The Owner Of Candy Crush Saga Is Getting Bought For $5.9 Billion

Mark Lennihan / AP

World of Warcraft maker Activision Blizzard is buying British gamemaker King Digital, best known as the maker of Candy Crush Saga, the company said.

Activision said the deal values King at $5.9 billion, which is more than $1 billion higher than King's current market value. But it's still lower than King's valuation when it went public last March: its IPO price of $22.50 valued the company at over $7 billion, but shared dropped to $19 on its first day of trading and the stock has never risen above $20 since last summer. King shares finished trading Monday at $15.54.

Investors have long been concerned that King is a one-hit wonder, with revenues too reliant on Candy Crush even as the company released a flurry of new games.

Activision's hit game franchises like Call of Duty, Diablo and World of Warcraft are still primarily played on PCs and gaming consoles, and the company is still searching for a smash hit mobile game. Buying King sets up the company for "growth across platforms, audiences, genres, and business models," the company said in a statement.

"The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment," Activision Blizzard chief executive officer Bobby Kotick said in a statement

While King's user count — some 474 million monthly active users — would be the envy of nearly any tech or media company, that number is in decline, having shrunk by more than 25 million in about three months. And King Digital's revenue and profit have also been declining, which is not common for a young, publicly listed tech company. Another online gaming company, Zynga, has also recently floundered in the public markets.

King said in August that its decline in revenue was "primarily due to lower gross bookings from Candy Crush Saga and our other more mature games." In its most recent quarter, some $205 million of its $529 million in "gross bookings" — an alternative earnings measurement — came from Candy Crush Saga 2 alone.

"Since 2003, we have built one of the largest player networks on mobile and Facebook, with 474 million monthly active users in the third quarter 2015, and our talented team has created some of the most successful mobile game franchises," King chief executive Riccardo Zacconi said in a statement.

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California's Attorney General Is Investigating The Online Charter School Industry

California attorney general Kamala Harris.

Damian Dovarganes / AP

The for-profit online charter school industry is the target of an investigation by California Attorney General Kamala Harris, according to a filing by K12 Inc., the country's largest online charter management company.

K12 received a subpoena in late September from the Bureau of Children’s Justice at the California Attorney General's office, the company said in its quarterly earnings report. The subpoena, K12 said, was part of an industry-wide investigation. There are 14,500 students enrolled in virtual schools run by K12 Inc., up from just 650 in 2002.

The California Attorney General's office said it could not comment on ongoing investigations.

Virtual charter schools are public schools that exist entirely online: Taxpayer dollars pay for students in kindergarten through 12th grade to take classes from home, communicating with their teachers over the internet. About two thirds of the country's virtual charters are run by for-profit companies like K12, which hire teachers and management and provide the school's curriculum and software.

A scathing report last week from Stanford's Center for Research on Education Outcomes found that online charter schools have an “overwhelming negative impact” on students' learning compared to traditional brick-and-mortar schools.

Over the course of a school year, the CREDO study said, virtual school students lost out on the equivalent of 180 days of learning in math and 72 days reading. The average length of a school year, according to the National Center for Education Statistics, is 180.4 days.

The Walton Family Foundation, which has supported the growth of charter schools nationwide, urged regulators to pay closer attention to online schools in the wake of the study. "Policymakers cannot ignore students who are lagging a full year behind their peers in math and nearly a half a school year in reading," representatives of the foundation said in a statement. "Policymakers should intervene to ensue that children are well served, and authorizers should not enable such low-quality schools to continue operating unchecked.”

In a statement, K12 said the study’s methodology, which compared online students to “virtual twins” at brick-and-mortar schools, was flawed, ignoring key factors that influence student achievement and made it impossible to directly compare the two groups. The company also said that its students are generally more at-risk, more economically disadvantaged, and more likely to enter online charters after having struggled or failed in traditional schools.

