China's Tencent raises $6 billion in bond sale; proceeds for general purposes

HONG KONG (Reuters) – Chinese social media and gaming giant Tencent Holdings Ltd said on Thursday it has raised $6 billion in a bond sale, with proceeds earmarked for refinancing and general corporate purposes.

FILE PHOTO: A Tencent sign is seen during the fourth World Internet Conference in Wuzhen, Zhejiang province, China, Dec. 4, 2017. REUTERS/Aly Song/File Photo

The sale was Asia’s largest this year, Refinitiv data showed, exceeding property developer China Evergrande Group’s $2.8 billion issue in January.

Tencent sold $2 billion in fixed and floating rate five-year notes, $500 million in seven-year notes, $3 billion in 10-year notes and $500 million in 30-year notes, it said in a filing to Hong Kong’s stock exchange.

The bonds will carry coupons of 3.280 percent, 3.575 percent, 3.975 percent and 4.525 percent on the fixed rate five-year notes, seven-year notes, 10-year notes and 30-year notes, respectively.

The floating rate five-year note will have an interest rate of LIBOR plus 0.910 percent.

The tech firm earlier this week said its board had increased its Global Medium Term Note Programme limit to $20 billion from $10 billion, with proceeds going towards general corporate purposes.

Tencent had a $6 billion offshore issuance quota from China’s state planner, the National Development and Reform Commission (NDRC), two people with knowledge of the deal said on Tuesday.

Deutsche Bank, HSBC, Goldman Sachs and Morgan Stanley were joint global coordinators for the sale, Tencent said in an earlier filing.

Tencent suffered a rough 2018, as China’s gaming regulator’s nine-month hiatus in approving games for monetization prevented the firm from capitalizing on some of its most popular titles.

Net profit for the last quarter of 2018 fell the most since the firm went public in 2004, by 32 percent, in part due to one-off losses at portfolio companies.

Reporting by Donny Kwok and Julia Fioretti; Editing by Christopher Cushing

South Korean, U.S. telcos roll out 5G services early as race heats up

SEOUL (Reuters) – South Korea’s three mobile carriers and top U.S. telco Verizon Communications commercially launched 5G services on Wednesday, ahead of their initial schedules, as they rushed for first spot in the race to roll out the latest wireless technology.

People take photographs during a launching ceremony for SK Telecom’s 5G service, in Seoul, South Korea, April 3, 2019. REUTERS/Kim Hong-Ji

SK Telecom and two smaller carriers had planned to initially launch 5G in South Korea on Friday with Samsung Electronics’ new 5G-enabled smartphone Galaxy S10.

Verizon was due to roll out the technology in Chicago and Minneapolis on April 11, and said last month customers could use 5G on Motorola’s Z3 and a “Moto Mod”, a physical magnet-like attachment for the phone.

Countries including South Korea, United States, China and Japan are racing to market 5G, hoping the technology will spur breakthrough in fields such as smart cities and autonomous cars.

The technology can offer 20-times faster data speeds than 4G long-term evolution (LTE) networks and better support for artificial intelligence and virtual reality with low latency.

Sometimes it can offer 100-times faster speeds.

South Korea claimed to be the first country to launch 5G, but that was disputed by U.S. carriers who say they rolled out 5G in limited areas as early as last year.

U.S. telco AT&T Inc said it was the first to launch a “commercial and standards-based” 5G network in December 2018. The service, however, was made available to mobile hotspot devices but is not yet on phones.

SK Telecom spokeswoman Irene Kim told Reuters the company had internal discussions and decided to launch the 5G service early as the company had networks and customers ready.

South Korean carriers started offering 5G services at 11 p.m. local time (1400 GMT) on Wednesday.


In South Korea, telcos and smartphone makers are pulling out all stops to market 5G services and devices.

On Wednesday, SK Telecom showed off K-pop stars and an Olympic gold medalist as its first 5G customers.

The company said it was working with its memory-chip making affiliate SK Hynix to build a highly digitized and connected factory powered by 5G technology.

Smaller rival KT Corp said it will offer cheaper 5G plans than its LTE service, with unlimited data and four-year installments to buy 5G devices.

