Facebook shares slip after Instagram founders quit

Facebook shares slip after Instagram founders quit

(Reuters) – Shares of Facebook Inc (FB.O) fell more than 2 percent in early trading on Tuesday after the two founders of photo-sharing app Instagram left the social networking giant under unexplained circumstances.

FILE PHOTO: A 3D-printed Facebook logo is seen in front of displayed stock graph in this illustration photo, March 20, 2018. REUTERS/Dado Ruvic/File Photo

Analysts said the departure of Kevin Systrom and Mike Krieger may have been the result of friction with Chief Executive Officer Mark Zuckerberg over how Facebook’s fastest-growing revenue generator is run.

“Our sense is the duo may have wanted to run Instagram more independently than their parent company wanted,” said Scott Kessler, an analyst at research firm CFRA.

“We think (the) departures are a notable negative for Facebook.”

The sudden loss of the pair follows the departures of WhatsApp co-founders Jan Koum and Brian Acton and a reshuffling of Facebook’s executive ranks earlier this year.

A Bloomberg report said Systrom and Krieger had been frustrated by a rise in the day-to-day involvement of Zuckerberg, who has become more reliant on Instagram in planning for Facebook’s future.

Facebook’s shares were down 2.4 percent at $161.51 in early trading, knocking more than $11 billion off the stock’s market value.

“To the extent that their departures represent Zuckerberg exercising more power and being less accountable, such a development would underscore the need for an independent board chair,” said Jonas Kron, senior vice president at Trillium Asset Management.

The institutional investor, which holds more than 52,000 shares in Facebook, urged Facebook in July to appoint an independent board chair to oversee management.

Systrom wrote in a blog post on Monday that he and Krieger planned to take time off and explore “our curiosity and creativity again”.

Zuckerberg described the two as “extraordinary product leaders” and said he wished them all the best and was looking forward to seeing what they build next.

Facebook bought Instagram in 2012 for $1 billion. Instagram had been hailed in Silicon Valley as a flashy acquisition done right, with the team kept relatively small and Systrom having the freedom to add features such as peer-to-peer messaging, video uploads and advertising.

Instagram has over 1 billion active monthly users, a sharp rise from the 30 million users when Facebook bought the app.

Facebook’s shares are currently down about 6 percent this year, following six years of stellar gains.

Concerns over the fallout of the Cambridge Analytica privacy scandal and signals that a rise in costs would hurt Facebook’s margins for years, fueled the biggest one-day wipeout in U.S. stock market history in July.

Reporting by Munsif Vengattil and Vibhuti Sharma in Bengaluru; editing by Patrick Graham and Saumyadeb Chakrabarty

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Michael Kors takes over fashion icon Versace in $2 billion deal

Michael Kors makes high-end fashion statement with $2.2 billion Versace buy

MILAN (Reuters) – U.S. fashion group Michael Kors (KORS.N) agreed to buy luxury designer Versace for 1.83 billion euros including debt on Tuesday in the latest foreign takeover of an Italian brand.

Italian designer Donatella Versace arrives to meet employees in Milan, Italy, September 25, 2018. REUTERS/Stefano Rellandini

Michael Kors, whose namesake label is best known for its leather handbags, has made no secret of its ambition to grow its portfolio of high-end brands after buying British stiletto-heel maker Jimmy Choo for $1.2 billion last year.

The bet on Versace comes as the U.S. group looks to refresh the more downmarket image of the Michael Kors brand and recover some of its pricing power. The combination is also aimed at reviving Versace, which returned to a net profit last year.

Versace, known for its bold and glamorous designs and its Medusa head logo, was one of a clutch of family-owned Italian brands cited as attractive targets at a time when the luxury industry is riding high on strong demand from China.

“We believe that the strength of the Michael Kors and Jimmy Choo brands, and the acquisition of Versace, position us to deliver multiple years of revenue and earnings growth,” John Idol, chairman and CEO of Michael Kors Holdings said.

Michael Kors has agreed to buy all of Versace’s outstanding shares for a total enterprise value of 1.83 billion euros ($2.2 billion), to be funded in cash, debt and shares in Michael Kors Holding Ltd, which will be renamed Capri Holdings Ltd.

