Newsletter: California Inc.: Is a tech bubble brewing?
Welcome to California Inc., the weekly newsletter of the Los Angeles Times Business section.
I'm Business editor Kimi Yoshino, filling in for your usual host, consumer columnist David Lazarus. Here's a rundown of what's coming this week and some of the highlights from last week.
Looking Ahead
U.S. economy: The Commerce Department will release on Wednesday its final estimate of the nation's first-quarter gross domestic product, a key measure of the health of the economy. Its previous estimate showed that economic activity dropped a disappointing 0.7%. Economists expect growth to return in the second quarter, but that initial estimate won't be out until the end of July.
Spill investigation: The operator of a pipeline that spilled oil at Refugio State Beach near Santa Barbara will be on the hot seat when a California legislative committee holds a public hearing Friday. Officials from Plains All American Pipeline, whose ruptured pipeline spilled 21,000 gallons of oil into the ocean after bursting on May 19, will field questions.
Delivery by rocket: Elon Musk's SpaceX is scheduled to launch another Falcon 9 rocket carrying cargo for the International Space Station on Sunday from Cape Canaveral in Florida. It would be the company's seventh NASA-contracted cargo mission and its eighth visit to the station. Key question: Will the Hawthorne company try again to make history and land its reusable rocket?
Just in time for summer: Universal Studios Hollywood will open its latest attraction on Wednesday: Fast and Furious -- Supercharged. It is part of a $1.6-billion, 25-year expansion that will include the highly anticipated opening of the Wizarding World of Harry Potter attraction next spring.
The Agenda
Monday's Business section explores the rise of a new class of American corporation -- those too highly valued to be called start-ups -– and how an influx of cash from venture capitalists has sparked heated debate about whether an exuberant tech sector is overheating once again. Some experts believe that a tech bubble is brewing.
Story Lines
Interest rates: Federal Reserve policymakers downgraded their view of the economy last week but still indicated that they will probably raise a key interest rate in the coming months. The short-term federal funds rate has been near zero since 2008 as a central part of the Fed's efforts to stimulate the economic recovery from the recession.
Uber drivers: A ruling that declared that an Uber driver is an employee of the company -- not an independent contractor -- has rattled the fast-growing sharing-economy industry. The ruling could spawn other legal challenges from workers.
Brian Williams: The popular NBC News anchor, who became embroiled in controversy over false statements he made about his reporting, will no longer anchor the network's evening newscast. Instead, Williams will be assigned to handle breaking news on cable network MSNBC.
Fitbit goes public: The initial public offering of exercise-tracking device company Fitbit elevated the heart rates of some investors Thursday. Shares finished the first day of trading at $29.68, almost 50% above the IPO price of $20.
The $10 bill: The Treasury Department plans to put a woman's face on a new $10 bill to be released in 2020 –- and you get to help choose the woman. The announcement sparked criticism from supporters of Alexander Hamilton, the country's first Treasury secretary, who currently appears on the note.
What We're Reading
Airbnb worth more than Marriott? The Wall Street Journal reports that the home-rental site is closing in on a $1-billion funding round, putting its valuation at $24 billion. That would eclipse Marriott, which manages 4,000 hotels and is valued at $21 billion.
Lettuce landfill: NPR visits the municipal dump in Salinas Valley, where an estimated 70% of U.S. salad greens are grown. It found that many big salad processors are dumping truckfuls of fresh, packaged greens.
AIG shocker: The New York Times' Andrew Ross Sorkin analyzes a federal judge's surprise ruling that regulators went too far in taking a huge stake in American International Group Inc. as part of its 2008 bailout. The ruling, coupled with the Dodd-Frank financial reforms, makes it unlikely that the government would rescue a failing institution again, Sorkin writes.
How Tesla will change the world: What's it like to get a cold call from Elon Musk's people? Tim Urban at the website WaitButWhy explains -- with lots of stick-figure drawings. The first two installments of Urban's four-part series are up: a piece on Musk, "The World's Raddest Man," and why Tesla is a game changer.
On a lighter note: Twitter needs a new chief executive to replace Dick Costolo, and Snoop Dogg has nominated himself for the job. Sounds crazy, but James Altucher at Quartz says the rapper has some words of wisdom on being a better CEO.
For the latest on Business news, visit www.latimes.com/business.
