Category Archives: Cloud Computing

Toshiba shares to be removed from special watch list: Nikkei

TOKYO (Reuters) – Shares of Toshiba Corp are to be removed from a special Tokyo Stock Exchange watch list, the Nikkei reported on Wednesday.

Toshiba has been on the “securities on alert” list since its 2015 accounting scandal.

Reporting by Chris Gallagher


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(Reuters) – Dutch meal delivery firm said it would increase its commission rates from Jan. 1 and that it expects this to have a 5 percent positive effect on its revenue growth. also plans to increase investments in Germany and other markets in the fourth quarter of 2017, it said in its third-quarter trading update on Tuesday.

Reporting by Camille Raynaud; Editing by Subhranshu Sahu

Our Standards:The Thomson Reuters Trust Principles.


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2 Dividend Growth Stocks Trading Near 52-Week Lows Worth Buying Today

I’m a contrarian investor by nature, meaning I’m more than willing to buy what I consider to be quality companies with safe dividends and bright futures just when the market hates them most.

In fact, my EDDGE 3.0 real money portfolio is stacked to the rafters with companies I bought at 52-week lows, including:

So I’d like to point out two more beaten down companies that I consider to be great contrarian value investments, Qualcomm (QCOM) and Kroger (KR).

Let’s take a closer look at why Wall Street hates these stocks. More importantly, why those fears are likely overblown, and these companies represent potentially excellent additions to your diversified dividend growth portfolio in this extremely frothy market.

Why Wall Street Hates Qualcomm

Chart QCOM data by YCharts

It’s been a rough few years for Qualcomm, with a rash of bad news that has soured the market on the company’s growth prospects.

For one thing it faces growing competition on the low end from low-cost manufacturers such as Mediatek, and on the high end from phone makers such as Samsung (OTC:SSNLF), Apple (AAPL), Xiaomi, and Huawei going in house.

However, by far the biggest cause of Qualcomm’s recent woes is the licensing disputes it’s facing.

QTL Getting Hammered

Qualcomm’s huge number of telecom patents makes its QTL licensing division its main profit driver, thanks to 73% operating margins compared to just 14% for its chip business.

The way it works is that Qualcomm licenses its patented tech to phone makers for a fixed percentage of the phone’s wholesale price, generally 3% to 5%.

In recent years, numerous companies have cried foul, claiming that this is outrageous because it allows QCOM to benefit from all value added propositions the phone maker brings to the unit that have nothing to do with QCOM’s tech.

For example, if Apple licenses Qualcomm’s modem technology, and then releases a new phone, such as the iPhone X for a 20% higher price, then why should Qualcomm’s royalty be 20% greater for the same exact chip?

In April of 2017, Apple suspended all royalty payments to QCOM claiming its licensing model was “illegal” which resulted in a 42% decline in QTL (licensing) revenue compared to Q2 2016.

Sources: Earnings Releases, Motley Fool

Now analysts are worried that this legal challenge, in which Apple claims that the licensing fees paid to a percentage of total phone sales are too high, could be triggering other phone makers to also refuse to pay until the legal challenges are resolved.

In fact, on August 18th, Evan Chesler, chief legal counsel for QCOM, admitted that a large phone maker has stopped paying royalties (possibly Huawei) as well.

This is far from the company’s only legal issue. The Seoul High Court recently ruled against QCOM’s appeal of an earlier $ 913 million fine over its licensing practices.

China also fined the company to the tune of $ 975 million in 2015, and regulators in Europe, Taiwan, and the US have launched antitrust probes against the company.

The basis of those claims is from the likes of Intel (INTC) which claims that Qualcomm refuses to license to direct competitors, while phone makers such as Samsung have claimed that Qualcomm threatens to charge more for certain licenses if you try to go to a competitor for certain chips.

Understandably all these setbacks to the high margin QTL licensing business have Wall Street running scared, with management guiding for QTL revenue in fiscal Q4 to decline by 31% to 47%. This has caused analysts to predict the company’s full-year sales and earnings to decline by 2% and 6% respectively.

This is also why Qualcomm is attempting to buy NXP Semiconductors (NXPI) for $ 47 billion to allow it to diversify away from its troubled QTL segment.

