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Thursday, March 14, 2024

'Ford has big goals for software sales to small business truck fleets'

  HomeTown Services, a heating and cooling repair company in Tulsa, Oklahoma, is getting ready to install driver monitoring cameras in some of its trucks, and already uses streamed data to remind drivers not to sit too long in idle vehicles, wasting gasoline.

"People will sit in a vehicle for an hour or two," said Del Underwood, vice president for purchasing and fleets for the company. Now, technicians get a text message instructing them to either turn off their trucks or move to the next assignment.

That may annoy some employees, but it is good news for Ford Motor Co's commercial vehicle unit, Ford Pro, which has placed a big bet on software-related services. Ford Pro hopes selling connected-vehicle services such as driver monitoring systems to small and medium sized fleet operators will help generate as much as $1.8 billion in annual profit within two years.

Ford CEO Jim Farley has urged investors to think of Ford Pro's bundle of software and vehicle sales, not Tesla, as the "future of the automotive industry."

Companies including Geotab and units of Verizon dominate the market for telematics services provided to large vehicle fleets, said Mike Ramsey, vice president at technology consultancy Gartner.

But Ford "can get all the guys buying Ford Transits for their plumbing business," Ramsey said.

Small and medium-sized business fleets in North America and Europe constitute a large enough market that Farley has told investors Ford Pro could earn 20% of its pre-tax profit from selling software and services within two years.

Farley has forecast Ford Pro pre-tax profits at $8 billion to $9 billion this year. He has promised investors Pro can earn fatter margins than its consumer businesses, partly due to services and maintenance business driven by telematics connections to vehicles and data.

In 2023, Ford Pro had 500,000 paid subscriptions for software services. "It's up 46% and the margins are over 50%," Farley told analysts in January. He said 12% of vehicles Ford Pro sells have software subscriptions attached and he wants to triple that.

Private credit ties to banks deepen in Europe as default risk rises

 Europe's private credit funds are increasingly borrowing from banks to boost their performance, fuelling concerns about the wider risks posed by this interconnectedness.

A record 80% of new European private credit funds borrowed from banks via 'subscription lines' in 2023, funding that allows them to lend before tapping their investors for cash, MSCI Private Capital Solutions research shared with Reuters shows.

Subscription lines are used by some credit funds to enhance returns, a separate MSCI study found. MSCI studied pools that were set up recently because funds are most likely to use subscription lines when they start operating.

Regulators including the Bank of England (BoE) are already probing potential risks posed by lenders' exposure to credit funds, which are loosely regulated and typically finance firms that struggle to borrow directly from banks or in bond markets.

The boom in so-called shadow banks has also raised the alarm among some financiers, who point to the possibility of new asset bubbles that could undermine financial stability.

"Increasing engagement in the private credit domain ... brings them (banks) closer to the sector's inherent risks," said Chris Naghibi, Chief Operating Officer of First Foundation Bank.

Some private credit funds are also adding leverage to their loans, maximising returns but at the same time magnifying potential losses, more than 20 industry sources told Reuters and some fund filings showed.

These moves come as corporate distress in Europe has reached its highest level since the start of the COVID-19 pandemic.

FLEXIBILITY

European private credit funds, while a fraction of the size of bank lending, now have $460 billion under management, UBS estimates. Their growth coincides with an economic slowdown that is adding to concerns that private lending may be delaying decisions to restructure businesses.

Since such funds are not obliged to publish detailed information on their loans or the bank leverage they deploy, beyond informing their own investors, it is hard for regulators and bank investors to know if credit fund lending is going sour.

Weak bids in Citgo auction spurs Venezuela to pitch alternative pay plan

 The highest bid received in a U.S. auction of shares that will decide the fate of Venezuela-owned oil refiner Citgo Petroleum was $7.3 billion, enough to cover only a third of court-approved claims, two people familiar with the matter said.

A federal court in Delaware is auctioning the shares of a parent of Venezuela's foreign crown jewel, Houston-based Citgo, that it found liable for the South American country's debt defaults and expropriations. Creditors have flocked to Delaware to press claims totaling $21.3 billion in a case first brought nearly seven years ago by miner Crystallex.

