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tv   Nightly Business Report  PBS  September 27, 2018 5:00pm-5:31pm PDT

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>> announcer: this is nightly business report, with sueerera d bill griffeth. elon musk sued. the s.e.c. files a lawsuit against the ceo of tesla. and investors run for the exit. shadow profile, facebook may have created one. and now advertisers have access to your hidden information. fighting food allergies, life-threatening allergies on the rise, prompting drug companies to take a new approach. those stories and more tonight on nightly business report for thursday, september 27th. good evening, eryone. and well. bill griffeth is off tonight. we begin with a bombshell lawsuit. the securities and exchange commission is suing tesla's ceo elon musk for fraud.
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the agency cites musk's tweet back in august that he was considering taking tesla private, adding, quote, funding secured, e quote. according to the s.e.c., musk did not dis oss confirm key terms to take the company private prior to his tweets. and musk was reckless in knowing that his statements were false. the s.e.c. calls musk's actions harmful to tesla's investors. >> thee. 's complaint which was filed earlier today in federal district court in the southern district of new york seeks a finding that musk committed securities fraud and injunction prohibiting him from doing so in the future, civil permits, disgorgement of ill gotten gains and a bar prohibiting musk from serving as officer or director of a public company in the future. >> shares of tesla fell sharply on the news in initial after hoursg. trad what happens now when a ceo is sued? eric gourd isn't a professor at the university of michigan law school school of business and
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joins to us tk about that. good to see you as always. >> hello, sue. >> what ha cens when a is sued? i think it depends in large part on what company it is and what type of company it is and how active a ceo in a company, right. >> yeah, i think that's exactly right. so what happens next for the company is somewhat up to the compan if the company maintains in idea th teslas musk, musk is tesla and they're inseparable, the company itself could be in big trouble because so far the government has only sued musk. they actually could also sue tesla. so to avoid that, i think it's time fk m to go as ceo. tesla has to say, look, we --is - musk did this on his own. and we don't condone i and don't come after us. we are cooperating. >> although there has bee a lot of criticism of tesla's board following that tweet. and there is some concern that
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perhaps the board isn't strong enough to move past tesla and tesla.lly elon musk being >> yeah, so far, the board seems to be sort of the elon musk fan club. there have been questioning about whether they are doing enou c to protect thepany and all of the shareholders. this lawsuit might be the move that it takes to get the board to say, okay, now we are going to act independently and we are not just going to be in musk's corner. we have to look out for the company. and we have to look out f all the other shareholders. >> elon musk just saying that them lawsuit f the s.e.c. is njustified, perhaps a predictable response from him. but wall street seems to be weighing i and even though perhaps we should think of tesla separate om elon musk, it's obvious that wall street does not. >> yeah, you know, much has been de, including b board members and a lot of wall street -- a lot of of equitly as said, oh, no don'to anything about
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musk. without him there is no tesla. they may have td f a face saving way to backtrack from that. cause i think there haso be a tesla without musk. and you know, the always say they look forward to their day in court. nobody looks forward to going into the evidence is -- the evidence is such that i think musk is going to have to reveal a card he hasn't revealed so far in out of this. >> all right, eric, we will leave it there. thank you eric gourd withinerhe unty of michigan's ross school of business. on wall street, upbeatep economicts and an advance in technology stocks helped lift te broader market. butding volume was low. as investors watched the testimony of president trump's supreme court nominee brett kavanaugh and his accuser dr. christine bsey ford. by the "closing bell" the dow jonesra industrial a rose 50,000 points to 26439 been the nasdaq up 51 and the s&p 500
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added 8. one day after the cir of the federal reserve said the economy was strong, new reports today confirmed that. economic growth in the second quarter rose at an annual rate of 4.2%. gross domestic product is there broadest meaf gods and services produced. and was powered by consumer ending next export and business investment. a separate report swed orders for long the lasting durable goods rose 4.5% in august thanks to increase in aircraft ordering. but pending home sales fell in august to the slowest pace since thetart of th year. the decline was due to increases in both home prices a also mortgage rates. canada plan tos to keep negotiating a new nafta agreement as long as there is chance of success. the prime minister justin trudeau said evenhough the negotiations are tough it's possible to reach a good and fair deal. the comments follow president trump's criticism yesterday. the talks with canada were
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moving too slowly and he t threaten impose tariffs on cars imported from canada. the $69 billion takeover of aetna by cvs took another step forward.ng aetna is selll of the medicare part d prescription drug plan business with 2mb million s to rival ensurer well care. that sent shares of well care to a new hih. h aetna and cvs rose. berth af coombs has the detailsa >> a and cvs health hope the this will is theur final he to winning regularry approval for the $69 merger. >> selling the entire aetna platform really eliminates the concentration issue sin the. d. p market is the major overlap and there is no change in the market after if if anything well care has to retain members and those members have been used to tha aetna brand. >> medicare part d is the only part ofetna and cvs businesses where the two overlap.
