fortune--2020-06-05--China relaxes flight restrictions after U.S. threat—but U.S. airlines say it’s not enough

The U.S. said on Thursday it would continue to let some Chinese airlines operate flights to the U.S., pulling back a Wednesday order that would have banned Chinese airline service to the country.
The announcement came a day after China’s aviation authority, the Civil Aviation Administration of China (CAAC), rolled back restrictions on foreign airlines, including U.S. carriers, that were in place to prevent imported coronavirus cases to China, where the virus outbreak is largely under control.
That rollback itself happened a day after the Trump administration said it would ban seven major Chinese airlines from the U.S. to retaliate against China’s foreign airline restrictions, which applied to U.S. carriers Delta Air Lines, United Airlines, and American Airlines. (Delta and United had asked to resume flights to China this month; American plans to restart its service at the end of October.)
The CAAC did not name specific airlines or the U.S. in particular, but the timing of the announcement appeared to be a concession from China that may ease rising tensions between the two countries.
Yet a trade group representing U.S. carriers said the change was not enough, and the airlines wanted a higher flight frequency than the promised once-a-week. “While the Chinese response to the Department of Transportation is a step toward parity for U.S. carriers, more is needed to achieve the goals of the agreement,” the group Airlines for America said Thursday, referring to the U.S.-China Civil Air Transport Agreement of 1980.
Four Chinese airlines—Air China, China Eastern, China Southern, and Xiamen Airlines—were granted flights to the U.S. for June. If the Wednesday order were to have gone through, those four carriers’ flights—each carrier was scheduled for one flight a week—would have been suspended.
“[W]e will allow Chinese carriers to operate the same number of scheduled passenger flights as the Chinese government allows ours[,]” the U.S. DOT statement said.
According to the DOT, the 1980 deal says China must allow one U.S. carrier one flight to China for every flight to the U.S. by a Chinese carrier.
China’s relaxed flight arrangements will allow Delta and United to fly to a city of their choice in China starting June 8. China’s aviation regulator, the CAAC, also said that foreign airlines will be able to fly to China twice a week instead of once if all their passengers test negative for the coronavirus for three consecutive weeks.
If five or more passengers on a flight test positive on arrival in China, the CAAC said, that airline will be banned from flying into the country for one week; if 10 or more people test positive, the ban increases to four weeks.
International flights will be able to land in 37 Chinese cities, the CAAC said. Besides U.S. airlines, European carriers like Lufthansa and Finnair had also applied to resume China flights in June, but those two airlines told Caixin in late May that they had not yet received a verdict.
“When the risks are under control and adequate guarantees are received, the number of flights from eligible countries can be appropriately increased,” the CAAC said.


fortune--2020-06-05--Trump seeks new ways to crack down on Chinese stock listings in the U.S.

The soda market is popping with new contenders .
Will they stay or fizzle out ?

The CEO of Hong Kong Exchanges and Clearing, which owns the Hong Kong stock exchange, believes more U.S.-listed Chinese companies will seek to re-list in China this year as tension between the two superpowers seeps into the stock markets.
“This is going to be a big year for IPOs, including both huge IPOs from China, but very substantial returnees, what we call them, from the United States,” Charles Li said during a conference hosted by investment bank Piper Sandler on Thursday.
Li’s comments came the same day President Donald Trump ordered his advisers to recommend executive action he could take against U.S.-listed Chinese firms, accusing China of posing a “significant risk for investors.”
But, according to Li, it’s a combination of increased scrutiny from the U.S. and the Hong Kong exchange’s recently relaxed restrictions that will drive Chinese companies to list closer to home.
Second home
“Today the atmosphere in the U.S. is becoming less friendly, and we obviously have fundamentally changed many aspects of our listing regime so that we are becoming more accommodating,” Li said, referring to a 2018 policy change that permitted companies to list dual-class shares.
Dual-class listings are preferred by tech companies. The structure allows executives to raise funds without diluting ownership of their company by issuing two share options that confer different levels of ownership.
In 2014, Alibaba chose to list in New York over Hong Kong because the latter wouldn’t accommodate dual-class shares. The e-commerce juggernaut’s massive $25 billion IPO that year was record-breaking—a win for New York and a major loss for the Hong Kong exchange. Since revising its rules, the Hong Kong exchange has lured a number of high-profile Chinese tech firms to list.
The first was smartphone maker Xiaomi, which launched a $4.72 billion IPO in June 2018, earning a $54 billion valuation. More important, Alibaba raised $11 billion through a secondary listing in Hong Kong. Li said the listing was “like a family member coming home.”
On Friday, Alibaba’s Nasdaq-listed rival JD.com revealed it is also planning a secondary listing in Hong Kong. The e-commerce platform filed a prospectus with the Hong Kong exchange. The document doesn’t offer any details about the sale, but Bloomberg reports JD.com aims to raise at least $2 billion as soon as next week.
Greater scrutiny
JD is not the only Nasdaq-listed company eyeing a secondary listing in Hong Kong. On Thursday, Chinese gaming firm NetEase secured a $3 billion secondary listing in Hong Kong, having listed on Nasdaq in 2000. Search engine giant Baidu, which listed on Nasdaq in 2005, is also said to be mulling options for a second flotation.
This split from Nasdaq comes weeks after the exchange proposed to increase its scrutiny of foreign IPOs. Following the scandal of Luckin Coffee—a Nasdaq-listed Chinese startup that was found to have committed major fraud and was forced to delist in May—Nasdaq proposed new rules for foreign-led IPOs. Under the new guidelines, foreign firms will need to raise a minimum $25 million—a rule that would have excluded 40 of the last 155 Chinese listings.
However, Nasdaq chief executive Adena Friedman said Thursday there is a “broader issue” of accounting and transparency at foreign firms, particularly in China, and called on the Securities and Exchange Commission (SEC) to do more to address the problem.
From the top
The SEC has fought for almost a decade to obtain better access to company audits in China, which Beijing often withholds as state secrets. Last month, however, the Senate passed a bill that could give the SEC greater leverage in demanding access to those documents.
Under the new legislation, if a company is unable to prove it is not controlled by a foreign government, or if the SEC is unable to review audits for a consecutive three years, the company will be banned from U.S. stock exchanges. Sen. John Kennedy (R–La.), who introduced the bill, said he did “not want to get into a new Cold War” but wants “China to play by the rules.” The bill has been passed to the House, where Speaker Nancy Pelosi (D-Calif.) said it will be reviewed.
Rhetoric from the White House, however, has struck a more divisive tone. On Thursday, Trump instructed his financial markets working group to submit within 60 days recommendations for executive action he could take to curb Chinese listing.
“While China reaps advantages from American markets…the Chinese government has consistently prevented Chinese companies and companies with significant operations in China from abiding by the investor protections that apply to all companies listing on United States stock exchanges,” Trump wrote.
Secretary of State Mike Pompeo added his own endorsement for greater scrutiny of Chinese firms, praising Nasdaq’s tighter restrictions as “a model for other exchanges in the United States and around the world.”


