Connect with us

AMERICA

Meta and Google poised to benefit most from a potential TikTok ban in the US

Published

on

Meta and Google are expected to be the biggest financial beneficiaries of a potential TikTok ban in the US, according to a new analysis by eMarketer. The rise of TikTok and retail giant Amazon has placed significant competitive pressure on Google and Meta, which have dominated more than half of the US advertising market for years.

eMarketer estimates that if TikTok is banned, more than half of the advertising dollars currently spent on the platform in the US will shift to assets owned by Meta and Google. Specifically, Instagram and Facebook are projected to receive 22.1% and 17.1% of TikTok’s reallocated ad spend, respectively, while Google’s YouTube will capture approximately 10.7%.

Other social media platforms are also expected to benefit from the ban. Snapchat, LinkedIn, Pinterest, Reddit, and X (formerly Twitter) are likely to collectively receive around 18.3% of the reallocated TikTok ad spend. Notably, some of these platforms have already begun restructuring their apps to incorporate TikTok-like short video features.

Additionally, affiliated TV companies, publishers, and other digital media companies operating in social, search, and retail advertising spaces are anticipated to capture about 30% of the reallocated ad dollars.

Both Meta and Google appear well-positioned to capitalize on a potential TikTok ban by heavily investing in their own short video products, such as Reels and Shorts. Meta CEO Mark Zuckerberg revealed last year that Reels alone accounts for over 50% of user time spent on Instagram. Similarly, Google reported that YouTube Shorts attracts more than 2 billion monthly logged-in users.

The likelihood of a TikTok ban has increased following recent Supreme Court arguments, with court observers predicting that the justices will approve the bipartisan legislation. If passed, the ban could take effect as early as January 19.

Meanwhile, a Bloomberg report published on Monday suggested that Chinese authorities are exploring a potential deal to sell TikTok to Elon Musk. However, TikTok has denied these claims.

The future of TikTok’s accessibility in the US now rests with the Supreme Court, which could issue a decision at any time.

AMERICA

Republicans propose ‘Make Greenland Great Again Act’ in Congress

Published

on

After former US President Donald Trump announced his interest in acquiring the autonomous Danish island of Greenland, Republican members of Congress submitted a bill to the House of Representatives titled the Make Greenland Great Again Act.

The bill, which opened for signature on Monday, would authorize Trump to initiate negotiations with Denmark to purchase the territory starting at 12:01 a.m. on January 20.

While Democratic leaders in Congress have mocked Trump’s expansionist ambitions, some moderate Democratic members have signaled openness to the idea, according to Axios.

Trump first floated the idea of buying Greenland during his first term in 2019. Recently, he reiterated his desire to acquire the region, which is part of Denmark—a member of the EU and NATO—and did not rule out using military or economic force to achieve this goal. These statements have sparked reactions across Europe.

Adding to the speculation, Trump’s son, Donald Trump Jr., made a surprise visit to Greenland’s capital, Nuuk.

However, Danish and Greenlandic officials have consistently stated that the autonomous region is not for sale.

“We don’t want to be Danes, we don’t want to be Americans; of course, we want to be Greenlanders,” Greenland’s Prime Minister Múte B. Egede said at a press conference in Copenhagen on Friday.

Speaking to local and international media in Nuuk on Monday, Egede expressed his desire for closer ties with the United States.

According to Axios, Danish officials have contacted Trump’s team and emphasized their openness to expanding the US military presence in Greenland.

Greenlandic media outlet KNR also reported that the prime minister is open to cooperation with the United States on mining and trade issues and is willing to explore opportunities for collaboration with Trump.

Greenland has retained the right to declare independence from Denmark since 2009. The island, home to 56,000 inhabitants and reliant on substantial annual budget transfers from Copenhagen, has so far chosen not to pursue independence.

Greenland is expected to hold parliamentary elections before April 6.

Continue Reading

AMERICA

California wildfires destroy area the size of San Francisco

Published

on

Fires in Southern California have burned 45 square miles (about 11 kilometrekare), equivalent to the size of San Francisco.

Firefighters face numerous challenges, including water shortages. The damage caused by the wildfires has been described as “unimaginable,” according to officials.

The Los Angeles County Coroner’s Department reported at least 10 fire-related deaths in the city. Thousands of homes were destroyed, including at least five churches, a synagogue, seven schools, and two libraries. Bars, restaurants, banks, and grocery stores were also reduced to rubble.

One resident told Eyewitness News, “Pacific Palisades [a neighbourhood in Los Angeles] could be wiped off the map right now. There is no Pacific Palisades,” she stated.

As of Thursday night, the Palisades Fire was only 6 per cent contained. This fire grew rapidly, destroying more than 5000 homes and other buildings. Meanwhile, the Eaton Fire in Altadena and Pasadena damaged or destroyed another 4000-5000 homes and buildings.

Insurance companies refused to renew millions of policies from 2020 to 2022

Preliminary estimates indicate losses amounting to $57 billion, potentially exacerbating the state’s insurance crisis. Between 2020 and 2022, insurance companies refused to renew 2.8 million homeowners’ policies in California, including 531,000 in Los Angeles alone.

Looting has also emerged as a significant issue in the aftermath of the fires. There have been calls for the National Guard to protect property. Many families no longer recognize their neighbourhoods. One woman, speaking to ABC News, shared her experience, saying, “The only thing I could find was a tile with turtles on it from my bathroom. I took it to frame as a memento.”

She added that five of her friends had lost their homes in the Palisades Fire.

Firefighting hindered by fragile water infrastructure

The disaster has also exposed vulnerabilities in Los Angeles’ water system. Fire crews faced low water pressure and dry hydrants while combating the flames. Officials cited “tremendous demand” as a contributing factor.

