Tech Brew Ride Home - Thu. 06/20 - Slack's (kinda) IPO

Episode Date: June 20, 2019

Slack debuts as a publicly traded company, there will be Congressional hearings about Libra, a Florida city pays ransom money to hackers, getting your internet from your lightbulbs and are we on the cusp of a fast-charging-battery revolution Sponsors: SVB.com/next Castro Links: Horns are growing on young people’s skulls. Phone use is to blame, research suggests. (The Washington Post) Facebook called before Senate panel over digital currency project (Reuters) YouTube under federal investigation over allegations it violates children’s privacy (The Washington Post) Apple Explores Moving Some Production Out of China (WSJ) Florida city pays $600,000 ransom to save computer records (Associated Press) Philips Hue company announces lights that beam data at 250 Mbps (The Verge) Vivo's insane 120W Super FlashCharge tech fills a 4000mAh battery in 13 minutes (AndroidCentral) The Blade Itself (The First Law Trilogy): Joe Abercrombie  Subscribe to the Ad-Free Premium Feed! Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the TechMeme ride home for Thursday, June 20th, 2019. I'm Brian McCullough today. Slack debuts as a publicly traded company. There will be congressional hearings about Libra. A Florida City pays ransom money to hackers, getting your internet from your light bulbs, and are we on the cusp of a fast-charging battery revolution? Here's what you miss today in the world of tech. So Slack has had a really successful IPO, except it wasn't really an IPO. It was a directly. listing, but never mind because the headline is. Slack's so-called reference price for its direct listing was $26 a share this morning, which would have valued the company at $15.7 billion.

But when Slack opened for trading late this morning under the ticker symbol, work, it surged 60% to actually open at $38.50 to actually value the company at about $20 billion. As of April, Slack had been valued at around $17 billion on the secondary market. and at its most recent financing round in 2018, Slack had a valuation of $7.1 billion. Again, this was a direct listing like Spotify recently had, quoting CNBC. In a direct listing, unlike an IPO, banks do not underwrite the offering, and no new shares are sold, so the company does not receive any additional money for operations. It's simply a way for existing shareholders to get liquidity by registering their shares for sale

on the public market. Plus, Slack doesn't need to raise more money since it already has more than $800 million in cash on hand. Slack said it engaged Goldman Sachs, Morgan Stanley, and Allen and company as financial advisors, and several more firms as associate financial advisors to assist in the process. Like many tech companies, Slack debuts with a dual-class structure, with Class B shares holding 10 votes per share to consolidate voting power among its top shareholders. According to Slack's prospectus, a sell is the company's largest shareholder at 24% followed by Andresen Horowitz with a 13.3% stake and social capital with a 10.2% stake. Slack CEO Stuart Butterfield owns an 8.6% stake and SoftBank holds 7.3%. Slack reported a net loss of

$138.9 million on revenue of $400.55 million for the year ended January 31st. As of January 31st, Slack said it had over 10 million daily active users and saw its number of paid customers increased 49% year over year compared to its fiscal year 2018. Its paid customers paying over $100,000 based on annual recurring revenue was up 93% year over year compared with fiscal 2018, according to the prospectus, end quote. Well, that was fast. The Senate Banking Committee says it will hold a hearing on Facebook's Libra plans on July 16th. Sources are telling Reuters that David Marcus, who leads Facebook's blockchain efforts,

is expected to testify. As many people noted on Twitter, that would be a sharp contrast to the not quite so eagerness with which Mark Zuckerberg agreed to testify before Congress about privacy issues. Quoting Reuters, the announcement comes one day after the social media giant unveiled plans to launch a global cryptocurrency, which immediately attracted attention from regulators across the globe and skepticism from Washington. Representative Maxine Waters, the Democrat who chairs the House Financial Services Committee, said Tuesday she planned to similarly, call Facebook to testify and ask the company to halt the project while policymakers studied it. In May, the leaders of the Senate Banking Committee wrote to Facebook,

seeking information on rumors of its cryptocurrency project and how it would protect consumer information, end quote. Again, this is super early days about Libra, but I'm suddenly really wondering if we'll actually see Libra come to fruition, at least as it's currently proposed. I mean, in theory, every single country in the world, can have a say on if Libra is allowed inside its borders. As someone said on Twitter, the thing about cryptocurrencies is you're always existing thanks to the grace or benign neglect of governments. In an instant, they can regulate you out of existence.

