Quartz Daily Brief—EU sanctions, the future of Fannie and Freddie, deal boom, bad apples
Good morning, Quartz readers!
What to watch for today
Twitter tries to prove it has game. After gaining just nine million users in its first post-IPO quarter, Twitter has to assure investors that it can really grow when it reports first quarter earnings today. As ever, investors will also be looking for details about mobile advertising, especially in light of last year’s MoPub acquisition.
Warrants for smartphones. The US Supreme Court will consider whether police officers have a right to search the digital contents of a smartphone without a judicial warrant. At issue is whether smartphones are more like wallets, which can be searched in an arrest, or homes, which require a warrant.
The future of Fannie Mae and Freddie Mac. The US Senate Banking Committee will put final touches on a bipartisan bill to phase out the mortgage lenders in favor of federal insurance, hoping to gather more support.
A bevy of other companies release earnings. It’s a busy day for corporate results. Stocks to watch include eBay, Spirit Airlines, Bristol-Myers Squibb, and America Movil.
While you were sleeping
The European Union revealed its latest Russian sanction targets. The chief of Russia’s General Staff and the head of its military intelligence agency, as well as pro-Russian separatist leaders in Crimea, were named on an EU sanctions list, bringing the total to 48 individuals.
Santander started a buyout offer for its Brazilian unit. The euro zone’s largest bank made a bid to buy up the remaining 25% Santander Brasil it does not own. The Spanish bank makes 40% of its profit from South America.
China’s provinces missed downgraded growth targets. 30 of 31 provinces and municipalities failed to meet growth targets for the year, even after targets were scaled back by the central government. Northeastern province Heilongjiang had the biggest shortfall, recording 4.1% growth against an 8.5% target. China’s expansion in the first quarter was the weakest in six quarters.
Alibaba bought in to Chinese online TV. Both Alibaba and its founder Jack Ma’s Yunfeng Capital agreed to buy a $1.22 billion stake in Youku Tudou, a major online TV portal. The deal will mean Ma controls nearly one-fifth of the company, and is just one of many acquisitions Alibaba has made in the run-up to its US IPO.
Samsung reported a second straight fall in profits. Weakness in flat screens and a maturing smartphone market were blamed for the 3.3% fall in operating profit in the first quarter 2014. The company predicted a strong second quarter, though, as World Cup fans buy new screens and phones for the tournament.
Takeover activity hit $1 trillion. An M&A boom is upon us, as announced takeovers this year reached $1 trillion nearly two months earlier than in 2013—the quickest rate in seven years.
Quartz obsession interlude
Leo Mirani on how and why the internet’s biggest companies are breaking themselves into small pieces. “Last year, Facebook tried—and failed—to get Android users to use Facebook as the primary interface for their phones with the Facebook Home app. Now, instead of going big, Facebook is thinking small. At the end of January, the company released Paper, an app that improves the appearance of your newsfeed. More recently, the company said it will create a separate app for its popular messaging function, which is used by some 200 million people every month. And while not many people use them, Facebook also offers a camera app and a Poke app. The company just bought a company called Moves (paywall), which makes a fitness tracker app.” Read more here.
Matters of debate
Pfizer’s AstraZeneca deal shows what’s wrong with the patent system. Pharma giants spend their time and money fighting over existing patents instead of investing in new research.
There’s a good reason the West isn’t directly sanctioning Putin. His main pressure point isn’t personal wealth, it’s his personal legacy.
Rivaling Silicon Valley is easier said than done. New York’s tech scene has lots of money, but no breakout multi-billion dollar hit.
The job market is killing US mobility. Americans are moving far less than they used to, because new job opportunities don’t make it economically worthwhile.
Money creation should not be left to the government. So-called private money (mostly banks’ debts to their account holders) is a vital part of the economy (paywall).
Surprising discoveries
An architect has standardized the world’s subway maps. He enlarges the city centers on maps, to spread out the mass of lines that can confuse travelers.
Europe banned US apples. Their potential carcinogen risk is too high, the European FSA says.
Single CEOs are better for company growth. Unmarried bosses invest more in research and development and are prepared to make riskier decisions.
The internet is killing American bank branches. They’re closing faster than new ones are opening.
Your smartphone could be giving away your location. Even if you have your location settings set to ”Off.”
Ontario lost 851 million gallons of water last year. That’s 1,300 Olympic-sized swimming pools worth of unaccounted-for H2O.
Even Starbucks can’t afford coffee anymore. The price of Arabica beans is up 90% this year, and Starbucks won’t buy more until the market stabilizes.
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