Year: 2020

The wild ride that has been U.S. stock market over the past couple of weeks may be settling down — at least for the moment — from the whiplash-like swings that helped set global markets on edge.

The new economic normal that the pandemic has brought to countries across the world seems to be settling on weary investors as the extent of COVID-19 becomes more clear and as proper testing begins to roll out along with massive trillion dollar aid packages.

Wall Street responded to reports of possible breakthroughs on the medical front, with vaccinations and other potential therapies touted by President Donald Trump causing some healthcare stocks to soar. But on the whole, the day was about digesting and coming to terms with where the world stands.

That was reflected in the major indices which couldn’t make up their minds for much of the day, but wound up up, in a nice surprise.

Here’s the tale from the tape at market close:

• Dow Jones Industrial Average: +188.48, +0.95%
• S&P 500: +11.29, +0.47%
• Nasdaq Composite: +160.73, +2.30%

While tech led other sectors on the day, SaaS and cloud companies — a subset of tech itself — shone during regular trading. The Bessemer-Nasdaq cloud index rose 6.4%, a good result even if the tracker is still sharply off its recent highs.

Some automakers, nearly all of which have announced temporary shut downs, saw shares rise or at least remain steady. Honda, GM, Ford, Fiat Chrysler Automobiles and Volkswagen have all said factories in North America will close. The closures were prompted by slowing demand due to the spread of COVID-19 as well as pressure from United Auto Workers to protect workers. GM and FCA have each reported a COVID-19 case among its workforce.

Ford saw shares fall 0.76% to close at $4.46 after the company said it would drawn down two credit lines to put an additional $15.4 billion of cash on its balance sheet and consider suspending its dividend.

GM saw shares rise 3% to $17.71 and FCA shares fall 6.37% to $6.47.

Meanwhile, Tesla shares took the biggest jump rising 18.39% to $427.64. Tesla is one of the only hold outs in the recent move to shutter plants. The company’s factory in Fremont, Calif., which is not unionized, remains open despite a shelter in-place order in Alameda County.

The U.S. State Department has issued an unprecedented “do not travel” warning to U.S. citizens, as the number of coronavirus-related infections jumped sharply overnight.

The advisory said U.S. citizens should “avoid all international travel due to the global impact of COVID-19,” the coronavirus strain which last week was declared a global pandemic. The advisory added that citizens abroad should “arrange for immediate return” unless they are prepared to stay overseas indefinitely.

The warning was published Thursday, where the official count for coronavirus cases hit 220,000 infections around the world, with more than 10,000 cases in the United States alone.

Several countries have closed their borders and restricted travel to their citizens and residents in an effort to stem the spread of the virus.

This week, the European Union closed the so-called Schengen border which covers the 27 member state bloc, and the U.S. closed its border with Canada to all but essential travel and trade.

The pandemic has seen stocks and global financial markets tank, prompting governments to inject cash and slash interest rates to try to keep their economies afloat.

It was, it seems, only a matter of time before something like this happened. As we noted in yesterday’s FreshDirect story, not everyone has the ability of being able to shelter in place during the spread of COVID-19. In fact, the more of us who stay put, the more strain we’re going to put on workers who play a role in getting products and supplies to our door. 

Amazon today confirmed that an employee in its Queens, NY fulfillment center has tested positive for the novel coronavirus. The company texted employees at the facility about the case yesterday. The text, obtained by The Atlantic reads, “We’re writing to let you know that a positive case of the coronavirus (COVID-19) was found at our facility today.”

It may be the first of its kind in the facility, but it almost certainly won’t be the last. Even as companies encourage workers to stay home at the first sign of sickness for both their benefit and that of customers, many will no doubt come to work. And then there’s the matter of those who are largely asymptomatic. 

We’ve reached out to Amazon to commitment on the incident. The company noted in the text that workers at the DBK1 facility were sent home, while the sorting facility was disinfected. Amazon has denied reports that, while dayshift workers were sent home, those on the night shift were still expected to come in.

In spite of the company’s massive footprint, Amazon has been forced to limit certain shipments, including non-essentials through its Fulfillment by Amazon program, along with the temporary pausing of shipments from Prime Pantry.

UK takeout marketplace Just Eat has announced a 30-day emergency support package for restaurants on its platform to help them through disruption caused by the coronavirus crisis.

From tomorrow (March 20) until April 19 the package — which Just Eat says is worth £10M+ — will see funds directed back to UK partner restaurants in the form of a commission rebate of one third (33%) on all commissions paid to Just Eat by restaurants; and via the removal of commissions across all collection orders which it intends to help reduce pressure on restaurants’ delivery operations, where collection is still available.

