Specialized Men's Turbo Levo Comp Review: A Pedal-Assist Mountain Bike That Rips Up the Trails

Signing on to test the new Specialized Turbo Levo mountain bike is a little like making a deal with the devil—especially if you live in a town, like I do (Duluth, Minnesota), where e-bikes aren’t allowed on the 93 miles of IMBA gold-medal-level, purpose-built singletrack. There are many purists out there who firmly believe that only those who can ride trails under their own power should have access to them. My sensibilities fall in that camp, but in the name of open-minded evolution and a hardwired quest for fun, I felt obliged to test the new bike anyway.

Haters, you’re going to cringe at my conclusion: This e-bike is a blast. Before you dismiss me as a traitor and a slacker, hear me out on why the bike deserves to exist on authorized trails.

For starters, Specialized employed 40 people to design this bike, hiring three system engineers whose sole job was to make sure every component would seamlessly integrate. Being bike manufacturers, they started with the frame design: The Levo uses the same asymmetric frame as Specialized’s new Stumpjumper, which makes the bike 20 percent stiffer over the previous Levo while reducing its weight by 110 to 550 grams. It’s also longer and slacker in the front, which translates to a flowing, precision ride on downhills.

Working off the benefits of that frame design, Specialized worked to integrate a motor within it. First, the company designed and perfected its proprietary software. Then they hired manufacturer Brose to wrap the inner workings in magnesium, which makes the motor 14 ounces lighter. When you make a motor, you also have to figure out where and how to mount it on the bike. The solution was to use a direct motor-to-frame system The motor mounts on the bottom bracket, which shaves off an additional 14 ounces. Like all Type 1 vehicles, the max speed the motor allows is 20 mph. But when it reaches that 20 mph max, the two freewheels in the motor disengage from the crank and the bike starts pedaling naturally, which makes it a much smoother ride.

Spinning Electrons

In the highest-end S-Works ($12,050) and Expert Levo ($8,250) models, Specialized amped up the battery up to 700 watt-hours—200Wh more powerful than the standard e-mountain bike. This gives it a whopping 40 percent longer life and extinguishes riders’ “range anxiety,” that sinking feeling that you’re going to be stranded in the back of beyond with a behemoth bike after the battery dies. In the alloy models like the Turbo Levo Comp, the battery is 500Wh, the industry standard. Both the 500Wh and 700Wh models are 15 percent smaller and 11 percent lighter and housed in the downtube.

To control the motor’s brains, Specialized installed a small Turbo Connect Unit (TCU) on the top tube. The TCU turns the bike on and tells the rider how much power the battery has—one LED bar equals 10 percent of the battery’s charge. For more data, Specialized upgraded its Mission Control app (available for Android and iOS) which allows the rider to connect to the bike over Bluetooth, then tune it, diagnose it, track rides, and connect to third-party platforms like Strava.

The best new features: “Smart Control,” which acts as a governor, regulating the power of the motor to ensure that a desired battery capacity is retained throughout the selected length of the ride; and “Shuttle Mode,” which gives maximum power output with less required pedaling force for going uphill fast with to get in more downhill runs.

Pedal Power

All of this sounds fantastic on paper, but how does it translate to the trail? Quite seamlessly. I started my first 2.5-hour test of the alloy Turbo Levo Comp on a mile-long bermy, bumpy downhill flow trail. Despite the Levo being roughly 20 pounds heavier than the carbon Stumpjumper, it felt surprisingly similar—stable, deftly absorbing bumps, and cornering well in the berms with its 150 mm of travel in both the rear shock and front fork. The almost silent whirr of the motor was mesmerizing, with no glitchy cutouts or surges in power.

I soon learned, however, that if my weight was too far forward, especially on tight rollers, I was dangerously close to flying over the bars. This ensured that I couldn’t get lazy. I had to play close attention to my technique throughout the downhills. This is why some coaches like to use e-bikes as a teaching tool: The bikes allow riders to reach higher speeds more regularly with less effort and more easily simulate a racing scenario.

My only crash of the three-day test came when I engaged “Smart Control” on the downhills. Without being able to click into turbo mode, I didn’t generate enough speed going into berms. In one instance I found myself too high, too slow, and washed out the front wheel.

My guiltiest pleasure while riding the Turbo Levo was engaging full Shuttle mode on a particularly challenging 800-foot singletrack climb. I confess I was cheating a little: Real athletes would have ridden uphill in the battery-saving eco mode, forcing a more challenging workout. But the battery-juice-munching climb was worth it. I felt like a superhero, or at least a doped cyclist, as I charged up the steep, technical stretch, beating my boyfriend Brian by a solid five minutes.

“Wow, that thing is the great equalizer,” Brian said when he finally reached the top, sweat dripping out of his helmet. But my e-assisted hard charging gave Brian even more incentive to beat me riding back down. He did so with ease. Which brings me to the reality that any bike is only as fast and technically proficient as its rider, so invest as much time in developing your skills as you would investing money in your e-mountain bike.

MannKind Is A Better R&D Company Than A Full Service Pharma Company

For almost as long as I have covered MannKind (MNKD) I have always stated that I would rather see this company as a research and development entity than one that is attempting to get into the business of sales and distribution. My opinion on that front became more solidified when it was blatantly apparent that MannKind was really struggling to deliver Afrezza sales numbers that were able to impress the Street or help the bottom line.

The pipeline deal with United Therapeutics (UTHR) gave some new life to the idea that MannKind might be able to shift its business model to something more in line with what I have always seen as the best opportunity for this stock. To that end, MannKind seems to be focusing its more recent presentations to the possibilities of the pipeline, a move which I applaud.

In my opinion, the perfect situation would be one that saw the company essentially sell off Afrezza and make a pronounced shift to the pipeline. To see some flavor on the possibilities with such a move, investors can look to Arena Pharmaceuticals (ARNA). Arena was in a very similar situation to the one MannKind finds itself in. The company developed a drug, got a big partnership deal, saw that partner essentially pull out, and was wallowing along without enough capital and with prospects that were not very compelling. The main difference is that Arena had a more mature pipeline that was closer to seeing new drugs come to fruition than what MannKind has. To make a long story short, Arena essentially sold off the first drug for some upfront cash and a royalty and shifted its entire business to its pipeline. Today, Arena has three very mature drugs in its pipeline and is on the cusp of either partnerships or FDA approval.

The issue here is simple, and it is something that less experienced investors often seem to miss. The Street will place more value on potential than it will on a drug that has a history of poor sales, or even one that is growing, but growing very slowly.

If MannKind were to announce that it had a buyer for the Afrezza franchise, the company could trim back its expenses greatly. If it were able to garner $50 million for the Afrezza move and add another $100 to $150 million with an offering, we would have a company that has a better appearance to Wall Street.

MannKind, as it currently exists, is paying out almost $1 million per week for selling and marketing, and another $200,000 plus in rebates, discounts, returns, etc., whilst paying out just $200,000 per week in research and development. Imagine what could transpire if monies were dedicated to the pipeline rather than attempting to sell a drug that is simply not selling well.

In its most recent presentation at Cantor Fitzgerald, management had to spend time discussing Afrezza, which, in my opinion, is a detraction from the current pipeline possibilities. If one were to look at the presentation in a vacuum, it was quite good. That being said, if one does a little digging (which the big players will do), you start to see the weak spots. Some examples below relative to a milestone checklist of management:

Chart Source – MannKind Corp.

Looking at the chart, it would appear that every goal management has outlined is tracking well. Looking deeper though, we see where there is some weakness. Let’s assess one at a time.

Growth Trajectory Continues With Afrezza

On its face, it is a truthful statement. The problem is that the growth trajectory is not even meeting management’s own stated goals, and is not a trajectory that impresses the Street. In fact, it can be argued that the growth trajectory delivered is getting more costly to support. Management might put a check mark next to the bullet point, but I would characterize this point as incomplete.

FDA Label Change 2017

Indeed, a label change happened. The issue here is that the company did not get everything it wanted, and compounding the problem is that the label change has not really shifted the trajectory on sales.

Completion of STAT

This sounds great, and did happen, but what has the impact been? It was a small study that provides some anecdotal data, but lacks the scope, size, and design to really move the needle in a way that will help the bottom line. It is a study that provides enough positive data to warrant additional studies, but funding those may not deliver the needed value in a reasonable time frame.

IND Filed For TreT and Partnered With United Therapeutics

This is the best accomplishment. I applauded the phase 1 trial of TreT as a smart choice. It was a great candidate with great odds for success. Attracting a partner was a big boost. In my opinion, MannKind did not get all that it could have in the deal because of a lack of leverage, but it does point to the possibilities of Technosphere as having real potential. The check mark in this bullet point is warranted.

Increase Payor Coverage

This is another statement that on its face is true. That being said, the level of coverage is still disappointing. MannKind made a big move in May of this year, but since then the coverage has not had much traction, and despite this better move in May, the sales trajectory has not shifted by very much. Many formularies will be re-established here in October, so this bears watching.

Chart Source – Spencer Osborne (based on data from FingertipFormulary)

In simple terms, Afrezza is on lower level tiers and still carries many restrictions. It will be costly to get onto higher tiers.

Recapitalization (Complete upon UTHR closing)

This bullet point is off of the mark, in my opinion. This company is not near being fully funded. The United Therapeutics deal does provide a couple of quarters worth of cash in the near term and possibly another couple of quarters during the next 2 years. But beyond that, the company still needs cash. Currently the company has some breathing room in until 2021, but it will need to address some substantial debt payments that year.

International Expansion

Management checks this box, but the deals it has established thus far have lacked attractiveness. There was no upfront money for Brazil, and minimal upfront money for India. The company has stated it intends to file for approval in Mexico and Canada. In my opinion, the Brazil and India deal will help the company use up contracted insulin, but will not be a driver of substantial cash making it to the bottom line. The insulin contract with Amphastar is a big burden to MannKind. The company still has to pay Amphastar almost $100 million over the next 5 years. As yet, the company is not able to use all of the insulin it must buy. International deals help use up what would otherwise expire, but until Afrezza can actually help the bottom line, it remains a burden that investors consider.

Of the seven bullet points that the company outlined as complete, five of them relate to Afrezza. Of the three remaining bullet points two relate to Afrezza. Perhaps the most important point that remains is a Co-Promote deal for the inhaled insulin. As yet, the company has not really defined what it means by co-promote, and due to a lack of analyst coverage, has been able to keep that point as undefined. If a co-promote partner were to take over the drug, pay the ongoing trials, absorb the insulin purchase requirements and simply pay MannKind a manufacturing contract and royalty, I think that the Street would celebrate the deal. Even if it was for a relatively small upfront payment.

Simply stated, I like MannKind as an R&D company much more than I like it as a company trying to mount its own sales force, and spending money on marketing, patient management, etc.

The deal with Receptor Life Science could be compelling if something were to actually happen. The cannabinoid sector is hot at the moment. Some of my regular readers have likely already seen some healthy returns of Youngevity (YGYI), a company I cover that is entering the CBD space and working toward a field-to-finish hemp and CBD oil capability. The current problem is that Receptor Life Science is on radio silence and has been for years. If RLS were to break radio silence while that sector is hot, it could provide a compelling move in MannKind stock. That, however, is a big if, but let’s take a moment to assess.

