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Wall Street banks fined $549 million for not backing up messaging app histories
Federal regulatory agencies have fined 11 financial institutions a combined $549 million for using “off-channel” messaging apps (WhatsApp, iMessage, Signal and text messages) for conversations about trades and other business. Securities laws require investment firms and banks to preserve communications records and ensure employees only carry out business through authorized channels. “The firms did not maintain or preserve the substantial majority of these off-channel communications, in violation of the federal securities laws,” the Securities and Exchange Commission (SEC) wrote in a statement today.
Discovery+ is turning the GameStop-Reddit stock drama into a documentary
Discovery+ is making a documentary about the GameStop meme stock saga narrated by real-life wolf of Wall Street, Jordan Belfort.
The science of language, community, and MMORPGs
Back in August, Massively wrote a little post about Swedish research on MMOs and language learning. That article provoked me, a gamer and teacher of English for speakers of other languages (ESOL), to hunt down the original research and talk directly to the researchers, Dr. Liss Kerstin Sylvén from the University of Gothenburg and Dr. Pia Sundqvist from Karlstad University, to better understand their research and findings. Note that we'll be talking here about games and language learning specifically, not other forms of game-related education. Also, Sylvén and Sundqvist don't consider themselves "gamers." Sundqvist remembers Pac-Man as her first game, both admit to playing Angry Birds on their cell phones, and Sundqvist is "allowed" to sometimes watch her 17-year-old son play League of Legends. I find this interesting because they are non-gamers who seriously consider games capable of being educational without specifically being developed to do so. This isn't a simple merger of a hobby with work; this is work in a field of interest that's still being explored.
Despite being doomed, Apple once again rockets towards its highest stock price ever
The iPhone 6 is going to suck, nobody wants an iPad, and the iWatch is going to cost US$3,000, so it's really quite surprising that despite all this on its plate, Apple is still managing to creep near to its highest stock price in history today. At the time of this writing, AAPL is sitting at 100.38, which puts it slightly ahead of its previous closing high water mark that it achieved in September of 2012. Its previous intraday high, which was closer to the 100.75 mark, remains elusive. This is just the latest in a long and turbulent history between Apple and Wall Street. The two have never really gotten along. Apple's stock price often fluctuates at seemingly random times, and even has a habit of dropping after good news is released. Investors and analysts have never really understood the company, but that's never really been an issue for Apple's bottom line.
Wall Street wants more government help to combat cyber attacks
Wall Street is worried. Not about government regulation or investigations by law enforcement agencies. No, the countries financial institutions are concerned about cyber attacks. The Securities Industry and Financial Markets Association, or SIFMA, has proposed that it and the government join forces in an effort to combat the 21st century threat. As Wall Street's biggest trade group, the organization already wields plenty of influence, but to help convince the American government it has hired former NSA director Keith Alexander.
How smartphones mean 'game over' for consoles, portable game systems
If there's one Wall Street analyst who consistently makes sense when it comes to computing and mobility, it's Asymco's Horace Dediu. On a regular basis, Dediu charts the sales and shipping information released by consumer electronics companies like Apple and is able to spot trends that spell either good fortunes or a bleak future for the firms in question. Today's target was the gaming console companies, with Dediu's analysis showing how mobile devices -- specifically smartphones and tablets -- spell doom for sales of gaming consoles. Didiu's numbers take a look at data from just two of the big three -- Nintendo and Sony -- as Microsoft does not provide sales information for Xbox. That confetti-like chart at the top of this post shows the bad news for Nintendo. Not only are sales of the latest console (Wii U) tanking, but the two portable gaming units -- 3DS and 3DS XL -- are also showing a precipitous dive towards irrelevance. Add in Sony's numbers (above) and the picture is the same -- for consoles and portable gaming devices, the peak year in sales was in 2008, five years ago. What's the difference? The huge influx of smartphones and tablets, all very capable gaming devices on their own. Dediu sums it up perfectly in his final paragraph: The implications are that Nintendo, Sony and Microsoft are beyond the point of no return in this industry. Gaming, as a business, cannot be sustained as a platform independent of a general purpose computer. Like other "applications" that used to have systems built around them conforming to their needs, the dedicated-purpose solutions came to be absorbed into the general-purpose platforms. And the modern general purpose computer is the smartphone.