However, here too the company has recently run into trouble.

Growth Plans Hit A Wall

Qualcomm’s management expects the NXP deal to close by the end of the year; however, there are two snags it’s currently facing.

First, EU regulators are now holding up the deal on antitrust concerns, implying that QCOM might use NXP’s market share in auto computer chips (it’s the world’s largest supplier) and NXP’s rich patent portfolio to gouge suppliers and raise prices.

In addition, Elliott Management, an activist investor in NXP, has said that the $ 110 per share tender offer QCOM is willing to pay for NXP shares is way too low.

Susquehanna, an analyst firm, has reported that “some investors believe that Qualcomm should pay up to $ 130 per share for NXP.” That would mean that QCOM might end up having to pay 18% more, or $ 55.5 billion.

In other words, there is now significant doubt about whether or not the NXP deal can close at all, which adds to the company’s numerous other problems to suppress the share price.

Here’s Why I See Value In Qualcomm

First, while true that big phone makers have been shifting to in-house SOC chip designs, Qualcomm’s QCT (chip business) continues to generate solid top line growth (5% in the most recent quarter), but more importantly shows continued strong operating earnings growth.

I’m confident that Qualcomm’s continued drive to innovate and branch out into new Snapdragon lines, including drones, cameras, wearables, and cars, should allow this business segment to drive solid double-digit bottom-line growth for years to come.

Now, as for the well founded concerns about QTL, there too we have some good news.

While the Apple litigation could drag on for years, ultimately Qualcomm is likely to win simply because Apple spent five years licensing the company’s patented tech under a contract that it voluntarily signed.

Thus, Apple now deciding years later that this contract was unfair, or even illegal, and to withhold payment isn’t likely to fly in court.

Now we may see a judge rule, such as in China in 2015, that the licensing terms were too high, but the point is that Qualcomm is likely to get some large catch payments from Apple (and Huawei) in the next year or two.

In fact, speaking of China, where a judge ruled in 2015 that Qualcomm needed to pay a large fine and reduce its royalty terms, we can’t forget that Qualcomm’s QTL segment is thriving in China, where it still enjoys 3% to 5% royalties on 65% of wholesale phone prices.

Source: Qualcomm Investor Presentation

And lest we forget Qualcomm has a rich patent portfolio that applies to pretty much all aspects of wireless telecom technology.

That number, which stands at nearly 47,000 granted patents, is steadily climbing over time and should ensure that the QTL segment is able to continue growing in the long term, monetizing the growth of smartphones for the next 10 to 20 years at least, though the royalty rate may be smaller than it is today.

Next, while it may take longer than expected, and potentially cost more than anticipated, I fully expect the NXP deal to close, and when it does, Qualcomm is going to see a nice boost to its struggling top and bottom lines.

Company TTM Sales TTM Earnings TTM FCF EPS FCF/Share
Qualcomm Today $ 22.6 billion $ 3.9 billion $ 3.78 billion $ 2.61 $ 2.54
QCOM + NXP $ 31.9 billion $ 5.9 billion $ 5.74 billion $ 3.93 $ 3.85

Source: Morningstar

In fact, thanks to the NXP deal being all cash and debt (non dilutive), the EPS and FCF/share accretion for the acquisition is 51% and 52%, respectively.

In other words, assuming the deal closes, as I and several other analysts expect, Qualcomm will immediately face a strong price recovery.

Of course, that’s in the short-term, but my concern is with the long-term growth prospects of the company, and there too the situation is far less bleak than the market currently anticipates.

In fact, I think that all of Qualcomm’s recent legal troubles have caused the market to lose the big picture, which is that the company is one of the best positioned in the world to take advantage of several major megatrends that will dominate the next century.

Specifically, QCOM isn’t just a chip maker, but a great, long-term investment into the future of computer expansion into all aspects of our lives including the internet of things, autonomous cars, 5G, data centers, and cybersecurity.

That in turn should allow Qualcomm to continue richly rewarding dividend growth investors as it has for the past 14 years.

Why Kroger Has Been Gutted…

Chart KR data by YCharts

Kroger has had a terrible few years, with shares now down over 50% from their all-time highs.

