Bloomberg

(Bloomberg) — Cyber attacks that knock the websites of election offices and campaigns temporarily offline are expected to continue as votes roll in, but none of the efforts have threatened the integrity of the vote, a senior official at the US government’s Cybersecurity and Infrastructure Security Agency said Tuesday.

A handful of offices, including the Mississippi Secretary of State’s website, were targeted with Distributed Denial of Service, or DDoS attacks, on election day. There was no evidence of a coordinated campaign nor a specific threat to core voting systems, said the official, who asked not to be identified.

The activity seen so far shouldn’t cause anyone to question the integrity of the election, the official said. Even successful denial of service attacks don’t affect the ability to cast a ballot or have it counted.

The agency’s major concern continued to be disinformation and misinformation surrounding technical glitches and the fact that some results may take days to be certified.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — SoftBank Group Corp. has accelerated the pace of its share buybacks, reigniting speculation that founder Masayoshi Son is laying the groundwork to take the company private.

The Japanese tech investor bought 197.6 billion yen ($1.4 billion) of its shares in ten days in late October — almost half of the amount allotted in a buyback scheme planned for a full year. It bought another 132.3 billion yen of shares from Oct. 3 to 17 under an earlier program, pushing its monthly total to more than $2 billion.

The first round of purchases is more than three times the pace of repurchases over the prior three months, making it SoftBank’s most aggressive push since 2020, when the company was implementing a 2.5 trillion yen buyback program.

SoftBank is using the cash proceeds from recent sales of assets, including shares of Alibaba Group Holding Ltd. and T-Mobile US Inc., to accelerate buybacks, while curbing its investments, SMBC Nikko analyst Satoru Kikuchi said in a research note. 

“We have already argued that changes in company structure, for example an MBO, could be coming in the not-too-distant future,” he said, referring to a management buyout.  

Son has repeatedly talked internally about taking SoftBank private, Bloomberg News has reported. When asked about the option in the past, he has declined to comment publicly.

“It is important to always consider both options strategically,” SoftBank Chief Financial Officer Yoshimitsu Goto said last year, regarding the choice of staying public and an MBO to take the company private. “The main objective of any MBO should be what is good for investors.”

SoftBank’s buybacks helped the company’s stock price rally 31% in October in its best monthly performance since November, making it one of the top performers so far in Japan’s Nikkei 225 Stock Average this quarter.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Some users who opted not to see Twitter Inc. owner Elon Musk’s tweets are saying the blocks they placed on his account have spontaneously lifted.

Users like Steve Bowler and shan horan tweeted this week alleging that Musk had been unblocked. Meanwhile, Nazih Fares said the new Twitter owner was also no longer muted — a less severe constraint where a user can opt not to see tweets from the muted account. That would mean the digital barriers that users chose to put between themselves and Musk’s content are being stripped away on the app without their consent.

An account can use the block function to restrict another from seeing their tweets, following or contacting the user. Muting someone like Musk means their posts won’t show up in your feed. Both are important tools for users to tamp down on harassment from people or bots on the platform. They empower users with more control over the sort of content they see when they open up Twitter.

The company didn’t immediately respond to a request for comment.

Blocked or muted accounts are likely to receive less engagement as other users opt out of seeing their content — whereas Musk is keen to promote more engagement and interaction at a time when advertisers are dubious about having their brands associated with his platform.

Unlike most chief executive officers of large tech companies, Musk frequently takes to the app to share details about the business, poll users about features and goof around with memes and jokes at the expense of anyone critical of his management.

Musk, who has said he doesn’t believe in permanently banning accounts, also moved earlier this week to suspend users who had impersonated his Twitter handle, including comedian Kathy Griffin and former NFL player Chris Kluwe.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Crypto exchange Coinbase Global Inc. said it’s seeing increased activity on its trading platform following the drama over the potential acquisition of FTX by Binance.

The liquidity crunch that prompted Binance’s tentative agreement with FTX wouldn’t happen at Coinbase because the company doesn’t engage in “risky behaviors,” Chief Executive Officer Brian Armstrong said in a Bloomberg Television interview. 

“We’re not investing customer funds,” he said. “We’re not doing market making or engaged in any kind of complex arrangement with other parties that we own.”

The potential deal between Binance and FTX came about after Binance Chief Executive Officer Changpeng “CZ” Zhao said the company was selling all of its holdings of FTT, FTX’s native token, which totaled $529 million. 

The tweet followed a report stating that Alameda Research, the trading firm co-founded and owned by Sam Bankman-Fried, held a large amount of its assets in FTT. 

