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NEW YORK (AP) — U.S. stocks made small gains Friday morning as banks and consumer products companies traded higher. Beauty products retailer Ulta jumped after it reported strong first-quarter results and raised its projections for the year. Stocks are closing in on their best week since the beginning of March.
KEEPING SCORE: The Dow Jones industrial average rose 29 points, or 0.2 percent, to 17,846 as of 10:16 a.m. Eastern time. The Standard & Poor’s 500 index added 6 points, or 0.3 percent, to 2,095. The Nasdaq composite index picked up 24 points, or 0.5 percent, to 4,925. After big gains earlier in the week, stocks are on pace for their biggest weekly advance since the week that started on Feb. 29.
REVISED: The Commerce Department said the U.S. economy was a bit stronger in the first quarter than it initially believed. The agency said the national gross domestic product grew 0.8 percent in the first three months of the year, above its original estimate of 0.5 percent. The department said the housing market did better than it thought while business investment and trade wasn’t as bad. Experts think economic growth will pick up in the current quarter and rise to around 2 percent.
CONSUMER CLIMB: Consumer stocks led the way in the early going. Ulta Salon, Cosmetics and Fragrance posted strong first-quarter results and raised its estimates for the year. Its stock advanced $20.74, or 9.7 percent, to $234.43.
VANDA SURGES: Vanda Pharmaceuticals climbed after the Food and Drug administration granted a new marketing approval for its schizophrenia drug Fanapt. The company said it could get additional marketing exclusivity for Fanapt as a result. That could bolster sales of the drug, which was originally approved in 2009. Vanda stock rose 89 cents, or 9.4 percent, to $10.38.
HEAVY METAL: Machinery maker Terex dropped after Chinese heavy equipment maker Zoomlion abandoned its effort to buy the company. It said the sides had failed to reach a deal after months of talks. Zoomlion offered to buy Terex at the start of the year, after Terex accepted an offer from Finland’s Konecranes. Terex backed out of that agreement and said it will sell its crane business to Konecranes instead. Terex stock lost $4.15, or 17.1 percent, to $20.18.
A CLOSE LOOK: Scientific equipment maker Thermo Fisher said it will buy electron microscope maker FEI for $107.50 per share in cash, or about $4.2 billion. The deal comes about two months after Thermo Fisher paid $1.3 billion to buy Affymetrix, a company that makes equipment to analyze genetic codes. FEI stock climbed $12.90, or 13.6 percent, to $107.48 and Thermo Fisher declined 27 cents to $150.93.
FED IN FOCUS: Federal Reserve Chair Janet Yellen is scheduled to discuss interest rates at a Harvard University appearance Friday afternoon, and investors will review her comments closely. The Fed has said it could raise interest rates again in June if economic conditions keep improving, but investors think the central bank is more likely to raise rates in July.
OVERSEAS: Germany’s DAX was up 0.1 percent while France’s CAC 40 gave up 0.1 percent, as did Britain’s FTSE 100. Japan’s benchmark Nikkei 225 index added 0.4 percent and South Korea’s Kospi gained 0.6 percent. Hong Kong’s Hang Seng climbed 0.9 percent.
ENERGY: Benchmark U.S. crude oil lost 40 cents to $49.08 a barrel in New York. Brent crude, which is used to price international oils, gave up 48 cents, or 1 percent, to $49.69 a barrel in London.
CURRENCIES: Bond prices held steady and the yield on the 10-year U.S. Treasury note remained 1.83 percent. The dollar rose to 109.79 yen from 109.72 yen. The euro dipped to $1.1155 from $1.1191.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at http://bigstory.ap.org/journalist/marley-jay
SHIMA, Japan (AP) — Japanese Prime Minister Shinzo Abe claimed success Friday in winning support for his approach to fighting off a possible economic crisis from fellow leaders of the Group of Seven wealthy nations, despite mounting evidence the formula is failing to yield promised results in Japan.
In meetings at an isolated seaside resort renowned for its crayfish and pearls, Abe appealed for more action to stave off a downturn, insisting that an earlier lack of urgency contributed to the financial crisis of 2008-2009.