Samsung was the first to unwrap a 5G phone in February when it unveiled the Galaxy S10 5G and a nearly $2,000 folding smartphone, putting the world’s top smartphone maker by volume in pole position in the 5G race, some analysts say.

LG Electronics Inc plans to release its 5G smartphone in South Korea later this month.


While security concerns over 5G networks using telecom equipment made by China’s Huawei Technologies Co Ltd have marred the buildup to the release of these services, South Korean telcos have tried to shrug them off.

“I don’t think we have a security issue in South Korea,” Park Jin-hyo, head of SK Telecom’s information and communication tech research center, told reporters.

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He added the company uses advanced technology to block eavesdropping or hacking into 5G networks.

Among South Korea’s three operators, SK Telecom and KT Corp do not use Huawei equipment for 5G. Smaller carrier LG Uplus Corp uses Huawei gear.

But SK Telecom officials said it was likely there will be an open auction for network equipment makers including Huawei if South Korea needs more base stations for higher frequencies. The country has one of the world’s top smartphone penetration rates.

Reporting by Ju-min Park in Seoul and Kenneth Li in New York; Editing by Diane Craft, Sayantani Ghosh and Himani Sarkar

Saudis gained access to Amazon CEO Bezos' phone: Bezos' security chief

FILE PHOTO: Jeff Bezos, president and CEO of Amazon and owner of The Washington Post, speaks at the Economic Club of Washington DC’s “Milestone Celebration Dinner” in Washington, U.S., September 13, 2018. REUTERS/Joshua Roberts/File Photo

WASHINGTON (Reuters) – The security chief for Amazon chief executive Jeff Bezos said on Saturday that the Saudi government had access to Bezos’ phone and gained private information from it.

Gavin De Becker, a longtime security consultant, said he had concluded his investigation into the publication in January of leaked text messages between Bezos and Lauren Sanchez, a former television anchor who the National Enquirer tabloid newspaper said Bezos was dating.

Last month, Bezos accused the newspaper’s owner of trying to blackmail him with the threat of publishing “intimate photos” he allegedly sent to Sanchez unless he said in public that the tabloid’s reporting on him was not politically motivated.

In an article for The Daily Beast website, De Becker said the parent company of the National Enquirer, American Media Inc., had privately demanded that De Becker deny finding any evidence of “electronic eavesdropping or hacking in their newsgathering process.”

“Our investigators and several experts concluded with high confidence that the Saudis had access to Bezos’ phone, and gained private information,” De Becker wrote. “As of today, it is unclear to what degree, if any, AMI was aware of the details.”

A spokesman for the Saudi embassy in Washington did not immediately return a request for comment. In February, the kingdom’s minister of state for foreign affairs said Saudi Arabia had “absolutely nothing to do” with the National Enquirer’s reporting on the affair.

A representative for AMI did not immediately respond to a request for comment. AMI has previously said that it acted lawfully in the reporting of the Bezos story.

De Becker said he has turned over the findings of his investigation to U.S. federal officials, without elaborating.

Reporting by Christopher Bing; Editing by Mary Milliken and Rosalba O’Brien

What I Wish I Knew Before Investing In Rental Properties

The best way to learn how to invest money is to make mistakes and then to learn from them. The problem with rental investments is that even small mistakes can be very costly! Every investment ties up a large amount of capital, often leveraged up with a mortgage – creating significant liabilities from interest payments, to property taxes and maintenance.

You better do it right on day 1, or you may soon be yet another real estate investor filing for bankruptcy. And don’t think a second that I exaggerate here. Bankruptcies are a very common outcome in rental investing and often the result of stupid mistakes that could have been avoided with better education.

I was lucky enough to be born in a family of savvy real estate entrepreneurs. From going to construction sites as a teenager to eventually working in the private equity real estate field; I can say that I have been immersed in real estate my entire life. I have made mistakes; I have lost money, but most importantly, I have learned from my past missteps, and become the (hopefully better) investor that you are today reading on Seeking Alpha.

Today, in an effort to pass along some of my costly lessons, I present a few points that “I wish I knew” before investing my hard-earned capital in my first rental property.

The Path to Financial Freedom (or Financial Hassle)

Most investors turn to rental properties in an attempt to achieve financial freedom. Here it is important to ask yourself how do you define financial freedom to set the expectations right.

