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Facebook takes legal action against Irish regulator on data transfers

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A visitor enters the Facebook European headquarters in Dublin, Ireland.

Chris Ratcliffe | Bloomberg | Getty Images

LONDON — Facebook on Friday launched legal action against Ireland’s data regulator, in an attempt to halt a preliminary order that could stop the company from transferring user data from the European Union to the U.S.

The social media giant has applied to seek judicial review of the approach used by Ireland’s Data Protection Commission on the grounds it was premature for the IDPC to have reached a preliminary conclusion at this stage. 

“A lack of safe, secure and legal international data transfers would have damaging consequences for the European economy,” a Facebook spokesperson told CNBC via email. “We urge regulators to adopt a pragmatic and proportionate approach until a sustainable long-term solution can be reached.”

The reported IDPC order came just a few months after the European Court of Justice ruled the data transfer standard between the EU and the U.S. doesn’t adequately protect European citizen’s privacy.

The court, the EU’s highest legal authority, restricted how U.S. firms could send European user data to the U.S. after concluding EU citizens had no effective way to challenge American government surveillance.

U.S. agencies such as the NSA can theoretically ask internet companies like Facebook and Google to hand over data on an EU citizen and that EU citizen would be none-the-wiser.

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Reddit group WallStreetBets behind massive GameStop, AMC run-ups goes private, invitation required

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Rafael Henrique | SOPA Images | LightRocket via Getty Images

“Wallstreetbets” Reddit chat room, where retail investors marshal against short sellers, went private on Wednesday evening, limiting access to outsiders.

“You must be invited to visit this community,” the page now states. The forum’s members topped three million as of Wednesday. The community gathered an army of rookie day traders who go after heavily shorted stocks, pushing share prices higher and squeezing out short-selling hedge funds.

GameStop, a popular target in “wallstreetbets,” saw its shares soaring more than 400% this week alone. The brick-and-mortar video game retailer has skyrocketed a whopping 1,700% as retail traders continued to encourage each other to pile on.

AMC Entertainment, another hot topic in the chat room, surged more than 300% Wednesday alone, experiencing its highest volume ever.

A Reddit spokesperson said “wallstreetbets” moderators set the community to private.

“Reddit’s site-wide policies prohibit posting illegal content or soliciting or facilitating illegal transaction,” the spokesperson said. “We will review and cooperate with valid law enforcement investigations or actions as needed.”

Social platform Discord banned the “wallstreetbets” chat room on Wednesday.

“The WallStreetBets server has been on our Trust & Safety team’s radar for some time due to occasional content that violates our Community Guidelines, including hate speech, glorifying violence, and spreading misinformation,” a Discord spokesperson said in a statement.

“Over the past few months, we have issued multiple warnings to the server admin.Today, we decided to remove the server and its owner from Discord for continuing to allow hateful and discriminatory content after repeated warnings,” the spokesperson added.

This is breaking news. Please check back for updates.

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Wall Street Firms Take GameStop Losses, Admit Defeat To Redditors

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Two of the major hedge funds targeted by investors on Reddit pushing up the stock price of GameStop have waved expensive flags of defeat and sold out of their investments, losing millions of dollars.

On Wednesday, the stock price of GameStop (GME), the mall retailer for video games, soared 134%, a staggering increase of 748% in just one week after Reddit investors launched a chaotic short squeeze attack to increase the price and screw over major investors.

Wall Street hedge funds, including Citron Research and Melvin Capital, had shorted the stock, meaning they bet against it and needed it to drop in price in order for their investments to be successful.

The meeting place for the internet investors, popular subreddit r/WallStreetBets (WSB), gained an extra million members in just one day as its GameStop push gained widespread media attention and the memes followed.

Andrew Left of Citron Research, who had called the redditors an “angry mob” last week after they attempted to hack his Twitter account and harassed his family after he said GME will drop to $20, released a video statement Wednesday. He confirmed Citron Research had closed its short position on GME, which basically means that it sold out of its investment, choosing to cut its losses before the price rose any further.

“I cannot answer one more phone call,” Left says in the video. “How are you? Are you OK? Are you in business? What about GameStop? Should I short it here? People I have not spoken to in 20–30 years — this has captured the attention of America.”

