October 13, 2024: Five Up Weeks For Major Indices

Last week, Nasdaq and S&P 500 both gained 1.1%, while Dow Jones gained 1.2% – the fifth straight weekly rise for all major indices. Cerebras Systems is likely to postpone its IPO. CoreWeave, an Nvidia-backed AI startup that rents out chips to other companies, announced that it has a new US$650 million credit line to expand its business and data center portfolio. Shortseller Hindenburg accused Roblox of inflated metrics. Tesla CEO Elon Musk unveiled autonomous Robotaxis he says will be available in 2026. Google’s grip on search appears to be slipping as TikTok and AI startups mount challenges. The Justice Department said Tuesday that it may ask a federal judge to force Google to divest Chrome, Google Play and Android, in order to fix Google’s illegal monopoly in general search engines and search text advertising. More than a dozen US states sued TikTok over allegedly harming kids, and the company has reportedly earmarked US$1 billion for future EU privacy fines. Delta Air Lines spent US$170 million on customer and crew-related costs in the wake of the CrowdStrike outage in the summer. Apple will sell its TV+ service on Amazon Prime video. In Canada, Sophic Client Plurilock and CrowdStrike partnered to secure critical infrastructure and organizations. Plurilock also announced a new US$1.7 million sale with an existing client, a major semiconductor manufacturer. Sophic Client, Kraken Robotics was featured in Motley Fool as a no-brainer tech stock to buy right now for less than $200. Sophic Client American Aires announced a partnership with dynamic UFC Lightweight title contender Michael Chandler. Sophic Client NowVertical highlighted a solution that provides simplified data management and provides greater transparency into partner marketing activities. Sophic Client Xcyte Digital, unveiled advanced AI capabilities.

Sophic Client Plurilock (PLUR-TSXV, PLCKF-OTCQB) and CrowdStrike partner to secure critical infrastructure and organizations.

Plurilock will provide sales and support of the AI-native CrowdStrike Falcon® cybersecurity platform to help power Plurilock’s Critical Services business unit. Through the partnership, Plurilock will collaborate with CrowdStrike to deploy the Falcon platform and related Plurilock Critical Services to key Plurilock customers that are seeking to modernize or optimize their security operations for today’s surging threat environment. Both companies have deep expertise in AI and cybersecurity, with Plurilock having been founded on AI as a cybersecurity research spin-out, and CrowdStrike providing the world’s most advanced AI-native cybersecurity platform. “Collaborating with innovative partners like Plurilock is core to CrowdStrike’s mission of stopping breaches,” said Daniel Bernard, chief business officer, CrowdStrike. “Plurilock customers are targeted by the world’s most sophisticated adversaries, and require the most advanced technology and elite services to safeguard their critical assets. We look forward to leveraging the power of the Falcon platform to achieve our shared objectives and stop advanced threats.” https://tinyurl.com/2d2ffbfj

Sophic Client Plurilock (PLUR-TSXV, PLCKF-OTCQB) announces that it has secured a new US$1.7 million sale with an existing client, a major semiconductor manufacturer.

The customer, a prominent industry leader, initially began working with Plurilock Critical Services last fall. Management also announced that as of October 1, 2024 warrants were exercised to purchase 13,627,613 of the Company’s common shares at an average price of $0.26, adding $3,595,644 to the Company’s Treasury. This is an increase from the August 28, 2024 announcement that warrants were exercised to purchase 8,038,946 shares of the Company’s common stock at an (average) exercise price of $0.27 per share for gross proceeds of $2,190,949. https://tinyurl.com/3z7avd9x

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) featured in Motley Fool as a no-brainer tech stock to buy right now for less than $200.

The company has made significant waves recently, with public offerings allowing it to expand its research and resources as well as successful demonstrations to the most significant market players, like NATO. But it has significant applications beyond defence, including oil rigs, offshore wind, marine-life, and several others. https://tinyurl.com/yja6smse

Sophic Client American Aires (WIFI-CSE, AAIRF-OTCQB), a pioneer in cutting-edge technology designed to protect against electromagnetic radiation and optimize human health, announces a partnership with dynamic UFC Lightweight title contender Michael Chandler.