Results from the first bidding round in January, however, show a sales process that is unlikely to provide a satisfactory outcome for creditors or Citgo's current owners. Offers received thus far in a case that broke new legal ground in sovereign immunity would leave many claims unpaid, analysts and sources warned.

The court may have to revamp the sales process, or consider an alternative being drafted by Venezuela, which would offer creditors a larger payout with proceeds spread over several years, while retaining some of Venezuela's stake in the company, the people said.

Judge Leonard Stark, who is overseeing the case, has declined to consider Venezuela's payment proposals, the people said. It is unclear if he would reconsider with the highest offer in the initial bidding round covering only 14 of the 26 claims that he has accepted from 18 creditors.

The weak initial bids were below the $13 billion to $14 billion value specialists appointed by the court had estimated for the shares. That shortfall is prompting Citgo's parent companies and boards to reprise an offer presented earlier this year: a $10 billion payment funded over time from Citgo profits, equity and borrowings.

EXTRA INNINGS

The auction has drawn interest from oil giant ConocoPhillips and units of conglomerate Koch Industries, both putting their claims against Venezuela via credit bids for the assets.

https://finance.yahoo.com/news/exclusive-weak-bids-citgo-auction-100240438.html

'US ban on TikTok would rob Biden, Democrats of 2024 election tool'

 If President Joe Biden keeps his promise to sign a ban on TikTok over its ties to the Chinese government, the 81-year-old may rob his reelection campaign of a platform that he and fellow Democrats rely on to reach younger voters.

Biden's campaign got thousands of "likes" on Tuesday for a TikTok video skewering Republican rival Donald Trump about cutting Social Security spending. But the comments were focused on another issue altogether: the proposed ban.

"Good thing we saw this on TikTok," said one. "How are you going to use this to campaign if you ban it?" asked another.

House Republicans voted Wednesday to force TikTok's Chinese owner ByteDance to divest its 170 million user U.S. business, or face a ban. If the Senate passes the bill, as the White House urges, Biden has pledged to sign it.

But the 2024 campaign is shaping up to be close, and Democratic-leaning U.S. political discourse online has shifted to TikTok in recent years, political strategists say. They note that X, formerly Twitter, has cut back on harassment curbs under owner Elon Musk while Facebook moved away from political content while the short-form video site is the platform of choice for a new generation of politically engaged Americans.

TikTok's users belong disproportionately to groups that vote reliably for Democrats, which Biden needs to woo. Trump's campaign does not have an official TikTok account.

Roughly 60% of TikTok's regular U.S. news consumers are Democrats or Democrat-leaning, according to a 2023 study from the Pew Research Center. Nineteen percent of TikTok's news consumers are Black, and 30% are Hispanic, versus about 14% and 19% of the general U.S. population, respectively. About 44% of news consumers on TikTok are between ages 18 and 29.

Banning TikTok risks "displacing a large part of the electorate from the ability to communicate…meaningfully about politics at a time when a highly contentious election is about to occur," said Samuel Woolley, journalism professor and director of the University of Texas at Austin's propaganda research lab. "We voted Joe Biden in through social media, through the power of TikTok," said NaomiHearts, a self-described Chicana trans woman with 1.1 million followers on TikTok, noting that youth voter participation hit a record in 2020. "Why just TikTok?"

'Reuters: Trump launched CIA covert influence operation against China'

 Two years into office, President Donald Trump authorized the Central Intelligence Agency to launch a clandestine campaign on Chinese social media aimed at turning public opinion in China against its government, according to former U.S. officials with direct knowledge of the highly classified operation.

Three former officials told Reuters that the CIA created a small team of operatives who used bogus internet identities to spread negative narratives about Xi Jinping’s government while leaking disparaging intelligence to overseas news outlets. The effort, which began in 2019, has not been previously reported.

During the past decade, China has rapidly expanded its global footprint, forging military pacts, trade deals, and business partnerships with developing nations.

The CIA team promoted allegations that members of the ruling Communist Party were hiding ill-gotten money overseas and slammed as corrupt and wasteful China’s Belt and Road Initiative, which provides financing for infrastructure projects in the developing world, the sources told Reuters.