Just Eat also said it’s waiving all sign-up fees for new restaurants joining its platform (which must still meet its standard conditions, such as being registered with the relevant local authority as a food business and having the required hygiene rating); and relaxing any existing arrangements that may be in place with partners to enable them to work with delivery aggregators — “regardless of existing contractual terms”.

It added that it will continue to pay restaurants weekly, including the rebate now in place.

Currently Just Eat has around 35,700 restaurants on its platform in the UK, with delivery available to 95% of UK postcodes.

Commenting in a statement, Andrew Kenny, Just Eat’s UK MD, said:

These are some of the most challenging times the restaurants we work with have ever been through. We want to show our support and help them to keep their doors open, so they can focus on doing what they do best — delivering food to people across the UK every day. We know our Restaurant Partners are worried about their teams — from chefs to delivery drivers — and these measures will go some way to helping them maintain their operations and support their people.

The food delivery industry has a crucial role to play at this time of national crisis and it is only right that as the market leader in the UK Just Eat steps up to help our independent partners so they can keep delivering for the communities that need them.

In the UK and elsewhere there is rising concern about the economic impact of COVID-19 on the hospitality sector as people are told to stay away from social spaces.

On Monday the UK government advised people not to go to bars and restaurants or other social spaces in a bid to try to limit the spread of COVID-19. Although, unlike many other European countries, it has not yet issued strict quarantine measures such as ordering hospitality industry businesses to close their doors and citizens to work at home where possible.

On-demand food delivery remains one of the services that continues to operate even in locked down EU Member States. However with gig economy business models not typically offering platform workers an employment safety net of benefits such as sick pay the entire sector has come under fresh scrutiny for the legal status it assigns to delivery couriers, given the heightened risks posed to them by the novel coronavirus. In a nutshell it they need to self isolate they won’t be able to earn. 

In its press release today Just Eat said it’s working on other unspecified support initiatives for couriers, as well as for groups including the vulnerable and isolated, and frontline workers.

These will be announced in due course, it added. 

Although it also notes that the vast majority of orders placed through its network are delivered by restaurants with their own delivery capability. Its commission for such orders is a maximum of 14%, it added.

Some on-demand food delivery startups operating in Europe which do rely on gig workers to make deliveries have already announced emergency support funds to help platform workers who fall ill or need to self isolate during the COVID-19 crisis — including UK-based Deliveroo and Spain’s Glovo.

Although there has also been some criticism of how easy it is for couriers to access claimed support.

With most new social media startups seeming to dial in on specific communities to thrive in a still Facebook-dominated sphere, some of the more broadly focused social investments from top VCs are going into online gaming.

The latest is Mainframe Industries, a Nordic game studio building a massively multiplayer online title. The team doesn’t have much to share of what their title will actually look like gameplay-wise, they’re just saying its a sandbox MMO designed for cloud streaming built on Epic Games’ Unreal Engine.

The startup, which has offices in Helsinki and Reykjavik, isn’t building cloud gaming tech but is instead building an MMO title that’s designed from the get-go for streaming platforms like Google Stadia or Microsoft xCloud that beam a title to a user’s device from a cloud-hosted GPU. What does being a cloud-native game entail? Mainly, it seems to mean that they’re creating a social title that is as fully playable on mobile as it is on PC/console.

Building a robust mobile game that meets console/PC gamers expectations has been one of the more tenuous pursuit of the past decade, and one that has more often than not led to watered-down experiences. Mainframe CEO Thor Gunnarsson acknowledges that titles have sometimes catered to the “lowest common denominator,” but he believes that as game-streaming advances lower technical barriers, his team can focus wholly on solving the user experience challenges.

A big focus seems to be leveraging cross-play with more consistent experiences on differently powered devices thanks to cloud streaming. Gunnarsson believes his company’s approach to what occurs on the “social layer” of the title will be what differentiates them the most, though he is mum on details regarding what that will look like in their eventual release.

The startup has some big names supporting them in their quest. The startup announced today that they’ve closed an $8.1 million (€7.6M) Series A round led by Andreessen Horowitz. Riot Games, Maki.vc, Play Ventures, Sisu Game Ventures and Crowberry Capital also participated in the round.

Andreessen Horowitz, already having bet big on Roblox’s $150 million Series G last month, has been quite active in placing bets on smaller gaming startups in the past year or so, most of which have been made by GP Andrew Chen.