If the deal with Binance were to fall through, it would likely mean that FTX customers would take losses, according to Armstrong. 

“That’s a not a good thing for anybody,” he said. He noted that customers are at risk when they go to less regulated, offshore exchanges that don’t have to provide clear financial statements.

Coinbase doesn’t have a plan to try and buy FTX US, the American affiliate of FTX, which is not a part of the Binance deal, according to Armstrong. He said there are reasons why that acquisition wouldn’t make sense for his company, but would not provide details.  

Armstrong said that he hoped the financial troubles faced by FTX won’t “taint” regulators’ view of the crypto industry, but noted that their perception of FTX Chief Executive Officer Bankman-Fried will likely change. The 30-year-old has been an active presence in Washington in terms of lobbying for industry regulation.

“There’s probably a lot of people in DC right now kind of scratching their head,” Armstrong said. 

–With assistance from Emily Chang.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Problems with voting machines and systems were sporadic as millions of Americans went to the polls, although glitches in some places, including Arizona’s largest county, produced unsubstantiated claims of fraud from some Republicans.

By 7 p.m. eastern time, polls had closed in states including Georgia, Virginia, Kentucky, South Carolina, Indiana and Vermont, as voters cast ballots to determine control of the House and Senate — and the fate of President Joe Biden’s agenda. Officials were on the lookout for disruptions and violence in the first big election since the Jan. 6, 2021, attack on the US Capitol. Candidates who deny the validity of the 2020 election are on the ballot across the country, many for roles that will oversee future elections. 

Key stories and developments:

• Election Deniers Air Baseless Fraud Claims Over Arizona Glitch
• Americans on Election Day Set to Deliver Early Verdict on Biden
• US Economy on Election Day: Where It Stands and What It Means
• Here Are the Most Consequential State and Local Ballot Measures

(All times are US Eastern Standard)

Houston Polling Places Ordered to Stay Open Late (7:21 p.m.)

Polling places in Texas’s largest county have been ordered to stay open until 9 p.m. eastern time, an hour later than usual, after technical malfunctions delayed voting.

The Harris County Democratic and Republican parties tweeted the decision after a late-afternoon court hearing.

Houston Polling Stations Are Running Out of Paper (5:55 p.m.)

Some polling places in the Houston metro area are running out of paper, forcing officials to halt voting until replenishments arrive.

It was unclear how many polling stations were affected across Harris County, Texas, elections spokeswoman Jill Shah said in an interview.

Harris County’s system requires individuals to cast their votes on a computer that prints out the results and then are fed into another machine for storage. After the polls close, the computer drives will be transported to a central counting facility for tabulation.

Georgia Poll Workers Fired Over Social Media Posts (4:57 p.m.)

Two Fulton County poll workers in Johns Creek, Georgia, outside of Atlanta, were fired after concerns were raised about questionable social media posts, the county said Tuesday.

The county’s elections office shared the concerns with the Georgia Secretary of State’s office, which oversees elections statewide, and the decision was made to terminate the workers, Fulton County said in a statement. “This decision is in alignment with our commitment to elections integrity,” the statement said. Jessica Corbitt-Dominguez, spokeswoman for the county, declined to comment further.

A spokesman for the Secretary of State’s office said the decision was made by the county.

Paper Shortage Spurs Extended Voting in Pennsylvania County (4:42 p.m.) 

Voting stations will be open until 10 p.m. Tuesday in Pennsylvania’s Luzerne County in the northeastern portion of the commonwealth, which includes Wilkes-Barre. The extension doesn’t include mail-in ballots or drop-box locations, according to a statement on the county’s website.

The extension was sought by party leaders and approved by a judge due to a shortage of paper ballots that kept voters from voting earlier in the day, according to WNEP TV.

Time Change Glitch Delays Vote in Suburban Houston (4 p.m.)

Voting was delayed at about a dozen polling stations in Houston’s largest suburban county when some laptops used to verify voters failed because of the last weekend’s switch back to Standard Time. 

The computers used by Fort Bend County, Texas, officials didn’t operate properly because of a synchronization error related to the time change, John Oldham, the county’s elections administrator, said in an interview.

Despite the snags, as of early afternoon, voter turnout already was almost 20% ahead of the 2020 presidential election, he said. 

North Carolina Extends Voting in Three Locations (3:30 p.m.)

North Carolina’s State Board of Elections extended voting for one hour in three polling stations that experienced technical difficulties earlier in the day, which prevented a few dozen voters from casting ballots. 

As a result, those counties won’t be able to report election results — including those from early voting — until 8:30 PM this evening. So far, there are no reports of voter harassment or intimidation, according to state board of elections spokesperson Patrick Gannon.