A separate report earlier this year by the left-leaning In the Public Interest, which looked specifically at virtual schools in California managed by K12, highlighted lax governance and potential self-dealing by the state's 11 different California Virtual Academies.

CAVA schools, which have a graduation rate of 36%, are run by small nonprofit boards that meet briefly and infrequently, the report said, and are often overseen by school districts that have just a handful of children. A district of 30 students — a single, quaint country schoolhouse with six teachers and a principal who also serves as the district’s superintendent — authorizes CAVA’s 3,000-student San Diego school.

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Xerox Under Federal Investigation Over Student Loan Business

AP Photo

Xerox's student loan business, which now manages more than 2 million loans, is under federal investigation after revealing more than a decade of errors to regulators, including overcharging some borrowers, BuzzFeed News has learned.

Xerox Education Services, formerly known as ACS Education Solutions, has serviced federally-backed loans on behalf of big banks including Wells Fargo and JPMorgan Chase. The investigation, which has not been previously reported, was disclosed in a quarterly loan servicing report by Chase, which said it had been informed in this September that the "Department of Education and the Consumer Financial Protection Bureau approved a remediation plan to address outstanding servicing issues."

A person with knowledge of the matter confirmed to BuzzFeed News that Xerox is under investigation by the CFPB. The agency has been scrutinizing the student loan industry in recent months, and in September released a report highlighting servicing errors on hundreds of thousands of student loans.

As early as 2006, Xerox made errors in servicing federally-backed loans it handled on behalf of big banks, according to an official at the Department of Education who spoke to BuzzFeed News on background. Those inaccuracies led to overcharging some borrowers and miscalculating the payments of others. They went unaddressed and unreported by Xerox, the official said, until 2014.

The department said it had been working with Xerox to fix the problem, alongside the CFPB, by ensuring borrowers who overpaid on their loans receive refunds and were not required to pay for any increases that resulted from Xerox's errors.

"Xerox regrets any inconvenience these financial adjustments may cause," said Kevin Lightfoot, a Xerox spokesman, in a statement to BuzzFeed News. The company is "taking proactive action" to address the problem by notifying borrowers and correcting any inaccurate balances. "Xerox reported these inaccuracies and its remediation efforts are on track," he said. The company did not respond to questions about the CFPB investigation.

After student loans are made by banks or the government, servicers like Xerox act as a point of contact for borrowers, handling billing, determining monthly payments, and enrolling them in programs like income-based repayment. Xerox's education unit currently services about $30 billion worth of student loans.

Servicers have come under scrutiny from regulators including the the CFPB, which found widespread errors, affecting millions of borrowers, in a September report on the sector. In 2014, the US Government Accountability Office the Department of Education for a lack of oversight of the industry.

Xerox services loans issued under the now-defunct Federal Family Educational Loan (FFEL) program, which included the popular Stafford and PLUS loans. In December of last year, according to the Chase report, Xerox told the bank it had "failed to properly make certain financial adjustments for some FFEL student loan accounts." Though Xerox initially told Chase that the issue "affects only a small percentage of borrowers," it later made disclosures concerning "additional errors."

An Education Department official, who spoke on background, told BuzzFeed News Xerox disclosed the errors to the department in December of 2014. "At no point between 2006 and December 2014 was the issue disclosed to the government, or otherwise resolved," the official said.

The September analysis by the CFPB found that after servicing of some 2.5 million student loans was transferred to another company, the new servicer found problems with one in five of the accounts. The CFPB report was anonymized, but a source with knowledge of the report told BuzzFeed News that the original servicer was Xerox.

According to the CFPB report, some 500,000 accounts had incorrect balance information; others had been improperly put into forbearance; and some had made payments that went missing altogether.

Until 2013, Xerox had an exclusive contract with the Education Department to mange some $140 billion of direct student loans owed by more than 10 million borrowers, in a program separate from the company's FFEL loan portfolio. This massive government contract was not renewed because the company had "improperly handled" the servicing of the loans, according to Jeff Baker, an official with the office of Federal Student Aid.