If MannKind were to be able to extract itself from Afrezza costs at the same time that it is able to announce something in the cannabinoid space, it could provide the very best opportunity for the stock to rise, the warrants to get taken out, and even provide for an offering that could raise enough capital to fund bringing some pipeline candidates forward, which could in turn bring in added partners.

Let me make this clear. I am not anti Afrezza. I feel that the product has some compelling attributes that can serve needs within the diabetes space. My issue with Afrezza is that MannKind cannot afford to market the drug the way that it needs to be marketed, and it has some legacy deals (Amphastar – and Deerfield milestones) that will make it difficult for any company to see a quick return on the drug without making a substantial investment into marketing it. That means that such a company would need to minimize its acquisition costs on the rights. If MannKind had hundreds of millions in the bank, and a pipeline that was a bit more mature, it could be worth continuing the efforts with Afrezza. Unfortunately, MannKind does not have that level of cash, and does not have a more mature pipeline.

With all of that being said, MannKind could be a great speculative play on the possibility of RLS alone if RLS gets moving. I am oft asked what would make me bullish on MannKind. The answer is rather simple.

  • Getting fully funded
  • Getting a more mature pipeline
  • Getting out of the sales and marketing business
  • Getting leaner on overhead and more swift on R&D
  • Recapitalizing existing debt and getting a cash stockpile to develop new drug candidates

I know that there are some readers that are full-fledged members of the “Afrezza Army.” Much of what I am saying in this article may be upsetting to those readers. My answer to you is simple. The investment is in MannKind, and not Afrezza. Public companies need to re-invent themselves, grow, and be nimble enough to shift the path when the situation dictates. Some might even say that the best chances to see Afrezza succeed may be in the hands of another company. Do not fear it. Celebrate it.

It is clear that the Street is looking to put money into inhaled solutions. Look no further than Liquidia (LQDA). That company was $11 per share just 2 months ago. Today it trades at nearly 3 times that level. Liquidia is focused on research and development. Liquidia has a story that the Street likes. Liquidia is not (at least not yet) attempting to be a pharma company that takes a drug to approval and then tries to market it alone.

There are many times that I would have been a player in trading MannKind stock. I committed to not buy the stock as long as I was actively writing about it, thus have no shares. In fact, I have never had a position in MannKind. That being said, I have made clear when the opportunities exist to trade this effectively, or even build a longer term position as a speculative play in one’s portfolio. MannKind has had a tendency to be late to the game in many respects, and to box itself into corners on the financial front. These are things that can be repaired, but it takes a bold move on the part of MannKind and a bold move on the part of potential investors and partners.

There is opportunity here for traders as there has always been. There is also more upside speculative potential than has existed in the past. Is MannKind going to rocket to the moon so fast that investors miss out? Not in my opinion. Can it make a substantial pop on the right news? Yes. Investors should not get themselves so hung up on the potential without balancing it with the cash situation, cash commitments, and cash flow. There will be bears that will argue that Technosphere cannot make it and that it is expensive. I do not subscribe to that thesis. What Technosphere needs is funding. In my opinion, the Street could be eager to fund Technosphere programs. What I do think the Street is not eager to fund is Afrezza sales and marketing efforts. That is simply my opinion based on the lack of appetite of the Street to play MannKind stock in a bigger way. If MannKind can re-invent itself, there could be a much more compelling story in the making. Stay tuned!

Disclosure: I am/we are long YGYI, ARNA.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Is The Tilray-Sandoz Canada Alliance Worth Getting Excited About?

Based on price action, Tilray Inc. (NASDAQ:TLRY) is currently the most exciting name in the very hot Canadian pot stock space. Also based on price action, Novartis AG (NYSE:NVS) is a boring Big Pharma stock. While I have previously warned investors that pot stocks are unlikely to be good buy-and-hold stocks, TLRY seems to have its supporters.

A point of difference between TLRY and other pot stocks is that it has a collaboration with Sandoz Canada, the Canadian arm of Sandoz, Novartis AG’s generics business. The aim of this article is to see if this collaboration justifies any of the current hype surrounding TLRY and if it might be something worth getting excited about for NVS investors.


TLRY data by YCharts

Figure 1: 2018 has been another boring year for NVS but an exciting beginning for TLRY

The TLRY-Sandoz Canada alliance

On March 18, 2018, TLRY issued a press release noting it had signed a binding letter of intent, which in concert with anticipated agreements to follow, allied TLRY with Sandoz Canada. TLRY noted it had become the exclusive collaborator of Sandoz Canada to “accelerate innovation and increase availability of high quality medical cannabis products.” So TLRY and Sandoz were set to sell cannabis together.

On June 19, 2018, Sandoz Canada announced that it had finalized the collaboration agreement. It noted that eight TLRY-Sandoz co-branded, non-combustible medical cannabis products were now available, including three dosages of capsules and five strengths of oils.

Figure 2: Eight products available under the TLRY-Sandoz Canada alliance. Source: TLRY website.

The Canadian medical cannabis market

Although legal access to cannabis for medical purposes in Canada came online during the period of 1999-2001, the initial framework for patients to access cannabis, coupled with the unwillingness to prescribe by many physicians, led to an initially tepid pace of growth. From humble beginnings, however, the medical cannabis market in Canada has transformed into a sizable industry.

Arcview Group and BDS Analytics have suggested the Canadian legal cannabis industry will generate $1.3 billion in 2018 ($600 million of that from medical use) and $5.4 billion in 2022 ($500 million of that from medical use). The predicted drop in revenues from medical cannabis is based on the fact that legalization may lead to those previously obtaining cannabis via the more complex medical route to simply obtain it as those using cannabis recreationally will. There are, however, two key factors which might offset patients switching from obtaining cannabis via the medical route to the newly legal recreational route come October 17, 2018. The first factor is that physician attitudes to prescribing cannabis continue to improve, which means prescribing might continue to increase, generating new patients.

Figure 3: Results from two studies examining attitudes among Canadian physicians to prescribing cannabis. The two studies were commissioned by CanniMed Therapeutics (OTC:CMMDF), which was subsequently acquired by Aurora Cannabis Inc. (OTCQX:ACBFF). Source: CMMDF prospectus.

The second factor is the recent commencement of coverage for medical cannabis by Canadian health insurers. For example, in February, Sun Life (NYSE:SLF) announced it would offer optional medical marijuana coverage of up to $6000 yearly per person in select conditions, including cancer pain and rheumatoid arthritis. In June, Markers Financial Inc. announced it too would soon offer coverage for medical cannabis prescriptions. For patients with insurance coverage, it may not make sense to access cannabis by the recreational route, although this will depend how much they would normally spend on cannabis.

Should NVS investors get excited?

The initial press release concerning the TLRY and Sandoz collaboration was just from TLRY – not TLRY and Sandoz (a Novartis division) or TLRY and NVS itself. Compare that to other developments which Sandoz felt it was worth bothering investors with, such as a collaboration with Biocon (OTC:BCNQY) to develop biosimilars. The same can be said of NVS, which does tend to issue a press release on major collaborations and their developments.

However, the website of Sandoz Canada does include press releases related to its collaboration with TLRY and medicinal cannabis. Now, this might seem like a simple way to analyze the impact of this new collaboration, but the point is that if NVS hasn’t bothered investors with this development, it might not be hugely material. If Sandoz Canada is talking about it, then it is relevant on the level of Sandoz Canada, which is not a stock you can buy.

NVS reported net sales of $49.1 billion in 2017, so even if Sandoz Canada and TLRY captured the entire Canadian legal medical cannabis market (say $500-600 million), that would not be a game changer for NVS. Rather, such an unlikely scenario (capturing an entire market) would be similar to NVS getting a new drug approved which is not quite a blockbuster. Then, Sandoz Canada’s entry into the Canadian medical cannabis space can be thought of as simply another recently approved drug in the NVS portfolio.

Figure 4: Breakdown of NVS sales by geographic region, including Canada/Latin America, and by division. Source: NVS 2017 annual report.

For the medical cannabis space to become more important to NVS’s bottom line, Sandoz Canada and NVS will need to do two things. The first would be to grow the market in Canada, don’t let it peak as the recreational route becomes legal. The second thing would be NVS (or other regional arms of Sandoz) to enter the medical cannabis space in other countries. NVS investors should keep an eye out for that second potential development, because the Sandoz Canada-TLRY collaboration does suggest that NVS is taking cannabis seriously, and so, collaborations in other countries seem possible (not necessarily with TLRY). Combined medical cannabis revenues from multiple countries could be a bit more meaningful for NVS and its investors.

Regarding attempts not to let the legal medical cannabis market peak too soon in Canada, Sandoz Canada is making moves. One of the attempts to further legitimize medicinal cannabis in the minds of unwilling physicians can be seen in a recent PR from Sandoz Canada, where the company essentially suggested pharmacies could serve as an ideal place to dispense medicinal cannabis.

If cannabis is used to treat a medical condition, Sandoz Canada believes that it should be distributed through appropriate channels to properly regulate the therapeutic intent of the treatment. If medical cannabis is authorized by a healthcare professional, it would be logical for it to be distributed by another professional, such as a pharmacist, so that patients can benefit from adequate follow-up and guidance from healthcare professionals if they wish. Sandoz Canada will share this vision during the upcoming consultation launched by the Ontario government.

– Sandoz Canada press release, August 15, 2018.

Even if the market doubles or holds steady thanks to the efforts of Sandoz Canada and others in the space, NVS will need to enter other worldwide markets before the cannabis business becomes a big line item on the balance sheet. NVS investors can stop here then.

Should TLRY investors get excited?

Although the medical cannabis market is not the size of the recreational market, TLRY does have some potentially competitive products worth review. One of the oils available as part of the Sandoz Canada collaboration is Tilray 2:100 (also known as TIL-TC150), which contains 2 mg/mL of Δ9 tetrahydrocannabidiol (THC) and 100 mg/mL of cannabidiol (CBD). On August 1, TLRY issued a press release noting published results from a phase 2 study of TIL-TC150 in children with a type of epilepsy called Dravet syndrome (notably, these patients had drug-resistant epilepsy). Twenty children in the study received TIL-TC150, 19 of them completing 20 weeks of treatment with TIL-TC150 being used as an add-on to existing anti-convulsant therapy. There was no control group in the study, but the drug did produce a statistically significant improvement in quality of life – and a statistically significant reduction in seizure count – at week 20 (compared to baseline).

Figure 5: Change in seizure frequency based on patient seizure diaries. Each column represents a patient, and the percentage change is calculated based on a comparison of weeks 17-20 (endpoint period of the study) to weeks -4 to 0 (lead-in portion of the study when patients were not on TIL-TC150). Five patients did experience an increase in seizures based on that comparison, whereas two patients were unchanged and 12 experienced a decrease in seizures (two patients had a 100% reduction and were thus seizure-free during weeks 17-20). The overlaid line represents the average change in seizures frequency across the 20 weeks of treatment. Source: Publication in Annals of Clinical and Translational Neurology.