More than 2.1 million North Carolina voters participated in early voting, an increase of 13% from the last midterm election in 2018.  

Election officials in North Carolina can begin counting early ballots on Tuesday afternoon, so the first results reported after polls close this evening will be from that batch. Those votes are more likely to be for Democrats than Republicans, making early results unclear. 

Two Georgia Precincts to Remain Open Late (2:33 p.m.)

Two Cobb County, Georgia, precincts north of Atlanta are being kept open beyond 7 p.m. ET Tuesday because of delays in opening for voters earlier in the day.

The delays prompted requests to a Superior Court judge, who agreed to sign orders extending the hour of voting at a Kennesaw precinct to 7:45 p.m. and a precinct in the Oregon neighborhood to 7:06 p.m.

On Monday, in the same county, another Superior Court judge ordered as many as 1,000 absentee ballots that had been requested — but never sent out — to be sent by overnight mail. Any eligible voter who hadn’t received an absentee ballot and hadn’t yet voted may still do so Tuesday.

Biden Calls Some Democratic Allies on Election Day (2:25 p.m.)

President Biden had no public events planned on election day and was expected to watch the results come in with advisers.

But the president did work the phones, calling Democratic allies including House Speaker Nancy Pelosi, Democratic Governors Association Chair Roy Cooper, Democratic Congressional Campaign Committee Chair Sean Patrick Maloney and Democratic National Committee Chair Jaime Harrison, according to the White House. 

Illinois County Sees an Ongoing Cyber Attack (2:00 p.m.)

An Illinois county clerk describes a cyberattack against its computer systems as a “strategic and coordinated effort” to undermine the democratic process.

The Champaign County Clerk’s Office said Tuesday it’s aware of unspecified “connectivity issues,” adding that for the past month its website has been the target of repeated distributed denial-of-service attacks. Those are when malicious actors try to bombard a site to bring it down.

The county said in a Facebook post that no data or information has been compromised and said the election was secure. The clerk’s website appeared online early Tuesday afternoon.

Houston Plagued by Voting-Machine Outages (2:05 p.m.)

Voting-machine outages across Harris County, Texas, caused long lines and delays in the country’s third-largest county.

The county’s top election official, Clifford Tatum, didn’t disclose how widespread the outages were or how many had been rectified. He noted that Harris County — home to Houston — has the longest ballot in the nation, with as many as 103 races in some precincts.

Community activist Tamaro Bell confronted Tatum after he toured one of the county’s biggest polling stations, saying some frustrated people had to leave without casting votes because of the outages. In response, Tatum said anyone who is in line when polls close at 7 p.m. local time will still be allowed to vote.

Tatum took over as elections administrator after the March primary debacle in which it took 30 hours to count the votes, prompting his predecessor to resign.

Michigan Governor Lauds Turnout Driven by Abortion Measure (1:50 p.m.)

Michigan Governor Gretchen Whitmer, the Democratic incumbent running against Trump-endorsed challenger Tudor Dixon, said she was buoyed by strong turnout that she said was spurred by a referendum that would codify legal abortion in the state’s constitution.

At a rally, Whitmer said if the abortion proposal passes, the governor and state legislature can have a role in regulating it but that the state constitution would be the final say.

“I do think that’s the best way to codify these rights that we’ve had for 49 years,” Whitmer said. “There’s a lot of misinformation out there trying to scare people that it goes beyond that. It doesn’t. The same restrictions about parental consent will be in effect, but we have to enshrine this into the constitution.”

Georgia Voting Is Nearing Records (1:40 p.m.)

Georgians are heading toward setting record state voting totals for a midterm, non-presidential year election, with contests for governor and a US Senate seat pivotal for party control of that chamber on the line.

About 2 million voters are expected to cast their ballots on Tuesday. That’s in addition to more than 2.28 million voters who’ve already voted across the state — a new high for early voting in mid-term elections, according to the Georgia Secretary of State’s office.

In the previous midterm election, in 2018, 1.8 million Georgians cast early ballots, with a total 3.9 eventually voting. In 2020, the most recent presidential election year, about 4.9 million Georgia voted, with 2.6 million of them being early voters.

Bomb Threat Closes a Louisiana Polling Place (1:25 p.m.)

A school that was being used as a polling location received a bomb threat in Kenner, Louisiana, according to the Kenner Police Department, forcing voters to move to a new location. 

According to local news reports, the building was evacuated and voting was set up in a nearby elementary school. 

Police are investigating and trying to determine whether Tuesday’s threat was directed at voting or if it is related to another threat made at the school last week.