This is understandable given market concerns about increasing competition in the grocery space, not just from traditional rivals such as Wal-Mart (WMT), and Target (TGT), but also now from Amazon (AMZN), whose $ 14 billion purchase of Whole Foods is its largest single acquisition in that company’s history.

After all, recently Kroger broke an impressive 13-year streak of comps growth, and with low cost grocers such as Aldi and Lidl making a bigger play for the American market, Kroger has had to slash food prices and invest more heavily into technology in order to compete in a notoriously low margin industry.

Company Operating Margin Net Margin FCF Margin ROA ROE ROIC
Kroger 2.4% 1.3% 1.2% 4.3% 24.1% 9.8%
Industry Average 2.5% 1.7% NA 5.2% 24.6% NA

Sources: Morningstar, GuruFocus

That means worse short-term earnings performance, and management’s recent decision to stop issuing long-term forward guidance certainly adds to the market’s uncertainty about its future growth prospects.

However, here’s why I bought Kroger anyway, despite all the fears, uncertainty and doubt.

…And Why It Will Likely Thrive In The Future

Source: Business Insider

The $ 800 billion US grocery market is highly fragmented, but Kroger currently has just over 10% market share, and is the largest grocery-only national chain.

Source: 2016 Factbook

Currently Kroger operates:

  • 2,793 full grocery stores in 35 states
  • 783 convenience stores in 19 states
  • 307 premium jewelry stores under the Fred Meyer Jewelers and Littman Jewelers brands
  • 38 manufacturing facilities for its own private label (higher margin) foods
  • 1,472 fuel centers
  • 2,258 pharmacies

Thanks to well executed acquisitions over the years, Kroger is today a food empire that serves 8.5 million customers daily, but more importantly, has managed to increase its market share for 12 consecutive years (through 2016).

This has allowed the company to become the number one or two sales leader in 98 of 120 markets in the US and number one in 46 of 51 major markets.

The reason that matters is because it allows Kroger to leverage its fixed costs (distribution system) better and not just win and protect market share, but achieve better bottom line growth.

This accomplishment isn’t just done through acquisitions of other brands and grocery chains but through two main competitive advantages that few other grocers have.

The first is that Kroger is very strong at private label foods (26% of total sales vs. 18% industry average) such as its Simple Truth organic foods. And since it manufactures its 40% of the private label brands it sells, Kroger benefits from higher margins (about 10% better gross margins) on these products.

Second, few grocers have been as effective at data mining its customers, courtesy of the company’s in-house 84.51 degrees analytics firm (fed by over 25 million digital accounts), which provides Kroger with deep insights into customer preferences and regional ordering patterns.

This has helped make Kroger a leader in online ordering and curbside pickup via its Clicklist and ExpressLane locations, which it now offers at 640 locations with plans to double that. In fact, this increased focus on omni-channel sales should allow Kroger’s e-commerce sales to grow at about 20% a year through 2021.

Source: Quarterly Filings, Motley Fool

In fact, thanks to online ordering, which more than doubled year over year, Kroger’s comps growth came in at 0.7% in the last quarter, and management expects 0.5% to 1% growth in the second of the year.

And while true that about 0.75% comps growth in the second half of the year would be a pale imitation of the kind of strong comps growth enjoyed in recent years, the fact is that it’s still moving in the right direction.

This indicates that management is capable of adapting to very challenging industry conditions. In addition, analysts expect Kroger’s long-term comps to return to 2.5%, which I believe is a potentially conservative estimate.

Let’s also not forget the company’s relentless focus on cost cutting via supply chain optimization and closing underperforming stores that has allowed sales per square foot to grow steadily over time and that can make a huge difference in earnings growth in the future.

In fact, at $ 650 in revenue per square foot, Kroger is the second best retailer in this industry, behind only to Costco (NASDAQ:COST) at $ 1,100.

All these reasons are why I as a contrarian investor like Kroger. Because the essence of what I do is to look at a historical winner, one trading at beaten down valuations (and preferably at 52-week low), and determine whether or not “this time is different”.

The simple fact is that the challenges facing Kroger right now, while different in specifics, are not meaningfully different than the kind of brutal competition it’s faced for decades from the likes of dividend aristocrat Wal-Mart and dividend king Target.

