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December 11, 2020

Facebook Slapped with Two Antitrust Suits – News Roundup Dec. 7-11

Honorable mention this week for Uber — it’s planning to sell both its self-driving car business and its air taxi business. The pandemic has not been kind to the ride-sharing company, and it is shedding money-losing parts of itself as it continues to pursue profitability.


The Business Buzz

Facebook hit with double antitrust whammy. This week the Federal Trade Commission (FTC) — as well as a majority of state attorney generals — filed lawsuits against Facebook for monopolistic practices. The FTC’s suit is based on federal laws, while the AGs’ is based on various state laws — but the investigations for the suits were coordinated together. Both accuse Facebook of stifling competition though acquisitions and other unsavory behaviours. Front and center to both suits are Instagram and WhatsApp — which Facebook acquired in 2012 and 2014 respectively. If the suits are successful, Facebook would have to give up control of both companies. But wait, there’s more — the suits also accuse Facebook of making it difficult for competitors to link their own services to platforms run by Facebook. And user privacy is another central issue. The AGs’ suit alleges that having more competition in the social media market might give consumers access to platforms with better privacy options than Facebook. 

Thus far, Facebook is essentially denying the accusations. The company claimed that Instagram and WhatsApp would not be the major social media platforms they are today without Facebook’s investment and development. And Facebook’s general counsel pointed out that the acquisitions were approved by the government in the past — implying that the sudden change of opinion wasn’t justified. But the FTC has the authority to change its ruling on past acquisitions if new information indicates that illegal action was taking place at the time. Now, we get to wait while Facebook decides how it wants to handle the suits — though any court case will likely take years to be decided.

The IPO frenzy just won’t stop. Two majorly anticipated initial public offerings (IPOs) happened this week — DoorDash and Airbnb. Per usual, venture capital firms — and Sequoia Capital in particular — were major beneficiaries of these successful public debuts.

DoorDash has seen its revenue triple in the first nine months of the year as people stayed home and ordered takeout through the app. And its IPO went pretty well too. Shares opened on Wednesday at a price of $102 each — and closed at $189.51. That’s an 86% increase in the first day. In total, the company raised more than $3 billion — one of the largest IPOs this year — and increased its valuation to $72 billion.  

I wrote last week about Airbnb’s plan to go public — and some of the host-centered troubles the company is facing. Despite those issues, the short-term rental company’s public debut was well-received by investors. Airbnb’s shares were priced at $68 originally — but trading opened at $146 per share and closed at just over $144. And Airbnb is now valued at more than $100 billion.  


The Private Market

The power of a familiar name. A new cryptocurrency token named after Steve Wozniak — the technical brains behind early Apple — hit a $950 million market cap in its first 13 minutes of trading. The token goes by the moniker WOZX, and it was launched by a company called Efforce, where Wozniak is one of six co-founders. Efforce is a Malta-based company that wants to provide a marketplace for businesses to receive funding for green/energy-saving projects. It’s based on blockchain technology and the crypto token. Currently, the token is only trading on the HBTC exchange, but Efforce also intends to list WOZX on Bithumb Global soon. 

Sometimes, the news is us! This week the final phase of KingsCrowd’s Merlin beta rollout was completed. And I wanted to talk about how cool it is. On our new Analytics page, you can drill down into the data we’ve been collecting and tracking for almost three years. And when I say drill down, I really mean it. Are you curious about how much clean-tech startups have raised with Reg CF over the past year? (Answer: almost $14.5 million). Or which security type was most commonly used by fintech startups in the same period? (Answer: SAFEs). What about which platforms were the best for fitness and wellness startups since 2018? (Answer: Wefunder, but StartEngine was a very close second). There’s so much awesome data manipulation you can do — and the visualizations are pretty sleek too. And we did this all three months ahead of schedule


The Fun Stuff

It’s fun to watch things explode. SpaceX tested a new rocket this week — with rather explosive results. The unmanned Starship SN8 successfully launched and flew upwards to a height of eight miles. Then it tried to do an upright landing — now a trademark of SpaceX rockets — but things didn’t quite go as planned. Due to a problem in the fuel system, the rocket exploded just before it touched the ground. However, that wasn’t really surprising. SpaceX CEO Elon Musk gave the rocket a one-in-three chance of surviving the test flight intact. But the flight is still considered a success because it allowed the company to gather valuable data for future iterations of the rocket — which is a prototype of the one Musk hopes to use to take humans to Mars.


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About: Aryelle Young

Aryelle Young is a published writer and editor with experience across industries. She has worked with an independent publishing company and as a proposal writer for a government contractor. Her original work has also been published in various journals and one short story collection. At KingsCrowd, she strives to provide insightful and actionable content for all readers. Aryelle graduated with a Creative Writing degree from George Mason University.

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