Facebook drops a quarter of $trillion; and Uranium is making a comeback.
February 7, 2022 Volume 2 # 37
Facebook lost the equivalent of the GDP of Romania in two days
Well it was the holding company, Meta. Off $250-billion and the big reason is that Apple decided not to let Facebook copy all the private info by people going to Facebook on their iPhones, iPads and Macs. Congressional hearings grilling the slippery Mark Zuckerberg produce nothing; a nod from Apple sends the stock plumetting. This probably won’t last. Young people have moved away from Facebook but it still owns WhatsAp and other goodies.
I realize comparing a company’s market cap to a country’s GDP is not kosher, but it’s dramatic and gives you some idea of the size of the loss.
Facebook is losing a bit of market share to competitors like Tik Tok. It also appeals to older people; it is about as uncool as a Hotmail email address. It is still a rich company and its stock will probably bounce back. But no one stays on top forever.
The top five companies on the Fortune 500 in 2001 were: Exxon Mobil, Wal-Mart, General Motors, Ford and General Electric.
Facebook and Google were not on the list of the 500 biggest American listed stocks.
Today the top five companies on Fortune 500 are: Wal-Mart, Amazon, Apple, CVS Health and UnitedHealth Group.
Uranium
U-235 is the isotope of Uranium used in nuclear reactors and nuclear weapons.
There is a lot of interest in Uranium again because the European Union is thinking of classifying Nuclear Power as green energy. The Chancellor of Austria disagrees: “Nuclear power is neither green nor sustainable.” Many European countries have ditched nuclear, though Sweden has changed its mind. France gets 70% of its electricity from its nuclear power stations.
Much of Europe is dependent on natural gas from Russia. Not a great situation at the moment. Classifying nuclear as green is practical, if a bit of a stretch.
When a lake is not Great
It reminds me of the 1998 classification of Lake Champlain as a Great Lake, pushed by Vermont Senator Patrick Lehay so his state could receive some kind of Great Lake benefits. Geographical reality returned and Champlain only lasted as a Great Lake for 18 days. “By all geographic measures the idea of Champlain as a Great Lake is ludicrous,” says Mike Winslow in an article on the subject.
Make them an offer they can’t refuse
An Italian castle that featured in the Godfather Part III is for sale in Sicily.
Piazza Agostino Pennisi is in the town of Acireale, near Catania and a 45 minute from the upmarket tourist spot, Taormina. It belongs the aristocrats Pennisi family and it on the market for €6-million or US$6.8-million.
Michael Corleone (Al Pacino) sent a hitman to kill an Italian politician on the porch at the Piazza Agostino Pennisi.
And it needs work. Also doing renovations in Italy can be tricky. It is Sicily, after all.
Want to cruise the photos? Click here.
Don’t be shy, upgrade from a free to a paid subscription so I can bid on that house.
Where the tourists are
When Covid hit two years ago I was planning a trip to Sicily, staying in the seaside town of Donnalucata, a bit more modest than the places mentioned above. The trip was cancelled and maybe it will be okay to return later this year. The Canadian government still says: “Avoid non-essential travel” in a note issued on January 21, 2022.
As you can see from the chart below, Italy is NOT one of the countries where tourism provides 15% of employment. The islands of the Caribbean have been hit hard.
Essay of the Week
This is the obituary of Harry Steele I filed to the Globe and Mail this week.
Harry Steele started his business career late in life, after more than 20 years as an officer in the Royal Canadian Navy. He retired in 1974 as a Lieutenant Commander, and his business colleagues always referred to him as The Commander.
From building a small nest egg on real estate and stock market savings, Harry Steele bought the floundering Eastern Provincial Airways (EPA) from the Crosbie family in 1978. His wife, Catherine Thornhill, worked on small real estate transactions while her husband was away at sea and managed the Albatross Hotel they bought in Gander, Newfoundland. It was a true partnership.
"Mum was willing to let him put all his chips on the table when he had to," said their son, John Steele, referring to the money used to buy EPA. He added his mother kept his father focused during a high-flying business career.
"Even when he had the wind in his sails, she could keep him tethered to reality."
The ad campaign called Eastern Provincial, "The Little Airline That Could." Mr. Steele expanded its routes from Atlantic Canada to Toronto despite opposition from the existing big carriers, Air Canada and Canadian Airlines. Eventually, he sold EPA to Canadian Airlines for $20-million and went on its board.
That deal provided the capital for the growth of Newfoundland Capital Corporation (NCC). It held Clarke Transport; Halterm, a company with container operations in the port of Halifax; a trucking company; a firm providing ferry service on the St. Lawrence River; and Oceanex, a shipping company serving ports from Montreal to St. John's and Halifax. NCC had operations on land, at sea, and in the air.
On top of all that, Harry Steele personally owned Universal Helicopters, hotels in Newfoundland, and fishing camps in Newfoundland and Labrador. Harry's friend and business associate Seymour Schulich said Harry fished for business as much as he did for salmon.
Preppie bonds with kid from the Newfoundland outport.
Harry Steele served on many Canadian boards, including Southam, the newspaper chain, Dundee Bancorp and many others. His family says Mr. Steele's business success was based on his character, which was the same in business as it was at home.
"He always did what he said he was going to do, whether that was closing a business deal or if he promised to pick you up at the airport," said John Steele.