Chart KR Revenue (Annual) data by YCharts

And as you can see, Kroger has done fine, growing sales, FCF/share, and EPS at 6.7%, 5.3%, and 10.0% CAGR respectively over the past 27 years.

Chart KR Total Return Price data by YCharts

In fact, Kroger has historically been a solid market beater, even after accounting for the recent 50% crash.

This tells me that this is a company that I’m more than comfortable owning for the long term, given management’s track record and its future growth plans.

Dividend Profiles Point To Market-Beating Returns

Company Yield TTM FCF Payout Ratio 10 Year Projected Dividend Growth 10 Year Expected Annual Total Return
Qualcomm 4.3% 84.4% 9% to 10% 13.3% to 14.3%
Kroger 2.4% 32.2% 7% to 8% 9.4% to 10.4%
S&P 500 1.9% 34.7% 6.1% 8.0%

Sources: GuruFocus, Morningstar,,

Ultimately as a dividend growth investor I’m counting on a combination of generous, secure, and growing dividends to generate market-beating total returns.

In this case both Qualcomm and Kroger offer far better yields than the market today, and despite QCOM’s temporarily elevated payout ratio (will come way down once the license dispute is resolved and or the NXP deal closes), I’m confident in the strong security of both dividends.

More importantly, I think that they will continue to grow at moderately strong rates that will allow for double-digit total return potential that should result in far superior total returns in the coming decade than what the overheated S&P 500 will generate.

Of course, those long-term dividend growth projections could end up being lumpy, meaning that short-term struggles to grow the top and bottom line might mean that payout growth might be slower in the next few years, but likely catch up later on.

Valuation Is Highly Attractive On Both

Chart QCOM Total Return Price data by YCharts

Both Qualcomm and Kroger have had a terrible year, which is exactly what I love to see, because it means the valuations are now at historically excellent levels.

Company Forward PE Historical PE Yield Historical Yield Yield Percentile
Qualcomm 12.8 19.6 4.3% 1.6% 1%
Kroger 10.3 16.0 2.4% 1.5% All Time High
S&P 500 18.5 14.7 1.9% 4.3% NA

Source: F.A.S.T. Graphs,, Jeff Miller, GuruFocus,

For example, on a forward PE ratio basis, both companies are way below the market’s overheated levels, as well as significantly below their historical norms.

More importantly for dividend investors, the yield for QCOM and KR is sky-high. For example, Kroger’s yield is near its all-time high while Qualcomm’s yield has only been higher 1% of the time.

Company TTM FCF/Share 10 Year FCF/Share Fair Value Estimate Growth Baked Into Current Share Price Margin Of Safety
Qualcomm $ 2.54 10.9% $ 65.65 6.6% 20%
Kroger $ 1.49 6.3% $ 24.25 3.6% 15%

Sources: Morningstar, GuruFocus, F.A.S.T. Graphs

Another thing I like to look at is the longer-term, 20-year outlook using a discounted free cash flow model, using a 9.0% discount rate (the post expense ratio historical return on an S&P 500 index ETF, i.e. the opportunity cost of money), and a conservative 4% 10-year terminal growth rate.

This allows us to get a rough estimate for the intrinsic fair value of a company, and in this case, we can see that Wall Street is being overly pessimistic about the future growth rates of both stocks, resulting in strong margins of safety.

Normally I like to buy quality DGI stocks at a 15% or higher discount to fair value, which makes both Qualcomm and Kroger some of the few undervalued names you can buy in today’s frothy market.

Bottom Line: Qualcomm and Kroger Will Likely Turn Things Around Presenting A Potentially Great Opportunity For Higher-Risk Investors

Don’t get me wrong, contrarian value investing isn’t for everyone. You need to be comfortable taking a VERY long-term, big-picture view and dealing with plenty of fear, uncertainty, and doubt in the short to medium term. It also means potentially experiencing a lot of volatility, which is something most investors would rather avoid.

Then again, it can also be an exceedingly profitable endeavor, and if you have a long enough time horizon and a high enough risk-tolerance, both Qualcomm and Kroger could prove excellent, contrarian income growth investments.