Any actions taken against loan servicers could have broader-reaching repercussions, said Rohit Chopra, a senior fellow with the Center for American Progress and the former student loan ombudsman for the CFPB. "Big banks outsource their student loan servicing, but they can still get hit with fines if the servicer violates the law," Chopra told BuzzFeed News.

Earlier this month, the Wall Street Journal reported that Wells Fargo — whose portfolio of loans Xerox's student loan business once serviced — was under investigation by the CFPB over practices related to student loan servicing.

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More Volkswagen Cars Have Failed Emissions Tests, Officials Say

Alexander Koerner / Getty Images

The Environmental Protection Agency on Monday issued a second notice of violation of clean air laws against Volkswagen, alleging the German automaker installed devices designed to cheat emissions tests in many more vehicles than initially thought.

Diesel cars with models years between 2014 and 2016 made by Volkswagen, as well as its subsidiary companies Audi and Porsche, were found to contain the "defeat device," which kicked in when officials were testing cars for emissions before then returning to a standard mode that increased emissions of nitrogen oxide up to nine times the EPA’s standard.

Cars covered under the latest notice of violation include the diesel versions of the 2014 VW Touareg, the 2015 Porsche Cayenne, and the 2016 Audi A6 Quattro, A7 Quattro, A8, A8L, and Q5.

Some 10,000 of the cars have already been sold in the U.S., according to the EPA, which also says the notice covers an "unknown volume" of cars with 2016 model years.

In a call to reporters, Cynthia Giles, assistant administrator for the office for EPA’s enforcement and compliance assurance, said the German automaker had "failed its obligation to comply with the law that protects clean air for all Americans."

“All companies should be playing by the same rules," she said.

The second notice of violation comes after the company was shamed worldwide when U.S. environmental officials first announced they had discovered the cheating software in September.

Volkswagen CEO Martin Winterkorn resigned after the news came to light, but maintained he knew nothing of the software. German prosecutors have since opened an investigation into Winterkorn for fraud.

Julian Stratenschulte / AFP / Getty Images

Both the EPA and California Air Resources Board are investigating Volkswagen over the alleged breaches of the Clean Air Act.

Officials stressed that owners of the vehicles in question are presently required to take no action and that their cars are still safe and legal to drive.

A possible recall would only be ordered after the EPA reviews any proposals offered by Volkswagen on how to fix the cars so they comply with the law, officials said.

The EPA and the California Air Resources Board (CARB) have both initiated investigations based on Volkswagen’s alleged actions.

"This is a very serious public health matter," CARB Executive Officer Richard Corey told reporters. "[CARB] and EPA will continue to conduct a rigorous investigation that includes testing more vehicles until all of the facts are out in the open."

LINK: Volkwagen’s Nightmare Is About To Get Worse: Here Come The Class Action Lawyers

LINK: Emissions Cheating Software Found In 2.1 Million Audis

LINK: German Prosecutors Open Investigation Into Former Volkswagen CEO Martin Winterkorn

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JustFab And Fabletics Are Reviewing Their Business Practices

After a flood of consumer complaints and attention from regulators, the company is hiring an outside auditor to look at its customer service systems.

Fabletics / Via Facebook: Fabletics

JustFab, the owner of subscription apparel companies like Kate Hudson's Fabletics and ShoeDazzle, is reviewing its sales tactics after fielding a slew of complaints from consumers.

The startup is hiring a third-party auditor to examine its customer service systems and has hired executives to lead "member satisfaction" roles, co-CEO Adam Goldenberg told Bloomberg News on Friday. JustFab has also considered allowing consumers to unsubscribe online, a process that's only possible right now through the phone, Bloomberg reported.

In September, BuzzFeed News reported that JustFab has amassed more than 1,000 complaints with the Better Business Bureau and the Federal Trade Commission, as customers accuse the company of duping them into unwanted subscriptions with recurring credit card charges. Many complaints center around how difficult it is to cancel subscriptions.

