Coinbase Hack Could Have Wide-Ranging Impact
Crypto trading platform Coinbase said a hacker demanded $20 million to delete illegally obtained customer data. Bloomberg's Margi Murphy explains how the hacker gained access to Coinbase's customer information and the potential cost of the incident. She speaks with Ed Ludlow on 'Bloomberg Technology.' (Source: Bloomberg)
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Yahoo
33 minutes ago
- Yahoo
Buy FuboTV Now or Wait Until the Disney Deal Is Done?
FuboTV is being merged with Disney's Hulu streaming service. FuboTV's first-quarter results weren't as strong as they may have seemed. The company's subscriber count was weak. 10 stocks we like better than fuboTV › FuboTV (NYSE: FUBO) made headlines in early 2025 when it agreed to merge with Disney's (NYSE: DIS) Hulu streaming service. This is a very big deal for FuboTV, and the stock has risen dramatically since the agreement was announced. Should interested investors buy now before the deal is done, or does it make more sense to wait and see what happens? FuboTV says it has "a global mission to aggregate the best in TV, including premium sports, news and entertainment content, through a single app." In the U.S. market, the product it sells is "a sports-first cable TV replacement product." Basically, it is competing with the major content providers with an aggregated cable replacement for so-called cord-cutters. That's not exactly a bad plan, but it is still a fairly big project to undertake since companies like Disney, among many others, have created compelling streaming products of their own. And cable providers are increasingly offering their services through the web, as well. Notably, even if a consumer uses FuboTV, they still need a connection to the internet to make it work. Cable and phone providers are still how large numbers of consumers reach the web. Disney is a media titan with massive content franchises. Hulu was an early effort to break into the streaming world, with multiple original partners. At this point, Hulu's partners have stepped back, preferring to start their own streaming services. That includes Disney. Merging FuboTV with Hulu, with Disney ending up retaining a 70% stake in the company, seems more likely to benefit Disney than Hulu or FuboTV. That's because FuboTV could end up being a mere vassal of Disney. In that scenario, Disney could sell content to FuboTV with costs so high that FuboTV barely makes a profit. Another scenario to consider is that Disney simply sells its stake in FuboTV, leaving FuboTV with a larger business, but one that is still at a strategic disadvantage as content makers push their own streaming products. The interesting thing is that FuboTV didn't have a great first quarter in 2025. For example, the company reported GAAP earnings of $0.55 per share in the first quarter. But if you remove one-time items, the company actually lost $0.02 a share. That was an improvement from an adjusted loss of $0.14 a year earlier, but FuboTV is still a money-losing venture. Worse, FuboTV's subscriber base declined year over year in the first quarter. The first-quarter showing suggests it isn't entering into the Hulu pairing on the strongest footing. Meanwhile, it is taking on a large business that it will operate separately from its FuboTV operation. Complexity will dramatically increase for FuboTV, given that Hulu is a larger streaming business. So execution will be very important, noting that it is entirely possible that FuboTV is biting off more than it can chew. That's highlighted by the company's first-quarter subscriber issues. Could Hulu combining with FuboTV be a massive win for everyone involved? Sure, that's one possible outcome, but there are negative outcomes that could transpire as well. Disney's large ownership stake could leave FuboTV beholden to Disney, placing the desires of other shareholders in a distant second place. FuboTV's not-so-great first-quarter subscriber numbers could be a harbinger of trouble to come even as it bulks up its subscriber count with Hulu. And Disney could just be attempting to offload a business that it doesn't want before the business really starts to show signs of weakness. Tiny FuboTV taking on the much larger Hulu service does sound exciting. But for most investors, it probably makes more sense to wait and see how the new FuboTV performs following the transaction before buying. After FuboTV's big stock price jump, it seems like there's a lot of good news already priced in here. Before you buy stock in fuboTV, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and fuboTV wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walt Disney and fuboTV. The Motley Fool has a disclosure policy. Buy FuboTV Now or Wait Until the Disney Deal Is Done? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
33 minutes ago
- Forbes
Have Reporting Burdens Led To More Firms Staying Private?