Despite the size of the study I find the results to be quite promising. I would like to see TLRY run follow-up studies, which the press release indicates TLRY will, with some sort of control group (be it placebo or active comparator). TLRY is not really a biotech/pharma company, although it is making drugs and selling them, and so, it might need some help furthering that clinical development. The phase 2 study in Dravet syndrome was designed and conducted by researchers at The Hospital for Sick Children in Toronto. Larger studies might require enrollment across multiple sites, and so, more expertise might be required to plan such studies, including hiring a contract research organization. TLRY might also need to make new hires to bring additional expertise on board (TLRY has some of the necessary people on board already). Another possibility is a partnership with a company with expertise in clinical development. With a partnership with Sandoz Canada already in place, the possibility of NVS stepping in to help with clinical development seems like a bright idea, although this is speculation on my part.

One last thing worth noting about the August 1 press release is the clarity with which the results and their meaning were presented. The press release even noted the limitations of the phase 2 study (that is not something seen often from biotech companies). I have to give TLRY some credit for its transparency.

A limitation in this study concerns the small number of participants, the majority of whom were already taking a prescribed antiepileptic drug. Tilray donated product for the trial and funded the research. Next steps include additional research with more participants and variable doses of combined THC/CBD.

– TLRY communicates clearly with investors in its August 1, 2018, press release.

If the company is to continue clinical studies on its medical cannabis products, it would do well to note the methods of GW Pharmaceuticals plc (NASDAQ:GWPH), which has been successful in its studies.

TLRY is no GW Pharma competitor yet

GWPH is a biopharmaceutical company with a market cap of ~$4 billion, focused on the development and marketing of plant-derived cannabinoid therapeutics. The company has marketing approval for Sativex (an oralmucosal spray containing THC and CBD in a 1:1 ratio along with other minor cannabinoids) in a number of ex-US territories, including approval in 21 European countries.

GWPH has run placebo-controlled, double-blind, randomized clinical trials demonstrating the efficacy of Sativex in spasticity due to multiple sclerosis (including a 572-patient study published in 2011 and a 337-patient study published in 2013). It is currently in phase 3 trials in the US for the same indication, and so, approval is likely not far away in that market (Sativex is already available in Canada).

The company also markets Epidiolex (plant-derived CBD), which was recently approved in the US for Dravet syndrome and Lennox-Gastaut syndrome. A timeline for submission of Epidiolex to the regulator in Canada is unclear.

Figure 6: GWPH has produced an impressive body of clinical research with Epidiolex as it did with Sativex. Source: Company investor presentation.

It seems likely that Epidiolex, should it gain approval in Canada, is going to have an advantage over non-approved formulations like TLRY’s Tilray 2:100 in Dravet syndrome and Lennox-Gastaut syndrome (as much as I like the data seen with Tilray 2:100). Physicians could prescribe Epidiolex to their patients like they would any other drug for epilepsy and know they are getting a product which has undergone multiple clinical trials and is approved by the Canadian regulatory authority. Now TLRY could one day seek approval for its products, but GWPH is obviously far ahead, with Sativex already on the market and Epidiolex already having completed clinical studies in two indications.

… we are working hard to make EPIDIOLEX available within the next six weeks as we know there is excitement for a standardized version of cannabidiol that has undergone the rigor of controlled clinical trials and been approved by the FDA.

– GWPH comments in September 27, 2018, press release. Note these comments apply to the US market, but a similar argument could be made for the Canadian market, were Epidiolex approved.

In summary, GWPH represents a likely TLRY-Sandoz competitor in certain groups of patients (seizure disorders and potentially off-label use), but also a competitor that has laid down the pathway to develop and gain approval of cannabis-derived pharmaceuticals. Of course, TLRY needs to continue down the recreational cannabis road given the size of that market. Nonetheless, a phase 3 study of something like Tilray 2:100 would attract a lot of positive attention, as an approved product can be sold at a much higher price point, and as discussed above, some physicians may have a strong preference for something that has been run through rigorous clinical trials.

Final remarks

While I am excited about TLRY’s collaboration with Sandoz Canada, particularly products such as Tilray 2:100 given the studies behind it, I feel that the Sandoz name will only take TLRY so far. Revenues from the medical cannabis space may peak as Canadian patients simply acquire products via the recreational route, and those going via the medical route may end up on competitors’ cannabis products or even approved drugs (Sativex and, potentially, Epidiolex). As other pharma players like Johnson & Johnson (NYSE:JNJ) and Apotex seem to be interested in entering, or have entered, the medical cannabis space, the market share held by TLRY-Sandoz can easily be divided. Even if the $600 million market size for 2018 remains in years to come, and TLRY could capture 20 percent of it, would $120 million per year in revenues be worth getting that excited about for a company which already has a $13 billion+ market cap?

Unlike Canopy Growth Corporation (OTC:CGC) or Hexo Corp. (OTCPK:HYYDF), TLRY doesn’t yet have a major collaboration with or investment from a beverage maker. I find the current partnership with Sandoz Canada to be a poor substitute for a large deal with a beverage maker. Meanwhile, TLRY isn’t yet ready to do what GWPH has. Although it could follow in GWPH’s footsteps in the future, the recreational market is likely lower-hanging fruit near term. If TLRY could do something similar what CGC has done in securing a multi-billion dollar investment from Constellation Brands (NYSE:STZ), then it might be possible to get behind a multi-billion dollar market cap. Until that happens, I remain bearish on TLRY at these prices despite my enthusiasm for the company’s medical cannabis products, clear communication and potential to follow in GWPH’s footsteps. Investors would do well to take profits on TLRY at current prices and come back when it is cheaper or has a deal worth getting excited about.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Judge Kavanaugh and the Information Terrorists Trying to Reshape America

Since the advent of Donald Trump’s candidacy, there’s been a ton of focus on botnets and sockpuppets—automated and semiautomated social media accounts that use disinformation to manipulate public opinion.

But the spotlight on bots has overshadowed the importance of the people who often initiate the flood and flow of information, and how the narratives they build over time influence how we see politics, ourselves, and the world around us.

Last month, the attorney of Christine Blasey Ford, the California professor who has accused Supreme Court nominee Brett Kavanaugh of sexual assault at a long-ago high school party, revealed that Blasey Ford and her family were in hiding and had hired private security after Blasey Ford received death threats over email and social media. Among those cheering on the hate-trollers were many familiar faces from the sewers of the modern far-right disinformation metropolis: dandified Republican rogue (and likely Mueller investigee) Roger Stone, his alt-media protégés Mike Cernovich and Jack Posobiec, anarchist turned Kremlin propaganda employee turned Bernie backer turned Trump backer Cassandra Fairbanks, and breathless Infowars conspiracist-in-chief Alex Jones. And not surprisingly, alt-right super-troll and white nationalist fund-raiser Chuck Johnson had his own connection to players in the scandal.

Alex Jones, the right-​wing conspiracy theorist, befo​re his show in Austin, February 17​, 2017.


This is an operational unit of information terrorists that is helping to transform the way Americans consume news in the age of Trump—some of the central nodes that give order to the information deluge and around which bot armies and human amplification networks can be organized, wiped out, reconstituted, and armed for attack.

Because that is what they do: attack. Many reporters who cover this phenomenon have themselves been swarmed by attacks and harassment from the digital insurgency that these information terrorists—call them the cadre—command. Information terrorism is not a term I apply lightly. But if you accept the core definition of terrorism as “the unlawful use of violence and intimidation, especially against civilians, in the pursuit of political aims,” then there are few terms more apt to describe what this group has unleashed against their fellow Americans.

The cadre coalesced and sharpened its edge starting in 2014 with Gamergate before throwing in with then-candidate Trump. It has promoted toxic conspiracies like Pizzagate and QAnon, and was ever-present around around movements from Unite the Right to #releasethememo.

This same information architecture was used to attack Blasey Ford and exonerate Kavanaugh. The attacks on Blasey Ford aimed to discredit and silence her using the same tactics that have been deployed to discredit and silence others over the past few years. As others have come forward to accuse Kavanaugh of wrongdoing—including Deborah Ramirez and Julie Swetnick—they have been similarly harassed and smeared by the same machinery and themes.

Some call this trolling, but that term is far too mild. These are not the proverbial hoodied losers in some basement, engaging with other humans only via videogames and 8chan. This cadre has hundreds of thousands of followers and devotees on Twitter, Instagram, Gab, and other social media, many of whom will post and amplify their views even after the personalities themselves are kicked off the platforms for threats and rules violations. The network also takes advantage of affiliations with increasingly mainstream partisan media outlets that will subscribe to any argument that suits their current agenda.

Ultimately, the followers—who are real people, not bots—are cultivated and activated: They don’t need be told to threaten or harass whoever the new enemy is because they already know their part in the play.

Even leaving last year’s Unite the Right white supremacist rally in Charlottesville, Virginia, aside, the conspiracies and toxic narrative this network promotes have inspired a number of armed and violent attacks and dangerous incidents. The feedback within this network is a form of radicalization and extremism. It may seem organized around older conservative themes—belief that “political correctness” has gone too far, straightforward dislike of the Clintons—but it has become a culture of digital violence that is bleeding into real life. The story of how this network emerged and evolved is as byzantine as any fever-dream conspiracy. Unfortunately, it is all too real.


The cadre that now orbits around its central figure, Roger Stone—with its many affiliates, guest stars, and hangers-on—was among the earliest and most ardent defenders of Donald Trump as the man who would upend “the establishment.” They embraced the Stone playbook of doing whatever it took to achieve a goal, of politics as “performance art” and seeing themselves as a new kind of mercenary or insurgent in a hopelessly corrupt and broken system. What Stone called “30 years of bipartisan treason and failure.”

Roger Stone, author of The Making of the President 2016, discusses the election, politics, and the Trump administration, in Longwood, Florida.

Christopher Casler/Alamy

Some of the younger, outsized personalities that would eventually storm the 2016 GOP Convention in Cleveland on behalf of Trump first garnered attention during the confusing 2014–15 events now known as Gamergate—an internet culture war sparked when a group of women exposed what they saw as inherent misogyny in the production and culture of videogaming and argued for greater inclusivity.

This started as a legitimate debate with valid arguments on both sides: Yes, gaming was a male-dominated scene, and some games did objectify women and violence, but there was also an expanding realm of games that appealed to different interests. This exchange was quickly drowned out by a group of militant gamers who resented this intrusion into their sandbox and set out to prove they were not misogynistic by relentlessly attacking and harassing the women and anyone who supported them. The women were doxxed and threatened in graphic terms with rape and death, and some fled their homes.

Many in the gaming industry were taken aback by the entire incident, and called for expanded inclusivity and offered rewards for information on the anonymous attackers. But on the other side, the less extremist group of gamers arguing that they didn’t want the culture to change was overtaken by fringe narratives of manipulation by the “left media” and echoes from conservative blogs about the dangers of political correctness. Over the year that followed, a group of emergent “men’s rights” commentators, amplified by far-right media, would attract a sizable internet following because of Gamergate.

First among these were the now-marginalized Milo Yiannopoulos, then a writer for Breitbart, and blogger Mike Cernovich. Cernovich latched on early, amplifying the theory of white-male identity politics long developed on his blog and arguing that Gamergate was a critical new front in the culture war. He wrote frequently on the need to expose the assault on the First Amendment and about how women make damaging, false allegations against men to smear them.