U.S. private equity firm Blackstone, which bought 20 percent of Versace for 210 million euros in 2014, will make a 156 million euro capital gain by exiting its investment, Reuters calculations show.

Slideshow (4 Images)

The Versace family, which owns 80 percent of the Milan-based fashion house, will receive 150 million euros of the purchase price in Capri shares.

“We believe that being part of this group is essential to Versace’s long-term success. My passion has never been stronger,” said Donatella Versace, the sister of its late founder who is its artistic director and vice-president.

Versace CEO Jonathan Akeroyd will remain at the helm of the company, while Donatella Versace will “continue to lead the company’s creative vision”, Idol added.

The deal is expected to close in the fourth fiscal quarter, subject to regulatory approvals.


Budding conglomerates like Michael Kors have been trying to make in-roads into an industry dominated by European players such as Louis Vuitton-owner LVMH (LVMH.PA) and Kering (PRTP.PA).

“The Versace brand has strong global growth potential which is untapped across all regions, particularly Asia and North America,” Cowen analysts said in a note.

However, giving Versace fresh impetus may not be easy as luxury groups struggle to swiftly adapt to the fast and fickle taste of an increasingly younger customer base, analysts said.

Michael Kors said it plans to grow Versace’s global sales to $2 billion globally, boost its retail footprint to 300 stores from around 200 and accelerate its e-commerce strategy. It also plans to raise the share of higher-margin accessories and footwear to 60 percent of sales from 35 percent.

Versace does not disclose financial details, but documents deposited with the Italian chamber of commerce show it had sales last year of 668 million euros and earnings before interest, tax, depreciation and amortization (EBITDA) of 45 million euros.

Michael Kors shares were down 0.3 percent at 1443 GMT, after falling more than 8 percent on Monday when the news of the deal first emerged.

Versace is the latest Made-in-Italy name to be snapped up by a foreign company after Rome-based Fendi, celebrity jeweler Bulgari and cashmere maker Loro Piana were all bought by LVMH.

Meanwhile, Gucci is the biggest brand in Kering, which also owns clothes and leather goods maker Bottega Veneta and menswear couture house Brioni.

The Versace buyout will also make it harder for Prada (1913.HK), Giorgio Armani, Dolce & Gabbana, Salvatore Ferragamo (SFER.MI) and Tod’s (TOD.MI) to keep up with the might of luxury conglomerates able to withstand shifts in trends.

Fans fretted on social media about the red carpet favorite losing its appeal, while Italian politicians mourned the loss of another of the country’s cherished brands.

“I am a liberal but I’m tired of seeing the best Italian brands in fashion, food and technology being bought by foreigners,” Italy’s Interior Minister Matteo Salvini said.

($1 = 0.8492 euros)

Additional reporting by Sarah White in Paris and Pamela Barbaglia in London; Editing by Kirsten Donovan and Alexander Smith

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U.S. targets Venezuelan president's wife, others in fresh sanctions

U.S. sanctions Venezuelan president’s wife, ministers

WASHINGTON (Reuters) – The United States imposed new sanctions on Venezuelan President Nicolas Maduro’s wife and key members of his government, including the vice president and defense minister, accusing them of plundering the country’s wealth and helping Maduro maintain his grip on power.

FILE PHOTO: Venezuela’s President Nicolas Maduro walks with his wife Cilia Flores upon their arrival at the airport in Beijing, China September 13, 2018. Miraflores Palace/Handout via REUTERS

Venezuelan Vice President Delcy Rodriguez and Defense Minister Vladimir Padrino were among the six people targeted, according to a statement on Tuesday from the U.S. Treasury Department. Three entities and an aircraft were also listed.

“President Maduro relied on his inner circle to maintain his grip on power, as his regime systematically plunders what remains of Venezuela’s wealth,” Treasury Secretary Steven Mnuchin said.

The Trump administration has steadily increased sanctions against Maduro’s leftist government for a crackdown on the opposition, widespread corruption and policies that have collapsed the economy.

Hyperinflation running at 200,000 percent, and shortages of basic foods and medicine have led to mass emigration.