The best evidence for this hypothesis comes from micro-caps. Confounding trends and offsetting benefits of being public are often ignored by advocates for reducing reporting rules. The number of US public firms has fallen in recent times. Prof. Jay Ritter, who tracks these numbers, documents that we had 3,804 US listed firms at the end of 2024 relative to the peak of around 8000 in 1996. Remarkably we had 1,384 foreign firms listed at the end of 2024. Many blame higher costs reporting and auditing for the smaller number of US listed firms. They point to the cumulative onslaught of Sarbanes Oxley 2022, the 2003 Global Settlement that alleged made it harder for analysts to cover small firms, Dodd-Frank 2010, and the supposedly relentless pace of accounting and auditing regulation pushed by Congress, the SEC and the FASB. The question I want to address is whether there is any evidence for that claim. Trend depends on benchmark period In a research note, Vanguard points out that if we go back to 1972, the decline shrinks to a third. On top of that, 1972 was the year NASDAQ was set up and 3,000 odd new companies entered the public arena. Why the fall? Doidge, Karolyi, Shen and Stulz (2025) list two potential underlying reasons: (i) it is easier to stay private because restrictions on staying private have softened and it has become easier to raise funds for private firms, perhaps due to the low interest rate environment; and (ii) antitrust enforcement over the last decade has been relatively lax and product market competition has heated up leading to a greater number of mergers. They don't seem to devote much space to reporting cost burden. Acquisitions drive most of the decline A McKinsey piece shows that 95% of the exits from our markets are driven by acquisitions. Thus, the so-called missing companies have not left the investible universe for the US investor as the investor gets indirect exposure to the target via the acquirer's stock. Espen Eckbo makes the acquisition point more rigorously. However, the rate of entry and exit into public markets is not uniform across industries. We had more IPOs, relative to exits, in pharmaceutical and biotech industries. The number of IPOs, relative to exits, are more or less the same in retail, materials, consumer apparel and durables. Exits far exceed IPOs in banking, software, technology hardware, media and telecom. Any theory that argues reporting burdens are a first order problem needs to explain why such burden has massively increased for banking, software, tech hardware, media and telecom relative to pharma. Smaller IPOs, mostly micro-caps, gone The McKinsey piece also makes the interesting point that we have far fewer smaller IPOs now relative to the past. This suggests that more of the earlier value is captured by private investors, as private equity firms seem to take longer to exit their positions now relative to before (3 years in 2007 relative to 6 years in 2015). One could argue that the costs of reporting, auditing and compliance have become too large for smaller IPOs to even think about going public. Vanguard points out that the missing IPOs are micro-caps. Is the loss of micro-caps a policy concern? Moreover, Mauboussin, Callahan, and Majd (2017) and Doidge, Karolyi, and Stulz (2017) note that half of what can be referred to as the 'listing gap' (exits more than IPOs) occurred before Sarbanes Oxley became law. Start-ups have declined too Somewhat intriguing, the number of start-ups appears to display mixed patterns since 1996. The Kaufmann index of startup activity falls from 1996 to its nadir in 2013, after which it picks up till 2017, when the index was last published but the 2017 number was still lower than the 1996 number. This suggests that there may be fewer businesses even available to go public. International exchanges I am in the UK as I write this and an institutional investor I know here suggested that the London stock exchange has suffered a similar decline in IPOs. In fact, there is some angst in the UK that they are losing listings to the US. The loss in listings applies to other advanced economies as well, as Espen Eckbo points out. The theory pushing for reporting burdens as the primary explanation will have to explain why UK reporting and reporting in other advanced economies has also become onerously burdensome. Burgeoning private equity (PE) A senior executive tells me,' the payouts achieved by management and their VCs by arranging acquisitions to PE firms, as well as PE to PE sales have been, in recent times, just as compelling as anything other than a truly dramatic IPO. Smaller companies, companies with significant internal ownership, companies without strong growth or high investment opportunities (that is to say not pharma or biotech who absolutely need risk capital), companies where management would like to stay involved but are not keen on public company visibility. These are all great reasons to be acquired by PE rather than