Yiannopoulos weighed in with his characteristic contrarian flare, including in articles like “Feminist Bullies Tearing the Video Game Industry Apart” (note the hyperlink is actually “Lying Greedy Promiscuous Feminist Bullies…,” which is the essence of most of the “men’s rights” memes), and led others at Breitbart to write on these themes. Infowars jumped on the Gamergate bandwagon and, as the conspiracy flourished, continued to be a platform for Gamergaters to reach the masses, as did Breitbart.

Both Cernovich and Yiannopoulos encouraged the doxxing of opponents on their social media feeds and in their blogs and articles (and Yiannopoulos doxxed reporters himself). They gained a kind of leadership over the unruly mob, maintained by issuing increasingly outlandish statements about the place of women and the rightful status of men. Chuck Johnson would also weigh in in favor of the Gamergaters, learning from the event and realizing that it was a chance to take his marginal brand mainstream. He would go on to amplify Yiannopoulos on “the myth of tech misogyny” and Cernovich on themes like false rape allegations.

All this made clear that Gamergate wasn’t really about gaming or even women—it was about identity, a bunker mentality that Trump would mobilize during his march to the presidency. Many long, thoughtful analyses of the road from Gamergate to Trump have been written. Even a Breitbart contributor would later ponder whether “leftists” weren’t right that Gamergate led to the Trump presidency.

The themes of censorship, false accusations, oppressed maleness, and resurgent masculinity were tempered in the fire of Gamergate, and they would gain amplification in the years to come. Gamergate was loud and controversial, and it was a magnet for other internet fringe elements, including white nationalists, anti-feminists, neo-Nazis, and dude-bros who use terms like “shit-posting” as a compliment.

But there’s another aspect to this that is critical: In terms of information architecture, Gamergate was a signal event—a rally-point for the charlatans and hucksters who would become leaders because they could put words to a previously poorly defined sentiment that was more widespread than anyone wanted to think.

Cleveland, Wikileaks, Seth Rich, and the Trump Candidacy

Yiannopoulos was banned from Twitter in July 2016 (as Chuck Johnson had been in May 2015) after directing racist hate-trolling against an actress, which finally seemed to trigger whatever Twitter rules hadn’t applied to his previous transgressions. His celebrity had just reached its peak, and he swaggered into the Cleveland GOP Convention surrounded in controversy and continually reassuring people he wasn’t a white nationalist. He wore his twitter exile as a badge of honor.

Milo Yiannopoulos, right-wing ​provocateur and former Breitba​rt editor, speaks at A Night f​or Freedom, hosted by Mike Cer​novich and Stefan Molyneux, in​ Washington D.C. on February 2​4, 2018.

Mark Peterson/Redux

And with this, the Gamergaters shifted into presidential campaign mode. In the months leading up to Cleveland, Yiannopoulos andCernovich had found common purpose with Roger Stone on the targeted bashing of Ted Cruz, including amplifying a “sex scandal” fromfavored Trump outlet the National Enquirer.

The America First Unity Rally, which wassponsored by Infowars and cohosted by Roger Stone, would bring together many of the fringe groups that were becoming more mainstream behind candidate Trump.Jones,Yiannopoulos, andStone would all speak to the crowd, promoting the idea of “radicals” taking the reins of the party.

During and after Cleveland, it was becoming clear that Stone appreciated the Gamergaters—along with Johnson, with whom he has repeatedly publicly feuded—as younger, if equally dapper and outlandish, devotees of his shady political and propaganda tactics. They were willing to cross lines, break rules, harass and intimidate opponents, spread lies, and revel in the the fact that they were reviled by the Republican establishment as trolls, freaks, and con artists—as Stone himself had become in championing Trump against the GOP establishment.

This made them a critical tactical force in Cleveland, where they collectively bullied, attacked, and intimidated anyone who wasn’t a fervid enough supporter of Donald Trump. Stone threatened to punish delegates who wouldn’t vote for Trump. Johnson stalked the female reporter who had accused Trump campaign manager Corey Lewandowski of physically assaulting her, with Cernovich filming the incident. Yiannopoulos leveraged his celebrity brand—labeled “gay neo-fascist” by one reporter—into high-profile parties that brought the fringes supporting Trump together, amplifying the discomfort many in the establishment GOP felt for this movement.

New names popped up in Cleveland that would become important to the insurgency. Neo-Nazis and “white nationalists” that would become better known later on because of Charlottesville—Richard Spencer, Ricky Vaughn, Tim “Baked Alaska” Gionet, Andrew “Weev” Auernheimer—would congeal near the core cadre in Cleveland. The anonymous pro-Trump bot-king “MicroChip” hadhelped amplify Stone’s message of the “#clevelandsteal” before the convention; at the convention, GOP delegates were intimidated via twitter, including by Vaughn, whotargeted threats of violence to certain delegates.

Online and on the ground, the atmosphere built by the core group and these new affiliates felt wild, dangerous, and out of control. It was the perfect counterpart to the fear that people closer to the Trump campaign had built up over the previous months—that if Trump was not given the GOP nomination, there would be violence.

Also debuting at Cleveland were memetic warfare advocate Jack Posobiec and Cassandra Fairbanks, a shape-shifting activist. In 2013, Fairbanks was an Occupy movement/anti-rape activist. In 2015, she spent months in Ferguson with Black Lives Matters. Her anti-police anarchist attitudes gained her the attention of Russian propaganda outlet Sputnik, for which she became a writer in 2015. At the time, she was a fan of Bernie Sanders and engaged with his campaign. A year later, just before Cleveland, she threw in with Trump, using her platform to convince other Bernie supporters to come with her. (And as the Mueller indictments would later detail, tapping into the leftist anti-establishment sentiment backing Sanders was a pillar of the 2016 Kremlin disinformation campaigns). In short, Fairbanks was the perfect “horseshoe”—using her anarchist political views to bridge left and right anti-government sentiments and, in this case, align them behind Trump.

Collectively, this group dominated the media surrounding the GOP convention with their outrageous statements and intimidation tactics. It was the grotesque slow-motion train wreck no one could pull their eyes from—in particular when they realized it was no longer the sideshow, but indicative of the main event, with Trump as ringmaster. This was no longer your father’s GOP.

As Cleveland took down police barricades and Republicans slumped homeward, the Stone cadre was full steam ahead, pivoting smoothly into promoting Wikileaks’ hacked DNC materials before the Democratic convention (material which was, of course, provided to Wikileaks by Kremlin hackers).

Stone would, by all appearances, become a focus for the Mueller investigation for his alleged contacts with Wikileaks and Guccifer 2.0. They all played a central role in amplifying Wikileaks, along with the parallel conspiracy theory that the DNC hack was actually a leak from murdered DNC staffer Seth Rich (a conspiracy reportedly amplified by Kremlin disinformation networks). Fairbanks wrote an article to fuel the conspiracy and was a leading driver of it. Johnson, working with Cernovich and Wikileaks, offered a bounty for information supporting the conspiracy in 2016. A year later, Yiannopoulos was still promoting this conspiracy.

But the work on this complex hacking/emails narrative wasn’t done. And hey—why not start some new ones about child sex trafficking while you’re at it?

In September 2016, Johnson claims he helped the teenage girl sexting with disgraced former congressman Anthony Weiner, husband of Clinton staffer Huma Abedin, sell her story to the media. The girl would later explain she had baited Weiner into the online relationship to see what he would do. The story published in the wake of Johnson’s efforts (and, he claims, amplified by his “troll army”) became the pretext for the FBI’s access to Weiner’s computer—an event that famously impacted the Clinton campaign in the final months, especially when FBI Director James Comey opened, and then closed again, the investigation into the “missing” emails.

Johnson had other irons in the fire as well. The day before the sexting story came out, Johnson published an article claiming he had obtained information from a “Soros-tied PR firm” that was launching a website, PutinTrump.org, supposedly to “spread conspiracy theories about Donald Trump’s connections to Russia.” Shortly after the story was posted, Wikileaks tweeted out the link to the website, which was still password-protected, along with the password itself. Johnson wrote about this in triumph, telling Wikileaks: “We can take down Hillary together.” (Later, in August 2017, Johnson would arrange a meeting for Putin-loving Republican Congressman Dana Rohrabacher with Wikileaks founder Julian Assange in London—which Johnson would also attend, and then refuse to tell Senate investigators about.)

At the same time, Johnson was supposedly helping GOP operative Peter Smith make contact with hackers who might have the “missing” Clinton emails.

In the summer of 2016, there was a lot going on, and these events have been interpreted in wildly divergent ways. But a central group of actors was fueling conspiracies to attack Trump’s opponent, and these were amplified by Kremlin-backed information operations targeting America.

There’s one more critical element to attribute to the toxic disinformation brigade: the stories Johnson helped spin on Weiner were in turn the origin of the fabricated nonsense that the Democrats were running a child sex trafficking ring—a narrative that has become the central axis around which another far-right conspiracy now orbits.

Pizzagate and QAnon

In October 2016, an online conspiracy that would become known as Pizzagate was started by a fake account, alleging that emails discovered on the Weiner laptop seized by the NYPD contained proof of a (potentially occult) child sex trafficking ring run by prominent Democrats like John Podesta and Hillary Clinton.

Kori and Danielle Hayes at a Pizzagate demonstration, outside the White House in Washington, DC on March 25, 2017.

The Washington Post/Getty Images

This lunacy of alleged secret code embedded in various food words—pizza, pasta, cheese—and communicated via secret calls to a DC pizza parlor escaped from the rumor/conspiracy peat bog and gained real attention when it was heavily promoted by Infowars and other right-wing disinformation sites like True Pundit; by Stone himself, plus Cernovich and Posobiec; by Fairbanks; and by a healthy array of foreign-hosted botnets. (Rolling Stone took the trouble to lay all this out in incredible detail.)

Posobiec was one of the biggest drivers of Pizzagate on social media, and his name will forever be synonymous with it. Johnson’s alt-right/white nationalist fund-raising site offered a bounty for anyone who could find proof of the conspiracy.

That one anonymous tweet about Weiner’s laptop culminated six weeks later in an armed attack by a Pizzagate believer who, inspired by an Infowars video, drove from North Carolina to DC with an assault rifle to raid the pizza parlor and free all the trafficking victims he was expecting to find. Shots were fired, but no one was injured. Suddenly, this fevered online circus was very real—in an immediate and dangerous way.

The Pizzagate promoters worked to distance themselves from the conspiracy. Even Alex Jones briefly realized he had crossed a line with this one, posting an apology for pushing the Pizzagate story on Infowars.

The problem was—his followers believed it. Pizzagate believers rallied at the White House after Jones renounced the conspiracy. The Pizzagate apology disappeared from the Infowars site, and Jones went right on into the next iteration of this elaborate contrivance—QAnon—hosting the exact same set of Stone-related characters to talk about it on his show.

Everything about the Pizzagate conspiracy theory was debunked. But if the pizza parlor raid was a dud, the sex trafficking conspiracy didn’t die; it was first relabeled in memes and murky chatrooms as “pedogate” and then found a new outlet as QAnon—a complex and addictive conspiracy that soon burst into mainstream consciousness.