Early last year, Chen directed a16z’s investment in Sandbox VR’s $68 million Series A, a startup aiming to make shared virtual reality experiences more common by building out physical retail locations in malls and shopping areas across the globe. This past August, Chen was also behind the firm’s investment in Singularity 6, another MMO gaming startup that’s looking to build a “virtual society.” Chen was also behind the investment in Mainframe Industries.

“We believe that cloud-native games are poised to revolutionize the entertainment industry in the coming years, yielding entirely new gameplay experiences and business models,” said Chen in a press release announcing the startup’s raise.

In some part, these investments highlight the belief of venture capitalists that online games like Fortnite may represent the future of social networks. They are also, however, platform bets that are rooted in early content plays, which can be notoriously difficult to pick winners in.

While Gunnarsson was quick to discuss how important he believed their title’s social platform would become, he was also just as quick to admit that building a great game was the most critical, “All of the platform stuff is ancillary to the prospect of creating a fun game, but we have really strong game design team.”

Games these days, particularly MMOs, are far from “finished” by launch. Gunnarsson plans to use this round of funding to reach a closed alpha of their title. He didn’t offer any timelines for launch as they’re only in pre-production now, but did say it certainly won’t be coming out this year.

Neighborhood social networking app Nextdoor has introduced two new features, Help Maps and Groups, to give people a way to better support one another during the coronavirus outbreak. The Help Map offers a way to coordinate aid between those in need, like the elderly and at-risk, and those willing to offer some form of assistance — like running errands or dropping off supplies, for example. Groups, meanwhile, allows smaller groups to network outside of the main feed.

Nextdoor had already the technology for a map-based feature like the Help Map, as it today offers a map of real estate listings in its app and runs annual features, like the Halloween Treat Map or Holiday Cheer Map which shows which homes are decked out with Christmas lights or other holiday decorations.

The Help Maps works similarly, but instead of listing your house, you’re able to list the services you’re willing to provide.

After updating the Nextdoor app to the latest version, you’ll find the new “Help Map” option under the More menu. From here, you can choose to either view the map or click a button to offer help to your neighbors.

Members who add themselves to the map can then detail the errands they could run or the other sort of assistance they can provide — like offering a daily check-in phone call, delivering groceries, or fetching prescriptions.

Though most stores have begun offering special early morning hours for those at the most risk for COVID-19, limiting exposure by staying at home is the best option. The Help Map, therefore, isn’t just handy — it’s a potential life-saver.

Related to this, Nextdoor is also launching its Groups feature out of beta to users worldwide. Similar to Facebook Groups, Nextdoor’s Groups allow communities to organize around topics, interests, providing aid, or anything else. But unlike Facebook, which doesn’t have an official way to confirm who people are who they say or where they live, Nextdoor validates users by phone or postal mail.

On Nextdoor Groups, neighbors can organize either by their specific neighborhood alone, with other neighborhoods nearby, or on a city-wide basis.

During the beta, neighbors were already beginning to use the feature for COVID-19 topics, including ways to unite communities, ways for parents to help kids stay connected during school closures, and different hobbies that can be done while stuck at home.

Nextdoor usage grew as the coronavirus outbreak took off in the U.S. People turned to the app to share local news and information — like where toilet paper is available. The company said user engagement had grown by 80% in the last two weeks, particularly in hard-hit areas like Seattle and New York.

App downloads have grown, too, sending Nextdoor further up the App Store’s Top Free Charts. In February, Nextdoor was ranking in the mid-to-lower 200’s on the Top Free Chart and is now No. 168 as of Wednesday.

Conversations around COVID-19 on Nextdoor haven’t always been productive, however. Misinformation, bad health advice and more have spread on the app, which doesn’t have Facebook-sized resources for moderation.

“People on Nextdoor are freaking out about coronavirus,” said a recent BuzzFeed story. CNN also called the app a “hub of anxiety.” 

As a result of its latest additions, Nextdoor usage is likely to spike even further — and hopefully refocus some of its members’ mania on doing good and helping others, instead of inciting further panic.

The company, as of last fall’s close of its $170 million in growth funding, said it reached 247,000 neighborhoods across 10 countries. Today, it’s available in 260,000 across 11 countries.

Today, Slack, a popular internal chat application, announced that it added 7,000 new customers between February 1st and March 18. That is 47 days. For context, Slack added 5,000 customers total in its preceding quarter, making its recent customer adds impressive.

Slack, like other companies whose products can help facilitate remote work, has seen a boom in usage due to the COVID-19 pandemic that has forced people to work from home. TechCrunch covered that fact this morning, saying that the company’s success would depend on how many of its new users became customers. Today’s SEC filing indicates that the newly public entity is succeeding in its efforts to monetize recent usage gains.