Financial freedom in my mind is when you earn enough passive income to be able to maintain a desired lifestyle with very minimal work. It is also the freedom of mobility and travel without being stuck in a specific location for a job.

With this definition in my mind, it is quite clear now in hindsight that rental investing is not my path to financial freedom. Rather, it quickly became what I refer to as “financial hassle” once the reality of being a landlord started to manifest.

There is a lot of misinformation online on what rental investing is about. There is an army of self-proclaimed real estate experts selling courses online on how to achieve financial freedom and get rich-quick through rental investing. While this is certainly possible, you need to know that:

  1. It’s a lot of work.
  2. It’s a lot of worrying.
  3. It’s not passive.
  4. You will have sleepless nights.
  5. You won’t have total freedom of movement.

Sooner or later toilets will get clogged, tenants will cause problems, rents will get unpaid, you will need a lawyer, and roofs will leak. I do not mean to pointlessly scare you. This is just the reality of being a landlord that you must accept if you decide to move forward with rental investing.

To me, this was not financial freedom…

You could delegate the managerial work to someone else, but this would significantly reduce your return while increasing risk – often turning what may have first appeared to be a profitable investment into an unworthy venture.

Lesson: If your goal is financial freedom, investing in rental properties will most often be a mistake. It is a ton of work and worrying that often gets closer to running a real business rather than a passive investment. Rental investing can be profitable, but you need to have the right expectation and be ready to put in blood, sweat and tears, quite literally.

Don’t Overleverage

The same self-proclaimed real estate experts who sell you on the dream of financial freedom will often preach the power of leverage with zero regards to the risk of it.

They argue that they can earn much higher returns by financing their investment with an 80% LTV and putting down only 20% in equity. There is no doubt that if you buy a property at an 8% cap rate, and finance it with cheap debt at 80%, you are set for high returns in the immediate term. But how safe is this?

Investors have a short memory, but just 10 years, thousands of property investors lost everything by using this much leverage. If you finance your rental with 80% debt, all it takes is a 20% price decline to wipe out your entire equity – putting you at 0.

Source: Stock photo

During the last recession, property prices declined by way more than that, and yet investors are once again using high leverage with no fear of a potential recession.

Lesson: There is no magic in leverage. It boosts returns in good times and crushes investors in poor times. It can be a powerful tool, but you need to use it with caution. 20% down is too little from my experience: it can work out well, but it adds a speculative nature to the investment since it may sink the ship in a Black-Swan scenario. As Warren Buffett likes to say:

“There is only three ways a smart person can go broke: liquor, ladies and leverage. Now the truth is – the first two he just added because they started with L – it’s leverage.”

I have personally never lost a property due to leverage; but I have seen it happen many times in my private equity days. Rather than reaching for maximum leverage; I would much rather make sure that the debt load is enough to boost returns; but not excessive to risk losing it all in a downturn. Most often, the appropriate LTV is then at closer to 50% in my experience.

Everyone, Always, Underestimates Costs

Underestimating costs in real estate is so common that it has almost become a joke. If you think that something will cost $1,000; plan for $2,000 – and you will still likely end up paying more than that when it is all said and done.


My property was in fairly good shape; but shortly after buying it, the Homeowner Association (HOA) decided to ramp up renovation projects and replace roofs.

They went for the cheaper option with an inexperienced contractor who did a poor job and end up fighting the case in justice for months on end – increasing the cost to probably 2 to 3 times more than initially anticipated.

Lesson: Don’t be the naive real estate investor who makes optimistic assumptions when accounting for expenses. Trust, but verify. Real estate is full of sharks and shady people looking to make a buck off inexperienced landlords. You will nearly always spend more than anticipated. Don’t go for the cheapest contractors; go for the most reputable ones – even if it comes at a premium. In the end, you will often save money in the long haul by avoiding poor quality work.