Chandler will promote the company’s EMF protection technology that safeguards against radiation from wireless technologies and enhances recovery and overall well-being. “I’m always looking for an edge and constantly pushing myself beyond what I think I’m capable of,” said Chandler. “Aires has become a key part of that process for me. It’s not just about how hard I train; it’s about being mindful of what I expose my body to. Aires provides that extra layer of protection, helping me stay at my peak, especially as I get ready for UFC 309 at the Garden.” https://tinyurl.com/mpr2dd5n

Sophic Client NowVertical Group (NOW-TSXV, NOWCF-OTCQB) helps clients maximize the value from complex partner relationships.

In the tech industry, Partner Marketing accounts for 37% of overall marketing budget-and 62% of companies are expecting this investment to grow-the demand for more effective partner management solutions has never been higher. Yet, 89% of partner marketers still face significant barriers, the top three issues being data integration, limited visibility into partner activity, and challenges with data sharing, according to the ‘State of Partner Marketing Report 2024’, issued by Foundry, a wholly owned subsidiary of International Data Group, Inc. (IDG), a tech media, data, research and marketing services company. NowVertical’s solution directly addresses these hurdles by simplifying data management and providing greater transparency into partner activities. This refined approach enables organizations to optimize partner-driven revenue, reduce reporting time, and improve the efficiency of their partner marketing programs. https://tinyurl.com/ffbayzbx

Sophic Client Xcyte Digital (XCYT-TSXV) unveils advanced AI capabilities with Intellibots technology.

These character-based AI agents are set to transform the events industry by automating customer interactions and delivering personalized engagement across multiple platforms. This launch, which builds upon the Company’s AI implementation that commenced in July 2024 across its offerings, positions Xcyte Digital at the forefront of the growing AI revolution in event management and customer experience. https://tinyurl.com/yzn5rm9b

dynaCERT (DYA-TSX, DYFSF-OTC) announces closing of $1 million non-brokered private placement financing.

The Company has issued one Unit at a price of $1,000,000 per Unit, such Unit consisting of: (a) one (1) Convertible Note bearing an annualized interest of eight percent (8%) maturing on October 9, 2025 and convertible at the option of the holder in whole or in part into 4,166,667 common shares of the Company (the “Shares”) being a conversion price of $0.24 per Share; and (b) 4,166,667 common share purchase warrants (the “Warrants”). Each Warrant entitles the holder thereof to purchase one (1) Share at an exercise price of $0.28 per Share on or before October 9, 2026. The net proceeds of the Offering will be used for working capital purposes. https://tinyurl.com/ye2xyfyd

Moselle secures $2.1 million to help manage their inventory with AI.

Toronto-based artificial intelligence startup Moselle is gearing up to add new functionalities to its inventory management platform after securing $2.1 million in seed financing. The all-equity seed round, which closed in August, was co-led by MaRS Investment Accelerator Fund and Montréal-based early-stage venture capital firm AQC Capital, with participation from consumer specialist investment and innovation advisory firm True, Rebellion Ventures, Highline Beta, Top Knot Ventures, and Singh Capital. The round brings the startup’s total funding to $2.8 million. https://tinyurl.com/m4x63e6e

AI godfather’ Geoffrey Hinton co-wins 2024 Nobel Prize in physics.

Geoffrey Hinton has spent recent years warning against the potentially disastrous effects of artificial intelligence (AI) systems he helped create if left unchecked. Now, the life’s work that spawned his ‘godfather of AI’ nickname has resulted in a Nobel Prize in Physics, one of the most prestigious awards in the scientific field. Hinton was co-awarded the prize, alongside Princeton University’s John Hopfield, “for foundational discoveries and inventions that enable machine learning with artificial neural networks.” A University of Toronto professor and British-Canadian citizen, he will see his name go down in history with the likes of Albert Einstein, Niels Bohr, and Werner Heisenberg. “I’m still slightly in shock,” Hinton said at an Oct. 8 press conference hosted by the University of Toronto. “I got a phone call at one o’clock in the morning in California, I thought about whether I should answer it or not, and luckily, I decided I would see who was calling. And I was extremely surprised to get the Nobel Prize in Physics. I never expected that.” https://tinyurl.com/2mnt7c2a

Cerebras’ IPO to be delayed by government review.

