An internet outage affects company websites in Australia and beyond.

Daily Business Briefing

June 22, 2021, 8:09 a.m. ET

June 22, 2021, 8:09 a.m. ET

Credit…Loren Elliott/Reuters

The websites for several major corporations in Australia and beyond briefly stopped working for many users on Thursday, in what analysts said was a glitch caused by service disruptions at a hosting platform based in the United States.

The outage was the second failure in the past two weeks that appeared to demonstrate widespread dependence on a handful of companies that maintain the plumbing underpinning the global internet.

The disruptions on Thursday affected several Australian banks, the airline Virgin Australia and the Hong Kong Stock Exchange, among other companies. There were also reports of service outages at the websites of companies in Germany, India and elsewhere.

Just as those websites failed, the website, which tracks internet disruptions, said that user reports showed a spike in “possible problems” at Akamai, a service provider based in Massachusetts. said the reports began to spike around 12:10 a.m. Eastern time on Thursday and began to taper off about an hour later.

Cybersecurity experts in Australia wrote on social media that the disruptions at Akamai appeared to be the cause of the website failures. The company said in a brief statement that it was “aware of the issue” and working to restore services.

In Australia, the outage affected online and mobile banking services at three major banks — ANZ, Commonwealth, and Westpac — as well as smaller banks, including ME and Macquarie. Residents complained on social media of being stuck in supermarket checkouts with no way to pay for groceries or being stranded at gas stations and unable to pay for fuel.

Westpac said in a statement that some its services had been affected by “an issue today with a third party provider,” while ANZ said it had been hit by “an incident related to an external provider.” Commonwealth Bank said it had been affected by a “tech outage.”

The country’s other major bank, National Australia Bank, said that its services had not been affected.

Australia’s post office said that an “external outage” had affected some of its services.

Virgin Australia said in a statement that it was “one of many organizations to experience an outage with the Akamai content delivery system today, and we are working with them to ensure that necessary measures are taken to prevent these outages from reoccurring.”

By about 2 a.m. Eastern time in the United States, or late Thursday afternoon in Australia, a few Australian banks said that their services were back online.

Last week, several major websites, including those of the British government, The New York Times, CNN, The Financial Times and The Guardian, were briefly inaccessible. Many of the affected sites appeared to have been restored after a little less than an hour.

That outage was connected to Fastly, a provider of cloud computing services used by businesses around the world to operate their websites. Fastly, which is based in San Francisco, later said the problem had been identified and was being fixed.


An earlier version of this article and an accompanying photograph incorrectly listed one company among others affected by the outage. National Australia Bank’s operations were not affected.

The Department of Justice filed a civil suit on Wednesday to block the proposed merger of Aon and Willis Towers Watson, arguing that combining two of the Big Three insurance brokers would create an anticompetitive “behemoth.”

Many observers thought the government would allow the deal. Regulators in Europe, where both companies also operate, had indicated that they were likely to approve the merger, which would create the world’s largest insurance brokerage.

The $30 billion transaction would “eliminate substantial head-to-head competition and likely lead to higher prices and less innovation,” the Justice Department’s complaint says. It says the companies dominate markets for risk and reinsurance brokering, health and pension benefits brokering, actuarial services for employer benefit programs, and private exchanges that offer retiree benefits.

Attorney General Merrick Garland said in a statement, “Today’s action demonstrates the Justice Department’s commitment to stopping harmful consolidation and preserving competition that directly and indirectly benefits Americans across the country.”

In a joint statement, the companies said the department’s assessment “reflects a lack of understanding of our business, the clients we serve and the marketplaces in which we operate.” They said they remained committed to the deal and were working with regulators internationally to make it happen.

The companies had tried to assuage the competition concerns of American regulators by selling off some of their businesses. The efforts came too late, however, and fell “way short,” said Richard Powers, acting assistant attorney general of the Justice Department’s antitrust division. The proposed divestitures involved only a small fraction of their businesses and a “handful of employees” and didn’t leave the companies free of entanglements, he said.

The government said the companies were aware they already operated in an oligopoly, adding in a statement: “If permitted to merge, Aon and Willis Towers Watson could use their increased leverage to raise prices and reduce the quality of products relied on by thousands of American businesses — and their customers, employees and retirees.”

The Justice Department worked on the case with regulators from around the world, including in Europe. A senior department official noted that the markets in Europe were different, especially the health benefits and pensions systems, and that the outcomes of the European merger reviews could be different.