House Democratic Campaign Head Frets About His Own Seat (1:08 p.m.)

US Representative Sean Patrick Maloney, who led the Democratic Party’s efforts to retain control of Congress, voted on Tuesday morning with his husband in Cold Spring, New York, in what’s turned into a tighter-than-expected race in the Hudson Valley. 

Maloney has railed against what he called the “MAGA money” that was pumped into the race in an effort to oust the 56-year-old chair of the Democratic Congressional Campaign Committee and send a symbolic message to the Democratic party.

“Without that, this would not be a race you’re talking about,” he said. 

Republican Mike Lawler, Maloney’s opponent in the 17th Congressional District, voted in Pearl River, New York, on Tuesday along with his 6-month-old daughter and wife, who he said became a US citizen two years ago.

Trump Votes in New Home State of Florida (12:40 p.m.)

Former President Donald Trump was filmed heading in to vote alongside his wife Melania Trump in Palm Beach, Florida, near his residence at his Mar-a-Lago club. 

“The country has lost its way, lost its confidence, it’s gotten very bad,” he told reporters.

At a rally ostensibly for Republican US Senate candidate JD Vance in Dayton, Ohio, on Monday, Trump came the closest he has to announcing he will run again for president in 2024, promising a “very big announcement” next Tuesday.

Florida Turns Away Federal Election Monitors (12:20 p.m.)

The Republican-led state of Florida has rejected the Department of Justice’s effort to send election monitors to three polling jurisdictions in the state, calling it an unnecessary “federal intrusion.”

Florida joins Missouri in rejecting DOJ personnel. The department announced on Monday that it planned to send monitors to the Florida counties of Broward, Miami-Dade and Palm Beach. The rebuff of federal monitors was annouced by the office of the Florida secretary of state, an appointee of GOP Governor Ron DeSantis.

“None of the counties are currently subject to any election-related federal consent decrees,” the Secretary of State’s office said in a letter to DOJ. “None of the counties have been accused of violating the rights of language or racial minorities or of the elderly or the disabled.”

Technical Issues Hit Arizona’s Biggest County (12:15 p.m.)

In Arizona’s Maricopa County, elections officials have flagged issues with tabulators in about 20% of polling locations. If the tabulator doesn’t read a ballot, voters can “insert their ballot in the secure slot on the ballot box where it will be counted at the Tabulation and Election Center,” the county elections office said in a statement.

Those ballots will be centrally tabulated later this evening, officials said, similar to how the country handles early voting — but without the need to further confirm identification, because ballots dropped at polling places today are already effectively signature-verified, officials said.

“Technical staff are working to resolve an issue with tabulators and investigating the cause,” the statement said.

Voting Machines Fail in a New Jersey County (11:20 a.m.)

All voting machines in Mercer County, New Jersey, were inoperable as of 7:47 a.m. Eastern time, according to a community alert post on the Nixle public-safety website from Gay Huber, Weat Windsor Township clerk.

Tom Szymanski, executive director of the New Jersey Republican State Committee, said voters could expect to insert paper ballots into the machines.

“Ballots that enter the machine unscanned will be preserved through a chain of custody and counted at the Board of Elections at a later time,” Szymanski said in a statement.

No Long Lines as Georgia Chooses Governor, Senator (11:15 a.m.)

Lines for in-person voting in Georgia ranged from none to no more than 12 minutes, and just 6 minutes in metro Atlanta counties, according to Gabriel Sterling, interim deputy secretary of state.

“It’s a steady turnout around the state,” he said. “The average wait time is 2 minutes statewide. Most places don’t have any lines at all.”

The state has two closely watched races on the ballot. Democratic Senator Raphael Warnock is facing a stiff challenge from former football star Herschel Walker while Republican incumbent Governor Brian Kemp looks likely to survive a rematch bid from Democrat Stacey Abrams. 

Nevada Senator Rallies Union Workers on Election Day (11:00 a.m.)

Senator Catherine Cortez Masto rallied with other Democratic state officials joined by members of Culinary Workers Union 226, a group of more than 60,000 casino, restaurant and hotel workers, at a 6 a.m. rally in Las Vegas ahead of a last-minute canvassing effort. 

The senator is in a close race for reelection against Republican Adam Laxalt. 

Cortez Masto, the only Latina in the US Senate, was welcomed with a standing ovation by the friendly labor crowd. “I am so excited to be here,” she said. “Mis hermanos y mis hermanas, (brothers and sisters) when we are united we are stronger. It is the workers here that make this an incredible city. Tu voto es tu voz. (Your vote is your voice.)”

