|Bid||1,178.00 x 800|
|Ask||1,181.00 x 900|
|Day's range||1,173.25 - 1,183.83|
|52-week range||977.66 - 1,296.97|
|Beta (3Y monthly)||0.98|
|PE ratio (TTM)||23.81|
|Earnings date||23 Oct 2019 - 28 Oct 2019|
|Forward dividend & yield||N/A (N/A)|
|1y target est||1,411.37|
(Bloomberg) -- President Donald Trump, who has repeatedly lashed out at technology giants and their leaders, announced on Friday evening that he would be dining with Apple Inc. Chief Executive Officer Tim Cook.“Having dinner tonight with Tim Cook of Apple,” Trump, who is staying at his golf resort in Bedminster, New Jersey, wrote on Twitter. “They will be spending vast sums of money in the U.S. Great!”He did not elaborate, and Apple did not immediately respond to a request for comment on the meeting.Heads of other major technology companies, including Amazon.com Inc., Alphabet Inc.’s Google and Facebook Inc. have not fared as well in the president’s tweets and public remarks.He and his political allies have made unsupported claims that social media companies muzzle conservative views. Trump has assailed Amazon for edging out brick-and-mortar retailers and criticized its founder Jeff Bezos, who owns the Washington Post.Pressure on tech companies is increasing in Washington as congressional Republicans examine accusations of bias against conservatives; Democrats in the House conduct an antitrust inquiry and officials at the Justice Department and the Federal Trade Commission divvy up oversight of Google, Facebook, Apple, and Amazon.Earlier this week, FTC Chairman Joe Simons said in an interview that he wouldn’t let Trump’s complaints about the size and political inclinations of large technology platforms affect his agency’s decisions.Cook visited the White House in June to discuss the Trump administration’s efforts to develop job training programs that meet the changing demands of U.S. employers. The meeting was part of the American Workforce Policy Advisory Board, a working group that includes many corporate leaders. Commerce Secretary Wilbur Ross and Trump’s daughter and adviser Ivanka Trump unveiled the initiative earlier this year.\--With assistance from Alistair Barr.To contact the reporter on this story: John Harney in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Kevin Whitelaw at email@example.com, John HarneyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
As both Nvidia and AMD compete to create the next best AI and cloud computing GPUs, the tech is only going to proliferate in performance and both companies stand to gain.
(Bloomberg Opinion) -- Two years ago, 10 sailors died when the U.S. Navy’s guided missile destroyer USS John S. McCain collided with a chemical tanker off Singapore. An investigation has determined that insufficient training and inadequate operating procedures were to blame, and both factors were related to a new touch-screen-based helm control system. The Navy has decided to revert its destroyers back to entirely physical throttles and helm controls.It’s worth exploring the Navy’s rationale for installing touch-screens (“Just because you can doesn’t mean you should,” says Rear Admiral Bill Galinis), as well as its rationale for getting rid of them:Galinis said that bridge design is something that shipbuilders have a lot of say in, as it’s not covered by any particular specification that the Navy requires builders to follow. As a result of innovation and a desire to incorporate new technology, “we got away from the physical throttles, and that was probably the number-one feedback from the fleet – they said, just give us the throttles that we can use.”There are lessons here — including a prescient one from 50 years ago — for other, more mundane transport-control interfaces as well.Large, interactive touch-screens are becoming increasingly prevalent in passenger cars; in the case of Tesla, they’re the only control interface. They’re lovely to look at, but as the Navy’s experience suggests, they might be more confusing than physical controls. That confusion isn’t academic, either: Distracted driving is an increasingly dangerous problem. According to the National Highway Traffic Safety Administration, 10% of all fatal crashes from 2012 to 2017 involved distracted drivers. Mobile phones are a major cause of distraction, as we’d expect, but they’re an even bigger problem for younger drivers.Almost 50 years ago, robotics professor Masahiro Mori wrote an extraordinary essay, “The Uncanny Valley,” on people’s reactions to robots as they became more and more humanlike. As Mori said, our affinity for robots rises as