Both companies are incorporated in Ireland, with headquarters in London. Aon has around 50,000 employees and offices in about 120 countries, including over 100 offices in the United States. It reported revenue of more than $11 billion last year.

Willis Towers Watson employs about 45,000 people in more than 80 countries, including over 80 offices in the United States. It reported revenue of more than $9 billion in 2020.

The action on Wednesday was the Biden administration’s first challenge to a potential merger. Coming on the heels of President Biden’s naming Lina Khan, a vocal critic of anticompetitive consolidation, as chair of Federal Trade Commission on Tuesday, it is a sign the administration will act on trustbusting promises made on the campaign trail.

The for-profit chain that operated ITT Technical Institute campuses like this one in Vista, Calif., collapsed in 2016.
Credit…Sandy Huffaker for The New York Times

The Education Department wiped out more than $500 million in student loans on Wednesday, in its first step toward unclogging a badly backed-up relief program for students who were scammed by their schools.

For the first time in more than four years, the department approved new grounds for claims through the so-called borrower defense program, canceling debts for 18,000 applicants who attended ITT Technical Institute, a for-profit chain that abruptly collapsed in 2016. The program allows students who were defrauded by their schools to have their federal student loans forgiven.

The new approvals involved applications from two groups of students: those who attended ITT between 2005 and 2016 and said they had been misled about their earning chances, and those who attended between January 2007 and October 2014 and said they had been misled about their ability to transfer credits to other institutions.

“Our action today will give thousands of borrowers a fresh start and the relief they deserve after ITT repeatedly lied to them,” Education Secretary Miguel Cardona said.

ITT students who attended during those time frames and were misled but who had not yet filed a borrower defense claim can now do so, citing the department’s decisions, and seek to have their loans discharged, a department representative said.

Eileen Connor, the legal director of the Project on Predatory Student Lending, a group that has won court victories against the department over its handling of borrower defense claims, praised Wednesday’s announcement but said Mr. Cardona needed to go further.

“The department needs to address the more than 700,000 borrowers with over $3 billion in fraudulent debt from ITT,” Ms. Connor said. “We cannot ask these borrowers to wait another day or pay another dollar toward federal student loans that never should have been made in the first place.”

The borrower defense program had languished for much of the past four years. In January 2017, at the tail end of the Obama administration, the department granted claims from some students who attended ITT’s California campuses — a move that many hopeful applicants saw as a sign of relief to come.

But the relief program essentially stopped functioning for much of President Donald J. Trump’s administration. Betsy DeVos, his education secretary, denounced the system as a “free money” giveaway and repeatedly chipped away at the protections it offered. Then, in her final year in office, she rejected more than 130,000 borrowers’ claims after reviews lasting just minutes. Tens of thousands more claims languished for years.

Mr. Cardona has promised to reverse that tide. “Many of these borrowers have waited a long time for relief, and we need to work swiftly to render decisions for those whose claims are still pending,” he said.

Nearly 108,000 applicants who say they were defrauded by their schools are still awaiting decisions. The department has not yet announced whether it would take on the thorny question of revisiting Ms. DeVos’s denials.

Stocks fell on Wednesday afternoon after Federal Reserve officials pulled forward their expectations for when interest rates will rise from near-zero, a potential first step on the path to removing the monetary policies that have lifted equity markets sharply over the last year.

The S&P 500, which had been roughly flat through most of the morning’s trading session, dropped immediately after the central bank announced its latest decision to keep interest rates close to zero, and it was down by more than 1 percent shortly before 3 p.m.

While a reasonably small decline by historical standards, the drop was a sizable in the context of minuscule swings in the S&P 500 in recent weeks.

It would have been the biggest loss for the blue chip index in over a month, if not for a strong rally later in the day that cut the days losses sharply. The S&P ended down just 0.5 percent.

While the central bank’s decision on interest rates was expected, the Fed also released a summary of expectations from members of the Fed’s rate-setting committee about when they think interest rates — which have been near zero since March 2020 — could begin to rise. Those projections showed policymakers now expect to make two rate increases by the end of 2023. Previously no increases were expected before 2024.

The financial sector was the best-performing part of the S&P, as bank stocks rose on the prospect of higher interest rates. Other parts of the market closely tied to the recovering economy also rose. Automakers climbed, with General Motors rising 1.6 percent after it said it would ramp up its spending on production of electric vehicles. The electric vehicle company Tesla rose 0.9 percent. The concert promoter Live Nation rose 1.5 percent.

