Gut Vs. Emotion

My Esquire piece on big tech getting bigly (I know, I know…) is live online and hits newsstands next week.

What. A. Thrill.

Gut vs. Emotion

Instinct is powerful, and useful. We’re blessed with millions of years of experience that register a strong sense you shouldn’t pet a snake or eat things that smell foul. The heart is often linked to emotion. But it ends up the gut and the vagus nerve are the original gangsters, with a direct line to your brain, influencing how you feel and behave. Similar to the brain, a plethora of neurons form neurotransmitters in your gut. Supposedly the gray matter of a cat’s brain is nestled in your girth. The good-time hormones, serotonin and dopamine, spend more time hanging in your gut than your brain. So, the key to someone’s heart is in their gut.

It’s an upward journey via the brain-gut axis that originates from bacteria in your GI tract, moves past the heart via the vagus nerve, picks up momentum fueled by budding emotion, and then hits the TSA that is the brain — slow down, put all your emotions in a gray bin. You can leave your shoes on, and laptop in your bag, if you aren’t prone to wild mood swings (Pre-Check).

We need our emotions to run through a metal detector. Emotions are an important and rewarding part of life, but they’re often poor inputs to decision-making. It’s wonderful to feel love, but its ability to blur judgment, which informs good decisions, is the grist of war, child support, and other uber-bad outcomes.

DOWn

The Dow Jones puked a thousand points Thursday, after doing the same last week. Boom, the neurons in your gut start churning and sending signals that get emotion and momentum. I bought a retail stock three months ago, thinking it had been so badly beaten up, it was due for a pop. People would realize that, while the firm is in fact going out of business, it’s going to die more slowly than the market thinks. By the way, this is a decent descriptor of every old-media firm right now. This company’s stock, after Thursday’s close, is off 25%, and… that hurts my feelings. That is, if hurt were a mix of anger, embarrassment, and self-loathing. But I digress.

Not wanting more tears in the rain, my emotions tell me to sell, to limit my downside of hurt. But the TSA steps in and asks, if I hadn’t bought higher, and the stock was here now, sans the pain, how would I feel then? The answer is, I’d want to buy a bunch, instead of sell. Barry Ritholtz pointed out this phenomenon to me as the reason most retail investors have portfolios that underperform the market, and do worse than even the stocks in their portfolio. People let emotion get in the way. They sell when things have declined, and are good values, and fall in love with stocks that have skyrocketed, and may be overvalued. If you had opted to get off the roller coaster of the markets in March of ’08 (understandable), you’d have sold at a low, missed the short 14 months it took to recover all of it, and be much, much worse off.

Bishop

The markets are Bishop from Aliens. They move and reflect traits of the sentient, but have no heart. The market doesn’t feel sorry for you when you’re about to lose your home, nor is it jealous of you when you buy a jet — it doesn’t care at all. If the markets registered emotion, would Jeff Bezos have accrued a personal net worth higher than the GDP of Ukraine?

Sidebar: I wonder if AI is a step to artificial emotion, and what that might mean for us. The adaptation central to AI sounds to me like the process of when your brain and emotion begin to improve or worsen decisions. #deepthoughts

To be one with the markets, and be a great investor, you have to be somewhat synthetic. Your role model is the cold, mission-focused android officer of the Sulaco — Bishop, not Ripley.

For the last decade, the markets have rewarded, more than any human or synthetic, the only other true android investor… the market itself. The greatest reallocation of capital in history has been flows of capital out of active investors, like hedge funds, even bypassing the near-synthetic of quant funds, and going to full Bishop with ETFs, void of all humanity. ETFs are structured to balance and rebalance to mimic the market, or sector, with no gut or emotion getting in the way. Active managers as a profession could best be described, over the last decade, as awful… but expensive. Pension funds, sovereigns, and family offices have paid rich fees for the pleasure of underperforming the S&P by the amount of their fees, and then some.

Who is the Warren Buffett of our age? Bishop.

The *Waymo v. Uber* Settlement Marks a New Era for Self-Driving Cars: Reality

The sun had only just come up Friday, but the young self-driving car industry had already moved into a new era. From the bench, federal Judge William Alsup, recovering from a sore throat, called it: “This case is now ancient history.”