Cerebras Systems is likely to postpone its initial public offering, Reuters reported on Tuesday, as a result of delays with the U.S. government’s review of United Arab Emirates’ tech conglomerate G42 investment into the company. The report comes just eight days after the AI chip maker filed to go public, revealing that it is reliant on G42 for most of its revenue. G42 bought a 1% stake in Cerebras in late 2021 but has an option to buy a bigger stake. Cerebras’ reliance on G42 would likely have been an issue for investors. Another potential issue for Cerebras was the fact, disclosed by the company, that its co-founder and CEO Andrew Feldman was convicted of an accounting fraud felony nearly two decades ago. https://tinyurl.com/zdm44d5w

OpenAI pursues public benefit structure to fend off hostile takeovers.

OpenAI is pursuing a largely untested corporate structure to defend itself from hostile takeovers and protect chief executive Sam Altman from outsider interference. The artificial intelligence start-up, which last week secured US$6.6 billion in new funding, is planning to restructure as a public benefit corporation (PBC), a new and rare type of company model also adopted by AI rivals including Anthropic and Elon Musk’s xAI. A key benefit of this PBC structure is its potential to thwart an unwanted acquisition or an activist’s demands, according to multiple people familiar with the company’s thinking. This means an existing investor such as Microsoft or another party could be frustrated if they mounted an effort to acquire OpenAI. The proposed changes come in a tumultuous period for the fast-growing group, which is now one of Silicon Valley’s most valuable companies after completing its latest fundraising at a US$150 billion valuation. Its new structure will allow it to continue to attract investors and gain the capital it needs to take on well-funded rivals such as Google, and afford the costs associated with building powerful AI models. The PBC model is relatively new. Delaware, where most companies are incorporated, only adopted PBC legislation in 2013 and then changed provisions in 2020 to make the structure more enticing. Of the thousands of publicly traded companies in the US, fewer than 20 are PBCs. They include Warby Parker, Black Rifle Coffee and Veeva Systems. However, it has proved popular with AI companies. Both Anthropic, the maker of the Claude AI tool, and Musk’s xAI are PBCs. https://archive.ph/59oI0

Shein reports US$2 billion in 2023 U.K. revenue ahead of potential London IPO.

Shein’s business in the U.K. reported US$2 billion in revenue for 2023, according to a filing Tuesday. Shein did not disclose figures for the full year in 2022. The 2023 revenue was 38% higher than what Shein reported for a 16-month period from September 2021 to December 2022. Shein also reported roughly US$30 million in profit for 2023, roughly doubling profit from the prior 16 months. The filing comes as Shein is stepping up efforts to go public in the U.K. after the company’s attempt to IPO in the U.S. was met with scrutiny from regulators and lawmakers over the company’s labor practices and supply chain. Reuters reported last week that Shein is planning to hold informal investor meetings in the coming weeks as it awaits approval from regulators in the U.K. and China. Shein recorded US$32.2 billion in global sales in 2023, a 40% increase from 2022, and doubled its profit to US$1.6 billion. https://tinyurl.com/33hws6ux

KoBold Metals, which uses AI to help find critical minerals for the energy transition, raises US$491 million.

Earlier this year, KoBold Metals found what might be one of the largest high-grade copper deposits of all time, with the potential to produce hundreds of thousands of metric tons per year, the company’s CEO said. Now, just eight months later, KoBold is close to raising over half a billion dollars. The funding should help the company develop the massive copper resource while moving forward on its other exploration projects, which number in the dozens. The mineral discovery startup has already raised US$491 million of a targeted US$527 million round, according to an SEC filing. Its previous round of US$195 million valued the company at US$1 billion post-money, according to PitchBook. The startup is reportedly aiming for a US$2 billion valuation for the current round. https://tinyurl.com/4ua7uwh8

Nvidia-backed CoreWeave gets US$650 million credit line from top Wall Street banks.

CoreWeave, an Nvidia-backed artificial intelligence startup that rents out chips to other companies, announced that it has a new US$650 million credit line to expand its business and data center portfolio. The cloud infrastructure company said it’s raised US$12.7 billion from equity and debt investors in the past 18 months, including a US$1.1 billion round in May at a US$19 billion valuation. By the end of 2024, CoreWeave plans to have 28 data centers across the U.S. and abroad — including locations in Austin, Texas, Chicago, Las Vegas and London — and it plans to build another 10 data centers in 2025. In the past, CoreWeave has supplied Microsoft and French AI startup Mistral with graphics processing units, or GPUs. As of last year, CoreWeave reportedly had US$2 billion in revenue under contract lined up for 2024. https://tinyurl.com/yuvb93tv

Shortseller Hindenburg accuses Roblox of inflated metrics.