Wrapping up the gathering with a sweeping declaration and several additional “action plans,” the leaders acknowledged increasing risks for the global economic outlook, including terrorism, legions of displaced people, and conflicts that “pose a serious threat to the existing rule-based international order.”
But they said their countries had strengthened policies to avoid relapsing into crisis.
Attention swiftly shifted from the G-7 finale as Abe and U.S. President Barack Obama traveled to Hiroshima, where Obama became the first sitting American president to visit the city devastated by a U.S. atomic bomb in 1945 in the closing days of World War II.
Abe said the commitment by the leaders to “use all policy tools — monetary, fiscal and structural” was an endorsement of his own “Abenomics” three-pronged strategy for reviving Japan’s sluggish growth.
“We agreed to mobilize all our resources and launch three ‘arrows’ of monetary, fiscal and structural reform measures,” Abe said. “We will be launching Abenomics to the world.”
“In order to avoid risks of the world economy falling into crisis, Japan will also do its utmost to cooperate and take leadership, mobilizing all possible resources, and boost the engine of Abenomics,” he said.
More than three years after Abe took office vowing to “Bring Japan Back!” from more than two decades of economic doldrums, his formula has yet to deliver the desired results: rising wages, business investment and a sustained recovery that places the world’s third-largest economy into a “virtuous cycle.”
After a slight uptick in growth earlier this year, economists say conditions in Japan have deteriorated, partly due to the slowdown in China and other emerging economies.
But backing from his G-7 counterparts may give Abe a boost as his ruling Liberal Democratic Party heads into a July parliamentary election. It also could embolden him to put off an unpopular increase in the national sales tax, to 10 percent from 8 percent.
“Abenomics is not a failure at all,” Abe told reporters, declaring he would “rev up the engine of Abenomics to the highest level possible.”
While they did not formally concur with Abe that the world is poised on the brink of crisis, the G-7 leaders did claim a special responsibility for beefing up their own economic policies.
Christine Lagarde, head of the International Monetary Fund, also said the world was “no longer in a 2008 moment.”
“We are out of the crisis but we are suffering the legacy of the crisis,” Lagarde said, pointing to bad loans on the books of companies and banks as one of the biggest causes of concern.
But she said, “Many countries can do quite a lot and some more than they are currently doing.”
The G-7 summit brought together the leaders of Britain, Canada, France, Germany, Italy, Japan and the United States. Leaders of major international organizations and a select group of developing countries attended “outreach” sessions held after the G-7 summit meetings ended.
The group’s discussions addressed a wide range of issues, including terrorism and other risks to peace and global growth, the massive flows of refugees and migrants to Europe to escape conflict and poverty at home, global threats to public health, cybercrime, corruption and efforts to help girls and women.
The leaders also expressed unease over territorial tensions in the East and South China seas. The declaration does not specifically mention China and its expansion into disputed areas, but calls for respect for freedom of navigation and overflights and for resolving conflicts peacefully through law.
But the main focus was on economic challenges.
In their statement, the leaders denounced protectionism and trade barriers and noted the negative impact of overcapacity in some industries. One of the biggest headaches, Abe said, was a glut in China’s steel industry.
“It’s a root cause distorting the market, and unless it’s fundamentally resolved, the problem persists,” he said.
The group said Britain’s possible exit from the European Union, depending on the outcome of a June 23 vote, is one of many potential shocks for the global economy.
British Prime Minister David Cameron said staying in the EU is “all about Britain’s national interest.”
“The EU makes us better off. Better off in terms of jobs, better off in terms of growth. Better off in terms of investment by other countries into our economy that creates the growth and the jobs and the livelihoods that we need,” Cameron said.
Associated Press writers Miki Toda and Aritz Parra contributed to this report. Kurtenbach reported from Ise, Japan.
BEIJING (AP) — General Motors Co.‘s main Chinese joint venture is recalling 2.2 million cars to deal with insufficient corrosion resistance on crankcase valves.
