Why Colin Kaepernick's Nike Ad Sets the New Bar for Leaders

If you haven’t been on Twitter in, oh, about ninety seconds, you might have missed the furor over quarterback Colin Kaepernick‘s starring role in a new Nike ad. In case you did, it’s simple: a full-frame black-and-white photo of Kaepernick’s eyes with the caption, “Believe in something. Even if it means sacrificing everything.”

Kaepernick’s role as the instigator of NFL players taking a knee during the national anthem as a protest against police brutality has already sparked angry talk of boycotts, throwing away Nike shoes and the like. But I’m going to steer clear of the controversy and the politics, because I’m more interested in Kaepernick’s example for leaders.

“Wait a second,” you might be saying, “are you telling me I should be inciting rage against my company?” Not on purpose.

Public anger is one outcome of Kaepernick’s stance, but that’s not why he knelt. If he was doing this just to make people mad, it would be nothing but an empty PR stunt. He would deserve the criticism. No, what makes Kaepernick a powerful role model is that he’s risked his career to speak up about what he feels is right.

When we think of great leaders, we typically bring up mental images of inspiring speakers, brilliant motivators and daring innovators. Truly great leaders are often those things, but they’re also more. Speaking, motivating–those are things they do, but it’s who they are that inspires their people to walk through fire and sets their competition back on its heels.

Great leaders stick their necks out. They take a stand. They lead with character and values. They fight for unpopular causes because they’re right. They know that nobody was ever inspired by a focus group or tracking poll, but by someone with a great deal to lose who is willing to lay their reputation on the line for what they believe in. They know they’ll be opposed; in fact, they count on it. Opposition, resentment, fear–those are indicators that they’re doing something right.

You don’t need to spark a social movement like Kaepernick has done. That’s probably not where your passions lie. But what about about attacking gender inequality in your field? What about taking on a giant competitor that’s ripping off its customers? What about inventing a technology or a brand that challenges a stereotype, or being the one to call out the naked emperor, like the finance nerds in The Big Short? Those are acts of rebellion and dissent, and dissent moves the world forward. Not always easily, not always quietly, but necessarily.

When your Colin Kaepernick moment as a leader comes up, what will you do? Here are some important things to remember:

Lean into it quickly.

Be the first person to stand up and speak out. If you’re not, someone else might beat you to the punch, and then you’ll look like a coattail rider, not a leader.

Make your message calm and rational.

Nobody wants to be shouted at, so let the people who disagree with you do all the shouting. Be icy cool and let your position do the shouting for you.

Make your position, and the reason for it, clear.

The reason kneeling during the anthem has won Kaepernick as many supporters as detractors is that he did it for a specific reason: to protest police violence against black people. Don’t leave any ambiguity about why you’re speaking out.

Have a specific goal.

Do you want to change a law? Grab market share? Win a legal concession from a rival? Know what you want and make sure everyone else knows it.

Don’t back down.

You will get pushback. Plan on it. Kaepernick’s suing the NFL because he can’t get a job, but he hasn’t backed down. Stand strong and you’ll earn respect.

Facebook, Twitter face U.S. Congress over politics and the internet

WASHINGTON (Reuters) – Top Twitter Inc and Facebook Inc executives will defend their companies before U.S. lawmakers on Wednesday, with Facebook insisting it takes election interference seriously and Twitter denying its operations are influenced by politics.

Facebook and Twitter logos are seen on a shop window in Malaga, Spain, June 4, 2018. REUTERS/Jon Nazca/File Photo

Facebook Chief Operating Officer Sheryl Sandberg will acknowledge to the Senate Intelligence Committee that the company was too slow to spot Russian efforts to manipulate social media to influence the 2016 U.S. election and vow to improve.

“The actions we’ve taken in response … show our determination to do everything we can to stop this kind of interference from happening,” according to written testimony from Sandberg made public on Tuesday.

She said the company was getting better at finding and removing “inauthentic” content, “from financially motivated troll farms to sophisticated military intelligence operations,” and now has more than 20,000 people working on safety and security.

Technology executives have traveled to Washington several times to testify in Congress over the past year.