Fetterman Votes in Pennsylvania’s Tight Senate Contest (10:45 a.m.)

Democratic Senate candidate John Fetterman cast his ballot at New Hope Church in Braddock, Pennsylvania. 

Dressed in his signature hoodie sweatshirt and shorts, Fetterman walked out of the church with his wife Giselle, who greeted reporters and said, “I voted for that guy.” 

Fetterman served as mayor of Braddock from 2006 to 2019. 

US Officials On the Lookout for Cyber Threats (10:20 a.m.)

A senior official with the US Cybersecurity and Infrastructure Security Agency told reporters on Tuesday it wasn’t seeing specific or credible threats to disrupt election infrastructure, adding that the agency has “high confidence” in the security of the elections.

But the official added it had seen more countries willing to try to influence operations in US elections, citing Russia in 2016, Iran in 2020 and China in 2022.

CISA, which has set up an Election Day operations center at its headquarters, will provide two additional updates on election security during the day. 

Pennsylvanians Rush to Fix Undated Ballots (10 a.m.)

Pennsylvania voters who forgot to put a date on their mail ballots are rushing to fix the issue on Election Day after the state Supreme Court ruled last Tuesday that undated ballots wouldn’t be counted.

A coalition of voting rights groups is challenging the decision in federal court, but in the meantime, officials in Philadelphia and Pittsburgh released the names of voters whose ballots would be discarded.

Elections expert David Levine with the Alliance for Securing Democracy said it’s unclear whether other local officials are also doing outreach to voters at risk of having their ballots thrown out for not having a date, but he said that rural officials typically don’t have the staff or resources available for last-minute outreach.

Early Voting Proves Popular (9:15 a.m.)

More than 44.2 million people voted before Election Day in the 2022 midterms, outpacing the last comparable election, according to data compiled by the US Elections Project at the University of Florida.

By comparison, in 2018, about 39.1 million people voted before Election Day, in person or by mail, in the midterms. But a number of states expanded early voting and vote-by-mail as a result of the coronavirus pandemic, which makes a direct comparison impossible.

Elections experts say it’s unclear whether the high rate of early voting is a sign of greater-than-usual voter enthusiasm, or if more people have simply switched to early voting instead of casting their ballot on Election Day.

Dr. Oz Heads to the Polls (8:45 a.m.)

Mehmet Oz, the Republican candidate for Senate from Pennsylvania voted with his wife near their home in Huntingdon Valley. 

The Trump-backed former TV doctor told a crowd he was going to work for bipartisanship if he wins his tight race against Democratic rival John Fetterman. 

“We want less radicalism and more balance,” he said. 

Razor-Thin Margins Turn Eyes to Arizona (8:30 a.m.)

Officials put orange-and-white plastic jersey barriers around the Maricopa County Elections Department headquarters in Phoenix, a center of pro-Trump protests after the 2020 election, before polling places opened there. 

A spokeswoman for the county said the barriers were for additional protection and there’s no timeline for when they will be taken down.

As of Sunday, some 1.5 million votes had been cast early in the state, almost evenly split between Republicans and Democrats, according to data compiled by the US Elections Project at the University of Florida. The state’s races for US Senate, governor and secretary of state are all very close. 

Voters Are … Voting (6:30 a.m.) 

Polls have opened in Connecticut, Virginia, New York, Maine, New Jersey, North Carolina, West Virginia and Ohio, and will open in many more states in the coming hour. Some of these early voting states have races to watch. 

Virginia, where polls close at 7 p.m. and votes are counted quickly, may offer signals of the national mood. Abortion and the Jan. 6 attack on the Capitol remain key issues in Representative Elaine Luria’s bid for reelection against Republican Jen Kiggans.  

And in New York, Governor Kathy Hochul faces a tighter-than-expected race for reelection against Republican Lee Zeldin. 

Braced for Impact (6:00 a.m.)

Election officials are preparing for disruptions and potential violence at polling places around the country. 

Michigan Secretary of State Jocelyn Benson said recently that she expects the Huntington Place convention center in Detroit to be a hub of post-election protests.

She said the convention center is under new management since 2020 and that the new owners are requiring anyone going inside to have credentials. That includes election observers, but only those who have been approved, not just anyone who shows up.

Canton, Michigan, is also requiring security badges for access. Clerk Michael Siegrist has been studying the manuals of third-party groups alleging massive fraud in 2020 so he and his staff can address misinformation when it comes up in volunteer training or on Election Day. He’s also been teaching deescalation tactics, and has launched a social-media campaign called “Faces of Canton Elections” to try to “build civic discourse,” he said.

