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00:00:03Live from Singapore now on BBC
00:00:06News, Business Today. The world's
00:00:15world's largest cryptocurrency. Exchange Exchange reopens after a massive
00:00:18massive cyber attack as Binance users
00:00:21users withdraw $3.6 billion worth worth of digital assets. And the
00:00:25the deal rumours are swirling with
00:00:27with reports that chip maker Marvell Marvell Technology is gearing up
00:00:31up to buy Nvidia backed Lumentum.
00:00:39Lumentum. Hello and welcome to Business Business Today. I'm Vandhna Bhan
00:00:43Bhan Binance, the world's largest largest cryptocurrency exchange,
00:00:47exchange, reopened on Sunday after after a record hack last week, with
00:00:50with users rushing to withdraw their
00:00:52their digital assets from the platform.
00:00:54platform. The firm had suspended suspended all transactions in the
00:00:57the wake of the incident, which impacted
00:01:01impacted $6.3 billion worth of digital
00:01:03digital assets. Major organisations, organisations, including the FBI,
00:01:06FBI, have accused North Korea of of being responsible for the cyber
00:01:10cyber attack, which is said to be
00:01:12be the largest hack in history. Our Our Asia business reporter Archana
00:01:15Archana Shukla explains how damaging
00:01:17damaging this hack has been for Binance.
00:01:20Binance. Well, it did test the confidence confidence of the crypto industry.
00:01:23industry. It was the largest hack
00:01:25hack in the history at $6.3 billion
00:01:29billion moved. And you know, it is is somewhat reflective in the withdrawals
00:01:33withdrawals that happened right after
00:01:34after the exchanges resumed trading
00:01:37trading $3.6 billion of net outflow
00:01:39outflow when on Sunday in phases,
00:01:42phases, Binance reopened withdrawals withdrawals and deposits. And that
00:01:45that somewhere shows the concern concern that the customers have.
00:01:49have. You know, it is the largest
00:01:51largest crypto exchange. And if a
00:01:53a hack of this nature can happen, happen, there is anybody's money
00:01:56money safe. It has also heightened heightened some amount of concern
00:01:59concern on the use of artificial artificial intelligence for such
00:02:02such attacks. You know, while you
00:02:05you know, Binance quickly got its
00:02:08its hand around this hack, this incident
00:02:11incident and they moved very swiftly swiftly to assure investors that
00:02:14that they would be bearing all the the losses and the money would be
00:02:18be safe within the crypto exchange.
00:02:20exchange. But it does damage some
00:02:22some bit of confidence in the industry.
00:02:25industry. For now, 95% of the assets
00:02:28assets have been restored, Binance Binance has said, and that the remaining
00:02:31remaining ones that they are still still figuring out how to bring that
00:02:34that back. It also raises questions
00:02:37questions on how did a hack of this this nature manage, you know, was
00:02:40was managed on such a big crypto crypto exchange because it started
00:02:44started with a very ordinary engineers engineers laptop. However, later
00:02:47later Binance said that possibly
00:02:49possibly it was a more complex attack attack where, you know, the attackers
00:02:53attackers actually used softwares
00:02:55softwares to hide some of the digital, digital, some of their digital tracks,
00:02:58tracks, which made it a bit difficult
00:03:00difficult to trace how this was done.
00:03:03done. But it for now, about 90% of
00:03:05of the assets are back. The crypto
00:03:08crypto exchange is back into trading trading with withdrawals and deposits.
00:03:12deposits. And Binance says it would would be covering all the losses.
00:03:16losses. Now following on from that that cyber hack, Bitcoin payment
00:03:19payment software, BTC Pay is warning warning operators to shut down their
00:03:23their systems after reports that that hackers have been draining funds
00:03:27funds from online wallets. This latest latest attack adds fresh concerns
00:03:30concerns about security across the the cryptocurrency industry. BTC
00:03:34BTC Pay says it's investigating the the attacks and has not yet revealed
00:03:38revealed how many users may have have been affected or how much money
00:03:42money has been lost. Now US chip
00:03:43chip maker Marvell has reportedly
00:03:46reportedly bid for laser supplier
00:03:48supplier Lumentum in a deal valued valued at $83 billion. While the
00:03:52the two companies have yet to confirm confirm the news, there has been
00:03:56been reaction in their shares, with
00:03:58with Marvell stock falling 10%. Last
00:04:00Last Friday. A deal would give Marvell,
00:04:03Marvell, which buys lasers from Lumentum Lumentum more direct access to a
00:04:07a major supplier. It would also bring
00:04:09bring together two AI investor favourites favourites as strong demand has sent
00:04:13sent both companies sales and stocks stocks soaring this year. Well, for
00:04:16for more analysis on this, let's let's talk to Kirk Yang, founder
00:04:20founder and chairman of Kirkland Kirkland Capital. Really great to
00:04:23to be able to speak with you about about this, Kirk. And like we mentioned
00:04:27mentioned there, I mean Marvell is is already buying from Lumentum.