First lady Cilia Flores is a lawyer and former attorney general who also ran the country’s legislature. She was thrust into the international public eye in 2015 when two of her nephews were arrested for conspiring to traffic cocaine into the United States.

Padrino, 55, was appointed defense minister in 2014.

The Treasury said Padrino helped ensure the military’s loyalty to the Maduro regime, while Rodriguez helped him maintain power and solidify his authoritarian rule.

The Venezuelan information ministry did not immediately reply to request for comment.

Reporting by Susan Heavey in Washington, Lesley Wroughton in New York and Brian Ellsworth in Caracas; Editing by Doina Chiacu and Alistair Bell

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Mukesh Ambani tops Barclays rich list for 7th time in row

Mukesh Ambani tops Barclays rich list for 7th time in row

Industrialist and Reliance Industries Ltd Chairman Mukesh Ambani has topped the “Barclays Hurun India Rich List-2018” for the seventh consecutive year, with his wealth estimated at Rs 371,000 crore, an official said on Tuesday.

Figuring next on the chart are S.P. Hinduja & Family of Hinduja Group, with an estimated wealth of Rs 159,000 crore, and Arcelor Mittal’s L.N. Mittal & Family at Rs 114,500 crore.

Following them are: Wipro’s Azim Premji at Rs 96,100 crore, Sun Pharmaceuticals Ltd’s Dilip Shanghvi at Rs.89,700 crore, Kotak Mahindra Bank’s Uday Kotak at Rs 78,600 crore, Serum Institute of India’s Cyrus Poonawalla at Rs 73,000-crore, Adani Group’s Gautam Adani & Family at Rs 71,200 crore, and Shapoorji Pallonji Mistry’s Cyrus P. Mistry at Rs 69,400 crore.

The annual list is a compilation of the super-richest Indians having a net worth of Rs 1,000 crore or more, and this number has increased by a staggering one-third — from 617 in 2017 to 831 in 2018, said Hurun Report India’s Managing Director Rahman Junaid.

The cumulative wealth of these 831 individuals featuring in the list stands at USD 719 billion, or one-quarter of the Indian GDP of USD 2,848 billion, as per the IMF’s April 2018 estimates.

Expectedly, the country’s commercial capital Mumbai tops the list with 233 names, followed by the political capital New Delhi at 163 and the IT capital of Bengaluru at 70, said Baclays Private Clients CEO S.N. Bansal.

While 306 new entrants made it to the list this year, 75 of those featuring in 2017 list failed to find a place in the super-exclusive Rs 1,000-crore-plus club.

“The Indian edition of the list is the fastest growing rich list in the world, highlighting the optimism of a young, vibrant and ambitious country,” said Junaid.

“Wealth creation in India is growing at an unprecedented pace, and the time it takes to accumulate wealth is shorter than before,” remarked Bansal at the report launch.

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Trump says Iranians must 'change their tune' before any meeting

Trump says Iranians must ‘change their tune’ before any meeting

UNITED NATIONS (Reuters) – U.S. President Donald Trump said on Tuesday the Iranians have no choice but to change before a meeting with him can occur, but he looks forward to having a great relationship in the future.

U.S. President Donald Trump speaks to reporters at the United Nations headquarters. REUTERS/Caitlin Ochs

Speaking before he was due to address the U.N. General Assembly, Trump said: “I’m not meeting with them until they change their tune. It will happen. I believe they have no choice. We look forward to having a great relationship with Iran, but it won’t happen now.”

Reporting by Doina Chiacu and David Alexander; Editing by James Dalgleish

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Trump rejects meeting Iran's Rouhani at U.N. gathering

Trump rejects any meeting with Iran’s Rouhani at U.N. gathering

NEW YORK (Reuters) – U.S. President Donald Trump on Tuesday said he would not meet Iranian President Hassan Rouhani as world leaders gathered in New York but signaled he was open to a future meeting, despite simmering tensions over Tehran’s nuclear deal.

