Equifax Stock Takes A Dive After Data Hack, Plus Facebook In China
“This is one of those huge things that we’ll look back at and marvel on the start of it.” Tim Cook’s pumped about augmented reality. You might be, too, following Apple’s annual event on Tuesday.
- U.S. indexes finished a bad week ahead of Hurricane Irma.
- The dollar fell in response to natural disasters and the threat of North Korea.
- Cryptocurrencies dropped on news of China shutting down exchanges.
- Kroger shares dropped 7.5% after reporting a decrease in Q2 profits.
You’ve Been Hacked
(-13.66%), a consumer credit reporting agency, disclosed that hackers had accessed the **personal information of 143 million American**s…that’s about 45% of the country’s population. We’re talking names, birth dates, home addresses, social security numbers, and driver’s licenses.
And it’s serious. Hackers now have the information needed to secure consumer loans under a false identity. A fraud analyst at Gartner warned, “On a scale of 1 to 10 in terms of risk to consumers, this is a 10.”
Sure, Yahoo took the the cake when 1.5 billion accounts were hacked between 2015-2016, but if we’re going by “quality over quantity,” Equifax’s breach is notably worse.
Equifax? No, not your local Dunder Mifflin
Founded in 1899, Equifax is the oldest and one of the largest consumer credit reporting agencies in the U.S. (along with Experian and TransUnion).
Think of these companies as vacuums sucking up everything from your loan history to credit balance and spitting out a number that says whether you have “good” or “bad” credit. Remember that car loan you got rejected for? Should’ve paid those water bills on time.
But because of the data it stores (820 million consumers and 91 million businesses), Equifax wakes up every day with a huge bullseye on its back.
And you better believe there’s more to this story
Even though Equifax didn’t hang a “HACK US” sign on its front door, it might as well have. Criminals twice broke through the defenses of an Equifax website and subsidiary in recent years, and the company repeatedly failed to tighten up the ship.
AND it was discovered that three senior executives (including the CFO) sold $1.8 million worth of shares only days after the hack occurred (and before it was disclosed). We’re not the SEC, but that sounds pretty suspicious.
Either way, good luck figuring out if your data was compromised. If you choose to check on Equifax’s website, you are ineligible to take part in the class-action lawsuit. Yeah…there’s already one of those.
Facebook in China
Facebook hired William Shuai, a former Chinese government official and corporate executive, as its new Senior Manager of Government Relations in China. The appointment will help Facebook make a comeback in a country where it’s been banned since 2009 (so are Google, Twitter, and YouTube).
This hire makes clear that Facebook
(-1.30%) remains aggressive in its pursuit of the Chinese market. Zuckerberg admitted in 2015, “You can’t have a mission of wanting to connect everyone in the world and leave out the biggest country” (1.38 billion people).
Enter William Shuai—one look at his resume and it’s obvious why he was brought in:
- Experience: Shuai managed government relations for LinkedIn’s China operation. Before that, he did the same thing for search giant Baidu.
- Skills: Shuai is an expert at building relationships between corporate leaders and government officials in China.
Impressive, no doubt. But he’ll need to be all that experience and more to get Facebook up and running in China.
Hello Smartphones, My Old Friend
(+0.89%) appears to be honing in on HTC’s smartphone business.
The potential figures still up in the air, along with the deal itself, but this move wouldn’t be too far outside Google’s wheelhouse.
Remember Google’s $12.5 billion purchase of Motorola back in 2012? Spoiler Alert: it failed and was pitched to Lenovo for $2.5 billion only two years later (guess the Razr was never destined for a comeback).
But that didn’t stop Larry Page & Co. from getting back on the wagon and drumming up the Pixel. And guess who manufactured it? Bingo: HTC
The legacy software company has been looking to break into the hardware industry for ages. And with Google Home gaining some momentum, the $470 billion phone market feels like Google’s next logical bet.
Not Your Typical Deal
When it comes to protecting critical IP, companies can get very creative. Exhibit A: pharma giant Allergan
(+2.47%) has **[sold the patent] to its Restasis drug to a Native American tribe in upstate New York.**
Is that…normal? No, but it’s clever. Because the Saint Regis Mohawk Tribe is considered a “sovereign government,” it’s exempt from patent challenges.
With that in mind, Allergan forked over $13.75 million to the tribe initially (and $15 million in annual royalties) in exchange for an exclusive license and extra “security” on the patent.
The tribe will use the cash to supplement revenue from its casino. Pick Red 3…you heard it here first.
If Allergan wins its IP battles against generic drug companies, then expect other pharmaceutical companies to explore similar deals with Native American tribes.
What Else Is Happening…
- What’s the fastest growing soft drink in the UK? Coconut water.
- The FBI is investigating Uber’s use of a software program to interfere with competitors.
- Glencore and Qatar are selling the majority of their combined stake in Russian oil company Rosneft for nearly $9 billion.
- Kraft Heinz
(+0.32%)hired a 29-year-old CFO, along with other changes in the C-suite.
- Friday (September 8th):
- Earnings: Kroger (+/-)
- Economic Calendar: Baker-Hughes Rig Count (+), Consumer Credit (+)
- Earnings: No Events
- Economic Events: No Events
- Earnings: No Events
- Economic Events: Small Business Optimism Index
- Earnings: No Events
- Economic Events: MBA Mortgage Application, PPI, Treasury Budget
- Earnings: Oracle
- Economic Calendar: CPI, Jobless Claims
- Earnings: No Events
- Economic Calendar: Retail Sale, Industrial Production, Business Inventories, Consumer Sentiment, Baker-Hughes Rig Count
From the Crew
Lauren—It’s Not Brew, It’s Me.
When I started at Morning Brew, Austin set my summer expectations as the following: “You’ll learn a ton about everything — and you’ll have to learn it faster than you have before.” He wasn’t kidding. As I start my full-time job at IBM Watson, I’m going to continue building on the grit, adaptability, and excited curiosity I’ve absorbed working here with the Crew… and of some of our #culture.
Alex—All Hands on Deck
A few companies have stepped up to the plate, doing all they can to help those affected by Hurricane Irma. Comcast is offering free Xfinity Wi-Fi to help emergency services stay connected. JetBlue, Delta, American, and United all offered capped flights to help residents evacuate. But most fascinating is Tesla. The electric automaker temporarily unlocked the full battery capacity on Model S and X cars in Florida to extend their range by 30 to 40 miles.
Last week in Pennsylvania, police officers found red balloons tied to sewers before Stephen King’s revamped IT hit theatres. Naturally, it scared the s**t out of people, because the memories of last years creepy clowns are still fresh in the their minds. Moral here is, stop being creepy, folks.
**[Oh, and you’ve got to go see ](https://editorial.rottentomatoes.com/article/it-is-certified-fresh/)_I_**T
Question of the Day
Set A contains all the even numbers between 2 and 50 inclusive. Set B contains all the even numbers between 102 and 150 inclusive. What is the difference between the sum of elements of set B and the sum of the elements of set A? (Give Up?)
Who Am I?
I am a graduate of Columbia and Harvard—You likely know me as a successful football owner—I purchased the team in 1994. (Any Guesses?)
Stat of the Day
7.5 billion minutes—How much time Americans spent watching Netflix on their phones in June. That’s up from 4.2 billion minutes recorded in June 2014.
Huge shoutout to the Brew readers that came out to Thursday’s happy hour conversation around the Future of Media! Massive success and such an inspiring group.
This week’s conversation will be surrounding Entrepreneurship and scaling your startup. Morning Brew’s own Austin Rief and Alex Lieberman will be telling the story of the Brew, while featuring other startup founders as well.