they more closely resemble humans. That affinity plunges, becoming negative and finally rising again once a robot reaches the (possibly unattainable) full likeness of a human being.Something similar is at work in our current touch-screen-filled vehicles. To an extent, adding more screen real estate give us more information, and with it more safety — until it begins to provide an overwhelming amount of information and an overly complex set of choices for visual navigation. And moving from one information-rich interface to another is increasingly difficult, as another Navy rear admiral said in reviewing the John S. McCain collision:When you look at a screen, where do you find heading? Is it in the same place, or do you have to hunt every time you go to a different screen? So the more commonality we can drive into these kind of human-machine interfaces, the better it is for the operator to quickly pick up what the situational awareness is, whatever aspect he’s looking at, whether it’s helm control, radar pictures, whatever. So we’re trying to drive that.There are two ways our in-car screens could evolve. The first is that, for safety’s sake, they’ll move back down the curve, so to speak, and be less ambiguous and more full of knobs and dials and physical throttles. That’s the Navy’s new approach. The second, though, is that we won’t go back, at least in passenger applications, to a more tactile interface of specific controls. We’re probably going to get more screens, with more information. Maybe the only way out of this valley is to shift the interface completely to voice or, in the very long run, to obviate the issue by having cars drive themselves. That could be how we navigate this uncanny valley of vehicle interfaces — the removal of any need to control the vehicle at all, and the chance to fill our cars’ screens with pure entertainment. Weekend readingA greener energy industry is testing investors’ ability to adapt. One coal CEO says “make money while you can” in an industry that is in terminal decline. The venture capital arm of Royal Dutch Shell Plc has invested in Corvus Energy, a maritime and offshore battery systems company. America’s obsession with beef is killing leather. A look at how Phoenix comes alive at night, and how other cities might too in a hotter world. An exploration of how extreme climate change has arrived in America. The Anthropocene is a joke. On a geological time scale, human civilization is an event, not an epoch. Three years of misery inside Google, the happiest company in tech. Here’s what happens when Apple Inc. locks you out of its walled garden after fraud suspicions. Machine vision can spot unknown links between classic artworks. When Midwest startups sell, their hometown schools often lose. A programmer in California got a “NULL” vanity license plate in the hopes that the word would not compute in a database of traffic offenders. Instead, he was fined $12,049. Robert Ballard, discoverer of the Titanic, is exploring a startling clue that may help him find Amelia Earhart’s plane. Bugatti’s one-off La Voiture Noire debuted at the Pebble Beach Concours D’Elegance. It’s already been sold, for $18.68 million. Bloomberg Businessweek’s Peter Coy looks back on the 40 years since the magazine declared “ the death of equities.” Get Sparklines delivered to your inbox. Sign up here. And subscribe to Bloomberg All Access and get much, much more. You’ll receive our unmatched global news coverage and two in-depth daily newsletters, the Bloomberg Open and the Bloomberg Close.To contact the author of this story: Nathaniel Bullard at firstname.lastname@example.orgTo contact the editor responsible for this story: Brooke Sample at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nathaniel Bullard is a BloombergNEF energy analyst, covering technology and business model innovation and system-wide resource transitions.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Shopify Inc.’s scorching rally and Lightspeed POS Inc.’s successful trading debut this year are throwing the spotlight on who might be the next Canadian tech star to go public.A total of C$1 billion ($751 million) was invested in 142 venture capital deals in the first quarter, up 48% from a year earlier, according to the Canadian Venture & Private Equity Association. More than half of that was in tech and increasingly from U.S. investors.Here’s what the founders of some of Canada’s hottest tech firms are saying about the future of their companies, and the potential for initial public offerings:ClearbancClearbanc offers $10,000 to $10 million to startups to help fund their marketing campaigns on Facebook, Google and the like in return for a flat fee and a share of revenue.The Toronto-based investment firm, founded in 2015, raised $300 million in new funding led by Highland Capital Partners of the U.S., the largest disclosed VC-financing this year in Canada. That brings total funding to $420 million.Clearbanc plans to offer $1 billion in financing this year and is interested in funding parts of a business that could turn into a repeatable revenue stream--infrastructure, shipping and sales commissions.It’s expanding outside the U.S. and Canada, where there’s a less developed venture ecosystem and “banks are more conservative,” according to co-founder and chief executive officer, Andrew D’Souza.“We think that the fundamentals of the business, the market opportunity, justifies a large standalone business,” D’Souza said about the possibility of an IPO.WattpadWattpad Corp. may no longer be a startup but its ambitions just keep growing. Founded as a mobile-reading app, 12-year-old Wattpad now calls itself a “multi-platform entertainment company.”The Toronto-based company has provided content for one of the most re-watched movies on Netflix (“The Kissing Booth”), a Hulu series (“Light as a Feather”), and this year a Hollywood feature film (“After”), all through Wattpad Studios, launched in 2016.Last week it inked a deal with Penguin Random House in the U.K. to turn its online content, mainly created and read by young women, into books. That follows the launch of its own publishing imprint, Wattpad Books, in the U.S. in April.The company uses data from more than 80 million monthly active users to identify the best stories across its platform and turn them into content. It has launched a paid, ad-free version as well as exclusive content for a fee.Wattpad has raised $117.8 million from investors including OMERS Ventures, Tencent Holdings Ltd.’s capital arm, and August Capital Corp, and is generating revenue in “eight figures,” according to co-founder and chief executive, Allen Lau.As for an IPO, it’s “not what we spend time focusing on,” Lau said. “Our focus right now is on movies and TV shows, with our partners.”VidyardVidyard Inc. wants to be the YouTube of business videos. Its software allows companies to create personalized videos to engage with customers and use data from their viewing habits to analyze that engagement.Companies are expected to spend $103 billion annually in video-ad marketing by 2023, according to Forrester Research.Vidyard counts 1,200 businesses in over 170 countries as its customers, including enterprise customers such as Honeywell International Inc., LinkedIn and Citibank.“In terms of the next two to three years, we’re just focused on consistent, hockey-stick style growth,” says Devon Galloway, co-founder and chief technology officer at Kitchener, Ontario-based Vidyard.The company has raised $60 million to date from investors including OMERS Ventures, Inovia Capital and the venture capital arm of Salesforce Inc.Galloway said if Vidyard continues to grow as well as it has an IPO would certainly be on its path.WealthsimpleWealthsimple Inc., wishes to replace banks as a customer’s primary financial relationship, according to founder and CEO Michael Katchen.“We want to be a firm that demystifies money,” Katchen said in an interview in Bloomberg’s Toronto office. The investment-services company has more than C$5 billion in assets under management and 175,000 customers in Canada, the U.S. and U.K.The robo-adviser favored by millennials, is also targeting wealthier Canadians and has branched out into commission-free stock trading and savings products. Mortgages, life insurance and checking accounts could be next, Katchen said.Founded in 2014, WealthSimple is not yet profitable, but its backers are patient, Katchen said. These include Power Financial Corp., an investment arm run by the Desmarais family and Allianz SE.Katchen said he’s interested in an IPO but it’s still “a few years away.”(Updates with Clearbanc’s financing plan)To contact the reporter on this story: Simran Jagdev in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Jacqueline Thorpe at email@example.com;David Scanlan at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Tencent's (TCEHY) second-quarter 2019 results benefit from robust FinTech and Business Services revenues despite sluggish ad environment in China.
Google (GOOGL) employees are petitioning the company to not accept contracts from US immigration agencies that commit human rights violations.
