The National Association of Insurance Commissioners (NAIC), a U.S. regulatory group, is cracking down on collateralized fund obligations (CFOs), an investment vehicle used by private equity groups. The NAIC shared concerns that rating agencies are downplaying the products’ risks, exposing insurers to undue risks. More: - CFOs are similar to collateralized debt obligations, which played a massive role in the 2008 financial crisis.
- A CFO has stakes in private equity funds like private real estate, credit, and infrastructure funds.
- According to the NAIC, the CFOs’ complex structures deprived “regulators, and possibly insurer investors, transparency into the true underlying risks, credit exposure and nature of the investment.”
- The planned crackdown comes as many large financial institutions consider setting up the investment vehicle for the first time.
- An executive working on plans to launch a CFO said the NAIC’s move has taken the industry by surprise and has introduced a lot of uncertainty into the market.
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TikTok is considering a $1.5B plan to reorganize its U.S. operations to appease U.S. lawmakers. The popular video-sharing platform has been negotiating with U.S. regulators and civil society groups to continue operations in the U.S. More: - Last month the U.S. House of Representatives banned TikTok on devices of House members and staff effective immediately.
- There has been bipartisan concern over TikTok’s continued operations in the U.S.
- Lawmakers fear that China could access U.S. users’ data on TikTok or use the platform to manipulate what Americans see on the platform.
- The company has been in talks with the Committee on Foreign Investment in the U.S. (Cfius) over how it can remain in the U.S.
- TikTok is offering U.S. officials oversight over its content-recommendation algorithms.
- The company hopes access to its algorithms and its planned re-organization would ease some of Washington’s concerns about the app.
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Activist investor Ryan Cohen has taken a stake in Alibaba Group Holding worth hundreds of millions of dollars. According to sources, Cohen has been pushing for the e-commerce giant to increase its share buyback program. More: - Cohen built up his stake in Alibaba in the second half of 2022.
- Cohen is often referred to as the meme-stock king after leading the rally for GameStop and other companies in early 2021.
- According to sources, Cohen reached out to Alibaba’s board in August, saying that the company’s shares were undervalued.
- Cohen believes Alibaba can achieve double-digit sales and nearly 20% free-cash-flow growth over the next five years.
- Alibaba stock peaked at over $300 in late 2020; it closed at $117.01 on Friday.
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The trial of the class action lawsuit over Elon Musk’s 2018 tweet about taking the EV company private at $420 a share starts this week. Investor Glen Littleton sued Tesla, Musk, and members of Tesla’s board at the time, claiming Musk’s tweets were false and cost investors billions by inducing volatility for the stock. More: - On Aug. 7, 2018, Musk tweeted, “Am considering taking Tesla private at $420. Funding secured.” This indicated he planned to take the company private.
- Tesla stock went up 11% on that day, but it lost all those gains and more as investors started to question the deal.
- Musk claims he was considering taking Tesla private and believed he had the financial backing of Saudi Arabia’s sovereign-wealth fund.
- The deal, which would have valued Tesla at roughly $72B, did not occur.
- In-person jury selection for the case begins on Tuesday.
- The trial is expected to run through Feb. 1.
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Chinese ride-hailing firm Didi Global has gotten approval from China’s cybersecurity regulator to resume accepting new users to its platform. In 2021, Chinese authorities, while conducting a cybersecurity review of the company, ordered app stores to pull the Didi app from their platforms. More: - In a post on the company’s Weibo social media account, Didi said it has rectified the security issues the regulator found during the review.
- Didi noted it would take measures to protect user data and safeguard national security.
- In June, Didi delisted from the New York Stock Exchange as part of actions to resolve the ongoing cybersecurity probe.
- In July, the Cyberspace Administration of China fined Didi about $1.2B, saying the company ignored China’s cybersecurity, data security, and personal information privacy laws.
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Alibaba is offering a new “buy now, pay later” payment option to its European customers. The feature would allow shoppers to receive their items before making a payment. Alibaba hopes the move will increase international sales as domestic sales slow. More: - Alibaba is partnering with Splitit Payments to provide the delayed-payment option to AliExpress customers.
- Splitit will provide a “pay after delivery” payment option, allowing customers to pay for the purchases in installments via their credit cards.
- The new feature will be available in Germany, Spain, and France initially and could be rolled out to other markets later.
- Splitit is based in Atlanta and listed in Australia; shares of the company rose 22% on Monday following news of the partnership with Alibaba.
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- U.S. Treasury Secretary Janet Yellen kicked off a 10-day visit to Africa this week. Yellen will visit Senegal, Zambia, and South Africa to entice the nations away from China’s influence.
- U.S. medical residents are joining unions at an increased pace, demanding higher pay and better working conditions.
- Italian authorities arrested the country’s most wanted Sicilian mafia boss, Matteo Messina Denaro.
- Electric vehicles made up 10% of all vehicles sold globally in 2022, its largest jump in market share to date.
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 |  | Vanessa Omeokachie is a writer for Inside.com; she writes the daily Inside Business newsletter. Her interests include finance, technology, and entrepreneurship. In her free time, she enjoys reading, hiking, attending concerts and music festivals, traveling, and exploring. Connect with her on Twitter @VanessaOmeo or on LinkedIn. |   | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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