More realistic guidance from Apple results in better analyst estimates
Apple 2.0's Philip Elmer-DeWitt put it the best in the subhead for his Apple Earnings Smackdown article this morning when he said "Apple management may have found a way to tame the wild beasts of Wall Street." What he was referring to was the fact that most Wall Street analysts were actually quite close on their estimates of how Apple performed in the second quarter of its fiscal year, thanks to new guidance rules that had been announced by CFO Peter Oppenheimer in January. The Smackdown is a quarterly roll call of analyst estimates and how well various institutional and independent analysts fared in their educated guesses of Apple performance. On the Q1 2012 earnings call, Oppenheimer stated that the company would no longer give analysts conservative forecasts, or as Elmer-DeWitt put it: "Rather than tell them what the company was reasonably confident it could achieve the following quarter, it would offer a range of guidance that reflected what it believed it was likely to achieve (emphasis is Elmer-DeWitt's)." Oppenheimer's pronouncement appears to have been embraced by the financial wizards, as 26 of 62 analysts picked the March quarter revenue and earnings within 2.5 percent. That's a vast improvement over the 2011 estimates for the same quarter that were off by a combined average of 11 percent. And while independent analysts used to do a much better job of making accurate estimates than the pros, the difference was essentially non-existant this time around. Perhaps between better guidance from Apple, closer estimates by analysts and the company's agressive dividend payout and stock repurchase plans, Apple CEO Tim Cook and Oppenheimer may have developed a method to sooth the nerves of Wall Street and hopefully halt the recent slide in the value of the company's share price.
Apple's reality distortion field has assumed Wall Street
Despite robust profits, strong revenue growth and excellent brand awareness, reports predicting the downfall of Apple continue to make headlines. This paradox has many people shaking their heads, but analyst Ben Bajarin has a theory as to why Apple is slipping on Wall Street, even though it remains a market leader. Bajarin, writing for Time, argues that Apple's much-talked-about Reality Distortion field is alive and kicking and has taken up residence at Wall Street. Apple is the most profitable company, can't make enough products to meet demand and is the most admired by its peers. Yet Wall Street and media fanatics are claiming Apple is doomed. The reality distortion field is in full effect. Apple, Bajarin argues, is in a better position than its competitors and will continue to thrive. You can read his full analysis and rosy predictions for Apple in his post on Time's Big Picture opinion column.
Trader charged with wire fraud after trying to buy $1 billion worth of AAPL
A fraudulent US$1 billion purchase of Apple stock has resulted in the arrest of a Wall Street trader and the loss of US$5 million for his brokerage firm. According to the District Attorney's office in Connecticut, trader David Miller of Rochdale Securities hatched a plan to use the brokerage's money to buy 1.625 million shares of Apple stock on October 25. Miller was hoping to cash in big on a rise in Apple's stock after the company reported its Q4 2012 financials later that afternoon. Miller's plan went awry when the stock fell and the brokerage started losing money. Miller allegedly tried to cover his tracks by falsely claiming he wanted to buy 1,652 shares for a customer, and accidentally entered the wrong amount. The brokerage was left holding the bag on 1.6 million shares of Apple stock and lost $5 million when it traded out of this position. Leading up to this billion dollar trade, Miller allegedly defrauded another broker-dealer by claiming to represent a company that he had no affiliation with and one for which he was not authorized to trade. Miller surrendered to the FBI this week and faces up to 20 years in prison. [Via MarketWatch]
Daily Update for August 27, 2012
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Robot stock traders lose $440,000,000 in 45 minutes, need someone to spell it out
Humans never learn and apparently neither do robots. Autonomous trading AIs went on a spending spree at Knight Capital Group in New Jersey this week, buying up shares in everything from RadioShack to Ford and American Airlines (ouch) in a 45-minute frenzy of disobedience. The company tried to offload the unwanted stock, but discovered it was already nearly half a billion dollars in the red -- enough to wipe out its entire profit from 2011 and "severely impact" its ability to conduct business. If only it had protected itself with one of these.
Zynga hit with insider trading lawsuit as execs cash out before crash
Zynga has been hit with the first of five expected lawsuits alleging a handful of top executives and investors engaged in insider trading – including CEO Marc Pincus and Google. Following Zynga's IPO in December, employees and investors were "locked up," unable to sell their shares until May 28. Technically. A group of top executives and shareholders hired underwriters to manage the sale of their shares, creating a loophole that allowed them to sell their stock at $12.By May 28, when initial investors were legally allowed to sell their shares, Zynga stock had fallen to $6. Yesterday, it struck $3. Locked up investors had no opportunity to sell their shares at the same price as the top brass, and the insiders that did "cashed out at exactly the right time," Business Insider's Henry Blodget writes.
