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China start-up readies capacity for 150,000 electric cars per year

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FRANKFURT (Reuters) – Future Mobility Corporation (FMC), the Chinese parent company behind electric car start-up Byton, has placed an order for a paint shop capable of handling 150,000 cars per year, German supplier Duerr said on Wednesday.

China’s Byton, a newcomer headed by the former head of BMW’s i8 program, has already released plans for a premium electric SUV vehicle, the latest in a series of China-backed electric autonomous prototypes.

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“Duerr is building a paint shop for FMC’s Byton brand in Nanjing for 150,000 cars per year,” Duerr said in a statement on Wednesday, adding that this was one of the largest orders it had ever received from an electric car manufacturer.

Byton has financial backing from Chinese state-owned carmaker FAW Group and the country’s dominant battery producer Contemporary Amperex Technology Co. (CATL)

Byton opened a North American headquarters in Silicon Valley in December and has announced it is working with Aurora, an autonomous driving company founded by Chris Urumson, the former head of Google’s self-driving cars program.

Byton is also working with auto suppliers Bosch and Faurecia SA on powertrains, braking systems and interiors.

(Reporting by Edward Taylor; editing by Jason Neely)

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Lenovo swings to forecast-beating first quarter profit; PC revenue jumps

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HONG KONG (Reuters) – Chinese PC maker Lenovo Group swung to a profit and beat estimates in the first quarter on Thursday, helped by a sharp jump in revenue.

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Net profit came in at $77 million for the three months ended in June, compared with a loss of $72.3 million in the same period a year earlier when it was hit by higher costs amid a shortage of components.

That was ahead of an average estimate of $59.37 million from six analysts polled by Thomson Reuters I/B/E/S.

Revenue rose 19 percent from a year earlier to $11.91 billion, its second straight quarter of double-digit revenue growth.

“The group remains confident in its core PC business, and aims to grow at a premium to the market in revenue without compromising on profitability,” Chairman Yang Yuanqing said in the statement.

Lenovo’s shares gained 3.4 percent in early trade on Thursday.

(Reporting by Sijia Jiang and Donny Kwok; Editing by Edwina Gibbs)

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Tencent shares slide as profit falls and regulatory outlook spooks investors

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HONG KONG (Reuters) – Shares of Chinese technology giant Tencent Holdings plunged on Thursday after it reported its first quarterly profit fall in nearly 13 years and said it did not know whether it would get Chinese approval for its most popular game.

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Chinese censors’ sometimes abrupt and haphazard regulatory measures have clouded the outlook for the world’s largest market for mobile games in a country where the government can make or break a business.

Tencent said late on Wednesday the biggest issue facing the company before it could return to rapid revenue growth was to gain regulatory approval to start charging for its PlayerUnknowns’ Battlegrounds (PUBG) video game in China.

While several brokerages cut their price target for Tencent after its earnings, analysts were broadly upbeat on the outlook.

“Fundamentally, the business is as strong as it has ever been, in our view, and management says that it is working on various initiatives to reinvigorate growth as soon as possible,” Renaissance Capital said in a research note.

Tencent’s shares, which have dropped 13.5 percent so far this week, fell as much as 5 percent in early trade to HK$319, their lowest level in a year. Shares of South Africa’s Naspers, which owns a 31 percent stake in Tencent, slid 8 percent after the results were announced on Wednesday.

Beijing’s move to halt approvals for game licenses has hit shares of video game companies across Asia and in the United States.

Tencent’s profit decline and caution over the gaming business further hit tech shares in Asia on Thursday.

Shares of chipmaker Samsung Electronics Co fell nearly 2 percent, SK Hynix dropped 3.4 percent, while Japan’s Capcom, which developed Tencent’s blockbuster game Monster Hunter:World, fell 3 percent.

(Reporting by Anne Marie Roantree; Editing by Edwina Gibbs and Stephen Coates)

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Apple accused of pressuring game rivals in Japan: Nikkei

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TOKYO (Reuters) – Japanese regulators are investigating Apple Inc over allegations it unfairly pressured Yahoo Japan Corp to slow the expansion of its online games platform, which competes with Apple’s App Store, Japanese media reported on Thursday.