–With assistance from Sergio Chapa, Joe Carroll, Amelia Pollard, Ryan Teague Beckwith, Steve Matthews, Skylar Woodhouse, Billy House, Hadriana Lowenkron, Carly Wanna, Sri Taylor, Airielle Lowe, Katrina Manson, Gabrielle Coppola, Chris Strohm, Francesca Maglione, Augusta Saraiva, Mackenzie Hawkins, David Welch, Elise Young and Jack Gillum.

(A previous version of this story was corrected because it left out a letter in ‘Florida’ in a headline)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Financial regulators are looking at the biggest private equity firms’ use of WhatsApp and other messaging apps for work, in a signal that the US is ramping up its push to police Wall Street’s electronic communications. 

Apollo Global Management Inc., Carlyle Group Inc. and KKR & Co. said in regulatory filings this week that they received letters from the Securities and Exchange Commission on their use of electronic messaging for business.

Financial firms must follow rules to monitor business communications to head off improper conduct. Investment advisers and money managers are required to retain records related to the provision of investment advice. 

The use of WhatsApp, Signal, Telegram and other chat apps has become prevalent since the pandemic forced traders and dealmakers to work from home. Many of these apps have functions to make messages automatically disappear, and financial-firm employee use of the apps represents potential violations of SEC regulations. 

The SEC sent letters to dozens of investment firms in recent weeks as part of the probe. Over the past year, banking giants including JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Goldman Sachs Group Inc. have paid a record combined $2 billion in SEC and Commodity Futures Trading Commission penalties to settle related allegations.

Receiving a request for information doesn’t imply wrongdoing. Representatives for Carlyle, Apollo and KKR declined to comment. An SEC spokesperson didn’t immediately respond to a request for comment.

Carlyle in a filing said that it received a request for information from the SEC “related to the preservation of certain types of electronic business communications” that could include “text messages and messages on WhatsApp, WeChat and similar applications.” The firm said it intends to cooperate fully with the inquiry. 

Certain Apollo investment-adviser subsidiaries have received a request from the SEC for information and documents related to an investigation into compliance with record retention requirements for business communications through electronic messaging, according to a filing.

KKR is cooperating with the inquiry into business-related electronic communications, which it doesn’t believe will have a material adverse effect on its financial condition or results of operations, its filing shows.

–With assistance from Lydia Beyoud.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Nintendo Co. shares fell as much as 6% on Wednesday after the company cut its fiscal-year forecast for Switch console sales by 10% to 19 million. It was their biggest intraday slump since March.

The Kyoto-based games maker said its operating profit was 118.7 billion yen ($809 million) in the quarter ended September, up from 100.2 billion yen in the same period a year ago. The consensus estimate was for a profit of 117.6 billion yen. The company revised up its net income forecast for the year, pointing to the weaker yen as a key reason, but kept its full-year operating profit forecast of 500 billion yen.

Nintendo said it sold fewer Switch consoles in the quarter than the year-ago period in part because of a prolonged chips shortage. The company says it’s now front-loading production to maximize delivery in the holiday shopping season and that production output is improving since September. President Shuntaro Furukawa said in a briefing after the results that demand for the console remains firm.

What Bloomberg Intelligence Says

Nintendo needs to drive software sales and live services to support long-term earnings growth as the Switch platform enters the mature phase of its cycle. Hardware sales could continue to decline as momentum from Animal Crossing fades further, barring a reported — but as yet unconfirmed — new Pro console.

— Nathan Naidu, BI analyst

Click here for the full research

Splatoon 3, the latest installment of a core Nintendo franchise, became the company’s fastest Switch software launch ever, with 3.45 million units sold domestically over its first three days. Its September launch gave a lift to the hit-driven sales of Nintendo’s five-year-old Switch console and that momentum is expected to be sustained by the Nov. 18 launch of the latest entries in the Pokemon series.

The company raised its net income forecast by 18% to 400 billion yen for the fiscal year. It kept its software sales outlook unchanged.

Nintendo also got a big boost from this year’s precipitous drop in the yen’s value. The currency trades at its lowest level against the US dollar in more than 30 years, and Nintendo gets four fifths of its sales from outside Japan while its software production costs are denominated mostly in the domestic currency.

Read more: Nintendo Surges After Record Debut of New Switch Game

Analysts are closely tracking the Switch console’s momentum heading into the year-end holiday season as supply chain constraints wane. Nintendo has consistently said demand for the handheld-hybrid console remains strong, despite the gadget’s age.