Before Buying, Consider Alternatives

Perhaps the most important lesson that I learned from my initial rental investment is that rather than blindly buying a property, it is worthwhile to consider alternatives. Real Estate Investment Trusts (REITs) as an example can make a great alternative, that 9 times out of 10 outperform rental investments from my experience. I know that many rental investors are very skeptical about REITs, but please have an open mind and consider the five following points:

  1. Professional management: All the unpleasant work is managed by professionals in a highly cost-efficient way thanks to economies of scale. These are people who do this full time, have great resources, and are likely to do a better job than you.
  2. Liquidity and low transaction cost: Unlike rentals that are highly illiquid and involve up to 10% in transaction costs on day 1, REITs are publicly listed, and shares can be traded in one click of mouse at minimal cost.
  3. Diversification: When you invest in a REIT, you own an interest in a portfolio of 10s or 100s of properties. As such, your risks are well mitigated as compared to owning one or two rentals.
  4. Passive Income: REITs must, by law, pay out 90% of their net income in dividends to shareholders. In this sense, without putting in any work, you will be earning very consistent income from a passive investment.
  5. Better long-term returns: Research shows that REITs (VNQ, IYR) outperform private real estate by up to ~4% per year in the long run, thanks to scale advantages, cost efficiencies, better management practices, and higher cash flow growth:


If after your calculations, you realize that you can earn a similar or higher returns with REITs, you would be fool to invest in rentals instead.

Rentals are illiquid, work-intense, highly leveraged, involve personal liability, and concentrated investments. You need to get a hefty return premium to make it worthwhile. How much? In my opinion, if you can earn 10% with REITs, you better target at the very least 15% with rentals.

Lesson: Be aware of your opportunity cost. By investing in rental properties, you are passing on the opportunity to invest elsewhere. If you are able to earn similar or even better returns with a passive, lower risk, liquid investment such as REITs; you better reevaluate your rental investment strategy.

Whether You Invest in Rentals or REITs, Never Lose Sight of Your Limitations and Objectives

All in all, my rental investment was pretty good. I earned a good amount of cash flow and managed to even sell the property at a small profit three years later.

Still, I would not do it again. Why?

It’s a huge hassle that was not worth taking once I learned about REITs. They have historically produced better returns than most private real estate investments with lower risk and greater liquidity.

Even better, they are totally passive investments once you have done the job of researching the right opportunity and built a diversified portfolio. For me, personally, this was a much better option that helped me get closer to my goal of attaining financial freedom.

That said, analyzing REITs and designing a portfolio yourself is no walk in the park either. It requires specialist skills that are not widely available and there is a strong need for professional research to sort out the worthwhile from the wobbly.

I have been investing in REITs for 10 years now and in my early REIT investing career, I made the common mistake of being overconfident. I thought that since I know real estate, I would have a competitive advantage over most other REIT investors and beating indexes would be easy peasy. I was overly concentrated in a few risky bets and a single mistake end up costing me a lot in performance.

Lesson: The lesson here is to keep a realistic view of your limitations and objectives as an investor. Whether you invest in rentals or REITs, you need to remain mindful of your limited resources (expertise, capital, time). Looking back, I should have never invested in rental properties. And when I started investing in REITs, I should have been more passive and invested in indexes instead. Today, my situation is very different as I work full-time for High Yield Landlord – a REIT investment newsletter, have ample resources and access to REIT management teams to conduct interviews.

Closing Notes: Real Estate Can Be Wonderful (If You Know What You’re Doing)

Since I started investing in real estate, I have greatly profited from it and enjoy high dividends from my REIT portfolio to this day. I have made mistakes, but most importantly, I have learned from them and now you can also benefit from my transparency to avoid falling into the same traps.

Whether you decide to purse rental investments, or go for undervalued REITs (like me) is a personal question. Nonetheless, you will note that knowledge and education is what separates the great investors from those who never seem to get ahead.

To illustrate this point, consider that the average investor generated only 2.6% per year over the past 20 years:

Clearly, the average investor does NOT know what they are doing. In comparison, passive REIT indexes returned 12.5% per year and outperformed almost all other asset classes including stocks, bonds, and real estate:


Then taking it one step further, active and more entrepreneurial REIT investors who target market inefficiencies have managed to reach up to +22% annual returns over the same time period:


Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

10 Foolproof Ways to Spot BS at Work

The pushback didn’t surprise me, since it’s easier to laugh at passé fads than management fads that are currently providing employment for thousands of consultant and are been deeply embedded in your company’s mission statement.