FILE PHOTO: Sheryl Sandberg, Chief Operating Officer and Member of the Board, attends the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, January 18, 2017. REUTERS/Ruben Sprich/File Photo

The Senate Intelligence Committee has been looking into widely reported Russian efforts to influence U.S. public opinion for more than a year, after U.S. intelligence agencies concluded that entities backed by the Kremlin had sought to boost Republican Donald Trump’s chances of winning the White House in 2016.

Moscow denies involvement.

Twitter Chief Executive Jack Dorsey will appear with Sandberg at the Senate hearing, but no executive from Alphabet Inc’s Google is scheduled to appear, despite the intelligence committee having requested one.

Google offered to send its chief legal officer, Kent Walker, as a witness, but he was rejected by the committee, which said it wanted to hear from corporate decision-makers.

Twitter’s Dorsey will also testify at a separate House of Representatives hearing on Wednesday, saying the company “does not use political ideology to make any decisions,” according to written testimony also made public on Tuesday.

Dorsey will appear before the House Energy and Commerce Committee, addressing Republican concerns about how the social media platform polices content.

FILE PHOTO: Jack Dorsey, CEO and co-founder of Twitter and founder and CEO of Square, speaks at the Consensus 2018 blockchain technology conference in New York City, New York, U.S., May 16, 2018. REUTERS/Mike Segar/File Photo

“From a simple business perspective and to serve the public conversation, Twitter is incentivized to keep all voices on the platform,” Dorsey said.

He added that a recent company review showed “no statistically significant difference” between how often tweets by Republican and Democratic members of Congress are viewed by Twitter users.

Conservative Republicans in Congress have criticized social media companies for what they say are politically motivated practices in removing some content, a charge the companies have repeatedly rejected.

President Donald Trump faulted Twitter on July 26, without citing any evidence, for limiting the visibility of prominent Republican through a practice known as shadow banning.

Representative David Cicilline, a Democrat, blasted Wednesday’s hearing and his Republican colleagues on Tuesday, calling recent claims of political bias baseless.

“There is no evidence that the algorithms of social networks or search results are biased against conservatives. It is a made-up narrative pushed by the conservative propaganda machine to convince voters of a conspiracy that does not exist,” Cicilline said.

Reporting by David Shepardson and Patricia Zengerle; editing by Steve Orlofsky and Tom Brown

'Google Go' Browser to Get AI Reader for Websites in 28 Languages

The internet has brought a wealth of information to the fingertips of many. Research that would have required hours in a library 20 years ago can now be done in 20 minutes. All you have to do is search and read some websites. But what if that’s not enough convenience for you? Google may have the solution. A new feature for the “Google Go” browser will allow users to listen to the text from their favorite website, in up to 28 languages, even on slow connections.

Google Go was launched last year as a lightweight version of the browser, which makes it a powerful tool for consumers in locations with limited internet infrastructure. Google Go is only a 5 MB download and it’s optimized to save up to 40% of data when loading pages. In just its first year, it has been downloaded millions of times. The international team of Google developers behind Google Go are introducing the new AI reader feature.

“Today, we’re launching a new feature which will let everyone using Google Go’s browser listen to webpages out loud,” explained Google in a blog post on August 28th. “Powered by natural language processing and speech synthesis AI, this technology can read aloud billions of webpages in 28 languages smoothly, and in a natural sounding voice, even on 2G connections. It also uses minimal cellular data. This technology relies on AI to determine which parts of a page to read, and which to leave out, so you only listen to what is important.”

Text-to-speech technology isn’t new, but it has always been hard to perfect the technology for general consumer use. Websites often have a lot of text that isn’t meant to be read (e.g. menus or alt-text for images). So creating an AI system that can sort through a page and only read the important elements is impressive. Especially since it can be done with something as slow as a 2G connection.

One of the persistent issues with text-to-speech programs through the ages is providing a natural sounding voice. Technology has come a long way from the computerized voices of the 80s, but even now, a virtual reader doesn’t have the inflection and tone of person who understands what they are reading. It will be interesting to see how well Google Go’s new feature will handle these issues and how well it will be handled in 28 different languages.