Waymo v. Uber, the first great legal fight over autonomous vehicles, ended in a peace treaty Friday morning: Uber gave Google’s sister company a 0.34 percent stake in its business (worth $245 million or $163 million, depending on how you count Uber’s worth), and pledged not to use any of Waymo’s software or hardware in its vehicles. “I want to express regret for the actions that have caused me to write this letter,” Uber CEO Dara Khosrowshahi wrote in a statement posted on the ride-hailing company’s website.

Waymo had alleged that when longtime Google engineer Anthony Levandowski resigned to start his own company, he took thousands of vital technical documents with him, including blueprints for the lidar laser sensor he had helped develop. Uber bought Levandowski’s startup a few months later for almost $600 million in equity and put Levandowski in charge of its struggling self-driving R&D effort. In Waymo’s telling, Levandowski and Uber used Waymo trade secrets to accelerate their efforts.

In large part, the lawsuit encapsulated the stakes in the early days of an industry that’s now booming. Back then, a good lidar system was so rare and coveted that it might be worth stealing. A single engineer like Levandowski, who helped found Google’s self-driving car team a decade ago, could merit a palace coup. And just two companies—Google, the progenitor of self-driving tech, and Uber, the virile challenger eager to convert its millions of human-operated cars into much more profitable robots—command nearly all the headlines and attention of anyone eager for a world where human drivers are a lol-worthy memory.

That world looks different now. More than 20 companies are currently developing lidar, making the sensor more necessary commodity than secret sauce. A pedigree like Levandowski’s loses its luster as a new generation of engineers, trained in robotics and machine learning, emerges. At least half a dozen companies not involved in this brouhaha have proven they can make cars drive about without human help. Waymo v. Uber was a fight over a once jealously guarded technology that today verges on commonplace. And now that the suit is settled, everyone can turn to the next chapter in the textbook, the one where all the companies grow up and figure out how to deploy the thing they’ve all created.

“This is evidence that the autonomous driving problem is not going to be solved by a single silver bullet,” says Shahin Farshchi, a partner at the venture capital firm Lux. “It’s a matter of building many things and getting many things to work together.”

As any good historian will tell you, a moment like the Visigoth-induced fall of Rome in 476 or Judge Alsup’s decree that “there’s nothing more for me to do here” doesn’t really trigger an epochal shift. It’s just a convenient marker. The transition from developing self-driving technology to actually deploying it happened independent of this case. Even before Waymo filed its lawsuit, others were turning a horse race into a stampede: General Motors acquired self-driving startup Cruise. The mysterious startup Zoox started testing in San Francisco. Waymo alum Bryan Salesky decamped for Argo AI and partnered with Ford. Former Google self-driving chief Chris Urmson founded Aurora and is now working with Volkswagen, Hyundai, and Chinese automaker Byton.

Of course, the settlement has tangible effects. First, Uber lives. The threat of a billion-dollar penalty or an injunction that could shut down its entire self-driving program has evaporated. As Uber co-founder and former CEO Travis Kalanick testified, the company sees autonomous vehicle tech as vital to its existence. If someone else figures out how to run a taxi service without a driver before Uber does, then Uber loses.

Uber wins that second life pretty cheaply, too. No money changes hands as part of this deal; Waymo receives a mere 0.34 percent stake in the ride-hailing company. Each party in the lawsuit will pay its own lawyers. And with that, Khosrowshahi ticks another box off his lengthy Fix Uber list, which also included a house cleaning after the company revealed it had paid off hackers following a 54-million-account security breach and an apology tour in London for safety infractions.

Waymo, meanwhile, maintains its position at the head of the self-driving pack, and shows competitors it’s willing to bleed a bit to stay there. “It was great from Waymo’s perspective to put everyone on notice: ‘We take our leadership position seriously and we will go hammer and tong after anyone who will upset that,”’ says Reilly Brennan, cofounder of the transportation-focused venture capital firm Trucks.

That goes for its own engineers, too. Pierre-Yves Droz, Waymo’s current lidar technical head, testified Thursday that, OK, yes, he had taken an outdated version of one lidar setup to Burning Man. And yes, he had taken two other versions home (with his bosses’ permission). Uber lawyers seemed prepared to argue that this wanton toting-about of self-driving tech proved that Waymo’s lidar wasn’t a trade secret after all. You have to hide stuff for it to be a secret.

So expect no more lidar shows at Burning Man, and no more carelessly protected servers. It’s time for the self-driving space, Waymo included, to grow up and be diligent about keeping their tech in-house. This is a real industry now. The money is still theoretical, but the autonomous vehicle market could be worth $7 trillion by 2050, according to a 2017 Intel report.

