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(Reuters) – Under Armour Inc (UAA.N) (UA.N) said on Thursday that data from some 150 million MyFitnessPal diet and fitness app accounts was compromised in February, in one of the biggest hacks in history, sending shares of the athletic apparel maker down 3 percent in after-hours trade.
The MyFitnessPal app is seen on a smartphone in Golden, Colorado in this February 5, 2015 photo illustration. REUTERS/Rick Wilking
The stolen data includes account user names, email addresses and scrambled passwords for the popular MyFitnessPal mobile app and website, Under Armour said in a statement. Social Security numbers, driver license numbers and payment card data were not compromised, it said.
It is the largest data breach this year and one of the top five to date, based on the number of records compromised, according to SecurityScorecard.
Larger hacks include 3 billion Yahoo accounts compromised in a 2013 incident and credentials for more than 412 million users of adult websites run by California-based FriendFinder Networks Inc in 2016, according to breach notification website LeakedSource.com.
Under Armour said it is working with data security firms and law enforcement, but did not provide details on how the hackers got into its network or pulled out the data without getting caught in the act.
While the breach did not include financial data, large troves of stolen email addresses can be valuable to cyber criminals.
Email addresses retrieved in a 2014 attack that compromised data on some 83 million JPMorgan Chase customers was later used in pump-and-dump schemes to boost stock prices, according to U.S. federal indictments in the case in 2015.
Under Armor said in an alert on its website that it will require MyFitnessPal users to change their passwords, and it urged users to do so immediately.
“We continue to monitor for suspicious activity and to coordinate with law enforcement authorities,” the company said, adding that it was bolstering systems that detect and prevent unauthorized access to user information.
Under Armour said it started notifying users of the breach on Thursday, four days after it first learned of the incident.
Under Armour bought MyFitnessPal in 2015 for $475 million. It is part of the company’s connected fitness division, whose revenue last year accounted for 1.8 percent of Under Armour’s $5 billion in total sales.
Reporting by Nivedita Balu in Bengaluru and Jim Finkle in Toronto; Editing by Leslie Adler
It was a somber scene outside New York’s City Hall on Wednesday afternoon. Four coffins sat at the foot of the steps; one by one, taxi drivers covered them with white flowers, before assembling on the steps and shouting for the city to “stop Uber’s greed” and “stop making us slaves.” It was the second such gathering in two months, as drivers and their advocates mourned another suicide that they attribute to the rise of ride-hailing services like Uber and Lyft. That sudden increase in the number of for-hire vehicles on the city’s streets, they claim, has made it impossible for drivers to earn a decent living.
On March 16, Nicanor Ochisor, a 65-year-old yellow cab driver, took his own life in his Queens home. According to his family and friends, he had been drowning financially as his prized taxi medallion, on which he had hoped to retire, plummeted in value. The circumstances surrounding Ochisor’s death were upsettingly familiar: In February, driver Douglas Schifter shot himself outside City Hall after posting a lengthy statement to Facebook blaming politicians for letting the streets get so saturated. According to the New York Taxi Workers Alliance, a nonprofit group that advocates for drivers, at least two other drivers have committed suicide since December in response to mounting financial pressures.
At Wednesday’s rally, Bhairavi Desai, the executive director of NYTWA, described the situation as “a living nightmare.” The assembled drivers echoed her sentiment. Noureddine Afsi said he began driving a yellow cab in 2001 when a friend said it would be easier money than his job in retail. “You could work nine hours and easily make $200 in a day,” he recalled. “Now, you’re lucky if you make $50 or $60.” Beresford Simmons, who has been driving a yellow cab for more than 50 years, expressed a similar frustration: At 71 years old, he said, he had just had heart surgery and was on dialysis—and he was in no financial position to take a break from driving. “We have guys at home who are losing their houses,” he said. “I know cab drivers who are homeless today.”
The anguish and anger on display at City Hall offer an unsettling look at the cost of disrupting long-standing industries. Until recently, driving a cab in New York was a gateway to the middle class, especially if drivers could get their hands on a coveted medallion (essentially a permit to operate their own cabs, rather than leasing cars from others). With the number of medallions fixed, prices generally rose, peaking in 2014 at over $1 million—well outside the budget of many drivers, but good news for medallion owners who sometimes borrowed against them. Since then, though, prices have fallen sharply, as competition from ride-hailing services intensified. In January, seven medallions sold for under $200,000 each. Many drivers are deeply in debt—and a long way from the stable lifestyle they once expected.
