/4543u2cn

Disney warns on economic impact on Disney+ profit target.

Walt Disney Co. hinted Tuesday that a “meaningful shift in the economic climate” could delay its ability to turn its Disney+ streaming service profitable by the target date of fiscal 2024, which starts a year from now. Disney made the comment as it reported its fourth fiscal quarter results, for the period ending Oct. 1, revealing continued growth in Disney+ subscribers, although mostly from overseas. Meanwhile its direct to consumer segment, which includes Disney+ and other streaming services, lost US$1.47 billion in the quarter, more than double the year-earlier loss. For the full fiscal year, the segment lost US$4 billion, cutting in half the operating profit reported by Disney’s TV networks. Disney reported that Disney+ lifted its total subscribers to 164.2 million in the quarter, up from 152.1 million at the start of July. North American subscribers rose to 46.4 million from 44.5 million. Meanwhile Hulu’s subscribers rose only fractionally to 42.8 million from 42.2 million. Disney CFO Christine McCarthy said the quarter was the peak for Disney+ losses. The red ink is expected to start coming down in the coming months, thanks to price increases. At the same time, she forecast that marketing costs for its streaming services would start to decline while growth in other costs would flatten out. But she also warned that Disney+ subscribers would grow “only slightly” in the first quarter of the new fiscal year. https://tinyurl.com/2j74dht2

Disney to announce layoffs, cost cutting measures.

Walt Disney Co. will tell employees that layoffs are likely as the media and entertainment giant will announce a series of cost-cutting measures, according to a memo to executives from Chief Executive Bob Chapek. Hiring and non-essential work travel across all Disney divisions has been frozen, and an administrative review of recommended spending cuts are to be released, according to the Wall Street Journal, which viewed the memo. Disney’s move would fall in line with many other tech and media companies like Facebook parent Meta Platforms Inc. that are laying off workers. Disney shares, which closed up 5% at US$95.01 Friday, were up less than 1% after hours. https://tinyurl.com/ye5cn458

TikTok slashes global revenue targets by at least US$2 billion.

TikTok has slashed its worldwide revenue targets for 2022 by at least US$2 billion as the fast-growing platform struggles to meet ambitious goals, becoming the latest tech giant to be hit by a global slump in online spending. Targets were cut by 20 per cent in late September by TikTok chief executive Shou Zi Chew in a virtual “all-hands” meeting, according to four people familiar with the move. TikTok originally projected revenues between US$12 billion and US$14.5 billion this year, but actual revenue is now believed to be closer to US$10 billion, these people added. During the meeting, staff were blamed for not driving enough sales in both advertising and ecommerce, the platform’s main sources of income, these people said. But several current and former employees told the Financial Times that TikTok had overspent in other areas, from salaries to social events. In the same meeting, staff were told that the Hong Kong IPO of ByteDance, TikTok’s Chinese parent company, was unlikely to take place this year. The company had previously shelved plans to list overseas, after Beijing launched a crackdown on Chinese tech giants last year. US advertisers are predicted to spend US$65.3 billion on social media this year, a year-on-year increase of just 3.6 per cent — around 10 times slower than in 2021, according to estimates from eMarketer. https://tinyurl.com/5n7d9nvm

Meta to lay off more than 11,000 employees, or 13% of staff.

Meta Platforms Inc. Chief Executive Mark Zuckerberg told employees Wednesday that he planned to lay off about 13% of the social-media company’s employee base as Meta works to become “leaner.” The layoffs will affect more than 11,000 employees. Zuckerberg admitted that he “made the decision to significantly increase our investments” after the pandemic brought surging e-commerce growth, but a sustained acceleration in e-commerce “did not play out” the way he expected. “Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected,” he said. “I got this wrong, and I take responsibility for that.” In addition to conducting broad layoffs, Zuckerberg plans to extend the company’s hiring freeze through the first quarter. Meta shares are up 4% after the announcement, but they’ve declined 71% over the past 12 months as the S&P 500 has fallen 52%. https://tinyurl.com/2p82pchp

Apple warns iPhone 14 Pro availability is limited as COVID-19 restrictions close supply chain factories in China.

