That TikTok you take on Mount Everest’s peak may go viral, but no one below is going to see it because Nepal banned the app on Tuesday.
Among other charges, Foreign Minister Narayan Prakash Saud said TikTok, owned by China-based company ByteDance, was “disrupting social harmony.” We’re guessing he or somebody he knows had a bad experience in the Opposite Best Friend Challenge. Or was it the Cha-Cha Slide challenge?
Morning Brief
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Small businesses try to survive the waiting game.
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Russia’s Google is the country’s tech canary.
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Climate change? In this economy?
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Economics
Small Businesses Stall Amid Higher-for-Longer Interest Rates
Everyone hates high prices and interest rates, but nobody hates them more than your local mom-and-pop shop.
In a Goldman Sachs survey of more than 1,200 small businesses, 53% said they can’t afford to take out loans at their current rates.
Keeping the Lights On
The average interest rate that small businesses pay on short-term loans has stood at 9% or higher over the past three months, up from 6.7% a year ago, according to the National Federation of Independent Business. Plus, reserves from pandemic-era assistance programs have dried up.
That’s bad for small businesses, which, because they operate on thinner margins and have fewer financing options, can’t afford to add more employees, expand their physical footprints, or purchase much-needed machinery:
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1-800-Tshirts owner Tom Rauen told the WSJ that he had to delay purchasing a $50,000 digital printing machine, which would’ve allowed his team of 35 to handle more on-site production. He also worries about making loan payments in January and February, when business tends to slow.
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The businesses making due are the lucky ones: Nearly 1,500 companies filed for a lower-cost Subchapter V bankruptcy at the end of September, roughly the same as for all of 2022, the American Bankruptcy Institute reported.
Get to the Cuts: In a much-needed reprieve, the Consumer Price Index slowed to 3.2% in October year-over-year, down from September’s 3.7%, and thankfully not even in the same universe as the 9.1% in June of last year. The dip was partly due to plunging gas prices, with eight states averaging less than $3 per gallon last week, according to GasBuddy.
Confidence is growing among traders and economists who feel the Fed might actually start cutting rates next year, a move that only a few months ago didn’t seem to be in the cards. Small businesses hope it’s not a long wait.
– Griffin Kelly
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Tech
The Former ‘Russian Google’ Wants Out of Russia
(Photo by Michael Parulava on Unsplash)
What passes for Big Tech in Russia these days is about to get a lot smaller.
Yandex, once Russia’s largest tech company, is looking to sell all of its Russian assets, Reuters and Bloomberg reported on Monday. The company, now headquartered in the Netherlands, had already been mulling a restructuring after its founder criticized Russia’s invasion of Ukraine.
Techxodus
Yandex earned a reputation for itself as Russia’s Google. While it never approached the search giant’s sheer economic, gravity-bending size, its market capitalization in October 2021 sat at a more-than-respectable $29.7 billion. Yandex had a bouquet of disparate products, including a ride-hailing service, a news aggregation service, and a search engine that Russians used more than Google.
In February 2022, however, senior executives at Yandex were sanctioned by the EU because of the Russian government propaganda that proliferated across its platforms after Russia invaded Ukraine, and it was delisted from the Nasdaq:
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Former Yandex employees told MIT Technology Review that around a third of the company’s staff quit in the first two months after the war began. It sold off its media products to state-run VKontakte, but the move didn’t insulate Yandex from Russia’s geopolitics.
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In November 2022, the company announced it was bifurcating its Dutch business from its core Russian business, which would now be run with the help of a prominent Putin ally. How generous!
The split between Yandex’s European and Russian business didn’t go smoothly, however, and company founder Arkady Volozh said in August that although he’d held his tongue to protect Yandex employees trying to leave Russia, he opposed the war in Ukraine. Yandex isn’t the only Russian tech company to hemorrhage talent either: Roughly 10% of Russia’s entire IT workforce left the country in 2022 — that’s according to the Kremlin’s own statistics, so the real figure could be even more embarrassing.