Twitter quietly adds clickable stock symbols
It might not pack the same thrill as the rumors of in-feed video, but Twitter has added clickable stock symbols on tweets. This now throws up search results for both the stock and the company, using a new 'cash' tag, like $FB, to differentiate from typical links and tags. As noted by TNW, it's bad news for the founder of StockTwits, a service that offered similar functionality to gather tweet-based financial nuggets. The new feature is live across Twitter's web client -- though it hasn't hit TweetDeck just yet -- and should make discovering exactly how many millions companies have made (or lost) all a bit faster.
Netflix and Twentieth Century Fox ink deal to bring additional Instant content to Latin America, Brazil
Twentieth Century Fox and Netflix have announced a partnership that will bring additional television and movie content to avid streamers living in Latin America and Brazil later this year. Beginning on July 15th, TV mainstays -- including 24, Prison Break, Bones and Glee -- will be available via the movie rental company's Instant service in the aforementioned geographies. What's more, Twentieth Century's classic films division will add several movie titles, including cult-classics like Office Space and Wall Street, to the streaming menu. If you currently reside in Latin America or Brazil and are itching to know more, mosey on past the break and have a look at the full press release.
Apple announces dividend and share repurchase program for 2012, expects to spend $45 billion over three years
Surprise, surprise -- Apple just let the cat out of its own bag. In right around a half-hour, the company will officially unwrap plans to initiate a dividend and share repurchase program commencing later this year. 'Course, analysts have been clamoring for such an announcement for quite some time, and with a stock price near $600 and some $100 billion in the bank, the outfit can clearly afford it. More specifically, Apple plans to "initiate a quarterly dividend of $2.65 per share sometime in the fourth quarter of its fiscal 2012, which begins on July 1, 2012." Granted, that's all subject to the Board of Directors giving the ole a-okay, but we highly doubt the company would issue such knowledge without a practical guarantee that everyone is on board. Additionally, the Company's Board of Directors has authorized a $10 billion share repurchase program commencing in the Apple's fiscal 2013, which begins on September 30, 2012; we're told that said program will be executed over three years, with the main goal being to "neutralize the impact of dilution from future employee equity grants and employee stock purchase programs."As for CEO Tim Cook's thoughts on the matter? "We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You'll see more of all of these in the future. Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program."Naturally, this all shows that Apple is supremely confident in its future, but it doesn't shed any light into potential acquisitions from a technology standpoint. Strangely enough, it was just a few days ago that Mr. Cook ended his new iPad keynote with a promise that 2012 would be chock full of unbelievable things from his company, but it sounds like the only folks celebrating this particular announcement are those with a hand in the stockpile. We don't expect to glean much more than what's given in the presser just past the break, but we'll be liveblogging the actual conference call starting at 9AM ET.
Amateurs beat pros at predicting Apple's Q1 performance
When it comes to predicting Apple's financial performance, you may want to ask bloggers, day traders, and amateur analysts instead of listening to Wall Street analysts. As cited in a post by Apple 2.0's Philip Elmer-DeWitt, the real analysts blew it big time predicting Apple's financial numbers for the first quarter of 2012. As noted by Elmer-DeWitt, "although even the most bullish independents were surprised by the strength of Apple's Q1 2012 results, at least they were in the ball park." In a ranking of accuracy, the independent analysts took the top fifteen positions, while the Wall Street gurus brought up the bottom of the chart. That's not to say that Wall Street's finest aren't capable of making at least a few good estimates. Asymco's Horace Dediu and Sterne Agee's Shaw Wu were both accurate on predicting the Mac sales numbers. TUAW's favorite analyst, Piper Jaffray's Gene Munster, was right on target with his estimate of iPod sales. When it came to iPads and iPhones, though, the independents beat the street. Gabriel Dubois was close with his estimates of iPhone sales and gross margin, while Gregg Thurman "missed narrowly on iPads." Elmer-DeWitt notes that "The company that Steve Jobs built is still that rare beast in American business: A $400 billion giant that acts -- and grows -- like a start-up." That ability to be agile, design and sell innovative products, and make huge margins on sales of those products make it difficult for even the most highly-trained Wall Street analysts to make accurate predictions.