“To call it an engine of social mobility would be overstating it, but [driving a taxi] is definitely a way that men without college educations have found to raise families, to provide family wages, for a long time,” says Julia Ticona, a sociologist studying technologies of work, emotions, and inequality at the Data & Society research institute in New York. For taxi drivers, disruption is not only financially destabilizing, but also demoralizing, as it recasts their careers as gig work. A longtime taxi driver who prides himself on knowing the ins and outs of the city’s streets is now competing with tens of thousands of newcomers, some of whom may only be driving as a part-time side hustle. “There’s this tension between older sets of professional norms and the ways that labor platforms are encouraging workers to promote themselves and be entrepreneurial,” Ticona says.
Though New York City caps the number of yellow cabs at just over 13,600, it doesn’t limit the number of drivers for Uber, Lyft, or other services. (It does, unlike most US cities, require that ride-share drivers be licensed by the Taxi and Limousine Commission.) The lack of regulation has led to rapid growth: Uber launched in the city in 2012 with just 105 cars on the road; by 2015, that had ballooned to 20,000, and today, there are more than 63,000 black cars providing rides through various ride-hailing apps, 60,000 of which are affiliated with Uber. Those rallying on Wednesday argued that growth is affecting all drivers—including those for Uber and Lyft. “The business model of Uber and Lyft…is destroying every driver across the sector,” said Desai. “They are destroying the full-time jobs of professional yellow [cab], green [cab], livery, and black car drivers, and replacing them with poverty-paid gigs where Uber and Lyft drivers themselves cannot survive.” A 2017 survey of drivers by the Independent Drivers Guild, which represents app-based drivers, found that 57 percent of respondents earn less than $50,000 per year, and 22 percent earn less than $30,000 per year.
As much as some taxi and app-based drivers may see each other as competition, they also are united on several fronts. They all want more money: The IDG is petitioning the city to require apps to raise driver pay by 37 percent, and the NYTWA is demanding that the city raise yellow cab rates and make them the minimum for all app-based services. Both groups also want the city to cap the number of new entrants, as they worry that demand isn’t keeping pace with increasing supply of drivers. Uber and Lyft bring on hundreds of new drivers per week—though some quickly quit. A recent analysis by Bruce Schaller, a former NYC traffic and planning commissioner, showed that the hours that taxis and ride-share vehicles spend unoccupied in central Manhattan increased by 81 percent between 2013 and 2017. Without passengers, drivers don’t earn money. “We don’t care about competition,” said Afsi, who began driving for Uber after leasing a yellow cab for nine years. “When you work 14, 15 hours and go home with $50, it’s not good. It’s not about competition. It’s about survival.”
Drivers and their advocates hope that, if anything, the recent string of suicides will compel New York City to further regulate the industry and avoid a full-throttled race to the bottom. The city last considered capping the number of for-hire vehicles on the road in 2015; however, Uber campaigned against the cap, and the City Council did not pass the legislation. Now, City Council Member Stephen Levin is again proposing a temporary freeze on new for-hire vehicle licenses while the city studies on the impact of the industry’s growth.
That’s one of several proposals for mitigating the effects of more ride hailing. Last fall, Council Member Ydanis Rodriguez introduced a bill that would allow medallion owners to operate two vehicles under a single medallion, helping boost the value of medallions. Rodriguez has previously suggested that the city bail out medallion owners, saying that “we should find a form of restitution to those who have invested in our city’s future through the purchase of medallions.” Another Council Member, Ruben Diaz Sr. introduced a bill last month meant to slow the growth of app-based for-hire services with, among other things, a $2,000 annual fee on every vehicle affiliated with an app-based service. And the TLC is considering piloting a program that would let taxi drivers offer up-front cost estimates. In theory, that could help them attract passengers who currently prefer the cost predictability of Uber to the traffic-dependent price of yellow cabs.
All those proposals share one critical element: They place the burden for change on the city, rather than the ride-share companies. And perhaps for good reason. Though app-based companies could theoretically raise wages or cap their pool of drivers on their own, they have no incentive to curb their growth. “The only place [a solution] will possibly come from is from public policy,” says Schaller, the former NYC traffic and planning commissioner. “The [app-based services] are hellbent on growth, and if I were the CEO at Uber and had announced that I planned to take the company public next year, I would be, too.” In a statement, Uber pointed to steps it has taken recently to win back its drivers’ trust, such as introducing in-app tipping and allowing drivers to earn more while waiting to pick up riders. “Drivers told us we needed to do better and we have been working hard to earn back their trust and improve the driver experience,” a spokesperson said. A Lyft spokesperson said that the company is “in ongoing conversations to find solutions to complex challenges in New York in order to provide the best transportation for passengers and earning opportunity for those who drive with Lyft.”
