| | Good morning.
Russia's foreign ministry announced Tuesday that Netflix CEO Reed Hastings is among 61 US nationals newly barred from entering the country, as part of a new round of sanctions. Lots of people have been rushing to cancel their subscription to the streamer, but this is a little bit overboard. |
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| • | | The EU announced it will force electronics manufacturers to use a single port by 2024, the bill is seen as an arrow through one particular apple. | | | • | | Raytheon is joining its defense giant peers by uprooting to the DC metro area. | | | • | | Cipriani emerges from tough pandemic days. | | | Please do not delete this text. |
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EU Will Mandate a Common Phone Charger by 2024 |
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One port to charge them all, one port to combine them. On Tuesday, the European Union announced it will force smartphone manufacturers to use a standard USB-C charging port, ending the ritual of asking around at the office until you find someone with the right charger after forgetting yours at home. Now there's only the resistance from a $2.4 trillion megacorporation. |
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The "common charger" rule is the EU's attempt to kill two birds with one cord. First, the bloc says consumers will save €250 million ($267 million) per year on "unnecessary charger purchases" due to standardization, which will also be required for tablets, digital cameras, headphones, portable game consoles, and e-readers. Second, the move will be good for the environment by cutting down on 11,000 tons of annual waste. Once, as expected, the rule is passed by the European Parliament, manufacturers will have 24 months to upgrade their devices (laptops will have to comply at a later date). Apple — which sold 56 million iPhones last year in Europe, out of 241 million total — says the EU could hinder technological advancement: |
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• | | "We remain concerned that strict regulation mandating just one type of connector stifles innovation rather than encouraging it, which in turn will harm consumers in Europe and around the world," Apple, the only major smartphone manufacturer that hasn't adopted USB-C, told Reuters. Still, Apple analyst Ming-Chi Kuo said the company is already testing iPhones with USB-C ports in place of its proprietary Lightning charger. | |
• | | "My job is to kill off these sea snakes whenever I can," retorted EU industry commissioner Thierry Breton. "Every time we put a proposal forward, they start to say 'oh, it will be against innovation.' No, it's not against innovation, it's not against anyone." Breton said the EU will develop a standard to allow for the development of new charging technologies. | | |
The Invisible Path: The EU's new rules will not prohibit wireless charging, already gaining a foothold in China thanks to Huawei, OnePlus, and Xiaomi — the iPhone 12 is also capable of (relatively slow) wireless charging with Apple's MagSafe charger. Kuo previously said Apple could proceed straight to a portless iPhone, a move best described as USB-C-U-L8R. |
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Raytheon Will Move Its HQ to the DC Metro Area |
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''Offensive operations, often times, is the surest, if not the only means of defense," wrote George Washington in 1799. For defense contractors in 2022, moving to Washington seems the surest means of shoring up business. Defense giant Raytheon Technologies said Tuesday that it will relocate its global headquarters from Waltham, Massachusetts to the Washington, DC metro area, the latest move in a geographic consolidation of the industry. |
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Mr. Hayes Goes to Washington |
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Raytheon expanded beyond its core military business just as the pandemic struck. A $74 billion merger with United Technologies in April 2020 brought the company into the commercial aircraft business and it now produces plane parts, including engines for Boeing and Airbus. After Covid collapsed the aerospace industry, Raytheon was forced to lay off thousands of workers. But aerospace sales rebounded 3% in the first quarter, to $15.7 billion. And while revenues of Raytheon's core defense business fell 12% in the same period, CEO Gregory Hayes said in April that the company stands to benefit from expanding defense budgets in the US and Europe. The company expects sales to hit $68 billion this year, and moving to DC will bring them closer to where deals get made: |
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• | | Raytheon's new HQ in Arlington, Virginia will place it in the same city as The Pentagon, the headquarters of the US Department of Defense, which reported a record $445 billion in contract spending in 2020, 10% more than in 2019. | | • | | After the move, four of the five largest defense contractors — Lockheed Martin, General Dynamics, and Northrup Grumman being the other three— will be headquartered in the DC area. The fifth, Chicago-based Boeing, is also in the process of moving to DC. | | | "We were seeing an increase in defense spending before any of this nonsense in Ukraine with the Russians," Hayes told investors in April.
Silicon Swamp: The DC area is home to a nascent tech scene, and Amazon plans to open a second headquarters in Arlington next year. Virginia Tech is also building a 3.5-acre innovation campus in nearby Alexandria, where students will work on projects sponsored by tech and engineering companies in the region rather than do traditional coursework. |
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Cipriani Scores $150 Million Boost From King Street Capital |
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(Pratham Gala at Cipriani's; Photo by John Phillip Green) Pop some prosecco, pour an aperitivo, crack open a few bottles of Peroni. Cipriani, the 91-year-old Italian luxury hotel and restaurant operator which owns the storied Harry's Bar in Venice and once ran the Rainbow Room at NYC's 30 Rock Plaza, is nearing a deal with King Street Capital Management to refinance roughly $150 million of loans held by its US arm, The Wall Street Journal reported Tuesday. For company leaders, that's plenty of reason to raise a glass and say salute. |
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Take the Funds, Leave the Cannoli |
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While most famous for serving clientele like Ernest Hemingway and Charlie Chaplin steps away from the Venetian canals at Harry's Bar, Cipriani has made a name for itself in the US. New York Mayor Eric Adams held his campaign's victory celebration at Casa Cipriani, the waterfront luxury hotel in Manhattan that opened in September. The brand also has locations in Miami and Beverly Hills. With the new deal, according to the WSJ, Cipriani will both retire loans dating back to 2018 and employ additional funding to support its expanding American footprint: |
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• | | Atop Cipriani's slate is Musica nightclub, a newly-opened 25,000 square-foot Hell's Kitchen dance hall planned in partnership with Italian nightlife entrepreneur Tito Pinto. It opened May 20 after a long pandemic delay, and is now the largest nightclub in all of New York City. | | • | | Cipriani also just opened Bellini, an Italian restaurant that will anchor Harry's Table, a soon-to-open Upper West Side artisanal Italian food hall and market. The venue also suffered long pandemic delays. | | | "This year we're opening 16 new projects," CEO and the founder's great-grandson Giuseppe Cipriani told the WSJ, which noted he spoke between sips of Negroni. "During the pandemic, instead of stopping, I traveled all over the world and we signed onto new projects. We're very excited." Sounds quite luxurious indeed. |
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Please do not delete this text. | Extra Upside | • | | The World Bank updated its outlook for the global economy, and not in a good way. | | | • | | Their loss: Target will mark down unwanted products as it tries to clear a major inventory backlog or, as a thrifty layman would say, they're having a sale. | | | • | | LEX Markets is breaking new ground. Last fall the innovative new platform took 286 Lenox Ave, a retail and office property in NYC, public. That's right, as in, IPO (Ticker: TESLU). We don't enjoy hyperbole — but it had never been done before. The upshot for investors: you can now trade in and out of individual buildings just like stocks with all of the traditional real estate benefits (distributions, tax advantages, etc.). Get started today and get up to $500 in deposit bonuses.*
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