QAnon takes the prepared ground of sex trafficking mania and links it to the need to prove that Mueller’s Russia investigation isn’t real. It argues—and I’m abbreviating this tremendously—that President Trump is saving the world from a vast Soros/Clinton/Podesta child sex trafficking ring; that attorney general Jeff Sessions has prepared tens of thousands of sealed indictments to arrest all those connected to the sex-trafficking ring; that the mass arrest is coming any day now, when people will be rounded up in the abandoned Walmarts or maybe GITMO or whatever; and that Mueller is in on it, because the Russia investigation is just cover for the investigation of the sex traffickers.

I really wish I was kidding—but alas. Way before Q went mainstream, I had a black car driver in Texas explain to me that he had already heard Trump’s pre-recorded secret address from the Oval Office, which would be aired when the mass arrests—of 18,000, 40,000, who can say how far it goes?—took place, which would be soon. He calmly, rationally, and politely insisted that Q “explained everything.”

In 2014, Chuck Johnson explained in a Mother Jones interview how he offered “bounties” to independent online researchers to solve “puzzles” that he gave them. What he said is actually a good description of why QAnon works: “You get all these hobbyists and amateurs and people out there who have a lot of time on their hands, many of whom are retired or they’re a mother, their kids are sleeping while they’re researching, they’re stay-at-home moms, or they’re college students or they’re unemployed or this is their moonlighting thing. All those people are starting to find one another.” It’s that sense of being a part of a bigger mission.

A man holds a large “Q” sign while waiting in line on to see President Donald Trump at his rally on August 2, 2018, in Wilkes Barre, Pennsylvania.

Rick Loomis/Getty Images

The way I wrote it, it’s easy to dismiss QAnon. Except that it was only nine months from its launch date (October 28, 2017) until people were so deeply entrenched in their belief of Q that they were caravaning to Trump rallies. Except celebrities promote Q. Except that less than a month after it was launched, President Trump promoted an account that supported the QAnon theory that replied to him on his Twitter feed. Except that Trump has hosted one of its promoters in the Oval Office and praised and defended celebrities who champion Q.

And the frenzy builds and builds.

So QAnon had fertile ground to seed. It had been a year since Pizzagate, but the anti-Clinton, anti-Podesta “THE EMAILS —> secret child sex trafficking” narrative had never died down in far-right blogs and “news,” including among the Stone cadre. Before the launch of QAnon for example, on August 5, 2017, Stone tweeted: “Gen Flynn has a list of high level pedophiles, the release of which will decimate the Deep State dons”—a tweet that was later reposted as proof that Trump “knows everything” by the same QAnon account the president retweeted.

By January, QAnon was regular fare for Infowars, where conservative writer Jerome Corsi was a frequent QAnon explainer, having started linking everything to Q in December 2017. (Corsi has now been subpoenaed by Mueller apparently as part of his investigation into Roger Stone.)

While Stone hawked QAnon, others in the group were more cautious after being burned by Pizzagate. Cernovich may have been capitalizing on the moral panic stoked by Q-fever when he targeted a Hollywood director, but both he and Posobiec claimed they weren’t believers in the conspiracy. Still, they would engage in individual parts of the vast plot. Both Cernovich and Posobiec were drivers of another pet theory of Q conspiracists, the #ReleaseTheMemo campaign—as was Fairbanks, even though she was otherwise outspoken in her dislike for Q followers’ fervor.

It was a fine line to walk. And even before Q was visible at Trump rallies and the media was writing about it, there was a disturbance in the Q-force. In May 2018, Infowars and the others in the Stone cadre started urgently denouncing QAnon, saying it had been “hijacked” by a deep-state information campaign or maybe just by people out to make a buck. For most of the summer, Posobiec teased that he would explain the whole deal.

In September, his opus supposedly debunking QAnon debuted, outing MicroChip, the aforementioned bot-king, and someone named Dreamcatcher as the creators of QAnon. According to Micro (if any of this is to be believed), they basically just created a word salad out of the stuff Trump supporters believed—the sex trafficking mania, Clinton is about to be arrested, the Generals, Russia’s not a thing, Trump is the savior—and made a list of questions that would tantalize that audience and engage them online.

“It was meant to be funny, to get people’s imaginations going,” Micro said in his interview with Posobiec. “It’s not supposed to go this far.” He said they only wrote a few of the original posts, essentially to bring disparate factions of the Trump movement together, and then someone else took it over.

Whatever its provenance, the conspiracy took on a dark life of its own. On June 15, an armed Nevada man and apparent QAnon follower blocked traffic on a bridge near the Hoover Dam using a homemade armored vehicle, demanding the release of the “OIG report”—a reference to a QAnon theory that there’s a secret, unreleased part of the Office of the Inspector General report on former FBI director Comey and the 2016 elections.

This resulted in a stand-off with police; he now faces a terrorism charge. An Arizona man with ties to QAnon was arrested on July 22 after a weeks-long argument with police over a homeless camp that he believed to be the site of the secret child sex trafficking camp. He still faces assault charges from a prior arrest and faces others, including trespassing, for the latest.

According to a video he once posted, the veterans’ group he is a part of once showed up with AR-15s and stood overlooking a highway. In August, a reported QAnon buff in California was arrested for starting the Holy Fire, a wildfire that scorched 23,000 acres of California’s Cleveland National Forest. He faces charges of arson and felony threat to terrorize. A group was also indicted in Illinois for various crimes, including federal civil rights and hate crimes violations for a bomb plot; the group’s name was an apparent reference to part of the QAnon conspiracy.

A man monitors the fire from a ridge as the Holy Fire approaches the McVicker Canyon neighborhood, which is under mandatory evacuation in Lake Elsinore Wednesday, August 8, 2018.

Allen J. Schaben/Getty Images

All of this to say: Q got out of control, and this fervor began to manifest in domestic terrorism and conflicts with law enforcement. No one wants to own that.

As with the previous toxic conspiracies, once they started sparking potentially violent events, their promoters pretended that they had always had their doubts. They had done the same on Charlottesville, when suddenly they all distanced themselves from the neo-Nazis they had befriended, partied with, and promoted in Cleveland.

And, as before, even as they denounced the conspiracy they kept a door open and prepared for the next iteration. “There is something going on with Trump,” Micro said as he debunked Q, implying there was a different secret conspiracy behind Trump just waiting to be discovered. “QAnon is not going to save you. You have to get out and vote, and do activism.” As I said—how convenient, just before the midterms where Republican voter turnout is in question.

Posobiec may now be ironically outraged that others are monetizing conspiracies. But he knows the drill too: “Perhaps [the format Q used] can be the starting off point for a new series of riddles and puzzles and a new type of information system.” A new type of information system that is essentially mindfuckery.

Reddit has recently banned a central QAnon forum for inciting violence, as they had done previously with a Pizzagate forum. The cycle repeats. But the audience is waiting.

The Kavanaugh Accusations

Once information architecture is in place, it’s like pipes. You just inject new material into the system, and it gets where it needs to go faster and faster as people get used to receiving narratives and themes in a certain context from certain sources. On the far-right, in particular, there has been a concerted effort to recruit people to participate in this process. They act as human amplifiers, both organic and automated, within these narrative structures. (I outlined an example of this here; it irritated this network so much, there are two “Q cards” that reference that piece).

This process of unleashing conspiracies is not just an online activity. This is about behavioral change. And often, in the case of the far-right, about different forms of radicalization.

This architecture has a preternatural advantage, of sorts: It has always been backed by hackers and coders—participants like MicroChip, who understand how to use algorithms and automation. As a result, a small number of important actors can drive the system as long as they have the right content to distribute—content that triggers the right emotional response.

Through each iteration of this network, rape has been a constant theme. Rape and pedophilia are potent triggers that elicit an intense emotional response from an audience. Rape has been used to fling charges of hypocrisy—almost always involving accusations against Bill Clinton or other Democrats. It has been used to highlight examples of “fake news” by pointing to the few cases where the media has promoted unsubstantiated rape allegations. It has been used in attempts to prove elite corruption by insisting that there is a secret cabal of elites who are pedophiles and predators. It has been used to normalize racism—referring to blacks and Muslims as serial rapists and to migrants as rapists and killers. And it has been used to justify misogyny by arguing that rape is “misunderstood.”

Cernovich’s manicured persona has always had an edgy and loathsome sexual aspect, studded with macho proclamations about dominance, violence, and rape—the boy-fantasy version of 50 Shades of Grey. There’s a lot of talk, as his Gamergate wingman Yiannopoulos used to say, of rape culture being a “fantasy”.”

Johnson had previously published a blog post targeting a rape accuser, only it was the wrong person, and has suggested that women who stay silent haven’t really been raped. Rape isn’t a myth for them, though, if you are a Democrat or in particular if you are BillClinton or maybe Senator Chuck Schumer. Stone helped deflect a series of assault allegations made against candidate Trump by bringing all of Clinton’s accusers to a debate.

This has all taken on a new heady energy as pushback to #MeToo—and riding the coattails of the conspiracy bandwagon. But the intent is the same: to demonize the opponent, define identity, activate the base around emotional rather than rational concepts, and build a narrative that can be used to normalize marginal and radical political views. It is, after all, very convenient to have a narrative positing that all your political opponents are part of a secret cabal of sexual predators, which thus exonerates your side by default.

This is the ideological landscape that has been so swiftly leveraged in the defense of Brett Kavanaugh.

The cadre and their followers knew exactly what to do when the allegations made against Kavanaugh by Christine Blasey Ford became public. They did not disappoint. Rapid efforts by far-right blogs and personalities to dox and troll Blasey Ford resulted in the targeting of the wrong Christine Blasey Ford; Posobiec was one of those reportedly amping this misguided doxxing. Cernovich said Blasey Ford was a “far left wing activist” who had been “scrubbing” her social media profile, so her accusations were “activism.” Alex Jones made a joke of the whole thing, with Infowars saying Blasey Ford is a “leftist” whose accusations were a “political ploy.” Fairbanks: “She can’t prove it… Her clothes were on… Fuck that lady.” That’s a particularly strong comment from a one-time anti-rape activist. Stone: “This is a woman looking for her Anita Hill moment.”

But this was pretty typical fare for this group. And then, in an interview discussing the allegations, Roger Stone cited Mark Judge’s denial of Blasey Ford’s account. Judge, it turns out, has a long history of interaction with this core network.

Perhaps not surprisingly, Judge deleted his Twitter and YouTube accounts soon after the Blasey Ford accusations were made public. (Johnson also deleted his entire news site.) Judge’s writings about high school drunkenness and sexuality and his experience getting paid to take pictures of women in bikinis have been duly noted, as has a yearbook quote that references hitting women. But Judge was a prolific writer on a range of conservative “culture warrior” causes, including for The American Spectator, CNSNews.com, The Daily Caller, Acculturated, and Splice Today, among other blogs and publications. Much of it fits right in to the Cernovichian advocacy of “men’s rights.”

Judge has weighed in on just about everything: holding forth about the need to “make Playboy great again” (masculinity), advising women on “graciously turning a man down” (toxic feminism), and expounding on how Melania Trump is an archetype feminine woman raised outside the “leftist orthodoxy.” He has quibbled over the definition of sexual misconduct by asking whether Wonder Woman was raped, and, on Acculturated, explored other “double standards” applied to what he sees as the increased liberation of women causing the oppression and depression of men. And don’t forget about the need for unrestrained “male passion.” Plus, you know, young women in bathing suits.

