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5 tech losers that can’t wait for 2021 to end

December 16, 2021, 6:38 PM UTC

Folklore tells that the Grinch and Ebenezer Scrooge eventually see the light of Christmas, reformed by the joy and merriment of the holiday.

But first, they’re big ol’ grouchy grouches.

As Data Sheet’s 2021 comes to a close (we’ll be on a two-week hiatus starting Monday), it’s time to look back on the year that was by picking winners and losers.

Today, we deliver coal to five companies and groups that took big lumps in 2021. Tomorrow, we’ll celebrate those that rocked it in 2021 (or, in one case, somehow survived it).

The people behind algorithms

The leaked Facebook documents known as the Facebook Files illustrated what we all knew, but hadn’t quite seen in such detail: algorithms that are manipulated, weaponized, and monetized by all manner of tech platforms for all manner of ills (Facebook and Instagram chief among the offenders).

European policymakers are so alarmed by algorithm misuse that they want access to the underlying systems used by tech companies so they can review them. American lawmakers are creating fake Instagram accounts to prove how algorithms push harmful content on kids (even if Congress is nowhere near coming up with solutions to fix the problem).

Sure, tech companies are promising a future where users gain more control over algorithms. But after so many broken promises, no one really believes them. 

Chinese tech companies

President Xi Jinping is on a mission to rein in China’s tech sector. And what Xi wants, Xi gets.

Chinese regulators picked up where they left off from last November’s suspension of Ant Group’s IPO. They handed down a $2.8 billion antitrust fine against e-commerce giant Alibaba, ordered ride-hailing app DiDi to stop registering new users, imposed strict limits on video game usage, and instituted restrictive new privacy regulations.

Xi is perfectly willing to kill China’s golden goose to preserve Communist Party authority. 

Peloton

After riding a pandemic-fueled wave of sales in 2020, Peloton face-planted over the handlebars this year.

The laundry list of issues included shipping problems, slumping sales, wobbly management, and claims of unequal pay by Black employees. And that’s all before Mr. Big croaked via a Peloton bike on the Sex in the City revival (okay, not really).

CEO John Foley admitted the company had become “a little undisciplined,” requiring a “back to the basics” approach, according to Insider. Even still, Peloton’s stock is down 73% for the year, almost back to pre-pandemic levels.

Robinhood

This year stonk for Robinhood.

Heralded as a potentially major Wall Street disruptor, investment service Robinhood seemed to make everyone mad in 2021. Its own customers fumed when Robinhood halted trading of GameStop and other meme stocks, the U.S. Securities and Exchange Commission chairman bashed the company’s revenue model, and investors fretted over anemic earnings that followed a volatile initial public offering

The result: Robinhood’s stock has precipitously declined since a post-IPO bump, trading at roughly half the price of its debut.

Organized labor

The decisive defeat of a closely-watched unionization vote at Amazon’s Bessemer, Ala., warehouse halted any momentum in labor’s drive to take on the nation’s largest tech companies. While federal labor officials in November ordered a re-vote, citing Amazon’s pre-vote tactics, it appears unlikely that supporters will overturn the 70% to 30% defeat.

Another blow came in New York, where union organizers withdrew a union vote request planned for an Amazon warehouse on Long Island. The Alphabet Workers Union also has failed to gain much traction, still representing a tiny fraction of employees at Google.

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Jacob Carpenter

NEWSWORTHY

Reddit to the SEC: Ask me anything. Social media platform Reddit said on Wednesday that it had filed confidentially with the U.S. Securities and Exchange Commission to go public, aiming to capitalize on its growing popularity and ride the momentum of a wave of IPOs. Reddit executives have not yet settled on a proposed price range or the number of shares that will be issued. The filing triggers an SEC review process. Reddit reached a $10 billion valuation following a funding round this summer. Reddit’s role in the meme stock craze brought in new users this year, helping it reach $100 million in quarterly ad revenue for the first time.