The business software company Oracle fell 5.6 percent, despite reporting better-than-expected earnings last night, after it issued profit guidance that Wall Street found disappointing.

Utilities companies, stable, dividend-paying stocks whose attractiveness is inversely related to the rise and fall of yields on safe bonds, posted some of the worst declines in the S&P, falling 1.4 percent.

The sell-off in utilities stocks reflected a sharp rise in bond yields after the Federal Reserve announcement on Wednesday afternoon. The yield on the 10-year Treasury note — which is closely tied to expectations for inflation, economic growth and Federal Reserve monetary policy — rose from 1.48 percent to 1.56 percent.

Such an increase in the yields — or in the returns investors earn — on government bonds makes buying them a more attractive option compared with dividend stocks such as utilities. The indication that these bond yields are going to rise, even far in the future, can spur Wall Street to rethink its expectations for corporate profit growth and its appetite for risky investments like stocks. Earlier this year, a rise in government bond yields, which are the basis for borrowing costs across the economy, roiled financial markets as traders worried that higher inflation might cause the Fed to raise rates sooner.

Price gains have been coming in quicker than central bankers had expected when they last released economic projections in March, and that has invited questions about whether and when the Fed will need to begin removing its economic policy supports, which remain set to emergency mode.

Fed officials have generally stuck to the script when it comes to price increases, predicting that inflation pressures will fade as the United States gets through a funky reopening period and noting that the central bank has the tools to deal with inflation if gains do last.

There are reasons to expect the bump to wane. Prices sank during lockdowns last year, making the year-over-year comparison look artificially big, and prices are rising now because demand is bouncing back faster than supply. Officials expect that the bottlenecks restricting the supply of items like cars and airline tickets will clear up as things return to normal.

But as climbing costs for consumers dominate headlines and political debates in Washington, Mr. Powell is likely to face questions about how much inflation the Fed is willing to tolerate before the situation is no longer seen as manageable and temporary.

Here are the inflation indicators the Fed is working with:

  • Personal consumption expenditures, the Fed’s preferred gauge: up 3.6 percent in April from the prior year, the fastest pace in 13 years.

  • Core P.C.E., which strips out volatile food and energy prices: up 3.1 percent in April over the year, the fastest pace since 1992.

  • Consumer Price Index, an important Labor Department gauge: up 5 percent in May from a year earlier.

  • University of Michigan consumer inflation expectation for next year: moderated to 4 percent in preliminary June data, but still up from 3 percent at the start of the year.

  • University of Michigan consumer inflation expectation for five years from now: moderated to 2.8 percent in preliminary June data, little changed from 2.7 percent at the start of 2021.

  • Five-year, five-year forward inflation expectation rate, a market-based measure: appears to have stabilized around 2.3 percent after climbing sharply earlier this year.

  • Federal Reserve Bank of New York’s Survey of Consumer Expectations, inflation expectation for next year: 4 percent, up from 3 percent at the start of the year.

  • New York Fed Survey of Consumer Expectations, inflation expectation for three years from now: 3.6 percent, up from 3 percent at the start of the year.

The Fed targets 2 percent inflation on average, and officials had been hoping to coax inflation slightly higher so that price gains average their goal rate after years of weakness. Officials have also aspired to lift inflation expectations, which had been drifting too low. As a result, the recent moves higher might be received as good news.

The key question is how long stronger price pressures will last — and at what point they will have overstayed their welcome.




Yellen Says Key to Economic Recovery Is in ‘Smart Policies’

Treasury Secretary Janet L. Yellen testified to Congress on Wednesday about economic recovery in the wake of the coronavirus. Yellen promoted Biden’s policies on paid family leave and education as the best way to fix long-existing disparities.

When I took office back in January, the first and most urgent problem confronting our economy was obviously the pandemic, helping people make it to the other side of the crisis and ensuring they were met there by a robust recovery. Thanks to this Congress and its passage of the American Rescue Plan, I believe we’re well on our way towards that goal. But we have to be clear-eyed about something: The pandemic was not our only economic problem. The budget, which includes both the American Jobs and Families Plan, will repair the fractured foundations of our economy. It does so through a series of smart policies, including child care and paid leave so more parents can join the workforce, a mass modernization and greening of America’s infrastructure to spur commerce and reduce emissions, and investment to make housing and education available to all. And the list goes on. We need to make these investments at some point, and now is fiscally the most strategic time to make them.