“It is strange that Nintendo cut its forecast of Switch shipments by 10% even though there is a broad consensus the chip shortage is easing,” said Tokyo-based industry analyst Serkan Toto. “I expect the next quarter to be another home run for Nintendo, largely thanks to the release of the new Pokemon title next week.”

–With assistance from Yuki Furukawa.

(Updates with shares)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — As Tropical Storm Nicole barrels toward Florida’s East Coast, a $4 billion NASA rocket remains on a launchpad at Kennedy Space Center, where it will ride out the approaching storm.

Nicole is intensifying and is expected to make landfall as early as Wednesday as a Category 1 hurricane with winds of 74 to 95 mph, potentially putting the huge Space Launch System rocket at risk. NASA estimates that the SLS can withstand wind gusts of up to 85 mph (74 knots), as well as sustained winds of 46 mph (40 knots). 

The agency had hoped to launch the rocket and uncrewed Orion capsule to the moon as early as Nov. 14. It would be the first of the agency’s Artemis missions to return humans to the lunar surface. But NASA officials late Tuesday opted to delay the launch to Nov. 16 to allow employees time to return to work safely and perform inspections after the storm. 

To prepare for Nicole, NASA has powered down Orion and the major pieces of the SLS rocket, according to a NASA blog post. Hard covers have been installed on the vehicle’s launch abort system on top of the rocket, while the crew access arm — the walkway that future astronauts will use to board the rocket — has been retracted and stored. “Teams also are securing nearby hardware and performing walkdowns for potential debris in the area,” NASA wrote.

The space center is at “HURCON III” status, a level of preparedness level for approaching hurricanes in which personnel work to secure the area’s facilities and hardware. NASA will also have a “ride-out” team on site throughout the storm to monitor conditions at the center.

Joel Cline, the tropical program coordinator with the National Weather Service, estimates there is an 80% to 90% chance of sustained tropical force winds along Florida’s space coast, with storm winds approaching the area as early as Wednesday morning. That’s roughly about the threshold that NASA said the rocket can handle.

“What they’re telling you is they’re looking for hurricane force wind gusts, and sustained winds of tropical storm force, which is the most likely probability,” Cline said.

In September, when Hurricane Ian was headed toward NASA’s Kennedy Space Center in Florida, the rocket was also out on the launchpad ahead of its planned mission. However, NASA ultimately decided to roll it back to its massive hangar, called the Vehicle Assembly Building, for shelter from the approaching storm.

NASA probably no longer has time for a rollback of the rocket since it takes roughly three days to prepare and move the vehicle the four miles to the Vehicle Assembly Building. In the meantime, the agency is standing by its decision to remain at the launchpad. 

NASA said high winds present the greatest risk — but aren’t expected to exceed what the rocket is designed to withstand. “The rocket is designed to withstand heavy rains at the launch pad and the spacecraft hatches have been secured to prevent water intrusion,” the agency said. 

Cline said that officials at Kennedy Space Center are on frequent calls with the National Hurricane Center, the Department of Defense and other entities operating in the area of the storm’s path.

Another concern, Cline said, is that the storm could bring as much as six inches of rain and a storm surge of three to five feet to Florida’s coast. 

Kennedy Space Center is located east of Orlando on Florida’s Atlantic coast. 

(Adds wind force of Category 1 hurricanes in second paragraph.)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — A multistate coalition led by New York threw its support behind a US regulator seeking to block Meta Platforms Inc.’s acquisition of virtual-reality app Within Unlimited.

The Federal Trade Commission sued in July to stop the deal on antitrust grounds. In a court filing, 25 attorneys general said Meta has an anticompetitive history of buying up rivals in a market instead of building its own product to compete for business.

Meta has called the FTC’s suit ill-conceived, saying the agency’s claims about competition in the virtual reality space are based on “pure speculation.”

New York Attorney General Letitia James was joined in the filing by Massachusetts, Mississippi, Oregon and Rhode Island, among others — along with California, home to Menlo Park-based Meta, the parent of Facebook and Instagram.

The acquisition “would eliminate competition in the virtual reality fitness space at a critical moment in the development of this market,” California Attorney General Rob Bonta said in a statement. 

The challenge to Meta’s proposed acquisition is indicative of the FTC’s stepped-up enforcement agenda under Chair Lina Khan, who was named by the Biden administration. The antitrust agency has faced significant criticism from Congress and antitrust advocates for allowing the biggest tech companies to acquire startups that might grow into rivals.

Meta has made a number of acquisitions, most of them small, to bolster its offering in virtual and augmented reality. Chief Executive Officer Mark Zuckerberg believes that in the future, the company will popularize a metaverse — a more immersive version of the internet, where people can populate an alternative virtual world to go shopping, go to work and see friends.

