Yesterday, Apple and Google launched the first phase of their joint effort to help track the spread of COVID-19. The two tech companies have begun testing an initial version of their exposure notification API that should help public health authorities contain the spread of coronavirus by quickly identifying people who might have been exposed to new cases. It will be widely available to most public health agencies by mid-May. 

For this effort to work, people using Apple and Android phones will need to download the apps and report whether or not they have been diagnosed with coronavirus. In a country where people are protesting lockdowns and social distancing and where big tech hasn’t exactly gained the public’s trust, how likely are Americans to use these apps?

A new survey conducted by The Washington Post and the University of Maryland found that a majority Americans aren’t planning on using the apps, with nearly 3 in 5 Americans are either unwilling or unable to use the infection-alert system that Google and Apple have developed. For the apps to be most effective, they require a large portion of the population to contribute. A recent study by epidemiologists at Oxford University estimated that the ideal number would be 60% of the population. If Americans are already rather adverse to the idea of using the contact-tracing tech, then it’ll be difficult to persuade them that this initiative will help find potential new infections, thus helping us to ease lockdown restrictions faster and make resuming economic and social activities safer. 

Just under half of polled Americans said that they would definitely or probably use the apps, however, and that’s no small number. Additionally, 59% said that they would feel comfortable using the app to anonymously inform people they came physically close to if they were to be diagnosed with coronavirus. 

In Australia, coronavirus tracing app COVIDsafe was released on Sunday and by Tuesday had over 2 million downloads, which is about 10% of Australia’s population. Singapore’s contact tracing app saw similar percentages of downloads, whereas among Norway’s population, about 30% have downloaded the app. As Casey Newton points out in his newsletter The Interface, “The first thing to say about this is that it’s very difficult to predict what people will do when they are asked to begin participating in Big Tech’s exposure notification system…if exposure notification appeared to be working — if public health agencies use it as part of a broader scheme relying on human beings to do more old-fashioned tracing — you can imagine big campaigns within communities to get more people to opt in. (Or your employer forcing you to!)”

According to the survey, Democrats and people who reported they are worried about becoming seriously ill from COVID-19 are more willing to use the apps, whereas Republicans and people who are less worried about getting infected are more likely to resist use of contact-tracing apps. One barrier to the success of this effort is the fact that 1 in 6 Americans don’t have smartphones, especially among the senior population who are more vulnerable to the virus. 

Another barrier to adoption would be concerns about privacy and lack of trust. The poll asked Americans how much they trusted tech companies like Apple and Google, universities, public health agencies and health insurance companies to keep their identities anonymous. More than half of Americans don’t trust tech companies or health insurance companies, and only 56% and 57% do trust universities and public health agencies.

Contact-tracing sounds very dystopian and concerns over privacy are understandable, but are they justified? Apple and Google say that they’d be using Bluetooth technology “with user privacy and security central to the design.” This means that the app will use your phone’s Bluetooth chip to find other devices whose owners have also opted to use the COVID-19 tracking apps. Public health authorities will determine what they consider to be likely exposure, based on physical proximity — six feet or closer based on current CDC guidelines — and time spent in proximity. These variables will be calculated on a user’s phone and if contact is likely, then both phones will log the event, but the information will not be shared with Google or Apple.

The most likely concern here is that governments or third parties can use this tech for surveillance. Google and Apple are essentially addressing this by changing the code that each device’s Bluetooth signals outward every 10 to 20 minutes, limiting a person’s ability to eavesdrop on these codes to track a someone’s movements. 

“When a user reports a positive COVID-19 diagnosis, their app uploads the cryptographic keys that were used to generate their codes over the last two weeks to a server,” reports Wired. “Everyone else’s app then downloads those daily keys and uses them to recreate the unique rotating codes they generated. If it finds a match with one of its stored codes, the app will notify that person that they may have been exposed, and will then show them information about self-quarantining or getting tested themselves.”