FILE PHOTO: U.S. President Donald Trump participates in a signing ceremony for the U.S.-Korea Free Trade Agreement with South Korean President Moon Jae-in on the sidelines of the 73rd United Nations General Assembly in New York, U.S., September 24, 2018. REUTERS/Carlos Barria

Both countries’ presidents were due to attend the annual United Nations General Assembly in New York. Trump is scheduled to address the gathering at 10:15 a.m. (1415 GMT).

Foes for decades, Washington and Tehran have been increasingly at odds since May, when the Republican U.S. president pulled out of the 2015 international nuclear deal with Iran and announced sanctions against the OPEC member.

The accord, negotiated under Democratic U.S. President Barack Obama, lifted most international sanctions against Tehran in exchange for Iran curbing its nuclear program.

Over the summer, Trump had said he would meet with Rouhani without preconditions to negotiate a new deal, an offer reiterated on Sunday by U.S. Secretary of State Mike Pompeo and extended to Iran’s supreme leader, Ayatollah Khamenei.

Rouhani said on Monday Tehran would not talk to Trump until the United States returned to the 2015 deal..

The top adviser to Khamenei, Ali Akbar Velayati, rejected the U.S. offer on Tuesday, saying “Trump’s and Pompeo’s dream would never come to reality,” the IRNA news agency said.

FILE PHOTO: Iranian President Hassan Rouhani speaks at the Nelson Mandela Peace Summit during the 73rd United Nations General Assembly in New York, U.S., September 24, 2018. REUTERS/Carlo Allegri

“Despite requests, I have no plans to meet Iranian President Hassan Rouhani. Maybe someday in the future. I am sure he is an absolutely lovely man,” Trump wrote in a post on Twitter.

Alireza Miryousefi, spokesman for Iran’s U.N. mission, told Reuters that Iran has not requested a meeting with Trump.

Some Iranian insiders have said any talks between Rouhani and Trump would effectively kill the existing nuclear accord.

Tensions have been rising after a deadly attack on a military parade in southwestern Iran in which 25 people were killed. Khamenei said on Monday the attackers had been paid by U.S. ally Saudi Arabia and the United Arab Emirates, and that Iran would “severely punish” those behind the bloodshed.

Quashing the current pact would come at a political cost for the Iranian president, who championed the deal with the supreme leader’s guarded backing and could lose support from European allies.

Rouhani is also under increasing pressure from Iranian hardliners, including Iran’s elite Revolutionary Guards, which have kept up the anti-American rhetoric ahead of the U.N. session.

Trump’s administration is pushing allies to cut imports of Iranian oil to zero as Washington prepares to restore sanctions on Iran’s oil sales in November.

The remaining countries in the deal, which see it as the best chance to stop Iran from developing a nuclear bomb, on Monday agreed to keep working to maintain trade with Tehran.

German Foreign Minister Heiko Maas, following a meeting on Monday with Britain, China, France, Germany, Russia and Iran in New York, warned that the U.S. strategy of applying maximum pressure on Tehran and going it alone could risk a regional escalation.

Reporting by Steve Holland and Michelle Nichols; writing by Susan Heavey; editing by Steve Orlofsky and Grant McCool

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U.S. targets Venezuelan president's wife, others in fresh sanctions

U.S. targets Venezuelan president’s wife, others in fresh sanctions

WASHINGTON (Reuters) – The United States has issued new Venezuela-related sanctions targeting Venezuelan President Nicolas Maduro’s wife as well as the country’s vice president and defense minister, according to a statement Tuesday on the Treasury Department’s website.

FILE PHOTO: Venezuela’s President Nicolas Maduro walks with his wife Cilia Flores upon their arrival at the airport in Beijing, China September 13, 2018. Miraflores Palace/Handout via REUTERS

Venezuelan Vice President Delcy Eloina Rodriguez Gomez and Defense Minister Vladimir Padrino Lopez were among the six individuals targeted, according to the statement. Three entities and an aircraft were also listed.

Reporting by Susan Heavey; Editing by Doina Chiacu

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Labour says open to second EU vote with option of remaining

Labour set to vote against Brexit deal, open to second referendum

LIVERPOOL, England (Reuters) – Britain’s opposition Labour Party is set to vote against any deal Prime Minister Theresa May clinches with the European Union and is open to a second referendum with the option of staying in the bloc, Brexit spokesman Keir Starmer said on Tuesday.

