👨🏿‍🚀TechCabal Daily – Nvidia’s blue chip

Layoffs

South Africa’s mobile giant, Vodacom, which has a market share of 8% is in the middle of seeking approval to merge with Vumatel and Dark Fibre Africa (DFA). If successful, this merger would create Maziv, the biggest fibre network in the country. 

But hold on a sec, there’s a snag. Another fibre network company, Frogfoot, isn’t exactly thrilled. Frogfoot worried this merger would squeeze them out, leaving less competition for everyone. Additionally, South Africa’s Competition Commission has voiced its opposition to the merger, echoing Frogfoot’s.

Already, Vodacom might be putting the foot before the frog. After releasing its financial results earlier this year, the company also downsized its workforce by 80 people in South Africa as part of cost-cutting measures. Reports have now revealed that the company has terminated the contracts of 631 staff and contractors and arrested 15 individuals on suspicion of various irregular activities and fraud within the company. The company employs about 14,000 employees. 

Vodacom comes for fraud: Thanks to customers, service providers, online snoops, business tip-offs, their own fraud-busting system, and even some external whistleblowers, Vodacom uncovered a whole lot of suspicious activity—over 8,600 cases in total! Almost 7,000 involved customers or suppliers, while the rest were internal issues with employees.

From April 1, 2023, to March 31, 2024, Vodacom’s corporate security teams looked into 8,652 suspected fraud or irregular cases. 

The outcome led to the arrest of 15 suspects and the dismissal of 631 staff and contractors, Vodacom stated in the latest Annual Report for the network operator for the 2023/24 financial year

A spokesperson of Vodacom said to a news outlet that the group has a strict stance on fraudulent activities across its operational markets and continues to take appropriate measures to safeguard its clientele. The company also mentioned that it employs cutting-edge technology within its systems to recognise and pinpoint internal and external misconduct. 

Vodacom added that the process of hiring replacements for the dismissed employees will differ across countries, as each decision is made independently in each country. 

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Companies

What’s inevitable? Rain, death, taxes and now, the astronomical rise of Nvidia’s stock prices.

For the last year and a half, stock prices of the $2 trillion chip giant have been on a tear. If you invested $1,000 in Nvidia stock in October 2022, your investment would now be worth over $7,000.

Fueling this growth has been its advancement in making processors that power artificial intelligence systems, especially chips for Artificial General Intelligence (AGI).

Yesterday, Nvidia’s market capitalisation reached $3.34 trillion, surpassing Microsoft’s $3.33 trillion. Apple remains the third most valuable company in the US with a $3.27 trillion market cap.

Nvidia’s rise to the top comes after Apple’s short stint as the US’ most valuable company. Stocks of the iPhone maker shot up after it announced it was adding new generative AI features to the iPhone. The stock rally didn’t last long as Microsoft took back the top spot after just a day. 

While Nvidia’s new, more powerful chip, Blackwell doesn’t launch until later this year, investors worry that there might be a slowdown between now and then. But right now, none of that matters.

The only thing that can stop Nvidia right now is if the AI machines it powers turn on its creators. 

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Big Tech

If you’ve been online the past day, you may have seen several social media users sigh a sense of relief over the latest big tech lawsuit, US v Adobe.

“Finally, they are so wrong and make it difficult to cancel. They charged me an extra month before I was able to finally cancel,” JustMarvG, an X user said. Another tweeted, “I am glad the US is suing Adobe for their harmful, inconvenient subscription practices.”

So what’s up? This week, the US Federal Trade Commission (FTC) filed a complaint accusing Adobe of hiding fees, which can sometimes amount to hundreds of dollars, and other crucial terms within its “annual paid monthly” subscription plan. It’s hard to cancel an Adobe subscription, and the US is going after the company for this reason.

Almost all of Adobe’s revenue in Q1 came from subscriptions. In the quarter ending March 1, 95% of Adobe’s $5.18 billion in revenue came from subscriptions, totalling $4.92 billion.

The FTC alleges that Adobe violated the Restore Online Shoppers’ Confidence Act, a federal law enacted in 2010. This law prohibits merchants from imposing charges or deceptive charges such as those for automatic subscription renewals unless it discloses essential terms and obtains informed consent from customers. It also names two Adobe executives David Wadhwani, the president of the digital media, and Maninder Sawhney, a senior vice president in digital sales as defendants in the lawsuit. 

The FTC alleges that Adobe charges a fee of half the remaining monthly payments if a customer cancels their subscription within the first year. This fee isn’t advertised according to the complaint. The FTC also claims that Adobe makes it difficult to cancel subscriptions and to cancel, it involves going through many unnecessary pages and cancelling by phone can lead to dropped calls, having to repeat information to different representatives, and facing delays or resistance from customer service.

Dana Rao, Adobe’s general counsel and chief trust officer has refuted these claims in court. The lawsuit aims to secure civil penalties, an injunction to prevent future misconduct, and other forms of redress or remedies while many users anticipate the outcome.

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Acquisitions

Looking to optimise cash after a bruising financial year, Multichoice has plans to sell a 60% stake in its insurance business, to local insurer Sanlam.

Sanlam will pay MultiChoice of R1.2 billion ($66 million) with an additional performance-based cash earn-up to R1.5 billion ($88 million). The additional cash payment of up to R1.5 billion ($88 million) will only be paid if the business meets the total gross written premium for the year ending December 31, 2026. 

Before the acquisition, Multichoice will pay out a dividend of R59 million ($3.27 million) to its shareholders. 

Sanlam shares went up by 5% while Multichoice shares inched up by 0.36% on news of the transaction.

Jobs

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Here’s what we’ve got our eyes on

• SEC urges capital market stakeholders to embrace innovation in Nigeria
• Uganda banks on tax exemption incentive for the e-mobility drive
• The man who brought the Internet to South Africa

Written by: Faith Omoniyi & Towobola Bamgbose

Edited by: Timi Odueso

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