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Treasury Secretary Janet L. Yellen testified to Congress on Wednesday about economic recovery in the wake of the coronavirus. Yellen promoted Biden’s policies on paid family leave and education as the best way to fix long-existing disparities.CreditCredit…Patrick Semansky/Associated Press

Treasury Secretary Janet L. Yellen urged lawmakers to pass President Biden’s $4 trillion jobs and infrastructure plans on Wednesday, warning that the United States must invest to combat “destructive forces” that are holding back millions of Americans from prosperity.

Testifying before the Senate Finance Committee, Ms. Yellen made the case that it is a critical time to deploy “ambitious fiscal policy” to reshape the economy in the aftermath of the pandemic. She pointed to income and racial inequality, declining labor force participation and climate change as festering economic problems that need to be addressed.

“We need to make these investments at some point, and now is fiscally the most strategic time to make them,” Ms. Yellen said.

The hearing, which was focused on Mr. Biden’s budget proposal, comes as the White House is negotiating with lawmakers in Congress over how to move forward with infrastructure legislation. Mr. Biden has expressed a willingness to narrow the scope of his plan to win support from some Republicans, but Democrats are also considering moving ahead with legislation on their own if talks break down.

Republican senators expressed deep skepticism about Mr. Biden’s economic agenda on Wednesday, questioning Ms. Yellen about international negotiations over a global minimum tax and plans to ramp up funding for the Internal Revenue Service so that it can shrink the “tax gap.” The Treasury Department estimates that $7 trillion in taxes owed to the government will go uncollected in the next decade if the agency is not modernized and given greater enforcement powers.

“President Biden feels that it’s crucial that we have a tax system that’s fair and one where we enforce tax laws so that individuals and corporations pay what they owe,” Ms. Yellen said.

Ms. Yellen said that Mr. Biden’s plans were fiscally responsible and that the investments in the economy would be paid for with an overhaul of the tax code. Mr. Biden’s tax proposals would raise taxes on the wealthy and on big companies, but he has promised not to increase taxes on anyone making less than $400,000 a year.

The Treasury secretary told lawmakers that the government needs to make these investments in child care and infrastructure because the private sector is not doing enough on its own to train workers or reduce carbon emissions.

“We need to remedy this lack of investment,” Ms. Yellen said.

Republicans have been resistant to most of Mr. Biden’s proposals, arguing that such robust spending threatens to overheat an economy at a time when deficits are growing and inflation is on the rise.

Ms. Yellen argued on Wednesday that because interest rates are so low, this is the best time to spend.

“We expect the cost of federal debt payments will remain well below historical levels through the coming decade,” she said. “We have a window to invest in ourselves.”

Asked about inflation, Ms. Yellen said that she is not taking the threat lightly.

“We’re monitoring inflation very carefully and do take it very seriously,” Ms. Yellen said. “No one wants to return to the bad high inflation day of the ’70s.”

Managing inflation falls to the Federal Reserve, not to the Treasury Department, but Republicans have suggested the Biden administration’s spending plans are contributing to a recent spike in prices. Ms. Yellen’s views on inflation and interest rates are watched closely, however, because she previously served as Fed chair.

G.M.s updated version of its electric car, the Chevrolet Bolt, can travel farther on a full charge.
Credit…General Motors, via Associated Press

General Motors is accelerating its plans to produce electric vehicles, the latest sign that automakers are engaged in a competitive race to transform themselves and embrace the electrification of cars and trucks.

The automaker said on Wednesday that it planned to build two more battery plants in the United States over the next several years, in addition to two battery factories it is already building in Ohio and Tennessee.

The company said it planned to spend $35 billion on E.V.s in the five years ending in 2025. That’s the second increase in the last eight months. A year ago, G.M. said it would spend $20 billion in that period, and in November increased the figure to $27 billion.

“E.V. adoption is increasing and reaching an inflection point, and we want to be ready to produce the capacity that we need to meet demand over time,” G.M.’s chief financial officer, Paul Jacobson, said in a conference call with reporters. “We know we’ll need those battery plants to further our goals.”

At the same time, G.M. also said it expected operating profit in the first half of the year to be $8.5 billion to $9 billion, a significant improvement over an earlier forecast. The company credited improved supplies of computer chips, better-than-expected earnings from its financing arm and strong overall demand and pricing for new vehicles. G.M. had previously expected a steep drop in second-quarter operating profit because of the global semiconductor shortage.

