Daily Archives: June 3, 2016

Free Speech Isn’t Facebook’s Job

By Noah Feldman – Here’s why: These social media giants are private actors, not the state.

They can’t be trusted to protect free speech, nor is it their obligation, whether in Europe or the U.S. Those of us who care about preserving free speech need to keep that in mind, while maintaining other venues for free speech that aren’t controlled by private companies.

The mistake is to think that media platforms are a true public square, where (in the U.S.) the government can’t regulate based on conduct unless it has a very, very strong reason to do so. They aren’t, no matter how cleverly they may initially have presented themselves as neutral platforms for everybody’s speech.

Make no mistake, these publicly traded companies have a fiduciary duty to their shareholders — not to their users.

The upshot is that we need to keep an eye on free speech by assuring that there are vehicles for self-expression that aren’t completely controlled by private actors.

This is a long-term project, one that won’t go away in our lifetimes. more> http://goo.gl/oEwTlF

Michael Dell Bought His Company Too Cheaply

By Matt Levine – Appraisal is a weird bit of corporate law, because it undermines the usual nice clean process of deciding how much a stock is worth by just seeing what someone will pay for it.

In 2012, with the “market not getting” Dell and valuing it at just $9.35 a share, Michael Dell rounded up some financing sources and offered to pay about $12 or so for it. Eventually. Michael Dell and his private-equity backers at Silver Lake ended up paying about $13.75 a share ($13.96 counting some dividends) in a $25 billion deal that they signed in February 2013 and closed in October of that year.

Then some shareholders sued in an appraisal lawsuit, arguing that the $13.75 was too low and that a Delaware court should award them more money.

On Tuesday (May 31) Delaware Vice Chancellor Travis Laster ruled on the remaining appraisal claims and found, in a 114-page opinion, that Dell was really worth $17.62 a share, so everyone who successfully sued — and managed to jump through the correct hoops — is entitled to an extra $3.87 a share, with interest.

To get there, first of all, Vice Chancellor Laster had to disregard the market price for the stock, which was $9.35 when the deal was first proposed, $13.42 when it was officially signed, and never closed above $14.51 afterward.

The market price didn’t reflect fair value, not because the market didn’t have the relevant information, but because it weighted it incorrectly. Analysts had a myopic “focus on short-term, quarter-by-quarter results,” and couldn’t understand the long-term value of the company’s plan. more> http://goo.gl/vISqXO

Updates from GE

Up In The Air: The World’s Hardest-Working Jet Engine Has Logged 91,000 Years in Flight
By Tomas Kellner – How long is 91,000 years? Go back that far in the history of the earth and the Sahara was a wet and fertile plateau.

It’s also the cumulative amount of time that the world’s most hardest-working jet engine, the CFM56, has spent in the air since its first commercial flight on a DC-8 Super 70 passenger jet in 1981.

CFM International, at the time a brand-new joint venture between GE Aviation and Safran Aircraft Engines of France, developed the engine in the 1970s. Since then, the company has delivered almost 30,000 of the engines to more than 550 airlines, with plans to add 1,700 more this year.

Today they power tens of thousands of Boeing 737 and Airbus A320 single-aisle passenger jets, the kind that ferry the majority of fliers on flights shorter than four hours.

“There are more than 2,400 CFM56-powered aircraft in the air at any given time,” says Jean-Paul Ebanga, CFM’s president and CEO.

The engine also essentially gave wings to discount airlines, which keep tight flight schedules. “The engines are ready to fire up again before the flight attendants can remove all of the newspapers and cookie wrappers from the previous flights,” says GE Aviation spokesman Rick Kennedy.

Back in 1974, CFM was essentially an ambitious startup. GE Aviation was primarily known for military engines that powered planes like the F-4 Phantom fighter jet and the B-1 Lancer strategic bomber. Companies like Pratt & Whitney and Rolls-Royce dominated the civilian space.

But Safran, which supplied GE with engine parts, sensed an opportunity. The company wanted to build a powerful but also relatively light and quiet engine that could crack the single-aisle market — and the Lancer’s GE F101 engine Lancer had all the right stuff.

After securing the necessary nods from none other than Presidents Richard Nixon and Georges Pompidou — jet engines being a matter of national security — GE and Safran engineers were allowed to proceed.

They used the core of the Lancer engine — the compressor, combustor and high-pressure turbine — to design the CFM56. The partners got the engine certified in 1974 and it flew for the first time in 1977, when it replaced one of four Pratt & Whitney engines on the U.S. Air Force’s McDonnell Douglas YC-15. more> http://goo.gl/evryQz

Helicopter Money: A Disguise For debt Financing Funded By Short-Term Borrowing

By John Kay – No one really envisages that money would be dropped from a helicopter.

What they have in mind is that in a recession government would increase expenditure in a manner that would directly stimulate private sector spending.

The ideal format in which to undertake the borrowing required is bank notes, which pay no interest and need never be repaid. That is why the idea of dropping currency from a helicopter has appeal.

Proponents of helicopter money seem to think government borrowing undertaken in this way does not really count — whether because it is irredeemable, and not really anyone’s liability; or because it is channelled through the central bank.

The so-called Maastricht figure for EU government indebtedness, collated by the European Commission, does not consolidate the balance sheets of the zone’s central banks.

The mystery of all this arises from the belief that central banks can never be insolvent because they can always print money and that bank notes are not exchangeable for anything but another bank note. more> https://goo.gl/g3aKj0