either IPO or even getting acquired by a public company rapidly, with certainty, without much publicity. PE is incredibly well equipped at maximizing ongoing cashflows, and growth, while still maintaining: (i) particularly attractive incentives for management in the transaction, (ii) management that stays post transaction with significant incentive retentions and milestones -- all without pesky proxy announcements about executive compensation; and (iii) objectively great returns to those equity holders that are just selling.' The role of reporting for intangibles Rene Stulz (2018) has suggested that new firms heavily invest in intangibles and forced disclosure of intangibles by securities laws, all else constant, encourage firms to stay private. I am not sure of this argument as US public firms barely tell us anything about their intangible investments, especially home grown ones. Papers suggesting that SOX increased regulatory burdens Zhang (2007) finds negative returns of around -15% to -13% around the events surrounding the passage of SOX. I find these returns too large to be credible. Engel, Hayes, and Wang (2007) observed an increase in decisions to go private after SOX. But this evidence is mixed. Bartlett (2008) of the Stanford Law School re-examines this question and concludes, 'non-SOX factors were the primary impetus for the "name brand" buyouts commonly evoked as evidence that SOX has harmed the competitiveness of U.S. capital markets.' Iliev (2010) is perhaps the best cited paper in the area. Using careful research designs, Iliev documents that section 404 of the SOX, which mandates that the auditor attest the internal controls of the firm for the absence of a material weakness, led to conservative reported earnings but also imposed real costs. Iliev compares audit fees and earnings quality for firms with float of $50-75 million to those just above at $75 million-$100 million. The idea is that firms in these two partitions are mostly similar except that Section 404 applies only to firms with float greater than $75 million. He concludes, 'on net, SOX compliance reduced the market value of small firms' and increases audit fees by 167%. Atanasov and Black (2020) replicate Iliev (2010) and conclude that not controlling for firm growth led Iliev (2010) to overestimate SOX compliance costs in his analysis. However, the increase in audit fees suffered by the small firms is real, by about 80%. The dollar numbers underlying these estimates are worth reiterating. The average firm in Iliev's affected firm sample pays more than $0.7 million in greater audit fees. The mean and median earnings of sample firms is -$4.8 million and -$1.4 million respectively. Iliev uses this comparison to argue that the compliance costs of section 404 were substantial. Were they? Would these firms have survived had section 404 not been enacted? Is it obvious that investors would have wanted to invest in such firms? And, how much of the audit fee hike is temporary for a year or two. Even more noteworthy, this evidence relates to micro caps (defined as stocks with market capitalizations of between $50 million and $250 million in 2024). These numbers would be smaller if we went back in time as stock markets have gone up quite a bit in the last 20 years or so. The bigger question is how can we possibly generalize evidence reliant on a sample of microcaps to the entire corporate ecosystem? Ewens, Xiao and Xu (2024), in a new paper, move this literature forward and consider three such natural breakpoints to estimate costs of mandatory reporting: (i) firms below $25 million in float in 1992 were designated as 'small businesses' and escaped a few disclosure requirements; (ii) the $75 million float threshold that Iliev looked for section 404 of SOX; and (iii) the $700 million float threshold used in the 2012 JOBS Act. The 2012 JOBS Act is interesting because the point of that legislation was to exempt smaller firms from a few reporting requirements. So, the JOBS Act presents a bit of a counterfactual to the usual setting whereby regulation increased. Based on these events, they claim that the median firm spends 4.3% of its market capitalization on compliance costs. I find the 4.3% number somewhat big. Moreover, even with the clever econometrics used in the paper, can one really generalize estimates from SOX and JOBS Act to the universe of firms? I don't know. Interestingly, Ewens et al. themselves seem to conclude, 'heightened regulatory costs only explain a small fraction of the decline in the number of public firms over the last two decades. Our results suggest that non-regulatory factors likely played a more important role in explaining the decline in the number of U.S. public firms.' Evidence around the 2012 JOBS Act Researchers are generally good at coming up with unintended consequences of regulations that public firms are required to follow. But we don't often see studies that document the offsetting benefits of going or