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Facebook Building 8 explored data sharing agreement with hospitals

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The exploratory effort to share medical-related data was led by an interventional cardiologist called Freddy Abnousi, who describes his role on LinkedIn as “leading top-secret projects.” It was under the purview of Regina Dugan, the head of Facebook’s “Building 8” experiment projects group, before she left in October 2017.

Facebook’s pitch, according to two people who heard it and one who is familiar with the project, was to combine what a health system knows about its patients (such as: person has heart disease, is age 50, takes 2 medications and made 3 trips to the hospital this year) with what Facebook knows (such as: user is age 50, married with 3 kids, English isn’t a primary language, actively engages with the community by sending a lot of messages).

The project would then figure out if this combined information could improve patient care, initially with a focus on cardiovascular health. For instance, if Facebook could determine that an elderly patient doesn’t have many nearby close friends or much community support, the health system might decide to send over a nurse to check in after a major surgery.

The people declined to be named as they were asked to sign confidentiality agreements.

Facebook provided a quote from Cathleen Gates, the interim CEO of the American College of Cardiology, explaining the possible benefits of the plan:

“For the first time in history, people are sharing information about themselves online in ways that may help determine how to improve their health. As part of its mission to transform cardiovascular care and improve heart health, the American College of Cardiology has been engaged in discussions with Facebook around the use of anonymized Facebook data, coupled with anonymized ACC data, to further scientific research on the ways social media can aid in the prevention and treatment of heart disease—the #1 cause of death in the world. This partnership is in the very early phases as we work on both sides to ensure privacy, transparency and scientific rigor. No data has been shared between any parties.”

Health systems are notoriously careful about sharing patient health information, in part because of state and federal patient privacy laws that are designed to ensure that people’s sensitive medical information doesn’t end up in the wrong hands.

To address these privacy laws and concerns, Facebook proposed to obscure personally identifiable information, such as names, in the data being shared by both sides.

However, the company proposed using a common cryptographic technique called hashing to match individuals who were in both data sets. That way, both parties would be able to tell when a specific set of Facebook data matched up with a specific set of patient data.

The issue of patient consent did not come up in the early discussions, one of the people said. Critics have attacked Facebook in the past for doing research on users without their permission. Notably, in 2014, Facebook manipulated hundreds of thousands of people’s news feeds to study whether certain types of content made people happier or sadder. Facebook later apologized for the study.

Health policy experts say that this health initiative would be problematic if Facebook did not think through the privacy implications.

“Consumers wouldn’t have assumed their data would be used in this way,” said Aneesh Chopra, president of a health software company specializing in patient data called CareJourney and the former White House chief technology officer.

“If Facebook moves ahead (with its plans), I would be wary of efforts that repurpose user data without explicit consent.”

When asked about the plans, Facebook provided the following statement:

“The medical industry has long understood that there are general health benefits to having a close-knit circle of family and friends. But deeper research into this link is needed to help medical professionals develop specific treatment and intervention plans that take social connection into account.”

“With this in mind, last year Facebook began discussions with leading medical institutions, including the American College of Cardiology and the Stanford University School of Medicine, to explore whether scientific research using anonymized Facebook data could help the medical community advance our understanding in this area. This work has not progressed past the planning phase, and we have not received, shared, or analyzed anyone’s data.”

“Last month we decided that we should pause these discussions so we can focus on other important work, including doing a better job of protecting people’s data and being clearer with them about how that data is used in our products and services.”

Facebook has taken only tentative steps into the health sector thus far, such as its campaign to promote organ donation through the social network. It also has a growing “Facebook health” team based in New York that is pitching pharmaceutical companies to invest its ample ad budget into Facebook by targeting users who “liked” a health advocacy page, or fits a certain demographic profile.

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Morgan Stanley had $911 million loss in Q1 tied to Archegos meltdown

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Bill Hwang in 2012

Emile Warnsteker | Bloomberg | Getty Images

Morgan Stanley posted blockbuster results for the first quarter, but a single prime brokerage client cost the firm nearly $1 billion.

In its earnings results, Morgan Stanley said Friday it had a $644 million loss from a “credit event” for that client, as well as $267 million in related trading losses.

That client was Bill Hwang’s Archegos, Morgan Stanley CEO James Gorman said during a conference call with analysts, confirming what a person with knowledge of the situation told CNBC earlier.

While Morgan Stanley was the biggest prime broker to Archegos, other banks suffered larger losses. Credit Suisse, which CNBC has reported was the No. 2 broker to Archegos, took a $4.7 billion hit to unwind the losing bets and shuffled top managers because of the meltdown. Nomura said it could face $2 billion in losses.  

During his scheduled call with analysts to discuss the quarter, Gorman said Archegos owed it $644 million after its meltdown in late March.

“We liquidated some very large single stock positions through a series of block sales culminating on Sunday night, March 28,” Gorman said. “That resulted in a net loss of $644 million which represents the amount the client owed us under the transactions that they failed to pay us.”

He added: “Subsequently, we made a management decision to completely de-risk the remaining smaller long and short positions,” Gorman said. “We decided we would be out of the risk as rapidly as possible, and in so doing, incurred an incremental loss of $267 million. I regard that decision as necessary and money well spent.”