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The Fair Trade Commission (FTC) is looking at whether Apple interfered in Yahoo Japan’s operations by pressuring it to cut back on developing its Game Plus web-based service which enables users to stream games without downloading apps, the Nikkei newspaper reported.

Apple did not immediately respond to requests for comment. A spokesman at Yahoo Japan, one of the country’s most successful internet companies, declined to comment on the report, but said that the site continued to add game titles.

Shares in Yahoo Japan fell around 2.5 percent in early trade, while the broader market slipped 0.5 percent.

Last month, the FTC said Apple could have breached antitrust rules by forcing Japanese mobile service providers to sell its iPhones cheaply and charge higher monthly fees, denying consumers a fair choice.

Game Plus offers free and fee-based games developed by Square Enix Holdings Co and other game publishers, some of which are also available on the App Store for Japan-registered users. Yahoo Japan’s gaming site has more than 60 million monthly users, which the company and game publishers can tap for usage history and other data.

According to the Nikkei, Yahoo slashed its budget for the platform last year, and has largely stopped promoting the service. Meanwhile, game publisher Square Enix in April removed a game that had been developed exclusively for the site, the newspaper added.

Yahoo Japan’s biggest shareholder is SoftBank Group Corp.

(Reporting by Naomi Tajitsu; Editing by Stephen Coates)

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SEC scrutiny of Tesla grows as Goldman hints at adviser role

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By Jan Wolfe

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission has sent subpoenas to Tesla Inc <TSLA.O> regarding Chief Executive Elon Musk’s plan to take the company private and his statement that funding was “secured,” Fox Business Network reported on Wednesday, citing sources.

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The electric carmaker’s shares fell as much as 4 percent but cut their losses after Goldman Sachs Group Inc <GS.N> said it was dropping equity coverage of Tesla because it is acting as a financial adviser on a matter related to the automaker.

Investors viewed the Goldman statement as confirming a tweet from Elon Musk on Monday about working with Goldman, even as the reported subpoenas indicated the SEC has opened a formal investigation into a matter.

The latest news extended the roller-coaster ride for Tesla investors in recent days, adding to uncertainty about the future course of the company and whether a deal can be done amid growing regulatory complications.

Tesla and the SEC declined to comment.

Musk stunned investors and sent Tesla’s shares soaring 11 percent when he tweeted early last week that he was considering taking Tesla private at $420 per share and that he had secured funding for the potential deal.

The shares fell 2.6 percent to $338.69 on Wednesday, below $341.99, their closing price the day before Musk tweeted his plan to take Tesla private.

The Tesla CEO provided no details of his funding until Monday, when he said in a blog on Tesla’s website that he was in discussions with Saudi Arabia’s sovereign wealth fund and other potential backers but that financing was not yet nailed down.

Musk also tweeted late Monday night he was working with Goldman Sachs and private equity firm Silver Lake as financial advisers. However, as of Tuesday, Goldman was still negotiating its terms of engagement with Musk, according to a person familiar with the matter.

The 47-year old billionaire’s tweet about secured funding may have violated U.S. securities law if he misled investors. On Monday, lawyers told Reuters Musk’s statement indicated he had good reason to believe he had funding but seemed to have overstated its status by saying it was secured.

The SEC has opened an inquiry into Musk’s tweets, according to one person with direct knowledge of the matter. Reuters was not immediately able to ascertain if this had escalated into a full-blown investigation on Wednesday.

This source said Tesla’s independent board members had hired law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP to help handle the SEC inquiry and other fiduciary duties with respect to a potential deal.

The Wall Street Journal said the SEC was seeking information from each Tesla director.