Apple released a statement warning investors and customers that iPhone 14 Pro and iPhone 14 Pro Max availability is very constrained following recent factory closures due to recent COVID-19 restrictions in the region. This means Apple is likely lowering shipment estimates for the critical holiday period, potentially impacting revenue figures for the quarter, and customers should expect longer wait times when ordering a new iPhone 14 Pro model at the moment. The company said it is working to restore normal production levels for its flagship iPhone series, whilst taking care of health and safety precautions of workers. https://tinyurl.com/mvm2rkzw

Roblox stock drops on widening losses in Q3, but other growth metrics remain strong.

One of the big players in the “metaverse” space, gaming platform Roblox, saw its stock tumble by more than 15% in pre-market trading on Wednesday after reporting a wider-than-anticipated loss in its third-quarter earnings. The company, which caters to a younger demographic with its virtual-world gaming platform, reported a loss of US$297.8 million, or US$0.50 per share, when analysts had forecast a loss of US$0.32 cents a share. Roblox revenue grew 2% year-over-year to US$517.7 million in the quarter, but Wall Street tends to focus on another figure called bookings, which represents both the revenue plus the change in deferred revenue during the period and other non-cash adjustments. As the company has previously explained, bookings are equal to the amount of virtual currency, which Roblox calls “Robux,” that’s purchased by its users during a time period — something that Roblox says provides a timelier indication of trends. In Q3, Roblox bookings were up by 10% year-over-year to US$701.7 million, above the US$686 million analysts expected. Daily active users were also up by 24% from the year-ago period to reach 58.8 million, but average bookings per daily active user fell 11% to US$11.94. While Roblox beat estimates on several key metrics, the stock dropped as Wall Street reacted to Roblox’s larger-than-anticipated loss. Despite this setback, many remain more bullish on Roblox in the long-term as a key metaverse player — perhaps even more so than Meta, which is spending billions trying to catch up. There are signs that Roblox is managing to grow and retain its users, even as many among its user base are now aging up. https://tinyurl.com/mrs7terc

ASML stock soars toward biggest gain in 20 years.

The U.S.-listed shares of ASML shot up 12.8% toward the biggest one-day gain in 20 years in midday trading Thursday, after the Netherlands-based semiconductor equipment maker set a new 12 billion euro (US$12.2 billion) stock buyback program, and as part of a broad rally in the chip sector and the stock market. The new repurchase program, which is effective Nov. 11 and is expected to be completed by Dec. 31, 2025, represents about 5.4% of the current market capitalization of about US$224.86 billion. Separately, the company raised its guidance for 2025 revenue to between EUR30 billion and EUR40 billion from guidance provided at last year’s Investor Day of between EUR24 billion and EUR30 billion. “While the current macro environment creates near-term uncertainties, we see longer-term wafer demand and capacity showing healthy growth,” the company said in a statement. The stock’s rally, which is on track to be the biggest since it soared 14.1% on Nov. 21, 2002, comes as the PHLX Semiconductor Index surged 7.7% with all 30 components gaining ground, and as the S&P 500 ran up 4.6% in the wake of upbeat inflation data. https://tinyurl.com/4hr63byd

MicroStrategy stock tumbles, as bitcoin prices fall well below ‘low watermark’ for carrying value in Q3.

Shares of MicroStrategy Inc. tumbled 14.4% toward a four-month low, in midday trading Wednesday, and has plunged 34.5% amid a three-day losing streak, as the software company-bitcoin play suffered from the recent plunge in bitcoin prices to a two-year low. The company, which makes enterprise analytics and mobility software, is also a bitcoin play since it acquires and holds the cryptocurrency as a treasury reserve. Bitcoin was down 9.1% in midday trading, and has lost 20.3% in three days, putting it on track for the first sub-US$17,000 close since Nov. 16, 2020. MicroStrategy disclosed earlier this month that it held 130,000 bitcoins, with a carrying value of US$1.99 billion. The carrying value is calculated using the lowest fair value of the bitcoins at any time since their acquisition. And in the conference call following third-quarter results reported on Nov. 1, the company said the “low watermark” for bitcoin was approximately US$17,600, suggesting the company will have to record digital-asset impairment charges in the fourth quarter. MicroStrategy’s stock has sunk 43.2% over the past three months, while bitcoin has shed 27.2% and the S&P 500 has lost 8.1%. https://tinyurl.com/yckrfkka

Thomson Reuters to acquire tax automation software company SurePrep for US$500 million in cash.

