Selasa, 14 Mei 2019

Morning Update: The Thirst Trap Is The Occasion - BuzzFeed News

The Supreme Court says consumers can sue Apple for allegedly monopolizing the App Store

In a 5-4 decision, the Supremes ruled that consumers can proceed with a class action.

The issue: Apple charges app makers a 30% commission on every app sale, while preventing developers from selling their apps on Apple devices outside the App Store. The people suing Apple say the company effectively passes on that 30% fee to customers, who have no choice but to buy apps on the App Store.

Apple’s argument: The tech giant said customers were not “direct purchasers” from Apple, but rather from the app makers themselves — an argument the court did not agree with.

What this ruling means: Now, the lawsuit can move forward in courts. It could potentially open Apple up to a class-action settlement or a loosening on its grip on the sale of apps for its devices.

The big picture: The App Store accounts for billions in revenue for Apple, so Apple has a lot to lose here.

Sri Lanka has blocked most social media networks after a Facebook post sparked anti-Muslim protests

The country temporarily banned Facebook, Instagram, and YouTube and instant messaging apps Snapchat, Viber, WhatsApp, and IMO after a Facebook post led to attacks on mosques and Muslim-owned businesses across several towns.

The ban comes three weeks after jihadist bombers targeting churches and hotels killed almost 300 people in Sri Lanka on Easter Sunday, sparking fears of sectarian violence against the country’s minority-Muslim population.

This was the third time in weeks the country had banned social media in the wake of religious tension.

Broader context: Read Megha Rajagopalan on why banning social media in Sri Lanka doesn’t make sense.

SNAPSHOTS

Elizabeth Warren pledged to replace Betsy DeVos with a former public school teacher if she wins in 2020. Sen. Warren’s announcement was a sign of how DeVos, President Donald Trump’s education secretary, has become a rallying point for Democrats on the campaign trail

Angela Merkel doesn’t want either of the EU’s top jobs. Merkel will quit politics when she steps down as German chancellor, and has privately made clear she’s not interested in leading the EU.

Monsanto has been ordered to pay more than $2 billion to a couple with cancer. A jury awarded $2 billion to an elderly couple that developed non-Hodgkin's lymphoma after years of using Monsanto's popular weed killer Roundup. The jury found the company failed to warn consumers that Roundup could cause cancer, attorneys said.

Felicity Huffman admitted she paid $15,000 to increase her daughter’s SAT score. The Desperate Housewives actor pleaded guilty on Monday. Prosecutors recommended she be sentenced to four months in prison.

A DC Metro worker is “hurt and embarrassed” after a writer called her out in a viral tweet for eating on the train. Natasha Tynes tweeted a photo of the Metro employee eating on the train, complaining it’s against the rules. Tynes’ tweet earned viral backlash — and she may have lost a book deal. Metro authorities say the worker will not be punished.

A teen decorated her graduation cap to direct people to a list of students killed in school shootings. Gina Warren compiled a list of victims killed in mass shootings at American high schools. She plans to wear a QR code on her cap at the graduation ceremony that will send people to the list.

YouTube’s newest far-right, foul-mouthed, red-pilling star is a 14-year-old girl

The future is here and I don’t like it.

“Soph” has become a rising star with more than 800,000 followers, in the universe of conspiracy theorists, racists, and demagogues that owes its big bang to YouTube.

The thing is, “Soph” is 14. Here’s how our reporter Joe Bernstein describes one of her videos: “a cherubic white girl mocking Islamic dress while lecturing her hundreds of thousands of followers about Muslim ‘rape gangs,’ social justice ‘homos,’ and the evils wrought by George Soros — under the thin guise of edgy internet comedy.”

As Bernstein writes, “The video platform for years has incentivized such content through algorithms favoring sensational videos.”

And where has that brought us? “This is what indoctrination looks like when it’s reflected back by the indoctrinated.”

We need to talk about Antoni from Queer Eye’s shirtless Mother’s Day selfie

Look, first of all, I’m not here to police your thirst — I’m on your side here.

Having said that, Queer Eye star Antoni Porowski may have stretched the line of what constitutes a thirst trap occasion.

Antoni posted a shirtless selfie that was a “shout-out to all the moms.” The photo, which showcased 36 abs and muscles I didn’t know existed, was a hit, but people were confused as to what, exactly, it had to do with Mother’s Day.

While people lovingly dragged Antoni for the thirst trapping, many said it would be rude to be ungrateful for such a gift.