Protecting intellectual property means telling employees what is and what isn’t secret—especially if they’re about to leave. “The critical juncture to reinforce those expectations is in the exit interview,” says John Marsh, a lawyer with the firm Bailey Cavalieri. “The employer says, “Hey, by the way, you signed this agreement about trade secrets when you started here; if you have questions, come see me. I expect you’re going to abide by this.’”

In the abridged trial, an Uber lawyer asked Waymo hardware engineer Sasha Zbrozek whether anyone at Google looked for activity that signaled someone was downloading huge numbers of files.

“No,” Zbrozek responded. “But nobody monitors when you get water from the fridge either.”

The time for such freedom could be ending. As autonomous driving technology approaches reality—the you give someone money to ride in this thing kind of reality—expect better defined policies and lots more rules. And maybe a camera watching the water dispenser, too.

Waymo’ Autonomy

Alibaba kicks off sponsor deal in Pyeongchang

PYEONGCHANG (Reuters) – Alibaba Group Holding Ltd (BABA.N) is launching a project that will create a “smarter” and more connected athletes’ village and stadia and make all Olympics stakeholders “more money”, its executives said on Saturday.

Many of Alibaba’s plans are still concepts since it has not had enough time to implement its technology after signing a deal last year worth hundreds of millions of dollars as a cloud and e-commerce partner with the International Olympic Committee.

But IOC president Thomas Bach said some of Alibaba’s plans “can become operational pretty soon” while Alibaba founder Jack Ma said they expected to be realized at the next Winter Games in Beijing in 2022.

“We want to make the Olympic Games so everyone can make more money,” Ma said, adding that “everyone” meant groups such as host cities’ organizing committees, athletes and sponsors.

Alibaba is one of the few top Olympics sponsors signed with the IOC until 2028.

It has said it wants to upgrade the technology that keeps the Games running.

It also unveiled its “sports brain,” on Saturday, a suite of software products designed to improve the back office of how sports events are run.

Ma, who appeared onstage with Bach, said he was moved by North Korea and South Korea marching together in the opening ceremony on Friday since it reflected “peace and prosperity”.

Former NBA player Yao Ming was in the audience at the media conference, which featured an interpretive dancer and a magician pulling a bird out of a hat.

Alibaba has about 200 to 300 employees on the ground in Pyeongchang to study how the games run and help find ways to save future host countries money.

Alibaba’s Tmall and Taobao shopping platforms dominate online retail in China. But it is not well known in many parts of the world, including in the United States where Amazon.com Inc is the e-commerce leader.

It is using an international branding campaign focused on the Olympics to help introduce it to markets such as the United States and Great Britain.

Editing by Greg Stutchbury

China's Shanda Games says Tencent to invest $474 million

BEIJING/SHANGHAI (Reuters) – China’s Tencent Holdings Ltd will invest 3 billion yuan ($474 million) in smaller peer Shanda Games, the target firm said in a statement to Reuters on Friday, a move that will boost Tencent’s lead in the local video game market.

The Chinese market is the world’s largest, registering an estimated $32.5 billion in sales last year, according to data from gaming consultancy Newzoo. In second place is NASDAQ-listed NetEase Inc.

Shanda owns popular titles “Dragon Nest” and “The World of Legend”, and had been the main force in Chinese gaming before slipping behind local rivals including Tencent over the past decade.

The investment comes as Tencent gears up to formally launch global hit game “PlayerUnknown’s Battlegrounds” in China, after saying last year it would give the game a socialist make-over to meet Chinese rules governing digital content.

Tencent also owns significant stakes in U.S. game developers Riot Games Inc, Epic Games Inc and Activision Blizzard Inc. In 2016, Tencent bought the majority of Finland-based “Clash of Clans” mobile game maker Supercell for $8.6 billion.

Shanda said Tencent’s investment would help “bolster” Shanda’s core business. It also said the two firms would collaborate on current businesses, including several of Shanda’s popular games.

Tencent is valued at over $510 billion and has seen its share price boom on the back of strong demand for its mobile games. The firm declined to comment when contacted by Reuters.