Thomson Reuters Corp. said Friday it has agreed to acquire tax automation software provider SurePrep LLC for US$500 million in cash. The company is expecting to receive a tax benefit with a net present value of about $60 million as part of the deal. SurePrep was founded in 2002 and healps accounting firms boost profitability using a digital tax workflow, the financial data and news company said in a statement. SurePrep is expected to generate about US$60 million of revenue in 2022 and to grow by more than 20% annually in the next few years. The deal is expected to close in the first quarter of 2023. Thomson Reuters shares were not active premarket, but are down about 8% in the year to date, while the S&P 500 has fallen 17%. https://tinyurl.com/3nh3e7n3

Emerging Technologies

LG Display develops stretchable display that elongates by 20%.

LG Display said on Tuesday that it has developed a stretchable display that can be elongated by 20%. The full-color display supports 100 pixels per inch (ppi) resolution and can be extended from 12-inch in size to 14-inch, the South Korean display panel maker said. The company said it expected the display could be used in products with uneven surfaces such as furniture and clothes as well as conventional consumer products such as wearables. For example, stretchable displays could be utilized in special uniforms of first responders to share real-time information. The displays could also be made to have bumps in certain areas that can act as buttons for the visually impaired to use touch screens more widely, LG Display said. The company has been developing the stretchable display since 2020 in collaboration with 20 South Korean research institutes. The project is expected to conclude in 2024. https://tinyurl.com/5n7wn9uh

Google and Renault are working on a ‘software-defined vehicle’.

Google and the Renault Group are expanding their four-year-old partnership to include the development of an advanced software platform for future vehicles. This “software-defined vehicle” will be built on Google’s Android Automotive operating system and send data to the company’s cloud servers for processing, the companies announced. In 2018, Renault struck a deal with Google as part of a broader partnership between the tech giant and the Renault-Nissan-Mitsubishi Alliance, which collectively is one of the largest auto groups in the world. As part of the deal, the Alliance announced that it would adopt Google’s native car operating system, which offers built-in Assistant, Maps, and Play Store. That first deal was just about putting Android in millions of new vehicles. Today’s announcement is a little more complex. Google and Renault say they will work together to create a “Digital Twin,” or a virtual carbon copy of a vehicle that features advanced artificial intelligence capabilities “for an easier and continuous integration of new services into the vehicle and the creation of new onboard (In-Car Services) and offboard applications,” the companies announced. https://tinyurl.com/bdrmkz3s

CRISPR cancer trial success paves the way for personalized treatments.

A small clinical trial has shown that researchers can use CRISPR gene editing to alter immune cells so that they will recognize mutated proteins specific to a person’s tumours. Those cells can then be safely set loose in the body to find and destroy their target. It is the first attempt to combine two hot areas in cancer research: gene editing to create personalized treatments, and engineering immune cells called T cells so as to better target tumours. The approach was tested in 16 people with solid tumours, including in the breast and colon. “It is probably the most complicated therapy ever attempted in the clinic,” says study co-author Antoni Ribas, a cancer researcher and physician at the University of California, Los Angeles. “We’re trying to make an army out of a patient’s own T cells.” The results were published in Nature1 and presented at the Society for Immunotherapy of Cancer meeting in Boston, Massachusetts on 10 November. https://tinyurl.com/4b26d4tx

Amazon’s new robot is capable of handling millions of different products and could replace human workers.

Amazon has developed a robot capable of identifying and handling individual items, a milestone in the e-commerce giant’s efforts to reduce its reliance on the human order pickers who currently play a key role in getting products from warehouse shelves to customers’ doorsteps. The robotic arm, tipped by a set of what appear to be retractable suction cup-like devices, is called Sparrow. In a company video released on Thursday, the machine autonomously grabbed items of different sizes and textures from a plastic tote and placed them in other receptacles. Amazon said the bot is capable of handling millions of different products. Automating such tasks may look simple but has stumped Amazon roboticists for years. Machines at the company’s facilities have long lifted pallets, arranged tightly packed shelves and shuttled packages on conveyor belts. But Amazon also employs hundreds of thousands of workers, whose dexterity and intuition currently let them pick and pack items more quickly and more reliably than existing machines. https://tinyurl.com/4cz2h5tp

Media, Streaming, Gaming & Sports Betting

Netflix is interested in carrying live sports.