This is Mark Carney, the governor of the Bank of England. Quote, anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation, Carney said. We will look at it very closely and in a coordinated thing, fashion at the level of the G7, the BIS, the FSB, and the IMF. So open mind, but not open door, end quote. As Matt Stoller wrote in his excellent newsletter this morning, quote, instantly systemic means that Facebook will have to prove to financial regulators in every country in which it seeks to operate that it will not destroy the world economy with its new toy money. Carney's statement is consistent with comments from France's finance

Minister Bruno Lamarie, Australia's Central Bank, and Indonesia's central bank. There's a G7 working group to examine systemic risk, consumer protection, surveillance, and the effect of such currencies on monetary policy, end quote. As someone else pointed out on Twitter, and sorry, I've been really bad at saving tweets this week, so I can't give credit. In theory, if Facebook's currency got into trouble because it's backed by this reserve of financial instruments and currencies, it could require a bailout to rescue it. And isn't that what motivated Satoshi Nakamoto to start Bitcoin in the first place? Horror at the big bank bailouts of the Great Recession. Quoting Stoller again,

I have a hard time believing that Cheryl Sandberg thinks Libra is a good idea considering she used to work at Treasury as the chief of staff for Larry Summers and she would understand all the toes this idea steps on. But maybe she's bought into the move fast and break things ideology or simply thinks the political system is so weak it can't stop a power grab this audacious. Or maybe she doesn't have the power internally to stop this or doesn't care enough to do so. At any rate, now the question goes to regulators and lawmakers globally, end quote. And remember yesterday how I told you that YouTube was making, or at least considering making changes to children's videos on the platform. Yeah, well, those changes might not entirely be their idea because YouTube might be

getting pushed. Sources are telling the Washington Post that the FTC is in the late stages of a probe into privacy practices around children's videos on YouTube. Quote, the complaints contend that YouTube, which is owned by Google, failed to protect kids who use the streaming service and improperly collected their data in violation of the Children's Online Privacy Protection Act, a 1998 law known as COPA, That forbids the tracking and targeting of users younger than age 13. The possibility of a hefty penalty against YouTube, including a settlement forcing YouTube to change his practices to better protect kids, could signal a new phase in the FTC's enforcement of the child privacy law, which many critics say has grown weak amid the technological changes over the past two decades, end quote. You see, this is what some kinds of regulations are for.

to, you know, gently or not so gently nudge companies to do the right thing. Not all the time, but sometimes regulations are useful. The tech meme right home is brought to you once again by Silicon Valley Bank. The bank built to help move bold ideas forward faster. For more than 35 years, Silicon Valley... Sources are telling the Wall Street Journal that Apple is asking suppliers to study the feasibility of shifting final assembly of some products out of China amid trade tensions. Quote, while any major changes would be difficult and could take months or years to implement,

Apple is looking into the feasibility of shifting up to around a third of the production for some devices, some of the people said. Destinations under consideration include Southeast Asia, the people said. No decision has been made on such a move. Some of the people said, any such transition, they said, is unlikely to significantly affect the iPhone in the near term because the company relies on hundreds of thousands of workers available in China to manufacture the high-volume product, which depends heavily on human hands for assembling, as well as a deep network of suppliers there, end quote.

Now, I suppose there's nothing surprising here. Why wouldn't you at least hedge your bets and make contingency plans if you're Apple? It would be malfeasance if you didn't. But I'd love to read a piece about the following. Low-cost manufacturing of especially electronics migrated over the last, I don't know, 70 years from places like Japan and Korea and Taiwan to over the last 30 years especially mainland China. And the anticipation has always been that eventually it would continue to move on, probably to Southeast and South Asia. This sort of thing is inevitable and predictable as manufacturing economies enrich certain countries.

Manufacturing moves on, chasing cheaper and cheaper labor. Any successful manufacturing economy faces the risk of eventually pricing itself out of the market niche. it filled so successfully. I'd love to hear someone smarter than me opine as to what degree the trade war of the last few months might be accelerating this anticipated trend. Will trade wars with China be moot in five years because manufacturing will have already moved on? I haven't shared many of these stories with you, but more and more cities and municipalities are falling victim to hacker attacks where either the hackers steal data or encrypt data or straight up crash systems and then contact the governments involved and demand a ransom to make things work again. There is a new

story about this every week or so, which is why I haven't done them before. I'd be doing them all the time. But the sad fact is this is becoming more and more common and this might be becoming more and more common. The Riviera Beach City Council of Riviera Beach, Florida, a suburb of Palm Beach, voted unanimously to pay $600,000 in ransom to hackers who, three weeks ago, encrypted the city's records, disabled its email system, and more. Quote, spokeswoman Rose Ann Brown said Wednesday that the city of 35,000 residents has been working with outside security consultants who recommended the ransom be paid. She conceded there are no guarantees that once the hackers receive the money, they will release the records. The payment is

