A logo of US company’s Meta is displayed during the Vivatech technology startups and innovation fair, at the Porte de Versailles exhibition center in Paris, on May 22, 2024.
Julien De Rosa | Afp | Getty Images
A former Meta staffer who was placed on a “Do Not Hire” list after he stalked and harassed one of the company’s employees found himself rehired by the tech giant after it gutted its talent and recruitment department, a lawsuit filed Tuesday says.
The suit, filed in New York Supreme Court on behalf of Meta employee James Napoli, accuses the company of violating New York City’s human rights law and negligence for hiring the person back. It also accuses the company of retaliation after it allegedly sidelined Napoli and took him off big projects when he raised concerns that the person had been rehired.
“I had spoken to my employer about this … on numerous occasions and I was told that he would not be able to enter our offices, that he would not be hired again, and then like, all of a sudden, this guy is reaching out to me [on Meta’s internal messaging system],” Napoli, a marketing leader who works out of Meta’s New York City office, told CNBC in an interview. “I trusted that my employer would be able to keep me safe, right? Because stalkers and harassers are also workplace hazards. … And this isn’t just a hazard for me, this is a dangerous individual that was let back into the workplace.”
The lawsuit comes after CEO Mark Zuckerberg announced in March 2023 that Meta would be reducing the size of its recruiting team as part of a larger strategy to cut 21,000 jobs, remove layers of middle management and operate more efficiently.
Although Wall Street has responded favorably to Meta’s cost-cutting plans, layoffs in the company’s customer service and trust and safety teams have made it harder for the social networking giant to respond to concerns from small businesses and influencers, as well as state and local election officials who use Facebook and Instagram, CNBC has previously reported.
In the aftermath of Meta’s cost-cutting efforts and ensuing layoffs, attorneys for Napoli say in the lawsuit that the company is relying “more heavily on hiring employees through outside contractors” and employs “far fewer recruiters to screen applicants,” which has negatively impacted their ability to properly catch red flags.
“Meta’s employment practices are apparently so chaotic, reckless, and ineffectual that the company fails to keep track of the most fundamental data point in its workplace – the dangerous people who pose a severe risk to Meta’s own employees,” the lawsuit, filed by attorneys Carrie Goldberg and Peter Romer-Friedman, states. “Yet Meta tells the public and public officials that the company has the ability to safeguard the personal data of billions of children and adults on their platforms.”
Meta has previously dealt with similar allegations that it’s employed workers who have engaged in stalking and related activity. For example, in 2018, the company said it fired a security engineer who allegedly used internal data to stalk women online.
Meta didn’t immediately respond to request for comment on the lawsuit filed Tuesday.
‘Do Not Hire’ list
The person accused of stalking Napoli, identified only by the initials “G.F.” in the complaint, was a member of Meta’s marketing team before he was laid off in November 2022 when the company cut 13% of its staff as part of a larger restructuring.
Before the layoffs, G.F. and Napoli occasionally saw each other in meetings but were no more than “work acquaintances,” Napoli said. After G.F. lost his job, he reached out to Napoli for support and asked him to get a coffee. During that meeting, the accused stalker started making “disturbing” comments, the filing states.
“[He] told me that he hears voices, God talks to him, and God had been talking to him about me since April of that year, and he sent me a list of documents that were his like journal entries over the months,” Napoli recalled.
Napoli “immediately” reported the incident to his manager and to HR, and says at first he was concerned for G.F.’s well-being. But over the next year, Napoli says, the situation escalated.
G.F. began sending Napoli up to 30 messages a day, contacting his family members and referencing Napoli’s partner, friends and even his dog, Luigi, in messages.
“I am being mind tortured with an A.I tech which I don’t know where it’s coming from and I am feeling like my love for you is being used for experiences I didn’t agree for, while I am being told by spirits that you and I are the two messengers,” G.F. wrote in one message to Napoli, according to the complaint.
G.F. found out where Napoli lived and “personally delivered a large ream of disturbing writings and drawings” to the apartment, forcing Napoli and his partner to move, the lawsuit says.
“It really felt like I was drowning for a long time because there was just nothing that I could do to escape. … It was really terrifying,” said Napoli. “I was worried about going out, I was worried about my dog, I was worried about my partner, because they were all mentioned by this person.”
Napoli reported G.F. to the police and considered getting a restraining order, but under New York state law orders of protection are only available to people who have an intimate or familial relationship to their stalker, the lawsuit states.
In September 2023, Napoli informed Meta that the stalking had increased “in both frequency and severity,” and the HR department assured him that G.F. was on the company’s “Do Not Hire” list and its “No Entry” list, which identifies people who shouldn’t be permitted into company buildings.
But just four months later, the company hired G.F. back to a contractor position after he apparently slipped through the cracks in the hiring process, the lawsuit says. Napoli learned his accused stalker was back at Meta when G.F.’s name popped up on Workplace, the company’s internal messaging system. Napoli says he received a message from G.F. stating that he’d been rehired and would be seeing him at meetings and events.