Netflix is thinking of getting into the game of offering live sports, much as its rivals Walt Disney Co. , Apple Inc. , Amazon.com Inc. and Comcast Corp. do, according to a Wall Street Journal report Tuesday. The video-streaming company, which spends billions of dollars annually on movies and shows, recently bid for streaming rights for the ATP tennis tour for some European countries, including France and the U.K., but dropped out, one of the people said. Netflix has also mulled bidding for U.K. rights to the Women’s Tennis Association and cycling competitions, the WSJ reported. Netflix, which has looked to bolster revenue through an advertising-supported platform and a crackdown on shared accounts, declined comment. Disney owns ESPN. Apple TV+ has a deal with Major League Baseball for Friday night games; Amazon Prime carries the NFL on Thursday nights. Comcast owns NBC Sports. https://tinyurl.com/u6dpdytn

Adtech, Privacy & Regulatory

Elon Musk is putting Twitter at risk of billions in fines, warns company lawyer.

Meanwhile, Musk’s personal lawyer is telling people, ‘Elon puts rockets into space, he’s not afraid of the FTC. Twitter’s privacy and security teams are in turmoil after Elon Musk’s changes to the service bypassed its standard data governance processes. Now, a company lawyer is encouraging employees to seek whistleblower protection “if you feel uncomfortable about anything you’re being asked to do.” The company’s chief privacy officer Damien Kieran, chief information security officer Lea Kissner, and chief compliance officer Marianne Fogarty have all resigned, according to two employees and an internal message seen by The Verge. Musk’s new legal department is now asking engineers to “self-certify” compliance with FTC rules and other privacy laws, according to the lawyer’s note and another employee familiar with the matter, who requested anonymity to speak without the company’s permission. On Thursday evening, Musk sent an email to employees obtained by The Verge to address concerns about the FTC consent order. “I cannot emphasize enough that Twitter will do whatever it takes to adhere to both the letter and spirit of the FTC consent decree,” he wrote. “Anything you read to the contrary is absolutely false. The same goes for any other government regulatory matters where Twitter operates.” http://bit.ly/3TuzXzV

Twitter pauses Twitter Blue as trolls overtake platform.

Twitter has withdrawn its $7.99 subscription service Twitter Blue, less than one day after the product update was broadly released. The subscription, which was updated this week following Elon Musk’s US$44 billion acquisition of the platform, gave users a blue checkmark next to their names. For years that check mark was an indication to users that Twitter had verified somebody’s identity, but the new checkmarks were obtainable by anyone with internet access and a credit card. The rollout led to chaos on the platform on Thursday, as pranksters impersonating brands, celebrities and government organizations paid to subscribe for the service, then tweeted absurd and often hilarious or ironic messages which appeared to come from a verified user. This was especially a problem for marketers, whose advertising is the main source of revenue for Twitter. One viral tweet, from an account impersonating Nintendo, showed the video game character Mario giving a middle finger. The pharmaceutical company Eli Lilly was impersonated by someone who posted that the profitable diabetes drug insulin would be distributed for free. The chaos undercuts Musk’s promise to eliminate spam and bot accounts from Twitter and also highlights his struggles to gain the trust of advertisers worried about brand safety. https://tinyurl.com/p8k4vrdt

Boosted by Twitter drama, Mastodon reaches 1 million active monthly users.