(Bloomberg) -- The promise of artificial intelligence has yet to translate into big business. Now Kai-Fu Lee, a prominent venture capitalist in China and founder of Sinovation Ventures, says his firm’s new startup should be able to reach $100 million in revenue next year and go public the year after.AInnovation, established in March 2018, develops artificial intelligence products for companies in industries such as retail, manufacturing, and finance. Its customers include Mars Inc., Carlsberg A/S, Nestle SA, Foxconn Technology Group, China Everbright Bank Co. and Postal Savings Bank of China Co.Chief Executive Officer Hocking Xu, a veteran of International Business Machines Corp. and SAP SE, has hired staff that work with traditional companies to figure out how to take advantage of AI in their operations. AInnovation is on track to hit $100 million in revenue within two years of its founding, the fastest pace yet for such a startup, Lee said.“We took the approach of ‘Let’s take some of the best business people and let’s target the industries which need AI the most’,” he said.Lee figures AInnovation will be able to go public in less than two years at a valuation of $1 billion to $2 billion. The firm has raised about $70 million so far from Sinovation, CICC ALPHA and Chengwei Capital. Since the company was funded with yuan, it would most likely list domestically, either on China’s new NASDAQ-like Star market, or on the country’s ChiNext.For retail companies, AInnovation sells products including a smart vending machine that opens with facial recognition and software that monitors retail shelves with image recognition. It’s created computer vision technology that detects defects on the production line for manufacturers and underwriting software and natural language processing technology for financial firms. There’s a large market in particular for technology to catch flaws early in the manufacturing process, said Jeffrey Ding, a researcher with Oxford’s Center for the Governance of AI. That effort “aligns with the Chinese government’s priorities to upgrade smart manufacturing capabilities to compete with countries like Germany and Switzerland,” he said in an email.The former president of Google China, Kai-Fu Lee founded Sinovation Ventures in 2009. It manages more than $2 billion across seven funds in U.S. and Chinese currencies. It holds shares in more than 300 companies, most of which are in China. Its investments include autonomous driving company Momenta, consumer AI chip firm Horizon Robotics Inc. and bitcoin mining and AI chip company Bitmain Technologies Ltd.In artificial intelligence, “we’re still at a very early stage in the commercialization,” Lee said. “We’re still at the equivalent of early internet portals, back when everybody was using Yahoo and there wasn’t even a Google, Amazon, or Facebook.”Global economic ructions, however, may present short-term challenges. Venture deals in China have been plummeting as investors pull back amid escalating trade tensions and slowing economic growth. The value of investments in the country tumbled 77% to $9.4 billion in the second quarter from a year earlier.“In an economy that’s slowing down, everything slows, including venture capital. There will definitely be a shakeout,” Lee said. “The positive side is that if the economy is challenging, and valuations are down, it’s a good time for us to go shopping.”Sinovation was one of the first Chinese venture capital firms with a presence in the U.S. With the trade war and the Trump administration’s tighter scrutiny of foreign investments, the firm has scaled back investments and no longer has an office in the U.S., Lee said, adding that investments in America have always been a small fraction of its overall investments.“In the long term, it’s a pity if we have to cause a total separation of two countries because one could argue that AI got to where it got because the whole world has been able to work together.”(Updates with analyst’s comment in the 9th paragraph)To contact the reporter on this story: Selina Wang in China at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Peter Elstrom, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Facebook Inc. this week confirmed that it ran a program to allow contractors to listen to and transcribe some users’ audio clips. The social network said that the only people who were affected were those who agreed to have their audio messages transcribed.That makes it sound like users agreed to have their chats read by third parties. But based on a look at the Messenger permissions pop-up dialogue box, they didn’t.In the Messenger mobile app, as soon as someone sends a voice message, they get a prompt asking, “Turn on Voice to Text in this chat?” Above the “No” and “Yes” buttons, Facebook describes the option: “Display text of voice clips you send and receive. You can control whether text is visible to you for each chat.”There is no mention of human involvement. Even in a separate information page in the app dedicated to understanding Voice to Text, Facebook explains that users can turn it off for each chat, and prompts people to use it more. “Voice to Text uses machine learning,” it says. “The more you use this feature, the more Voice to Text can help you.” There’s no explanation that machine learning doesn’t just involve software code.Companies including Apple Inc., Amazon.com Inc. and Google have been relying on humans to check and improve their artificial intelligence systems -- they’re just not telling their users about it. That’s a critical lapse at a time when all of the companies -- especially Facebook -- are facing regulatory scrutiny for privacy lapses. The Irish Data Protection Commissioner, which enforces European Union privacy laws, said it was looking into Facebook’s transcription practices.