fortune--2020-06-05--Has the market lost its mind? Probably. But there’s a slim chance that equities are entering a new e

Has the market lost its mind? Probably. But there’s a slim chance that equities are entering a new era of high valuations

8 athletes who own stakes in MLS teams

If you’re one of those calm, rational investors who believes that earnings, not wild shifts in momentum, drive stock prices, you’ll probably draw the logical conclusion from the phenomenal rally in stocks: The markets are unhinged from reality.
Indeed, the view that stocks are defying gravity and will fall to earth is probably the right one. But a slim chance exists that equities are entering a new era of super-high valuations, and not just for a couple of years—a trademark of past bubbles—but as an enduring new normal. The reason: Interest rates on risk-free Treasuries that compete with stocks for investors’ dollars will remain far below historic norms for many years to come.
On June 5, the S&P 500 closed at 3194, a 43% jump since the March lows that marks the biggest short-term rally ever. The index now sits just 1% below its near-record close last year. The reason for the jump looks crazy: It’s hard to envisage a scenario in which profits rebound fast enough to remotely support prices that since February have careened from rich to reasonable to rich again.
To be sure, the surprise surge in new jobs that ignited June 5’s 2.7% breakout was great news. But what matters most is where profits are headed, and on that front the news remains dismal even as the market parties on. At the close of 2019, the S&P posted net earnings, based on the trailing four quarters, of $139.47, an all-time high. Where would those profits need to settle once we get past the shutdown and tumult from the coronavirus pandemic for shareholders to make a decent return from here?
The intrepid folks buying stocks at these heights are taking big risks, so they’ll want a pretty good return. Let’s be conservative and say they’re looking for 5% capital gains (that’s a modest total return of 6.8% including the dividend yield). In that case, the S&P would need to hit 3522 by early June 2022, when it’s safe to predict the hurricane has passed. Now, we need to choose a reasonable price/earnings ratio, what investors are willing to pay for each dollar of profits, two years hence. That’s a tricky job, since multiples have varied widely in past decades. For example, the median P/E since 1990 was 21.8, far higher than the 60-year benchmark of 17.4.
I choose a P/E of 20 because it’s around halfway between the two readings—higher than the long-term number but below the extremely elevated levels of recent years. Dividing the current S&P index by 20 to get a measure on where earnings must go to justify price is the test I call “the Tully 20 rule.”
At a 20 multiple, the Tully 20 rule says earnings would need to hit $176 a share by mid-2022. That’s a 26.3% increase from the end of 2019. Getting there would require a Rip Van Winkle fantasy. You fell asleep in February, never knew about COVID-19, and woke up to see earnings rise over 9% a year in mid-2022. You’d be pleasantly surprised in any case and dumbfounded once you learned about the pandemic.
Right now, earnings are headed in the opposite direction, in a big way. The analysts polled by S&P predict profits will drop 34% to $92 at the end of this year. And those ever-cheery prognosticators see profits only reaching $146 by the end of 2021, a long way from the $176 needed to justify a 20 P/E. In fact, if Wall Street is right about this year, profits would need to soar from $92 to $176 in just under 18 months from the start of 2021 to early June 2022 in order to catch the explosion in valuations, and expectations of what’s to come.
The sober numbers person can say with virtual certainty that profits will go nowhere near $176 by mid-2022. That outcome borders on the mathematically impossible. A better predictor is Robert Shiller’s cyclically adjusted P/E multiple of CAPE, which adjusts earnings based on a 10-year average. Smart money managers I know bump up the Shiller number by between 7.5% and 10% to get a reading on where profits stand on a normalized basis. That formula would put today’s EPS at $120.
But let’s make the optimistic forecast that profits climb back to their fourth-quarter 2019 level of $139. At least that outcome is conceivable, while $179 is not. If that happens, an S&P at 3572, 10% higher than today, is a possibility. It could happen if the P/E multiple goes to around 25.6 (3572 divided by $139). That’s almost 18% higher than the 20-year average and more than 40% above the norm since 1960.
Of course, investors want a margin over risk-free Treasury yields in exchange for the rough ride of owning stocks. So the total gains they demand are the sum of the risk-free rate and that margin, known as the equity risk premium, or ERP. A reasonable estimate of that extra cushion over long periods is 3.5 points. So if the “real” inflation-adjusted rate is 0.5% (meaning the 10-year Treasury is at 2%, and inflation is running at 1.5%), then the ERP plus the real rate is 4%. That’s the “real” return investors would be expecting. Hence, they’d settle for $4 in earnings for every $100 they pay, for a P/E of 25 ($100 stock price divided by $4 in profits).
Today that outcome looks feasible, since the 10-year yield now sits at 0.92%. That could explain why the market is factoring in a huge P/E a couple of years out. Keep in mind, however, that these are extraordinary times, when rates are depressed by gigantic flows from foreign investors seeking safety.
Real rates have been dropping in recent years and will probably stay well below the long-term average—which, by the way, is over 5%. But if the U.S. economy grows at 2% or more, it’s hard to see how the real rate could be much lower than that, since GDP growth is closely correlated with demand for capital and real rates.
If the right P/E is 20, not 25.5, stocks are now extremely pricey and probably overvalued. If earnings do get back to $139 by mid-2021, the S&P would be 2780, 13% below its level today, and that’s optimistic.
In sum, you can invent a plotline that gets the market to today’s heady valuation and makes room for gains from here. But that’s like watching one of those cinema thrillers where you can’t imagine how the hero can escape, yet he ducks the gunfire and somehow manages to declare victory. It happens in the movies. It’s still unlikely to happen in the markets.