The New York City Council created a new committee on for-hire vehicles in 2018, and that committee had its first hearing shortly after Schifter’s suicide in February. For several hours, drivers and advocates delivered emotional testimony and asked for a cap on the number of vehicles on city streets. TLC Commissioner Meera Joshi appeared receptive to the idea of stricter regulation, acknowledging at the hearing that “the expanding industry will continue to make driving a very stressful career without any growth-control mechanism.”
Some sort of “growth-control mechanism” would likely ease the impact that the ride sharing boom has had on drivers across the industry. But the days of being able to retire on a yellow cab medallion might be a thing of the past. “People are frozen in place, dreaming of the idea that the medallion system is about to recover,” says Schaller. “This can turn out perfectly fine for yellow cab drivers. It’s very difficult to see how it could be fine for yellow cab medallion owners.” In other words, it may not be possible to protect every worker from the negative effects of disruption—but there is hope that new regulations might keep drivers from going to the desperate extremes that the city has seen in recent months.
Going for a Ride
The Independent Drivers Guild struck a deal with Uber, which recognized the Guild and helped fund its existence.
The self-driving car industry is in the final miles of a grueling marathon to bring autonomous technology to market. Uber needs autonomous tech to offer ride-hailing services sans human drivers. GM bought Cruise and put autonomous Chevy Bolts on the roads of San Francisco in an effort to remain relevant when people stop buying private cars. If Tesla can cross the line first, it could disrupt the other guys and even offer its own ride-sharing service.
And ahead of them all is Waymo. After nearly a decade of R&D, the company that started life as Google’s self-driving car project has shifted its focus from tech to operations—from development to deployment. The Alphabet subsidiary says it will launch its first commercial, driverless service later this year, in Arizona. It already has the permit. All of which makes it the irritatingly fresh-looking guy, in a dayglow tank-top, taking big bouncing strides at the front of the running pack.
Today, Waymo announced it’s partnering with Jaguar Land Rover to build autonomous versions of the electric I-Pace SUV. “It’s going to be the world’s first premium, electric, fully self-driving car,” says John Krafcik, CEO of Waymo. That sounds like a claim Elon Musk would love to be able to make about Tesla.
Waymo plans to buy 20,000 of the vehicles over the next couple years, do extensive testing and validation, and then fully integration them into its passenger-carrying fleet by 2020. The company says the new cars will be able to offer a million trips per day. It’s a huge expansion for Waymo, which has around 600 vehicles on the roads now, and an existing partnership with Chrysler for “thousands” more minivans.
Waymo is launching its debut service in Arizona, thanks to relaxed legislation and good weather. But Uber’s recent crash in Tempe—one of its cars killed a pedestrian pushing a bike across the street—raises questions about the ethics and wisdom of testing on public roads. Earlier today, Governor Doug Ducey indefinitely barred Uber’s robo-cars from testing in the state.
“We have confidence in our system,” says Krafcik. “We continue to work very closely with regulators, but there should be no question about the care we take, and the redundancy we have.” He cites the five million autonomous miles his firm has driven in 25 cities, plus five billion miles in simulations, when defending the decision to let his vehicles loose on public streets.
This is the sixth vehicle that Waymo has outfitted with sensors, from the Prius, to the most recent Chrysler Pacifica, and it’s getting pretty slick with the styling. The autonomous I-Pace prototype the company unveiled on stage ahead of the New York Auto Show doesn’t ruin the hunky lines of Jaguar’s SUV too much. Waymo and Jaguar have condensed the lidar laser scanners, radar, and cameras, needed to perceive the world around the car, into a streamlined roof box with a black bulge on the top, which looks like the spinning light on a 1970s cop car. The only other giveaways are lumpy sensors over the front wheels, and some less-than-subtle badging.
Jaguar, for its part, gets a large chunk of guaranteed sales and a chance to look like it’s at the forefront of this emerging technology. The company is involved with separate self-driving trials with the UK Autodrive Project, a three year test of connected and autonomous cars.