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https://www.buzzfeednews.com/article/elaminabdelmahmoud/morning-update-the-thirst-trap-is-the-occasion

2019-05-14 10:35:00Z
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Uber and Lyft Get Creative With Numbers, but Investors Aren’t Blind to the Losses - The Wall Street Journal

Traders at the New York Stock Exchange during Uber’s IPO on May 10. Photo: Xinhua/Zuma Press

Uber Technologies Inc., UBER -10.75% Lyft Inc. LYFT -5.75% and other big startups going public now have touted their new business models that disrupt old industries but lose historic amounts of money.

To try to win over investors, they have also come up with unusual alternatives for measuring their performance. So far, investors aren’t buying it.

The ride-hailing rivals have struggled after debuting on the public markets with the two largest-ever 12-month losses for American startups preceding an IPO. Uber, with a $3.7 billion loss in the 12 months through March, priced its shares at the low end of expectations and its stock has fallen about 18% from Friday’s offering price. Lyft, with a loss of $911 million last year, has fallen about 33% since its debut in March.

Both companies provide financial measures they say better measure their performance. However, these measures ignore significant expenses. Uber calls this “core platform contribution profit,” and on this basis, it made $940 million last year versus a $3 billion operating loss. Lyft’s “contribution” profit, measured differently, was $921 million.

Some companies turn around after poor public debuts. And Uber and Lyft aren’t alone in creating unconventional metrics that mask large losses.

WeWork Cos., the shared office space company, filed for an IPO in December—its executives say it should be treated like a tech firm—after inventing a new profit metric called “community-adjusted Ebitda.”

The measurement flipped WeWork’s bottom line last year from a net loss of about $1.9 billion, using standard accounting, to a profit of $467 million, using the company’s preferred measure. The loss, based on generally accepted accounting principles, would be the second largest in history among U.S. startups going public—between Uber and Lyft—according to S&P Global Market Intelligence.

“The early investors are trying to find some sucker who will buy the stock in the public market,” said Howard Schilit, a forensic accountant known for detecting accounting tricks. “In order to sell the deals, they make up a fact pattern that is nonsensical.”

Spokesmen for WeWork and Uber declined to comment. A Lyft spokesman said the contribution figure is meant to help investors understand how its margins are expanding.

The creative accounting is reminiscent of the late 1990s dot-com bubble, when money-losing companies went public touting “pro forma” profit as a better measure of financial performance. More recently, Silicon Valley startups have pushed unconventional financial terms like “annual recurring revenue,” “billings” and “bookings” that can inflate their actual performance.

Many companies argue these nontraditional metrics are better measures for understanding the growth trajectory of their businesses. Venture capitalists often place a premium on startups that can grow quickly, ignoring some upfront expenses. Marketing costs, for example, might push companies into the red at first, but if customers who sign up are highly profitable in the long run, the losses would be worth the investment today, venture capitalists and entrepreneurs say.

New Math

A look at creative ways tech companies have measured their financial performance ahead of IPOs

Groupon

Uber

WeWork

Operating loss (2010)

Operating loss (2018)

Net loss (2018)

–$3.0 billion

–$1.9 billion

–$420 million

New metric:

Adjusted consolidated

segment operating income

New metric:

Core platform

contribution profit

New metric:

Community-adjusted

Ebitda

$940 million

$60.6 million

$467 million

Excludes:

Marketing expenses related to subscriber acquisition

Excludes:

‘‘Unallocated’’ costs such as research for self-driving cars

Excludes:

Basic expenses like marketing related to growth

Company’s reason:

Marketing costs are an upfront investment for growth

Company’s reason:

Shows profitability for active WeWork buildings

Company’s reason:

Better measures costs tied to the ride-hailing and delivery businesses

Groupon

Uber

WeWork

Operating loss (2010)

Operating loss (2018)

Net loss (2018)

–$420 million

–$1.9 billion

–$3.0 billion

New metric:

Adjusted consolidated

segment operating income

New metric:

Core platform

contribution profit

New metric:

Community-adjusted

Ebitda

$940 million

$60.6 million

$467 million

Excludes:

Marketing expenses related to subscriber acquisition

Excludes:

Basic expenses like marketing related to growth

Excludes:

‘‘Unallocated’’ costs such as research for self-driving cars

Company’s reason:

Marketing costs are an upfront investment for growth

Company’s reason:

Better measures costs tied to the ride-hailing and delivery businesses

Company’s reason:

Shows profitability for active WeWork buildings

Groupon

WeWork

Uber

Operating loss (2010)

Net loss (2018)

Operating loss (2018)

–$1.9 billion

–$3.0 billion

–$420 million

New metric:

Adjusted consolidated

segment operating income

New metric:

Community-adjusted

Ebitda

New metric:

Core platform

contribution profit

$940 million

$60.6 million

$467 million

Excludes:

Marketing expenses related to subscriber acquisition

Excludes:

‘‘Unallocated’’ costs such as research for self-driving cars

Excludes:

Basic expenses like marketing related to growth

Company’s reason:

Marketing costs are an upfront investment for growth

Company’s reason:

Better measures costs tied to the ride-hailing and delivery businesses

Company’s reason:

Shows profitability for active WeWork buildings

Uber

Operating loss (2018)

–$3.0 billion

New metric:

Core platform contribution profit

$940 million

Excludes:

‘‘Unallocated’’ costs such as research for self-driving cars

Company’s reason:

Better measures costs tied to the ride-hailing and delivery businesses

WeWork

Net loss (2018)

–$1.9 billion

New metric:

Community-adjusted Ebitda

$467 million

Excludes:

Basic expenses like marketing related to growth

Company’s reason:

Shows profitability for active WeWork buildings

Groupon

Operating loss (2010)

–$420 million

New metric:

Adjusted consolidated segment

operating income

$60.6 million

Excludes:

Marketing expenses related to subscriber acquisition

Company’s reason:

Marketing costs are an upfront investment for growth

Source: the companies

Once startups go public, they must explain non-GAAP financial terms and disclose how they differ from traditional accounting, as required by law. Accounting watchdogs warn investors not to ignore standard measures, which exist to make financial statements easily comparable across companies.

Companies are reporting rosier numbers than their financials would indicate if they were using standard accounting practices. The members of the S&P 500 index reported earnings in 2018 that were $19 a share higher using adjusted profit measures, according to Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices.

That figure is double the average increase of the past 10 years. Since 1980, only recessionary periods have seen similar increases in the difference between companies’ preferred profit measures and the standard figures as such periods are often accompanied by large write-offs.

The growing gap is something investors need to keep their eyes on, Mr. Silverblatt said. “These are real expenses and could be indications that companies are running into difficulty.”

In 2000, in the wake of the dot-com bust, Lynn Turner, chief accountant at the Securities and Exchange Commission, lamented what he called “EBS” earnings reports, or “Everything but Bad Stuff.”

Still, tech companies have tried to push the envelope with regard to problematic financial performance. And many firms have failed to convince investors.

In 2011, Groupon Inc. touted in the first three pages of its IPO filing a metric it created called “adjusted consolidated segment operating income,” or ACSOI. The measurement didn’t include subscriber-acquisition expenses like marketing costs, causing its $420 million operating loss in 2010 to flip to a $60.6 million profit. It ended up taking out ACSOI from its IPO filing due to pressure from the SEC and its shares dropped sharply after its public offering.

In 2015, Yahoo Inc.’s then-CEO Marissa Mayertried to sell investors a new revenue measure she called “Mavens”—an acronym for mobile, video, native advertising and social—that tracked smaller parts of the business that were growing even as the lion’s share continued to fall. The metric was widely panned and two years later, Yahoo sold its core business to Verizon Communications Inc. at a steep discount from where the company had once been valued.

WeWork’s community-adjusted Ebitda excludes hundreds of millions of dollars in operating expenses and recognizes up front the discounts it gets for signing long-term leases, instead of amortizing them over the life of the lease. WeWork says the measure better isolates the costs associated with active buildings.

Uber’s “contribution profit” ignores hundreds of millions of dollars in research and development expenses—including those aimed at self-driving technology—even though it has said such efforts are important to its future. Lyft says “contribution” is a key measure “of our ability to achieve profitability,” but the figure ignored nearly $2 billion in 2018 operating expenses that pushed it deeply into the red.

Any tech investors concerned about how companies report their numbers are losing power to do much about it. Lyft and WeWork are among technology companies giving supervoting shares to founders, a move that has grown more common among startups.

According to data form Jay Ritter, a professor at the University of Florida who studies IPOs, a third of tech companies that went public from 2015 through 2018 had supervoting shares, up from an average of 6% in the previous years dating back to 1980. A 10th of non-tech IPOs had supervoting shares the past 38 years.

Share Your Thoughts

What do you think is the best way to measure Uber and Lyft’s financial performance? Net loss or profit? “Contribution” profit? Something else? Join the conversation below.

Write to Rolfe Winkler at rolfe.winkler@wsj.com

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https://www.wsj.com/articles/uber-and-lyft-get-creative-with-numbers-but-investors-arent-blind-to-the-losses-11557826202

2019-05-14 09:30:00Z
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