fortune--2020-06-05--8 athletes who own stakes in MLS teams

8 athletes who own stakes in MLS teams

Has the market lost its mind ?
Probably .
But there ’ s a slim chance that equities are entering @ @ @ @ @ valuations

Step aside, tech startups. The newest enterprise where athletes are investing their money? Major League Soccer teams.
Kevin Durant of the Brooklyn Nets became the latest to join the trend with the purchase of a minority stake in the Philadelphia Union, Sports Business Daily reported Thursday. According to the outlet, the stake runs somewhere between 1% and 5%, and it’s not yet clear if the investment is a personal one or through Thirty Five Ventures, the business Durant cofounded with his manager, Rich Kleiman. The firm declined Fortune’s request for comment.
But K.D. isn’t alone: A number of world soccer stars and NBA players have a mutual fandom in each other’s respective sports. Los Angeles Lakers star LeBron James is a notable fan of Liverpool Football Club, a team that plays in England’s Premier League, and went so far as to purchase a 2% stake in the team in 2011, which was reportedly worth more than $32 million as of 2018. The late Lakers star Kobe Bryant was a passionate supporter of FC Barcelona. And speaking of Barcelona, one of the team’s stars, Antoine Griezmann, is ardent fan of the NBA, going so far as to say he’d prefer watching an NBA game over a match in his own sport.
In the U.S., soccer is growing in popularity as the MLS continues its expansion from 10 teams in 1996 to 26 today—with four more teams set to round out the league by 2022. With an average attendance of more than 21,000, the MLS has the third highest attendance of the five major U.S. sports leagues—beating out the NBA and NHL.
Athletes in the U.S. appear to have taken notice of soccer’s growing appeal in the country, and are in turn buying stakes in MLS teams. Here are the others investing in the MLS:
James Harden and Oscar De La Hoya
James Harden cheers for the Houston Dynamo during the Leagues Cup in Houston in July 2019. Omar Vega—Getty Images
In 2019, the Houston Rockets star and 2018 NBA MVP purchased a 5% stake in the Houston Dynamo as well as the Houston Dash, the National Women’s Soccer League team (the Dynamo and Dash are part of the same ownership group). According to Front Office Sports, Harden’s investment put the organization’s value at $475 million.
“Houston is my home now, and I saw this as a way to invest in my city and expand my business interests at the same time,” Harden said in a statement at the time. “Soccer in general, and especially MLS, have exploded in this country throughout my lifetime.”
Well before Harden got involved, world and Olympic boxing champion Oscar De La Hoya acquired a 25% stake in the Dynamo in 2008. “I invest in soccer because I love it,” De La Hoya said in 2018. “I see a lot of promise in the MLS.”
Magic Johnson, Mia Hamm, and Nomar Garciaparra LAFC owners Earvin “Magic” Johnson, Nomar Garciaparra, and Mia Hamm with author Tony Robbins on Oct. 30, 2014, in Hollywood. Charley Gallay—Getty Images for LAFC The trio—a Los Angeles Lakers Hall of Famer, a two-time World Cup champion, and a six-time All-Star shortstop—are cofounding partners of Los Angeles Football Club, which began playing in 2018. Johnson, Hamm, and Garciaparra are part of a large ownership group that also includes comedic actor Will Ferrell and a number of business executives and private equity managers. In February, a handful of the LAFC’s owners bought half of businessman Vincent Tan’s 20% stake, sending the club’s valuation to over $700 million—the most-ever for an MLS team. It’s unclear if the trio of athlete owners were part of that deal. Russell Wilson Seattle Seahawks quarterback Russell Wilson (right) and recording artist Ciara during the MLS Cup Champions Parade on Nov. 12, 2019, in Seattle. Alika Jenner—Getty Images
The Seattle Seahawks quarterback, along with his wife, R&B star Ciara, and the rapper Macklemore, became part of the Seattle Sounders ownership group in 2019. The total ownership stake of the club’s 12 owners came out to $58.6 million, according to an SEC filing, though it’s unclear what percentage each of the owners holds.
“Ciara and I are fired up to announce we are team owners of the Seattle Sounders, one of the best soccer franchises in the world!” Wilson wrote in a tweet. “We can’t wait for our kids to grow up loving soccer!”
David Beckham
David Beckham (right) talks with Inter Miami CF goalie Luis Robles on Feb. 25, 2020, in Fort Lauderdale. Michael Reaves—Getty Images
Perhaps the least surprising name on this list is David Beckham, one of soccer’s most recognizable stars.
Beckham rose to fame as a Manchester United player in England, but spent the tail end of his career playing for the Los Angeles Galaxy. His unprecedented contract in the MLS included an option to purchase an MLS expansion team for $25 million—which he exercised in 2014. Four years later, Inter Miami CF was officially unveiled.
The club made its MLS debut on March 1, just weeks before the coronavirus pandemic interrupted the league’s season, with a 0-1 loss to LAFC.
Steve Nash
Whitecaps FC co-owner Steve Nash cheers his team on as they play against D.C. United during their MLS game at BC Place, Oct. 12, 2011, in Vancouver. Jeff Vinnick—Getty Images
The South African–born, Canadian-raised Nash made his mark in the NBA as a point guard, notably for the Phoenix Suns—but he’s a huge soccer fan as well. That led him to purchase a minority stake in Vancouver Whitecaps FC, one of three Canadian teams in the MLS.
Nash is one of four investors in the club, though the exact size of his ownership stake is not publicly known. He purchased it in 2011, while he was still playing in the NBA, and his since gone on to purchase a minority stake in Spanish soccer team RCD Mallorca.