“AI just isn’t at the level yet where it can interpret human conversation,” meaning the companies need to rely on monitoring to help train the systems, said Jennifer King, director of consumer privacy at Stanford Law School’s Center for Internet and Society. “But the big issue from my perspective is the non-disclosure. Users clearly don’t know it’s happening.”The report on Facebook’s human transcription program raised the ire of U.S. lawmakers, some of whom were already calling for stronger privacy protections than those imposed by a $5 billion settlement with the Federal Trade Commission approved last month. Senator Mark Warner, a Virginia Democrat, said the latest revelation about Facebook’s audio collection “is yet further proof that consumers’ expectations of how their data is collected and used radically differ from what companies like Facebook are actually doing.”Some privacy lawyers suggested the lack of disclosure ran afoul of the company’s settlement with the FTC. That agreement, which resolved known conduct before June 12, bars misrepresentations by Facebook about user privacy controls, third-party access to user data and how information is collected, used and disclosed."Absent some other disclosure to users regarding the human listening, I do believe it is likely this is a violation of the order in the case," said Mark McCreary, chief privacy officer at law firm Fox Rothschild LLP.(Updates with comments from privacy lawyer in final paragraphs.)To contact the reporter on this story: Sarah Frier in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The company says that searches for "community colleges near me" saw a 120% increase in the past two years, with overall searches for college information spiking between August and the fall, as high school students get ready to apply. With this update, students can now easily compare the tuition cost, acceptance rates and other information of four and two-year schools. The feature will now also show popular certificates and associate programs offered at four-year universities, and students can create lists of schools that specialize in specific fields and filter them based on distance (which often matters because many community college students, for example, stay close to home) and size.
Zero-click searches on Google reached an all-time high of 50.3% in June. This finding could raise more questions about its dominance of the Internet search market.
(Bloomberg) -- Democratic Senator Gary Peters of Michigan cast doubt about Mark Zuckerberg’s congressional testimony amid revelations that Facebook Inc. has been paying contractors to transcribe audio clips from its users.Peters’s comments, which followed a Bloomberg report that the company used the transcriptions to improve its speech-recognition technology, come as smartphones and other microphone-enabled devices become ever-more ubiquitous."I am concerned that your previous testimony before Congress appears to have been, at best, incomplete,” Peters said in a letter sent Thursday to the Facebook chief executive officer that requested more information about the report.During Zuckerberg’s testimony in April 2018, Peters asked the CEO whether "Facebook uses audio obtained from mobile devices to enrich personal information about its users," according to the senator’s letter. Zuckerberg called the notion a "conspiracy theory" and denied the company uses the audio for its ads business.Peters was referring to a theory that Facebook listens to conversations through a phone’s microphone and related permissions. Bloomberg reported on a narrower activity: Contractors transcribed users’ audio messages from the Facebook Messenger chat app. Still, members of Congress from both parties called the company out this week and urged new statutes to combat threats to privacy."Congress needs to pass tough rules that ensure that Americans don’t have our privacy repeatedly violated by unaccountable corporations," Senator Ron Wyden said in a statement. The Oregon Democrat, who last year circulated draft legislation that would impose steep fines and even prison time for executives who fail to adequately safeguard Americans’ personal data, said Zuckerberg "must be held personally responsible for Facebook’s serial privacy offenses."Wyden also slammed the company’s recent $5 billion settlement with the Federal Trade Commission over privacy