staying public. The 2012 JOBS Act presents a rare opportunity to consider whether relaxing reporting regulations encourages more IPOs. Dambra et al. (2015) conclude that the 2012 JOBS Act led to an increase of 21 IPOs a year, on average. Ewens et al. (2024) find a slightly higher estimate: roughly 28 additional IPOs. One must wonder whether 20 odd IPOs per year are worth the potential collateral damage to the credibility of US reporting and compliance systems, if the PCAOB were to be dismantled or SOX were to be repealed. Incidentally, many other advanced economies passed regulation, modeled on SOX, in their own countries. Did they not conduct a careful assessment of costs of such regulation on their IPO activity? Or did they recognize the need to tighten up reporting and audit rules after the tech bubble burst in 2001? IPO Tax Robert Jackson's, the ex-SEC commissioner, analysis highlights the 7% tax that middle market IPOs must pay even before they go public, to investment bankers, lawyers and the like. Surely, the IPO tax, which has little to do per se with the reporting and compliance costs of 4.3% highlighted by Ewens et al, deserves more attention. The advocates of cutting reporting burdens are somewhat silent about reducing the 7% middle market IPO tax. And I am aware of startups that are working on software that can write an S1 in minutes with AI. Shouldn't the 4.3% reporting costs, estimated by Ewens et al., fall? Benefits of staying public are often ignored Owners, VCs, and capital providers get liquidity. Public firms can potentially pay labor mostly via stock and hence attract higher quality talent. Stock can be used as a means of payment to buy another company and hence take out a rival or to buy a complementary firm. If you get acquired, the acquirer is usually expected to pay a 25% control premium over the prevailing stock price. In sum, the case for reporting burdens forcing companies to stay private is far from clear. The best evidence relates to micro-caps and generalizing from that set to other companies is not straightforward. Partisan debate about the evidence often tends to ignore the vast number of confounding factors such as low interest rates, falling number of start-ups, special time periods chosen for the analysis and large number of acquisitions of public firms and the 7% IPO tax. If anything, US reporting rules need to be strengthened, not weakened. I have pointed out, time and again, the deficiencies in our financial reporting system and how auditors could potentially do a better job. Regulators may want to proceed with caution the next time someone brings up the hypothesis that reporting burdens are a significant barrier to US firms going public.
Associated Press
38 minutes ago
- Associated Press
Serbian Defense Technology Leader PR-DC Partners with American Military Contractor Raven Advisory to Establish Joint Drone Manufacturing Venture in the United States
Belgrade, Serbia--(Newsfile Corp. - June 7, 2025) - PR-DC, Serbia's leading multicopter drone manufacturer, and Raven Advisory, a North Carolina-based defense contractor founded by former Green Beret special operations veteran Sheffield Ford, have announced the formation of a strategic joint venture to manufacture military-grade drones in the United States. The new entity, named 'USAT,' will produce PR-DC's advanced multicopter drone systems for military applications across global markets. [ This image cannot be displayed. Please visit the source: ] PR-DC To view an enhanced version of this graphic, please visit: The partnership agreement was signed in Belgrade last week by PR-DC co-founder and president Zeljko Mitrovic and Sheffield Ford, founder and CEO of Raven Advisory. They were accompanied at the press conference by Milos Petrasinovic, co-founder and aerospace engineer at PR-DC. This marks PR-DC's first major publicly confirmed international business arrangement and represents a significant expansion of both companies' operational capabilities. Under the terms of the joint venture agreement, PR-DC will retain full ownership of its intellectual property, including all proprietary components, solutions, and software technologies. The Serbian company will continue its existing manufacturing operations in Serbia while simultaneously establishing production capabilities in the United States through the new partnership. Raven Advisory will provide comprehensive financing and establish manufacturing, testing, and demonstration facilities at their 2,700-acre private training facility in North Carolina. The American company will also serve as the exclusive sales and distribution partner for PR-DC's military drone solutions, not only within the United States but across international markets. The joint venture will initially focus on manufacturing PR-DC's flagship IKA-BOMBER drone system, which has been specifically designed to meet U.S. Department of Defense standards and NATO ammunition specifications. Zeljko Mitrović, the