Mastodon, the decentralized social network that’s increasingly being positioned as an alternative to Twitter, has eclipsed 1 million active monthly users. That’s according to CEO and lead developer Eugen Rochko, who revealed the milestone in a post on Monday morning. Germany-based Mastodon has experienced rapid growth since Elon Musk’s takeover of Twitter, with nearly half a million users joining the network since October 27. While a fraction of the size of Twitter’s 238 million daily active users, Mastodon’s user base remains on a steep upward trajectory, growing from 60-80 new user registrations per hour prior to October 27 to thousands of registrations per hour today. Twitter’s controversial new ownership — and recent product changes — have supercharged Mastodon’s expansion. Some users say that they were inspired to switch to Mastodon over to concerns about how Twitter’s functionality may change under Musk’s control, while others joined as a form of protest against Twitter’s new paid verification scheme and Musk’s heavy-handed approach to moderating certain forms of satire. Mastodon offers an experience in many ways comparable to Twitter’s, with features like hashtags, replies, bookmarking and retweet-like “boosting.” But unlike Twitter, the network is ad-free and distributed across thousands of servers organized around interests and geographic regions, run largely by volunteers who join their individual systems together in a federation. https://tinyurl.com/4cvp75t7

Twitter tells advertisers that user growth is at ‘all-time highs’ under Elon Musk.

Twitter’s daily user growth hit “all-time highs” during the first full week of Elon Musk owning the platform, according to a company document obtained by The Verge. Since Musk’s dramatic takeover, Twitter’s monetizable daily user (mDAU) growth has accelerated to more than 20 percent, while “Twitter’s largest market, the US, is growing even more quickly,” according to an internal FAQ obtained by The Verge that was shared with Twitter’s sales team on Monday to use in conversations with advertisers. Per the FAQ, Twitter has added more than 15 million mDAUs, “crossing the quarter billion mark” since the end of the second quarter, when it stopped reporting financials as a public company. If those numbers are in line with how Twitter reported metrics when it was public, they imply that the service has yet to see a mass exodus under Musk’s ownership. He tweeted on Sunday that, since his deal to buy Twitter was announced, “user numbers have increased significantly around the world.” Twitter last reported 237.8 million mDAUs and a 16.6 percent yearly growth rate for the second quarter. https://tinyurl.com/27rrh54a

Biden says Elon Musk’s cooperation with other countries ‘worthy of being looked at’.

President Joe Biden on Wednesday said Elon Musk’s “cooperation and/or technical relationships with other countries is worthy of being looked at.” Speaking at a White House news conference, Biden was asked if he thought Musk, the new owner of Twitter and the CEO of Tesla was a threat to national security. At least one Democratic senator has called for a probe into the security implications of Saudi Arabia’s stake in Twitter after Musk took over the company. Biden stressed that he was not saying Musk is doing “anything inappropriate.” https://tinyurl.com/2p84u63k


TikTok launches e-commerce feature in app to compete with Amazon.

TikTok quietly entered the United States e-commerce market this week, where it will compete with Amazon and other retail giants during the coming holiday shopping season. Users can now make purchases directly through the app using a feature called TikTok Shop, which the company officially began testing in the U.S. this week. It was previously only available in the UK and seven countries in Southeast Asia. TikTok is currently inviting select U.S. businesses to participate in the initiative, according to a person familiar with the matter. That means livestreamers from China and other places who sell goods on TikTok will need to continue directing shoppers to third-party websites. TikTok, which is owned by the Chinese social media giant ByteDance, has told international merchants that they will eventually be allowed to start using TikTok Shop, the person said. https://tinyurl.com/hfazb66c

Amazon’s new MK30 drone is set to fly Prime Air deliveries in 2024.

Amazon is building a better drone that should help chart a course for the company’s Prime Air delivery service after the project was reportedly hampered by multiple malfunctions, crashes, and even fires. The new MK30 drone will go into service in 2024 and is designed to be quieter, go further, and handle the elements better, like high temperatures and light rain. The new drone has the same function and goal as its predecessor designs: fly vertically hundreds of feet into the air, autonomously maneuver and land, and deliver packages up to five pounds.  Amazon isn’t giving up on its decade-long efforts to widely launch its Prime Air drone delivery service; the company announced in July that its next test site will be College Station, Texas, where it’s partnering with the city and Texas A&M University doing test flights with its current drone prototype, the MK27-2. Still, the company faces many hurdles, including approval from the FAA, and is still a long way away from its 2013 goal of operating a 30-minute delivery service straight over your roof. http://bit.ly/3O1uNKE

Fintech, Blockchain & Cryptocurrency

Twitter looks to become PayPal rival processing crypto and other payments.

