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Kevin Paffrath, Kevin Paffrath smiles for a selfie in front of the California State Capitol in Sacramento on Friday, July 16, 2021.
Kevin Paffrath via AP

Last year at this time, Kevin Paffrath was focused on his YouTube channel, where his half-million-plus followers could tune in for daily commentary on housing, stocks and stimulus checks. It earned him nearly $10 million over the last 12 months.

Now, the 29-year-old former real estate broker is following Gov. Gavin Newsom around his home state. It’s the best way he can think of to draw attention to his unlikely effort to replace Newsom in the upcoming recall election on Sept. 14.

Paffrath is a registered Democrat and self-declared centrist who voted for Joe Biden in the 2020 presidential election. While he’s highly critical of Newsom and says he’s been a “failed leader,” Paffrath is equally concerned that the Democratic Party has no emergency plan.

Should more than half of California voters support the recall on their ballots, the next governor would be whichever of the 46 successor candidates gets the most votes, making it much easier for an outsider to win. Paffrath is one of the nine candidates listed as a Democrat, but party leaders are urging a “No” vote to the recall effort and saying voters should skip the second question asking who should be governor if the recall succeeds.

“It was mind-blowing to us that they didn’t put at least somebody in, so that way, worst case, they had a hail mary,” Paffrath said in an interview on Friday over a coffee, after attending a Newsom press event in San Francisco.

In an early August poll by Survey USA, Paffrath had the most votes in the field of replacements, with 27%. The next six candidates are all Republicans, including conservative talk show host Larry Elder and reality TV star and former Olympic athlete Caitlyn Jenner.

“We think in the last two weeks of this campaign if the recall looks more and more likely, the Democratic party will be forced to pick a Hail Mary back-up candidate,” Paffrath said. “Given that we’re No. 1 in the polls, we hope that’s us.”

California Governor Gavin Newsom speaks with media at a long-standing encampment along Highway 80 in Berkeley, California, August 9, 2021.
John G. Mabanglo | Pool | Reuters

Democrats are right to be nervous.

A poll conducted by the University of California, Berkeley, and the Los Angeles Times in late July showed 51% of registered voters opposed the recall, with 36% in favor. But among likely voters, the gap favoring Newsom’s retention narrowed to three percentage points.

The anti-recall movement has raised about $51 million, almost eight times as much as the side trying to oust Newsom. Netflix CEO Reed Hastings has contributed $3 million in support of the governor.

Donors can contribute an unlimited amount for or against the recall, but only up to $32,400 in support of any specific replacement candidate. Paffrath said he’s raised close to $400,000 and has put in about $200,000 of his own money. The average donation is $70, he said.

“We don’t have the war chest that Newsom does, so we have to do everything in our power with grassroots and social media,” Paffrath said.

For example, Paffrath paid his brother-in-law, an app developer, to build his “Meet Kevin” app. And he’s trying to get in front of the media as much as possible. Most of his ad spending is via text message to let voters know there’s a Democratic alternative.

On Friday, Paffrath hung out outside Manny’s restaurant in San Francisco as Newsom spoke inside to the press. Dressed in a navy suit with a purple tie, Paffrath made himself easy to spot for reporters. He said he’s careful not to be disruptive at the events.

“We have to combat, this ‘Oh yeah he’s a YouTuber, he’s a prankster,'” Paffrath said. “We stand there very respectfully and reporters recognize us. They talk to us.”

From San Francisco, he’s following Newsom to Los Angeles and San Diego, and possibly beyond.

How it started

The recall effort picked up momentum during the pandemic as frustration mounted about the state’s shutdown of schools and small businesses, and the slow pace of the reopening even as Covid-19 cases and hospitalizations plummeted.

Newsom critics pounced at the opportunity to highlight the worsening homeless problem and increasing crime rates while taxes and living costs remained among the highest in the country. Paffrath said he wasn’t an initial proponent of the recall and didn’t get involved until it was well underway.

“The reason I think folks are frustrated is we pay our taxes, then we look up to see what our government is doing for us with the services we’re paying for,” he said. “And we see people dying on the street. We see blight. That’s why people are leaving.”

Paffrath, who lives with his wife and two young sons in Ventura, about 70 miles from Los Angeles, has made addressing the homeless issue his top agenda item. His proposal is to build new emergency facilities and lease commercial and office buildings, including many that have been vacated during the pandemic, to set up mass spaces with cots and small rooms, supported by staffing from the National Guard.

His aim is to get all of California’s 160,000 homeless people off the streets in 60 days at an eventual cost of $10 per person per day, covering food, medical support and bathrooms.

Paffrath has equally ambitious — some may say outlandish — goals for new types of “future” schools, a system of underground tunnels to alleviate traffic problems and the building of Las Vegas-style casinos as part of a plan to fully legalize gambling.

He also recognizes the existential threat posed by fires and droughts. He advocates spending on controlled burns and a pipeline from the Mississippi River to double water flow to the Colorado River. When it comes to solar plants, he wants to incentivize companies to stay in California rather than going elsewhere.