Hindenburg Research, a noted short-selling firm, says Roblox, a publicly traded online gaming company popular with children, repeatedly overstated individual user numbers and engagement metrics in communications with investors. The research firm has taken a short position in shares of Roblox and says the company is overexaggerating its daily active users by possibly as much as 42%, according to a research report Hindenburg published on Tuesday. The research firm alleges that “Roblox effectively has two sets of books for counting users: one for internal business decisions…and one used by the finance team that reports higher metrics to investors.” The report also alleges that Roblox fails to adequately protect children from explicit content, and identified dozens of groups on the platform accessible to users under the age of 13 that were “openly soliciting sexual favors and trading child pornography.” https://tinyurl.com/yck4zu8d

Chinese semiconductor stocks extend rally on China’s stimulus measures.

Chinese semiconductor stocks continued to rally in Hong Kong, buoyed by China’s recent aggressive economic stimulus package as well as hopes for even more measures. Investor sentiment has been boosted by Beijing’s recent package of stimulus measures across multiple policy fronts as well as strong fund inflows into Chinese and Hong Kong equity markets, benefiting the chip sector, analysts said. Some think Beijing could unveil additional fiscal measures in the near term, as the country returns from a weeklong National Day holidays, and investors will be closely monitoring the press conference by its top economic planner, the National Development and Reform Commission, on Tuesday. China could unveil a modest fiscal package of up 1.5 trillion yuan to 2 trillion yuan, the equivalent of US$212.8 billion to US$283.7 billion, in the near term, UBS economists said in a research note. Shares of Semiconductor Manufacturing International Corp., China’s largest contract chip maker, put on 20% in Hong Kong on Monday, after surging 29% on Friday. Their gains over the past two sessions added HK$93.65 billion, the equivalent of US$12.06 billion, to its market capitalization, Its smaller peer Hua Hong Semiconductor has gained over 40% since Thursday’s close. https://archive.ph/g1e3T

Musk unveils autonomous Robotaxi he says will be available in 2026.

Tesla CEO Elon Musk said the company would release Robotaxis costing less than US$30,000 in 2026, though he stopped short of promising the vehicles would be fully autonomous, describing them as “highly optimized for autonomous transport.” Musk also said the company would sell US$20,000 humanoid robots for homes that will serve drinks, watch children and “whatever you want,” though he did not say when they would be available. Musk made the highly choreographed announcements at a late-evening event Thursday on the Warner Brothers movie lot in Hollywood, Calif., speaking before investors, analysts and other guests. Tesla and Musk have been under intense investor scrutiny since April, when Reuters revealed that he had shelved plans to build a US$25,000 mainstream electric car, and would focus on building the Robotaxi. Musk intended the Thursday event to demonstrate that the Robotaxi is real, and would be released reasonably soon. The Information reported last month that Tesla plans a new battery for a Robotaxi in 2026. But Thursday’s event did not demonstrate that the car—whenever it is released—will be fully autonomous. Musk climbed out of the back seat of a two-door car that had no steering wheel and no pedals and said there were 20 such vehicles in which guests could ride along a course that would “feel like a park ride.” The course was ring-fenced and did not show that the car could go anywhere, autonomously. He also introduced an autonomous 20-person van that he called the “Robovan” that he said was meant for densely populated areas. He did not say when it would be available. Though investors had also anticipated that Musk might reveal a low-cost new EV—in April, he said Tesla would release new “affordable” models in 2025—he did not mention the subject on Thursday. This cast doubt on the prospects for the cheaper Tesla next year. https://tinyurl.com/49xmennh

Anduril lands US$250 million Pentagon contract for drone defense system.

The Pentagon awarded Anduril Industries a contract worth US$250 million to counter drone attacks against U.S. forces with the company’s recoverable Roadrunner interceptor. Under the deal, which Anduril announced on Tuesday, the Defense Department will buy 500 Roadrunner all-up rounds as well as the firm’s portable Pulsar electronic-warfare capability, which can be integrated with aircraft to jam enemy systems. “This latest contract award highlights Anduril’s commitment to investing its own research and development to support defense innovation, providing rapid, scalable solutions to safeguard U.S. forces,” the company said in a statement. https://tinyurl.com/yd52vvr7

North American robotics sales declined in first half of 2024.

