In this week’s Digital Digest we take a look at a crypto expert’s North Korea woes and London’s tech boom.
We then take a look at big tech with Elon Musk’s Twitter takeover being all the rage and Daniel Ek looking to distance Spotify from Netflix.
Closer To Home
British cryptocurrency expert faces £1m fine relating to North Korea links
A British cryptocurrency expert, Christopher Emms, is facing a fine of £1 million and 20 years jail time in the US after he spoke at a conference in Pyongyang, North Korea. Emms allegedly ‘advised members of the North Korean government on cutting-edge cryptocurrency.’
This is not the first time the despotic state has faced controversy in the world of crypto however, with accusations it has stolen $2bn by hacking cryptocurrencies. In fact, earlier this month the US claimed North Korea was responsible for stealing almost £500mn in crypto from a video game.
Emms, who claims Foreign Office guidance indicated it was safe for him to attend the event, is alleged to have said during his speech that the way the US controls the global monetary system is unfair. Another cryptocurrency expert who spoke at the event has been sentenced to five years of jail time in the US earlier this month on the same charges. Following his arrest in Saudi Arabia, Emms maintains his innocence.
The number of new tech companies incorporated in London increased by 94% in 2021
An analysis of data held by Companies House has revealed that 18,549 tech companies were incorporated in London last year, representing an increase of 94%. This seems to fulfil the Brexit promise that leaving the European Union and its legislative minefields would encourage digital innovation. Whilst London accounted for the highest number of incorporations, growth was visible across the UK.
David Blacher, partner and head of media and technology at RSM UK, commented “to be seeing incorporations increasing by between 40 – 60% in regions throughout the UK is very encouraging.” Blacher acknowledged the impact of the pandemic upon digital innovation highlighting how businesses have embraced technology as consumer demands shifted, demonstrated by the technology sector thriving while others struggled.
The UK tech sector became the third economy, alongside the US and China, to reach $1 trillion in value after a surge in growth throughout the pandemic. The British digital industry is estimated to be worth more than double Germany’s equivalent – Britain’s closest European rival.
Elon Musk announces takeover of Twitter for $44 billion
It has been a whirlwind week for Twitter and Elon Musk. Musk announced he was the platform’s largest shareholder on 2 April, only to refuse an offer to join the board. Many speculated at the time whether this was because of a loss of interest, but Musk only stepped back to allow himself to take a much bigger forward, quickly announcing a full takeover for $54.20 a share.
Musk is currently planning to pay for $21 billion of the deal, having secured additional funding from Morgan Stanley. Earlier this week it appeared to be a done deal, however, there has been a new twist as Tesla’s shares have dropped 12.2 per cent since the announcement. Musk’s bid is secured against his Tesla stock, but if Tesla’s stock continues to fall he could run into problems.
Even if Musk does end up completing the deal to buy Twitter, he could still face issues as the site has long had a rocky relationship with autocratic states like China. Tesla is partly manufactured and widely sold in the country, so Musk’s interest in a hostile company could be a point of contention – and potential leverage for the Chinese government to influence the future of the social media site.
Spotify chief distances music streaming group from Netflix
Daniel Ek has told Spotify investors that Netflix and his company are “vastly different businesses” as he sought to avert further stock volatility. Netflix’s recent stock crash, driven by the news of their declining subscriber numbers, has had a knock on effect on Spotify reducing its value by nearly 20%.
Ek’s move greatly contrasts with his previous attempts to convince investors that Spotify could replicate Netflix’s trajectory, with the streaming service’s great success on the stock market in recent years. Ek even hired Netflix’s former CFO Barry McCarthy to oversee Spotify’s IPO.
This is the latest hit to Spotify’s stock, having dropped by over 50% this year due to broader issues such as the Ukraine conflict and general worries over the business model of streaming services. Despite this, Spotify has seen its subscriber numbers grow by two million in the first three months of this year. This came despite shutting down its service in Russia and controversies involving Joe Rogan and wider misinformation.
Also In The News
- BT Group set to ditch its namesake BT brand as it’s ‘flagship’ for UK households in favour of promoting EE products instead. See here.
- Google has begun removing search results containing people’s personal information, including phone numbers, and home and email addresses upon request. See here.
- The Head of the UK’s new digital watchdog has claimed that the Online Safety Bill risks stifling start-ups. See here.
- Alphabet has seen its revenue fall below analysts expectations due to a combination of inflation, the Ukraine conflict, supply issues and competition between YouTube and TikTok. See here.
- There could be a shift in the global supply of electric car batteries to the West as China’s Covid lockdowns damage the country’s dominance in the market. See here.
Worth A Read
- Daily Telegraph: How attacking the New York Post paved the way for Elon Musk – and the Twitter lawyer behind the ban
- Financial Times: Why the UK joined the race to woo the crypto industry
- Guardian: ‘Bossware is coming for almost every worker’: the software you might not realise is watching you