“I’m just fine. Citron Capital is just fine,” he says. “Covered the majority of the short in the 90s, at a loss, 100%, I had a small manageable position and I let it go.”

That means Left sold the majority of his investment when the stock was selling in the $90 range. It closed on Wednesday at $330.

Left also says in the video that as a longtime activist investor, he respects WSB and redditors taking on hedge funds, and acknowledges that the market is changing.

“Even though we have been called boomers many times over the past week, we understand the changing dynamics in the market, and with that, we’ll become more judicious when it comes to shorting stocks,” Left says. “It doesn’t mean the industry is dead, it just means you have to be more specific.”

Melvin Capital announced that it had sold out of GME on Wednesday morning. The Melvin Capital news was announced on CNBC by Andrew Ross Sorkin, who said he’d spoken with the manager of the fund, Gabe Plotkin.

“They got out of the stock yesterday afternoon. They have taken a rather huge loss,” said Sorkin, who added that he did not know the total of the loss.

On Monday, Melvin received more than $2 billion in emergency cash to help stabilize the fund and allow it to close the shorted position, the Wall Street Journal reported.

Yet some of the WSB redditors didn’t believe that Melvin had closed its position and encouraged investors to not sell GME.

After the flurry of activity on Wednesday, TD Ameritrade, one of the free brokerage apps commonly used by young investors, briefly restricted trades on some stocks, including GameStop and AMC (another target of the WSB crowd) “in the interest of mitigating risk for our company and clients.” That frustrated many who saw the halt as Wall Street firms stopping investors from making trades that would improve their personal wealth.

Adena Friedman, the CEO of Nasdaq, said her exchange would possibly temporarily halt trading so investors could “recalibrate” if one of the stocks was being targeted online in a similar manner to what’s happened with GameStop.

“If we see a significant rise in the chatter on social media channels,” Friedman told CBNBC, as reported by Mediate, “we also match that up against unusual trading activity, [and] potentially halt that stock to allow ourselves to investigate the situation, to be able to engage with the company, and to give investors a chance to recalibrate their positions.”

Sen. Elizabeth Warren, who has long fought to hold Wall Street accountable, called out the big financial players for freaking out when everyday investors used the same techniques against hedge funds that the firms used to build their own wealth.

“For years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino, while everyone else pays the price,” she said.


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Apple is one of our biggest competitors

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Facebook CEO Mark Zuckerberg used the opening remarks of the company’s fourth quarter earnings call to blast Apple over its upcoming privacy changes, and to say Facebook increasingly sees Apple as one of its biggest competitors.

Apple is gearing up for a software change that will more prominently ask iPhone and iPad users if they want to share their information for ad-tracking purposes. The online advertising industry expects to be hit as some percentage of users choose not to share that information.

Facebook, which derives nearly all its revenue from online advertising, has been outspoken about the changes, running newspaper ads, publishing a website and running a blog post outlining its arguments opposing Apple over the change it claims “threatens the personalized ads that millions of small businesses rely on to find and reach customers.” 

Zuckerberg, in his comments, suggested Apple uses its position to help its own services, particularly its iMessage service, which competes with Facebook’s Messenger and WhatsApp services.

“iMessage is a key linchpin of their ecosystem,” he said. “It comes pre-installed on every iPhone and they preference it with private APIs and permissions, which is why iMessage is the most used messaging service in the U.S.”

He said Apple’s business is now depending more and more on gaining share in apps and services.

“Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own,” he said. “This impacts the growth of millions of businesses around the world, including with the upcoming iOS 14 changes.”

Zuckerberg also reiterated Facebook’s argument that Apple’s privacy changes will make it harder for small businesses ability to reach their customers with targeted ads.

“Apple may say they’re doing this to help people but the moves clearly track their competitor interests,” he said. “We and others are going to be up against this for the foreseeable future.”

Nominations are open for the 2021 CNBC Disruptor 50, a list of private start-ups using breakthrough technology to become the next generation of great public companies. Submit by Friday, Feb. 12, at 3 pm EST.


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