fortune--2020-06-05--Fortune focuses on racism and allyship

Fortune focuses on racism and allyship

The edit team at Fortune has been working overtime to bring candor, resources and accountability to this urgent moment.
But first, here’s your week in review, in Haiku.
If you are tired,
do what is in front of you.
It will be enough.
If you are tired,
feed your body and your soul.
You deserve the rest.
If you are tired
but fear being left behind,
we will hold your place.
If you are tired
and cannot see the right path
you will find your way.
It’s good to be still,
to listen, take turns, seek peace:
When you are tired.
Be safe and take good care, if you can.
EDITOR’S NOTE: I am sad to announce that we’re saying good-bye to Tamara El-Waylly, who is moving on to another editorial adventure. She has been an expert editor, fierce ally, and friend. I will miss her dearly.
And then, another door opened. Starting today, I am thrilled to welcome my dear colleague, Fortune writer Aric Jenkins to the team as editor and collaborator. He also covers the intersection of the entertainment and technology industries. Expect his voice here often. Oh, the places we will go.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
On point
I want to devote this Friday’s On point to flag some work that Fortune has been doing to bring candor and accountability to this urgent moment.
Thank you in advance for supporting this work.
On background
The home security system was invented by a Black woman in 1966 because she was afraid the police wouldn’t respond in time Today, in forgotten history, we bring you Marie Van Brittan Brown, the Jamaica, Queens-based inventor of the first home security system and the first closed-circuit television. The nurse/inventor devised the system — an ingenious array of microphones, peepholes, cameras, and monitors — because she and her electrician husband worked odd hours and lived in a dangerous neighborhood. The two won a patent for their work in 1966. She enjoyed wide acclaim for her invention, many of the elements of which are still in use today. BlackPast.org
As Marie Brown was protecting her family, James Baldwin was explaining why she needed to In 1966, Baldwin wrote an essay about police brutality that is painful to read precisely because of its relevance today. It begins with a brutal beating delivered by police in a Harlem neighborhood — first to kids in the street, and later to bystanders who had been taken into custody for the high crime of asking why. One such bystander was a salesman, who had been beaten so badly in custody that he lost an eye. The story is a foundational one. “[A]ll of this happened, all of this and a great deal more, just before the ‘long, hot summer’ of 1964 which, to the astonishment of nearly all New Yorkers and nearly all Americans, to the extremely verbal anguish of The New York Times, and to the bewilderment of the rest of the world, eventually erupted into a race riot,” said Baldwin. So began the police occupation of Black communities he explained in an unsparing and necessary analysis. The Nation
Speaking of the New York Times, you can read Adolf Hitler’s op-ed on propaganda, if you like A massive debate has erupted over an op-ed written by Sen. Tom Cotton (R-Ark.) called “Send In the Troops,” and published by the Times earlier this week. Cotton called for the deployment of U.S military to stamp down public protests on police reform. Some staffers have called for the post to be removed and are demanding a full examination of its pathway to publication. As the soul-searching on the role of opinion pages continue, critics have been sharing this June 22, 1941 piece written by Adolf Hitler that was published in the Times, which can be read by subscribers via the company’s archive tool. The piece was an excerpt from Hitler’s autobiography, Mein Kampf, and was introduced to readers with this editorial message: “Germany is now waging a psychological war against this country as well as a military war in other parts of the world. That psychological war is based in the principles of propaganda laid down by Adolf Hitler…below [his] book’s most important passages are published.” The New York Times
raceAhead is edited by Aric Jenkins.
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fortune--2020-06-05--Washington D.C. paints huge Black Lives Matter mural on street leading to the White House

City workers and local artists painted the words Black Lives Matter in enormous bright yellow letters on the street leading to the White House, a highly visible sign of the District of Columbia’s embrace of a protest movement that has put it even further at odds with President Donald Trump.
D.C. Mayor Muriel Bowser said after the mural was completed Friday that it was intended to send a message of support and solidarity to Americans outraged over the killing of George Floyd by police in Minneapolis.
“There is a lot of distrust of police and the government. There are people who are craving to be heard and to be seen and to have their humanity recognized,” the mayor said. “We had the opportunity to send that message loud and clear on a very important street in our city.”
The letters and an image of the city’s flag stretch across 16th Street for two blocks. The mural ends near St. John’s Episcopal Church, where Trump staged a photo-op on Monday after officers in riot gear fired tear gas and charged demonstrators to make way for the president and his entourage.
A sign now identifies that section of 16th Street near the White House as “Black Lives Matter Plaza.”
Bower has verbally clashed with the Trump administration over the handling of the protests. The mayor has complained about the heavy-handed federal response and called for the removal of out-of-state National Guard troops.
She says their differences highlight the need for D.C. to be a state and have more control over its affairs. They may also reflect the fact that Trump is deeply unpopular in the district, where Hillary Clinton won about 90% of the vote in the 2016 presidential election.
While not addressing the painted mural, Trump continued his attacks on Bowser in tweets Friday.
“The incompetent Mayor of Washington, D.C., @MayorBowser, who’s budget is totally out of control and is constantly coming back to us for ‘handouts,’ is now fighting with the National Guard, who saved her from great embarrassment over the last number of nights,” he tweeted. “If she doesn’t treat these men and women well, then we’ll bring in a different group of men and women!”
She shrugged off his criticism. “You know that thing about the pot and the kettle,” the mayor said at a news conference.
The local chapter of Black Lives Matter said it did not support painting the street and took a swipe at Bowser. “This is performative and a distraction from her active counter organizing to our demands to decrease the police budget and invest in the community,” it said on Twitter.
On Thursday, as the protests remained peaceful, Bowser ended a curfew imposed after people damaged buildings and broke into businesses over the weekend and Monday. A large demonstration is expected in the city on Saturday, and the city has not yet decided whether the curfew will be reinstated.
The mayor tweeted out a letter from House Speaker Nancy Pelosi, who wrote the president to express alarm that peaceful protesters were being confronted by heavily armed federal agents and officers, many of them with their identities and agencies obscured.
There are thousands of members of the National Guard along with officers and agents from numerous agencies deployed around Washington in case of civil unrest.