Even a category as hot as robotics is not immune from macroeconomic trends. According to figures from automation advocacy group, A3, the North American robotics market declined in the first half of 2024, both in terms of sales and revenue. The number of industrial robotics ordered in H1 declined 7.5% year-over-year to 15,705. Revenue dipped 6.8% to US$982.83 million for the combined two quarters. The association points the blame at broader economic headwinds among manufacturers. Breaking things down category by category presents a mixed bag. Automotive, by far the largest employer of industrial automation, saw its share of ups and downs. On the OEM side, order numbers increased by 14.4%, while revenue dropped 12%. With automative components manufacturers, both sales and revenue were down, 38.8% and 27.3%, respectively. https://tinyurl.com/5n7scucy

Google’s grip on search slips as TikTok and AI startup mount challenge.

Google’s grip on the nearly US$300 billion search advertising business is loosening. For years, the tech giant has seemed invincible in this corner of the ad market, which is the foundation of its business. Now, rivals are beginning to eat into its lead, and new offerings—fueled by the rise of artificial intelligence and social video—threaten to reshape the landscape. TikTok, the wildly popular short-form video platform, has recently started allowing brands to target ads based on users’ search queries—a direct challenge to Google’s core business. Perplexity, an AI search startup backed by Jeff Bezos, plans to introduce ads later this month under its AI-generated answers. Until now, it has made revenue mostly from a US$20-a-month subscription offering that grants access to more-powerful AI technology. The new initiatives add to the pressure on Google from the rise of Amazon.com, which has taken a chunk of search ad spending. Many consumers begin product searches on the e-commerce platform. Google’s share of the U.S. search ad market is expected to drop below 50% next year for the first time in over a decade, according to the research firm eMarketer. Amazon is expected to have 22.3% of the market this year, with 17.6% growth, compared with Google’s 50.5% share and its 7.6% growth. Some 46% of Perplexity queries in the U.S. lead to follow-up questions, according to the presentation. The company said it processed 340 million queries in September. By comparison, Google has said that it handles some two trillion searches a year. Other search engines have experimented with inserting ads in AI-generated answers. Microsoft has introduced sponsored links and comparison-shopping ads in a chatbot attached to its Bing search engine. Almost 60% of U.S. consumers used a chatbot to help research or decide on a purchase in the past 30 days, according to a survey by New Street Research. Some analysts have questioned whether ads in chatbots will be as valuable as traditional search ads, because people might be less likely to click on them. https://archive.ph/1XNf8

Apple to sell TV+ service on Amazon Prime video.

Apple will offer its TV+ streaming service through Amazon Prime Video in the U.S. beginning later this month, according to the companies. Apple TV+ will be sold as a US$9.99 add-on subscription within Prime Video. A wide range of streaming services are offered through Amazon Prime Video, including services owned by Warner Bros. Discovery and Paramount Global, which also sell their services directly. While streamers can use Prime Video deals to reach more viewers, Amazon typically takes as much as a 50% cut of subscription fees, The Information has reported. The deal is a sign that Apple wants to broaden the reach of Apple TV+, which has won critical plaudits for series such as “Slow Horses.” Apple doesn’t release subscriber numbers but based on Nielsen streaming data, Apple’s service isn’t widely popular. https://tinyurl.com/54ux5997

OnlyFans content creators have reaped US$20 billion since 2016.

The UK-based company doesn’t accept advertising or track its customers, Chief Executive Officer Keily Blair said Thursday at Bloomberg’s Screentime conference in Los Angeles. Instead it relies on subscriptions, pay-per-view events or tips for its talent. Blair said the platform allows its more than 400 million customers to pick and choose what they want to view. She noted that more than half of the company’s revenue comes from micro-transactions versus subscriptions. https://archive.ph/lyENS

Instagram has surged to a new high among US teens, new data reveals.

According to the investment bank Piper Sandler’s latest survey of US teenagers, Instagram is the most used social-media app (and TikTok is the most liked). Piper Sandler surveyed about 13,500 US teenagers this fall to understand their behaviors on things like social media, fashion, and food. The analysts found that 87% of teens said they used Instagram at least once a month. That’s up from 80% a year ago, and an all-time high since Piper Sandler began the survey in 2016. TikTok was the second most used social app, with 79% saying they used it monthly compared to 74% a year ago. Snapchat came in third at 71% monthly usage, a decline from fall 2023 when 74% said they used the app monthly. Pinterest (41%), Twitter (30%), and Facebook (30%) rounded out the bottom in terms of monthly usage this fall. https://tinyurl.com/42ux7rzz

Justice department says it may ask a judge to break up Google.