The British company launched the I-Pace earlier this year. It’s fully electric, with a 95kWh battery, and a range of 240 miles. It can sprint to 60 mph in just 4.5 seconds, and makes a compelling alternative to Tesla’s Model X. (Just don’t expect the robot to floor the accelerator.) The range is enough for any average commuter, but for a self-driving vehicle aiming to offer up to 50 rides a day, it may be a limiting factor. The hardware required to enable robo-driving is also power intensive—all the extra sensors and the chips in the supercomputers on board suck down electrons.
On the other hand, Jaguar advertises an 80 percent top-up in 40 minutes. “One thing that attracted us to the I-Pace is the quick recharge time,” says Kafcik. “We can get through the peak duty cycle of a rush hour, and then do a quick top-off charge to get us through the rest of the day.”
Learning how to manage a fleet of electric vehicles, or who to partner with, is another valuable insight Waymo will gain, and it’s one that other players will need to learn if countries like the UK, India, Norway, and China, go through with plans to ban the sales of internal combustion engines. As well as just needing outlets, self-driving cars will have to be capable of hooking up to power with no human help. That could be achieved with wireless charger (just park over a particular spot, like throwing your phone on a charging pad), or more creepy looking concepts like Tesla’s robotic snake cable charger.
As for the passengers, a ride in a Jag might be fun at first. But dramatic as it currently sounds, a ride in a vehicle with no human in control quickly becomes mundane. People in the back get over the novelty of an empty drivers’ seat quickly and resume normal passenger behavior, like looking at their phones, or napping, even as they cruise down the highway to the future.
Apple has reported outages for the iTunes Store, the App Store and other systems after customers reported receiving error messages.
Several Apple customers and iOS users tweeted at Apple Support on Tuesday to find out why they were repeatedly receiving messages saying “The iTunes Store is unable to process purchases at this time” — especially when no one was attempting to buy any applications. Users reported getting the pop-up message while trying to open apps on their iPhones.
Apple’s System Status page reports outages for Apple TV, the iBooks Store, the iTunes Store, iTune U, the App Store and the Volume Purchase Program. Each outage report says the ongoing issues started affecting some users at 3:04 p.m. Those affected will be unable to access the platforms and make purchases until the problems are resolved. Apple did not immediately respond to a request for comment.
Apple Support said on Twitter that it will update the System Status page with any new information.
Update: Apple’s System Status page reports that the issues were resolved at 4:49 p.m.
If you’re still trying to get your head around Bitcoin and ICOs, that’s understandable. Blockchain though, the underlying social encryption technology behind cryptocurrency, is applicable to any and all industries.
The far-reaching implications of its technology are well documented. Blockchain’s ascension to top buzzword of 2018 is based on its potential to bring transparency and efficiency, eradicate fraud, wipe out corruption, fix supply chain issues, and give people power over their data.
A blockchain can be applied to anything, immediately. It will be years before we are using a different form of payment for most goods.
How This Can Work In Your Favor
When I view cryptocurrency for the immediate future I’m far more interested in the innovative uses of ICOs as alternatives to venture capital than if someone will eventually be able to use Dogecoin at their local supermarket. That’s the real and applicable stuff for startups and entrepreneurs.
An ICO can be more substantial than a quick way to gain funding. Swytch, an upcoming ICO, is a renewable energy token. Built on a blockchain, it will use data and advanced modeling to estimate the relative environmental impact of user’s energy use and allocate tokens accordingly.
Basically, they’re creating a real monetary incentive for smart energy use. And they intend on a Proof-of-Production protocol that creates evidential proof of energy production to capture data directly from existing smart meters and create a network of trusted devices.
Why do I mention this? Because you can’t create a simple ICO anymore. Those days are gone. A random coin offering will not perform. Just like any movement or marketplace, there has to be a compelling reasoning behind an ICO in 2018.
Last year, it was new enough to just create one and succeed. Now, it’s just like pitching anything: It has to have substance and a marketing hook that points towards stability in an unstable market.
Why Your Startup Should Use a Blockchain?
The immediate and obvious answer is you may get more funding. The Long Island Iced Tea Company changed its name to Long Blockchain Corporation and the dollars started pouring in.
But don’t they still just sell an assortment of ready-to-drink beverages? They sure do.
That oft-used example shows you how powerful the buzzword is this year. But beyond that, there are tangible reasons to use a blockchain. It’s a public ledger that can store and manage all types of transactions. Transactions take place within “blocks” that are time stamped and linked to each other. Tampering with any information in a block would affect the entire chain, making it impossible to meddle with and more secure.