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pharmacy giant cvs ensuring humana and united health have 50% market share in that business. aetna's sale if approved by regulators would triple well care's market share, making it the fourth largest prescription drug plan ensurer. >> this is a big milestone.is s one of the things asked for and it's being done. a lot of people feels in close to the home stretch. >> while financial terms of the sale weren't disclosed, well care says it's going to buy aetna's business with the carbon hand. analysts say that makes it a win for both sides. from a financial perspective they got an extremely attractive price. remember aetna and cvs didn't sell it nessarily in terms of the highest possible price they could get. but they were paying for the sanity ofd and -- you know their ability to sleep at night with the transaction because, again, they've got a credible buyer that satisfies what i think the government was looking for. >> but winning over the
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department department of justice is jus thebeginning. >> everyone is really curious to see what this merged eity is going to do and how it affects the delivery of care and whether there is thetial for sort of a -- you know the creation of value that is giving consumers a better experience. >> before that cvs and aetna need to win over stateto regu. connecticut and new york are both holding hearings on the deal next month. for nightly business repor bertha coombs, new york. t it's tim look at some of today's upgrades and downgrades. apple was initiated with an overweight rating in new coverage at jp morgan. . analyst cites theransformation to a fs ises business. the price the stock rose 2% to 224.95. the amazon's price target was raised to $20525 at steve is itting highest price among analysts. citing long term revenue arp
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margin expectations.in ining a buy rating shares gaining 2% to $2012.98. bed bath and beyond price target was lowered to $13 over at citi. the analyst says the retailers turn around maybe too little too ate. the firm has sell rating on the stock. the shares fell 21% to 14.86. that is an 18-year low. still ahead, a new twist in what facebook knows about you. and what it does with that customers can now test drive amazon's top selling products before hitting the boy button. the ecommerce giant launched a
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concept brick and mortgagorer locationle in new york city c amazon four-star only selling items that are either new, trending or highly rated on amazon's website. ea product has a digital price kag tag with digital reviews ewhich both upd in real time. well if you are on facebook you created your profile. butt also appears that facebook has created a shadow profile of tyou. and reportedly sells that data to advertise. julia boorstin looks at the latest privacy issue to swirl around the company. >> reporter: when peoplevi p facebook with the phone number for two factor authentication they think they make the account more secure, not giving advertisers more ways toarget them. a giz mo arcleulates how advertisers target consumers based obstetric phone numbers and email addresses on file. facebook can then css reference the information not just with info that users put into the profile but also
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information that people provide for security purposes, and data collected from friends 'contact books. facebook has a problem with transparency with users. d is not clear with how it's using data and how it's communicating with users. >> facebook responding, quote, we use the information people provide to offer a better more personalized experience on facebook, including ads. we are clear about how we use the informaon we collect, including the contact information that people upload or add o to their accounts. you can manage and delete the contact information you've uploaded ant. facebook encourages two factor authentication to secure accounts. androviding a phone number is the easiest way to set that up. but users can also a use separate app such as google authentication to generatein lo codes. the question is whether facebook adequately communicates how rsonal information is used. >> the egself-rulatory regime we have of relying on companies to
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explain to users and expecting users to read and understand company privacy policies is very broked. and w legislation that gives users real rights. >> this comes as facebook drawing critique from the coveder of major acquisiti broien who left facebook years ago. criticized them on advertising. fischer exec david marcus shooting back in defense of the media giant saying connectinghe people is t noble mission and the bad is far outweighed by the good. for nightly business report, ju julia boorstin. st fort's turn to our g what it ultimately means for you. he is a executive editor at cnet good to see you. >> hi. >> you're theo go guy on this. you have been covering facebook for a long we have talked to you about it before and you said you didn't even know about ts. i find that worrisome.