Though the feature is launching with Google Go (which is predominately used overseas), Google hopes to bring the AI reader to other Google products in the future. This means that website owners in America should be thinking about how things sound when read aloud while creating content for a site.

One way to make sure content sounds right when read aloud is to double-check the most important content on a site for spelling and grammar accuracy. Issues such as correct comma usage and homonyms are more important when an AI reader will decide how to read a sentence based on the way it’s written.

For example, though they contain the same words in the same order, these two sentences mean different things:

  • She said I should go to bed.

  • She said, “I should go to bed.”

Accurate grammar and spelling are always important when creating content, but when visitors are listening to your site being read aloud, every mistake will become more obvious, or worse, change the meaning of a sentence.

Another concern for website owners will be to ensure that their content works, even when people are only listening to the written text. This means website owners can’t rely on the text in the images to tell important information, since that won’t be read to listener.

Having an AI reader for websites can be beneficial for consumers, and may help websites reach new audiences. However, these changes will require some adjustments from website owners. While the adjustments won’t be major, as good writing has always been suggested, an AI reader will make accuracy and well-written copy more important.

The (En)Bridge-T Jones Baby

We have covered the Enbridge Corporation (ENB) saga previously. Briefly, our take on this was that ENB is undervalued and a highly underrated future dividend aristocrat. We covered the Federal Energy Regulatory Commission (FERC) decision when it came out mid March and believed that ENB had several alternatives to ensure that Enbridge Energy Partners (EEP) and by extension Enbridge Energy management LLC (EEQ) would not suffer as a consequence of the decision. One of the six suggestions was that ENB would simplify the corporate structure by absorbing all its babies into the fold. That is exactly the path ENB decided to go. A few days ago the offer for Spectra Energy Partners (SEP) was boosted by 9.8%. We now examine what is likely to happen next with EEP & EEQ.

What has changed since the original FERC decision

FERC clarified mid June on its initial ruling with a key component being that the accumulated deferred income tax (ADIT) would not have to refunded to customers.

Although the final rule maintains the requirement to file the FERC 501-G, the final rule makes adjustments to the proposed form, including automatically eliminating the accumulated deferred income tax from a pipeline’s cost of service when the form enters a federal and state income tax of zero for pipelines that are non-tax paying entities. This adjustment is consistent with the Order on Rehearing of the Revised Policy Statement in Docket PL17-1-001 issued concurrently with the final rule. The final rule also encourages pipelines to file an addendum to the FERC 501-G to reflect their individual financial situation.

This has an impact of removing uncertainty about any potential refunds for past service overcollection on the tax front. It also increases the net equity invested by the MLPs and hence increases the return on equity threshold in our opinion. For those unaware, this is the threshold that FERC has deemed “fair” and would not allow MLPs to earn less than this return via reducing their rates. We believe this was a key component in ENB increasing SEP’s offer by 9.8%. ENB already owns 83% of SEP and hence the boost was a rather marginal hit to ENB.

Impact to EEP & EEQ

During the second quarter conference call ENB made the preliminary assessment that mid June FERC announcement would be marginally positive for EEP & EEQ.

With respect to the impact of the FERC policy change on EEP, our early assessment is that, in isolation, the ability to eliminate ADIT from the forecast cost of service and to add it to rate base would generate incremental DCF of approximately CAD 30 million per year. However, this would only partially offset the negative impact of U.S. tax reform and the elimination of the tax allowance for MLPs, which we previously estimated at approximately CAD 120 million per year.

Previously ENB had guided that EEP would produce a DCF coverage of 1.0X and this will likely boost DCF coverage to the range of 1.04-1.07X. While not the biggest boost, it is significant for better interest coverage and funds for Line 3 replacement.

What is fair value for EEP/EEQ?

That is what it all comes down to. Before we show you what we think we ask that you keep an open mind about our numbers. To start with let’s look at ENB’s debt to EBITDA.

Currently hovering near the 5.5X mark, it should hit 5.0X at year end after some asset sales.

Source: ENB Q2-2018 slides

Here is where EEP & EEQ stand.

