May 22, 2013
Automotive industry
Tesla Motors pays off Energy Dept. loan

Electric carmaker Tesla Motors said Wednesday that it has paid off its Energy Department loan, using money raised last week in a stock and notes offering. The automaker said it wired $451.8 million to repay the full loan with interest.

“I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the [Advanced Technology Vehicles Manufacturing] program, and particularly the American taxpayer from whom these funds originate,” Tesla chief executive Elon Musk said in a statement. “I hope we did you proud.”

Energy Department officials touted the news. Republicans have criticized the Obama administration’s support of new-technology companies, including struggling automaker Fisker Automotive, as well as electric battery maker A123 Systems and solar panel maker Solyndra. Both A123 and Solyndra filed for bankruptcy.

Energy officials heralded the Tesla payoff.

“When you’re talking about cutting-edge clean energy technologies, not every investment will succeed -- but today’s repayment is the latest indication that the Energy Department’s portfolio of more than 30 loans is delivering big results for the American economy while costing far less than anticipated,” Energy Secretary Ernest Moniz said in a statement.


Moniz said more than 90 percent of the loan loss reserve Congress established remains intact, while losses represent about 2 percent of the overall $34 billion portfolio.

— Reuters

Social media
Twitter beefs up its log-in security

Twitter began introducing new technology Wednesday to shore up security for users, responding to a spate of recent attacks on prominent accounts including those owned by the Associated Press and Financial Times.

Twitter said in a blog post that it has begun to introduce “login verification,” a form of two-factor authentication in security industry parlance. The feature asks users to confirm their identity after a typical log-in, by sending a six-digit code to smartphones that must then be typed in to complete a sign-on.

The microblogging service, considered one of the most important communications platforms today, has not done enough to help protect users’ accounts, critics say. Criticism intensified after a fake tweet sent from the AP’s account in April about a nonexistent White House explosion briefly roiled U.S. financial markets.

“There’s a second check to make sure it’s really you,” the company said on its official blog.

Repeated hacking incidents have raised questions about Twitter’s credibility and reliability just as it is beginning to assume a central role in a fast-changing media landscape, with the volume of tweets rising to more than 400 million a day.

— Reuters

Also in Business

l  Hewlett-Packard’s quarterly profit slid 32 percent but the world’s largest personal computer maker raised the lower end of its full-year outlook after earnings per share beat forecasts, sending its stock 13 percent higher in after-hours trading. Net income fell to $1.08 billion, or 55 cents a share, from $1.59 billion, or 80 cents a share, a year earlier. Last week, Dell, a rival personal computer maker, reported a 79 percent slide in profit.

l  J.C. Penney said Wednesday it has secured a $2.25 billion loan, $500 million more than it had expected, as it tries to stop a collapse in its sales. The expanded financing deal with Goldman Sachs comes as the Plano, Tex.-based retailer has been burning through cash and struggling to win back customers. An overhaul plan spearheaded by its former chief executive Ron Johnson backfired and caused sales to plummet.

l  The Florida city of South Miami defrauded investors by not disclosing problems with the tax-exempt status of two bond deals, the Securities and Exchange Commission said Wednesday. The city agreed to settle the fraud charges, involving debt sales totaling $12 million, and to hire an independent consultant to oversee its municipal bond disclosures, the SEC said. The city settled without admitting or denying the allegations and did not have to pay a monetary penalty. The SEC attributed the violation to poor communication and lack of training for the city’s finance officials.

l  Target reported a 29 percent drop in first-quarter profit to $498 million as unusually cool spring weather and financial pressures chilled customers’ appetite for spending. The company, based in Minneapolis, also cut its annual profit outlook, sending its stock down 4 percent to $68.40. While chilly weather was a big factor in depressing sales of spring clothing and other seasonal goods, Target said a yo-yo economic recovery has continued to make shoppers stick to shopping lists and plan their spending.

l  Microsoft, the largest software maker, will hire several thousand workers in China to support new cloud computing services and smartphones using its Windows operating system, chief executive Steve Ballmer said. The workforce expansion, from a current base of 4,000 staff, will take place during the next year, Ballmer said Wednesday at a news conference in Shanghai that was streamed live.

— From news services

Coming Today

l  8:30 a.m.: Weekly jobless claims released.

l  10 a.m.: New home sales for April released.

l  Earnings: The Gap, Ralph Lauren, Sears Holdings.

First-quarter profits
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