The Justice Department said Tuesday that it may ask a federal judge to force Google to divest Chrome, Google Play and Android, in order to fix Google’s illegal monopoly in general search engines and search text advertising. The judge, Amit Mehta, ruled in August that Google engaged in anticompetitive behavior in those markets. The DOJ’s proposal, filed Tuesday, also recommends the judge prohibit Google from striking deals in which it shares search revenue with browser and device makers in exchange for being the default search engine in their products. Such a move would likely impact Google’s lucrative agreements with Apple, Samsung and Mozilla, the owner of the Firefox browser. Government lawyers may also ask the judge to require Google to make its search index of websites available to its competitors, allow websites to opt out of being included in Google’s artificial intelligence-powered search product and provide more transparency to advertisers about how it runs the auctions that determine which one of them wins a bid to buy ad space in search results. Tuesday’s proposals may change as government lawyers learn more from reviewing Google documents and employee communications, known as discovery. In a blog post, Google called the government’s proposals “radical” and said that splitting off Android—the most-used mobile operating system—and Chrome, the world’s most popular browser, would “break them” because other companies would not be able to keep them open source. The Justice Department said it aimed to file a refined proposal next month, and Judge Mehta has said he intends to make a final judgment by next August. https://tinyurl.com/4er43sdc

U.S. judge punishes Google’s lucrative app store in antitrust ruling.

A federal judge in California took extraordinary actions to weaken Google’s Android app store, known as Google Play, after the company lost an antitrust trial late last year. App developer Epic Games filed the case. The judge, James Domato, ordered Google to stop requiring American Android app developers to use Google’s in-app billing service, from which it extracts a fee. He also prohibited the company from paying Android device makers like Samsung a share of revenue from the Android app store in exchange for preinstalling the app store on their devices. Google also will be required to provide rival Android app stores with the full catalog of apps that Google Play distributes so that the rival stores might be able to compete with Google Play. The new restrictions will last for three years, and only apply to the U.S. to restore “free and unfettered competition” for companies like Epic that have tried to launch alternative app stores on Android or avoid paying the in-app billing fee, the judge said. Google Play is a cash cow. Financial disclosures suggest the app store generated more than $10 billion in profit in each of the last two years, or at least 12% of Google’s operating income in 2023. Google stock fell 2% on Monday, but that was in line with broader market declines. Google said it would appeal the injunctions. The ruling in the Google case might influence similar proceedings involving Apple. The U.S. Department of Justice is suing Apple, which generates significantly more profits than Google from its own app store, in part for the way it makes it hard for app developers to avoid Apple’s in-app billing fees. https://tinyurl.com/4sa4yb66

Google faces painful reckoning as antitrust cases rev up.

Google’s antitrust problems are coming home to roost. While the company has beat back European antitrust interventions by paying 6.5 billion euros (US$7.1 billion), US enforcers are now flexing their muscles — and the most painful part for the Alphabet Inc. unit won’t be monetary fines, but blows to core businesses that bring in big revenue. https://tinyurl.com/mrydyb7y

More than a dozen states sue TikTok over allegedly harming kids.

Attorneys general from 13 states and the District of Columbia sued TikTok on Tuesday, alleging that the company deliberately designed the app to be addictive to children. The lawsuits, which were filed separately in New York, the District of Columbia and 12 other states, are the latest in a growing list of legal battles to ensnare social media giants. In recent years, Meta and Snapchat have faced similar suits, the vast majority of which are still ongoing. In the suits, attorneys general accuse the popular video-sharing app, which is owned by China-based tech giant ByteDance, of violating local consumer protection laws, misrepresenting the effectiveness of its content moderation efforts, and designing its platform in a manner that it knew could cause compulsive behaviors in young users and harm their mental health. The suits are relying on a novel legal strategy, now gaining wider adoption, to hold social media companies accountable for harms critics say they’re causing young people. The approach uses the principles of product liability to circumvent a key legal protection internet companies have relied on for decades—Section 230 of the Communications Decency Act of 1996—to immunize themselves against claims stemming from user-generated content. https://tinyurl.com/55fx7ffp

TikTok earmarks US$1 billion for future EU privacy fines.