Twitter is taking steps to launch a payment processing product that could put it into competition with PayPal. Last week, the company filed registration paperwork with the Treasury Department, according to The New York Times, allowing  Twitter to transfer money, exchange currency or cash checks, and requires the company to report suspicious transactions, according to the report. While details on the new payment product are sparse, a person familiar with the project told The Information that it is going to take cryptocurrencies, and that it will likely accept dogecoin. Elon Musk, who acquired the social media company for US$44 billion in October, came to prominence in the tech industry as a cofounder of the payments company PayPal. He has previously said he wants to turn Twitter into an “everything app” which would combine communication and payments much like the Chinese social media company WeChat. Musk has been searching for new sources of revenue for Twitter which has long relied on an advertising-based model. The company is in the process of revamping its subscription service Twitter Blue, which will charge users US$8 a month for an expanded set of features including a blue verification badge. Twitter rolled out a separate verification badge early Wednesday which marked accounts for select public figures and media organizations as “official”, but that new badge disappeared as quickly as it had appeared. Musk announced his decision to cut the product in a tweet at 8:38 am pacific time. “I just killed it,” Musk wrote. https://tinyurl.com/bde3j8ft


Chip-making juggernaut TSMC eyes multibillion-dollar Arizona factory expansion.

TSMC plans in the coming months to announce it will build a cutting-edge semiconductor plant north of Phoenix, beside another chip factory that the company committed to in 2020, according to people familiar with the expansion plans. The scale of the investment is expected to be roughly similar to the US$12 billion it committed two years ago, the people said. The company’s big bet on making chips in the U.S. comes after Washington agreed to provide semiconductor makers lucrative grants to bring advanced manufacturing back to American soil. TSMC’s new facility would manufacture so-called 3-nanometer transistors, some of the tiniest and most lightning-fast currently possible, the people said. https://tinyurl.com/3dvajxv2

Nvidia offers new advanced chip for China that meets U.S. export controls.

U.S. chip maker Nvidia Corp is offering a new advanced chip in China that meets recent export control rules aimed at keeping cutting-edge technology out of China’s hands, the company confirmed on Monday. Nvidia responded to Reuters’ reporting that Chinese computer sellers are advertising products with the new chip. The chip, called the A800, represents the first reported effort by a U.S. semiconductor company to create advanced processors for China that follow new U.S. trade rules. Nvidia has said the export limitations could cost it hundreds of millions of dollars in revenue. Nvidia declined comment on whether it consulted the Commerce Department about the new chip. A Commerce Department spokesperson declined to comment. At least two Chinese websites by major server makers offer the A800 chip in their products. One of those products previously used the A100 chip in promotional material. https://tinyurl.com/msdr5js8

Japan to invest US$500 million to manufacture advanced chips.

Japan said on Friday it will invest an initial 70 billion yen in a new semiconductor venture led by tech firms including Sony Group Corp and NEC Corp as it rushes to re-assert itself as a leading maker of advanced chips. Japan’s government will likely invest billions of dollars more going forward and wants to lure U.S. and European chip-related companies to the venture, such as IBM and ASML Holdings, a trade and industry official told Reuters, asking not to be identified because he is not authorized to talk to the media. As trade friction between the United States and China deepens and Washington restricts Beijing’s access to sensitive semiconductor technology, Japan is rushing to revive its chip manufacturing base. It wants to ensure its carmakers and information technology companies do not run short of the key component and that it has advanced chip technology necessary to nurture new fields such as artificial intelligence. Japan, which once made over half the world’s semiconductors, is also concerned that China may attempt to take control of Taiwan, the current global hub for advanced logic chip production. http://bit.ly/3USjoip


Rivian upholds 2022 production targets as net loss widens.