violations. Senator Josh Hawley of Missouri, one of tech’s foremost Republican critics, asked in a series of tweets whether Facebook’s audio collection violated the agreement with the FTC.On Wednesday, the Irish Data Protection Commission, which oversees Facebook in Europe, said it was examining the activity for possible violations of the EU’s strict privacy rules.Congress, inspired partially by Facebook’s high-profile lapses, has spent months working on a federal privacy bill that could also tackle the handling of voice recordings, but a key group of legislators working on the bill has fallen apart after it missed a number of self-imposed deadlines, and progress on the bill has stalled.Facebook is not the only company that might be affected by new privacy rules. Bloomberg reported in April that Amazon employed a team of thousands of people around the world who listened to recordings picked up by Alexa and checked them for accuracy to improve the software. Humans were also brought in to review voice assistant recordings at Alphabet Inc.’s Google and Apple Inc., which both courted controversy for not making the practice clear to users.Democratic Representative Seth Moulton of Massachusetts cited Bloomberg’s reporting in July in announcing his plan to introduce a bill to allow the FTC "to seek penalties when digital personal assistants and smart doorbells record private conversations of users who haven’t said the device’s wake word or phrase." Moulton, who is seeking the Democratic presidential nomination, said his bill would impact companies like Amazon, which also owns the smart doorbell company Ring.Senator Mark Warner said the latest revelations about Facebook’s audio collection "is yet further proof that consumers’ expectations of how their data is collected and used radically differ from what companies like Facebook are actually doing." Warner, a Democrat from Virginia, called for legislation to require companies to disclose more detail about their data collection, use and sharing.\--With assistance from Matt Day.To contact the reporters on this story: Ben Brody in Washington at email@example.com;Sarah Frier in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Sara Forden at email@example.com, ;Jillian Ward at firstname.lastname@example.org, Anne VanderMeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Now, you can do so in a more passive-aggressive way by sending them a reminder through the Google Assistant instead of in person. "Hey Google, remind Alex to take out the trash at 8pm,” is all it takes. Your family members (or roommates that you've added to your Google family group) will then get a notification on their phones and/or Assistant-powered Smart Displays.
(Bloomberg Opinion) -- I confided to a colleague that the WeWork Cos. IPO filing on Wednesday reminded me of a lower-stakes Mueller report. Truly.It was good for WeWork, as it was for President Donald Trump, that the public had a chance over years to process in small doses the wild events described in those very different tomes.Without the history of WeWork reporting from Bloomberg’s Ellen Huet and many others, it would have been stunning to see for the first time the massive growth and losses of an office-leasing company on steroids, its Russian-nesting-doll corporate structure, the string of WeWork’s eyebrow-raising financial arrangements with its CEO, the company’s outlandish mission statements and its history of questionable spending and investments.We had time to digest WeWork in all its WeWork-iness, and for the shock to settle in.Let’s be clear, though: This company is profoundly shocking, and odd. It is at once perhaps the most controversial member of the last decade’s “unicorn” era of richly valued startups, and the one that perfectly encapsulates this moment in financial history. WeWork is so unicorn, it hurts.Historically, brand new tech companies tended to follow an established pattern. They created something or found ways to make a niche product accessible to the masses. The pioneers of Silicon Valley created computer chips first for government or military purposes and then for more widely useful equipment such as radios and smartphones. Bill Gates and others made computers useful and cheap enough for everyone. Google made software that organized the sprawling digital world. For the most part, these companies were treading on terra incognita. The big change in the last decade was that new companies started busting into established industries with the aid of unprecedented amounts of cash, at least a little technology and a spin on a conventional strategy.Uber Technologies Inc., Lyft Inc. and others took the idea of matching people with drivers for hire and added the twist of letting just about anyone become an ersatz professional driver. A boatload of companies are creating brands of sneakers, mattresses and luggage and trying to cut out the retail store middlemen. Young companies are buying houses for resale as a replacement for the inefficient home-buying process. Technology changes make all these ideas possible, although in many