BuzzFeed News found that Goldenberg and co-CEO Don Ressler have fielded similar complaints regarding unwanted recurring credit card charges since at least 2004, on a string of businesses selling products including anti-aging shampoo, weight-loss pills and anti-cellulite cream.

Fabletics / Via Fabletics.com

Despite that, JustFab was valued at $1 billion in a funding round last year, making it a "unicorn" in Silicon Valley terms. The valuation came seven months after Goldenberg reached one of the biggest-ever deceptive advertising settlements with the Federal Trade Commission over a miracle-weight loss powder called Sensa. An investor in JustFab erased mention of Sensa from a bio of the founders on its website after BuzzFeed News published its story.

JustFab has also reached settlements over its business practices with a group of district attorneys in California, the Florida attorney general, and a separate Florida consumer who filed a lawsuit in 2011.

The company has said complaints come from "a very, very small minority" of unhappy users among its 3.5 million customers, many of whom report pleasant experiences with its brands. The startup is on pace to make $500 million in sales this year.

"As a company that has gone from 0 to in excess of 3.5 million customers in five years, we have had inevitable bumps along the way," a spokeswoman for JustFab told BuzzFeed News in September. "Customer satisfaction is a top priority for us and when there are issues with service, product quality, shipping deadlines, and the like we always do everything we can to make it right."

"It is certainly not the company's intention to have anybody be confused," Goldenberg told Bloomberg. "If someone feels tricked, we lose that customer."

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Can Someone Please Explain What Mountain Dew Is?

With names like Baja Blast, Code Red and the upcoming Black Label, it’s hard to know exactly what taste defines America’s fifth most popular soda. And that’s exactly how it’s meant to be.

Paul Sakuma / ASSOCIATED PRESS

There's something about Mountain Dew that evades all definition.

Its color is boldly unnatural. It tastes, approximately, like melted Life Savers, but unlike any recognizable fruit or flavor. There are no noteworthy Mountain Dew copycats or competitors. Mountain Dew exists, largely, in its own realm, separate from other sodas — and other beverages entirely.

And that turns out to be a feature, not a bug. Thanks to its radical vagueness, Mountain Dew has managed to launch a procession of spin-off flavors, each as enigmatic as the original. (Mountain Dew Voltage, anyone? It's blue, and "charged with ginseng and raspberry citrus" flavor.) Those spin-offs have helped the brand do something none of its major competitors — Coke, Pepsi, Dr Pepper — have managed to: grow sales every year since 2010, despite a widespread sense that America is moving on from its love affair with soda.

So this ambiguous drink is a big deal. But what is Mountain Dew, when you really get down to it?

We thought asking the folks at Mountain Dew would sharpen our understanding on a matter of such great import, but the mystery surrounding America's fifth most popular soda only deepened.

"We don't try to say what color the product is internally," Greg Lyons, vice president of marketing at Mountain Dew, told BuzzFeed News. He called it "Mountain Dew color," which really didn't push things forward much. We pressed further.

"Neon," he eventually said, reluctantly.

"That's if you're forcing me to describe it. 'Mountain Dew color' is in my words. If you force me to use an adjective, that's what I'd use. But I'd prefer, if you write about it, it to be Mountain Dew color. Because there's not really a color we call it."

The official BuzzFeed style guide does not recognize "Mountain Dew" as a legitimate color, so we're going to stick with chartreuse.

Like the best abstract art, Mountain Dew leaves plenty of room for interpretation. Since first launching as a whiskey mixer in Tennessee in 1940 — its name was old-timey slang for moonshine — it has successfully spawned a rainbow of spin-offs of differing colors, tastes, and fundamental natures.

The packaging and labels across the different products are not consistent. No Mountain Dew variety looks or tastes like the other, and yet no one challenges their membership in the Mountain Dew family.