Electric vehicle maker Rivian affirmed Wednesday that the company is on track to hit its annual production target of 25,000 vehicles despite unpredictable supply chain crunches and component shortages. The startup-turned-public company remained committed to its production goal even as industry-wide challenges, supply chain snarls and macroeconomic forces have conspired this year to keep automakers from satisfying a strong consumer appetite for cars, trucks and SUVs. Rivian reported that its third-quarter production rose 67% over the same period a year ago, for a total count of 15,000 vehicles, including the automaker’s truck, SUV and Amazon delivery vans, through September 30. During the quarter, the company produced 7,363 vehicles, boosted by the addition of a second shift at its Normal, Illinois, factory. It delivered 6,584 of them — a significant jump from the 4,467 vehicles Rivian delivered in the second quarter of the year. Like other automakers, and especially other startups, Rivian has struggled this year, with founder and CEO RJ Scaringe forced in July to lay off 6% of its workforce, or roughly 900 employees. For the third quarter, Rivian reported a net loss of US$1.72 billion on revenue of US$536 million. That compares with a net loss of US$1.23 billion on revenue of US$1 million the same period a year ago. https://tcrn.ch/3WXYlfZ

Amazon says it has ‘over a thousand’ Rivian electric vans making deliveries in the US.

Amazon’s fleet of Rivian-made electric delivery vans is growing. Since first rolling out earlier this year, the retail giant’s new zero-tailpipe emission vehicles have made more than 5 million deliveries in the US, with its fleet-size exceeding 1,000 EDVs (electric delivery vans). That’s still only a fraction of the company’s overall transportation fleet, which is comprised 30,000 Amazon-branded delivery vehicles and 20,000 branded trailers. But the electric-portion is growing, with Rivian eventually expecting to deliver 100,000 vans to the company. Of course, supply chain woes and inflation, as well as other hurdles, have conspired to stymie Amazon and Rivian’s goals of an electrified delivery fleet. When then-CEO Jeff Bezos announced a deal with the EV startup in 2019 to buy 100,000 vans, he said they should be on the road by 2024. Now, Amazon projects to hit 100,000 vans on the road by 2030. https://tinyurl.com/mswycj5j

Foxconn invests another US$170 million into EV SPAC Lordstown Motors.

Taiwanese manufacturer Foxconn is increasing its investment in EV startup Lordstown Motors by buying US$170 million in common stock and newly created preferred shares. Once the deal is complete, Foxconn will hold all of Lordstown’s outstanding preferred stock and 18.3% of its common stock on a pro forma basis. Foxconn will also have the right to two board seats, the companies said Monday. The additional investment comes a year after the electric light-duty truck manufacturer sold its 6.2-million-square-foot Lordstown, Ohio, factory to Foxconn. As part of that US$230 million deal, which included a direct investment of US$50 million, Foxconn agreed to help Lordstown Motors manufacture its Endurance pickup truck. Production of the electric pickup truck began in September 2022. This latest deal, specifically the US$100 million direct preferred stock investment, replaces the joint venture funding announced last year by Foxconn and Lordstown Motors. The investment will occur in tranches and is subject to a review by the Committee on Foreign Investment in the United States. https://tinyurl.com/mkba6mvd

Sophic Capital Client Insights

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC): Smooth Sailing for Kraken Robotics.

In our 4 prior reports in this series, we detailed how governments and industry competitors are investing heavily into unmanned underwater vehicles (UUVs): Report #1 highlighted why developing UUVs is far more difficult than designing and launching spacecraft; Report #2 detailed what Russia and China are doing to gain a strategic advantage in the Pacific and beyond; Report #3 discussed how the rest of the world was investing in UUVs to safeguard oceans; Report #4 provided an update on underwater drone companies. This report focuses on how Sophic Capital client Kraken Robotics [TSXV:PNG, OTCQB:KRKNF] is leading the global fight for subsea supremacy. Military and commercial markets continue to grow as both incorporate unmanned vehicles and intelligent sensors in their procurement plans and budgets. Kraken Robotics is becoming a major supplier for these markets, providing its advanced imaging, sensing, and subsea power solutions for military grade and commercial UUVs. The Company also operates a Robotics-as-a-Service division, targeting commercial, underwater infrastructure for oil and gas, offshore wind, pipelines, and telecommunications networks.  Kraken has been winning large defence contracts with several NATO Navies. The Company has also done business with the U.S. Navy, Government of Canada, and several global defense contractors. http://bit.ly/3tl6dur


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