fortune--2020-06-05--Reddit cofounder resigns from board, urges black replacement

Alexis Ohanian, cofounder of the link-sharing site Reddit, announced his resignation from the company’s board of directors Friday and called on the company to replace him with a black candidate.
Reddit, one of the most popular websites in the world, has long been a source of controversy. Ohanian has an on-again, off-again relationship with the company. He stepped down from day-to-day work with Reddit in 2018 but had remained on its board.
“I believe resignation can actually be an act of leadership from people in power right now,” he wrote on Twitter. “To everyone fighting to fix our broken nation: do not stop.”
In a video, he said, “I’m saying this as a father who needs to be able to answer his black daughter when she asks, ‘What did you do?’ So I have resigned as a member of the Reddit board. I have urged them to fill my seat with a black candidate, and I will use future gains on my Reddit stock to serve the black community, chiefly to curb racial hate.” Ohanian has a 2-year-old daughter with his wife, tennis star Serena Williams.
A pro-Trump message board on Reddit called The_Donald has been a continued source of tension. Reddit’s former interim CEO Ellen Pao publicly criticized the company this week. In response to a post from the company about the Black Lives Matter movement, Pao wrote on Twitter, “I am obligated to call you out: You should have shut down the_donald instead of amplifying it and its hate, racism, and violence. So much of what is happening now lies at your feet. You don’t get to say BLM when reddit nurtures and monetizes white supremacy and hate all day long.”
A spokeswoman for Ohanian’s venture capital firm Initialized Capital declined to make him available for comment.
Ohanian also said he would pledge $1 million to Know Your Rights Camp, a nonprofit founded by Colin Kaepernick, the NFL star who has been shunned by the league for peacefully protesting for black rights.
I've resigned as a member of the reddit board, I have urged them to fill my seat with a black candidate, + I will use future gains on my Reddit stock to serve the black community, chiefly to curb racial hate, and I’m starting with a pledge of $1M to @kaepernick7’s @yourrightscamp — Alexis Ohanian Sr. 🚀 (@alexisohanian) June 5, 2020
“It is long overdue to do the right thing. I’m doing this for me, for my family, and for my country,” Ohanian said in the video that was included in his Twitter thread on Friday.


fortune--2020-06-05--Gap calls on landlords to share the pain

It’s been a tough time for mall-based retailers. Many stalwarts like Gap, Abercrombie & Fitch, and Macy’s have seen sales plunge up to 50% in the first quarter because of lengthy store closings, while others like J.C. Penney and Neiman Marcus have sought bankruptcy court protection.
And that has led a few major retailers to suspend rent payments and renegotiate lease terms with mall operators, resulting in some standoffs. Notably, earlier this week, Simon Property Group, the largest mall operator, sued Gap Inc., its biggest tenant, for $65.9 million in back rent. Meanwhile, CBL, a major mall operator, expressed doubts in a regulatory filing on Friday about its ability to stay in business.
Reflecting that mutually dependent relationship, Gap chief executive Sonia Syngal called on landlords to be flexible and work with retailers to get through the biggest crisis in retail’s modern history.
“There’s a lot of uncertainty out there, and we will win together and we will share the uncertainty together,” Syngal tells Fortune.
In April, Gap, which also operates Old Navy and Athleta along with some smaller brands, said it paid $115 million a month in rent when it announced it had stopped making those payments while stores were closed. The company has resumed paying for stores that have reopened.
The retailer is under enormous financial stress at the moment: Gap said late Thursday that sales in the first quarter ended May 2 were down 43% to $2.1 billion and that it had had a net loss of $932 million.
Gap said that 1,500 stores have reopened, but it will have to contend with uncertainty over how much to order for major shopping events like the upcoming back-to-school season and the holidays, with consumer appetite hard to ascertain. It will also have to deal with a ton of competitors’ apparel flooding the market that will likely be cleared at deep discounts.
Its first-quarter results showed that its strong brands were poised for a quick snapback but that its weaker brands continue to languish. While Old Navy and Athleta saw sharp online sales growth (20% and 49% respectively) as people bought casual clothes or athletic wear, Gap and Banana Republic languished online as well as in stores. Banana Republic’s problem was weak demand for casual office wear. At Gap, it was more of the product misfires that have plagued it for years, and missteps in filling orders and getting them to customers.
With most of its stores in strip malls, where shopper traffic is bouncing back more quickly than in shopping malls, Old Navy is poised to rebound well, as is Athleta given its focus on “athleisure.” But Gap and Banana Republic will continue to be hit by slower mall traffic and weak interest in their products.
In the case of Gap, Syngal has made it clear the company is looking to further reduce its store count over time, something she is likely to accelerate because of the COVID-19 breakout. She may get an assist from the J.C. Penney bankruptcy and Macy’s store closings. Most mall lease clauses give a tenant the right to change terms or exit the lease if an anchor tenant leaves, since such stores have long drawn shopper traffic.
Gap Inc. is well insulated from whatever problems are befalling malls. One-quarter of its sales are online, and Old Navy makes up nearly half of its sales. But mall stores are key to the health of Banana Republic and Gap—both multibillion-dollar brands—and even Athleta, which is soon to be a $2-billion-a-year business. So it behooves Gap to keep the peace with mall operators.
“We are a fair company, and our whole model is working with our landlords,” says Syngal. Lawsuits and all.