“To have all of that come back after I was guaranteed that I would be kept safe, it was really harrowing,” said Napoli. “I immediately went to [HR]… they let me know that they were equally stunned. They didn’t have an answer as to how it happened, and they let me know that they would investigate.”
Terminated again
For the next month, Napoli says he “lived in terror of interacting with G.F. at work” until Meta notified him that G.F. had been terminated. However, after G.F. lost his job a second time, his “stalking and harassment of Mr. Napoli significantly amplified and became more creative, sexually violent, and obsessive,” the lawsuit states.
As Napoli grappled with the continued stalking, he also faced what the lawsuit says was retaliation at Meta for complaining to his managers and to HR about the decision to rehire G.F.
Napoli had been tapped to lead an artificial intelligence marketing push at Meta, but says that in response to his complaints, those projects were taken away and he found himself sidelined with reduced responsibilities.
In his complaint, Napoli is asking for damages but didn’t specify an amount. He also asked the court to enter judgements that would prohibit G.F. from being rehired at Meta and prohibit the company from “engaging in any further discriminatory or retaliatory acts” against Napoli.
“I want to be able to do my job, and I want to be able to do my job without feeling like the shoe is going to drop,” said Napoli. “I am very passionate about my work, and I take a lot of pride in my work, and that is really all I want to be able to do.”
Napoli said he decided to tell his story because he wants Meta to make reforms that would prevent something like this from happening again.
“It doesn’t seem to me as though there are the right processes in place to stop this from happening to … me or to someone else,” said Napoli. “Everybody deserves a safe workplace.”
While Nvidia’s spectacular surge remains the biggest story in the technology industry, the AI chipmaker’s performance on the market has been dwarfed this year by a digital advertising company with a specialty in gaming.
AppLovin has soared 310% in 2024, beating every U.S. tech company with a market cap of at least $5 billion, according to FactSet data. Nvidia, which has led the artificial intelligence boom and become the world’s second-most valuable public company, is up 173% this year.
Founded 12 years ago, AppLovin went public in 2021, riding a Covid-era wave of excitement in online games. Now, the company’s games unit generates relatively slow growth, but its online ad business is bustling from advancements in AI that have improved ad targeting.
Great returns bring great expectations, and AppLovin has a lot to prove in its earnings report on Wednesday, as investors look for proof that the rally is warranted. In its third-quarter report, analysts are expecting revenue growth of 31% to $1.13 billion, according to LSEG, following two straight quarters of growth above 40%.
More than revenue, AppLovin has shown a massive increase in profit. Based on LSEG’s consensus, EPS is expected to more than triple to 92 cents, while analysts see operating income more than doubling to $424.2 million, according to FactSet.
AppLovin attributes much of its growth to its AI advertising engine called AXON, particularly since releasing the updated 2.0 version last year. The technology helps put more targeted ads on the mobile gaming apps the company owns, and works for other studios that license the software.
“AXON enhancements through ongoing self-learning and our dedicated development efforts have fueled robust business performance this quarter,” AppLovin said in its second-quarter shareholder letter in August. Revenue in the software business jumped 75% in the second quarter to $711 million, accounting for about two-thirds of total sales.
Analysts have gotten increasingly bullish.
Wells Fargo initiated AppLovin with the equivalent of a buy rating on Oct. 29, calling the company a share gainer. Analysts at BTIG lifted their price target last week to $202, the highest among firms tracked by FactSet. Oppenheimer, Stifel Nicolaus and Jefferies also raised their targets in October.
According to analysts at Wedbush, the ad opportunity in the mobile gaming industry will grow from $10 billion today to $50 billion over the next decade.
“Investors have bought into the story, driving APP shares to all-time highs, and we think that the rally is warranted,” Wedbush analysts wrote in a note on Oct. 11. They said the company’s “real opportunity” is to catch the influx in brand advertising towards mobile gaming from more conventional channels like social media or legacy broadcasting.
Because of its position in digital advertising, AppLovin faces potential competition from some of the most well-capitalized companies on the planet. In its latest annual filing, AppLovin named Google, Amazon and Facebook as competitors. The company also relies on a small set of mobile platforms, most notably from Apple and Google, for distribution.
AppLovin didn’t respond to a request for comment.
Among the biggest financial beneficiaries of AppLovin’s historic rally is founder and CEO Adam Foroughi, whose stake has soared to about $5 billion in value.
Things could’ve turned out very differently.
In September 2016, several years before the IPO, Foroughi agreed to sell a majority stake in AppLovin to Chinese investment firm Orient Hontai Capital in a deal valued at $1.4 billion. The transaction never materialized as the agreement came at a time when the U.S. government was clamping down on Chinese involvement in the domestic tech sector.
More recently, AppLovin was supposed to be on the other side of a deal that ultimately got scuttled. In 2022, AppLovin gave up on efforts to buy gaming software developer Unity Software for $20 billion, after Unity shareholders rejected the bid.
Unity has since struggled mightily, losing more than half its value. Over that same stretch, AppLovin’s market cap has ballooned by almost sixfold.
Chey Tae-won, chairman of SK Group, during the SK AI Summit in Seoul, South Korea, on Monday, Nov. 4, 2024. SK Hynix is working with Nvidia to resolve the supply bottleneck, Chey said.