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>> i mean, look it's hard to keep track of allhe different ways that facebook advertises at us. there are so many different systems they have. and processes in place. and this is one of those things that among all the things if you sat me down an asked me to write them all down -- and there would be a lot -- would not have known they were taking this information and use going for advertising too. >> tt's another blow, is it not to the transparency argument that government officials have put forward that facebook -- and some of the other providers have been faci i, especiall last year. >> yeah, iis definitel part of the overall problem. i think you can t lce of facebook's -- at least the pr end of their problems to transparency. and it is something i have written about on cne many times. they need to to up this issue d and really n to tackle it. and the fact that these things
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keep coming out and we keep finding new things tt they didn't proactively tell everybody is a black mark allac over the and it encouraging washington, which is already upset with the tech tindustry,get even more riled up and eventually write some laws they're not going to >> exactly. like. i was going to ask you, basically, do you think this is going to usher in -- origin the end of the self-regulatory era for technology? >> i think that the beginning oe that happened a while back. and really you can point a lot it at the 2016 election. and the russian interference that happened a the propaganda. and the fact that even some lawmakers just a couple of weekn ago w i was in washington, d.c. for the tech hearings then were complaining to me that we still don't have a full accounting in public of what happened with the russian propaganda from facebook. anhi sois just a larger issue that keeps coming up. and cerinlyaving these things keep coming up, having them show up in the headlines
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more and more is going to rangle congressman and komsz who are getting so many complaints about it. >> very quickly, should a consumer asse that this same type of situation exists on other platforms that they >> it's hard to tell. i mean, all of sil has transparency problems. facebook is not special here. i'm not awareni of other com going to this degree. is one thing we have seen that as facebook has come up with new advertising technology, a lot of other companies look at it -- saying oh, we should do something similar. >> right. >> the question is, what's going to keep going down the pike and other people doing similar stuff? it's interestng. make no mistake, targeted advertising is very popular in silicon valley right now. >> ian, thank you so much. ian cheerith cnet. >> my pleasure. can20 years of google tp you believe it? the company has had a profound
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impact on everyday lives, connecting the world and given us access to information we didn't think we needed. it's even aerb. josh lipton has more on googles impact. >> reporter: no tech company din more to o up the internet to more people than google. that's because the before google we cliktn directory at yaw shoe or subscribed to aol ofrpg limitedon infor. google's search engine changed that broadening the available information and delivering it faster. >> i google every day. i use it for looking up where to get a car fixed, to people, to news. >> it can make lif easier. i know about all the intrusive stuff that it does. but it certainly makes life easier. >> ansi ext of your self-like a cell phone. >> you can google it up, having e phone in t pocket makes it supereasy.
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t it wasn't inevitable that google would be search nner. 20 years ago they entered a crowded field including excite, alt vista and yahoo!. but today 80% of all online severance on both deskop and mobile are run through google. >> aerktd to com score. they transformed the which we collaborate with google docs and travel with google google map. but search is the bread and butter even becoming a verb. and investors know that search is how google makes most of the money displaying ads alongside the search results. in the company's most recen earnings report it said that advertising business through 24%, driving total alphabet net revenue to more than $26 billion. but there are challenges for search too, including more competition from rivals. >> we have seen from our survey work that increasingly consumers go to directly to amazon
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espeally with a prime membership go directly to amazon a and by pass google. >> with more competition there is the possible that google slows i coming years. that's why the company may put a big are focus on other businesses like youtube, cloud computing and self--driving cars for nightly business report, i'm josh lipton, san francisco. carnivalops expectations. that's where we begin the market focus tonight. the cruise line operatorun ed a $1.0 billion share buyback and said futureng boo are strong. they say they expect calm seas ahead. >> we are excited about having a record earning again this quarter. and having the opportunity to raise our guidance for the year. in fact at the midpoint of the guidance we'll show operationally a 16% increase in earnings per share operatisnally. pagour offset with fuel and currency drag.
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still above double digit increase in earnings for the year. >> despite the improved guidance concerned were raisedrebout fu pricing. and that sent the stock lower nearly 5% to 63.74. the consulting and outsourcing saidces firm accenture growth across divisions led to angers beat. but it was the full-year pfofit casting disaping investors. they said the guidance reflects the potential impact from the trade war and stronger u.s. dollar. the shares fell marin more than 1% to 170.05. and aetna health reportedly received multiple acquisition offers. private rts that two equity firms and a strategic buyer are all interested in the cloud-based health i.t. company but likely won't maybe pay more than the $11 per share. earlier aetna expressed- agentena expressed interest in selling itselfhares of athenna
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health rose to among food aermgys peanuts can be the most st ere. w researchers are working on a drug to counter the life threatening reactions pl meg tyrell has the installment of modern medicine. >> reporter: for 13-year-old wi borrowedy a bite of the wrng food could be fatal. >> my allergiy is the definitely the worst i have. it's anaphylactic meaning if i eat a peanut i could die. >> he is an increasing number of kids with dangerous allergiys accordingo the cdc, the previaenslee of fooder aes rose from in kids younger than 18. allergic reactions are more hospital visits too. increase of more than four followed in a decade.an s are the worst culprit. zblierjtnu p allergiy affect 1.5 to 4.5% of children.