Although he started in business relatively late in life, once he started on his quest, he succeeded himself in a hurry. In fact, Joey Smallwood, the first premier of Newfoundland and Labrador, once said of Harry Steele, "I never knew anyone to come so far so fast."
Harry Steele's start was as modest as they get. He was born in 1929 in Musgrave Harbour, an outport on Newfoundland's Atlantic coast. It is a place with one of the most beautiful beaches in all of Newfoundland, an out-of-the-way spot sought after by tourists today, but when Harry was a child, the remoteness of the village meant that the only way in was by boat. Times were rough in the 1930s, and the community lived on fishing and work in the woods. The school there had two rooms, one upstairs and one downstairs, and taught everything from the first grade to the last year of high school.
When Harry left his hometown, he walked out through the bush that surrounded the village to the railway tracks that he picked up in the nearby town of Lewisporte. Not only was there no road into his village, there was no direct rail line to Musgrave Harbour either.
His first job outside Musgrave Harbour was digging ditches on the roads in Deer Lake in western Newfoundland. Then Joey Smallwood came to the rescue. The first premier of Newfoundland created a scholarship program for Newfoundlanders who wanted to be teachers. Harry seized the opportunity and enrolled in Memorial University. He also joined the University Naval Training Division (a program set up by the Royal Canadian Navy to develop officers for the navy.) He needed both scholarships to survive. Although he did graduate from the teacher training program, Harry never did teach school. Instead, he joined the Royal Canadian Navy full-time as a junior officer.
He and his wife went to England, where Harry trained as a communications specialist at a Royal Navy school. He learned about codes and radio frequencies, the foundations of military intelligence. He also learned about secrecy: He never gave details, even to his family, of exactly what he did, except to say: "I read other people's mail."
He spent time at sea on a variety of warships: a large cruiser, an aircraft carrier, frigates, and other types of vessels. He travelled the world, taking in many sights and different cultures. He saw poverty in West Africa and the opulence of diplomatic life in Washington, D.C., where he worked in naval intelligence.
Harry's last posting with the Royal Canadian Navy was as commander of the base at Gander, Newfoundland, where he served for four and half years. Gander was a key NATO base during the Cold War — among other things, the base there kept an eye on submarine traffic in the North Atlantic and intercepted and deciphered radio messages from the Russian vessels in the nearby ocean.
Around this time, Harry became fascinated with the stock market, and he began to make investments, pooling knowledge and money with his brother-in-law Roland Thornhill. He was an astute student of markets, a natural. And his wife, Catherine, had a sharp eye for real estate. She discovered The Albatross Hotel in Gander and, together with Harry, bought it and made a success of it.
Harry left the navy in 1974, riled by the amalgamation of Canada's armed forces, an action that resulted in the loss of many military traditions. The end of Harry's military career resulted in the beginning of a new chapter in his life.
Mr. Steele began his civilian career working for Eastern Provincial Airways, whose head office was in Gander. However, he worked only briefly at the airline, leaving after a year. His decision to depart seemed a good one since EPA was on the ropes. Shortly after that he had a change of heart about the airline. He learned that the Crosbie family, the owners of the company, was looking for a way out. The airline's stock price was in the basement and the Crosbies were looking to cut their losses. Harry had been picking up a sizeable number of shares since he joined the company, and at this point, he decided that he could turn the airline around. Harry mortgaged everything he and Catherine had and bought the airline. He was forty-nine years old.
"EPA Changes Hands … But It's Still a Newfoundlander" screamed the St. John's Daily News headline on November 22, 1978, when Harry bought the airline.
He ran the airline the same way Harry Steele, naval commander, would run a ship or a military base: keeping operations tight. He found a way to reduce the fuel burn of EPA's Boeing 737s by 10 percent, saving a million and a half dollars a year.
The company's other cost-cutting measures were not so obvious. One example: Eastern Provincial Airways was the first airline in Canada to become non-smoking. It was healthier, but it also meant that the ashtrays didn't need to be cleaned after short hops.
Mr. Steele didn't like smoking.
"There were a few smokers in the office, but they knew not to smoke at work," said Veronica Brown, Mr. Steele's executive assistant for 42 years. "He was always at work before anyone else in the morning. He loved work. Work to him was more like a hobby. He enjoyed salmon fishing, but his mind was always on work."
Along the way, Mr. Steele invested in newspapers, magazines, and radio stations. In the 1990s there was a total re-think and re-organization of NCC. Clarke Transport, Halterm, Oceanex, and all the related transportation businesses were sold. The newspapers and magazines went too. That left a pure media play, 101 radio stations across Canada. Newcap Radio was sold in 2018.
On April 29, 1992, then governor-general Ray Hnatyshyn invested Harry Steele as a member of the Order of Canada. In his comments during the ceremony, Hnatyshyn remarked: "Although he remains modest about his career achievements, this Newfoundlander had a distinguished naval career before becoming one of the leading entrepreneurs in the Maritimes. He is a generous employer and community-minded citizen whose support of various local causes in the areas of education, health care and the arts is well-known."
Along with his Order of Canada, Harry has received many other awards, including alumni of the year at Memorial University.
Harry Raymond Steele was born on June 9, 1929. June 9 was also the day of his marriage. He died in St. John's on January 28, 2022. He is survived by his wife Catherine, his sons Peter, Rob and John, seven grandchildren and two great children.