An Amazon fulfillment center in Frankenthal, Germany.
Thorsten Wagner | Bloomberg | Getty Images
Amazon is joining forces with a U.S. government watchdog group to conduct counterfeit inspections, the company announced Tuesday, in its latest effort to address a problem that’s plagued the e-commerce platform for years.
The company will work with the National Intellectual Property Rights Coordination Center, a task force that’s overseen by U.S. Immigration and Customs Enforcement, to “analyze data and conduct targeted inspections aimed at preventing counterfeit products from entering the U.S. supply chain,” Amazon said. Any evidence collected from their inspections will be used to expand ongoing investigations and go after bad actors.
The initiative, referred to as “Operation Fulfilled Action,” is led by Amazon’s Counterfeit Crimes Unit. The team was launched earlier this year and is made up of former federal prosecutors, investigators and data analysts who mine the site for information and work with federal prosecutors.
Amazon’s marketplace, launched in 2000, now accounts for more than half the company’s overall sales. While it’s been a key driver of Amazon’s overall business, it has also faced a number of issues related to counterfeits, as well as unsafe and expired goods. Knockoff goods have been especially harmful for Amazon’s relationships with some brands, such as Nike and Birkenstock, who quit Amazon following a surge in counterfeits.
The company has ramped up its efforts to stamp out counterfeits on the platform. It has pursued counterfeiters in court, rolled out various programs to seek and detect sales of counterfeit goods and continues to block millions of suspected bad actor accounts and listings.
Digital bank N26 is thinking of acquiring a competitor
The logo of German online bank N26 displayed on a smartphone.
Thomas Trutschel | Photothek via Getty Images
LONDON — German online bank N26 is considering making an acquisition for the first time, after raising heaps of cash and trimming its losses despite the coronavirus pandemic.
The $3.5 billion financial technology firm said net losses at its core European business came in at 110 million euros ($133 million) in 2020, down from 165 million euros the previous year.
N26 didn’t disclose a revenue figure for last year, but said gross revenues doubled to nearly 100 million euros in 2019, from 43.6 million euros a year earlier. Its losses also more than doubled that year, though, from 73.2 million euros in 2018.
Founded in 2013 by longtime friends Maximilian Tayenthal and Valentin Stalf, N26 has attracted 7 million users globally and is one of many app-based challenger banks that gained popularity in recent years. Its rivals include Revolut in Europe and Chime in the U.S.
The firm has raised a total of $800 million to date, from investors including Chinese tech giant Tencent and billionaires Peter Thiel and Li Ka-shing. It has also started looking at deploying its war chest of funds to buy a fintech competitor.
“We have started to look — and we are still looking — opportunistically at some interesting targets,” Tayenthal, N26’s co-CEO, told CNBC in an interview. The company has historically relied on organic growth, he added.
“It could be players that are strong in certain areas; think about trading, think about KYC (know your customer). There could be other fintechs; challenger players in our space that have a good customer base.”
Tayenthal said there were no “super concrete” plans currently in place, but that it’s held discussions and is “looking at a good number of players.”
“I’ve had conversations and we still continue to look at interesting opportunities,” he said.
In the summer of 2020, N26 grappled with discontent from its own workers. Disgruntled staff formed their own works councils — worker organization bodies within a company — to address concerns with management.
So-called neobanks have come under pressure to not only clean up their work culture but also switch their focus toward making money. Experts in the fintech industry have warned the space could see some consolidation as some players stumble amid the Covid-19 crisis.
A big driver of N26’s revenues has been its premium subscription-based accounts, for which it charges between 4.90 euros to 16.90 euros for a range of additional features.
But Tayenthal said the big focus for 2021 will be a “marketplace” model, where it includes products it can’t offer itself — such as trading and credit — while taking fees from third-party providers in the N26 app.
“In 2020, we actually brought down the burn significantly,” Tayenthal said. “It is true that, at one point in time, while we are still investing into growth, expansion and building up the team, we also want to get more in the direction of profitability.”
The N26 co-founder said his company plans to hire an additional 200 employees this year. It currently employs 1,500 staff globally. The firm is also planning to expand into Brazil, having recently obtained a banking license in the country.
“The environment in Brazil is actually very favorable,” Tayenthal said. “Everyone has a bank account in the markets we’re in already; in Brazil, this is obviously not true.”
Just under a third of adults in Brazil don’t have access to a bank account, according to the World Bank. But the market has seen increased digital banking adoption over the past few years. Nubank, a well-funded neobank based in Brazil, has a total of 25 million users across Latin America.
N26 recently hired a new chief financial officer, Jan Kempe to replace Tayenthal, who was himself elevated through the ranks to a newly created co-CEO role. Kempe is a former Zalando executive who led the German e-commerce firm’s 2014 initial public offering.
The move fueled speculation that N26 may soon go public. But Tayenthal said the firm has no immediate plans, despite strong recent debuts from the likes of U.S. consumer finance start-up Affirm and digital insurer Lemonade.
Best quarter in the history of the smartphone
Apple reported blowout earnings on Wednesday. Even during a global pandemic, every single product line was up, leading to the company’s first quarter with over $100 billion in sales.