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>> drug companies arepo ring and two new treatments may reach the market next year. from biotech companies aimmune and dvb technologie both introduced small amounts of peanut protein over time with th goal o building up tolerance. will borrowedy is in a clinical trial. goes right tbilky the core of where food allergy starts. >> every day he mix as pder made of peanut protein into food. over time the dose increasing. >> and they start you on a low dose. that was 1/100th of a peanut. when they did the last food challenge he completed the entire challenge, over 4,000 milligrams, something like 13 peanuts. >> french biotech. dvb technologies using a patch to dpr a does of $1-10 oh ohth of a peanut.
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at biotech giant rejenner on. this targets two signaling moleculing that become over active in. >> the more specifically you can identify whahs wrong wit the immune system and overactive can you target that. >> it's testing the drug and other allergic disorders and in combination with amun therapy for peanut allergiy. they are developing drg drugs to target the cause of each alvergiy. >> we program for cat allergy for example where we know the major driver from the cat allergan inducing a lot of theymptoms and we took it into a phase 1 clinical study and showed that patients doav symptomic relief. >> for the rejenner onnt scts the work is deeply personal her sons have severe >> it puts a spark in everything do you. because i see how much this affects my children. >> will brody says while theut
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pean treatment has given protection it doesn't comwi thout side effects. mainly upset stomach and it's not a zblur you have to be very careful still. but jt the piece of mind of knowing if i accidentally ate something i shouldn't nothingd woppen. >> his mom calls it a game changer. for nightly business report, meg tirrell. >> coming up porsche's need for speed. s a sound porsche owners love revving up the karin and before going race. we take you to place where porsche owners are meeting for rent sports number 6. coming up on nightly business report. porsche owner he is and fans for a this weekend festival celebrating the german
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auto brands 70th anesversary. it c as the luxury brand enjoying record sales in the u.s. phil lebeau is in salinas, california, where the snd and speed of porsche is on display. >> reporter: it's music to the ears of porsche fans. the roar of porsche race cars turning lap after lap at the famed laguna racetrack. this is porsche's sixth reunion, the four-day celebration celebrating the feel and handling of pushing a performance car to thet,li in self-driving car, the people still here want to control the driving exsrience. >> i homecoming for an aspect of porsche, which is racing, which is the company's whole heritage. and every porsche race car is represented here. >> is kind of a slogan.
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but it's -- porsche -- it's about the people, not necessarily really the cars. and the community and -- i've got friends i've known for 40 yearri that have beenng porsches. and it's just a thing. >> and you love it. >> oh, yeah. >> it's great. i mean,yo where du find so many beautiful cars likehis except that at ren sport. >> while porsche is developing a electric car it plans to roll out next year, this isra b where fuel injection and horse power still attractuyers. nask the company enjs record les here in the united states, especially for its signature model, the 911. >> it's on fire. it's not just about the new 911. when you look at the new classic ours it's a mark. and when look at the values of our cars in the market we see a verytrong deman for our brand. the brand is m aliveore than ever before. >> and ring to stay in the lead of an auto industry hurd
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herteling towards massive changes. a reminder many drivers love the feeling behind the wheel.e phil row nightly business report. salinas, california. >> and before we g here a look at the final numbers on wall street. the dow rose 54 points. the nasdaq was up 51. and the s&p 500 added 8. and that is nightly business report for tonight. i'm sue herera. thanks for joining us. have a great evening. we'll see tomorrow. ♪
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♪ ♪ ♪ >> this is "bbc world news america." >> funding of this presentation is made possle by the freeman foundation, kovler foundation, pursuing solutions for america's neglected needs, and purepoint financial. >> how do we shape our tomorrow? it starts with a vision. we see its ideal form in our mind, and then we begin to chisel. we strip away everything that stands in the way to reveal new
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