Judge discussed Hollywood liberals and child rape jokes with Cernovich (Hollywood/pedophilia is a topic he frequently returns to). He wrote a piece on Gamergate linking to Yiannopoulos and calling media critic Anita Sarkeesian a “social justice warrior.” He authored a positive review of alt-right backer David Horowitz’s book. (Horowitz is known for his views that the real race war is being waged against white people and that the coverage of Charlottesville was “fake news.”)

In short, Judge was a generator of content for the alt-right machine, using his high school bad-boy, “real man” credentials as a springboard to comment on the whole suite of social issues that the alt-right feels is eating away at our Americanness.

This is the information that flowed through the architecture the Stone cadre popularized and mainstreamed over the past few years, moving it from the fringe to a central pillar of the conservative agenda, cartoonifying legitimate issues of conservative concern and recruiting new supporters as they went. The narrative was set long ago—allegations are false, men (especially white men) are oppressed, the people who stand against you are corrupt perverts worthy of demonization, and everything that is the America you know will fall apart if you don’t fight for some notion of the way things were and should be again. And the best way to achieve this, since the system will fight back, is viciousness.

This architecture is established, and permanently in transmit mode.

Players like Judge may seem marginal to us—but their role in building these networks is important when suddenly the worlds they come from are involved in events like the accusations Blasey Ford has leveled in the midst of a Supreme Court confirmation battle.

Consider the now-infamous and disavowed (but archived here) Ed Whelan twitter thread, an odd diversionary narrative hyped as an alternate theory of the night Blasey Ford describes. Its gist: mistaken identity of the perpetrator. Potential defamation issues aside, it seemed to build on the groundwork being laid by Senate Republicans and the White House to carefully insinuate that Blasey Ford wasn’t lying, merely mistaken about who attacked her. But Whelan transformed it into a bonkers Twitterverse conspiracy theory about the bedroom at the top of the stairs.

An analysis of the accounts that retweeted Whelan’s teaser for his conspiracy most frequently post content from right and far-right media, several of which are anchors in the far-right disinformation ecosphere (and Russian disinformation, to boot).

Posted for less than 24 hours, Whelan’s mistaken-identity theory sparked a wave of blog posts and discussions on far-right sites that live on even after Whelan backed off. This post, for example, repeats Whelan’s claims and suggests they all but vindicate Kavanaugh. It was a top-trending piece on disinformation trackers and was still being circulated on Twitter days after the source was deleted. And so was this one, this one, and this one. Some 1.5 million “Fox and Friends” viewers heard all about the mistaken-identity theory live on TV. Once it’s out there, you can’t pull it back.

Whelan only did what the Stone cadre has done for years: push a lie, entrench it, later disavow, thus minimizing the damage all while presumably knowing that it’s still there, colonizing the target population. Whelan’s conspiracy plugged into the narrative architecture that had been refined since Gamergate. They know these themes and narratives, and the “evidence” scratched the conspiracy brain, seeming like plausible open-source intelligence. It achieved exactly what it was intended to.

The narratives to defend Kavanaugh were mostly about discrediting Blasey Ford: that she was part of a secret CIA mind-control project (the CIA connection was also alluded to by Kremlin disinformation purveyors); that George Soros was behind her allegations; that her lawyer was linked to Hillary Clinton; that she was motivated by profit; that she did this as revenge for a foreclosure case where Kavanaugh’s mother, also a judge, ruled against Blasey Fords’s parents (only, she didn’t—she ruled in their favor); that she had also made false allegations against Neil Gorsuch; and many more.

What was the payoff for this multifront conspiracy defense? Well, Blasey Ford was asked questions that hinted at some of these conspiracies during her testimony before the Senate Judiciary committee—who was paying her bills and pulling her strings?—by the prosecutor representing the Republicans. Presumably those questions came from members of the committee.

And then, when it was his turn to testify, Kavanaugh himself deployed this narrative by referencing and implying conspiracies in his red-faced attacks on the Democratic members of the Senate Judiciary Committee. While he would not say directly that Blasey Ford was lying, he alleged the left was “willing to do anything … to blow me up,” including “false last-minute smears” “calculated and orchestrated” against him as “revenge on behalf of the Clintons.”

In the course of his angry self-defense, Kavanaugh stamped a lot of bingo squares: attempted rape allegations as a political tool, false allegations, Clinton, secret conspiracies. By going out and taking the big swing, he elicited a powerful emotional response in his defense—an activated response from a hardened base. #ConfirmKavanaugh was trending—with support of far-right and Russian-linked accounts—after the hearing.

What’s Next

The chasmic problem facing us all: Radicalization is relatively simple to accomplish using social networks and other media, but de-radicalization is not. Pizzagate believers still believe. The people pushing Q disavowed it months ago—and only after that did it crest in the public imagination.

As Micro said in his confession: Things weren’t supposed to get so out of control. But this is the system the cadre built—a network hungry for the next hit of disinformation to inflame confirmation bias, moving content so swiftly that stories can jump from rando twitter to MSM in 12 hours flat. The landscape is prepared. The participants know what to do.

When it comes to the psychology that shapes mass movements, there are two fundamental rules: Everybody wants to be a part of something bigger than themselves, and everybody wants someone to tell them what to do so that things will turn out OK. With that in mind, our understanding of what conspiracy theories are and why they work comes into focus. Conspiracy theories aren’t something that stupid or uneducated people fall for—they are something that people who want to believe in something latch on to.

Maybe it’s religion, family, national identity, ethnic identity, community, or government that used to be this structure—the system of belief, the answers to who you are and where you fit within the system. But when those break down, conspiracies can take their place, particularly in times of rapid change or upheaval. They become the framework for making things that don’t make any sense somehow understandable.

As Kavanaugh was holed up in the White House undergoing intensive prep to combat the accusations, Blasey Ford was off the grid, moving from house to house with a newly employed security detail, terrified by death threats, swarmed and disparaged by trolls and digital attackers whose smears and conspiracies then bleed over into the blogs and then into more acceptable conservative media. So prepared is this landscape for new conspiracies of central bogeymen—crisis actors, pedophiles, Soros, secret CIA plots, and more—that naked absurdities are liked and reposted without much thought.

Gamergate became Pizzagate became QAnon became entrenched modern narrative architecture ripe for exploitation. The cadre mobilized a movement of misogyny and white nationalism and intimidation—of angry boys who reveled in the chaos god of Roger Stone—and cultivated the narrative to make it acceptable to a wider lane of conservatives. This is triggering violence and identifiable forms of extremism that we can no longer ignore.

This is Donald Trump’s America. But more, it is Roger Stone’s America. Whatever it takes to win is fair game, even if they burn down the minds of Americans in the process. This willful radicalization is a campaign of information terror waged on fellow countrymen—the necessary domestic counterpart for hostile nation-state information warfare to be successful. It seems no accident that Stone is apparently in Mueller’s sights, possibly for behavior that suggests coordination with Kremlin-linked actors.

The leading lights in Stone’s orbit take scalps and champion memes, only to shed their skins and awake in a new persona, turning their flamethrowers from one topic or group to the next. In a non-Trumpian America, they might have remained the fringe provocateurs they are, trolling the fact-based world for exposure and ad revenue, vitamin hucksters and doomsday preppers masquerading as political commentators.

But as the Trump Train prepared to leave the station, the conservative media was already so thoroughly riddled with conspiracists and storytellers that the fringe had ample bridges to the much-maligned MSM. To name a few: Sean Hannity and his commentators (John Solomon, Dan Bongino, Sara Carter); Tucker Carlson and his Daily Caller, where Johnson and Judge contributed; Breitbart, which helped integrate conspiracy and propaganda like Infowars and Gateway Pundit.

And, of course, the president himself has amplified conspiracy and demonized “the media”—even while elevating a new ecosystem of far-right media groups and personalities, like One America News’ Posobiec and whatever TruNews is. This has transformed the way conservative Americans consume information, altering how they make judgments on truth and reality.

Blasey Ford has learned how devastating this runaway narrative architecture can be. But so, now, has Kavanaugh, whose personal credibility was also being run down by the propaganda being levied in his defense. Maybe, just maybe, it was a Hail Mary that worked out for him, in the end. Certainly, it has helped inflate a sense of urgency to vote on his nomination and to make it more intensely partisan. Or, as Posobiec added at the close of the hearing, “Confirming Kavanaugh to own the libs.”

As with Gamergate and Pizzagate and QAnon, the information weapons being fired in the Kavanaugh controversy are uncontrollable and adaptive. We are beginning to see the cost of this—but now the question is: Who will pay?

It is clear that foreign powers seeking to manipulate Americans with these asymmetric tools of information warfare must pay a price for doing so. But what about domestic forces that use the same tools and tactics? How do we judge those who apply disinformation against their fellow citizens to improve their odds, seeking to benefit from the ability of this architecture to spark frenzy and fear, intimidation and violence? What price should they pay for the scorched earth they leave behind?

Cognitive warfare is a dark, seductive rabbit hole. It is powerful and unregulated, and right now, thanks to social media in particular, the information domain is as lawless as the wild west, as demoralizing as the terror of World War I trench warfare, and as adaptive as the guerrilla tactics in the Philippines in World War II. There are state actors, nonstate actors, private sector and other independents—armies, mercenaries, and terrorists, all looking to master these techniques. Even small groups, like the cadre I described here, can achieve significant outcomes when the network effects kick in.

Trained and untrained operators alike are beta-testing tools and tactics on human minds, deliberately or intuitively. Information weapons are intangible. But people aim them, and people are the target. It’s time we take them seriously. The immediate costs are already visible in America. The long-term costs will be devastating. One need only look to Stalin’s campaigns of internal psychological terror waged in captive nations to understand the price can be inconceivably high.

And we’re all paying the price already, whether we know it or not.

Molly K. McKew (@MollyMcKew) is an expert on information warfare and the narrative architect at New Media Frontier. She advised Georgian president Mikheil Saakashvili’s government from 2009 to 2013 and former Moldovan prime minister Vlad Filat in 2014–15. Open source researcher Jay McKenzie (@JamesFourM) helped conduct the research for this analysis.

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BitTorrent's Creator Wants to Build a Better Bitcoin

In 2001, a 25-year-old unemployed college dropout named Bram Cohen crafted an elegant protocol for moving data around the internet. Titanic numbers of pirated songs and movies, and countless lawsuits, later, he’s putting the finishing touches on what he hopes will be another world-changing protocol—this time for moving around money.

Cohen’s earlier invention was BitTorrent, a specification for peer-to-peer file sharing that delighted millions but angered entertainment moguls, and at one point consumed more than a third of global internet traffic. His latest creation is a digital currency and startup called Chia, aimed at making cryptocurrency acceptable to the financial industry.

“I like hard technical problems,” says Cohen, with a knowing smile. The solidly built 42-year-old met WIRED in a San Francisco skyscraper built as the headquarters for Wells Fargo, which now houses other financial industry tenants. Chia Network, as Cohen’s startup is called, plans to move into its own space in the building soon.