Mark Pestrella, director of L.A. County Public Works, stated, “The municipal water systems that serve our homes and businesses operate effectively but were not designed to fight wildfires.”

In Pacific Palisades, three large water tanks, each holding one million gallons (3.8 milyon litre), were emptied. Janisse Quiñones, CEO of the Los Angeles Department of Water and Power (DWP), explained, “There was tremendous demand on our system in the Palisades.”

Despite the efforts of the DWP, which deployed 19 tanker trucks carrying between 7600 and 15,000 litres (2000 to 4000 US gallons) of water, the scale of the fires posed overwhelming challenges.

California’s water problems and private control

California’s water crisis is not limited to wildfire response. In 2022, during an unprecedented drought, urban water systems received just 5 per cent of their requested allocation, while agricultural tycoons like Lynda and Stewart Resnick used 150 billion gallons annually.

The Resnicks, owners of The Wonderful Company, control vast farmlands spanning an area four times the size of San Francisco. Their crops, such as pistachios, pomegranates, and almonds, are consumed by millions of Americans. Their company is valued at $5 billion, with the couple’s personal wealth exceeding $8 billion.

Secret 1994 meeting and the Kern Water Bank transfer

In 1994, state water officials, private companies, and agricultural landowners held a secret meeting in Monterey Bay to rewrite California’s water laws. These changes, known as the Monterey Amendments, abolished the “urban preference” rule, which prioritized urban areas during droughts.

The amendments also transferred ownership of the Kern Water Bank, a major state-built water storage facility, to private entities, including the Resnicks’ Westside Mutual. This facility, constructed with taxpayer money, is now 60 per cent owned by the Resnicks.

Continue Reading

AMERICA

Pentagon blacklisting of CATL creates challenges for U.S. banks

Published

on

For Wall Street banks hoping to play a role in one of Hong Kong’s biggest IPOs in years, the U.S. Department of Defense’s decision this week to add CATL to a list of companies thought to have links to the Chinese military could not have come at a worse time.

The company, the world’s largest maker of electric vehicle batteries and a supplier to Tesla, has been in talks with banks in recent weeks as it prepares plans for a secondary public offering in Hong Kong. The initial public offering will give the company, which aims to expand overseas, access to offshore funds, and Morgan Stanley estimates it could raise up to $7.7 billion.

Goldman Sachs, Bank of America, JPMorgan, and Morgan Stanley have expressed interest in working on the listing, two people familiar with the process told the Financial Times. The Shenzhen-listed company is expected to select underwriters ahead of a shareholder meeting on January 17, when the date and size of the offering will be discussed, one of the people said.

But the Pentagon’s move, which also added tech giant Tencent and Cosco, one of China’s largest shipping companies, to the list, threatens to change banks’ risk-reward calculations.

Although it does not directly impose legal restrictions on banks working with companies on the list, it will force banks to face a difficult reputational question: Can a bank finance shares in a company that the U.S. says has links to the Chinese military?

“Unfortunately, random blacklisting of customer names is becoming a more common feature of banking these days, which creates risk,” said Han Shen Lin, China country director at U.S. consultancy The Asia Group. “The most banks can do is to reposition their business and customer mix accordingly,” he added.

Speaking to the Financial Times, Lin said inclusion on the list “doesn’t carry the same weight as a sanction, but it’s close enough that banks can preemptively reduce exposure to these names just to avoid negative headlines.”

It is unclear whether U.S. banks will continue their participation following the Pentagon’s move. Goldman Sachs, Bank of America, and JPMorgan declined to comment, and Morgan Stanley did not respond to a request for comment.

Tensions lead to uncertainty in trade agreements

This action is the latest sign that U.S.-China tensions are dragging deals into more and more uncertainty. Any move to sever ties with companies on the list could be costly for banks. Tencent, in particular, is among the most important Chinese customers of U.S. institutions.

The tech giant’s parent company paid $524 million in investment banking fees between 2004, the year of its initial public offering, and 2023, according to figures from the London Stock Exchange Group. Morgan Stanley, Bank of America, Goldman Sachs, and Citigroup were the biggest beneficiaries of these payments.

Although Goldman Sachs was the third-largest recipient of fees from investment banking activities, CATL benefited less from foreign banks, with the lion’s share of its fees going to China Securities and CICC, according to LSEG data.

CATL and Tencent said they are planning legal action to challenge the Pentagon listing if talks with the U.S. Department of Defense fail.

Pony Ma, founder and chairman of Tencent, said the company was “neither a Chinese military company nor a military-civilian fusion company contributing to the Chinese defense industrial base.”

CATL said it had “never engaged in any military-related business or activity,” while Cosco said none of the companies on the list were “Chinese military companies” and that it would contact U.S. authorities “to clarify this matter.”

The move echoes the dilemma faced by banks in 2023 when Swiss agrochemical company Syngenta wanted to hire banks for its $9 billion initial public offering on the Shanghai Stock Exchange.

Banks were hesitant about whether they could work on the deal because the U.S. Department of Defense had placed Syngenta’s owner, state-owned ChemChina, on its list of “Chinese military companies.”

Bankers at Goldman Sachs, JPMorgan, Morgan Stanley, UBS, and HSBC lobbied for a role on the list, although Syngenta eventually canceled the plan.

CATL told investors that access to dollars was a key part of the rationale for the listing. The company had RMB 289 billion ($40 billion) in cash as of March 31, but China’s strict capital controls system means government approval is required for overseas direct investments above a certain threshold.

Continue Reading

MOST READ

Turkey