The recall was ordered after Shanghai-GM received complaints about engine damage, according to the country’s product quality regulator. The automaker is a joint venture between GM and state-owned Shanghai Automotive Industries Corp.
The recall applies to Buick Excelle sedans and Chevrolet Cruzes, Epicas and Aveos. The product quality agency said GM will replace affected valves for free.
Sales by GM and its Chinese partners of GM-brand vehicles rose 5.2 percent last year to 3.6 million units.
SHANGHAI (AP) — In 2011, a respected anti-counterfeiting coalition in Washington escalated its fight against the Chinese e-commerce giant Alibaba, saying that its websites served as a 24-hour market “for counterfeiters and pirates” and should be blacklisted.
Fast forward to 2016. That lobbying group, the International Anti-Counterfeiting Coalition, called Alibaba “one of our strongest partners,” welcomed it as a member and invited its founder, Jack Ma, to speak at its spring conference.
Alibaba won — and ultimately lost— a friend in Washington using legal methods long deployed by corporate America: money and influence. A month after it became the first e-commerce company to join the IACC, Alibaba got kicked out.
An Associated Press analysis of public filings shows that as personal and financial ties between Alibaba and the coalition deepened, the group’s public comments shifted from criticism to praise, even as others — including the U.S. and Chinese governments — took a harder line.
Those who believe Alibaba intentionally profits from the sale of fakes fear the company could lobby its way out of having to make meaningful changes. That, critics say, would benefit the multibillion-dollar counterfeiting industry, which costs U.S. companies money, can imperil consumers’ safety and feeds an underground money-laundering industry. Alibaba is at the forefront of China’s rise on the global stage, and the anxiety and suspicion that have greeted the company abroad are, to some extent, anxiety and suspicion about China itself.
Alibaba was among the first Chinese companies to play politics seriously inside the beltway, and may not have realized how even the smallest misstep can backfire, said Sean Miner, China program manager for the Peterson Institute for International Economics.
“Their reputation has preceded them,” he said. “Some Americans might think, ‘Why don’t you go home and fix the problems first?‘”
When Robert Barchiesi, a gruff-talking former New York cop, took over the IACC, the coalition singled out Alibaba and its Taobao platform for facilitating the large-scale sale of fakes. The U.S. Trade Representative placed Taobao on a blacklist in 2008.
Alibaba responded by ramping up its game in Washington. In 2012, Alibaba’s lobbying expenditures shot up from $100,000 a year to $461,000, and has remained fairly steady since, according to Opensecrets.org. It has hired several well-connected people, including a former general counsel for the U.S. Trade Representative and a former White House senior director for intellectual property enforcement coordination.
“Alibaba has engaged in a thoughtful, customer-focused dialogue with policy makers,” said Eric Pelletier, head of international government affairs for Alibaba Group.
By the end of 2012, Alibaba was off the notorious markets list. The U.S. Trade Representative commended Taobao for its “notable efforts” to work with rights-holders.
The next year, the coalition signed an agreement with Alibaba to expedite removal of counterfeit goods through a program called MarketSafe. The coalition charged its members $12,500 last year to participate.
The coalition had found a way to monetize brands’ frustration with Alibaba’s take-down procedures. Barchiesi’s daughter-in-law, Kathryn Barchiesi, provided “investigative support” for MarketSafe. The coalition says the program is not profitable, but those fees helped the IACC more than double revenues, to $2.6 million, during Robert Barchiesi’s tenure.
Five weeks before Alibaba’s 2014 public offering on the New York Stock Exchange, Barchiesi went on CNBC and deflected attention from Alibaba, saying counterfeiting on Alibaba’s sites was a “microcosm of a bigger problem.” He praised the company for working “in good faith” with the coalition.
What Barchiesi didn’t say is that he too would buy shares in Alibaba Group Holding Ltd.
He bought shares on that first wild day of trading, at $91 each, according to the coalition, which says his holdings represent a “small percentage” of his portfolio. Alibaba’s shares shot up 38 percent in one day. It was the largest IPO in history, catapulting Ma to near-mythic status.