Shares of Slack stock are up 19% as of the time of writing, broadly higher in a day of positive trading. We’ll update this post at the end of trading to see where the firm wraps the day. The company was previously dinged by investors for not posting higher guidance during its most recent earnings report.

In its most recent quarter, the fourth of its fiscal 2020, Slack added 5,000 customers, growing from 105,000 at the end of its fiscal third quarter to 110,000. In seven weeks then, Slack has grown its customer count by 6.4%, or a hair under 1% each week.

Earlier today Microsoft announced that its competing Teams product had crested the 44 million daily active user (DAU) mark, a figure far greater than what Slack has announced to date. We might consider this new SEC filing as a way for Slack to not only flex its recent gains in front of its current investors, but also to combat Microsoft’s recent PR push. 

Teams added 12 million of its total DAUs from March 11 to March 18, underscoring the huge demand the two products are seeing today.

Slack’s product efforts

While Slack is seeing rising usage and, as we’ve learned today, rising commercial application of its service, the company is also turning out a good number of changes to its service.

Slack recently announced a simplified interface to make user experiences more smooth. While the company has felt more useful than ever before, with the massive move to work from home across the world, Slack claims that users have always relied heavily on the platform. 

As for whether or not it can handle the remote work boom, Slack sounds confident. It had connectivity issues with calls last week, but resolved the problem within a day. (Teams has also had some recent outages.)

In a memo about business continuity, Slack said that “the demands on our infrastructure do not change when employees shift away from working together in the same office; there is no difference in load on our systems whether people are connecting from their office, a cellular network, or their homes.” 

But nine hours a day for work is becoming more than just the singular use case for Slack. 

Slack is often looked at as a haven for workplace communication. We’re seeing a bunch of more use cases, perhaps spurred by social distancing: support groups for founders, alumni groups, and even groups for students who want to make better use of their time while taking classes remotely. 

Today’s news, coupled with the trends coming out of this, positions Slack more as a virtual community than just another work productivity tool.

Earlier today, we learned that EU Commissioner Thierry Breton had called for Netflix to reduce streaming quality in Europe — a move to limit its overall bandwidth usage as more users turn to streaming services for in-home entertainment during the novel coronavirus outbreak.

Netflix has confirmed that it will comply with this request. In a statement first sent to Business Insider and confirmed to TechCrunch, a rep for Netflix says:

Following the discussions between Commissioner Thierry Breton and Reed Hastings – and given the extraordinary challenges raised by the coronavirus – Netflix has decided to begin reducing bit rates across all our streams in Europe for 30 days. We estimate that this will reduce Netflix traffic on European networks by around 25 percent while also ensuring a good quality service for our members.

Story developing…

The threat of vape lung seems to have receded to the distant past now that we are all facing the coronavirus, but new research has shed light on the nature of that much more limited epidemic. It turns out vitamin E acetate, the vape fluid additive until now merely associated with lung damage, converts into a toxic chemical cocktail when heated.

That vitamin E acetate is not healthy to inhale is not a surprise; The chemical, which essentially had been used to dilute THC oil in cheap aftermarket vape cartridges, was associated in several studies cited by the CDC with lung damage. But at the time it was more correlative than causative information — the oil was found in the lung tissues of those suffering from vape lung, but there was no proven mechanism for harm.

Now work from researchers at the Royal College of Surgeons, in Dublin, has shown that vitamin E acetate’s effects are not limited to sticking around in the lungs and gumming up operations there. In a paper published in the Proceedings of the National Academy of Sciences, Dan Wu and Donal O’Shea write:

A combined analytical, theoretical, and experimental study has shown that the vaping of vitamin E acetate has the potential to produce exceptionally toxic ketene gas…

Additionally, the pyrolysis [i.e. heating] of vitamin E acetate also produces carcinogen alkenes and benzene for which the negative long-term medical effects are well recognized.

In other words, heating up vitamin E acetate, on its own or in a mixture, provably produces a number of toxic and carcinogenic compounds. Other studies would have to establish the potential pathology of those compounds interacting with the lungs, bloodstream, etc, but it’s safe to say that this substance is an extremely dangerous one to be burning and inhaling.

The obvious question of why it was put into cartridges in the first place is answered by the fact that vaping is a much lower cost alternative to cigarettes and many forms of cannabis. As vaping went downmarket a race to the bottom was all but assured and unscrupulous cartridge makers cut THC oils with substances that would produce no major changes in the immediate experience of taste, mouthfeel, and so on. Vitamin E acetate was one of those substances.