That’s because, based on the excellent track records of both companies to navigate their respective, challenging industry conditions over past decades, as well as the long-term growth potential, I’m confident that both QCOM and KR will once more rise like a Phoenix from the current short-term ashes (Amazon can’t dominate every industry).

Which is why I’m more than happy to lock in their highest yields in over a decade (or ever) and patiently wait for their likely turnarounds to play out and their share prices to recover nicely.

Disclosure: I am/we are long QCOM, KR.

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.


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Famed Architect’s Lawsuit Against Google Just Got Much More Serious

Eli Attia alleges he wasn’t the only one mistreated by the search giant.

A long-running lawsuit filed against Google by a prominent architect has just gotten much broader.

Last week, the Superior Court of California granted a motion adding racketeering charges to the civil case being pursued against Google by Eli Attia, an expert in high-rise construction. Attia claims Google stole his idea for an innovative building design method – and now he wants to prove that it does the same thing frequently.

Attia’s suit was originally filed in 2014, four years after he began discussions with Google (prior to its reorganization as Alphabet) about developing software based on a set of concepts he called Engineered Architecture. Attia has said Engineered Architecture, broadly described as a modular approach to building, would revolutionize the design and construction of large buildings. Attia developed the concepts based on insights gleaned from his high-profile architecture career, and has called them his life’s work.

Google executives including Google X cofounder Astro Teller came to share his enthusiasm, and championed developing software based on Engineered Architecture as one of the company’s “moonshots.” But Attia claims the company later used his ideas without fulfilling an agreement to pay to license them.

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Attia’s suit names not just Google, but individual executives including founders Larry Page and Sergey Brin. It also names Flux Factory, the unit Attia’s suit alleges was spun off specifically to capitalize on his ideas.

Speaking to the San Jose Mercury News, Attia’s lawyer claims Google told Attia his project had been cancelled, “when in fact they were going full blast on it.” Flux Factory is now known as Flux, and touts itself as “the first company launched by Google X.”

Attia’s suit will now also seek to prove that his case is representative of a much broader pattern of behavior by Alphabet. According to court documents, the motion to add racketeering charges hinged on six similar incidents. Those incidents aren’t specified in the latest court proceedings, but Alphabet has faced a similar trade-secrets battle this summer over X’s Project Loon, which has already led to Loon being stripped of some patents.

The idea of racketeering charges entering the picture will surprise many who associate them with violent organized criminals. But under RICO statutes, civil racketeering suits can be brought by private litigants against organizations and individuals alleged to have engaged in ongoing misdeeds. The broader use of racketeering charges has slowly gained ground since the introduction of RICO laws in the 1960s, with some famous instances including suits against Major League Baseball and even the Los Angeles Police Department.


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The Simple Reason to Learn to Lead Yourself First

Inc. readers love leading. We love learning to lead better.

Usually that means learning to lead others. Leading others sounds sexier.

In my leadership courses and workshops, nearly everyone prefers the exercises that lead others over ones to build self-awareness and self-leadership.

I recommend learning to lead yourself first. Here’s why.

Learn to lead yourself first

To see what happens if you learn to lead others first, imagine learning a foreign language.

Say it’s Italian. With dedication and practice, you learn the language. The natural next step is to spend time with Italians, eat the cuisine, visit the country, learn their history, and so on.

Now say you learn that you prefer Chinese cuisine, history, philosophy, and so on.

After learning Italian is a lousy time to realize you’ve invested years in learning skills that will take you away from your interests.

Learning to lead yourself reveals your interests and values. It gives you direction. It keeps you from leading people where you don’t want to go.

Better to find out you love Chinese before learning Italian. No matter how good you are at Italian, it will always feel like work. Doing what you love will feel less like work all the time.

Learning to lead others is enticing and alluring. We feel powerful. More followers enables us to do more.

Without direction and purpose, power and action are as likely to lead us astray as where we want to go.


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The 6 Most Expensive Stocks In The Dow Jones Industrial Average: Part 1 Of 5


When the Dow Jones Industrial Average first hit 20,000 in January of this year, it generated quite a buzz within the financial community. Since January, the Dow Jones Index has continued to rise and currently is over 22,700. However, the Dow Jones is not the only market index that is currently sitting at or near all-time highs. The broader S&P 500 index is also at a historic peak.

