Start Up No.1486: GameStop saga prompts federal investigation, inside Facebook’s (non) Supreme Court, Nissan disses Apple, and more


After a lot of huffing and puffing and threats to leave, Google has started making deals with Australian news organisations. CC-licensed photo by Luis on Flickr.

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A selection of 10 links for you. Use them wisely. I’m @charlesarthur on Twitter. Observations and links welcome.

Subpoenas start to fly in the GameStop saga as a dude sitting in federal prison offers guidance • Wall Street On Parade

Pam Martens and Russ Martens:

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Keith Gill is the man who hawked the shares of GameStop on Reddit’s WallStreetBets’ message board under the screen name DeepF***ingValue and on YouTube under the handle Roaring Kitty. As we reported on January 30, far from being an “amateur trader,” as Gill was being characterized by the media, he actually held sophisticated trading licenses and was registered with the broker-dealer unit of MassMutual. As we pointed out in the article, when you are a licensed broker and an associated person of a broker-dealer, you have to follow strict licensing rules. Gill appears to have flouted a number of those rules and Galvin has now subpoenaed him to testify, according to the Boston Globe.

Another poster on the WallStreetBets message board that is likely seeing some sweat beads form on his brow is the infamous Martin Shkreli, who is serving a seven-year sentence for securities fraud in Federal prison in Allenwood, Pennsylvania. Shkreli, a hedge fund manager turned “Pharma Bro,” gained notoriety hiking the price of the drug, Daraprim, by 5400 percent. The drug was used to treat life-threatening parasitic infections as well as to treat AIDS and cancer patients with compromised immune systems. Shkreli’s prison sentence was related to his fraud at his hedge funds, not his spiking the price of Daraprim.

Prior to his conviction, Shkreli had been a moderator at Reddit’s WallStreetBets, according to an interview the forum’s founder, Jaime Rogozinski, gave to the news service, Cheddar. In that interview, Rogozinski calls Shkreli “a brilliant financier.”

Rogozinski was removed last year from the WallStreetBets forum over alleged conflicts of interest. Prior to that, he posted under user name jartek. In a post 11 months ago, Rogozinski said he could “confirm” that the posts then being made under the user name “martinshkreli” were “real.” According to the subreddit under the name of user martinshkreli, two people, Mo and Reida, have been making posts on his behalf. In a post under user name martinshkreli on January 29 of this year, it says “I still think GME [stock symbol for GameStop] will trade at 1,000.” The long post notes at the end that it was “sent from martin, posted by mo.”

As a result of Shkreli’s jury convictions, the Securities and Exchange Commission barred him from “acting as a broker or investment adviser or otherwise associating with firms that sell securities or provide investment advice to the public.”

We emailed Shkreli to confirm if he was, indeed, the author of the posts under user name martinshkreli. We heard nothing back.

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As they point out, the Wall Street Journal notes that there’s now an investigation into whether there was market manipulation in GameStop. (Ya think??)
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Australia says Google, Facebook close to media pay deals • Japan Today

Rod McGuirk:

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Google and Facebook were close to striking “significant commercial deals” to pay Australian media for news ahead of Australia creating world-first laws that would force the digital giants to finance journalism, a minister said Monday.

Parliament is scheduled to consider the draft laws on Tuesday after a Senate committee last week recommended no changes to the proposed regulations that Google and Facebook have condemned as unworkable.

Treasurer Josh Frydenberg, one of ministers responsible for the legislation, said he had discussions at the weekend with Facebook CEO Mark Zuckerberg and Sundar Pichai, chief executive of Alphabet Inc. and its subsidiary Google. Frydenberg had also spoken with Australian news media executives.

“We’ve made real progress, I think, in the last 48 to 72 hours and I think we’re going to see some significant commercial deals which could be of real benefit to the domestic media landscape and see journalists rewarded financially for generating original content, as it should be, and this is a world-leading reform,” Frydenberg told Nine Network television.