Apple joins the growing crowd. Apple on Wednesday scrapped its plans to bring employees back into offices starting in February, as it had planned, adding to the list of companies delaying their return-to-office amid a rise in COVID cases and uncertainty about the Omicron variant. Apple CEO Tim Cook notified staff members that the company will reopen offices at a “date yet to be determined.” It’s the fifth time since this summer that Apple has pushed back its return-to-office plans. Google, Facebook parent Meta, Ford, and other large multinational companies made similar calls in the past several days.

The international chip race heats up. The Indian government announced plans Wednesday to spend $10.2 billion to prop up semiconductor manufacturing in the world’s second-largest country, The Associated Press reported. The investment comes as tech companies across the globe struggle with a COVID-induced chip shortage disrupting major supply chains. The plan pales in comparison to legislation proposed by U.S. lawmakers to spend $52 billion on boosting domestic semiconductor manufacturing, but Indian leaders are moving ahead with the spending while legislation languishes in Congress.

What’s in a name? The tax preparation company H&R Block filed a trademark infringement lawsuit Thursday against Block, which changed its name from Square earlier this month, CNBC reported. H&R Block CEO Jeff Jones called the lawsuit “an important effort to prevent consumer confusion” between his legacy company and the newer Jack Dorsey venture. In announcing the name change, Dorsey said Block better signifies his company’s foray into blockchain and other ventures beyond its well-known Square payment product.

FOOD FOR THOUGHT

Two-day delivery in Bad Axe. Not merely satisfied with dominating urban and suburban markets, Amazon is expanding deeper into rural America with its warehouse and delivery business, Insider reported Thursday. The company now operates at least 34 smaller delivery hubs in so-called “rural and super rural” areas, where customers typically receive Amazon products via the U.S. Postal Service or UPS. Some of those hubs are in well-known areas, such as Wichita, Kan., and Albuquerque, N.M., but several serve sparsely populated regions (a gold star if you’ve ever heard of Conklin, N.Y.)

From the article:

The new expansion is mainly designed to help Amazon reach a broader audience, as rural and super rural areas have traditionally been underserved by the company, these people said. It also helps Amazon become less reliant on UPS and USPS, as its own delivery partners and Flex drivers are available in those areas, the people added.

Marc Wulfraat, president of supply chain consulting firm MWPVL, told Insider that running delivery stations in rural areas is costly and likely a "money-losing proposition." Still, he said it's worth the investment because Amazon can control the entire supply chain, instead of having to rely on a delivery schedule "dictated by another partner."

"This way they can promise 2-day service for Amazon Prime coast to coast and not just to select zip codes that are in urban/suburban markets," Wulfraat said.

IN CASE YOU MISSED IT

Elon Musk has sold nearly 12 million shares of Tesla in the past six weeks—and he may have cashed out at the top, by Declan Harty

Sotheby’s posted its highest-grossing year ever, boosted by millennials and NFTs, by Yvonne Lau

Video shows Better.com CEO telling employees, ‘You will not be allowed to fail twice’, by Jessica Mathews

Can a community of basketball fanatics run an NBA team as a DAO?, by Aron Solomon

Russian central bank looks to ban crypto investments, by Chris Morris

Robinhood to launch crypto gifting feature, by Chris Morris

BEFORE YOU GO

What’s in a name, part 2. At some point, former Google employees Benjamin Darnell, Spencer Kimball, and Peter Mattis had to settle on a moniker for their new database software company. What did these dudes come up with? Cockroach Labs. You read that right. While their competitors landed on basic, buzzy-sounding names—DataStax, MongoDB, MariaDB—this trio decided to tie their company brand to the unofficial state insect of Florida. And hey, they’re making it work. Cockroach Labs just finished a funding round with a $5 billion valuation, double its end-of-2020 mark, TechCrunch reported. Like their namesake, may Cockroach Labs live forever.

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