Google's Q4 2011 results: $2.71 billion profit, $8.13 billion in revenue, Wall Street disappointed
Google just released its fourth-quarter 2011 results, and man, Wall Street is not pleased. The company reported $2.71 billion in profit (up from $2.54 a year earlier), net revenue of $8.13 billion and earnings of $9.50 per share, excluding some one-time charges. That's less than the $10.49 per share and $8.40 billion financial analysts were expecting and, as Reuters notes, it's the first time in nine quarters that Google hasn't beaten revenue estimates. Of course, the company spun its results the best it could, emphasizing that its gross revenue jumped 25 percent to $10.58 billion, making this the first time the company's raw sales exceeded $10 billion in any given quarter. Of course, that figure doesn't reflect the myriad costs associated with boosting web traffic, and investors are more concerned with that $8.13 billion in net revenue. Needless to say, Wall Street is none too impressed -- as of this writing, the company's stock was down almost nine percent in after-hours trading.That's not to say Google is struggling. The outfit actually logged a sharp increase in clicks on its search ads, but said the fee it receives from those ads was down eight percent from both the previous quarter as well as the fourth quarter of 2010. Plus, by all metrics, Android is still on quite the tear. In a conference call with investors, the company said there are now 250 million Android devices, up 50 million from the last quarter. Some more tidbits: 7000,000 devices are being activated per day and more than 11 billion items have been downloaded from Android Market (it hit the 10-billion mark last month). Finally, Google+ now has 90 million worldwide users, more than double the figure from three months earlier. Need a deeper dive on the numbers? We've got the full financial results at the source link, with the summary earnings release below.
Former Apple supplier exec pleads guilty to leaking iPhone details
Former Flextronics employee Walter Shimoon pleaded guilty to charges of conspiracy to commit wire fraud and security fraud. Shimoon leaked information about upcoming Apple products to hedge fund traders in late 2009. He is one of 11 people who have admitted their guilt after the government's crackdown on insider trading. Mr Shimoon and the others were industry experts who worked with Wall Street analysts and managers. The government alleges this relationship got too cozy and the information shared between the two groups crossed the line from "permissible market research" to insider trading. Mr Shimoon was recorded talking about the unreleased iPad (K48 codename) and iPhone as well as confidential sales information. He told a government witness, "So, you can get, at Apple you can get fired for saying K48...outside of a, you know, outside of a meeting that doesn't have K48 people in it. That's how crazy they are about it." [Via AppleInsider]
Wall Street analysts think iCloud's future has a silver lining
Apple fans and developers apparently weren't the only people who liked the iCloud announcement on Monday at WWDC. As reported by Fortune's Philip Elmer-Dewitt, Wall Street analysts are almost unanimous in their positive comments about iCloud's effect on the financial future of Apple. For example, Credit Suisse's Kulbinder Garcha is quoted as saying "Although Google and Amazon are already offering cloud based offering, we believe Apple has continued to lead innovation in the services space with the introduction of its iCloud, which we believe is superior to existing cloud services from competition." RBC Capital's Mike Abramsky was even more enthusiastic when discussing the PC-Free capabilities of iOS 5, noting that by "'cutting the cord' to the PC, Apple may expand its addressable device market by 4x, addressing the ~3B handset users who have a phone -- but not a PC." TUAW's favorite analyst, Piper Jaffray's Gene Munster, also chimed in on the ability of future iOS devices to work sans PC, and commented that "Bottom line is that Apple is increasing the likelihood that consumers buy multiple Apple devices ... Apple will be giving away iCloud for free (we had expected it to be priced between $25-$99 a year) ... sharing non iTunes music will cost $25 a year. (As a point of reference, Amazon's Cloud drive could cost up to $200 a year.)" The future for Apple looks as bright as the sunlight in those architectural renderings of the proposed Cupertino campus of our favorite company.
NPD: Mac sales up 47% in March
The numbers are out on NPD's March report for computer sales, and our favorite Apple analyst, Piper Jaffray's Gene Munster, said MacBook Pro sales continued to drive Mac sales overall, boosting them up to a 47 percent year-over-year-growth. Munster says that despite an overall drop in the amount of PC sales worldwide, Apple will likely announce Mac sales of 3.6 to 3.7 million units, which is slightly more than Wall Street expects. iPod sales, however, are reportedly down according to Munster and NPD's accounting. The analyst still expects sales to come in above expectations, but they're charting a 10 percent year-over-year drop for Apple's music players. Apple is set to announce earnings during a conference call this Wednesday -- we'll be listening in, of course, and we'll let you know what we hear.
