Why Travis, why

Quote of the Day

What is my belief and vision for this investment? I have only one belief—Singularity.”

Market Snapshot

• The S&P and Nasdaq hit new records.
• Amazon closed up 2.58% after Black Friday.
• Oil reached a two-year high.
• Bitcoin passed $9,000—Ethereum rocketed past $400.

Why Travis, Why?

When Uber disclosed that hackers made off with 57 million accounts and 600,000 driver’s licenses, we figured there was more to the story. Turns out, we were right.

Uber is making Equifax look like Mother Teresa

While the credit reporting agency took six weeks to come clean about its data breach of 143 million consumers, the ride-hailer kept it a secret for more than a year.

Here’s what happened: ex-CEO Travis Kalanick got word of the hack in November 2016, about a month after it took place. And instead of notifying those affected he paid the hackers $100,000 in hush money. That’ll show ’em!

So you can imagine the surprise when Uber’s new chief, Dara Khosrowshahi, learned about the hack two weeks into his tenure. He ordered an investigation, and brought the news to the public in the most 2017 way possible: by writing an apology blog.

And it seems like apologizing is all Dara’s doing these days

From hanging on by a thread in London, to a court date with Waymo over stolen IP, Dara’s few months as CEO have been haunted by the ghost of Kalanick (that is, a ghost who sits on the board and owns around 10% of the company).

But with this latest scandal, Kalanick has pushed back Dara’s plans to morph the ride-hailer into “Uber 2.0.” Dara fired his security chief and is running from a mob of angry regulators asking questions about the breach, from the FTC to several U.S. states to entire European countries.

With all the chaos, is there anyone who’s still betting on Uber?

Of course...his name is Masayoshi Son. And this week, the SoftBank CEO is expected to move forward with a multibillion dollar investment, when he’ll issue formal tender offers to buy shares from existing Uber investors.

Because let’s not forget...Uber’s still the most valuable startup in the world ($68 billion). And with Masa padding it with even more cash, Uber isn’t going anywhere.

Beware the Comments Section

It was a Black Friday to forget for YouTube, which saw major corporations like Adidas, Deutsche Bank, eBay, Amazon, and Mars, freeze ad spending on the site.

Apparently, YouTube algorithms placed their ads alongside videos featuring children...videos that attracted inappropriate comments from pedophiles. For companies trying to get the word out on YouTube, this wasn’t exactly the brand messaging they had in mind.

In response, the video-sharing site is scrambling to make amends by reviewing its screening process, hiring extra staff, and shutting down 50 kid-centric channels attracting the wrong sort of viewer.

But ad placement has been a persistent issue for YouTube. It took a hit back in March when major advertisers like Coca-Cola and P&G ditched spending after realizing their products segued into anti-semitic and racist videos.

So if YouTube can't figure this out, we might see more ad-free videos...not that we're complaining.

Quantity Over Quality

Time’s running out on 2017, but Japan’s pushing itself to see just how many manufacturing scandals it can rack up—this time, it’s Mitsubishi Materials misrepresenting quality reports on airplanes, cars, and power plant parts.

Employees were literally rewriting data on rubber gaskets and copper products, which were shipped to over 200 companies worldwide. So when your brakes give out on I-95 you know who to blame…

...or maybe it’s Kobe Steel’s fault (scandal date: this October). Japan’s Steel Mamba falsified data on copper and aluminum parts that were sent to over 500 companies.

...or it could be Nissan (scandal date: this October). Japan’s second largest carmaker provided unqualified trainees with certified inspection badges to meet production demands. It ended up recalling 1.2 million vehicles.

...or maybe even Takata (scandal date: 2014-present). The (now bankrupt) airbag maker recalled tens of millions of faulty airbags worldwide—the largest auto safety recall ever.

Mitsubishi Materials is still trying to “grasp just how many products deviated from specifications,” but while it crunches the numbers, one thing’s becoming clear: in almost a year’s time, Japan’s decades-long reputation for quality manufacturing is quickly unraveling.

Time to Get Angry

Rovio shares plunged 22% after its first earnings report post-IPO. Investors weren’t to thrilled to hear about a Q3 loss of $954,000 compared to last year’s $4.6 million bottom line.

This wasn’t out of the blue—underwriters halved Rovio’s valuation from $2 billion to $1 billion from IPO day. And to make matters worse, Rovio’s been spending aggressively to acquire new users: $26 million this quarter (4x what it spent last year).

Wondering why it’s spending so much? Gamers' attention spa…

But actually. In the mobile gaming industry, only 8% of gamers are still playing 27 days after downloading an app.

As for CEO Kati Levoranta, she's staying optimistic and penciling in a comeback for 2018. Just last year King Digital Entertainment (maker of Candy Crush) was acquired by Activision Blizzard for $5.9 billion.

What Else Is Happening…

• Lyft appears to be raising another $500 million. That’s after announcing a separate $1 billion round a month ago.
• Jeff Bezos is now worth over $100 billion.
• Swiss chemical company Clariant rejected White Tale’s (its largest shareholder) request for more board seats...this could get ugly.
• Meredith Corp. acquired Time Inc. for $2.8 billion with backing from the Koch brothers.

Economic Calendar

• Monday     Earnings: No Events

                    Economic Events: New Home Sales

• Tuesday    Earnings: No Events

                  Economic Events: Consumer Confidence

• Wednesday    Earnings: Tiffany & Co

                        Economic Events: GDP, Corporate Profits

• Thursday   Earnings: Barnes & Noble, Express

                   Economic Events: Jobless Claims, Personal Income and Outlays

• Friday       Earnings: No Events

                 Economic Events: Motor Vehicle Sales, PMI Manufacturing Index, ISM Manufacturing Index

From the Crew

Austin—Crypto Chat

As Bitcoin and Ethereum hit new highs, I listened to Tim Draper explain why blockchain is the future of venture capital and so many other industries. Oh, and Tim may know a thing or two about crypto. He bought $20 million worth of Bitcoin in 2014, and allegedly owns over a billion dollars in cryptocurrencies.

Hear Tim explain the future of currency.

Alex—Mind Blown

I chose sneakers instead of gym shoes. And soda instead of pop. 25 questions later, NYTimes’ dialect quiz had guessed my hometown in New Jersey within 20 miles...all because of the language I use. Kind of freaky, but so awesome.

Take the quiz, boggle your mind, and learn more about language.

The Breakroom

Question of the Day

Answer quickly. Filling an empty barrel, which happens first?

2/3 full,
1/4 empty
1/2 full
3/4 empty

(Answer located at the bottom of newsletter)

Rank by Net Worth

Female athletes: Annika Sorenstam, Serena Williams, Danica Patrick, Maria Sharapova

(Answer located at the bottom of newsletter)

Stat of the Day

$50 million—Elon Musk's winning wager. Musk bet with Australian billionaire Mike Cannon-Brookes that he could build the world’s largest lithium-ion battery for Australia in 100 days or it was free.

Let’s just say, there’s a lot more this battery can do than help Elon win $50 million.

Breakroom Answers

Question of the Day: 3/4 empty

Rank by Net Worth: Serena Williams ($150M), Maria Sharapova ($125M), Danica Patrick ($60M), Annika Sorenstam ($40M)