Facebook’s recent struggles are proof that any company, no matter the size, is susceptible to eroding public trust if it can’t keep user data secure. There’s a reckoning coming. Established companies like Facebook will probably survive and be just fine. Startups looking to get funded might not.
In my experience, most venture capitalists will now choose a company using a blockchain to secure data and transactions over a company that isn’t. That’s becoming common sense. And the barrier to entry on creating a blockchain is not high. It’s actually quite simple.
Understand the Trends
Currently, companies are willing to pay good money to access your data and do so on a daily basis, without your knowledge or input. Blockchain technology can cut out the middlemen and allow consumers to authorize their own data as they see fit.
Focus on this space intently this year. Read. Learn. Educate yourself.
Why? Consumers are going to want solutions and security regarding their data. A paradigm shift is coming and that always means opportunity. If you can invert the process and give people control over their own data, you’ll be meeting a growing need while creating a potentially very large business.
But on a smaller scale, even allowing that within your existing business will help with consumer confidence.
Having control over your data means that you can charge companies for its usage, since you’ll know every time someone wants to access it. ICOs like Sooloox are allowing consumers to authorize their data use, rather than simply provide it–reversing the marketing model by turning it into a consumer-led one. In an open data marketplace, consumers can trade their data like a commodity.
You don’t need to be an expert in the technology itself. I’m not. But understanding emerging consumer needs (privacy, ownership of data) can help you predict where and how to position your startup to get funding or find customers, regardless of industry.
Facebook CEO Mark Zuckerberg issued a public apology in an old-school format Sunday — via a full-page newspaper ad in major U.S. and U.K. papers.
The ad, printed in clear type over Zuckerberg’s signature, begins: “We have a responsibility to protect your information. If we can’t, we don’t deserve it.”
It then refers to “a quiz app built by a university researcher that leaked Facebook data of millions of people in 2014. This was a breach of trust, and I’m sorry we didn’t do more at the time. We’re now taking steps to make sure this doesn’t happen again.”
That’s a rather mealy-mouthed summary of the Cambridge Analytica debacle, in which a ‘quiz app’ was only the tip of the spear wielded by political operatives set on influencing the U.S. election.
Nonetheless, the ad continues. Zuckerberg says that Facebook has “already stopped apps like this from getting so much information. Now we’re limiting the data apps get when you sign in using Facebook.” Zuckerberg also writes that Facebook will investigate, ban, and inform users about other apps that had access to similarly large amounts of data. Facebook will also provide better privacy protection by reminding users what apps they’ve granted access to their data.
“Thank you for believing in this community,” Zuckerberg concludes. “I promise to do better for you.”
According to Vanity Fair, the ad appeared in British newspapers The Observer, The Sunday Times, Mail on Sunday, Sunday Mirror, Sunday Express, and Sunday Telegraph. In the U.S., it appeared in print editions of The New York Times, The Washington Post, and The Wall Street Journal.
The ad is the latest in a weeklong series of public apologies by Zuckerberg and other execs. Such apologies, followed by promises to do better, are getting lessconvincingeverytime. And the surge in calls to #deletefacebook suggests users seem to be waking up to the fact that Facebook is less a “community” than an ingenious digital glue trap. Investors certainly seem to doubt that Facebook is going to emerge unscathed. And all the humble apologies in the world seem unlikely to save Zuckerberg’s political ambitions.
The irony of Facebook’s CEO taking out a print ad to apologize for the company’s biggest scandal ever also can’t be overlooked. Facebook grew in part by leveraging the work of established publications, then became a major vector for manipulative “fake news.” Now, Zuckerberg seems to be implicitly acknowledging that print remains a valuable format when you really, actually want to be taken seriously.
Apple Inc. Chief Executive Tim Cook has called for stronger privacy regulations that prevent the misuse of data in the light of the controversial leak of Facebook user information.
Cook called for “well-crafted” regulations that prevent the information of users being put together and applied in new ways without their knowledge during a session on global inequality at the annual China Development Forum in Beijing on Saturday.
His comments will ramp up pressure on Facebook Inc. and other technology companies that rely on the huge reams of data gathered from billions of people to power their products, services and sales. Facebook co-founder Mark Zuckerberg belatedly apologized for failing to better control its customers’ data following reports that it let Cambridge Analytica amass information on 50 million users. The social network’s shares have tumbled 14 percent following the reports.