Its owners see it as something that transcends the senses. Indra Nooyi, CEO of Mountain Dew owner PepsiCo, told BuzzFeed News that Mountain Dew is "an attitude. It's a fantastic attitude in a bottle." And attitude never had a particular taste, per se.

Mountain Dew is, at once, both nothing and anything.

Some Mountain Dews are yellow, some are red, some are blue. Some taste vaguely like cherry, others like berries or lime, yet their names — "Baja Blast," "SuperNova," "Code Red" — don't attempt to evoke any particular flavor. Soon, there even will be a Mountain Dew sauce at Buffalo Wild Wings.

Then there's Mountain Dew Solar Flare, currently available exclusively from the soda fountains at 7-Eleven. It describes itself as "Dew with a blast of tropical punch." None of these words are a flavor, or a taste, or even an attitude.

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Macy's Will Open Stores On Thanksgiving Day Again This Year

The march of Black Friday into Thanksgiving continues.

AP / Mark Lennihan

Macy's said it will open on Thanksgiving Day for the third year in a row, just days after outdoor retailer REI drew widespread praise for closing on Black Friday and urging customers to spent the day outside instead.

"Our principal goal is to serve our customer when and how she wants to shop, and our extended hours are always in the interest of courtesy and convenience for customers," a Macy's spokesperson said in an emailed statement. "We understand and respect the impact on our associates, and we began our staffing planning early to allow associates to review available shifts throughout the holiday season, including on Thanksgiving weekend, and to volunteer for those shifts they prefer."

Big retailers seem to be digging their heels in on Thanksgiving openings, a relatively new phenomenon, even as criticism builds around putting employees to work on a national holiday.

In recent years, evidence has showed that pulling Black Friday shopping bonanzas into Thanksgiving simply spreads the weekend's sales out over an extra day, rather than drumming up extra revenue.

At the same time, it's easier than ever to offer similar deals online — Amazon successfully conjured its own version of Black Friday this July called "Prime Day," suggesting consumers will show up whenever and wherever deals are offered.

Macy's said most of its shifts on Thanksgiving day will be worked "by associates who volunteer to work those hours, and they are compensated with additional pay when doing so. Employees often tell us they prefer to work on Thanksgiving evening so they can have Friday off to spend shopping or with friends and family." Macy's staff working on Thanksgiving will be paid time-and-a-half.

Macy's, which beat retailers like Walmart and Target to the punch in announcing plans for the weekend, will open at 6p.m. on Thanksgiving, for the second year in a row. The company first opened on Thanksgiving in 2013 at 8 p.m. When it announced its plans in 2013, it specified in a statement that the opening would take place "after families across the country have finished their holiday meals and celebrations."

The Macy's spokesperson said that the 6 p.m. opening time is still after "many families" have finished their holiday meals and celebrations. Prior to 2013, Macy's opening at midnight on Black Friday in 2012 and at 4 a.m. on Friday in 2011.

Earlier this week, REI made headlines for closing on Black Friday — bypassing the Thanksgiving Day opening conversation altogether — and paying employees to go outside instead. While more than 700,000 people have used the private company's #OptOutside hashtag on social media so far, the company's chief creative officer noted he didn't expect Black Friday closures to be a trend.

"It would have been a heck of a lot harder if we were a public company," Ben Steele, the CCO, told BuzzFeed News. Macy's, in particular, has reported disappointing results this year.

Still, a number of chains have decided to close their doors on Thanksgiving Day, including GameStop, Ikea and Staples. TJX, the owner of T.J. Maxx, Marshalls and HomeGoods, which recently surpassed Macy's in annual revenue, has also typically closed in recent years.

LINK: Black Friday Was A Bust, So Why Keep Opening Stores On Thanksgiving?

LINK: Amazon Can Declare A Shopping Holiday Any Time It Wants. So Can We Have Thanksgiving Back?

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