Reporting by Pei Li and Adam Jourdan; Editing by Christopher Cushing

Exclusive: China's Ant plans equity fundraising at potential $100 billion valuation – sources

HONG KONG (Reuters) – China’s Ant Financial Services Group is planning to raise up to $5 billion in fresh equity that could value the online payments giant at more than $100 billion, people familiar with the move told Reuters.

A fundraising would bring Ant, in which e-commerce firm Alibaba Group Holding Ltd is taking a one-third stake, a step closer to a hotly anticipated initial public offering by establishing a more current valuation.

Ant’s last fundraising in 2016 valued the owner of Alipay, China’s top online payment platform, at about $60 billion. The new round should start with a valuation of between $80 billion to $100 billion, the people said.

Ant is currently in talks to appoint advisers for the fundraising which is expected to be launched in the next couple of months, they added.

Ant declined to comment on its fundraising plans. All the people spoke to Reuters on the condition they not be identified due to the sensitivity of the issue.

While no timetable for an IPO has been set, nor any location yet chosen, Ant’s plans are being viewed as a pre-IPO fundraising, the people said. A pre-IPO round is an increasingly common move by sought-after Chinese companies to establish valuations and widen their investor base ahead of going public.

It was not immediately clear how the company plans to use the fresh cash.

The exact timing and size of the fundraising still depends on investor feedback but any deal will add to an already hectic pace of domestic and offshore fundraising by Chinese tech firms that are looking to expand both at home and abroad.

Chinese e-commerce firm JD.com is raising funds for its logistics unit with a target of attracting at least $2 billion, while live-video streaming start-up Kuaishou is nearing the close of a $1 billion funding round, sources have said.

Ant’s own existing investments include stakes in Paytm, the Indian mobile payment and e-commerce website, and Thai financial technology firm Ascend Money.

Last month, however, Ant suffered a setback when a U.S. government panel rejected its $1.2 billion offer for money transfer company MoneyGram International over security concerns.

At home, in addition to its core online payments business, which Ant says has 520 million yearly users, the company also offers wealth management, credit scoring, micro lending and insurance services.

Last week, Alibaba announced it would take a 33 percent stake in Ant – replacing the current system where Alibaba receives 37.5 percent of Ant’s pre-tax profit – in what was viewed as an important step ahead of any IPO.

Alibaba set up Alipay in 2004, modeling the business on PayPal, to help Chinese buyers shop online, and later controversially spun it off ahead of its own listing in 2014. Jack Ma, Alibaba’s founder, controls Ant, according to Alibaba filings with the U.S Securities and Exchange Commission.

Ant is considered by some analysts as one of the most valuable Alibaba assets due to its unique position in Chinese e-commerce.

Current shareholders in Ant include large state-owned institutions such as China Life Insurance, China Post Group – parent of Postal Savings Bank of China – and a unit of China Development Bank.

Reporting by Sumeet Chatterjee and Julie Zhu; Additional reporting by Kane Wu; Editing by Muralikumar Anantharaman and Edwina Gibbs

Akamai revenue, profit top estimates on robust cloud demand

(Reuters) – Akamai Technologies Inc’s (AKAM.O) profit and revenue topped analysts’ estimates on Tuesday, and the company said it had cut about 400 positions, or 5 percent of its global workforce.

The company’s shares were up 8.2 percent at $68.87 in extended trading.

Activist investor Elliott Management, which has disclosed a 6.5 percent stake, would push Akamai to curtail what the hedge fund sees as wasteful spending, among other measures, sources told Reuters in December.

“As part of our effort to improve operational efficiency, we reduced headcounts in targeted areas of business, most notably in areas tied to our media business,” Chief Executive Tom Leighton said on a post-earnings call with analysts.

Akamai’s media business, which helps in faster delivery of content through the web, has been under pressure from large customers, such as Apple Inc (AAPL.O) and Amazon.com (AMZN.O), developing in-house capabilities to handle their web traffic.

Revenue in the unit declined 3 percent to $284 million in the fourth quarter ended Dec. 31, the ninth straight quarterly drop.

To offset the weakness, the company is bolstering its cloud security solutions.

Revenue in the company’s cloud unit surged over 32 percent to $135.2 million. Quarterly sales growth in the unit has averaged about 30 percent in 2017.

The company, which recorded a $52 million charge related to the restructuring in the fourth quarter, said it would take another charge of about $15 million in the current quarter.

Total revenue rose 7.7 percent to $663.5 million, beating analysts’ average estimate of $649.1 million, according to Thomson Reuters I/B/E/S.