After that move, Chia’s neighbors will include the west coast office of the Securities and Exchange Commission. That may seem bold, as the regulator pressures cryptocurrency startups for flouting securities rules. But Cohen, Chia’s CTO and chairman, is happy to have the SEC looking over his shoulder.

SEC complaints about the frothy cryptocurrency market have focused on ICOs, or initial coin offerings, in which startups sell units of new or planned cryptocurrency as a quick and easy way to raise capital. Cohen says he plans a more distinctive route by filing for a conventional initial public offering before the end of this year, to list shares on a small-cap public stock exchange. Chia’s revenue will come from helping banks build systems to use the cryptocurrency of the same name for functions like international transfers. The company will also own a significant chunk of available Chia coins, which the company hopes will become a valuable commodity over the longer term; but it won’t be selling coins in an ICO.

Bram Cohen says he designed Chia to appeal to financial institutions.

Phuc Pham

To pull all that off, Cohen needs to repeat his technical success with BitTorrent—and avoid the legal and business challenges that followed. Cohen’s file-sharing protocol was wildly successful, and won interest from companies such as Facebook, which has used it to speed the distribution of internal software updates. Yet despite raising more than $30 million in funding, BitTorrent Inc., the startup Cohen cofounded to maintain and monetize his free-to-use creation struggled to build a business. In 2005 the company agreed to work with the Motion Picture Association of America to remove links to copyrighted content from its search engine. Cohen left day-to-day operations at BitTorrent to cofound Chia in August 2017, and vacated his seat on the board this past July.

On the technical side, the Chia cryptocurrency is the result of Cohen looking hard at the guts of Bitcoin and trying to design substitutes that are less dangerous to the planet, and more palatable to banks. “Satoshi was not a really great protocols engineer,” Cohen says, referring to the pseudonymous person or persons who announced bitcoin in 2008 using the name Satoshi Nakamoto.

Bitcoin’s environmental problem is rooted in the way Nakamoto’s design secures digital transactions. It incentivizes people to run “mining” software that races to solve cryptographic puzzles and win transaction fees or newly minted bitcoin. Although the currency is still a niche interest, one analysis last year estimated bitcoin mining consumes as much power as Serbia, a country of 7 million people.

Cohen gives his version of mining the more bucolic name “farming.” Similar to bitcoin, participants compete to win Chia cryptocurrency in a race that also processes transactions. Unlike in Nakamoto’s system, maximizing your chance of winning depends on amassing disk storage space, not running more powerful—and energy-hungry—hardware. Cohen reckons that there are already countless computers with spare storage in the world that could start farming Chia alongside their existing uses. Anyone motivated to buy more storage just to earn cryptocurrency wouldn’t have an outsized effect on the world as bitcoin miners do, he says.


The WIRED Guide to Bitcoin

Chia’s system depends on two new cryptographic protocols, one that verifies the storage a computer has committed to farming, and the other that guards against fraud while determining which farmers win rewards for verifying transactions. Anyone curious about the details can read the two peer reviewed papers Cohen has coauthored with academic mathematicians. On Wenesday, he launched a competition that invites the mathematically minded to test the speed or security of the cryptography behind Chia farming. The winners will receive $100,000—denominated in bitcoin because Chia has not yet launched its currency.

When the Chia currency does launch sometime next year, Cohen says it will be attractive to financial institutions because of its greater flexibility than bitcoin. Like Nakamoto’s cryptocurrency, Chia is built around a distributed, unchangeable ledger of past transactions. But it’s also designed to support custom add-ons that can automate contracts, holds funds in escrow, or implement features such as chargebacks not supported by bitcoin’s design but central to how the financial system deals with fraud. “The idea is to make Chia the premier cryptocurrency based off of our technology,” Cohen says. “A competitor to bitcoin, but better.”

Unsurprisingly given Cohen’s track record of delivering technology that makes the internet more useful, Chia has attracted leading Silicon Valley venture capitalists. It raised $3.4 million this spring, including from Greylock Partners and Andreessen Horowitz, both of which previously invested in leading cryptocurrency exchange Coinbase. Katie Haun, a partner with Andreessen, says Cohen and his cofounder Ryan Singer’s plan to IPO rather than ICO made the company a more attractive investment. “The early ICO market is full of abuse,” says Haun, who as an assistant US attorney helped take down the digital black market Silk Road. “Chia’s approach provides a roadmap that other crypto projects can follow.”

Chia’s journey to a public listing may not be smooth. Singer, who recently took over as CEO from Cohen, expects some complicated conversations with the SEC. He’s convinced they will be worth it. “Going public is difficult and expensive but we think it’s an important way to professionalize the relationship between us and investors,” says Singer. He previously cofounded the early bitcoin exchange Tradehill, which shut down in 2012 saying it lacked the money transmitter license necessary to operate.

Professionalism isn’t a term commonly associated with the cryptocurrency market, which has become synonymous with hype, fraud, and questionable hijinks such as conference catering spiked with marujuana. “It’s basically the dot-com frenzy all over again, investors have to try and separate hype from information,” says Atif Ellahie, a professor at the University of Utah business school. “Taking on the cost and complication of going public could help make Chia more attractive to investors,” he says.

Ellahie recently showed with colleagues at Columbia University and London Business School that some cryptocurrency investors are ready for more disclosure. Analyzing almost 800 ICOs between 2014 and 2018 that collectively raised more than $13 billion revealed that projects disclosing more technical and financial information were more likely to be successful. It’s starting to look inevitable that US regulators will place more controls on cryptocurrency projects, Ellahie says.

Chia’s IPO strategy could be a savvy way to get ahead for that. Cohen says arguments that forcing the sector into line with conventional regulations would quench technical innovation are wrong. “If you start loosening those up you don’t get technologists coming in with better things, you get scam artists coming in and stealing things,” he says.

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These Tech Companies Will Need More Women on Their Boards

Several major tech companies—including Apple, Google parent Alphabet, and Facebook—will likely have to add women to their boards of directors by mid-2021 under a pioneering new California law aimed at bringing more women into corporate boardrooms.

California governor Jerry Brown signed the measure, known as SB 826, into law on Sunday. In an unusual note attached to his signature, Brown nodded to the #MeToo movement and last week’s charged hearings for Supreme Court nominee Brett Kavanaugh. “Recent events in Washington, DC—and beyond—make it crystal clear that many are not getting the message,” about equal treatment of women, Brown wrote. “It’s high time that corporate boards include the people that constitute more than half the ‘persons’ in America.”

The law, sponsored by state senator Hannah-Beth Jackson, requires all publicly traded companies based in California to have at least one woman on their board by the end of 2019. By the end of 2021, all boards must have two women, and boards with six or more members must have three women.

Apple, Alphabet, and Facebook each have two women on their boards, as do chipmakers Intel and Nvidia. Among the biggest Silicon Valley companies, Cisco, Oracle, and Netflix meet the 2021 requirement, with three or more women on their boards.

Beyond big tech, the impact of the law could be even greater. Annalisa Barrett, of Board Governance Research, says only 62 of the 439 California companies in the Russell 3000 stock index comply with the 2021 requirement. The others will have to add 684 women to their boards by July 2021 in order to comply, including 66 companies that now have no women directors. In a study last year, Barrett found that women account for 15.5 percent of directors on California-based companies, compared with 16.2 percent of directors on all Russell 3000 companies.

In an interview, Barrett says the law’s biggest impact will be at smaller companies, far from the media spotlight and pressure from institutional investors seeking more diversity in the boardroom. “That is going to take a lot of these smaller companies by surprise,” she says.

But the law’s reach could be stunted. In a paper posted online last month, Joseph Grundfest, a law professor at Stanford, said California can only dictate the makeup of boards that are both headquartered and incorporated in the state. Attempts to apply the law to companies incorporated in other states will likely be found unconstitutional, said Grundfest, a former member of the Securities and Exchange Commission. Most big California companies are incorporated in business-friendly states such as Delaware or Nevada. Among the biggest companies, only Apple and Cisco are incorporated in California.

Brown acknowledged such concerns in his signing message, saying, “I don’t minimize the potential flaws that indeed may prove fatal to its ultimate implementation.” Nonetheless, the governor said he was signing the bill in part because of the broader national climate.

Other lawyers disagree with Grundfest’s analysis. Ray Cardozo, a partner at Reed Smith LLP, says the board requirement is similar to other anti-discrimination laws that apply to all companies in California. Jackson, the bill’s sponsor, predicts the law will hold up in court. “I believe there is an extremely compelling state interest in California moving forward to protect women and the state’s economy,” she said in a statement. “From everything to establishing labor laws to reporting requirements and tax laws, states have historically and consistently developed ground rules for companies operating in their states.”

California is the first US state to require that women be represented on corporate boards. Several European countries have similar laws or guidelines, following the lead of Norway, which a decade ago required all companies to have at least 40 percent women on their boards. The Economist reported earlier this year that the laws have led to big increases in women directors in France, Germany, Italy, Britain, and the Netherlands.

The law arrives amid concern about the number, and prominence, of women in technology. Women account for 24.5 percent of technical employees at Google, 23 percent at Apple, and 22 percent at Facebook, according to those companies’ most recent diversity reports. Those numbers have been creeping higher in recent years, but not quickly enough for critics of the companies’ diversity efforts.

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Farmers Can Now Buy Designer Microbes to Replace Fertilizer

Jake Misch’s family has been growing corn in the sandy soils of northwestern Indiana for four generations. Like other farmers in the area, the Misches spray their fields with a nitrogen-rich fertilizer once in the spring when the seeds are planted, and once later in the year, when the corn is going through its growth spurt. Fertilizing is essential to yielding a healthy harvest, but it’s expensive enough that he stresses about it, and, as he’s well aware, it’s not great for the planet.

Which is why next year, Misch is trying something new. In the spring he’ll douse his freshly furrowed corn seeds with a liquid probiotic for plants. As the seedlings grow, these special microbes will colonize their roots, forming hairy nodes and converting atmospheric nitrogen into a form that plants can use to turn sunlight into sugar. If all goes as planned, those little critters will produce 25 pounds of usable nitrogen for every acre of corn.

At least, that’s what Pivot Bio is promising. The Berkeley, California, biotech startup announced today its commercial launch of the first and only nitrogen-producing microbial treatment for US corn farmers. It’s not a complete and total replacement for fertilizer, but the product aims to reduce farmer’s reliance on it. Fertilizer production is a huge contributor to greenhouse gases. Once it’s on fields, it can leach into aquifers or run off into rivers, leading to toxic algae blooms. According to Pivot, if every corn farmer in the US followed Misch’s lead, it would be the environmental equivalent of removing one million cars from the road.

“We’re trying to create an ecological zeitgeist,” says Karsten Temme, CEO and cofounder of Pivot. The company also announced that it had raised $70 million in series B funding, led by Bill Gates’ Breakthrough Energy Ventures, an investment fund that aims to drastically cut greenhouse gas emissions.

Using underground microbes to solve modern agriculture’s biggest challenges is not an altogether new idea. Farmers have been lacing their fields with pest-killing bacteria for decades. But money only recently started flowing into Big Ag microbials. Startups like Pivot and Indigo Ag began hunting down useful organisms to turn into products in 2014. Last year, German biotech giant Bayer launched a $100 million joint venture with Ginkgo Bioworks, an organism-engineering outfit, to create self-fertilizing crops with the help of designer bacteria.