cases tech isn’t the point of differentiation. What’s new is the freedom, and mountains of cash from outside investors, to try shaking up old ways of doing things. It doesn’t usually matter if businesses are run on the knife’s edge of irrational in the short term, or if corporate conventions are cast aside, as long as the opportunity is big enough.WeWork’s “superpower,” to use a term apparently favored by its CEO, is taking those hallmarks from the unicorn era to their absolute extreme. It rents office space under long-term contracts, gussies it up and charges a markup for flexible, shorter-term rentals. It’s not a new idea, but WeWork does this to the max, to the point where its revenue barely exceeds its basic expenses to serve tenants. At the same time, it is lavishing cash on buying buildings and expanding into every country it can. Adam Neumann, WeWork’s co-founder and CEO, once said his company’s valuation was based on “energy and spirituality,” but the mystics won’t help pay the $47 billion in cold cash that WeWork owes its landlords in coming years.WeWork also takes up a notch the Silicon Valley habit of empowering founder-CEOs. Neumann runs the company, controls it through a special type of stock, has leased to the company several buildings he has owned, borrowed hundreds of millions of dollars backed in part by WeWork shares, seems to be lowering his taxes through a recent WeWork reorganization, and his wife will have a significant say in his successor if he dies or is incapacitated. Take that, Mark Zuckerberg. WeWork, Uber, Airbnb Inc. and other young companies founded in the last decade or so have absolutely helped shift what people and businesses expect of their products and services and forced every conventional industry to change what it does or risk death. The unicorn disruption is real and mostly healthy, although it remains unclear how many of the unicorns will thrive beyond the shake-ups they sparked. WeWork is the inevitable outcome of the last decade of technology and financial development. The unicorn era could only have led to this. A version of this column originally appeared in Bloomberg’s Fully Charged technology newsletter. You can sign up here.To contact the author of this story: Shira Ovide at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Investors tend to be biased in favor of their home markets, but that can limit them -- especially if home is not the United States.
(Bloomberg Opinion) -- A few short years ago, law schools were falling out of favor with young Americans looking for a route to affluence, influence, or both. Business schools, on the other hand, were attracting more students than ever.This year, the number of applicants to U.S. law schools is up an estimated 3.2%, after rising 8.1% last year. Graduate business schools in the U.S. saw a 6.6% decline in applications last year, and indications are that applications are down again this year as well.(3)What changed? Donald Trump became president, silly!OK, there are some other factors at work, especially at business schools, where the traditional MBA (master’s in business administration) is falling out of favor even as other programs gain. But President Trump’s policies and utterances really do seem to be driving more young Americans to go to law school while at the same driving foreign students away from U.S. business schools. Right now this shift matters mainly to people who work at law schools and business schools, but it will affect certain high-end parts of the U.S. labor market for decades to come.Here are the statistics, starting with law schools, where enrollment began plummeting in 2011 and hit bottom in 2015 and 2016.There was also a decline in the quality of law school applicants, at least as measured by scores on the Law School Admission Test, and that has turned around too. The percentage of applicants getting scores of less than 150 (out of 180) rose from 33.6% in 2012 to 38% in 2015; this year it’s back down to 33%.The fact that the number of new law students stopped falling in 2016, before Trump was elected, is an indication that this can’t be all about him. The decline in first-year law students from 2011 to 2015 was so sharp that it brought enrollment back to early 1970s levels, which may have been overkill given that there are a lot more legal jobs now than there were in the 1970s, and the Bureau of Labor Statistics projects an 8% increase in the number of jobs for lawyers from 2016 through 2026.Still, a law degree is rightly no longer seen as quite the path to a secure and remunerative career that it used to be, and a lot of today’s law school applicants seem less interested in their future earnings profiles than in using their legal skills to fight the power, or something like that. In one survey conducted by test-prep provider Kaplan, 87% of law-school admissions officers said “the current domestic political climate” was a significant factor in 2018’s applications increase. In another, 45% of students taking Kaplan LSAT prep courses this February said the political climate affected their decision to apply