“I’m tired of hearing about Tesla building solar panels in New York and Nevada,” he said. “Those should be in California.”

$10 million on YouTube

Paffrath’s fans are used to hearing him opine on such matters. He now has almost 150,000 Twitter followers and 1.7 million on YouTube. Regular topics include interest rates, the crypto economy and politics.

Paffrath got his start in real estate a little over a decade ago by teaching people how to invest in the market. He became a broker and started buying property, then took his teaching experience and market knowledge to YouTube. By 2018 was making enough money — a couple thousand dollars a day — to let his broker license expire and to get out of sales.

At the coffee shop on Friday, he pulled out his phone and navigated to his YouTube earnings dashboard. Over the past year, the page showed, his ad revenue on the site topped $3.5 million. Affiliate revenue and money he makes from courses on building wealth brought in an additional $6 million or so, he said.

Kevin Paffrath on the campaign trail
Ari Levy | CNBC

But his focus now is on politics. Paffrath said he’ll run in 2022 even the recall is unsuccessful or if another replacement candidate wins. That’s as far out as he’s projecting.

“I don’t want to be a career politician,” he said. “I want to fix California.”

He also wants to assure Democrats that he’s not just using their party label because it gives him the best chance to win. With a legislature that’s three-quarters Democratic, he said it’s important to start on things that the majority cares deeply about, like the homeless problem.

Control of the U.S. Senate could also be at stake. Dianne Feinstein, the state’s senior senator, is the oldest member of the chamber at 88. She’s not up for reelection until 2024, and questions have been swirling around whether she’ll retire before then.

If so, the governor would get to pick her temporary successor. The Senate is currently at a 50-50 split, with Vice President Kamala Harris in position to cast deciding votes when needed.

Paffrath made it clear he would pick a Democrat.

“I’m not going to burn the party,” he said. “I don’t want people to think that just because I’m a recall candidate I’m going to go in there and do what Republicans say they want to do, start cutting things and throwing around the furniture. It’s not going to work. You’ve got to respect the legislature.”

WATCH: California Gov. Newsom faces recall

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Nvidia to join Dow Jones Industrial Average, replacing rival chipmaker Intel

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Nvidia to join Dow Jones Industrial Average, replacing rival chipmaker Intel

CEO of Nvidia, Jensen Huang, speaks during the launch of the supercomputer Gefion, where the new AI supercomputer has been established in collaboration with EIFO and NVIDIA at Vilhelm Lauritzen Terminal in Kastrup, Denmark October 23, 2024.

Ritzau Scanpix | Mads Claus Rasmussen | Via Reuters

Nvidia is replacing rival chipmaker Intel in the Dow Jones Industrial Average, a shakeup to the blue-chip index that reflects the boom in artificial intelligence and a major shift in the semiconductor industry.

Intel shares were down 1% in extended trading on Friday. Nvidia shares rose 1%.

The switch will take place on Nov. 8. Also, Sherwin Williams will replace Dow Inc. in the index, S&P Dow Jones said in a statement.

Nvidia shares have climbed over 170% so far in 2024 after jumping roughly 240% last year, as investors have rushed to get a piece of the AI chipmaker. Nvidia’s market cap has swelled to $3.3 trillion, second only to Apple among publicly traded companies.

Companies including Microsoft, Meta, Google and Amazon are purchasing Nvidia’s graphics processing units (GPUs), such as the H100, in massive quantities to build clusters of computers for their AI work. Nvidia’s revenue has more than doubled in each of the past five quarters, and has at least tripled in three of them. The company has sginaled that demand for its next-generation AI GPU called Blackwell is “insane.”

With the addition of Nvidia, four of the six trillion-dollar tech companies are now in the index. The two not in the Dow are Alphabet and Meta.

While Nvidia has been soaring, Intel has been slumping. Long the dominant maker of PC chips, Intel has lost market share to Advanced Micro Devices and has made very little headway in AI. Intel shares have fallen by more than half this year as the company struggles with manufacturing challenges and new competition for its central processors.

Intel said in a filing this week that the board’s audit and finance committee approved cost and capital reduction activities, including lowering head count by 16,500 employees and reducing its real estate footprint. The job cuts were originally announced in August.

The Dow contains 30 components and is weighted by the share price of the individual stocks instead of total market value. Nvidia put itself in better position to join the index in May, when the company announced a 10-for-1 stock split. While doing nothing to its market cap, the move slashed the price of each share by 90%, allowing the company to become a part of the Dow without having too heavy a weighting.

The switch is the first change to the index since February, when Amazon replaced Walgreens Boots Alliance. Over the years, the Dow has been playing catchup in gaining exposure to the largest technology companies. The stocks in the index are chosen by a committee from S&P Dow Jones Indices.

WATCH: Nvidia leaps and bounds ahead of AMD

Nvidia is leaps and bounds ahead of AMD on the AI story, says Susquehanna's Christopher Rolland

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Super Micro’s 44% plunge this week wipes out stock’s gains for the year

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Super Micro's 44% plunge this week wipes out stock's gains for the year

Charles Liang, chief executive officer of Super Micro Computer Inc., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024. The trade show runs through June 7. 