By 2015, the coalition had stopped complaining about Alibaba to U.S. officials, focusing instead on the “true cooperation and partnership” they enjoyed through MarketSafe. But neither the U.S. nor China was convinced the company had turned a corner.
In January 2015, Chinese regulators published a report stating that just 37 percent of the goods purchased on Taobao were genuine. Alibaba disputed the accuracy of the report, which disappeared from the Chinese internet.
Meanwhile, the American Apparel & Footwear Association, which represents over 1,000 brands, urged U.S. authorities to put Taobao back on the counterfeiting blacklist. “The slow pace has convinced us that Alibaba is either not capable of or interested in addressing the problem,” the group told U.S. authorities.
In December, the U.S. Trade Representative reported that Alibaba’s platforms had been “widely criticized” for selling large quantities of counterfeit goods. It urged Alibaba to “enhance cooperation.”
The next month, Matthew Bassiur, a longtime friend of Barchiesi’s with deep ties to the coalition, started work as Alibaba’s chief of global intellectual property enforcement.
The coalition continued to praise Alibaba to U.S. officials and in April welcomed the company as its first e-commerce member.
Members revolted. Michael Kors and Gucci America quit in noisy protest. Tiffany left soon after, citing governance issues.
The coalition suspended Alibaba’s membership category the same day the AP published an investigation revealing Barchiesi’s Alibaba stock ownership. The coalition’s board vowed to commission an independent review.
Ma’s keynote speech at the coalition’s conference was called off; Alibaba’s president spoke instead.
But Ma came to America anyway, and left no doubt that despite its public relations debacle, Alibaba has succeeded in making inroads with Washington.
Reporters spotted him leaving the White House in a crush of black umbrellas last week after a quiet lunch with President Barack Obama.
He pronounced the meeting “very good,” ducked in a waiting car and was gone.
Associated Press reporters Stephen Braun and Josh Lederman in Washington and researcher Fu Ting in Shanghai contributed to this report.
Follow Kinetz on Twitter http://twitter.com/ekinetz and Butler at http://twitter.com/desmondbutler
HONG KONG (AP) — Asian stock markets were mostly higher Friday as investors maintained a cautiously optimistic outlook while they waited for U.S. economic data and remarks by the Fed chief.
KEEPING SCORE: Japan’s benchmark Nikkei 225 index added 0.4 percent to 16,843.73 and South Korea’s Kospi gained 0.2 percent to 1,961.15. Hong Kong’s Hang Seng slipped 0.3 percent to 20,329.79 and the Shanghai Composite Index dipped 0.2 percent to 2,815.72, but Australia’s S&P/ASX 200 rose 0.5 percent to 5,415.90. Benchmarks in Taiwan, New Zealand and Southeast Asia also rose.
FED RATE: Investors will be watching to see what Federal Reserve chair Janet Yellen has to say about monetary policy. She’s scheduled to hold a “conversation” about interest rates with a professor at an event at Harvard University. The Fed has signaled that it will raise rates again at its next meeting in June if economic conditions continue to improve, another step in dialing back loose the loose monetary police that has supported global stock markets.
MARKET INSIGHT: “Yellen’s public comments tonight could give markets good reason to remain cautious,” said Margaret Yang, an analyst at CMC Markets in Singapore. With a number of Fed governors signaling recently that they’re leaning toward favoring a rate hike, “her words will be closely watched by the market for a clearer picture of the market outlook.”
GROWTH OUTLOOK: Markets are also awaiting the latest U.S. quarterly growth figures to get a read on the health of the world’s biggest economy. Analysts expect the second of three estimates of gross domestic product, due out after Asian markets close, will be revised up to an annual 0.8 percent rate in the January-March quarter. That’s higher than the initial 0.5 percent estimate last month. Economists expect growth to rebound to about 2 percent in the current quarter and get stronger as the year progresses.