for law school, up from 32% a year earlier.In legal circles this phenomenon has come to be called the “Trump bump,” which sounds about right. More precisely, with young people and college graduates both tending to give the president low approval ratings, it seems likely that most of these political-climate-inspired applicants are inspired by opposition to Trump and his policies. Also, all of this year’s and most of last year’s applicant gains were driven by women, who as a rule like the current president a lot less than men do. As recently as 2013, women were still a minority among applicants to U.S. law schools. This year they accounted for 55%. So U.S. law schools will for at least the next few years be churning out more smart, politically engaged, probably left-leaning lawyers, most of them women.At U.S. business schools, the big Trump-related story is that foreign students are staying away. At the 400 U.S. business schools that reported international and domestic application volumes to the Graduate Management Admission Council, international applications fell 10.5% in 2018 and domestic applications just 1.8%. Meanwhile, GMAC reports that graduate business schools in Asia, Europe, and Canada all experienced application gains in 2018. In another survey by Kaplan, 31% of business school admissions officers said international students concerned about the U.S. political climate were the number one cause of the 2018 application decline, and 74% said they expect these concerns to weigh on applications in the years to come. Trump administration policies have also made student visas harder and more expensive to get, which is surely also depressing applications from overseas. (Because legal systems vary from country to country, U.S. law schools haven’t been nearly as big a magnet for foreign students as business schools are, and thus haven’t been affected as much by these changes.)Still, Trump can’t be the only reason MBA applications are down, given that master’s programs in business had stopped growing well before his presidency seemed even conceivable.The number of people getting undergraduate business degrees has risen this decade even as master’s programs have flat-lined. Within master’s programs there’s also been a significant shift, according to the Association to Advance Collegiate Schools of Business,(2) with the MBA and other generalist degrees (such as “master of management” degrees) losing ground to specialized degrees in accounting, finance, data analytics, and the like.What’s driving these changes? Worries about debt loads and employability seem to be pushing more students into undergraduate business majors (versus, say, the liberal arts), which may reduce subsequent demand for MBAs.(1) Increasing job-market demand for specific skills, enhanced by automated applicant-screening methods that sift for those skills on resumes and LinkedIn profiles, has shifted demand away from generalist programs. The strong job market of the past few years may be reducing the willingness of would-be MBA students to take two years out of their careers. Then there's the increasing availability of alternatives that don’t require a career break: Virginia Tech, Wake Forest University, the University of Iowa and the University of Illinois, among others, have ditched their full-time MBA programs, with the latter two opting to focus instead on online MBAs.None of that can be blamed on Trump, and none of it is necessarily a bad thing. But at least part of the decline in foreign applications can be and might be. What long-run effect could this have? Well, the chief executive officer of the most valuable publicly traded corporation in the U.S. (and the world), Microsoft Corp.’s Satya Nadella, is a foreign-born recipient of a U.S. MBA, as is Sundar Pichai, the CEO of Google, which makes all the money for fourth-most-valuable Alphabet Inc. And while Nadella and Pichai originally came to the U.S. to study engineering and got their MBAs later, Ajit Jain, head of the all-important insurance arm of Berkshire Hathaway Inc., came to the U.S. for the MBA. These are just a few examples culled from the top of the market-cap rankings, but they indicate that reducing the number of foreign students coming to the U.S. for MBAs and other graduate degrees might noticeably cut into the future talent pool of U.S.-based business.(1) Just to be clear, yes, the law-school numbers are for applicants, while the business-school ones track applications. The former is more meaningful, but it doesn't seem to be available for business schools.(2) This somewhat ungainly name is the result of wanting to keep the same acronym as the American Association of Collegiate Schools of Business, the group's former name,while expanding overseas.(3) On the other hand, the financial returns to majoring in business as an undergraduate seem to be dwindling, although students may not realize that.To contact the author of this story: Justin Fox at email@example.comTo contact the editor responsible for this story: Sarah Green Carmichael at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.