Jean Chung | Bloomberg | Getty Images
Shares of SK Hynix rallied 6.5% on Monday after the business announced a next-generation memory chip and the parent company’s chair said that the South Korean semiconductor firm sped up the supply of a key product to Nvidia.
Speaking at the company’s event on Monday, Chey Tae-won, chair of SK Group, ran through an anecdote in which he said Nvidia CEO Jensen Huang asked him if SK Hynix could move the supply of high-bandwidth memory (HBM) chips called HBM4 forward by six months. SK Hynix’s CEO at the time said it was possible to do so, according to Chey.
It’s unclear if this will shift SK Hynix’s production timeline from the previously-announced second-half of 2025.
High-bandwidth memory is a key component of Nvidia’s chips, which are in turn used to train huge artificial intelligence models. Tech giants around the world have been snapping up Nvidia chips in a bid to produce the most powerful models and applications.
SK Hynix is a key supplier to Nvidia, and the huge demand for the American company’s products has helped the South Korean firm to achieve rapid growth this year and record profits.
SK Hynix shares are up around 36% this year.
On Monday, the company also announced a new product that helped support its share price rally. Samples of the chip — a 16-layer HBM — will be provided to customers in early 2025, SK Hynix said.
HBM is a type of dynamic random access memory, known as DRAM, where chips are vertically stacked to save space and reduce power consumption. Adding more layers to a HBM will, in theory, give it more capacity to handle complex AI applications.
The aggressive roadmap from SK Hynix comes as its closest rival Samsung, which has fallen behind in HBM, tries to stage a comeback and get its most advanced chips certified for use by Nvidia.
PayPal Inc. co-founder and Affirm’s CEO Max Levchin on center stage during day one of Collision 2019 at Enercare Center in Toronto, Canada.
Vaughn Ridley | Sportsfile | Getty Images
LONDON — Buy now, pay later firm Affirm launched Monday its installment loans in the U.K., in the company’s first expansion overseas.
Founded in 2012, Affirm is an American fintech firm that offers flexible pay-over-time payment options. The company says it underwrites every individual transaction before making a lending decision, and doesn’t charge any late fees.
Affirm, which is authorised by the Financial Conduct Authority, said its U.K. offering will include interest-free and interest-bearing monthly payment options. Interest on its plans will be fixed and calculated on the original principal amount, meaning it won’t increase or compound.
The company’s expansion to the U.K. marks the first time it is launching in a market outside the U.S. and Canada. Globally, Affirm counts over 50 million users and more than 300,000 active merchants, including Amazon, Shopify and Walmart.
Among the first merchants offering Affirm as a payment method in the U.K. are Alternative Airlines, the flight booking website, and payments processing firm Fexco. Affirm said it expects to onboard more brands over the coming months.
Max Levchin, CEO of Affirm, told CNBC that the company had been working on its launch in the U.K. for over a year. The reason Affirm chose Britain as its first overseas expansion target was because it saw a lot of demand from merchants in the country, according to Levchin.
“It is a huge market, it’s English-speaking,” making it a great fit for the business, Levchin said in an interview last week ahead of Affirm’s U.K. launch. Affirm will eventually expand into other markets that aren’t English-speaking but this will take more work, he added.
“There are lots of competitors here who are doing a sensible job serving the market. But when we started doing merchant outreach, just to find out locally, is the market saturated? Does everybody feel well served?” Levchin said. “We got such an enormous amount of market pull. It kind of sealed the deal for us.”
Fierce competition
Competition is fierce in the U.K. financial technology space. In the buy now, pay later segment Affirm focuses on, the company will find no shortage of competition in the form of sizable players like Klarna, Block’s Clearpay, Zilch, and PayPal, which entered the BNPL market in 2020.
Where Affirm differs to some of those players, according to Levchin, is that its range of financing products offer customers the ability to pay purchases off over much lengthier periods. For example, Affirm offers payment programs that last as long as 36 months.
Affirm’s launch in the U.K. comes as the government is consulting on plans to regulate the buy now, pay later industry.
Among the key measures the government is considering, is plans to require BNPL providers to provide clear information to consumers, ensure people aren’t paying more than they can afford, and give customers rights for when issues arise.
“Generally speaking, we welcome regulation that is thoughtful, that pushes the work onto the market to do the right thing, but also knows how not to be too cumbersome on the end-customer,” Levchin said.
“Telling us do lots of work in the background before you lend money is great. We’re very good at automating. We’re very good at writing software. We’ll go do the work,” he added. “Pushing the onus on the consumer is dangerous.”
Affirm secured authorization from the Financial Conduct Authority, the country’s financial services watchdog, after months of discussions with the regulator, Levchin said. He added that the firm’s “pristine reputation” helped.
“We’ve never charged a penny of late fees. We don’t do deferred interest. We don’t do any sort of the anti-consumer stuff people struggle with,” Levchin told CNBC. “So we have this good, untarnished reputation of being just very thoughtfully pro-consumer. And merchants love that.”