“I think that this certain situation is so dire and has become so large that probably some well-crafted regulation is necessary,” Cook said after being asked if the use of data should be restricted in light of the Facebook incident. “The ability of anyone to know what you’ve been browsing about for years, who your contacts are, who their contacts are, things you like and dislike and every intimate detail of your life — from my own point of view it shouldn’t exist.”
Cook said his company had long worried that people around the world were giving up information without knowing how it could be used.
“We’ve worried for a number of years that people in many countries were giving up data probably without knowing fully what they were doing and that these detailed profiles that were being built of them, that one day something would occur and people would be incredibly offended by what had been done without them being aware of it,” he said. “Unfortunately that prediction has come true more than once.”
Top U.S. executives from Google chief Sundar Pichai to IBM’s Ginny Rometty gathered in Beijing this weekend under the shadow of a brewing trade war, as U.S. President Donald Trump prepares to slap tariffs on Chinese goods, potentially affecting more than $50 billion worth of products. Until the U.S. government formalizes the details of the tariffs, the impact on American companies will be difficult to gauge.
Cook said that he held passionate views on the issue and that he’d personally weighed into the debate.
“The countries that embrace openness do exceptional and the countries that don’t, don’t,” he said. “It’s not a matter of carving things up between sides. I’m going to encourage that calm heads prevail.”
An online persona “Guccifer 2.0,” which claimed credit for hacking the Democratic National Committee ahead of the 2016 election, has been confirmed as a front for Russian military intelligence. The confirmation has significant implications for Special Counsel Robert Mueller’s ongoing investigation into Russian interference in the 2016 U.S. Presidential election.
During the U.S. election, Guccifer 2.0 presented itself online as an independent Romanian hacker. The name was supposedly an homage to Guccifer, an actual Romanian hacker who targeted U.S. politicians and uncovered Hillary Clinton’s private email server. Guccifer 2.0 obtained email archives from the Democratic National Committee, then released them to outlets including WikiLeaks. Those emails appeared to show DNC efforts to thwart Clinton primary challenger Bernie Sanders, likely damaging her support among progressive Democrats.
But skepticism about Guccifer 2.0’s identity has been widespread, and U.S. intelligence authorities have previously said it was likely a Russian operation. But there has been little hard evidence, because the persona generally went online using a VPN, or Virtual Private Network, to mask the origin of its activities. Now, The Daily Beast reports that investigators have found a single instance in which that VPN was not activated, and have identified Guccifer 2.0 as a front run by a specific but unnamed Russian military intelligence officer within the military intelligence agency known as the GRU.
That’s an important confirmation for one clear reason: Guccifer 2.0 has communicated directly with members of Donald Trump’s inner circle. Roger Stone, one of the most flamboyant of Trump’s allies and a onetime campaign adviser, admitted in March that he had exchanged congratulatory messages with Guccifer 2.0 on Twitter during the election.
Stone’s known communications came after the release of hacked DNC emails, but Stone also made statements suggesting he knew about some parts of the hacked DNC emails before they were made public. According to The Daily Beast, the FBI agents who tracked Guccifer 2.0 have now become part of Mueller’s team.
Zuckerberg, after all, has known that Cambridge Analytica, a data firm that worked on President Trump’s 2016 campaign, had acquired 50 million Facebook users’ data from a third party researcher since 2015, when The Guardianfirst reported it. But the public rage about the misuse of this data didn’t reach a boiling point until last Saturday, when The New York Times, along with The Guardian and The Observer, published their investigations citing a whistleblower named Christopher Wylie.
While Facebook issued public statements as the scandal broke, Zuckerberg remained silent.
Zuckerberg mostly stuck to the script. But between admitting Facebook’s mistakes and rolling out a series of updates to further protect users privacy, he also managed to make some news. Here’s what we learned from Zuckerberg’s apology tour:
Macedonian Fake News Artists Are Still At It
In an interview with The New York Times, Zuckerberg explained how much Facebook has learned since the 2016 election by pointing to the recent special election in Alabama between Republican Roy Moore and Democrat Doug Jones. “In 2017 with the special election in Alabama, we deployed some new [artificial intelligence] tools to identify fake accounts and false news, and we found a significant number of Macedonian accounts that were trying to spread false news, and were able to eliminate those,” Zuckerberg said.