fortune--2020-06-05--Facebook sees no foreign interference around protests

Facebook said it removed two networks of accounts linked to white supremacy groups, but it hasn’t seen any attempted foreign interference on its platforms related to the recent Black Lives Matter protests across the U.S. targeting police brutality.
Attorney General William Barr said Thursday that the U.S. government has seen evidence of “foreign actors playing all sides to exacerbate the violence.” But Facebook officials said Friday they haven’t detected foreign influence on the social network. “We have not yet seen or received evidence of foreign interference or coordinated inauthentic behavior targeting the protests,” said Nathaniel Gleicher, head of cybersecurity policy at Facebook.
The social media company, however, said it removed dozens of accounts linked to two white supremacy groups, Proud Boys and American Guard, which were “organizing around the protests.” The two groups had previously been banned from Facebook, but resurfaced.
“These groups were planning to rally supporters and members to physically go on the ground to the protests, in some cases preparing to go with weapons,” said Brian Fishman, Facebook’s director for counterterrorism and dangerous organizations.
Facebook officials also said they removed the accounts of some individual users who were posing as antifa members to “deceive the public.” Specifically, Facebook took down a “handful of largely dormant Pages and accounts” that were linked to a Twitter account posing as an antifa member to incite violence. Antifa is a loosely organized leftist movement that is a frequent target of conservative critics, who have accused it of fomenting violence during the recent protests. Facebook found the pages after Twitter officials reached out to share more information about the account, said Gleicher.
The executives’ comments came as Facebook released its monthly report on what it calls “coordinated inauthentic behavior”—networks of accounts working together to artificially push a particular message or spam users. Facebook removed two such groups in May, including one with more than 400 Pages, and a total of 400 Facebook and Instagram accounts in Tunisia posing as local individuals and news organizations.
A second network originating in Iraq that included 324 Pages and more than 100 Facebook and Instagram accounts was also removed.


fortune--2020-06-05--What the pushback of military leaders against President Trump can teach us about leadership

“Every American should be outraged that the conduct exhibited by police in Minneapolis can still happen in 2020.”
That statement didn’t come from a protester or Al Sharpton or Joe Biden. It came from Gen. David L. Goldfein, Chief of Staff of the U.S. Air Force. He was the first of the Joint Chiefs of Staff to make such a statement, part of a longer message to all Air Force personnel expressing empathy with those outraged by the death of George Floyd and quoting the Constitution. The other Joint Chiefs—leaders of the Army, Navy, Marines, and National Guard—quickly issued messages in the same vein.
In 24 extraordinary hours this week, all of America’s top military leaders, including many in addition to the Joint Chiefs, issued public statements seeming to defy President Trump, their Commander-in-Chief. What they did, and why, illuminates deep issues of loyalty, duty, and leadership, issues that anyone in any organization inevitably faces.
The inciting event was apparently Trump’s visit to St. John’s Episcopal Church, two blocks from the White House, on Monday. Federal law enforcement officers used gas and flash-bang grenades to clear protesters from the area. The next day, James Mattis, a retired four-star Marine general who was Trump’s Defense Secretary for two years, issued a statement citing the incident and angrily attacking Trump as “the first President in my lifetime who does not try to unite the American people—does not even pretend to try.”
Significantly, Mattis noted that when he joined the military, “I swore an oath to support and defend the Constitution. Never did I dream that troops taking that same oath would be ordered under any circumstance to violate the Constitutional rights of their fellow citizens—much less to provide a bizarre photo op for the elected Commander-in-Chief, with military leadership standing alongside.”
Mattis’s statement inevitably influenced active-duty military leaders, says Thomas Kolditz, a retired Army general and executive director of the Doerr Institute for New Leaders at Rice University. “Mattis is military royalty,” he says. “Trump just lost the Marine Corps.”
All the Joint Chiefs issued statements the next day, including the chairman, Army General Mark Milley, who emphasized one of Mattis’s points—that “we swear allegiance to the Constitution, not to the President,” Kolditz says. Milley pointedly noted in his message to the entire U.S. military that the Constitution “gives Americans the right to freedom of speech and peaceful assembly” and that “during this current crisis, the National Guard is operating under the authority of state governors”—not the President.
All these statements avoided directly contradicting or disobeying Trump. But in tone and substance, they opposed diametrically his response to Floyd’s death and the ensuing protests, and his use of the military in U.S. cities.
These military leaders in effect undermined Trump, their boss, who can give them direct orders. Did they do the right thing?
That question arises in many organizations when someone thinks the boss is doing something wrong—operationally, strategically, or morally. There aren’t many options. You can quit, or you can stay and try to make things better. “In a corporate environment, you can attempt to lead up,” says Kolditz, who teaches executives how to handle this situation. “That’s usually the best first option. Go to the boss and just say, ‘I’m trying to keep you out of trouble, but I can’t go along with what you’re saying.’ It has to be done in a very supportive voice. If you do it in a challenging voice, you’re immediately on the outside looking in. Research shows that anything you say thereafter will be discounted.”
Such situations can become emotional, and the sincerest attempts to help may backfire. “Leaders who are unsure about their ability and their position tend to become paranoid, suspicious of the loyalty of others,” says Kolditz. At that point, trying to change the boss’s course is probably hopeless, and it may be time to exit.
The larger point is that we all have a duty to something larger than any one person. Service members are taught that idea explicitly; the rest of us have to decide for ourselves what that larger something might be. For now, the nation’s top military leaders clearly believe the boss is off course, especially on the matter of deploying troops for domestic law enforcement, which they strongly oppose. They’re trying to redirect him from the inside. How the boss will respond remains highly uncertain. “Trump loves his generals, but he expects loyalty from them,” says Kolditz, “and they didn’t swear loyalty to him. They swore to support and defend the Constitution.”
Trump would gain from remembering that if their loyalty is tested, no one doubts how they’ll side.


fortune--2020-06-05--American Airlines stock adds to yesterday’s 41% gain as reopening optimism soars