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From “this will never work” to “OK, we’re leaving Australia” to “here’s some money” in the course of about three weeks. Interesting to discover that Google postures, but its devotion to getting customer data outstrips principle. (The money’s a pittance.)
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Inside the making of Facebook’s Supreme Court • The New Yorker

Kate Klonick:

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The [Facebook Oversight] board originally included twenty members, who were paid six-figure salaries for putting in about fifteen hours a week; it is managed by an independent trust, which Facebook gave a hundred and thirty million dollars. (“That’s real money,” a tech reporter texted me. “Is this thing actually for real?”) According to Facebook, as many as two hundred thousand posts become eligible for appeal every day. “We are preparing for a fire hose,” Milancy Harris, who came to the governance team from the National Counterterrorism Center, said. The board chooses the most “representative” cases and hears each in a panel of five members, who remain anonymous to the public. Unlike in the Supreme Court, there are no oral arguments. The user submits a written brief arguing her case; a representative for the company—“Facebook’s solicitor general,” one employee joked—files a brief explaining the company’s rationale. The panel’s decision, if ratified by the rest of the members, is binding for Facebook.

The “most controversial issue by far,” Darmé told me, was how powerful the board should be. “People outside the company wanted the board to have as much authority as possible, to tie Facebook’s hands,” she said. Some wanted it to write all of the company’s policies. (“We actually tested that in simulation,” Darmé said. “People never actually wrote a policy.”) On the other hand, many employees wondered whether the board would make a decision that killed Facebook. I sometimes heard them ask one another, in nervous tones, “What if they get rid of the newsfeed?”

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Very in-depth piece about the FOB, though as it points out, the headline isn’t quite right. FOB decisions don’t set any precedent; nor are they actually binding on Facebook. Nor can it adjudicate on decisions to leave content up (“take-ups”) rather than remove it. But it’s the former which are the real problem. Facebook isn’t suffering a surfeit of overmoderation, as the frequent reports of troubles erupting from it show.

Bonus link: a thread about the FOB in a “historical trajectory” (possibly “context”).
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How our brutal science system almost cost us a pioneer of mRNA vaccines • CommonHealth

Dr David Scales:

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Here’s my story: 20 years ago, I worked part-time in a tumble-down laboratory in a dusty corner of an old medical school building at the University of Pennsylvania, where I was an undergrad. For three years, I studied HIV replication in T-cells under researchers Drew Weissman and Katalin Karikó.

These days, they are coronavirus vaccine heroes, but back then, their very early work on mRNA vaccines aimed to fight HIV. After spending my first four months in the lab on an experiment that never worked, I learned that good science is really, really hard.

I didn’t know it at the time, but I also absorbed what I later could describe as the sociology of science — how the sausage is made — and it wasn’t always pretty.

While Weissman was an expert at designing experiments, I remember him most for his generosity. He made sure all contributors in the lab shared the credit, from the lab tech and lowly undergrad all the way to fellow researcher Karikó.

Still, Karikó was struggling. Her science was fantastic, but she was less adept at the competitive game of science. She tried again and again to win grants, and each time, her applications were rejected.

Eventually, in the mid-1990s, she suffered the academic indignity of demotion, meaning she was taken off the academic ladder that leads to becoming a professor. We never discussed it personally because by the time I joined the lab, Karikó’s history was still only discussed in hushed tones as a cautionary tale for young scientists.

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In case you don’t grok mRNA vaccines, XKCD has you covered. (Thanks G for the link.)
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Slate Star Clusterfuck • My New Band Is

Liz Spiers helped set up Gawker, and here points out that the paranoia about journalists among some of the tech community is simply loopy:

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The malicious journalist thesis is the one that was the hardest on my ocular muscles [rolling her eyes] yesterday.  Scott Alexander, the figure at the center of the piece himself believes this and has advanced this theory that the journalist who wrote the piece, and perhaps The New York Times institutionally, was out to smear him. To what end, it’s unclear. (A favorite fallacious rationale: clicks! More about that in a bit.) Alexander has reconstituted Slate Star Codex as a Substack publication called Astral Codex Ten. In a statement on the New York Times article, which he did not like, to put it mildly, he writes, “The New York Times backed off briefly as I stopped publishing, but I was also warned by people ‘in the know’ that as soon as they got an excuse they would publish something as negative as possible about me, in order to punish me for embarrassing them.”