Within’s Supernatural is a subscription fitness service where users can work out or meditate to music in immersive environments. 

Meta representatives didn’t immediately respond to a request for comment.

The filing was reported earlier by Reuters.

Read More: Meta’s Zuckerberg to Testify in FTC Merger Challenge to VR Deal

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Billionaire Changpeng “CZ” Zhao became the undisputed king of the crypto world on Tuesday, shocking the industry with a move to take over FTX.com, the troubled firm led by his chief rival and onetime disciple, Sam Bankman-Fried.

The letter of acquisition intent by Zhao’s Binance Holdings came after a bitter feud between the two men spilled into the open, with Zhao actively undermining confidence in FTX’s finances and helping spark an exodus of users from the three-year-old FTX.com exchange. A day before accepting the deal from Binance, Bankman-Fried said on Twitter that assets on FTX were “fine.” By Tuesday, he had changed his messaging.

Such moves would be prohibited on Wall Street but aren’t uncommon in this rough-and-tumble corner of finance, which remains largely devoid of regulation about a decade after its founding. Ironically, it was Bankman-Fried who was pushing for greater regulation, something that Zhao has largely opposed. 

“I’m sorry I didn’t do better, and am going to do what I can to protect customer assets, and your investment,” Bankman-Fried wrote in a letter to investors. “I wish I had more details for you guys right now; I don’t yet,” the letter said.

After initially rising on the news, prices of cryptocurrencies tumbled, with terms of the deal scant and uncertainty swirling over whether it will even get done. Binance said the agreement came after “a significant liquidity crunch” befell FTX and the firm asked for its help. The takeover is a startling twist for FTX, whose 30-year-old founder had emerged in recent years as the ready-for-prime-time face of crypto and amassed a fortune approaching $20 billion.

The acquisition — which doesn’t involve FTX.US, a separate exchange also founded by Bankman-Fried — will reshape the more than $1 trillion industry that is already dealing with a prolonged market downturn. The two founders made the announcement on Twitter concurrently. “To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch,” Zhao said in a tweet. 

FTX was hit with about $6 billion in withdrawals in the 72 hours before Tuesday morning, Reuters reported, citing a message sent to staff by Bankman-Fried. 

“Our teams are working on clearing out the withdrawal backlog,” Bankman-Fried said on Twitter. “This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in.”

It’s fast comeuppance for Bankman-Fried, no stranger to bare-knuckled exploits in his role as founder of Alameda Research, the crypto trading firm whose fate was left unmentioned in the tweets announcing the bailout. The former Jane Street trader has been unapologetic about Alameda’s willingness to pounce on profit opportunities in the wild-west crypto space, framing it as part of a long-term plan to give away billions to charity.

FTX.com was valued as recently as January at $32 billion in a fundraising round from investors including Temasek, Paradigm, Ontario Teachers’ Pension Plan Board and SoftBank Vision Fund 2.

Bitcoin swung between gains and losses, dropped below $19,000 for the first time since Oct. 21. BNB, the native token of the Binance blockchain, did the same and was down about 5% after initially jumping as much as 15%.

For the crypto industry broadly, FTX’s demise is another example of a once-towering player laid low when a crisis of confidence forced a run on its assets. Like others before it, including lenders Celsius Networks and hedge fund Three Arrows Capital, reserves proved inadequate when market sentiment turned against it, even as top executives said nothing was amiss.

The tension between Bankman-Fried and Zhao has been brewing almost since the start. Back in 2019, Binance invested into FTX, then a derivatives exchange. The next year, Binance launched its own crypto derivatives, quickly becoming the leader in this space.

Tensions rose as the two companies increasingly had been seen as different by regulators. Bankman-Fried was testifying in Congress, while Binance was said to be facing regulatory probes around the world and emphasized that it’s not headquartered anywhere.

The two companies have also been competing for assets, with both bidding for assets of Voyager Digital. FTX won the auction of Voyager.

The drama reached fever pitch on Sunday, when Zhao announced he would sell all of his FTT holdings, the native token of FTX exchange, worth $529 million at the time due to “recent revelations that came to light.” The tweet followed a story from CoinDesk saying that Alameda Research, a trading house owned by Bankman-Fried, had a lot of its assets in FTT token. FTT tumbled by more than 70% to around $6, according to prices on CoinMarketCap. 

Binance is the largest crypto exchange by far, with trading volume of about $40 billion so far today. FTX is second in spot trading, with volume of about $4 billion, according to CoinMarketCap data. CoinMarketCap is owned by Binance.   

(Adds quote from Bankman-Fried investor letter.)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.