being covered by insurance. The FBI on its website says it, quote, doesn't support paying off hackers, but Riviera Beach isn't alone. Many government agencies and businesses do. Quote, we are relying on the consultant's advice, she said. The hackers demanded payment in the cryptocurrency Bitcoin. While it is possible to trace bitcoins as they are spent, the owners of the accounts aren't necessarily known, making it a favored payment method in ransomware attacks. Numerous governments and businesses have been hit in the United States and worldwide in recent years. Baltimore refused to pay hackers $76,000 after an attack last month. The U.S. government indicted two Iranians last year for allegedly unleashing more than 200 ransomware attacks,

including against the cities of Atlanta and Newark, New Jersey. The men who have not been arrested received more than $6 million in payments and caused $30 million in damage to computer systems, federal prosecutors have said, end quote. As malware Jake tweeted, Ouch, 600K for ransomware. Honestly, that probably could have been negotiated down, but if you have no available backups of your critical records, what choice do you really have? Now, go make changes, so this is a one-time thing, end quote. Let's end with two straight, cool tech product stories today. Signify, formerly known as Phillips Lighting, makes the Hugh branded.

smart lights. And this morning they announced true Li-Fi, a new brand of lights that can also deliver internet and data access at speeds of up to 150 mbPS from the lights. They do this via a technology called Li-Fi, which has actually been around for years. Instead of using radio waves like 4G, 5G, or Wi-Fi, Li-Fi transmits data over visible light, ultraviolet, or infrared spectrums. Using light to transmit data can offer advantages, including a wider bandwidth channel, immunity to electromagnetic interference, and high transmission speeds. There are some notable drawbacks as well. Virtually no laptops or smartphones have Li-Fi receivers so you need a dongle or external adapter to use, and the signal can be blocked if the receiver is in a shadow

or line of sight is blocked. Quoting the Verge, in the right circumstances, however, Li-Fi's use of light rather than radio signals to transmit data has its advantages. For example, it can be used in areas where there might be a lot of radio frequency interference or in places like hospitals where RF could interfere with sensitive machines. While Li-Fi signals can be easily blocked, this disadvantage can be a boon to security applications since you have a lot more control over where the network spreads, end quote. This might not be something that even comes to phones or laptops ever, but I can see a ton of use cases for all manner. of Internet of Things gadgetry.

And one of the laments of tech for the last decade or so has been that battery technology has basically been stuck in a rut. But is that about to change? Are we on the cusp of a fast-charging revolution for fast-charging, at least, of cell phone batteries? At Mobile World Congress Shanghai next week, Vivo is apparently going to demonstrate 120-watt super-flash-charge technology

that can recharge a 4,000 MAHBH battery in just 13 minutes. A 50% charge only takes five minutes, and Vivo is not alone. All the Chinese phone makers seem to be in a race to one-up each other on fast charging technology, quoting Android Central. Oppo now offers a 50-watt super V-O-O-C charging solution, and Huawei has 40-watt charging with the P-30 Pro. Earlier this year, Zhaumee showed off a 100-watt. wired charging solution that fills a 4,000 MAHBarrh battery in just 17 minutes, and Vivo is now aiming to outdo that with its super flash charge tech. The main issue with such fast charging solutions inevitably tends to be battery degradation, so we'll have to see what Vivo is doing

to ensure that the battery itself is able to sustain these voltages, end quote. So, apropos of absolutely nothing, a book recommendation. I made a grave mistake last week. I was listening to a podcast, and they were talking about other fantasy books like the Game of Thrones books. And somebody recommended the first law trilogy by Joe Abercrombie. So I bought the first book in the series. And I almost quit it because the book opens with a lot of torture stuff and I can't stand torture stuff. All that reek, Ramsey, Theon stuff and Game of Thrones drove me nuts. I don't even like the Uron Greyjoy. stuff in A Feastford Crows. But I stuck with it, and here we are a week later. I've already

devoured books one and two, and I'm on to book three, and this is why it was a mistake. I am literally sneaking in a chapter here and there in between every waking minute I have. I can't remember the last time I was so engrossed by a book series. It was probably either the Broken Earth trilogy or the Southern Reach trilogy. But as I said, apropos of absolutely nothing. If you like your fantasy medieval and gritty, this is good stuff. The first law trilogy. It's faster moving than George R.R.R. Martin. Link to the first book in the series, The Blade itself, at the very bottom of the show notes. Talk to you tomorrow.