The Labour Party’s Shadow Secretary of State for Departing the European Union Keir Starmer walks to a radio interview at his party’s conference in Liverpool, Britain, September 25, 2018. REUTERS/Hannah McKay

With just over six months until Britain leaves the EU, May has yet to reach a deal on the terms of the divorce, and her plan for future trade ties has been rebuffed by both the EU and many lawmakers in her own Conservative Party.

Labour has listed six tests it would apply to any Brexit deal, including whether it ensured a strong future relationship with the EU and delivered the same benefits Britain has as a member of its single market and customs union.

Starmer said May was on course to fail these tests.

He called for an election to allow a Labour government to steer Britain’s departure from the EU, the biggest shift in the country’s foreign and trade policy in decades.

“If Theresa May brings back a deal that does not meet our tests – and that looks increasingly likely – Labour will vote against her deal,” he told Labour members at the party’s conference in the northern city of Liverpool.

He repeated Labour’s argument that if parliament rejected May’s Chequers deal, named after the prime minister’s country residence where she hashed out a plan with her ministers, the party would press for a general election.

“But if we need to break the impasse our options must include campaigning for a public vote and nobody is ruling out remain as an option,” he said to a standing ovation and prolonged applause in a packed conference hall.

The Conservative Party’s chairman, Brandon Lewis, accused Labour of breaking “their promises” and taking “us back to square one on Brexit”.

Britain’s shadow Secretary of State for Exiting the European Union Keir Starmer delivers his keynote address at the annual Labour Party Conference in Liverpool, Britain, September 25, 2018. REUTERS/Phil Noble

The EU indicated officials in Brussels saw a new referendum as a complication rather than a solution.

“That does not sound like a solution to anything. The first referendum is still keeping us busy. And will they want to have a third one in another two years?” asked a senior EU diplomat in Brussels. “It’s more about power struggles in Britain than about managing Brexit seriously.”

But with May’s plan for maintaining close ties with the EU for trade in goods facing opposition from her own lawmakers, Labour could play a decisive role in whether any Brexit deal is approved by parliament.

May has a working majority of just 13 in the 650-seat parliament and a former junior minister said this month as many as 80 of her own lawmakers were prepared to vote against a Brexit deal based on the Chequers plan.

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But like the governing Conservatives and much of the country, Labour is split over how to leave the bloc, with its veteran eurosceptic leader, Jeremy Corbyn, under pressure from many members to move to a more pro-EU position. [L8N1WA260]

Brendan Chilton, general secretary of Brexit campaigning group Labour Leave, accused Starmer of launching a leadership bid and of trying to undermine Corbyn.

“This is a betrayal of the very highest order. It is a betrayal not only of the millions of Labour voters, but of our 2017 manifesto,” he said, referring to the party’s campaign at last year’s election that gained Labour more votes than many expected.

Labour’s conference will vote later on Tuesday on keeping a second Brexit referendum as an option if May fails to get her Brexit plan through parliament.

In the published motion which the Labour conference will debate later on Tuesday, the party again set out is position on Brexit – it wants full participation in the EU’s single market after Brexit and will reject a “no deal Brexit”.

The wording on a possible second referendum was left vague, opening the way for some to describe it as a fudge when the party’s finance spokesman, John McDonnell, said any such vote should be on how to leave the EU, not whether to do so.

But Starmer was clear. He understood that the motion could allow Britain to vote to stay in the EU.

“This isn’t about frustrating the process,” he said. “It’s about stopping a destructive Tory Brexit. It’s about fighting for our values and about fighting for our country.”

Additional reporting by Gabriela Baczynska in Brussels; Editing by Guy Faulconbridge and Angus MacSwan

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Live: President Trump speaks at the UN

Live: President Trump speaks at the UN

President Trump just arrived at the United Nations in New York and approached the press to preview his remarks on a few topics. Here’s what he said on Iran:

Iran has to change its tune before I meet with them. They want to meet. I’m not meeting with them until they change their tune. It will happen. I believe they have no choice. We look forward to having a great relationship with Iran. But it won’t happen now.”