Morgan Stanley may have been misled by the family office, CFO Jon Pruzan said during the call. The bank held collateral for Archegos based on facts that turned out to be untrue, he said.

Archegos representatives could not immediately be located for comment. Its previous communications firm said it no longer represented the family office.

At least part of the Archegos loss was driven by the fact that Morgan Stanley had been an underwriter on ViacomCBS shares the previous week, so it held off selling a block of the company’s stock until Sunday, which caused the bank to be later in selling than others, Gorman said.

During the call, an analyst asked Gorman if the episode would change the firm’s approach to risk management in the prime brokerage business.

“I think we’ll certainly be looking hard at family office-type relationships where they are very concentrated and you have multiple prime brokers and frankly, the transparency and lack of disclosure relating to those institutions is just different” from hedge funds, Gorman said. “That’s something I’m sure the SEC is going to be looking at and that’s probably good for the whole industry.”

— CNBC’s Dawn Giel contributed to this report.

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‘Roaring Kitty’ stands to rake in millions on his GameStop options bet Friday

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The Reddit logo is seen on a smartphone in front of a displayed Wall Street Bets logo in this illustration taken January 28, 2021.

Dado Ruvic | Reuters

It could be a big payday for Keith Gill, the Reddit trading crowd’s favorite and the man who inspired the epic GameStop short squeeze.

Friday is the expiration date of Gill’s 500 call options contracts he bought at the beginning of 2021. Gill — who goes by DeepF——Value on Reddit and Roaring Kitty on YouTube — attracted an army of day traders who piled into the brick-and-mortar video game stock and call options, pushing the shares up 400% in a single week in January.

GameStop closed at $156.44 a share on Thursday, up 730% for the year. Assuming Gill still holds the contracts and sells them Friday, at a $12 strike price, he will make more than $7 million on his position (The options cost the buyer $10,000 in total.)

It’s unclear if Gill has already closed his position at a profit. His last update on Reddit’s r/WallStreetBets forum was on April 1, which showed 500 outstanding call options in a position worth more than $8 million at the time. (The post was not independently verified by CNBC so we are assuming that it is his actual account.)

Gill has also been holding 100,000 shares of GameStop, which he bought earlier this year at around $27 apiece, according to the screenshots he posts on Reddit. As of April 1, the stake gained more than $16 million. It wasn’t clear if he sold the shares this month.

The investor was a former marketer for Massachusetts Mutual Life Insurance. Through YouTube videos and Reddit posts, Gill encouraged a band of retail traders to squeeze out short selling hedge funds in GameStop.

The action got so wild at one point that brokerages including Robinhood had to restrict trading in the stock as it blew up their clearinghouse margin. The mania also led to a series of congressional hearings featuring Gill around brokers’ practice, and gamifying retail trading.

Gill owned 10,000 shares of GameStop at the end of 2020 and increased his holding to 50,000 shares in January and to 100,000 in mid-February. Judging from the updates he posted on Reddit, he never sold his GameStop stakes amid the monstrous short squeeze or in the aftermath.

The GameStop story is still far from over. Besides the scrutiny the saga brought on around retail trading, the company itself is in the middle of a transformation, hoping to capitalize on the massive rally in the stock price.

GameStop announced a $1 billion stock sale at the beginning of April to accelerate its e-commerce transition led by activist investor and board member Ryan Cohen, who is Chewy’s co-founder. The company also hired former Amazon and Google executive Jenna Owens as its new chief operating officer.

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Danish energy giant Orsted pivots to onshore wind in $684 million deal

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Closeup of a wind turbine nacelle on blue sky.

lupmotion | iStock | Getty Images

Orsted said Friday it had reached an agreement with Brookfield Renewable to purchase a 100% equity interest in the latter’s Irish and U.K. onshore wind business, Brookfield Renewable Ireland.

Orsted said the deal would see it enter Europe’s onshore market. In 2014 the company, which was then known as DONG Energy, divested its last activities in onshore wind to focus on the offshore sector.

According to Orsted, the agreement has an enterprise valuation of 571 million euros ($684 million), although this figure is subject to adjustments. The deal is slated to close in the second quarter of 2021.

Brookfield Renewable Ireland, or BRI, is headquartered in the Irish city of Cork and specializes in the development and operation of onshore wind farms.

Orsted described BRI as having “an attractive portfolio” which includes 389 megawatts (MW) in operation and under construction as well as a development pipeline of over 1 gigawatt (GW).

“In the US, we’ve built a strong onshore business with 4 GW in operation and under construction,” Orsted CEO, Mads Nipper, said in a statement.

“The European market for onshore wind power is expected to grow significantly in the coming years,” Nipper added.

He went on to state his firm’s acquisition of BRI would provide it with “a strong platform that expands our presence in onshore renewables to Europe.”

Europe is home to a well-developed wind energy industry. According to figures from WindEurope, 2020 saw 14.7 GW of wind energy capacity installed there.

The industry body says 80% of these installations were in the onshore sector, with total onshore capacity amounting to 194 GW.

In the U.S., onshore capacity stands at more than 122 GW, according to the American Clean Power Association. China, a dominant force in wind energy, boasts over 278 GW of onshore capacity, the Global Wind Energy Council says.

Capacity refers to the maximum amount that installations can produce, not what they are necessarily generating.

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