However, even though the Dow Jones sits at an all-time high, it does not logically follow that all stocks in the Dow Jones are at all-time highs. Perhaps more importantly, even though the index is at an all-time high, it does not necessarily mean that all the stocks in the Dow Jones are overvalued. On the other hand, since the index is at an all-time high, it might also logically follow that many (if not all) of the stocks in the Dow Jones are overvalued. As I’ve often pointed out, it is a market of stocks, not a stock market.

Consequently, the only way that any of these things can truly be determined is by evaluating each of the individual constituents that make up the 30 Dow Jones Industrial Average. The good news is there are only 30 stocks in the index; therefore, it is not too difficult or overly time-consuming to evaluate each of the constituents independently. But more to the point, I think there is a significant benefit and enlightenment achieved through examining each of the 30 constituents individually.

Then, not only will the veracity of the statement “it is a market of stocks” be validated, but also the reality of how different each individual company that makes up the market is also vividly revealed. Therefore, this will be the first of a series of five articles where I will examine each of the 30 Dow Jones Industrial constituents individually. Moreover, I will be presenting the 30 stocks 6 at a time in order of valuation highest to lowest. As a prelude to what will be revealed relative to valuation, I intend to illustrate that approximately half of the Dow Jones constituents are currently reasonably valued.

Portfolio Review: The Six Most Expensive Stocks in the Dow Jones Industrial Average

The following portfolio review lists the six most expensive stocks in the Dow Jones Industrial Average based on their current blended P/E ratio. However, there are many ways to value a stock in addition to the P/E ratio. Consequently, I suggest the reader also notices the price to cash flow of each of these six Dow constituents. For those investors most interested in dividend income, price to cash flow might be more relevant for higher-yielding dividend paying stocks. Furthermore, when ascertaining valuation, other factors such as expected growth need to be considered as well. I will elaborate more fully in the video below.

FAST Graphs Analyze Out Loud Valuation Analysis

This video will present a quick overview of each of these Dow constituents based primarily on price relative to earnings and cash flow. However, for certain constituents, I will also evaluate several other metrics. For any reader concerned with the current valuation of the stock market, this video and the subsequent four videos that follow in future articles are must watches. Furthermore, although I will be only providing a cursory, or a pre-more comprehensive due diligence analysis, I believe you will find the video enlightening and hopefully entertaining.

Summary and Conclusions

In Part 1 of this five-part series, I covered what I consider the six most expensive stocks in the Dow Jones. With my next article (Part 2), I will look at the next six Dow stocks relative to valuation. I believe you will find that relative valuation of these next six Dow stocks is quite similar to these first six. However, with each respective installment, I will be reviewing additional Dow constituents that appeared to be more attractively valued.

As an aside, many of you may have seen or read about Warren Buffett’s recent prediction that the Dow Jones Industrial Average will someday hit $ 1 million. Personally, I believe that Warren Buffett may in fact be correct. But more importantly, that prediction needs to be put into perspective. His time frame is 100 years, and this would imply that the Dow Jones increases only by 4% a year. Nevertheless, the reason I bring this up is simply to point out that stocks have generally risen over the long run.

Consequently, I believe the Dow Jones will in fact increase in value over time. On the other hand, that does not mean that stocks will go never-endingly up. As history has proven, there will be interruptions along the way. Nevertheless, the most vulnerable stocks will be those that are most overvalued just prior to a correction occurring.

If you enjoyed this article, scroll up and click on the “Follow” button next to our name to see updates on our future articles in your feed.

Disclosure: I am/we are long CVX, V, BA, XOM, MCD.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.


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China approves HP's $1.1 billion buy of Samsung's printer business with curbs

BEIJING (Reuters) – China said on Thursday it has approved HP Inc’s (HPQ.N) $ 1.1 billion purchase of Samsung Electronics’ (005930.KS) printer business with certain restrictions, citing concerns about the U.S. firm’s dominance of the domestic laser printer market.

HP announced the deal in September 2016, hoping to disrupt the $ 55 billion copier market by focusing on multifunction printers and more deeply embedding mobile and cloud printing technologies to its product solutions.