G.M.’s push to increase E.V. spending follows an announcement by Ford Motor that it would start making an electric version of its F-150 pickup truck this year. Ford recently said it expected to spend $30 billion on electric cars and trucks by 2025.

Ford has already started selling an electric sport utility vehicle, the Mustang Mach E. Volkswagen has a similar model, the ID.4, that is now in dealerships. Tesla is leading the shift to electric vehicles and is expected to sell about 800,000 cars globally this year.

G.M. this year introduced an updated version of its electric car, the Chevrolet Bolt, that can travel farther on a full charge and has added to roomier version of the same car. A battery-powered GMC Hummer pickup truck is set to go into production late this year and is supposed to be followed by more than 20 electric models over the next four years.

The company did not say where the two additional battery plants would be built. It is building them in a joint venture with the South Korean manufacturer LG Chem.

As part of its announcement on Wednesday, G.M. said it had reached an agreement with Honda Motor to make an electric S.U.V. for the Japanese company’s Honda brand and another for its luxury Acura line.

G.M. has set a goal of selling one million E.V.s a year by 2025. It also hopes to produce only electric cars and trucks by 2035.

Google’s first store is scheduled to open Thursday in the Chelsea neighborhood of Manhattan.
Credit…Paul Warchol/Google

Five years ago, Google started making its own smartphones and voice-assisted speakers. Now, Google has a store to sell them in.

The company is set to open its first-ever physical store on Thursday on the ground floor of its Manhattan headquarters in the Chelsea neighborhood. The store will carry a full array of Google’s gadgets, including Pixel smartphones, Nest home devices and Fitbit’s wearable fitness products, the company said.

Inside, shoppers can try out devices and subscription services, while existing customers can get on-site repairs of broken products. The 5,000-square-foot store will include rooms where customers can experience “real-life scenarios” in which Google products can be useful, the company said.

Some non-Google products and Google-branded gear, such as T-shirts, hats and dog toys, will also be sold.

Credit…Paul Warchol/Google

The store is Google’s latest attempt to give its fledgling hardware division a shot in the arm and an extension of pop-up stores that the company opened in the last few years.

Since Google started selling Google-branded smartphones in 2016, it has expanded the kinds of devices it sells. It has also acquired Fitbit and integrated Nest, a maker of devices like thermostats. Nest had been a separate subsidiary of Google’s parent company, Alphabet.

Although Google has invested heavily in the hardware division, it is still an afterthought to the company’s main advertising arm and its fast-growing cloud computing unit. Google would not comment on whether it had plans to open more stores.

The track record of technology companies that have opened retail stores is mixed. Apple’s stores stand out as a major success, elevating the brand and offering a showcase for new products. Microsoft, on the other hand, said it was shuttering all of its stores last year, more than a decade after it started opening retail outlets to augment its own push into hardware.

A worker preparing a display of clothes in a shop in London. Prices rose 0.6 percent in May from the previous month, driven by increases in clothing and other areas.
Credit…Neil Hall/EPA, via Shutterstock

Inflation in Britain accelerated at its fastest pace in nearly two years last month, as businesses reopened and social distancing restrictions were relaxed. Consumer prices rose 2.1 percent in May compared with last year, the national statistics agency said on Wednesday.

It is the first time the annual inflation rate has climbed above the Bank of England’s 2 percent target since July 2019. In April, the rate was 1.5 percent.

Prices rose 0.6 percent in May from the previous month, driven by increases in clothing, transport, restaurants and hotels, and recreational expenses like computer game downloads.

Across Europe and the United States, policymakers and investors are watching inflation closely for signs of whether the current upward pressure on prices is temporary or here to stay. Some of the jump in annual inflation rates can be explained by the fact that prices were so low a year ago, when economies shut down in response to the pandemic.

But the reopening is also causing prices to jump as businesses try to keep up with a sudden increase in demand. If inflation remains high and keeps rising faster than expected, it could be a sign the economy is overheating and central banks would be forced to pull back on monetary stimulus. On Wednesday, the Federal Reserve will make its next policy announcement amid rising inflation expectations in the United States.

“The firming of price pressures in the U.K. is part of a global phenomenon as the world emerges from the Covid-19 pandemic,” Ambrose Crofton, a strategist at JPMorgan Asset Management, wrote in a note. “As a result, central banks are gradually tiptoeing towards the exit of their emergency monetary support programs.”