00:04:30Lumentum. So really what's the thinking
00:04:32thinking behind this deal to purchase
00:04:34purchase it altogether? Sure. Marvell
00:04:36Marvell has seen a trend for data
00:04:39data centre to go from copper to
00:04:42to laser to make the speed faster. faster. If you look at data centre,
00:04:46centre, the bottleneck today is not
00:04:49not CPU, GPU or even the high bandwidth bandwidth memory is the connection
00:04:52connection between servers and data
00:04:54data centre. That's why, as you mentioned,
00:04:57mentioned, Lumentum does fibre optics, optics, laser type of work. They
00:05:00They already work together. However, However, I think Marvell wants to
00:05:03to control the entire value chain, chain, so it's safer if they can
00:05:07can buy the company to be part of
00:05:09of Marvell because Lumentum makes makes optical components, whereas
00:05:13whereas under tight supply, even
00:05:15even the CEO said they are fully
00:05:19fully occupied fully capacity until
00:05:21until year 2029. That's why I think
00:05:23think to secure the supply of the
00:05:25the products, it's better to own
00:05:27own Lumentum outright. In addition
00:05:31addition Marvell is a leader DSP.
00:05:33DSP. They can also co-design a lot
00:05:35lot of products into DSP products products with luminous optical components
00:05:39components so they can provide a
00:05:40a better solution to their customers customers such as Google, Amazon
00:05:44Amazon and Microsoft to be competitive competitive against Broadcom, for
00:05:47for example. And Wall Street didn't
00:05:50didn't have a particularly good reaction reaction to this news. Why do you
00:05:53you think investors pulled back from
00:05:56from this? Sure. I used to be a sales
00:05:59sales analyst at Goldman Sachs and and Citi. That's one thing I do is
00:06:02is look at the potential share dilution.
00:06:04dilution. If you look at the Marvell
00:06:07Marvell the market cap is 176 billion.
00:06:11billion. Lumentum is about 76 billion. billion. So Marvell is only about
00:06:14about 2 to 3 times larger than Lumentum.
00:06:18Lumentum. In addition, Marvell has has only about $4 billion of cash
00:06:21cash on the balance sheet. That's
00:06:23That's not enough to buy Lumentum, Lumentum, so very likely Marvell
00:06:26Marvell will have to issue new shares
00:06:29shares to cause a dilution. I think think that's the biggest concern.
00:06:32concern. I think my view is doing doing the right thing by acquiring
00:06:35acquiring the technology to secure secure the supply. But from a share
00:06:39share price perspective, the major
00:06:42major dilution would be an issue. issue. Obviously this week we should
00:06:45should hear more confirmation, more more news from the company. When
00:06:48When confirmed. One concern is the
00:06:51the dilution. The other concern is is the premium that might need to
00:06:54to pay probably 20 or 30% premium. premium. So I think valuation perspective
00:06:58perspective that's the concern why why the share price went down after
00:07:01after the announcement of the potential. potential. Kirk really appreciate appreciate you putting all of that
00:07:05that into context for us. Kirk Yang.
00:07:07Yang. Now thousands of Virgin Media
00:07:09Media O2 staff face redundancy risk risk as the telecoms firm looks to
00:07:13to save money in the face of billions billions of pounds of debt and tougher
00:07:17tougher competition. The broadband broadband provider has not finalised
00:07:20finalised the number of roles to
00:07:21to be cut, but it is likely a sizeable
00:07:25sizeable chunk of its 16,000 workforce.
00:07:27workforce. That is according to what what the BBC understands. Virgin
00:07:30Virgin Media O2 has billions of debt debt on its balance sheet and is
00:07:33is tackling competition from both both smaller providers as well as
00:07:37as giants like BT, which has agreed agreed a deal to acquire rival TalkTalk,
00:07:41TalkTalk, a move which Virgin Media
00:07:44Media O2 has firmly opposed. Now Now Starbucks reported stronger than
00:07:48than expected comparable sales in in its most recent quarter and said
00:07:52said it would resume share buybacks buybacks as it turnaround plan to
00:07:55to improve the coffee chains performance performance reached its two year
00:07:59year anniversary. However, the coffee coffee chains latest quarterly revenue
00:08:03revenue figures and outlook for 2027
00:08:052027 fell short of forecasts as international
00:08:08international sales continue to trail trail domestic US sales. Well, let's
00:08:11let's get more with Heather Herzog,
00:08:15Herzog, executive director of research, research, at Growmark Institute. Institute. Heather, really great
00:08:18great to be able to speak to you
00:08:21you here. What is the strategy that
00:08:23that is working so well for Starbucks Starbucks domestically in the US?