Now this number is an annual number and will trend higher as the reduction from FERC hits but will be under 5.0X at year end 2018.

EEP & EEQ currently distribute $1.40/share a 1.04-1.07X coverage gets to a DCF of $1.50/share. ENB has guided for about $3.30 (this is USD) in DCF per share and the shares are thus trading close to 10.3X DCF.

Based on the acquisition share exchange proposed EEP would be sold for $10.80 and EEQ at $10.10. Obviously both are trading higher than that, perhaps pricing in a better offer. But even at today’s prices EEP is trading at 7X DCF. The question therefore is, why would you sell an asset to ENB at 7X DCF while being paid at 10X DCF currency? Now if the exchange was made when ENB itself was trading at the same multiple, it might make sense.

There are two other considerations, debt to EBITDA and growth profile. The first metric is similar for both and likely better for EEP/EEQ as shown above. ENB does have a superior growth profile but a big part of its growth is the line 3 replacement with EEP/EEQ. So the minimum fair value for us would be where EEP/EEQ gets the same DCF multiple as ENB.

Now obviously as ENB increases the price for EEP/EEQ, its stock is likely to fall. Based on that the absolute minimum that shareholders should accept is a 9X multiple for both EEP/EEQ, which would put shares at $13.50.

Reasons to reject regardless

There is substantial room for EEP/EEQ to improve their metrics from here. The first is simply through documenting the full impact of the FERC rule. We think ENB is likely being conservative on the $30 million estimate. The second is through corporate conversion. Post conversion, EEP/EEQ would have a big tax shield and DCF should approach close to the $1.70 mark. For a boring utility like business with a virtual monopoly we would be hard pressed to value this under 10X DCF or $17/share. By rejecting the offer investors would force ENB to either pay the full amount or simply convert EEP/EEQ to corporate status. Unlike in the case of SEP, EEP/EEQ shareholders do have substantially more leverage.

The proposed merger transaction will be subject to the approval of holders of a majority of the outstanding SEP common units.

The proposed EEP merger transaction is subject to the approval of holders of 66?% of the outstanding EEP units. The proposed EEQ merger transaction is subject to the approval of holders of a majority of the outstanding EEQ listed shares, other than Enbridge and its affiliates.

Clearly a blockade here is possible with retail holding a lot of EEQ shares.

Source: ENB presentation

One interesting aspect of this corporate conversion would be that EEP/EEQ would reduce Enbridge Income Fund Holdings Inc revenues (OTC:EBGUF) as the total revenues on the mainline are fixed and currently the FERC decision is essentially enriching EBGUF at the expense of EEP/EEQ.

Trades

Currently EEP holds a premium to EEQ. There are reluctant shareholders in the EEP shareholder group who are working hard at avoiding the taxes that come with the sale. We think however that a sale to ENB or a corporate conversion is inevitable. Selling EEP and buying EEQ would be the best way to get the votes to block ENB’s acquisition attempt as EEQ is held far more by non-institutions. It would also get the potential further upside if ENB is ultimately forced to recognize EEP and EEQ shares as equals (which they actually are based on the 10-K). The same additional upside would also be realized on corporate conversion by EEP itself. Hence trading your shares now seems a good way to capture an additional 4% with no downside.

On ENB itself, we were very bullish in mid March but we got defensive as the stock hit $36. We covered our cash secured puts,

as well as sold calls against our long position. The rationale was that higher bids were coming for SEP (which happened) and EEP/EEQ and those would pressure ENB lower in the shorter term. We were happy capturing 3% extra yield for 2.5 months.

Conclusion

We get all advantages associated with the roll-up and we think ENB is undervalued here. But we just don’t see the rationale of throwing away great assets at a ridiculously low price just because ENB thinks it is fair. If ENB wants EEP/EEQ, it has to explain why a corporate conversion fails to give us the same advantages as rolling into the behemoth ENB. At the minimum we would like an estimate of what the 5 year DCF profile would be post a stand alone corporate conversion and what kind of dividends could be paid while funding Line 3. In the absence of that if ENB wants EEP & EEQ…

For more analysis such as this, along with recommendations for binge watching on Netflix, please consider subscribing to our marketplace service Wheel of Fortune.