It hoped at the time to close the transaction within 12 months, pending regulatory review.

In a statement issued late on Thursday, the Ministry of Commerce said sale of A4 format laser printers by HP in China should be done on “fair and reasonable” terms and the firm must report every six months on their prices and related data to the ministry.

HP must not buy any stakes in other A4 printer manufacturers in China even if they are a minority equity investment, it said.

It must not adapt its printers to restrict compatibility with third-parties or claim in advertising that its printers are not compatible with other suppliers, the ministry said.

HP expects to close the acquisition in the fourth quarter which ends on Dec. 31, a spokeswoman said in an email. She declined to comment on the regulatory process.

Samsung was not immediately available for comment.

Under the deal, HP would add an intellectual property portfolio of more than 6,500 printing patents and nearly 1,300 researchers and engineers with expertise in laser printer technology, imaging electronics and printer supplies.

Reporting by Josephine Mason and Stella Qiu; Editing by Muralikumar Anantharaman

Our Standards:The Thomson Reuters Trust Principles.


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Indonesia's first ever IPO by a startup draws robust investor interest

JAKARTA (Reuters) – E-commerce firm PT Kioson Komersial Indonesia Tbk drew strong investor interest for Indonesia’s first ever IPO by a startup, and its shares surged on their trading debut in very thin volumes on Thursday.

The response to the IPO could potentially pave the way for more technology companies in Southeast Asia’s biggest economy to follow in Kioson’s footsteps and list in the domestic stock market.

Kioson raised 45 billion rupiah ($ 3.3 million) by selling 150 million shares, or 23.1 percent of the company’s total share base, at 300 rupiah each. The offering was more than 10 times over-subscribed.

The stock surged as much as 50 percent on its debut, but volumes were very thin with just over 10,000 shares traded.

Indonesia’s startup scene is booming as investors are lured by the youthful demographic of the country of 250 million people, who are increasingly buying anything from tickets to electronic gadgets online.

President Joko Widodo has also aimed to increase broadband access in the sprawling archipelago.

Kioson CEO Jasin Halim said the company previously received offers from venture capital and private equity funds, but decided to go for an IPO because of a difference in valuation.

“The path that startups take is normally to look for venture capital, angel investors and so on…We feel that by taking the IPO route, that’s the method that is the most fair and transparent,” he told reporters. “Let the market value our company.”

On top of showing that an IPO could be an alternative method to raise funds for startups in Indonesia, Kioson also offers retail investors a chance to take part in the capital market and benefit from the “hyper-growth” of startups, Halim said.

Kioson operates an “online to offline” business model, which allows customers to make online purchases and pick up their orders at the ubiquitous kiosks, locally known as “warungs”, across Indonesia.

The company had tied up with 19,000 kiosks as of September, and plans to raise that to 100,000 by 2019, Halim said.

Kioson plans to use the proceeds from its IPO mainly to acquire online vouchers firm PT Narindo Solusi Komunikasi.

Andi Boediman, co-founder of venture capital firm Ideosource, told Reuters he expects more startups to take the IPO route in Indonesia as they could get better valuations from local investors who are more familiar with their products.

“With products that are offered in Indonesia, it’s easier to build a positive perception in Indonesia than to introduce it in other countries,” said Boediman, whose venture capital firm had invested in online retailer PT Bhinneka Mentari Dimensi. (

PT M Cash Integrasi, which distributes online vouchers through its physical kiosks, is also planning to raise up to 300 billion rupiah by offering a 25 percent stake in an IPO. M Cash is a unit of PT Kresna Graha Investama Tbk.

Reporting by Eveline Danubrata; Additional reporting by Cindy Silviana; Editing by Muralikumar Anantharaman

Our Standards:The Thomson Reuters Trust Principles.


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Wisconsin, Michigan were key targets of Russia-linked ads on Facebook: CNN

(Reuters) – Russia-linked Facebook ads during last year’s U.S. presidential election mainly focussed on the states of Michigan and Wisconsin, CNN reported on Tuesday.

The ads targeted key demographic groups and used divisive messages including promoting anti-Muslim sentiment, the report said, citing sources.