Annabelle Chih | Bloomberg | Getty Images

Super Micro investors continued to rush the exits on Friday, pushing the stock down another 9% and bringing this week’s selloff to 44%, after the data center company lost its second auditor in less than two years.

The company’s shares fell as low as $26.23, wiping out all of the gains for 2024. Shares had peaked at $118.81 in March, at which point they were up more than fourfold for the year. Earlier that month, S&P Dow Jones added the stock to the S&P 500, and Wall Street was rallying around the company’s growth, driven by sales of servers packed with Nvidia’s artificial intelligence processors.

Super Micro’s spectacular collapse since March has wiped out roughly $55 billion in market cap and left the company at risk of being delisted from the Nasdaq. On Wednesday, as the stock was in the midst of its second-worst day ever, Super Micro said it will provide a “business update” regarding its latest quarter on Tuesday, which is Election Day in the U.S.

The company’s recent challenges date back to August, when Super Micro said it would not file its annual report on time with the SEC. Noted short seller Hindenburg Research then disclosed a short position in the company and wrote in a report that it identified “fresh evidence of accounting manipulation.” The Wall Street Journal later reported that the Department of Justice was in the early stages of a probe into the company.

Super Micro disclosed on Wednesday that Ernst & Young had resigned as its accounting firm just 17 months after taking over from Deloitte & Touche. The auditor said it was “unwilling to be associated with the financial statements prepared by management.”

A Super Micro spokesperson told CNBC that the company “disagrees with E&Y’s decision to resign, and we are working diligently to select new auditors.” Super Micro does not expect matters raised by Ernst & Young to “result in any restatements of its quarterly financial results for the fiscal year ended June 30, 2024, or for prior fiscal years,” the representative said.

Analysts at Argus Research on Thursday downgraded the stock in the intermediate term to a hold, citing the Hindenburg note, reports of the Justice Department investigation and the departure of Super Micro’s accounting firm, which the analysts called a “serious matter.” Argus’ fears go beyond accounting irregularities, with the firm suggesting that the company may be doing business with problematic entities.

“The DoJ’s concerns, in our view, may be mainly about related-party transactions and about SMCI products ending up in the hands of sanctioned Russian companies,” the analysts wrote.

In September, the month after announcing its filing delay, Super Micro said it had received a notification from the Nasdaq indicating that its late status meant the company wasn’t in compliance with the exchange’s listing rules. Super Micro said the Nasdaq’s rules allowed the company 60 days to file its report or submit a plan to regain compliance. Based on that timeframe, the deadline would be mid-November.

Though Super Micro hasn’t filed financials with the SEC since May, the company said in an August earnings presentation that revenue more than doubled for a third straight quarter. Analysts expect that, for the fiscal first quarter ended September, revenue jumped more than 200% to $6.45 billion, according to LSEG. That’s up from $2.1 billion a year earlier and $1.9 billion in the same fiscal quarter of 2023.

WATCH: I don’t know if Super Micro is guilty or innocent, says Jim Cramer

I don't know if Super Micro is guilty or innocent, says Jim Cramer

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Apple to buy Pixelmator, the iPhone image editing app with AI features

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Apple to buy Pixelmator, the iPhone image editing app with AI features

Peopl walk outside Steve Jobs Theater at the Apple Park campus before Apple’s “It’s Glowtime” event in Cupertino, California, on Sept. 9, 2024.

Nic Coury | AFP | Getty Images

Apple will buy Pixelmator, the creator of image editing apps for Apple’s iPhone and Mac platforms, Pixelmator announced Friday in a blog post.

Pixelmator, a Lithuanian company, was founded in 2007, and in recent years has been best known for Pixelmator and Pixelmator Pro, which compete with Adobe Photoshop. It also makes Photomator, a photo editing app.

Apple has highlighted Pixelmator apps over the years in its keynote product launches. In 2018, Apple named Pixelmator Pro its Mac App of the year, citing the company’s enthusiastic embrace of Apple’s machine learning and artificial intelligence capabilities, such as removing distracting objects from photos or making automated color adjustments.

We’ve been inspired by Apple since day one, crafting our products with the same razor-sharp focus on design, ease of use, and performance,” Pixelmator said in its blog post.

Apple does not acquire as many large companies as its Silicon Valley rivals. It prefers to make smaller acquisitions of companies with products or people that it can use to create Apple features. Neither Pixelmator nor Apple provided a price for the transaction.

Pixelmator said in its blog post that there “will be no material changes to the Pixelmator Pro, Pixelmator for iOS, and Photomator apps at this time.”

Earlier this week, Apple released the first version of Apple Intelligence, a suite of features that includes photo editing abilities such as Clean Up, which can remove people or objects from photos using AI.

Apple has acquired other popular apps that received accolades at the company’s product launches and awards ceremonies.

In 2020, Apple bought Dark Sky, a weather app that eventually became integrated into Apple’s default weather app. In 2017, it bought Workflow, an automation and macro app that eventually became Shortcuts, the iPhone’s scripting app, as well as the groundwork for a more capable Siri assistant.

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