CHINA CHALLENGE: Stocks in Hong Kong and mainland China struggled after disappointing data from the world’s second-biggest economy. Industrial profits rose 4.2 percent last month compared with the year-ago period, slower than the 11.1 percent increase in March, official data showed. It’s the latest sign of economic weakness in China, where growth slowed last year to a 25-year low of 6.9 percent and is expected to decelerate further this year.
WALL STREET: U.S. stocks barely budged, with the Dow Jones industrial average dipping 0.1 percent to 17,828.29. The Standard & Poor’s 500 index was nearly unchanged at 2,090.10. The Nasdaq composite index added 0.1 percent to 4,901.77.
ENERGY: Benchmark U.S. crude oil slipped lost 31 cents to $49.17 a barrel in electronic trading on the New York Mercantile Exchange. The contract slipped 8 cents to settle at $49.48 a barrel on Thursday. Brent crude, which is used to price international oils, fell 41 cents to $49.76 a barrel in London.
CURRENCIES: The dollar rose to 109.95 yen from 109.70 yen. The euro dipped to $1.1185 from $1.1195.
ISE, Japan (AP) — The latest news on the Group of Seven summit in Japan, where the leaders of the seven advanced economies are meeting for two days (all times local):
The G-7 summit has released an action plan for countering extremist violence to help close what it called “critical gaps” in capacity and international cooperation.
Apart from backing related U.N. resolutions, the plan calls for more information sharing between G-7 countries and with Interpol.
The leaders also endorsed plans to improve border security and aviation security and to tighten controls on financing of violent extremism. That includes cracking down on trading of antiquities and other works of art that sometime fund militancy.
The summit statement cites gaps in the existing operational capabilities and cooperation and stressed the need to address violent extremism.
The G-7 leaders have joined with their counterparts from seven developing countries for talks on how to ensure that economic growth is “inclusive.”
Friday’s meeting at the end of the G-7 summit included the leaders of some of Asia’s poorest countries, such as Bangladesh, Laos and Papua New Guinea. Leaders from two of the region’s fastest growing economies, Vietnam and Indonesia, also participated, as did the heads of major development agencies such as the Asian Development Bank and World Bank. The president of Chad, Idriss Deby, was representing the African Union.
Officials said the talks would focus on women’s empowerment, health and infrastructure and other issues related to global development.
The G-7 leaders have expressed their concern about territorial disputes among Asian countries in the East and South China Seas.
In a communique at the end of their two-day meeting, they emphasized “the fundamental importance of peaceful management and settlement of disputes.”
G-7 member Japan is embroiled in a territorial dispute with China over uninhabited islands in the East China Sea. Japan and the U.S. have also expressed concern about China’s island-building activities in the South China Sea, where several countries have overlapping territorial claims.
A Japanese government spokesman says that Prime Minister Shinzo Abe bid farewell to President Barack Obama at the end of the annual Group of Seven summit meeting, as this will be Obama’s last.
Deputy Chief Cabinet Secretary Hiroshige Seko said Friday that Abe thanked Obama for his contribution to the G-7 during his eight-year-long presidency.
Obama noted that he will still be around for a while and asked their continued friendship, prompting laughs from the others, Seko said. The U.S. president leaves office early next year.
The leaders of the Group of Seven advanced economies have pledged to “collectively tackle” major risks to global growth, including direct political threats to the international order from terrorist attacks, violent extremism and refugee flows.
G-7 leaders wrapped up their annual summit Friday with a declaration that claimed a “special responsibility” for leading international efforts to cope with those challenges.
They committed to a cooperative approach in beefing up policies to stimulate and sustain growth of their sluggish economies with use of flexible spending strategies to create jobs and shore up confidence in uncertain times.
6:30 p.m. Thursday
President Barack Obama says G-7 leaders are focused on the need to accelerate economic growth.
Obama is speaking to reporters after the first day of meetings. He says that the leaders of the G-7 nations are intent on using all of the tools at their disposal to put people back to work and to lift wages.
Obama says there are signs the economy is improving in Europe as it has gotten past the Greek debt crisis.
He says the leaders are also focused on advancing free trade agreements and “pushing back against protectionism.”