The company’s net income plunged to $19.1 million, or 11 cents per share, from $91.6 million, or 52 cents per share, a year earlier, due to the charges.

Akamai also recorded a $26 million provisional charge associated with the recent U.S. tax law changes.

Excluding items, the company earned 69 cents per share, 6 cents above analysts’ average estimate.

The company forecast first-quarter revenue in the range of $647 million to $659 million, above analysts’ average estimate of $647.61 million.

Profit is expected to be about 67 cents to 70 cents per share, compared with expectations of 61 cents.

Reporting by Sonam Rai and Arjun Panchadar in Bengaluru; Editing by Sriraj Kalluvila

Seattle finds Facebook in violation of city campaign finance law

SAN FRANCISCO (Reuters) – Seattle’s election authority said on Monday that Facebook Inc is in violation of a city law that requires disclosure of who buys election ads, the first attempt of its kind to regulate U.S. political ads on the internet.

Facebook must disclose details about spending in last year’s Seattle city elections or face penalties, Wayne Barnett, executive director of the Seattle Ethics and Elections Commission, said in a statement.

The penalties could be up to $5,000 per advertising buy, Barnett said, adding that he would discuss next steps this week with Seattle’s city attorney.

It was not immediately clear how Facebook would respond if penalized. Facebook said in a statement it had sent the commission some data.

“Facebook is a strong supporter of transparency in political advertising. In response to a request from the Seattle Ethics and Elections Commission we were able to provide relevant information,” said Will Castleberry, a Facebook vice president.

Barnett said Facebook’s response “doesn’t come close to meeting their public obligation.” The company provided partial spending numbers, but not copies of ads or data about whom they targeted.

The unregulated nature of U.S. online political ads drew attention last year after Facebook said Russians using fake names bought ads on the social network to try to sway voters ahead of the 2016 presidential election. Moscow denies trying to meddle in the election.

Buying online election ads requires little more than a credit card. Federal law does not currently force online ad sellers such as Facebook or Alphabet Inc’s Google and YouTube to disclose the identity of the buyers.

Legislation is pending to extend federal rules governing political advertising on television and radio to also cover internet ads, and tech firms have announced plans to voluntarily disclose some data.

Facebook Chief Executive Mark Zuckerberg said in September that his company would “create a new standard for transparency in online political ads.”

At the center of the Seattle dispute is a 1977 law that requires companies that sell election advertising, such as radio stations, to maintain public books showing the names of who bought ads, the payments and the “exact nature and extent of the advertising services rendered.”

The law went unenforced against tech companies until a local newspaper, The Stranger, published a story in December in the wake of the Russia allegations asking why.

Seattle sent letters to Facebook and Google asking them to provide data. The sides have been in talks, and last month Facebook employees met in person with commission staff.

“We gave Facebook ample time to comply with the law,” Barnett said.

Google has asked for more time to comply, and that request is pending, Barnett said.

Legal experts said they were unaware of any similar regulation attempts by other U.S. localities or states.

“Given the negative publicity around Facebook’s failure to provide adequate transparency in the 2016 elections, I would be surprised if they tried to challenge this law,” said Brendan Fischer of the Campaign Legal Center, a nonprofit that favors campaign finance regulation.

Reporting by David Ingram; Editing by Leslie Adler and James Dalgleish

Exclusive: Broadcom to raise Qualcomm bid in push for talks, sources say

(Reuters) – Broadcom Ltd (AVGO.O) plans to unveil a new approximately $120 billion offer for Qualcomm Inc (QCOM.O) on Monday, aiming to ratchet up pressure on its U.S. semiconductor peer to engage in negotiations, people familiar with the matter said on Sunday.

The move comes ahead of a Qualcomm shareholder meeting scheduled for March 6, when Broadcom is seeking to replace Qualcomm’s board of directors by nominating its own slate for election.

Broadcom is scheduled to meet with its advisers later on Sunday to finalize an offer that values Qualcomm between $80 and $82 per share, two of the sources said. Broadcom’s previous $70 per share offer consisted of $60 per share in cash and $10 per share in stock.

Broadcom also plans to offer Qualcomm a higher-than-usual breakup fee in the event regulators thwart the deal, according to the sources. Typically, such break-up fees equate to approximately 3 percent to 4 percent of a deal’s size.

The sources cautioned that Broadcom Chief Executive Officer Hock Tan may decide to significantly change the terms at the last minute.