Although the U.S. officials declined to provide specific details of these operations, they said the disparaging narratives were based in fact despite being secretly released by intelligence operatives under false cover. The efforts within China were intended to foment paranoia among top leaders there, forcing its government to expend resources chasing intrusions into Beijing’s tightly controlled internet, two former officials said. “We wanted them chasing ghosts,” one of these former officials said.

Chelsea Robinson, a CIA spokesperson, declined to comment on the existence of the influence program, its goals or impacts.

A spokesperson for China’s Ministry of Foreign Affairs said news of the CIA initiative shows the U.S. government uses the “public opinion space and media platforms as weapons to spread false information and manipulate international public opinion.”

The CIA operation came in response to years of aggressive covert efforts by China aimed at increasing its global influence, the sources said. During his presidency, Trump pushed a tougher response to China than had his predecessors. The CIA’s campaign signaled a return to methods that marked Washington’s struggle with the former Soviet Union. “The Cold War is back,” said Tim Weiner, author of a book on the history of political warfare.

Reuters was unable to determine the impact of the secret operations or whether the administration of President Joe Biden has maintained the CIA program. Kate Waters, a spokesperson for the Biden administration’s National Security Council, declined to comment on the program’s existence or whether it remains active. Two intelligence historians told Reuters that when the White House grants the CIA covert action authority, through an order known as a presidential finding, it often remains in place across administrations.

Trump, now the Republican frontrunner for president, has suggested he will take an even tougher approach toward China if re-elected president in November. Spokespeople for Trump and his former national security advisers, John Bolton and Robert O’Brien, who both served the year the covert action order was signed, declined to comment.

The operation against Beijing came with significant risk of escalating tensions with the United States, given the power of China's economy and its ability to retaliate through trade, said Paul Heer, a former senior CIA analyst on East Asia who learned of the presidential authorization from Reuters. For example, after Australia called for an investigation inside China probing the origins of the COVID-19 pandemic in 2020, Beijing blocked billions of dollars in Australian trade through agricultural tariffs.

Trump’s 2019 order came after years of warnings from the U.S. intelligence community, and media reports, about how China was using bribery and threats to obtain support from developing countries in geopolitical disputes as it attempted to sow division in the United States through front groups.

China’s Foreign Ministry said Beijing follows a “principle of non-interference in the internal affairs of other countries and does not interfere in the domestic affairs of the United States.”

A year earlier, Trump gave the CIA greater powers to launch offensive cyber operations against U.S. adversaries after numerous Russian and Chinese cyber attacks against American organizations, Yahoo News reported. Reuters could not independently confirm the existence of the earlier order.

Sources described the 2019 authorization uncovered by Reuters as a more ambitious operation. It enabled the CIA to take action not only in China but also in countries around the world where the United States and China are competing for influence. Four former officials said the operation targeted public opinion in Southeast Asia, Africa and the South Pacific.

“The feeling was China was coming at us with steel baseball bats and we were fighting back with wooden ones,” said a former national security official with direct knowledge of the finding.

Matt Pottinger, a senior National Security Council official at the time, crafted the authorization, three former officials said. It cited Beijing’s alleged use of malign influence, allegations of intellectual property theft and military expansion as threats to U.S. national security, one of those former officials said.

Pottinger told Reuters he would not comment on the “accuracy or inaccuracy of allegations about U.S. intelligence activities,” adding that “it would be incorrect to assume that I would have had knowledge of specific U.S. intelligence operations.”

Covert messaging allows the United States to implant ideas in countries where censorship might prevent that information from coming to light, or in areas where audiences wouldn’t give much credence to U.S. government statements, said Loch Johnson, a University of Georgia political scientist who studies the use of such tactics.

Covert propaganda campaigns were common during the Cold War, when the CIA planted 80 to 90 articles a day in an effort to undermine the Soviet Union, Johnson said. In the 1950s, for example, the CIA created an astrological magazine in East Germany to publish foreboding predictions about communist leaders, according to declassified records.