Wisconsin and Michigan were among the handful of battleground states that helped Trump win the presidency over Democratic rival Hillary Clinton. Trump carried Wisconsin by 22,748 votes and Michigan by 10,700 votes.

About 10 million people in the United States saw politically divisive ads on Facebook which were purchased in Russia in the months before and after the U.S. election, Facebook said on Monday as social media companies face calls for increased regulation and more transparency to open up the opaque world of online political ads.

Special Counsel Robert Mueller and congressional committees are investigating possible links between President Donald Trump’s campaign and Russia. Russia denies meddling in the election.

A representative from Facebook could not be reached for comment outside regular U.S. business hours.

Reporting by Kanishka Singh; Editing by Sunil Nair

Our Standards:The Thomson Reuters Trust Principles.


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Tax Reform Proposal Gets Mixed Reviews From Small Business Owners

The Republican-backed tax proposal announced last week addresses concerns of some small business groups but also raises questions that it could create a tax loophole for wealthy people.

The proposal would change the way some company owners — sole proprietors, partners and owners of what are called S corporations — are taxed. They report business income on their individual 1040 forms and under current law, can be taxed at a rate up to 39.6 percent. Many small business advocates have long objected to the fact that some of these owners pay a higher tax rate than corporations whose rates currently top out at 35 percent.

Under the GOP proposal, the tax rate on the businesses known as pass-throughs would be 25 percent. The corporate rate would be 20 percent.

Small business advocates were split over the plan. The National Federation of Independent Business welcomed it, but others objected.

“The current proposal leaves a disparity by offering pass-through entities a 25 percent tax on business income while dropping the corporate rate to 20 percent,” said Todd McCracken, CEO of the National Small Business Association. “We hope to work with tax writers to find ways to close that gap.”

The pass-through provision has already encountered criticism among Democrats who say it would enable wealthy Americans to structure their finances in a way that would dramatically lower their tax bills. Sen. Ron Wyden, D-Ore., said it would allow hedge funds to “to convert ordinary income into low-rate pass-through income.”

The NSBA was happy with some other proposals, including an end to the estate tax, which can force the heirs of company owners to sell a business or place it in debt in order to pay the government.

The Small Business Majority said the plan would not help most small companies.

“The current top rate is paid by less than 2 percent of pass-through business owners. Nearly 9 in 10 businesses that pass through their income already pay at the 25 percent rate or less,” said the group’s CEO, John Arensmeyer.

The plan would simplify business taxes, encourage business investment and increase owners’ confidence, the Small Business & Entrepreneurship Council said.

“High confidence will drive investment, risk-taking, bigger economic growth and wage growth,” said Karen Kerrigan, the group’s CEO.

The overall tax proposal faces an uncertain path through Congress although it has the backing of GOP leaders and President Donald Trump. Another provision in the overall plan that is being criticized is a proposal to eliminate the deduction for state and local taxes.


Small and mid-sized U.S. businesses that export their goods and services generally anticipate healthy growth in their overseas sales in the next five years. That’s the finding of a survey of 501 exporters released Monday by American Express.

Seventy-seven percent of the exporters who took part in the survey expect revenue from overseas sales to increase in the next five years, on average by nearly 30 percent. International trade is a significant part of their business — on average 36 percent of annual revenue comes from other countries.

Global economics and politics are a concern to these companies, with nearly 80 percent saying changing economics is a significant challenge. Thirty percent said Britain’s planned exit from the European Community will make them more cautious about international trade.

The survey, which questioned companies with total annual revenue between $ 250,000 to under $ 1 billion, was conducted in August.


Rhode Island has become the eighth state to require employers to give their staffers paid time off when they’re sick. Gov. Gina Raimondo signed a bill Thursday giving staffers at businesses with at least 18 employees three days of paid sick leave in 2018, four in 2019 and five in 2020. Workers can also use the time to care for ill relatives.

A growing number of states and cities have enacted laws that give workers paid sick leave, which is not required under federal law. Rhode Island’s neighbors, Connecticut and Massachusetts, also have sick leave laws, as do Vermont, California, Oregon, Arizona and Washington state.

–The Associated Press


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