Only in a bubble as insular and tiny as the SSC community would this theory be even remotely plausible. To put this in context: SSC is influential in a small but powerful corner of the tech industry. It is not, however, a site that most people, even at the New York Times. are aware exists – and certainly, the Times and its journalists are not threatened by its existence. They are not out to destroy the site, or “get” Scott, or punish him. At the risk of puncturing egos: they are not thinking about Scott or the site at all.

Even the reporter working on the story has no especial investment in its subject. That reporter is also probably working on six other stories at the same time, thinking about their friends, family, what their kid needs to do in Zoom school tomorrow, the book they want to read, whether Donald Trump will get arrested, whether rats dream of boredom. They do not sit around thinking about how they’re going to “get” people they write about, and when subjects think they do, it’s more a reflection of the subject’s self-perception (or self-importance) and, sometimes, a sprinkling of unadulterated narcissism. 

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So very much this. The only questions journalists ask themselves about a story are “do I think this a good story?” and then “will anyone else think this is a good story, starting with my editor?” Sometimes the answer to the first question is “no”, but the editor wants them to write it anyway.
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Top five reasons why restaurants fail in the first year • Restaurant Blue Book

What surprised me about this article was that none of the reasons is “food’s not good enough”.
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Clubhouse, a tiny audio chat app, breaks through • The New York Times

Erin Griffith and Taylor Lorenz with your primer about the service, in case you haven’t heard enough about it:

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Clubhouse has generated debate about whether audio is the next wave of social media, moving digital connections beyond text, photos and videos to old-fashioned voice. In thousands of chatrooms every day, Clubhouse’s users have conducted unfettered conversations on subjects as varied as astrophysics, geopolitics, queer representation in Bollywood and even cosmic poetry.

“This is a major change in how the social internet works,” said Dave Morin, who founded the social network Path more than a decade ago and has invested in Clubhouse. “I believe it’s a new chapter.”

Clubhouse’s trajectory has been rapid — it had just a few thousand users in May — even though the app is invitation-only and not widely available. The invitations are so coveted that they have been listed on eBay for as much as $89. Media companies such as Barstool Sports have also set up Clubhouse accounts, and at least one firm has said it plans to hire a “senior Clubhouse executive.”

The attention has overwhelmed the tiny San Francisco start-up, which has around a dozen employees and was founded by two entrepreneurs, Paul Davison and Rohan Seth. While Clubhouse raised more than $100 million in funding last month and was valued at $1bn, it has struggled to handle the surging traffic. On Wednesday, the app crashed. Also, Facebook and Twitter are working on similar products to compete with it.

Mr. Davison created several social networking apps, including Highlight, which allowed users to see and message people nearby. Mr. Seth was a Google engineer and co-founded a company, Memry Labs, which built apps. Those start-ups were either bought or shut down.

In 2019, the two men — who had met through tech circles in 2011 — built a prototype podcasting app, Talkshow, which they called their “one last try.” But Talkshow felt too much like a formal broadcast, so they decided to add a way for people to spontaneously join the conversation, Mr. Davison said in an interview with the “Hello Monday” podcast last month.

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So attempts to build podcast businesses/apps have led both to Twitter and now Clubhouse. It’s a space full of frustration which forces people to break out of it.
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Apple approached Nissan to work on autonomous car project • Financial Times

Kana Inagaki, Peter Campbell and Patrick McGee:

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one person with knowledge of the discussions said talks faltered after the US company asked that Nissan make Apple-branded cars, a demand that would effectively downgrade the automaker to a hardware supplier.

Many carmakers have expressed a fear of becoming “the Foxconn of the auto industry”, a reference to the Taiwanese manufacturing group that assembles iPhones.

Apple declined to comment.

Ashwani Gupta, Nissan’s chief operating officer, said the Japanese group “is not” in talks with Apple, whose interest in entering the auto industry goes back to 2014.

“We have our own customer satisfaction, which comes by car. No way we are going to change the way we make cars,” Gupta said in an interview with the Financial Times. “The way we design, the way we develop, and the way we manufacture is going to be as an automotive manufacturer, as Nissan.”

Gupta said the company was open to exploring partnerships with tech groups to adapt to the shift towards connected vehicles and autonomous driving, pointing to collaborations with Google and other start-ups.