There are few regulations on this sector of commerce and frankly, even if there were, it would be trivial to avoid them. Besides, marijuana has a long history of existing outside of FDA approval. People are going to smoke whatever they want. But it seems clear now that there are plenty in the industry who have no problem putting others at risk of serious injury or death to sell more of their product.

It’s difficult to say which vape product providers were using vitamin E acetate, though it seems it was mostly THC cartridges on the low end, which make sense. There’s no need to dilute your product if people are already paying a healthy premium and you have a reputation as a high-end brand.

Exactly how testing and verification should be accomplished is a matter for the FDA, the vaping industry, and individual shops which may conduct their own checks to reassure customers. But the testing must be done — or else other unknown interactions or substances may still produce the sort of long term health effects we are trying to avoid.

As Wu and O’Shea write:

The potential for unexpected chemistries to take place on individual components within a vape mixture is high. Educational programs to inform of the danger are now required, as public perception has grown that vaping is not harmful.

Until it’s been tested, it’s still a risk.

New York City Mayor Bill de Blasio made a direct plea to Elon Musk, asking the CEO of Tesla and SpaceX to produce ventilators to help alleviate a shortage at hospitals gearing up to combat COVID-19.

The mayor’s tweet came out of a discussion on Twitter that began Wednesday evening between Musk and Nate Silver, the author and editor-in-chief of @FiveThirtyEight.

Musk, who has in the past downplayed COVID-19 in emails to employees and on social media, tweeted Wednesday evening that Tesla “would make ventilators if there is a shortage.” Silver responded, noting that “there’s a shortage now, how many ventilators you making?

Musk later noted that “Ventilators are not difficult, but cannot be produced instantly. Which hospitals have these shortages you speak of right now?” His question prompted a flurry of responses from media, public healthcare officials and lawmakers, including Rep. Julie Fahey, who said that there are 688 ventilators in the state of Oregon.

De Blasio tweeted out the plea Thursday morning. “Our country is facing a drastic shortage and we need ventilators ASAP — we will need thousands in this city over the next few weeks. We’re getting them as fast as we can but we could use your help!”

The mayor’s office could not be reached for comment. We will update the article if we receive a comment.

Musk’s tweets and emails to employees regarding COVID-19 have been met with criticism from some within the healthcare, media and business community who argue that his attitude to downplay the disease will cause more harm.

Musk has also come under criticism for keeping Tesla’s Fremont, Calif., factory open despite its location in Alameda County, which is currently under a shelter in place order. The order requires all non-essential businesses to close, including bars, gyms and dine-in restaurants because of the global spread of COVID-19.

Tesla’s factory and a number of its other facilities are located in and around Fremont, which is within Alameda County. On March 17, the Alameda County Sheriff declared that Tesla’s factory is “not an essential business” and the company should follow the shelter in place directive.

In an internal email sent to employees Wednesday, Tesla said it would continue to keep its Fremont factory open for production, because it has had “conflicting guidance from different levels of government” over whether it could operate during a shelter in place order in Alameda County.

The human resources department told employees to come to work if their job is to produce, service, deliver or test its electric vehicles, in spite of the order.

CNBC reported that the Fremont city officials plan to meet with Tesla factory managers on Thursday to discuss cooperation with the county’s order. As of Thursday morning, the Fremont factory was still open.

However, another email sent late Wednesday evening reiterated that while the factory was open for “essential” employees, the company would be taking additional steps to prevent the spread of COVID-19.

This latest email, which has been viewed by TechCrunch, informed workers at the Fremont factory that Tesla will hand out masks to be worn throughout the day, take temperatures prior to entry, add more hygiene stations inside the facility, rearrange operations to promote social distancing as much as possible and increase cleaning frequency of all work areas.

Critical shortages

Automakers, including GM and Ford, have reportedly already been in talks with the White House to repurpose factories for the production of critical medical equipment.

Ventilators are not the only pieces of medical equipment that hospitals are scrambling to secure. N95 respirators are also in short supply.

The White House said it has been in discussion with manufacturers of the N95 industrial masks that are considered a critical safeguard for healthcare workers. Vice President Mike Pence said Thursday during what has become a daily press conference on COVID-19 that 3M increased its production capacity to 35 million masks per month, beginning in January.

“We’re seeing a dramatic increase in production,” Pence said.

Honeywell is also increasing production to 120 million masks per year. The production increases haven’t reached many of the thousands of U.S. hospitals facing shortages. There have been widespread reports of dwindling supplies of masks, as well as other protective gear.

Pence said construction companies are also responding to the White House request to donate their N95 masks to hospitals.