| |  | TOGETHER WITH |  | | | Good morning.
US job openings are near all-time highs and so are... US workers? Of more than 6 million workforce drug tests screened by Quest Diagnostics last year, 3.9% came back positive for marijuana, the highest rate ever reported and 50% higher than in 2017, the company said Wednesday. Word of advice: Stick to the morning coffee. | | | • | | Facebook is targeting TikTok with a stealth campaign led by a DC political firm. | | • | | Germany and Austria are planning gas rationing. | | • | | A wave of regulatory oversight may be coming for SPACs. | | | | |  | Social Media | Facebook is Paying a Political Consulting Firm to Smear TikTok |  | | Like Harrison Ford in The Fugitive, Cary Grant and Grace Kelly in To Catch a Thief, or Roger Rabbit in Who Framed Roger Rabbit?, TikTok has been accused of some serious wrongdoing. And now we know who framed them.
On Wednesday, The Washington Post published the explosive revelation that Facebook has hired a DC political consulting firm to run a national campaign to turn the public against emerging competitor TikTok. The campaign has already blamed TikTok for false rumors that originated on — where else? — Facebook. | Tik for Tat | Facebook’s parent company, Meta, has plenty of reasons to fret about TikTok. Meta’s stock is down almost a third this year, wiping away $300 billion in market value, and, in February, Facebook reported its first ever decrease in daily active users. By contrast, video-based social network TikTok became the most popular website in the world last year, according to Cloudflare, usurping even Google (and all the boomers Googling “What is a TikTok?”). Meta, in leaked documents, said teens spend double to triple as much time on TikTok than on Meta-owned Instagram. But TikTok and its owner, privately-held Chinese company ByteDance, are the subject of US security concerns over user data being held on Chinese servers and — like Instagram — concerns they spread harmful trends among youth. Facebook hired Targeted Victory, a DC consulting firm that works for politicians, to run a national stealth campaign to highlight these concerns. The campaign itself hasn’t exactly been honest: | • | | Documents obtained by WaPo show Targeted Victory placed TikTok-critical editorials and letters to the editor in newspapers across the US while lobbying politicians and news organizations to scrutinize the company's data and social practices. | | • | | Last year, the firm tried to spread news of a viral “Slap a Teacher TikTok challenge.” Turns out no such trend existed, and rumors of its existence originated on Facebook. Another supposed trend of students being challenged to vandalize school property was also the product of Facebook rumors. | | | | Meta-Averse: Meta’s dwindling stock is hurting share-driven executive compensation and might as well be an internal stealth campaign against working at Facebook. The company’s chief creative officer, head of communications, head of global advertising, head of the Facebook app, head of its now-canceled stablecoin, head of virtual reality, and more have all left over the last 15 months. | | | | | | Energy | Germany Prepares for Gas Rationing Amid Standoff With Russia | | Vladimir Putin’s latest aggression on the international stage is leading Germany to brace for a potential swift end to trading with its largest energy supplier.
The country’s economic affairs minister, Robert Habeck, triggered the first phase of an emergency law on Wednesday to address major energy shortages, a serious threat should Germany be cut off from Russian gas. Keep your kettle use to a minimum, he advised the public. | Counting Down the Kilowatt Hours | | In retaliation for the kitchen sink’s worth of Western sanctions placed on Russia, Putin is demanding the EU and US pay for gas imports in rubles, which would help prop up the value of his country’s beleaguered currency. Putin’s demand would violate current agreements, which stipulate payments in dollars or euros. The G7, of which Germany is a member, rejected Putin’s proposal earlier this week.
“Either Europe pays in rubles in order to keep the lights on and the heat on, or Russia may get the excuse it could potentially be looking for to cut off energy supplies to Europe,” Jason Bordoff, director of Columbia University’s Center on Global Energy Policy, told Marketplace. That would be tough on Germany, which last year sourced 34% of its oil, 55% of its natural gas, and 26% of its coal from Russia: | • | | Habeck convened a crisis committee of government officials, regulators, and private-sector members to assess Germany’s energy supply, the first step laid out in the emergency gas law. He also asked businesses and households to reduce their energy consumption with the reminder that “every kilowatt counts.” | | • | | If the situation becomes critical, German regulators could ration gas, and its manufacturing industry is first in line for cuts. That poses a strong risk to Germany’s manufacturing-led export economy, which was responsible for 46% of GDP in 2019. Austria also activated the first stage of its own emergency plan Wednesday. | | | | Kicking the Habit: Poland said Wednesday it will end Russian gas imports by year’s end, but Germany previously said it won’t be able to wean itself off Russian natural gas until 2024.