The Bank of England expects inflation to rise to about 2.5 percent by the end of this year before drifting lower. Its next policy meeting is on June 24.

VidCon attracts young influencers the way Davos attracts older ones.
Credit…Jerod Harris/Getty Images

VidCon, the annual online video convention that has become the biggest event in the influencer industry, is returning to the Anaheim Convention Center in California this fall. And it has a new top sponsor: TikTok.

The announcement on Tuesday, which was first reported by Variety, solidified the app’s ascendancy after a year of tremendous growth and reflected a changed social media landscape, one where overnight stardom is more likely to happen on TikTok than on YouTube, which had been VidCon’s top sponsor since 2013.

TikTok, which was introduced in the United States in 2018, made a memorable appearance at the last VidCon, in 2019. Its splashy party drew such a crowd that hundreds of creators were left standing at the entrance.

This year, the company’s presence will only be bigger. TikTok will bring many of the app’s top creators to appear at events, and an executive at the company will deliver the keynote address.

Since its founding in 2010, VidCon has been an opportunity for creators to network with executives in entertainment and technology; source brand deals; socialize; and meet fans. Last year’s VidCon drew more than 75,000 attendees.

In years past, YouTubers dominated the convention, but the creator economy has changed substantially in the last year.

A YouTube representative said that the company would maintain a large presence at this year’s event, which is scheduled to take place Oct. 21-24.

“We prioritized the health and safety of our creators, fans and employees as we thoughtfully worked through our VidCon plans months ago,” the representative wrote in an email. “We are excited to continue our investment in our creators and VidCon as we have done since 2013 through new and different opportunities as part of the overall program.”

  • Royal Caribbean postponed the inaugural sailing of its cruise ship Odyssey of the Seas after eight crew members tested positive for the coronavirus, the company’s chief executive, Michael Bayley, said Tuesday night on Facebook. All 1,400 crew members aboard the Odyssey, which is based in Fort Lauderdale, Fla., were vaccinated on June 4 and are now in quarantine. The positive cases were identified after the vaccinations but before they were considered fully effective. The cruise was set to embark on July 3; no new departure date was given. “While disappointing, this is the right decision for the health and well-being of our crew and guests,” Mr. Bayley wrote.

Jason Robins, the chief executive of DraftKings, on the Nasdaq jumbotron in New York for the company’s public debut.
Credit…Shannon Stapleton/Reuters

DraftKings rose to popularity by making it easy for sports fans to compete in daily fantasy sports competitions, and counts Major League Baseball, ESPN and Michael Jordan as partners.

But it now faces an opponent of its own: a hedge fund known for taking on a number of companies associated with the Wall Street trend that helped take DraftKings public.

Hindenburg Research announced on Wednesday that it was betting against DraftKing’s stock price, accusing the company of being overvalued and secretly profiting from questionable business practices, the DealBook newsletter notes.

In recent months, Hindenburg has taken on businesses that have gone public by merging with so-called special purpose acquisition companies, or SPACs, which allow them to begin trading on public markets more quickly — and, critics argue, with less scrutiny. Among the companies that the hedge fund has taken aim at are the electric vehicle makers Nikola and Lordstown Motor and the health insurer Clover Health.

In many of those cases, Hindenburg has shorted the companies’ stocks, essentially hoping to profit from a fall in their share prices.

Now the hedge fund has trained its focus on DraftKings, which is considered to have carried out one of the most successful SPAC deals of the current boom. It went public last year in unusual fashion: Not only did it combine with a SPAC, Diamond Eagle Acquisition Corporation, but it also merged with a sports betting technology provider, SBTech.

SBTech was a major focus of Hindenburg’s critique: Through it, the firm argues, DraftKings has exposure to “black or unregulated markets.” It cited purported conversations with former employees to accuse SBTech of running illicit operations in China and other countries, and previously doing business in Iran.

Hindenburg also asserted that DraftKings traded at “an extremely rich valuation” equal to its four next-biggest rivals combined. And it questioned the sports-betting company’s heavy spending on promotion to win new customers, while it continues to run up losses.

Shares in DraftKings fell 4 percent on Tuesday after Hindenburg published its report, though they remain well above where it began trading on the public markets.

A spokesman for DraftKings said that the report was “written by someone who is short on DraftKings stock with an incentive to drive down the share price” and that the company was comfortable with SBTech after reviewing its business before their merger.

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