(Reporting by Sonam Rai, Michelle Price and Supantha Mukherjee; Editing by Anil D’Silva, Nick Zieminski and Cynthia Osterman)

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U.S. investor sues AT&T for $224 million over loss of cryptocurrency

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By Gertrude Chavez-Dreyfuss

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NEW YORK (Reuters) – U.S. entrepreneur and cryptocurrency investor Michael Terpin filed a $224 million lawsuit on Wednesday against telecommunications company AT&T <T.N>, accusing it of fraud and gross negligence in connection with the theft of digital currency tokens from his personal account.

In a 69-page complaint filed with the U.S. District Court in Los Angeles, Terpin alleged that on January 7, 2018, the tokens were stolen from him through what he alleged was a “digital identity theft” of his cellphone account. In the complaint, he said AT&T was his service provider.

In an emailed response, an AT&T spokesman said: “We dispute these allegations and look forward to presenting our case in court.”

At the time of the theft, the three million stolen tokens were worth $23.8 million, the complaint said. Terpin is also seeking $200 million in punitive damages.

The complaint said that AT&T had been previously contacted by law enforcement authorities about such frauds.

Cryptocurrencies have a market capitalization of about $200 billion, according to data from virtual coin tracker coinmarketcap.com. Nine years after bitcoin came into existence, the market has seen the emergence of more than 1,800 digital currencies.

Terpin, represented by Los Angeles litigation firm Greenberg Glusker, claimed in the lawsuit that after the theft of the digital currency, his cellphone account was transferred to an international criminal gang.

Terpin co-founded the first angel group for bitcoin investors, BitAngels, in early 2013, and the first digital currency fund, the BitAngels/Dapps Fund, in March 2014. He is a senior advisor to Alphabit Fund, one of the world’s largest digital currency hedge funds.

The complaint claimed that the theft of the tokens occurred through what is called a SIM swap fraud. SIM stands for subscriber identification module, and SIM cards are used to authenticate subscribers on mobile phones.

SIM swapping consists of tricking a provider into transferring a subscriber’s phone number to a SIM card controlled by someone else. Once that person gets the phone number, it can be used to reset the subscriber’s passwords and access online accounts.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Toni Reinhold and Nick Zieminski)

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Cisco’s software push fuels quarterly beat, strong forecast

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(Reuters) – Cisco Systems Inc <CSCO.O> topped Wall Street targets for quarterly revenue and profit and forecast first-quarter sales above estimates on Wednesday, as the network gear maker’s transition to a software-focused company gains traction.

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Shares rose 6.1 percent to $46.53 in extended trading as the company also highlighted improving subscription-based revenue.

Cisco, like other legacy technology companies, has been launching new products focused on high-growth areas such as cyber security and Internet of Things to cushion sluggish demand in its traditional routers and switches business.

“We’re seeing the returns on the investments we are making in innovation and driving the shift to more software and subscriptions,” Chief Financial Officer Kelly Kramer told analysts on a post-earnings call.

The company forecast first-quarter revenue growth of between 5 percent and 7 percent, implying $12.86 billion at the mid-point, and adjusted profit of between 70 cents and 72 cents per share.

Analysts were expecting a profit of 69 cents and revenue of $12.61 billion, according to Thomson Reuters I/B/E/S.

Subscriptions, which provide a more steady revenue stream, represented 56 percent of total software revenue in the reported quarter, the company said.

Revenue in the security business, which offers firewall protection and breach detection systems, rose 12 percent to $627 million, beating estimates of $615.8 million. Deferred revenue in the business jumped 23 percent.

Cisco said in August it would buy cyber security provider Duo Security for $2.35 billion, the latest in a series of acquisitions by Chief Executive Officer Chuck Robbins as he builds out the company’s newer businesses.

CFO Kramer told Reuters Cisco is looking at more acquisitions in the security space.

Revenue in its infrastructure platform division, which houses the company’s traditional business of supplying switches and routers, rose 7 percent to $7.44 billion. Analysts had expected revenue of $7.32 billion.

On an adjusted basis, the company earned 70 cents per share, beating analysts expectation by 1 cent.

Total revenue rose 6 percent to $12.84 billion, topping average estimate of $12.77 billion.

(Reporting by Munsif Vengattil in Bengaluru; Editing by Sriraj Kalluvila)

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