But Apple is still best known for the iPhone, which accounted for nearly 59% of the company’s revenue during the holiday quarter. The iPhone is booming, too: Sales were up 17% year-over-year to a whopping $65.6 billion in a single quarter. That’s a big improvement from last year’s holiday quarter, when sales were up only 7.6% from the year ago.
Apple doesn’t provide unit sales for its products anymore, but according to an estimate from research firm IDC, Apple shipped 90.1 million phones during the quarter. That’s the largest number in any single quarter since IDC started tracking smartphones, analyst Francisco Jeronimo said.
Apple’s dominant quarter is adding fuel to the so-called “super cycle” investor thesis, where must-have updates combine with the natural customer upgrade cycle to drive a spike in sales growth. Analysts saw this year’s iPhone 12 models as a good candidate for a super-cycle because they sported a new design and added 5G, which enables the devices to connect to faster wireless networks.
In a note on Wednesday, Wedbush analyst Dan Ives predicted that the current cycle “should eclipse the previous iPhone record set in FY15, an achievement for the ages in our opinion.”
Apple CEO Tim Cook also said in an interview with CNBC that the company’s iPhone results could have been better if not for store closures caused by the ongoing pandemic.
“Taking the stores out of the equation, particularly for iPhones and wearables, there’s a drag on sales,” Cook told CNBC’s Josh Lipton.
In a conference call with analysts, Cook said that the new iPhones were not only getting current iPhone users to open up their wallets and upgrade, but also convincing people who had previously used competitor phones to get their first iPhone.
“Looking at the iPhone 12 family, we saw both switchers and upgraders increase on a year over year basis. And in fact, we saw the largest number of upgraders, that we’ve ever seen in a quarter,” Cook said.
5G remains a potential tailwind for iPhone sales through the rest of the year, Apple signaled on Wednesday. Cook said that while 5G in China was well established, leading to strong iPhone sales, 5G cellular networks in other regions aren’t as built-out yet, especially in Europe.
“I think most of that growth is probably in front of us there as well,” Cook said.
Elon Musk explains how self-driving robotaxis justify Tesla valuation
Elon Musk, founder of SpaceX and chief executive officer of Tesla Inc., arrives at the Axel Springer Award ceremony in Berlin, Germany, on Tuesday, Dec. 1, 2020.
Johannessen-Koppitz | Bloomberg | Getty Images
Don’t count Elon Musk among the investors who think Tesla is overvalued, even with the stock up almost 700% in the past year and the company valued at 213 times projected 2021 earnings, according to FactSet.
In the car maker’s fourth-quarter earnings call on Wednesday, Tesla’s CEO said there is a “roadmap to potentially justify” its market cap, which has topped $800 billion, making it the fifth-most valuable U.S. company. Musk is now the world’s wealthiest person, with a net worth over $200 billion.
Musk’s valuation math goes like this: Assume the company soon reaches $50 billion to $60 billion in annual car sales (the company generated $9.31 billion in automotive revenue in Q4 and said that vehicle deliveries would increase an average of 50% a year going forward). As Tesla’s self-driving technology continues to improve, those vehicles will become self-driving robotaxis, allowing usage to go from 12 hours a week to 60 hours a week. Tesla could charge additional fees for those robotaxis, allowing the company to generate much more revenue per car. Basically, it would be like bringing software economics to the manufacturing-intensive car business.
Musk also announced that Tesla’s Full Self Driving package will be available on a subscription basis starting in Q1, rather than as a one-time $10,000 add-on, which will allow Tesla to begin adding recurring revenue as it works on improving its self-driving technology.
Even if usage only doubles, a $1 trillion valuation can make sense, according to Musk.
“If you made $50 billion worth of cars, it would be like having $50 billion of incremental profit, basically because it’s just software,” Musk said in the introductory part of the call. Based on that formula, Musk says a multiple of 20 times earnings would lead to $1 trillion in market cap — “and the company’s still in high-growth mode.”
Less than nine months ago, Musk had a very different perspective on the company’s valuation. In a tweet on May 1, he said “Tesla stock price is too high,” a comment that sent the shares down 10%. Since then, the company’s market cap has jumped by more than 450%.
It’s possible that investors are already presuming Tesla’s cars will eventually turn into revenue-generating robotaxis. But the company isn’t close to having those capabilities yet, and Musk has a history of over-promising when it comes to technological innovation.
For instance, when Tesla began to discuss self-driving technology in 2016, Musk said the company would complete a hands-free trip across the U.S. by late 2017. The company has yet to complete that mission.
Currently, Tesla’s Full Self Driving features include Smart Summon, which lets a driver call their Tesla to roll out from a parking spot to where they are standing, and Navigate on Autopilot, which can pilot the car from a highway on-ramp to an off-ramp, making necessary lane changes along the way.
But despite its name, the Full Self Driving package still requires drivers to keep their hands on the steering wheel and remain attentive at all times. A Munich court ruled last year that Tesla misled consumers on the abilities of its automated driving systems, and banned the company from including “full potential for autonomous driving” and “Autopilot inclusive” in its advertising materials.
While Tesla has missed many of its own projections for self-driving technology, Musk continues to insist that it’s coming. “I really do not see any obstacles here,” he told an analyst on the call who asked about the company’s progress.
Tesla shares fell 5.5% in extended trading on Wednesday after the company reported earnings that missed analysts’ estimates, even as revenue was better than expected.
WATCH: Tesla misses on earnings
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