Obama says the leaders also touch on key security issues, particularly in the South China Sea and Ukraine. In Ukraine, there has been progress with negotiations, but there has still been too much violence.
The many splendored menu for the G-7 leaders’ working lunch showcases local specialties in keeping with Japan’s effort to pique appetites for its traditional products.
It includes five appetizers and at least 15 vegetables, including burdock root and pickled ginger.
The area where the leaders are meeting is known for its luscious, fat-marbled Matsuzaka beef, which was seared and served atop rice as sushi, along with “nigiri” made of squid, flounder, tuna and egg.
A local sake was complimented by a Chardonnay from central Japan’s Nagano prefecture.
The no-holds-barred effort to promote Japanese cuisine and other products is in full gear at the summit media center, where alongside elegantly presented sushi, noodles and fish, an exhibition features robots and other high technology, including some of the latest mobility devices and electric vehicles.
SHIMA, Japan (AP) — The leaders of the Group of Seven rich economies pledged Friday to “collectively tackle” major risks to global growth, including direct political threats to the international order from terrorist attacks, violent extremism and refugee flows.
Meeting at a seaside resort with expansive views of a scenic bay and emerald-green islands, G-7 leaders wrapped up their annual summit Friday in central Japan claiming a “special responsibility” for leading international efforts to cope with those challenges. They also committed to a cooperative approach in beefing up policies to stimulate and sustain growth of their sluggish economies.
“Weak demand and unaddressed structural problems are the key factors weighing on actual and potential growth,” they said in a declaration. “We have strengthened the resilience of our economies in order to avoid falling into another crisis and to this end commit to reinforce our efforts to address the current economic by taking all appropriate policy responses in a timely manner.”
“We remain committed to ensuring that growth is inclusive and job-rich, benefiting all segments of our societies,” it said.
The wording of the leaders’ declaration glosses over differences on the issue of fiscal stimulus by saying each will take into account “country-specific circumstances” in committing to stronger policies to support their economies. Germany, in particular, has balked at committing to expansionary fiscal policy.
In a nod to such concerns, the communique includes a reference to the need to ensure debt is “on a sustainable path.”
While Japan is moving toward more public spending, and the likely postponement of a sales tax increase next year, to revive faltering growth, its own gross public debt is more than twice the size of its economy.
The G-7 host, Japanese Prime Minister Shinzo Abe appealed to his fellow leaders to act to avert another global crisis, comparing the current global economic situation to conditions just before the 2008 financial crisis.
Vigilance is crucial for averting a relapse, he said: “We learned a lesson that we failed to respond properly because we did not have a firm recognition of the risks.”
President Barack Obama backed Abe’s call, saying it was crucial not just to put people back to work but also raise wages and maintain the momentum of the recovery.
“We’ve all got a lot of work to do and we agreed to continue to focus on making sure that each country, based on its particular needs and capacities, is taking steps to accelerate growth,” Obama said.
G-7 countries denounced protectionism and trade barriers. They also noted the negative impact from overcapacity in some industries and government subsidies and other incentives that tend to make such problems worse.
The annual summit brings together the leaders of Britain, Canada, France, Germany, Italy, Japan and the United States. It is taking place amid extraordinarily tight security around the remote summit venue, with uniformed police standing guard at close intervals on both sides of roads and randomly in forests, rice fields, soccer fields and other locations.
During talks on the sideline of the summit, the U.S., EU and Japan reiterated their determination to reach agreement on various trade agreements meant to expand mutual market access.
In their declaration, the summit leaders cited a possible departure of Britain from the European Union, depending on the outcome of a June 23 vote, as one of many potential shocks for the global economy.
The leaders also expressed concern over territorial tensions in the East and South China seas. The declaration does not mention China and its expansion into disputed areas specifically, but calls for respecting freedom of navigation and of overflight and for resolving conflicts peacefully through law.
The summit declaration also highlighted joint efforts on corruption, cybercrimes, terrorism, global health and migration — which has become a huge headache especially for European nations — as other top priorities.
