Wall Street Breakfast: Huawei Arrest And OPEC Troubles
France will tax tech giants at a national level from 2019 if EU states cannot reach an agreement on a digital revenue tax. “I am giving myself until March,” Finance Minister Bruno Le Maire told France 2 television. A tax deal failed to surface on Tuesday, despite a last minute Franco-German plan to salvage the proposal by narrowing its focus to companies like Google (GOOG, GOOGL) and Facebook (NASDAQ:FB).
Appeals in merger litigation are fairly rare, especially for the government, but the second run of United States v. AT&T (NYSE:T) will open a new stage today over the telecom giant’s acquisition of Time Warner. Pressing ahead with its blockbuster antitrust fight, the DOJ argues that Judge Leon ignored “fundamental principles of economics and common sense” and misunderstood how pay-TV operators and content providers bargain over contracts.
Apple supplier shares took a beating overnight after Taiwan’s Largan Precision (OTC:LGANF), a leading lens supplier for smartphone cameras, reported a more than 25% Y/Y decline in its November revenue. The Tawainese company plunged 10% on the news, triggering a sector selloff across Asia. Apple’s (NASDAQ:AAPL) share price has suffered since its Q3 earnings, with analysts maintaining the company’s “iconic hardware unit growth is broadly over for now.” AAPL -3% premarket.
SoftBank’s mobile phone service was disrupted in some parts of Japan today, ahead of an IPO of its domestic telecoms unit later this month that will potentially raise $21B. Biedex.coms of SoftBank (OTCPK:SFTBY) fell as much as 6% on the news, pressured also by a broader selloff in stocks following the arrest of CFO Meng Wanzhou from Huawei Technologies. The two companies have partnered on 5G trials.
“We’ve never sold people’s data,” Facebook (FB) declared, responding to yesterday’s U.K. release of what the company called “cherrypicked” documents. “We still stand by the platform changes we made in 2014/2015.” Few expect U.S. regulators to respond directly to the new emails from Six4Three, a developer that’s suing Facebook in the U.S., but they have inspired some lawmakers to call for more aggressive action against Facebook.
Uber is plotting its return to the self-driving road a day after Alphabet (GOOG, GOOGL) launched the first U.S. commercial robotaxi service, called Waymo One, in Arizona. UBER had suspended operations after one of its autonomous cars hit and killed a woman crossing a street in March. It now plans to run the vehicles on a mile loop between its offices in Pittsburgh, not exceeding a speed limit of 25 miles per hour.
Following private Congressional meetings on Wednesday, General Motors (NYSE:GM) CEO Mary Barra vowed to keep an “open mind” about the future of an Ohio plant that will lose vehicle production. She also said it would be “very costly” to shift production from Mexico, but acknowledged that the company’s restructuring “is something that impacts the country and there is a lot of emotion and concern about it.”
Ford is reportedly offering buy-outs to staff at its moribund plant in Venezuela to reduce its payroll, as the automaker seeks to streamline its money-losing South American operations. The Ford (NYSE:F) plant used to produce as many as 17K cars annually before Venezuela’s economy entered a now five-year recession. Union officials said total production this year has been about 220 vehicles.
Tesla’s China factory, dubbed Gigafactory 3, is set to begin production in the second half of 2019, according to the Shanghai government. Producing in China, the world’s largest market for electric vehicles, will allow Tesla (NASDAQ:TSLA) to reduce costs significantly. The company has said it is operating at a 55%-60% cost disadvantage versus domestic peers due to ocean transport costs and tariffs.
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