For the past 25 years, a big part of my job has been detecting and exposing various forms of business bullsh*t; I even wrote a minor bestseller explaining how to avoid bullsh*t in the workplace. Spotting bullsh*t is a crucial skill because then you know to be elsewhere when the bullsh*t hits the fan… as it always eventually does.

Trying to debunk business bullsh*t and management fads one by one is like playing Whack-a-Mole, so rather than keep doing it solo, I’m going to share the “red flags” that tell me that a business theory, management concept, or technology category is doomed-to-fail hype. Here they are:

1. Concentrated Biz-Blab

The validity of any business proposition or concept is always inversely proportional to the amount of vaguely-defined corporate-speak used to describe it. Fuzzy terminology always reflects fuzzy thinking. Example: the statement: “collaboration increases the ability for nimble market transformation” actually means nothing but sounds good. Ergo bullsh*t.

2. Sponsored Research

Over the past few years people have gotten more savvy when it comes to spotting “research” that’s obviously self-serving and therefore invalid. Nevertheless, I still get story pitches citing research like “90% of employees want better entry door security,” the topline of a study that (of course) was funded by an entry door security provider. Ergo bullsh*t.

3. No Double-Blind Testing

A huge software company– for instance–could easily fund a study comparing, say, a sales group given fully-functioning software and a sales group given a hobbled version, with the testing company and vendor unaware of which group had which version. That would tell us if CRM really works as advertised. But not study ever happens. Ergo bullsh*t.

4. Category Refreshes

Products and services that actually work–provide value to their customers–tend to keep the same name over time. Why change it? Products and services where the hype has outrun reality require periodic “umbrella term” refreshes. Hence, “SFA” begat “CRM” begat “Sales 2.0” begat “Sales Enablement.” Ergo bullsh*t.

5. Anecdotal Proof

“Company A bought our product or service and their costs went down and their revenue went up.” Sorry, but correlation isn’t causation and how do we know that there’s not companies B, C, D, and E who bought that product or service and it turned into a pig’s breakfast? Case studies aren’t proof. Ergo bullsh*t.

6. Metaphorical Proof

Example: “Diamonds form under high pressure, therefore a high pressure workplace makes you stronger.” Say whut? Another example: “Our AI learned to play poker, therefore it can make complex business decisions.” Dudes, “business as poker ” is a metaphor. Poker’s rules can be printed on a single page; there are over 1 million books about business. Ergo bullsh*t.

7. Obviously Biased Endorsements

As evidence that a product or service works, the vendor quotes somebody whose career now depends on the purchase proving successful. (E.g. a facilities manager who bought into open plan is quoted on how successful it’s been.) Similarly, quoting employees who know they’d be fired were they to tell the truth. Ergo bullsh*t.

8. “Google Does It” Proof

Aka “Apple Does It”, “Microsoft Does It”, “Amazon Does It”, “Facebook Does It”, etc. Seriously, are we really going to hold these firms up as the pinnacle of business wisdom? From what I can see they’re pretty screwed up in multiple ways. In any case, if every company is doing something (like open plan), how could you possible know whether it’s working or not? Ergo bullsh*t.

9. Quasi-Religious Claims

Any claim that a technology will result in either the apocalypse or human immortality is simply repurposing religious hopes and fears. Example: “AI will take over the world!!!” Yeah, just like Y2K was going to destroy it. Another example: “Humans will transfer their minds into computers and live forever!!!” Religion not science. Ergo bullsh*t.

10. Denialism

Despite overwhelming peer-reviewed evidence that open plan offices are productivity disasters, we still encounter “there are studies on both sides” arguments. There aren’t. Similarly, multiple studies have shown CRM installations have a huge failure rate, but we still hear “CRM is a strategic investment” lingo. Can’t pass a simple reality check? Ergo bullsh*t.

South Korea chipmaker shares rise on Micron's industry recovery outlook

SEOUL (Reuters) – Shares of South Korean chip giants jumped on Thursday after U.S. chipmaker Micron Technology Inc forecast recovery in a memory market saddled with oversupply as device demand sags.

FILE PHOTO: Memory chip parts of U.S. memory chip maker MicronTechnology are pictured at their booth at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS/Kai Pfaffenbach

The world’s second-biggest memory chip maker, SK Hynix Inc, saw its shares surge nearly 7 percent by 0330 GMT, while technology giant Samsung Electronics Co Ltd gained 4.3 percent.