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American Airlines’ stock is flying higher as investors look to signs that the economy is beginning to recover—and flight demand with it.
The airline stock surged Thursday, then again led the S&P 500 higher on Friday morning, trading up roughly 15% for a two day gain of over 60% by midday. Fellow airlines United Airlines and Delta Airlines were also up over 13% and 8% respectively by midday.
The boost in airline stocks comes as states begin to reopen and restrictions start loosening. That’s led several companies including American Airlines to announce they are boosting flight capacity in the coming months. American Airlines said Thursday it plans to fly 55% of its domestic schedule and 20% of its international schedule in July—a massive boost from last month, when it only flew 20% of its schedule from the previous year in May.
“We’re seeing a slow but steady rise in domestic demand. After a careful review of the data, we’ve built a July schedule to match,” Vasu Raja, senior vice president of network strategy at American Airlines, said in a press release. The announcement pushed the airline’s stock up over 40% on Thursday—it’s best one-day boost ever.
In fact, those trends in increasing load size are what Burkett Huey, an aerospace analyst at Morningstar, call “the most encouraging sign.” Yet he sees it “more as limiting 2020 losses—that’s the positive news,” he told Fortune. According to Huey, American’s stock is higher on Friday due to “the recent load factor trends, which are indicating that people are getting more comfortable flying than they were just two months ago.”
Flights have been modestly increasing in recent weeks, with nearly 400,000 passengers passing through TSA checkpoints on Thursday, according to TSA daily data (still a yawning gulf from its year-ago period, which saw over 2.6 million).
Meanwhile, US Global Jets, an airline exchange-traded fund with the ticker JETS, has seen a massive surge in assets in recent months, boosting its inflows from $33 million in March to over $1 billion, helped in part by its recent popularity on trading platform Robinhood.
But the recent optimism comes off a period of heavy battering for the industry amid world-wide shutdowns due to the coronavirus, which had seen many big airlines, including American, shave over 60% off their market caps by April. And while some big names are slowly clawing back losses, there are still massive headwinds the big airlines are facing—including on their balance sheets.
Indeed, some analysts think stocks like American Airlines have hit their heights, and note the bounce may be due to a short squeeze of investors covering bearish bets. “The news flow is likely to remain favorable as demand (primarily leisure) continues to recover into the summer and before focus shifts to 4Q risks (i.e., business demand recovery, second wave of infections),” Raymond James analyst Savanthi Syth wrote in a note. “However, taking into consideration the additional debt during the current crisis, we view [American Airlines] as priced close to perfection … which potentially invites an equity issuance to address the highly levered balance sheet.” Syth also downgraded the stock from market perform to underperform.
Other analysts are taking bearish tones, as Credit Suisse’s Jose Caiado remarked in a note that “AAL’s share price reaction is confounding,” pointing to the airline’s debt load “that the company will need to dig out of,” while Citi’s Stephen Trent wrote in a Thursday note that “ambitious load factor targets could create social distancing concerns.”
With big challenges facing the airline industry, including the heavy debt load, “When stocks move 20%, 30% in a day, there’s a whole lot less of a margin of safety if your underlying estimates on what that enterprise value is is incorrect,” notes Huey.
Yet as countries and states begin to reopen, some are watching signs that the economy on the whole is beginning to heal. “American consumers, workers and business leaders all share the desire to be in a better place. That journey appears to have begun,” Mark Hamrick, senior economic analyst at Bankrate.com, said in a note Friday following the unemployment report—which saw unemployment decline in May, coming in at 13.3% versus 14.7% in April. In fact, that’s enough for others like Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, to declare, “as long as [the unemployment rate] continues to move lower, it will show that the re-opening of the economy is proceeding smoothly,” he wrote in a note Friday.
Airline analysts like Morningstar’s Huey suggest improvements in unemployment would likely impact the airline industry, but warns that, “at this point, there’s a whole lot of uncertainty in what’s going on now.”
The big question is when—if ever—air travel will fully recover.
When Fortune recently surveyed Fortune 500 CEOs about whether “Business travel will become less frequent, replaced by video conferencing,” 91% agreed. And analysts like Huey are “less optimistic” that business travel, which he describes as “substantially more profitable” than leisure, would bounce back before a vaccine is available.
Yet some industry insiders don’t foresee all doom and gloom. One former industry leader recently told Fortune, “The major carriers will be 10% to 20% smaller than they are now,” in the future. “In the near term, it will be ugly. We’ll see painful restructurings, but probably not bankruptcies for the majors.”


fortune--2020-06-05--Wireless industry fears 5G protest day could lead to damaged cell towers

The U.S. wireless industry fears that a global protest against 5G networks planned for the weekend could lead to vandalism of cell phone towers.
Conspiracy theories about the purported dangers of 5G wireless networks have prompted anti-5G activists to set June 6 as a global protest day against the spread of the new technology. The activists warn that 5G radio emissions are harmful to human health, a charge not supported by most scientists.
The trade group for companies that install wireless equipment on towers, known as NATE: The Communications Infrastructure Contractors Association, issued a warning to its members this week about the protest day.
“NATE member companies set themselves apart by embodying the characteristics of work ethic, professionalism, safety, and quality on a daily basis,” the group wrote. “NATE reminds our member companies and their employees to remain safe, exercise vigilance, and report any unusual or suspicious activities that they witness when traveling to and working at tower sites this weekend.”
The unsupported health theories have already led to vandalism and burning of some 5G equipment, particularly in the United Kingdom. Telecommunications industry groups fear that the protest day could lead to more widespread damage in the United States.
The wireless industry is spending tens of billions of dollars to upgrade its current 4G LTE networks to 5G, which offers connection speeds 10 to 100 times as fast and enables new applications like mobile high-resolution virtual reality. But 2020 has been a difficult year for 5G, as unfounded health fears have stalled the network upgrades necessary to reach faster speeds in some cities, while the coronavirus pandemic has slowed sales of 5G-compatible phones.


fortune--2020-06-05--Shopping by appointment is the next big thing for retailers, but it’s no panacea