The covert propaganda campaign against Beijing could backfire, said Heer, the former CIA analyst. China could use evidence of a CIA influence program to bolster its decades-old accusations of shadowy Western subversion, helping Beijing “proselytize” in a developing world already deeply suspicious of Washington.

The message would be: “‘Look at the United States intervening in the internal affairs of other countries and rejecting the principles of peaceful coexistence,’” Heer said. “And there are places in the world where that is going to be a resonant message.”

U.S. influence operations also risk endangering dissidents, opposition groups critical of China and independent journalists, who could be falsely painted as CIA assets, said Thomas Rid, a professor at Johns Hopkins University who wrote a book on the history of political warfare.

https://www.yahoo.com/news/exclusive-trump-launched-cia-covert-100648423.html

PhRMA Loses Another Legal Battle as Court Sides with Arkansas Over Drug Discount Program

 The U.S. Court of Appeals for the Eighth Circuit on Tuesday ruled against industry group Pharmaceutical Research and Manufacturers of America, upholding an Arkansas law that enables healthcare providers to dispense drugs—obtained at a discounted price via a federal program—through certain pharmacies.

The ruling would also allow Arkansas to prohibit drugmakers from limiting the availability of their products on contract pharmacies and could potentially embolden other states to enact similar laws.

Arkansas participates in the Section 340B program. Established by Congress in 1992, the program incentivizes pharmaceutical companies to give healthcare providers discounts on certain products that are prescribed to patients who fall below the federal poverty level.

The healthcare providers, in turn, work with outside entities such as contract pharmacies to help ship and distribute the 340B medicines. The program has helped providers cut costs while also dispensing treatments closer to where the low-income patients live, according to the court ruling.

In 2020, pharma companies disallowed or otherwise limited their beneficiary healthcare providers from using outside pharmacies to dispense the 340B drugs. In response, Arkansas in 2021 passed Act 1103, which prevents drugmakers from blocking the providers from contracting with outside pharmacies.

Pharmaceutical Research and Manufacturers of America (PhRMA) sued Arkansas in the same year, claiming that Act 1103 Is unconstitutional because it is pre-empted by Section 340B itself as well as by the Federal Food, Drug, and Cosmetic Act.

The trade group’s legal challenge focused on the use of these outside pharmacies, which it claimed contravened Congress’ intention to create a “closed system” of drugmakers and healthcare providers. PhRMA also alleged that Act 1103, a state law, interferes with federal law.

However, the court in Tuesday’s 13-page ruling disagreed with the industry group, noting that the involvement of the contract pharmacies does not interfere with the 340B system. “Pharmacies do not purchase 340B drugs, and they do not receive the 340B price discounts,” the court said, pointing out that the covered healthcare providers still maintain the title over the discounted drugs.

“Act 1103 does not create an obstacle for pharmaceutical manufacturers to comply with 340B, rather it does the opposite: Act 1103 assists in fulfilling the purpose of 340B,” the court document stated. “PhRMA presents no evidence of an obstacle.”

The ruling comes amid an increasingly heated face-off between the federal government and the industry regarding drug pricing. At the center of the controversy is the Inflation Reduction Act’s Drug Price Negotiation Program, which empowers Medicare to negotiate prices for some of the most widely prescribed medicines.

Several pharma companies and industry groups, including PhRMA, have filed lawsuits seeking to block the program but have so far been unsuccessful. PhRMA’s own legal challenge was dismissed by a Texas judge last month.

https://www.biospace.com/article/phrma-loses-another-legal-battle-as-court-sides-with-arkansas-over-drug-discount-program/

Entrada Results, Updates

  Cash runway extended through the second quarter of 2026 –

– $352 million in cash, cash equivalents and marketable securities as of December 31, 2023 –

– Completed dosing for third cohort of Phase 1 clinical trial of ENTR-601-44 for the potential treatment of DMD with data readout on track for the second half of 2024 

– Regulatory applications expected in the fourth quarter of 2024 for the global Phase 2 clinical development of ENTR-601-44 and ENTR-601-45 in people living with DMD –

https://www.globenewswire.com/news-release/2024/03/13/2845281/0/en/Entrada-Therapeutics-Reports-Fourth-Quarter-and-Full-Year-2023-Financial-Results.html