The sources asked not to be identified because the deliberations are confidential. Broadcom and Qualcomm did not immediately respond to requests for comment.

FILE PHOTO: A sign on the Qualcomm campus is seen, as chip maker Broadcom Ltd announced an unsolicited bid to buy peer Qualcomm Inc for $103 billion, in San Diego, California, U.S. November 6, 2017. REUTERS/Mike Blake/File Photo

Broadcom has said it is very confident a deal can be completed within 12 months of signing an agreement. Qualcomm counters that the regulatory review processes required around the world would take more than 18 months and be fraught with risks.

Qualcomm provides chips to mobile carrier networks to deliver broadband and data, making it an attractive acquisition target for Broadcom, which hopes to expand its offerings in so-called 5G wireless technology.

Qualcomm has argued to its shareholders that Broadcom’s hostile bid is aimed at acquiring the company on the cheap.

Qualcomm reported quarterly profit and revenues last week that beat analysts’ expectations as demand surged for its chips used in smartphones and cars. However, its forecast was below estimates due to tepid mobile phone sales in China.

Qualcomm is engaged in a patent infringement dispute with Apple Inc (AAPL.O). Qualcomm has said the litigation is necessary in order to defend is licensing programs.

Qualcomm is also trying to clinch an acquisition of its own, proposing to buy NXP Semiconductors NV (NXPI.O) for $38 billion. The deal was approved by European Union antitrust regulators last month, and only China has yet to approve it. Qualcomm expects the government’s blessing later this month.

The NXP deal still faces an uncertain future as some of its shareholders, including activist hedge fund Elliott Management Corp, have asked Qualcomm to raise its offer. Qualcomm is expected to make a decision later this month.

Reporting by Greg Roumeliotis in New York; Additional reporting by Liana B. Baker in San Francisco; Editing by Jeffrey Benkoe

Apple Sets Records With Its Best iPhone Ever

If there’s anything that can be said of Apple, it’s that it knows how to make money—even if things don’t appear to be going well.

Apple this week posted a record quarterly profit of $20 billion, thanks in no small part to iPhone revenue jumping 13%. However, Apple’s iPhone unit sales fell year-over-year due to what some analysts have said was sluggish demand for the iPhone X.

Profit aside, that hasn’t stopped people from finding things to complain about. This week, there were reports about why the iPhone X was a mistake for Apple and others about internal Apple meetings about delaying work on new iOS features to improve its mobile operating system’s security and stability. Even Apple co-founder Steve Wozniak couldn’t resistant taking a jab at the company.

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Here’s a look back at the biggest Apple news from the past week:

This is Fortune’s latest weekly roundup of the biggest Apple news. Here’s last week’s roundup.

  1. Apple on Thursday announced that it had $88.3 billion in revenue during the holiday quarter and a $20 billion profit, or $3.89 per share. Both were records. But Apple also worried Wall Street by issuing revenue guidance for the current quarter of $60 billion and $62 billion—far below an average analyst consensus of $65.4 billion. Many analysts believe Apple’s sales forecast is a reflection of slumping demand for the iPhone; shipments for the device dropped 1% year-over-year during the holiday quarter. The earnings also prompted Bernstein Research analyst Toni Sacconaghi to downgrade Apple from “outperform” to “market perform.”
  2. Apple may have changed its plans for this year’s iOS release. According to a report, Apple software chief Craig Federighi last week shelved plans to add new features to this year’s iOS 12 update and instead focused his team on improving the security and reliability of the mobile operating system. The new updates aside from the security and stability updates will likely come to iOS in 2019.
  3. The U.S. Department of Justice and the Securities and Exchange Commission have launched an investigation into a software update Apple released last year that throttled iPhone performance. The agencies are investigating whether Apple violated securities laws in its initial disclosure about the update, which slows the processing performance of iPhones when their batteries start to malfunction.
  4. Apple quickly responded to the investigations this week, saying that it has “never—and would never” introduce software updates that would artificially degrade the iPhone user experience. Apple said that the update was not designed to “shorten the life of any Apple product” and get customers to upgrade to a new handset. Instead, the feature is intended to protect iPhones and keep them working when the battery starts to malfunction.
  5. Apple co-founder Steve Wozniak said recently that he’s generally pleased with Apple’s iPhone X. But his biggest complaint about it centers on the device’s power button and all the functions that can be handled from it, including toggling the device on and off, taking screen shots, or making mobile payments via Apple Pay.