Though he didn’t expand upon what exactly the company found, or how those new tools were trained and implemented, the fake news in question seems to be an extension of the fake news websites that popped up in Macedonia and permeated Facebook during the 2016 election. Run in some cases by teenagers with no particular stake in US politics, the sites mostly offered their creators a way to make some quick cash through advertisements that ran on the sites.
Zuckerberg May Support Some Regulation
In his interview with WIRED, Zuckerberg said Facebook would be open to some regulation, including the Honest Ads Act. Introduced by Democratic senators Amy Klobuchar and Mark Warner and Republican senator John McCain, the bill would require digital ads to be more transparent about who’s paying for them, who they’re targeting, and how much they cost. “Most of the stuff in there, from what I’ve seen, is good. We support it,” Zuckerberg told WIRED. That is, of course, a low-risk claim for Zuckerberg. The Honest Ads Act is one of the more light-handed proposals for how to regulate the tech industry floating around right now, and Facebook has already implemented many of its strictures. It also appears unlikely to pass, as Zuckerberg himself acknowledged.
Later on, in an interview with CNN, Zuckerberg said, “I’m not sure we shouldn’t be regulated,” but stopped short of suggesting specific policies Facebook would welcome, beyond increasing advertising transparency.
Zuckerberg Would (Maybe) Testify to Congress
When it came to answering Congressional calls to testify before the Senate Judiciary Committee and others, Zuckerberg chose his words carefully. “If it is ever the case that I am the most informed person at Facebook in the best position to testify, I will happily do that,” he told WIRED, in a statement he echoed to other outlets.
That doesn’t mean Zuckerberg will be showing up on Capitol Hill any time soon. The CEO reiterated in interview after interview that Facebook sends people to testify who are the most informed about the topic at hand. “There are people at the company whose full jobs are to deal with legal compliance or some of these different things, and they’re just fundamentally more in the details on those things,” he told WIRED.
That may be. But given the existential crisis Facebook is now experiencing, it seems in the company’s best interest for its CEO to have a firm grasp on those details, too.
Facebook’s Fixes Won’t Come Cheap
In his conversation with Recode, Zuckerberg admitted that auditing Facebook apps, going back years, to ensure they’ve handled data appropriately is a complex, costly task. “You know, the conversations we have been having internally on this is, ‘Are there enough people who are trained auditors in the world to do the number of audits that we’re going to need quickly?'” Zuckerberg said.
He noted it will likely cost millions of dollars to hire the number of people required to undertake such an investigation. Given Facebook’s market value, even after this scandal, is nearly $485 billion, though, it seems well worth the investment.
We believe the recent update from Geron (NASDAQ:GERN) was definitely negative. Despite Geron’s claim that the overall survival seen so far in the IMbark trial is very promising, we believe the median overall survival (mOS) for the imetelstat group is not unusual given the baseline health of the IMbark patients. We also believe that Geron provided evidence that imetelstat has no impact on survival by disclosing that there was no difference in median survival detected so far in either dosing arm. The update only served to confirm our view of imetelstat’s likely failure and our expectation that partner Janssen (NYSE:JNJ) will terminate its licensing agreement.
IMbark enrolled a population which benefited survival when compared to historical literature
The big takeaway that investors seemed to have had from Geron’s recent update was that with a median follow up of 19 months at the time of the January 2018 data cut, median overall survival had not been reached in either dosing arm in the IMbark trial. Geron further stated the greater than 19 months of median overall survival looked promising since published clinical and real-world studies estimate that median overall survival after discontinuing JAK inhibition therapy is approximately 14-16 months. Analysts such as from Stifel went further and stated, “As the 19 month follow-up was conducted in January, this suggests a potential ~22-24 month median overall survival in patients taking imetelstat.” Investors ate up the news, driving the shares up over 50% to 52-week highs.
We think investors are overlooking the fact that the patients in the IMbark trial are healthier than the trials to which Geron compared them. The IMbark trial’s inclusion and exclusion criteria explicitly state that only ECOG 0-2 patients can be enrolled and that patients with a peripheral blood blast count of >= 10% are to be excluded. The trial excluded ECOG 3 patients, who are capable of only limited self-care and are confined to a bed or chair for more than 50% of their waking hours. We also know that myelofibrosis (MF) patients with peripheral blood blast count of >=10% have shorter overall survival. Based on stated trial criteria, we have concluded that the IMbark trial did not include very sick patients.
Geron provided additional information on the 4Q 2017 conference call when in response to a question, Geron revealed that IMbark patients “required at least 75,000 platelets” per microliter. This point is crucial because when stratified by platelet count, the historical MF trials show that patients with higher platelet counts live substantially longer than the overall population of patients who discontinue JAK inhibitors.