It’s All Connected: Like much of the rest of the world, Germany is dealing with unusually high inflation, which the European Central Bank said Wednesday rose to a 40-year high of 7.6%. The chief culprit? A 39.5% increase in energy prices from a year ago. | | | | | | SPONSORED BY CALIBER | There are Two Types of Investors… | …those who understand the power of compounding, and those who do not. The math is the only thing that matters — and even the smallest differences in after-tax return rates can mean much bigger gains over the long term. That’s why many sharp investors are now reinvesting capital gains into Opportunity Zones when they are facing hefty tax bills after the sale of a business, stocks, or crypto. Interested in learning how this can unlock tax incentives and turbocharge your portfolio? Caliber — The Wealth Development Company — has put together this special investor’s guide to illuminate why Opportunity Zones are so impactful for investors (particularly those with capital gains of $100K or more) AND impactful for communities. Make your move and learn more — Access the “Accredited Investor’s Guide to Opportunity Zone Investing” instantly from Caliber. | | | | | | SPACs | The SEC Drafts New Rules For Blank-Check Companies | | If 2021 marked the beginning of the so-called “techlash” (just ask the harried minds in Meta’s legal and PR departments how they're sleeping lately), then 2022 may mark the beginning of another turning of the public opinion tide: the “SPAC-lash.”
On Wednesday, the SEC proposed new rules for blank-check special acquisition companies, requiring disclosures of sponsors and potential conflicts of interest, as well as protections for investors against embellished business projections. | Baby Got SPAC | | The SPAC promise of a fast track to public listing sparked a tidal wave of high-profile deals in recent years including DraftKings, SoFi, and Clover Health. But SPAC deals sputtered nearly as often as they succeeded (BuzzFeed, anyone?). Even worse, the SPAC space grew increasingly litigious last year, with 15 shareholder lawsuits against post-merger SPAC companies in the first half of 2021 alone, up from five through all of 2020. And this was while overall securities cases fell 13%, according to CNBC.
The red-hot space has quickly lost steam, with the CNBC SPAC Post Deal Index down 20% in 2022 and 45% in the past 12 months. For investors, the time is right for some regulation in the relatively speculative realm, and the SEC’s newly drafted rules could add much-needed stability: | • | | The new rules would require a SPAC’s private business target to be a co-registrant when the shell company files its take-public Form S-4 or F-4. | | • | | To protect investors from any irresponsibly bullish estimates, the new rules would also strip a blank-check company’s liability safe harbor for misleading forward-looking statements. | | | | “Investors deserve the protections they receive from traditional IPOs,” SEC Chair Gary Gensler said in a statement. The agency had been signaling a SPAC crackdown for months.
Bank On It: SPAC bankers have already been slashing their fees as investor redemptions and withdrawals spike amid a run of poor performance. In February, the average redemptions notched 90%, according to the Financial Times. | | | | | | Extra Upside | | | • | | A hacker gang claims it stole some Apple Health-related materials from one of the tech giant’s partners. | | • | | Your doctor isn’t the only person who can use data to assess and manage your health. Check out Base, the health platform designed to educate and empower you. Base uses blood and saliva tests to generate personalized recommendations that can help solve issues with sleep, stress, sex drive, and more. Base puts the power of health data in your hands, so you can start feeling better with science-backed support. Take 20% off when you start today.* *Partner | | | | | | |  | Just For Fun | | | | | Written by Sean Craig and Brian Boyle. | | No longer want to receive these emails? Unsubscribe here. Copyright © 2022 The Daily Upside, LLC., All rights reserved. 1230 York Avenue, Box 154, New York, NY 10065 | | | | |