One more thing…There’s been some iPhone X hate making the rounds online lately. In a commentary this week, I discussed why the iPhone X is not only a great smartphone, but also the best iPhone Apple has ever released. Check it out.

The Sound of a Cyber Bubble Popping

The cryptocurrency market is in a meltdown. Bitcoin prices are down nearly 60% from their December highs, and major banks are cutting off credit card access to crypto exchanges—no surprise in the wake of a mania that saw everyone and their dog sharing hot crypto tips.

Meanwhile, the cyber-security industry is experiencing its own bubble bursting, albeit in much less dramatic fashion. As Reuters reported last month, investors are at last acknowledging the obvious: There are too many VC-bloated start-ups chasing too few clients, while unicorns are morphing into zombies struggling to find an IPO or other exit.

This situation may explain a recent flurry of press releases from cyber firms like Tenable, Cylance and Duo. The releases tout revenue growth and appear intended to assure anyone who will listen that “hey, we’re surviving the cyber shake-out just fine thank you very much.”

It’s hard to say for now which firms will be left standing at the end of 2018 but, for now, it’s clear the peak of the cyber-boom, when VCs would shower money on any company with blinky lights, is over. The investor uncertainty, though, is just one part of the cyber story. There’s also the more important question of whether all these companies have helped harden the country against hacking, and the answer appears to be yes.

Based on recent conversations with ordinary executives, I’ve found cyber-literary has shot up. While hackers are still getting through (they always will), managers and general counsels are finally attuned to the threat and doing something about it.

This change is also trickling down to more humble enterprises. I met a company this week called CyberSight, which offers free and low-cost ransomware protection to the likes of small businesses and county governments, and many of them are actually implementing it. This is a welcome change from a year ago when too many companies blew off cyber defense as an exotic affair they didn’t need.

So let’s celebrate cyber victories where we can find them. Finally, returning to crypto, don’t forget it’s tax time—if you bought or sold, here’s a plain English Q&A to get you through. Have a great weekend.

Jeff John Roberts

@jeffjohnroberts

[email protected]

Welcome to the Cyber Saturday edition of Data Sheet, Fortune’s daily tech newsletter. You may reach Robert Hackett via Twitter, Cryptocat, Jabber (see OTR fingerprint on my about.me), PGP encrypted email (see public key on my Keybase.io), Wickr, Signal, or however you (securely) prefer. Feedback welcome.

THREATS

Bye-bye little bots: Twitter users are losing tens of thousands of followers in the wake of a searing report about a “follower factory” that let people inflate their social media popularity with the help of bots, many of which were crafted by means of identity theft. A Twitter board member was among those who lost followers in the purge.

Apple and the FBI, it’s complicated: In the wake of a 2016 terrorist attack, media outlets (including Fortune) reported on bad blood between Apple and law enforcement over the iPhone maker’s encryption polices. Today, the two sides still don’t see eye-to-eye but are in many ways more friendly than you think.

Looming specter of Spectre: Sure enough, those scary Spectre and Meltdown viruses may be coming to a chip near you. Researchers have already found 130 malware samples that appear to have been built in order to exploit the worldwide chip vulnerabilities disclosed in January.

Netflix and Phish: When you have 118 million subscribers, many of them addicted to binge-watching, your service will be a popular target for scammers. A fake Netflix subscription email is making the rounds (again), threatening to cancel Netflix customers’ accounts if they don’t supply their credit card number. One guess what happens if you click.

Hey Hawaii, good call on canning that button pusher who kept confusing drills with real life. 

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ACCESS GRANTED

The robbery caper began in a Ruby Tuesday’s restaurant in Times Square, where Meza met his victim, who had earlier disclosed he was an early investor in Ethereum. The cryptocurrency was once worth pennies but last year soared to over $1,000.

— If you’re going to rob someone at gunpoint for their crypto-currency, for heaven’s sake, don’t transfer the funds to a popular exchange in your own name. Fortune obtained exclusive details about a crazy crypto heist in New York.

ONE MORE THING

Obligatory SuperBowl tidbit: Jeopardy host Alex Trebek chided his contestants over their complete and utter ignorance of football, a topic that regularly pops up in the weeks before the gig game. The show then trolled the players with a tweet, saying “Our contestants answered as many clues in this category as the @Browns had wins this season.”