A well-known trial for MF patients after discontinuation of ruxolitinib (Jakafi) is a recently published paper in the 130 edition of medical journal Blood by researchers at MD Anderson. The researchers state that patients after discontinuation of Jakafi had a “median survival time of 14 months (95% CI, 10-18 months).”
At face value, the IMbark results look very promising versus the MD Anderson results: at least 19 months mOS in IMbark vs. an expected mOS of 14 months. However, the MD Anderson trial was actually a chart review on an essentially all-comers basis and followed patients from the start of Jakafi and after discontinuation. In other words, it included all patients who discontinued Jakafi regardless of health. This can be seen in Table 1 where it shows that the median platelet count in the post-Jakafi population was 91,000/ul with a range of 11,000/ul to 922,000/ul. Because the median platelet count in the paper was so close to the allowed lower bound in the IMbark trial, a substantial portion of the patients followed in the MD Anderson paper would have been ineligible for IMbark. For reference, a normal level of platelets is 150,000-400,000/ul and mild bleeding can occur if platelets drop below 50,000/ul. We can also see that one of the patients in the MD Anderson paper had a platelet count of 11,000/ul, which is considered very low.
We can see later in the Blood article in Figure 2B that patients with platelet counts <100,000/ul did significantly worse in terms of survival. It appears this population had a median survival closer to 10 months. They accounted for 33 of the 56 total patients, more than half of the population, which we believe skewed the overall results negatively. Conversely, for the patients with a platelet count of >100,000/ul, it appears the mOS was closer to 36 months! We believe the IMbark patient population was more similar to the >100,000/ul population in the MD Anderson trial than the <100,000/ul population. Keep in mind that IMbark already excluded patients with ECOG scores greater than 2 and patients who had peripheral blood blasts of >10%.
If IMbark, which as we showed above had a relatively healthy population, enrolled one-third of patients that should have an expected mOS of 10 months and two-thirds of patients that should have an expected mOS of 36 months, then we would expect the blended average to be around 24 months. As a result, we believe that the median OS of 22-23 months that Stifel estimates Geron is observing currently is neither impressive nor unprecedented. In fact, it’s completely expected.
IMbark high-dose arm is not outperforming the low-dose arm which was determined to be ineffective
Furthermore, Geron disclosed that neither arm of the IMbark had reached median OS. The IMbark trial had two arms, a low-dose 4.7mg/kg arm and a high-dose 9.4mg/kg arm. In September 2016, Geron announced that enrollment in the 4.7mg/kg dosing arm would be discontinued because the dose was determined to be ineffective and did not “warrant further investigation.”
In addition, because the low-dose arm was essentially shut down, Janssen amended the trial protocol so that the 4.7mg/kg arm patients were allowed to crossover to the 9.4mg/kg arm at the investigator’s discretion. However, Geron stated on the recent fourth quarter 2017 earnings call that “there were a meaningful number of patients who remained on 4.7 mg/kg.” Therefore, we believe the 4.7mg/kg is a good proxy for a placebo or control arm.
Since Geron and Janssen determined the 4.7mg/kg arm was ineffective, then we should expect the 9.4mg/kg arm to outperform on a survival basis, but we haven’t seen that yet, as indicated in their press release which stated: “the median overall survival has not been reached in either dosing arm.” Since the 4.7mg/kg arm was enrolled on average earlier than the 9.4mg/kg arm, a best case would be equivalent survival rates between the arms.
This indicates to us that imetelstat has not had a positive impact on survival. This lack of survival efficacy matches the lack of efficacy in traditional endpoints associated with MF like spleen volume, which Geron and Janssen announced in April 2017, and we believe it corroborates our view that imetelstat is not effective in MF.
Janssen is no fool
Lastly, we point out that Janssen has essentially delayed its decision on imetelstat multiple times. A decision was originally expected in 2016 and then in 2017. If imetelstat truly offered a 4-6 month or greater survival benefit, we believe Janssen would have opted into imetelstat by now. Instead, Janssen stopped enrollment in September 2016 and has been waiting until the last moment to make a decision. To us, this seems like more of a Hail Mary than a strong indicator of efficacy.
We are short Geron
We are short Geron with a price target of $0.51. We believe imetelstat will be returned by Janssen and value it at $0.
Disclosure:I am/we are short GERN.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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