Eq: Tech

(Los Angeles)

Tesla investors got some grim news yesterday (unless you are the group hoping for Musk’s departure). That news is that the SEC is suing Elon Musk for fraud and is seeking to have him removed as the leader of Tesla. The suit seeks to have Musk banned from serving as an officer or director of a public company. The basis for the suit is the series of tweets Musk made regarding taking the company private, which the SEC says were “false and misleading statements”.

FINSUM: This is a pretty serious move from the SEC, made worse by news out today that Musk chose the price of $420 as a marijuana reference to impress his girlfriend.

(New York)

Amazon has announced the launch of a new store in New York city. So far, most of Amazon’s brick and mortar aspirations have been unfulfilled, with only a handful of physical stores across the country. However, the company will launch a new store in New York that will feature the top-ranked and trending items from its website. The company is seeking to offer the items New Yorkers buy most directly in its store. Everything in the store will be a 4-star or higher item. The store is called 4-star and will launch in the SoHo neighborhood of Manhattan today.

FINSUM: We think this is an excellent theme for Amazon stores and could be a concept for the company to launch many more physical outlets across the country.

(San Francisco)

Two of Instagram’s founders have just left Facebook on acrimonious terms. The departures come six years after their company was bought by Facebook for about $1bn. They are leaving on poor terms because of recent changes Facebook has made which seem to prioritize Facebook’s growth at the expense of Instagram. Many analysts say the departures are a considerable negative for the stock, especially coming as part of a long string of troubles. There is also a serious threat that the two founders may come up with a competing product. Instagram accounted for 14% of Facebook’s revenue, or about $7.5 bn this year.

FINSUM: We don’t think a competing product is a worry, at least not yet. But image-wise, it does look like Facebook is a bit out of control.

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