Micron said on Wednesday it saw recovery in the memory chip market, after reporting quarterly profit that beat analyst estimates as cost control helped offset falling demand and prices.

“Micron’s projection on growing memory chip demand from data center operators set up a positive outlook for the memory chip industry, helping boost shares of South Korean chipmakers,” said analyst Seo Sang-young at Kiwoom Securities.

Analysts have been wary about prospects of the memory chip market due to lower demand for smartphones and slumping investment from data center companies.

“With its plan to cut production, it seems that Micron is determined to better control oversupply problems in the chip market,” said analyst Park Sung-soon at BNK Securities.

Tech research firm TrendForce in a report on Wednesday said it expects a only a slight decline in NAND flash chip sales in the second quarter as demand recovers from smartphones, computers and servers.

“Although it won’t cause an immediate reversal of the oversupply situation, it will have a positive effect on the market environment,” analyst Ben Yeh at DRAMeXchange, a Trendforce division, said in the report.

Both Samsung Electronics and SK Hynix said in their earnings conference calls in January that they expected sales of memory products to revive in the second half of the year.

Rising chip shares helped lift the broader KOSPI stock price index by 0.3 percent.

Reporting by Heekyong Yang; Editing by Christopher Cushing

How the FAA Decides When to Ground a Jet Like Boeing’s 737 MAX 8

When an Ethiopian Airlines Boeing 737 MAX 8 jet crashed shortly after takeoff from Addis Ababa on Sunday morning, killing all 157 people aboard, observers quickly noted that the circumstances resembled those of another flight. In October, Lion Air Flight 610 crashed into the Java Sea, killing all 181 passengers and eight crew. Both flights plummeted a few minutes after takeoff, in good weather. And both were on 737 MAX 8 jets, the plane Boeing started delivering in 2017 to replace the outgoing 737 as the workhorse of the skies. Since 2017, Boeing has delivered 387 MAX 8s and 9s. It has taken orders for 4,400 more, from more than 100 customers.

As of Tuesday evening, various foreign aviation regulators and airlines had decided that after the two crashes, the plane shouldn’t be in the air. Officials in the European Union, China, Indonesia, Singapore, Australia, and the United Arab Emirates have all grounded the planes. Of the 59 operators that fly the new 737, at least 30 have parked it.

In the US, though, Boeing’s plane is free to fly. American Airlines, Southwest Airlines, and United Airlines are still putting their 737 MAX jets—74 in total—in the air. (So is Air Canada.) And the Federal Aviation Administration—the agency that oversees American airspace—says that’s just fine.

Which might seem strange, since the FAA is notoriously safety-conscious. Planes in search of an airworthiness certificate must meet stringent standards; the certification process usually takes years. And it gets results: Just one person has died in American airspace on a commercial airplane since 2009. But, it seems, the agency has not yet found reason to ground the new 737.

In a statement Tuesday, acting FAA administrator Daniel Elwell said the agency is looking at all the available data from 737 operators around the world, and that the review “thus far shows no systematic performance issues and provides no basis to order grounding aircraft.” Elwell said the FAA “would take immediate appropriate action” should such problems be identified. The FAA and the National Transportation Safety Board both have teams at the crash site outside Addis Ababa to investigate and collect data.

The agency did note in a directive published Monday that it would probably mandate flight control system enhancements that Boeing is already working on, come April. And after the Lion Air crash, the FAA made a Boeing safety warning mandatory for US airlines.

“We have full confidence in the safety of the 737 MAX,” Boeing said in its own statement Tuesday. “Based on the information currently available, we do not have any basis to issue new guidance to operators.”

A number of senators, including Ted Cruz of Texas, Elizabeth Warren of Massachusetts, and Dianne Feinstein of California, have called for the US to ground the aircraft. But it’s the FAA chief who has final say. (Elwell has been the acting administrator since January 2018, though Politico reports that the Trump Administration is close to nominating Delta Air Lines executive Steve Dickson as administrator.) He doesn’t make that decision alone, says Clint Balog, a flight test pilot and human factors expert with the College of Aeronautics at Embry-Riddle University. Any grounding goes through a “semi-formal” process, full of discussions with experts on the specific aircraft and crash situation, both in- and outside the federal government.