00:08:27US? Well, they really had a massive
00:08:30massive turnaround in terms of operations. operations. So the new CEO came in
00:08:33in cut and slashed a lot of the stores, stores, which is sad for some of
00:08:37of the communities that are now missing
00:08:38missing a Starbucks. However, a real
00:08:42real focus on staffing and really really doubling down on a smaller
00:08:45smaller menu with more hero products products such as these, you know,
00:08:49know, drink mixers that my kids tend
00:08:50tend to love. This is what is really
00:08:53really driving the traffic into the
00:08:55the stores now. Global comp was up
00:08:59up significantly around 6.2%. Revenues Revenues were up about 2%. However,
00:09:03However, when you parse that out
00:09:05out and you look specifically at
00:09:07at China, the guidance fell to about
00:09:11about 1% versus 1.4%. And North America America is also slowing down. So
00:09:15So that is something we have to look look at when they start talking about
00:09:18about guidance. That's when we have
00:09:20have to, as investors become more more aware. What are you hoping to
00:09:24to see then from Starbucks in the the years ahead, especially in terms
00:09:28terms of how to bump up those sales
00:09:32sales in international audiences audiences like China? You know, selfishly,
00:09:35selfishly, I would like them to add add more stores because we're missing
00:09:38missing our Starbucks. However, when
00:09:40when it comes to international, they
00:09:43they really need to take almost the
00:09:45the same sort of operational guidance guidance that they applied to here
00:09:48here in North America and double double down on the hero drinks. That
00:09:52That is what is bringing in the store store traffic, especially with the
00:09:56the younger generations. When you you have these drinks that are going
00:10:00going viral on social media, kids kids want to come in. That's what's
00:10:03what's bringing that traffic in. in. And they remodelled a lot of
00:10:06of the stores. So it feels a lot lot different within the stores as
00:10:09as well. Look, we're also going into into silly Season Christmas. That's
00:10:13That's a hit time of the year for
00:10:15for Starbucks isn't it? I mean apart
00:10:18apart from the drinks they also have
00:10:20have a product and you see lines lines out the door for these mugs
00:10:24mugs that they sell or certain drink drink vessels that people put their
00:10:27their drinks in. It is really hitting
00:10:30hitting a mark. And I think again,
00:10:32again, it's because of that pared
00:10:34pared down focus on what is going going to sell and what is not. Instead
00:10:37Instead of having a huge skew mix, mix, they really just focus on very
00:10:41very specific product that is resonating resonating with the customers. And
00:10:44And if they can do that internationally, internationally, it'll be better better for them. You'll see a lot
00:10:47lot more results going into the next next couple quarters, certainly,
00:10:51certainly, and into the next couple couple of years. Heather, always always great to get your analysis
00:10:54analysis there. Executive director director of research at Parsons Gromek
00:10:57Gromek Institute. That's it from from Business Today. Do stay with with us. I'll be back at the top
00:11:01top of the hour with News Day. MUSIC
00:14:31MUSIC
00:14:40Being able to inspire someone
00:14:42is always the greatest joy. I saw
00:14:45saw Souza one time at the Grammys, Grammys, and she said that she studied studied some of my songs for their
00:14:49their songwriting, and I thought thought that that was the biggest
00:14:51biggest compliment ever. My support
00:14:53support for Ukraine is unwavering.
00:14:57unwavering. It is 100% when the big
00:14:59big names talk, they talk to us.
00:15:03us. And on BBC News, a round up of of the day's sporting action plus
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00:15:09and original journalism. BBC Sport.
00:15:19Sport. Hello there, I'm Olly Foster Foster with the latest sports headlines
00:15:22headlines here on BBC News. The boy
00:15:24boy racer from Bologna Antonelli
00:15:27Antonelli is Formula One's youngest youngest world champion, a rare win
00:15:31win at Anfield lifts the champions
00:15:32champions Arsenal to the top of the the Premier League, and Hibs come
00:15:36come out on top in the Edinburgh Edinburgh derby to reach the Scottish
00:15:39Scottish League Cup final.
00:15:56Hello there Kimi Antonelli is Formula One's youngest world champion champion and he