But it’s not foolproof against correlation attacks or linkage attacks. In the case of a correlation attack, the contacts of an infected person can figure out which people they encountered is infected. “Taken to an extreme, bad actors could collect RPIDS [(rolling proximity identifiers)] en masse, connect them to identities using face recognition or other tech, and create a database of who’s infected,” writes the Electronic Frontier Foundation, a nonprofit that defends civil liberties in the digital world. “A well-resourced adversary could collect RPIDs from many different places at once by setting up static Bluetooth beacons in public places, or by convincing thousands of users to install an app. The tracker will receive a firehose of RPIDs at different times and places. With just the RPIDs, the tracker has no way of linking its observations together.” 

Given the global state of emergency, many argue that potential surveillance is a “price worth paying.” The Tony Blair Institute for Global Change recently published a report that argues that the public must accept a level of intrusion that would normally be unacceptable in liberal democracies. 

“The paper argues all governments must choose one of three undesirable outcomes: an overwhelmed health system, economic shutdown, or increased surveillance,” reports the BBC. 

In May, we’ll see a larger rollout of APIs that can communicate between Android and iOS devices using apps from public health authorities that users can download from the Apple App Store or Google Play. Over the summer, the second phase of the effort will allow exposure notification to be built directly into iOS and Android.

“This is a more robust solution than an API and would allow more individuals to participate, if they choose to opt in, as well as enable interaction with a broader ecosystem of apps and government health authorities,” according to an Apple press release. “Privacy, transparency, and consent are of utmost importance in this effort, and we look forward to building this functionality in consultation with interested stakeholders. We will openly publish information about our work for others to analyse.”

Rebecca Bellan

Facebook Inc. (FB) shares are jumping on April 30 by about 5% following its first quarter results. Despite the rally, the company is likely to face several headwinds in 2020 that may pressure operating margins, and in return, reduce earnings per share. Additionally, there is a lack of clarity to how the business may perform since the company did not provide second quarter or full-year guidance.

Still, even with all of that uncertainty and potential margin pressure, the stock is quickly approaching its all-time highs. An odd move higher due to the uncertainty that lies ahead for the company and the broader economy.

Stock Deserve Trade At Lower Earnings Multiple

Despite the lack of clarity, the stock is trading less than 9% from its all-time high at the end of January. The stock certainly is not expensive at current levels trading for around 21 times one-year forward earnings. That one-year forward PE ratio does come towards the lower end of its historical range of 13 to 28 over the past three years. 

However, one could easily argue that during a time of considerable uncertainty regarding a business outlook that a stock deserves to trade at a lower price to earnings multiple. While in the face of these uncertainties, earnings estimates for future quarters are likely to continue to decline. It could suggest that at this point, Facebook’s stock may have less to gain and more to lose.

Analysts Cutting Forecast

Analyst forecast that revenue for the second quarter will grow by 1% versus last year to approximately $17.1 billion, while earnings are forecast to decline by more than 27% to $1.45 per share. For the full year, analysts forecast earnings will fall by over 10% to $7.68, with revenue expected to climb by around 9.8% to $77.6 billion.  However, 2021 holds promise for improvement, with earnings forecast to rise by 30.4% to $10.01 per share as those estimates have been trending lower.

Beating Significantly Reduced Expectations

For the first quarter, Facebook was able to beat significantly reduced earnings and revenue estimates. The company reported revenue of $17.7 billion, which was 3% better than analysts’ estimates. However, that was significantly worse than what analysts had been forecasting on March 17 when they stood at $18.5 billion. Additionally, earnings came in at $1.71, in line with expectations, but again significantly below estimates on March 17 of $1.99 per share.

Cutting Expenses

The one benefit that may help to offset some of these uncertainties is that the company plans to spend less in 2020, lowering its expense forecast to $54 billion at the midpoint of the range, from $57.5 billion.  Additionally, the company is cutting back on capital expenditures to $15 billion at the midpoint of the range from $18 billion. But the reductions in spending are still likely not to be enough, as the company is forecasting a negative impact on its operating margins.

Should the coronavirus spread come under control, and the economy can pick up steam, then it seems likely that advertiser spending will improve. As a result, Facebook could see a surge in business, thus helping to lift its revenue, earnings, and stock. But in the absence of that recovery, the shares may struggle.

Michael Kramer is a financial market strategist and the portfolio manager of the Mott Capital Thematic Growth Portfolio.

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future results.