It said a global response was needed to cope with the surge in refugees, migrants and other displaced people to its highest level since World War II and committed to increasing assistance to meet their immediate and long-term needs.
But there were no specific, concrete offers of extra help.
Expanding their discussions to issues of “inclusive” growth, the group met Friday with leaders of seven developing countries. The “outreach” session invited leaders from some of Asia’s poorest countries, such as Laos and Papua New Guinea, and also some of its most dynamic emerging economies, like Vietnam and Indonesia. The president of Chad, Idriss Deby, was representing the African union, and top international leaders such as Christine Lagarde of the IMF also attended.
On Friday afternoon, Obama plans to visit the peace park in Hiroshima, becoming the first sitting U.S. president to visit the city on which the U.S. dropped an atomic bomb in 1945 in the closing days of World War II.
Associated Press writers Aritz Parra and Frank Jordans in Berlin contributed to this story. Kurtenbach reported from Ise, Japan.
ST. PETERSBURG, Fla. (AP) — Former pro wrestler Hulk Hogan has an unlikely ally in his corner for his courtroom cage match with Gawker — a high-tech billionaire with a long-standing grudge against the news-and-gossip site.
The vendetta has set the stage for even more bad blood to pour out between Gawker CEO Nick Denton and the vengeful billionaire, Silicon Valley venture capitalist Peter Thiel, as Gawker fights for its survival.
Two months after Hogan won a $140 million invasion-of-privacy verdict against Gawker for posting a sex tape of him, Thiel confirmed he covered the lawsuit’s costs after news reports identified him as the covert financier.
Thiel, who co-founded PayPal and was an early investor in Facebook, was outed as gay by a Gawker-owned website. The same Gawker site, Valleywag, ran a number of stories skewering Facebook, which provided a big chuck of Thiel’s estimated $2.7 billion fortune.
The 2007 article about him and other articles about his friends that he said “ruined people’s lives for no reason” spurred Thiel to help fund “victims” of Gawker, he told The New York Times .
“It’s less about revenge and more about specific deterrence,” he told the newspaper Wednesday. “I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest.”
Gawker CEO Nick Denton counterpunched Thursday with an open letter that pilloried Thiel as a “comic-book villain” and an example of the “unaccountable power of the billionaire class.”
“You show yourself as a thin-skinned billionaire who, despite all the success and public recognition that a person could dream of, seethes over criticism and plots behind the scenes to tie up his opponents in litigation he can afford better than they,” Denton wrote.
The damages facing Gawker threaten to destroy the company. As part of its contingency planning, Gawker has hired an investment banker to explore its options, including a possible sale.
During the Hogan trial, Gawker’s parent company, a collection of websites called Gawker Media, was estimated to be worth $83 million.
Thiel didn’t respond to The Associated Press’ requests for an interview.
In the Times interview, Thiel also said Hogan’s lawsuit is one of several against Gawker he has financially backed. Hogan’s attorney, Charles Harder, is also handling two separate lawsuits against Gawker, filed on behalf of Shiva Ayydurai and Ashley Terrill.
Ayydurai said Thiel isn’t involved in his lawsuit, but applauded him for backing Hogan. “More power to Peter Thiel,” Ayydurai said Thursday. “He is doing a public service. He is standing behind his principles, something few people in his position do.”
In a Wednesday court proceeding, Gawker’s attorneys asked the judge to allow them to seek evidence from the other side regarding Thiel’s supposed involvement. But the judge said no.
In his open letter, Denton vowed to use an appeal of the Hogan verdict to subject Thiel to a “dose of transparency.”
“However philanthropic your intention, and careful the planning, the details of your involvement will be gruesome,” Denton promised Thiel in his letter.
As an alternative to a court battle, Denton proposed a public debate for “a more constructive exchange.”
Hogan sued Gawker after it posted a 2007 video of him having sex with the wife of his best friend, Tampa radio personality Bubba The Love Sponge Clem. Hogan said Clem betrayed him by secretly videotaping him.
Liedtke reported from San Francisco.
Follow Tamara Lush on Twitter at http://twitter.com/tamaralush .