“The FAA looks at all of this information and decides, ‘OK, if it’s just likely that there’s a significant problem here, it doesn’t matter what the cost to the traveling public is—we have to put safety first and ground this aircraft,’” Balog says. “However, if they look and say, ‘Well, jeez, grounding this aircraft is going to be a monumental cost to the world and we simply don’t have enough information to know what the risk really is with this aircraft, do we really want to ground it at this point in time?’”

The FAA has grounded aircraft before. In 1979, the FAA grounded all McDonnell Douglas DC-10s (and forbid the aircraft from US airspace) after a crash in Chicago killed 273 people. An investigation found the problem was maintenance issues, not the aircraft design, the FAA lifted the prohibition just over a month later.

In early 2013, the FAA grounded Boeing’s 787 Dreamliner, after two lithium ion-battery related fires in the aircraft. “We are issuing this [directive] because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design,” the FAA wrote in its emergency airworthiness directive. It didn’t let the jet take to the sky again until Boeing found and corrected its design issues. (That happened in April.)

So far, though, we have little concrete information on whatever might be going on with the 737 MAX. The investigation into the Ethiopia crash is in its earliest stages. Indonesia’s civil aviation authority has released a preliminary report on the Lion Air crash, but has not issued any findings on what caused it.

Based on its directives, the FAA hasn’t “seen any red flags that are significant enough” to ground the aircraft, Balog says. So he’d have no problem getting on a 737 MAX-8. “More importantly, I would have no problem having my family get on a 737 MAX-8 at this point.”

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Elon Musk Says Tweeting Is Free Speech in His SEC Battle

Elon Musk will not go quietly. On Monday night, lawyers representing the Tesla CEO submitted a filing to a federal judge in New York arguing that she should deny the Securities and Exchange Commission’s request to hold Musk in contempt of court for—what else?—a tweet. Musk’s legal team argued the SEC overreached in its request, and claimed the agency is trying to violate his First Amendment right to free speech.

If the judge, Alison Nathan of the Southern District Court of New York, does hold Musk in contempt of court, she would decide the penalty. “If the SEC prevails, there is a good likelihood that the District Court will fine Mr. Musk and that it will put him on a short leash, with a strong warning that further violations could result in Mr. Musk being banned for some period of time as an officer or director of a public company,” Peter Haveles, a trial lawyer with the law firm Pepper Hamilton, told WIRED last month.

This latest chapter in Musk’s ongoing legal spat with the SEC dates back to the evening of February 19, 7:15 pm Eastern Time to be exact, when Musk wrote on Twitter, “Tesla made 0 cars in 2011, but will make around 500k in 2019.” About four and a half hours later—at 11:41 pm ET—Musk corrected himself, tweeting, “Meant to say annualized production rate at the end of 2019 probably around 500k, i.e. 10k cars/week. Deliveries for the year still estimated to be around 400k.”

Musk is the head of a publicly traded company, so making a mistake about his business on Twitter—which investors treat as a valid source of news like any other—is already less than ideal. But Musk and Tesla also reached a settlement with the SEC in September over another tweet containing misinformation about the electric carmarker’s operations. That was after Musk tweeted that he planned on taking Tesla private, and that he had the “funding secured.” He soon revealed he did not have that funding secured, and Tesla announced it would stay public.

In the ensuing deal with the SEC, Musk gave up his role as Tesla’s chairman for at least three years. He and Tesla each paid a $20 million fine. And Musk and Tesla agreed that the CEO’s tweets about the carmaker would be truthful, and reviewed by a team of Tesla lawyers before sending. According to the filing, Tesla’s general counsel and an assigned “disclosure counsel” are in charge of approving Musk’s Tesla tweets. The lawyers write that “the disclosure counsel and other members of Tesla’s legal department have reviewed the updated controls and procedures with Musk on multiple occasions.”

In December, Musk said on CBS’s 60 Minutes that he does not respect the SEC, and that the only tweets of his that require pre-approval are those that can affect Tesla’s stock price. Asked how Tesla could know which tweets would do that, Musk said, “Well, I guess we might make some mistakes. Who knows?” The SEC cited that interview in its motion for a contempt of court charge, writing that “Musk has not made a diligent or good faith effort to comply” with the terms of his settlement.