That company, now called Joyn Bio, is using every trick in the synthetic biology trade to engineer organisms that can do for corn and wheat what naturally occurring microbes do for legume crops like soybeans. It’s still two to three years from field testing its first product.

Pivot, on the other hand, saw a way forward with what nature had already provided. There were bacteria, they knew, that lived on corn roots, that had nitrogen-fixing genes encoded in their DNA. But because the process is so energy-expensive, those bacteria only flipped those genes when needed. And because farmers always plant in fertilized fields, those genes had gone dormant over the decades. Someone just had to turn them back on. “What we’re trying to do is actually reawaken this function that the microbe has had all along,” says Temme.

But first, they had to find ’em. To start, Pivot bought buckets of soil from farmers throughout the US corn belt. Into that soil, the company’s scientists planted young corn seedlings called “bait plants” because of the substances they excrete to attract beneficial bacteria. Think of it like agricultural Tinder; the corn swipes right on microbes that make its life easier. Out of thousands of bugs that might be in the soil, the plant pulls out maybe a dozen or so. Then Pivot’s scientists grind up the roots and dab the mixture onto a plate of agar devoid of nitrogen. Anything that survives must be making its own.

Once they’ve got some good candidate bacteria, says Pivot scientist Sarah Bloch, they use gene editing tools to rewire their gene expression programs. The goal is to keep the nitrogen-fixing activity turned on, even in the presence of fertilizer. “We’ll take a promising strain and remodel it 100 different ways and test all those approaches to see which one is best,” she says. Sometimes, big breakthroughs come from surprising places. The strain that makes up Pivot’s first product, which will be available to farmers in select states for the next growing season, came from land in Missouri belonging to Bloch’s father.

“A lot of our early samples came from people we know—friends and family,” says Bloch. “It just turned out that we hit the jackpot on my dad’s sample.”

That product was tested in five generations of small field trials before going into larger trials this summer. Pivot worked with twenty-five farmers across the US to each grow a few acres using the liquid probiotic treatment. The harvest has yet to come in, and the data with it, but farmers like Misch are already excited. He learned on Twitter that an associate of his was participating in the trial, so Misch stopped by his farm to walk the test rows last week. What he saw convinced him to sign up to be Pivot’s first customer in Indiana. “If you go back 10 years, biologics get a mixed review from farmers,” says Misch. “These are living organisms and they act with every environment differently, but the science has come a long way.” The way Misch crunches the numbers, using this kind of probiotic plant treatment could save him $20 an acre, or about a third of his current annual nitrogen investment.

Is it enough to save the planet? Maybe not. But at least it’s a step in the right direction.

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Elon Musk’s SEC Settlement Is Sending Tesla Shares Through the Roof

The news of Tesla CEO Elon Musk settling with U.S. financial regulators sent the company’s stock soaring Monday morning.

The electric car firm’s shares were up more than 15% in pre-market trade in the U.S., and up almost 13% in Germany.

The rise pretty much makes up for the losses suffered Friday, after the Securities and Exchange Commission (SEC) officially sued Musk over his tweet about having secured funding for a plan to take Tesla private. The funding had not been secured.

On Saturday, Musk settled with the SEC. He and Tesla will pay $20 million each, and the company will have to find an independent chairman to replace Musk, who will stay on as CEO. Tesla will also need to bring a couple more independent directors on board.

However, the Justice Department is still probing Musk’s tweets, and lawsuits by investors and short-sellers over the false information are also still ongoing.

Many see the forced changes as being positive for Tesla, partly because the mercurial Musk will now have someone to answer to, and partly because his reduced role may allow the chronically overworked CEO to focus more.

Over the weekend, Musk emailed his staff to tell them to “ignore the distractions” and to claim that Tesla is “very close” to finally becoming profitable.

Sunday was also the end of the latest quarter, and Tesla has been working flat-out to break a delivery bottleneck that stemmed from increased production capacity.

I Went to Starbucks and Its New Open Door Policy Drove Me Out

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

The hunger got me at the wrong moment, as it turned out.

I’m was in New York, staying in the darkest hotel room in the world. 

Perhaps this affected my mood.

On Wednesday, though, I wandered into a Starbucks because I needed something quick and familiar. And because I wanted to see if the pumpkin scones taste even sweeter than the ones in California. (They do. It’s unbearable.)

What struck me, however, was that there wasn’t a seat to be had. 

The whole window was populated by humans on laptops, prodding away vigorously as if they were sending hundreds of ransom notes.

At the tables, the usual business meetings you expect to see in any big-city Starbucks.

It took quite a while for my order to be completed. I imagined, naively, that just one seat might have become free.

It didn’t.

Everyone was doing their thing. What was striking, however, is that their thing didn’t seem to involve consuming anything sold by Starbucks.

You’ll tell me that this has been a problem at Starbucks for years. 

I wonder, though, whether the coffee chain’s infamous Philadelphia incident earlier this year — when a manager called police on two black men who hadn’t ordered anything and were waiting for a business meeting — has emboldened more of these laptop loungers.

There’s not much shame in New York anyway. Now, perhaps, there’s none when it comes to taking up Starbucks’ space and WiFi bandwidth, given that the chain has instituted an open-door policy that allows anyone to come in and buy nothing.

I confess I walked — discreetly, of course — behind the people populating the window. 

Between the five of them, just one had any evidence of a Starbucks product purchase.

Meanwhile, there were people standing in any corner they could find — myself included — trying to balance a drink in one hand, a sandwich in another and a phone in a third.

I contacted Starbucks to ask whether the chain has noticed an increasing problem with laptop loungers taking advantage because now they officially can.

I’ll update, should I receive a reply.

Humans take advantage whenever they can. Especially in New York, a city built on the joy of taking advantage and loudly crowing about it afterwards. 

I’d had enough of it, though, and decided to leave. 

As I did, I gave the laptop loungers the beadiest of eyes. 

They didn’t notice.

18 True Tales of Ridiculous Performance Appraisals

 “Your greatest strength… your listening abilities. well, there might not actually be anything going on in your head, but you SEEM like you’re listening,” this is a direct quote from a performance review, sent to me by Reflektive, a people management company.

It’s performance review season–many companies do an annual review in December, so October is when people start thinking about writing them. If you’re a manager, you want the reviews to be helpful for your employees. Additionally, never write anything you’re not willing to stand behind in a lawsuit. 

Whatever you do, don’t use the following examples from people’s true experiences. Reflektive shared the following three with me as well:

  • Higher level position years ago – boss spent 70% of PR talking about her husband, 30% was in-the-weeds process recommendations like: “If a team member removed paperclips from incoming documents that’s a big process improvement. Useless info! 
  • In one of the organizations that I worked in, we were asked to fill out pages of answers to open-ended subjective questions. We did. Only to find out later that our manager had already filled in his ratings before he left for a vacation a week before we started writing the reviews. Our painstakingly written answers and response had absolutely no purpose apart from making us feel like we were writing something up.
  •  I went in for my 30-day review all excited about all I’d been able to do in a newly created position. I was told that I hadn’t done anything they had wanted me to do even after he admitted that they hadn’t actually decided what they wanted to measure the position on; they just knew I hadn’t done it. I had been meeting with my supervisor for a 1-on-1 every week and he’d never said anything! I upped my documentation, reporting, project management, asked for more feedback and clearer expectations only to sit down at my 6-month review and get told a similar story – My work was exemplary, but it wasn’t what they wanted. I left that company and the person after me lasted 6 months too.

I wish I could say that performance appraisals like these are rare, but they aren’t. I asked on LinkedIn and Facebook for stories about bad appraisals and within a couple of hours had more than I could publish. Here are a few of my favorites:

  • I was dinged on a Performance Review for “causing too much drama.” The drama? Reporting and investigating Discrimination and Harassment Claims by employees who had a legitimate reason to say something.
  •  I got written up for making a typo. Fair enough but it was a fax, and I had put a period instead of a comma. There’s not a fax machine in the world clear enough for someone receiving it to catch that kind of error. My boss was gearing up to fire me for political reasons but sadly for her, I quit before her plan could come to fruition.
  •  I got lower than average rating for initiative, with the criticism that I take initiative Micromanaging boss thought it was a negative quality. Same person who, hand to God this is LITERALLY true, corrected my thumbtack positioning on a piece of paper hung on a bulletin board and DREW ME A DIAGRAM of optimal thumbtack placement.
  • Involved in a car accident while driving to a scheduled evening meeting, called from the ER to let the team know I wasn’t going to make it. The next week, I was called into the main office and written up for “allowing personal drama to interfere with my responsibilities.”
  • I once was written up years and years ago for organizing my stockroom horizontally and not vertically. Mind you all my staff were under 5ft tall and we had a completely empty room except cleaning supplies and shopping bags.
  • I was told in one job that I was “too direct” in my communications. To this day I still have no idea what that meant. When I asked for clarification as to what I was supposed to do differently in communicating with people — was I supposed to be more indirect? — they couldn’t tell me specifics. I got the feeling asking directly for clear, unambiguous feedback rubbed them the wrong way.
  • I was once told that I was too friendly with our law firm’s admins and that they wouldn’t respect me.
  • I was told that “someone” at “a meeting” “somewhere, sometime” didn’t like my facial expressions, and that I needed to make sure my facial expressions were nicer. She could not define which meeting, who said it, where it was or when.
  • A performance review stated that my number of “corrective actions” (mistakes) had increased for the year. Well, it had…from 1 to 2. Very low when you consider tens of thousands of opportunities to make an error in the course of a year. I complained and my supervisor added a note that the total remained very low. (At least the review didn’t say my number of errors doubled!)
  • My performance review was taken down because of attendance. I had influenza and missed 5 days of work. Why have sick days and get docked for using them?!
  • When I was student teaching I think my supervising teacher was looking for ways to criticize me because the students liked me better. He told me that I needed to walk backward in front of the line of fifth-grade students when we moved down the hallway. My typical place to walk was near the front of the line but to the side of the line so I could see all of the fifth graders in the line at once. I am 4’10” tall, and backward in front of the line allows me to see one or maybe two kids at the most. I failed to understand how that would be effectively managing them. Also, nothing about my instructional practices or lesson planning, just how I walked down the hall. Also, no complaints about my management of said students or them being loud or unruly in the hallway, just physically where I stood.
  • I didn’t smile enough and my “brand” was being damaged.  Mind you my manager wrote “manor” instead of manner.  She should have put eye rolling after that meeting.  When I asked for specific input to improve she said it would really hard for her to write that down.  She said she had a very hard time writing the first one.  There was never a question about my work product.
  • After 6.5 years, and 5 strong/positive reviews my company made some changes and hired a new person as my manager, while my former manager had another role. After 4 months he gave me my review which what not even close to my historical reviews. I asked if they had consulted my former manager and was told: “After a few months I’m comfortable I know you well enough to not have to consult anyone”.
  • I had a manager complain about how slow I was catching on to a task for which I was never trained on and the only one who knew how to do the task was her.

Published on: Sep 30, 2018