Skeleton Crews: While Russia’s tech industry gasps for air, one of its more traditional GDP buttresses is doing surprisingly well. Western officials told the Financial Timesthat the $60-per-barrel punitive price cap on Russian oil has lost its potency, with one unnamed European government official saying “almost none” of Russia’s shipped oil is being sold under that cap, with the Kremlin deploying what some have dubbed a “shadow fleet” of decrepit and under-regulated vessels to keep the black gold flowing.
– Isobel Asher Hamilton
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Sponsored by StartEngine
Ends Nov. 17: Invest in the Company Democratizing Access to VC
(Photo by StartEngine)
The path to building a successful startup takes a lot more than a good idea, 5am wakeup calls, ice baths, and a consistent meditation schedule.
Startups (most of them, at least), need capital. For many ambitious startups out there, StartEngine has become the home for successful capital raises.
Founded by Howard Marks, a gaming pioneer who was on the founding team of Activision in the ‘90s (recently acquired by Microsoft for $68 billion), StartEngine has helped raise over $750M for startups, with a community of over 1.8M users* (Investing guru/Shark Kevin O’Learydecided to jump aboard to capitalize**).
StartEngine has:
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Acquired crowdfunding competitor SeedInvest’s Assets, a platform that’s facilitated over $470M in raises to date***
Depending on your climate-change anxiety level, read on.
The annual US National Climate Assessment included an economic impact assessment for the first time, and it’s not pretty: The US experiences a climate disaster costing at least $1 billion every three weeks on average — totaling nearly $150 billion a year.
Don’t Go (Climate) Changin’
When adjusting for inflation, billion-dollar disasters used to happen about three times a year as recently as the 1980s, according to the report. In a double dose of bad news, the United Nations Framework Convention on Climate Change published its own report on Tuesday calling out a far slower reduction in carbon emissions than called for in the Paris Agreement.
Greenhouse gas emissions are on course to increase by 9% in 2030 compared to 2010 levels, the UN report said, even though the Paris Agreement called for a 45% reduction to limit global warming to just 1.5 degrees Celsius by that same year. (The smidge of good news? This time last year, the group projected an 11% increase.)
The US National Climate Assessment lays out just where exactly the economic consequences are most likely to be felt:
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The impact may be felt most by the 40% of the US population that lives in coastal communities likely to be exposed to rising sea levels, the report argues, which could displace millions of Americans.
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Extreme weather, like hurricanes and wildfires, tend to also cause direct economic losses through “infrastructure damage, disruptions in labor and public services, and losses in property values,” the report says, while also highlighting the likely impact on domestic agriculture.
Derailed: Compared to the rest of the world, the US is faring slightly better in achieving its carbon-reduction goals — emphasis on slightly. US emissions were about 17% lower in 2021 than 2005, the report found, marking a roughly 1% reduction each year. But that needs to jump to an average of 6% annually by mid-century to hit national targets, the report says.
– Brian Boyle
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Extra Upside
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Let’s eat in tonight: With restaurant prices soaring, shoppers might consider more home-cooked meals.
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First Meta, now Snap: Amazon wants you to buy its products seamlessly while scrolling through social media apps.
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Reg A+ offering made available through StartEngine Crowdfunding, Inc. No broker-dealer or intermediary involved in offering. This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment. Please see the most recent supplement, offering circular, and selected risks.
*StartEngine Community: Count determined as number of unique email addresses in StartEngine’s database as of 10-6-2023.
**Kevin O’Leary is a paid spokesperson for StartEngine. See his 17(b) disclosure, here.
***In May 2023, StartEngine acquired assets of SeedInvest, including email lists for SeedInvest’s users, investors and founders seeking to raise funds.
****Based on StartEngine’s unaudited financials: $1.88M for first half of 2019 compared to $9.9M for first half 2023, since these are semi-annual numbers and have not been audited, they may not include year-end adjustments necessary to make those financial statements comparable to audited results.
*****$75m raised for StartEngine includes funds raised over multiple offerings and at different terms.