main visionary behind PR-DC, said: 'PR-DC has established itself as a premier developer and manufacturer of advanced multicopter drone systems, with a particular focus on military applications. The company's flagship product, the IKA- BOMBER, represents a breakthrough in universal drone platform design. Built with a modular concept, the system can be adapted for numerous applications and mission requirements. The drone is engineered to NATO standards and utilizes predominantly Western-sourced components, ensuring compatibility with international defense procurement requirements. PR-DC's commitment to excellence is demonstrated through its comprehensive testing protocols, including cold weather testing, vibration testing, and extensive field trials. The company's engineering team has invested significant time and resources in identifying and resolving potential issues through rigorous testing and retesting procedures, ensuring reliability in demanding operational environments.' Sheffield Ford of Raven Advisory noted that what sets PR-DC apart from competitors is its ability to deliver not just hardware, but complete operational solutions. As he said, while many companies can produce individual components, PR-DC has demonstrated the capability to deliver integrated systems that can accurately deploy multiple munitions from aerial platforms under real-world conditions: 'Raven Advisory as a partner in this joint venture and our subsidiary division, Raven Autonomous Technology, which specializes in research and development of autonomous systems, including drones, will further develop PR-DC solutions on our dedicated 2,700-acre facility with allocated airspace approved by the Federal Aviation Administration (FAA) for testing of both civilian and military drone applications. This facility provides comprehensive capabilities for training, testing, research, development, and integration of drone systems. The FAA approvals allow Raven to conduct advanced testing scenarios that would be impossible at most other facilities, providing a significant competitive advantage in system validation and customer demonstrations.', said Ford. The joint venture will begin operations this year with comprehensive demonstrations of PR- DC drone systems at Raven's North Carolina facility, targeting both U.S. Department of Defense officials and international clients. These demonstrations will showcase the systems' capabilities in realistic operational scenarios, leveraging Raven's extensive testing infrastructure. - end - About PR-DC: PINK RESEARCH C DEVELOPMENT CENTER (PR-DC) is a privately held military-licensed aerospace company based near Belgrade, Serbia, with an office in Washington, D.C. It features complete in-house research C development and covers everything from design and verification to finished product production. The company is dedicated to producing state-of-the-art drones and equipment in compliance with applicable military standards, using the most advanced composite materials, latest electronics, and propulsion systems. From electric motors, propellers, all kinds of software, autopilots, and electronic systems to carbon-fiber-based structures, all designed and produced in house, in Europe. Company's main products are electric rotary-wing drones with a maximum payload capacity ranging from 1 kg up to 250 kilograms (IKA drone lineup). They are primarily designed for close-range missions and missions where there is a need for hovering, larger payload mass, vertical take-off and landing. The second product category is mixed-wing drones (fixed-wing drones capable of vertical take-off and landing) for missions demanding greater speed and longer range. They feature electric propulsors or small jet engines. These drones are tested with many different payloads, including very sophisticated sensors, in different environments and at altitudes of more than 6000 m. PR-DC also produces different types of loitering munition including ones with fiber optic control. Website: Contact: [email protected] About Raven Advisory Raven Advisory LLC is a consulting and security services US firm providing solutions for manufacturing, pharmaceutical, oil and gas companies, and high-net worth individuals. The company has expanded internationally, facilitating gas turbine projects in Northern Afghanistan that provide electricity to over 250,000 homes. Raven Advisory provides specialized services to the U.S. Government, including Prolonged Field Care for Special Forces units at the Joint Readiness Training Center in Louisiana. The company operates a training facility in Gibson, North Carolina, near Fort Liberty. In December 2020, Raven Advisory acquired Gryphon Group Security Solutions and reorganized into six specialized business units. The company and its subsidiaries serve both government and commercial markets across multiple sectors. Website: Contact: [email protected] To view the source version of this press release, please visit