Disclaimer: Please note that this is not financial advice. It may seem like it, sound like it, but surprisingly, it is not. Investors are expected to do their own due diligence and consult with a professional who knows their objectives and constraints.

Seeking Alpha has changed its policies. Previously “following” someone required a ritualistic commitment and an offering of not less than 4 oxen or 3 breeding horses. Now, all it takes is one click! If you enjoyed this article, please scroll up and click on the “Follow” button next to my name to not miss my future articles. If you did not like this article, please read it again, change your mind and then click on the “Follow” button next to my name to not miss my future articles.

Disclosure: I am/we are long ENB, EEQ.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The Ecologist on a Mission to Count New York's Whales

The first thing you notice about ecologist Arthur Kopelman is his giant white beard. The second is the gold whale charm dangling from his earlobe—a symbol of the creature that has consumed his thoughts for decades.

“I don’t think I’ve ever seen him without it,” says Joe Carrotta, a photographer who documented Kopelman’s whale-watching cruises up and down the New York coast last summer. The boat rides allow Kopelman to collect data for the Coastal Research and Education Society of Long Island—an organization he co-founded in 1996—while also educating passengers about the incredible cetaceans and pinnipeds swimming (and singing) just miles from shore.

“People are surprised to learn there are marine mammals in New York,” Kopelman says, “perhaps because it’s an area that also has some of the densest human populations in the world.”

The New York Bight—a coastal region stretching from the northern tip of Long Island to southern New Jersey—is a frolicking ground for 19 species of whales, dolphins and porpoises, as well as four species of seal. But in the 1950s, when Kopelman was just a kid in Queens, few people thought about them; whales were mythic figures from the past, long banished by industrial pollution and hunting. But following the Clean Water and Marine Mammal Protection Acts of 1972, they returned. Today, hundreds of humpback, fin and right whales cruise the bight at any time, gobbling up schools of menhaden, a silver fish too oily for Manhattan’s delicatessens.

It’s not all great on the open water, though. While humpback populations are increasing, right whales aren’t doing so well—last year, 17 out of the 450 inhabiting the North Atlantic were killed in Canadian and US waters. Counting the communities has become so crucial, allowing researchers to monitor their abundance and distribution. Organizations like Gotham Whale and the Wildlife Conservation Society do so within the harbors and near Fire Island, while CRESLI does so on the eastern end of the bight.

But that’s not all the cruises are for. “Besides counting, my objective is to educate people about the whales, so they become informed stakeholders who will protect them,” Kopelman says.

Oddly enough, Kopelman began his scientific career in the 1970s studying a creature several orders in magnitude smaller: the Leptopilina boulardi, a two-millimeter wasp that lays its eggs in the larvae of fruit flies. He did that for nine years before switching phyla to whales. “I’d always been an activist,” he says, “and I decided to put my actions where my rhetoric was.” This single-minded passion fascinated Carrotta when the two met in 2016, inspiring Carrotta to tag along on 10 whale-watching cruises and seal walks.

All took place via the 140-foot-long Viking Starship, a gleaming vessel the captain steered toward known whale feeding spots and other places whales were recently reported. Passengers on board marveled as they saw humpbacks break the surface, slapping their fins and tails around to communicate. Kopelman kept a log of the cetaceans and pelagic birds they saw, snapping photos of the animals’ patterning to add to his searchable database of nearly 80,000 images. When he saw a familiar animal, he called out its name—”Draco,” “Glo,” “Infinity”—over the PA system. “He’s very serious about marine life, but you can still hear his excitement when he gets to talking about it, even over the loudspeaker,” Carrotta says.

Carotta photographed it all with a couple Nikon DSLRs and a Profoto strobe. His images sketch a vivid portrait of Kopelman and the charismatic megafauna that inspires his life’s work—and, occasionally, fashion accessories. Sadly, Kopelman lost his whale charm this summer. “I came home from a day on the water and it was gone,” he says. Not to worry, though: He had a backup.


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