Now, though, Musk and the SEC are debating what that “pre-approval” actually means. Tesla’s lawyers say nobody pre-approved the tweet in question, but that it shouldn’t matter, because it had already made public the information about those production numbers: in an earnings call, in end-of-year financial results, and in an SEC filing submitted on the day Musk sent out the tweets in question. Musk did not receive pre-approval before sending that tweet because it “was simply Musk’s shorthand gloss on and entirely consistent with prior public disclosures detailing Tesla’s anticipated production volume,” according to the filing.

Moreover, the Musk team argues, the SEC’s attempt to limit Musk’s tweeting is a violation of his First Amendment rights to free speech.

The Musk legal team also argues that the CEO has really worked very hard since the SEC settlement to be careful about his tweeting behavior. It wrote that Musk’s less frequent tweeting about Tesla “is a reflection of his commitment to adhering the Order and avoiding unnecessary disputes with the SEC.” In fact, it says the correction tweet, the one sent four-and-a-half hours later, “is precisely the kind of diligence that one would expect from someone who is endeavoring to comply with the Order.”

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With a Single 10-Word Tweet, Elon Musk Just Made a Stunning Announcement About How He Spends His Time

In this episode, I’ll start by sharing a tweet that Musk posted on Twitter Monday afternoon.

I will then explain the insane background of the story from two crucial angles–one about the tweet itself, and one about the insane thing it says about Musk.

In case that didn’t embed for some reason, it’s Musk tweeting simply, “Did meme review last night with Justin Roiland from @RickandMorty.”

Here are your promised two angles:

‘Did meme review’

Okay, if you’re not initiated in what I’m about to explain, just know that this part of the story is going to seem like a creative writing class dropped acid before doing a group project.

There’s a Swedish YouTuber named Felix Arvid Ulf Kjellberg, who is 29 years old and goes by PewDiePie, and who is basically the most successful single YouTuber of all time.

Forbes estimated then that he he was making $12 million a year. A lot has happened since, but two key things for our purposes stand out:

Second, he’s locked in an epic battle with a giant Indian music company called T-Series, over which can get more YouTube subscribers. As I write this late on Tuesday evening, the score is:

  • PewDiePie 86,303,046 
  • T-Series 86,250,944

It’s neck-and-neck, and it seems as if almost any tiny little edge could give PewDiePie or T-Series the victory.

If only there were an eccentric billionaire who might provide that edge…

Hi, I’m Elon Musk

Okay. In telling that story, especially the part about the battle for YouTube subscribers, I’m reminded of an old quote: “Academic politics are so vicious because the stakes are so small.”

Kind of the same thing here. But, you also need to know that PewDiePie hosts a YouTube show called Meme Review. That’s the show Musk was saying he took time from his schedule to do.

There’s actually a whole debate right now online about whether Musk actually did the show, or if he’s just trolling everyone. But for our purposes, whether he did or not is more a matter of degree.

Because for someone like Musk, who is the CEO of one public company and at least two private ones, his time should be at a premium.

We’d be saying that even if Musk hadn’t laid off 7 percent of Tesla’s workforce less than a month ago.

Or if he hadn’t tweeted his way into an SEC oversight investigation, or a lawsuit over calling a British cave diver who helped rescue that Thai soccer team last year, a “pedo guy.”

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And yet, here we are, talking about whether Musk really did Meme Review (along side Roiland, who as Musk points out is the creator of the Adult Swim series Rick and Morty), as part of what is almost certainly the effort to help PewDiePie get more subscribers.

The alternatives here aren’t great. Either Musk is serious, in which case he’s taking time away from his most important responsibilities to do a show that’s controversial to say the least.

Or, the whole thing is just a trollish joke, in which case: why is Musk even involved in talking about this? How does he even have time to know about it?

I wrote recently about how Jeff Bezos explained in one sentence that he realizes how much of a distraction the National Enquirer blackmail scandal could have been — and how much more important his time is than any other resource.

For Musk, the same is true. Time is what matters most. So why is he wasting it here?

And if we can’t come up with a good answer to that question, here’s another: Why would you still be willing to buy a Tesla?

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