But he added: “We have to check who has got the best competency to catch what the customer is thinking. For this, we can do the partnership, but that is to adapt their services to our product, not vice versa.”

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Understandable from Nissan; there’s always going to be the fear of being subsumed. Is Apple going to have to struggle to find manufacturing capacity?
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Jaguar to lose internal combustion engines in new EV strategy • Ars Technica

Jonathan Gitlin:

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Big change is in store for Jaguar Land Rover. The British automaker has a new global strategy, as revealed earlier on Monday by new CEO Thierry Bolloré. There’s a new roadmap for Jaguar, which will lose its internal combustion engines as it focuses on purely electric luxury cars. Six new battery EVs are in the works for Land Rover, and the company is exploring hydrogen fuel cells as well.

…Under the Reimagine strategy, Bolloré said that JLR will become a “battery first business.” For Land Rover, there are six new BEVs scheduled to arrive by 2026, although the first of these isn’t due until 2024. Future Land Rovers will be built using a pair of new flexible vehicle architectures—Modular Longitudinal Architecture and Electric Modular Architecture—both of which are powertrain-agnostic. And production for MLA vehicles will take place at Solihull in the British midlands.

By 2026, the brand will also retire its diesel engines, and Bolloré said that by 2036, Land Rover should have zero tailpipe emissions, with a goal for the entire company to be carbon-neutral by 2039.

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Well, things are starting to change. Land Rover’s most ardent fans are usually to be found on weekends destroying bridle paths by churning them up and getting stuck. I wonder if they’ll feel the fun is the same without the roar of wasted diesel.
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This radio website is my favorite discovery so far during our lockdown era • BGR

Andy Meek:

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For anyone who likes to listen to music online and enjoys services like Spotify, there’s a free Internet site called Radio Garden that’s also worth checking out.

Radio Garden is basically like Google Earth, except for radio stations. Anywhere there’s a green dot on the world map, you can start playing a local radio station there.

With a simply click, you can start listening to local radio across the US and beyond, with broadcasts everywhere from Moscow to London, Tehran and more.

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It is indeed good. A good lockdown diversion. (There was a version about 10 years ago which required downloading a huge app, or plugin, and wasn’t much good. It’s much improved.)
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Errata, corrigenda and ai no corrida: none notified

2 thoughts on “Start Up No.1486: GameStop saga prompts federal investigation, inside Facebook’s (non) Supreme Court, Nissan disses Apple, and more

  1. Charles, if there was ever an illustration of the aptness of the saying
    “Just because you’re paranoid doesn’t mean they aren’t after you”,
    it’s cases like the SSC kerfuffle. Spiers isn’t wrong about the
    paranoia over intent. But her explanation is that the reality is
    in fact a real-life instance of the joke “But For Me, It Was Tuesday”.

    https://tvtropes.org/pmwiki/pmwiki.php/Main/ButForMeItWasTuesday

    “Chun-Li: My father saved his village at the cost of his own life. You
    had him shot as you ran away. A hero at a thousand paces.
    M. Bison: I’m sorry. I don’t remember any of it.
    Chun-Li: You don’t remember?!
    Bison: For you, the day Bison graced your village was the most
    important day of your life. But for me, it was Tuesday.”

    For you, the subject, this might disrupt your life, maybe get you fired, possibly
    cost you future employment. For me, the writer, it’s Tuesday.
    Brr … I’ve been on both sides of this problem, and there’s no easy solution.
    But, to cite another phase, “nothing personal, just business” doesn’t change the end result.

    Here’s a good piece on the topic:

    https://chosenbychoice.substack.com/p/learning-how-to-and-how-not-to-kill

    “In becoming increasingly driven by the pleasure of attention and
    conflict, I was sharpening my cruelest edges. The roar of Twitter on
    my side meant the kill was justified and good. I was using the tools
    that had been gifted to me — my love of people, my ability to write —
    but pursuing only attention, which is just the affection of the mob.

    I do not want to cultivate sociopathy in myself. And cultivating
    sociopathy was exactly what I was doing.”

  2. I would think if Tata had a US factory, Jaguar would be very attractive to Apple as their sales are terrible in the US. I still reckon it’s going to be Greeley (via Volvo) now that Nissan is off the table.

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