Michael KramerContributorSocial MediaFounder of Mott Capital Management

Twitter will provide selected academic teams with full access to the public tweet conversation about COVID-19 as part of a new dataset designed to help in the research of the virus and its spread.

Specifically, Twitter is releasing a new endpoint into Twitter Developer Labs which will enable developers and researchers to study the public conversation about COVID-19 in real-time.

As per Twitter:

“This is a unique dataset that covers many tens of millions of Tweets daily and offers insight into the evolving global public conversation surrounding an unprecedented crisis. Making this access available for free is one of the most unique and valuable things Twitter can do as the world comes together to protect our communities and seek answers to pressing challenges.”

The COVID-19 data set will facilitate research into how people are discussing the pandemic, what they’re discussing about it, the spread of misinformation and hoaxes, predicting future hot spots for healthcare management, and more.

Facebook has also provided its own dataset for similar purpose – earlier this month, The Social Network launched its new COVID-19 location tracking and individual connectivity maps, which aim to highlight where people are more connected, and where they’re traveling, in order to help predict potential spread.

Though Twitter’s data set is more about the specific conversation – which past research has shown can also be a highly effective tool in predicting future concerns.

US Geological Survey, for example, uses tweet data to track earthquakes and their potential impacts, while Tweet insights have also been used in various regions to predict civil unrest, and even crime.

Probably the best example in this case, however, comes from back in 2013, when researchers showed how tweet conversation can be used to map flu outbreaks, and help local health authorities prepare in order to mitigate the impacts.

As per the research paper:

“Our system detected the weekly change in direction (increasing or decreasing) of influenza prevalence with 85% accuracy, a nearly twofold increase over a simpler model, demonstrating the utility of explicitly distinguishing infection tweets from other chatter.”

In their further notes, the research team says that real-time monitoring of relevant conversation via Twitter can better enable clinicians to anticipate surges in influenza-like illness – “up to two weeks in advance of existing data collection strategies”.

That’s the kind of predictive capacity Twitter will be hoping to facilitate with this new access, but Twitter also knows that it needs to be very cautious when enabling such usage.

The Cambridge Analytica debacle at Facebook changed the process in this respect. The dataset that CA used originally came from academic usage, and Twitter, like all social platforms, is acutely aware of how such insights can potentially be misused, if they fall into the wrong hands. Because of this, researchers that are looking to access the new dataset will need to apply via a specific process. Twitter will then review each application “to ensure they support the public good”. 

I’m not entirely sure what to make of this yet, but according to a new discovery by reverse engineering expert Jane Manchun Wong, Instagram is working on a new ‘DM Me’ sticker for Instagram Stories, which would prompt direct message engagement from your Stories content by tapping on the sticker image.

I mean, it makes sense from a usage standpoint. Like all messaging options, usage of Instagram Direct has been on the rise over the last few years, and that’s spiked even further during COVID-19, with Facebook reporting a 50% increase in total messaging volume across its apps in March.

In this respect, there’s clear logic to Instagram looking to facilitate more messaging use. But maybe it seems too pushy? Maybe?

It seems like maybe a direct prompt to call for messages from Stories viewers could also be problematic, in regards to harassment and abuse. People might want to get private messages as a result of their Stories, but opening the door in this way could lead to more unsolicited attachments and such, which has become a problematic element, particularly for younger users.

Of course, people would be able to restrict such through their privacy settings, but still. It seems a little off, somehow.

Then again, it’s not a lot different to the ‘Join Chat’ sticker that Instagram added for Stories last July, though the key variation here is that that sticker is about adding people into a group chat, as opposed to initiating one-on-one discussion.

Is prompting private DMs that much different? Is it that useful?

From a brand perspective, if it’s made available to business profiles, it could be another prompt to get potential customers to make that first contact. You could showcase your product in a video and include the sticker with a CTA to ‘Get more info’ or similar. That could help drive more direct discussion, and would be another consideration to keep in mind.

There’s no word from Instagram as yet as to a possible launch, but it may be looking to push the DM sticker as an engagement measure for users during COVID-19. Wong’s discoveries tend to take around six weeks before official announcement, but the pandemic has shifted development timelines somewhat.

We’ll keep you updated as we get more info.

AUTHOR Andrew Hutchinson