Earlier on Tuesday President Trump tweeted that “despite requests,” he has no plans to meet with Iranian President Hassan Rouhani. “Maybe someday in the future. I am sure he is an absolutely lovely man!” he added.

But earlier, in an interview with CNN’s Chief International Anchor Christiane Amanpour, Rouhani denied making any such request.

“Not this year, nor last year. We have never made such a request for a meeting with the President of the United States,” Rouhani said. He added, “Under the current conditions, when it comes to a meeting, I do not see it as beneficial nor appropriate. But you should ask him who made such requests.”

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No Modi minister knew about Rafale deal, says Congress

No Modi minister knew about Rafale deal, says Congress

Continuing its attack on the NDA government, Congress leader Kapil Sibal today (September 25) claimed that no one in the government was aware of the Rafale deal signed between India and France in 2015 except Prime Minister Narendra Modi and former French President Francois Hollande.

“In 2015, when PM Modi visited France, foreign secretary Subramanyam Jaishankar announced that Rafale deal would not be part of discussions between Modi and Hollande. They would only discuss international affairs. But PM announced about the 36 Rafale aircraft deal on April 10, 2015, that India had decided to buy off the shelf,” Sibal said.

Sibal said that none of them — Manohar Parrikar, Arun Jaitley, Nirmala Sitharaman or Sushma Swaraj — were aware of the new deal announced by PM Modi.

“Parrikar, who was the defence minister at that time was in Goa for some event. Sitharaman has never said that she was told about the deal by the PM. Even Sushma Swaraj wasn’t aware because foreign secretary had said that Rafale deal wasn’t on the table,” Sibal said.

He went on to say that only two people were aware of the deal signed between the two countries — PM Modi and former President Hollande.

He also claimed that India is not in a position to buy 126 Rafale jets. “India needs 126 Rafale jets but now the government is not in a position to buy the rest. They have already overspent on the initial 36 jets,” Sibal said.


The BJP, who brought in the Robert Vadra angle in the Rafale deal to hit at the Congress-led UPA government today said Vadra along with the Gandhi family has looted the country and he will soon go to jail.

BJP spokesperson Sambit Patra, in a press conference, said, “One day Robert Vadra will go to jail. This is not a political vendetta…but the way this family [Gandhi] and Vadra looted this country, the day will come when he’ll go to jail. Even Lalu Prasad was convicted in six fodder scam cases. It took 20 years to get him convicted in fodder scam…[the] same will happen with Vadra.”

On Monday, the BJP had accused the Congress to be part of a “nexus” with former France President Hollande to sabotage the procurement. The party alleged that the Congress wanted the Rafale deal scrapped and that its aim was to take revenge on Dassault Aviation (the makers of the jets), who had allegedly refused to work with a company linked to Vadra during the UPA’s tenure.

Taking the allegation forward, Patra today said that it was the UPA which dropped Hindustan Aeronautics Limited (HAL) from the deal in 2009. “The UPA government ignored HAL’s claim to purchase basic training aircraft in 2009 and instead gave it to a Swiss company Pilatus. In return, the party got two commissions in instalments from the company. In 2010, two instalments were deposited in Standard Charter Bank account number 52105058250 — first on August 25 and the second on October 6.

Meanwhile, the prime minister himself attacked the Congress and said that the party was no longer able to form alliances in India, and was looking for an “international” alliance.

He said lotus — the symbol of the BJP — would bloom in every home, state and corner of India as long as Congress leaders kept throwing “mud” at him.

Former French President Francois Hollande’s recent claim has intensified the fight between the two parties over the India-France Rafale fighter jets deal. Hollande in an interview to a French media house had said that the Indian government “proposed” Anil Ambani’s Reliance Defence as Rafale manufacturer Dassault Aviation’s Indian partner (for the offset clause of the agreement). “We didn’t have any say in the matter,” Hollande had said.

READ | Commander In Thief: In Rafale dogfight, Rahul hurls Hollande bomb again

WATCH | Is there now a need for the Modi government to probe the Rafale deal charges?

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