TikTok has set aside US$1 billion for future fines from regulators in Europe, according to a corporate filing in the U.K. from the ByteDance-owned company. One potential hefty fine could be coming soon, as The Information previously reported. Irish regulators are preparing a draft decision related to a 2021 investigation into TikTok’s transfers of user data to China. That adds to other open investigations in Europe, and indicates TikTok is expecting more fines to come. Last year, Irish regulators fined TikTok €345 million (about US$381 million) for violating the GDPR over how it handled children’s data, the largest fine TikTok has received from regulators so far. The filings, which were first reported by Forbes, also showed that TikTok’s revenue in Europe rose more than 75% to US$4.57 billion in 2023 compared to a year earlier. The company’s losses almost tripled to about US$1.37 billion last year. Separately, The Wall Street Journal reported that TikTok laid off people in its content moderation team, though it didn’t disclose how many employees were cut. https://tinyurl.com/3rdfv7js

Delta Air Lines spent US$170 million on customer and crew-related costs in wake of CrowdStrike outage.

Delta Air Lines spent about US$170 million on customer and crew expenses after July’s CrowdStrike outage. Delta was the worst-hit airline as it canceled more than 7,000 flights across five days when a flawed CrowdStrike update crashed millions of computers worldwide. In its third-quarter earnings report released Thursday, Delta said the incident cost it US$380 million. https://tinyurl.com/4asnpbv8

American Water warns of billing outages after finding hackers in its systems.

U.S. public utility giant American Water says it has disconnected some of its systems after discovering that hackers breached its internal networks last week. American Water, which supplies drinking water and wastewater services to more than 14 million people across the United States, confirmed the security incident in an 8-K regulatory filing with the U.S. Securities and Exchange Commission on Monday. The New Jersey-based company said in its filing that its water and wastewater facilities are “at this time” not affected and continue to operate without interruption, though the company noted that it’s currently “unable to predict the full impact of this incident.” https://tinyurl.com/5br6tu59

Who are buy now, pay later borrowers, and what are they buying?

As Amazon’s Prime Day kicked off the holiday shopping season this week, U.S. consumers are expected to spend a record US$18.5 billion using buy now, pay later for purchases in the last quarter of the year, according to projections by data firm Adobe Analytics. Buy now, pay later (BNPL) exploded in popularity as the COVID-19 pandemic forced more shoppers online, driving US$75 billion in online spending in 2023, up 14.3% from 2022, according to Adobe. BNPL providers like Affirm and Klarna boost shoppers’ purchasing power by lending them the money for purchases, which they repay in installments spread over as many as 36 months, although the most common products are four-installment payment plans.
Because most BNPL providers do not report their loans to the credit reporting agencies, comprehensive data on BNPL delinquencies is scant. The Financial Technology Association, which counts three BNPL lenders among its members, reports less than a 2% delinquency rate among those companies compared to nearly 9% for credit cards. Still, 71% of BNPL users also had credit card debt in 2023, according to the Federal Reserve Bank of Boston. Afterpay — which is owned by Block — reported that 96% of customers paid all of their installments on time during the fourth quarter of 2023, while Klarna reported that 96% of its pay-in-four users in 2023 paid off their bills early or on time. For the three months ended June 30, 2024, Affirm said 2.4% of its monthly loans were delinquent by more than 30 days. https://tinyurl.com/yxkmv2fc

In Sophic Capital’s (Pluri)Lock-ing Your Data report, we discussed how pure-play cybersecurity Company and Sophic Client Plurilock (PLUR-TSXV, PLCKF-OTCQB) is a leader in the fight against cyber threats. Plurilock stands out as a prominent North American cybersecurity Company in the microcap space. Plurilock is a trusted provider of IT and cybersecurity solutions for governments and commercial clients across North America and NATO countries.

The Company develops and integrates innovative solutions for specific security challenges, addressing gaps in the market. Their portfolio boasts established brands renowned for their commitment to client safety and regulatory compliance. Their focus on high-value critical services, combined with patented AI, data, and identity solutions positions them as a key player in the evolving cybersecurity market. https://tinyurl.com/2p9u9ehw