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These days, if you are in the market for a new home theater setup or refrigerator and want to ask someone at a Best Buy store for advice, you have to book an appointment.
Best Buy managed to hold on to most of its business at the height of the lockdowns thanks to e-commerce and curbside pickup of online orders. But now as it gingerly reopens its 1,000 U.S. stores, it has turned to appointment-only shopping in blocks of 30 minutes to limit the number of people in stores. Each customer is given a safety briefing by phone beforehand and chaperoned by a Best Buy employee once at the store.
While that might sound a bit high-touch for an electronics retailer and even a bit of a hassle, the complexity and high-ticket prices of much of what Best Buy sells, and the opportunity for upselling, justify the approach, according to the company.
“As customers are coming for this concierge service, they have more time to ask more questions, and our associates are providing more fulsome solutions,” Best Buy CEO Corie Barry recently told reporters.
Pulled between the need to reopen stores and arrest double-digit percentage sales—while wanting shoppers to feel safe during the pandemic—the idea of appointment-based shopping is catching on with retailers: Williams-Sonoma and West Elm now require appointments, while Chico’s has added it as an option. Tapestry’s Coach and Kate Spade are offering the service at a few of their stores, too.
Sales by appointment is not a new concept. Genius Bar consultations at Apple require a reservation, as does setting up a wedding registry at Macy’s or buying an evening gown at Neiman Marcus. But like many changes resulting from the pandemic, it’s something more retailers are trying out. While the labor-intensive way of selling is unlikely to replace just going to the store, it provides shoppers and stores alike more options.
“The retail that is best suited to appointment shopping is either very complex items that require knowledgeable sales people for input or big-ticket items where customers want to feel more comfortable about what they’re buying,” says Shelley Kohan, a professor at Fashion Institute of Technology in New York.
In the case of Chico’s the approach works, Kohan says, because that retailer’s customers are loyal, skew older, and have typically dealt with the same salesperson for years. It wouldn’t work as well, she notes, at Old Navy with its larger choice and frequent employee turnover. At Chico’s, the store gets in touch with the customer beforehand to discuss what she is looking for, and based on that, the retailer gathers multiple outfits for her to try on, with everything set up in a fitting room for her.
That is similar to the concept of Nordstrom’s new Local stores—small locations in neighborhoods far from its main stores in key markets like Los Angeles and New York—which offer tailoring and where customers can request that a few outfits be shipped to try on via appointment.
Even though it dents shopper traffic, appointment-only selling has upsides for retailers. People going to the bother of making an appointment typically have a specific need to fill and are more intent on making a purchase.
“There will be lower volume, but you will have much higher-ticket [spending per trip] and much higher conversions,” says Stacey Widlitz, president of SW Retail Advisors. What’s more, it can lead to lower staffing levels in stores.
Still, there are inherent limitations to how widely appointment-only shopping will be adapted after lockdowns have eased. After all, it is by design a way to reduce the number of visitors to a store, a challenge to a business model predicated on volume and fast turnover, especially for larger spaces.
Williams-Sonoma CEO Laura Alber recently acknowledged this in an update with investors. “With strict social distancing measures in place, customer limits will continue to constrain sales in our stores,” she said. For now the strategy seems more about saving as much business as possible and staying front and center in shoppers’ consideration.
A friction source
Despite its upsides, don’t expect to see appointment shopping at places like Walmart, Target, or Home Depot with their mammoth 100,000-square-foot stores and enormous assortments. “There are too many products for it to be logistically feasible,” says FIT’s Kohan.
Williams-Sonoma stores are not nearly as big, and it doesn’t carry a million kinds of items in all sorts of categories, which helps make the appointment model more viable, according to Alber. “We’re at a different kind of business than other stores where you need a lot more traffic,” she said. Still, she allowed that this model could be painful during a busy period like the holidays if the company still needs to use it by then.
Analysts see appointment shopping as a supplement to a retailer, not something to replace impromptu store visits, once the pandemic is contained, given the need for volume. Indeed, Best Buy’s Barry suggested the practice will continue even after the retailer fully reopens stores.
For appointment shopping to work, a retailer has to be good at e-commerce and have an app with reliable scheduling features. That is the case with Williams-Sonoma, which also owns West Elm and Pottery Barn. It has weathered the store closings better than most: In its most recent quarter, sales were unchanged despite massive store closings, helped by its soaring e-commerce, which last year generated more than half of revenue. Best Buy is also an e-commerce powerhouse.
Yet, however much appointment-based shopping has its attractions, there are built-in impediments that will hinder its adoption.
A lot of shopping is convenience driven and buying things while browsing. Appointment shopping, as pleasant as it could be, is more involved and adds to the work of going to shop if it’s the only option. There is also the matter of not wanting to feel the pressure to buy something if you’ve had an associate spend a lot of time with you. Say you are at Best Buy for that home theater consultation, but after you leave you remember you wanted to get a new camera case. Will you really make another appointment? Or if you are in your car and remember you need some USB cables but don’t feel like booking a time slot, you can just as easily go to Walmart where you can buy groceries, too, and reduce trips to additional stores.
“It’s a friction point,” says Wendy Liebmann, CEO of consulting firm WSL Strategic Retail. “When it’s something that’s basic, that I can order online, I don’t have to touch and feel it. I don’t think people will want to plan that shopping that way.”
Still, it will likely find a niche within new shopping habits post COVID-19, as more shopping goes online, further changing the role of stores. “It’s like the personal shopping experience,” says Liebmann. And the pressure for retailers to improve that shopping experience in stores started well before the pandemic struck.


fortune--2020-06-05--The antiracist resources Fortune staffers are reading and sharing

As Black Lives Matter protests continue across the country and the globe, the questions on millions of minds are: How can we do better, as a society, and how can I help?
George Floyd, the black man who died last Monday after a white Minneapolis police officer handcuffed him and pinned him to the ground for several minutes, is one of countless black people who have died during an encounter with police. Many who have been speaking out and taking to the streets over the past several days are doing so to demand justice for victims, and to call for the dismantling of systemic racism and all the ways in which it manifests itself.
It will take more than voting, or the actions of elected officials, however, for America to recover from the violent, sinister history and reality of racism embedded in its collective consciousness. Many people, including Fortune staffers, have been gathering and circulating resources to undo and unlearn racism. To quote Angela Davis: “It is not enough to be non-racist, we must be antiracist.”
Below are educational and actionable resources Fortune’s editorial staff have been consuming and sharing among our friends, families, professional networks, and one another to help us rise to the occasion in this long overdue moment—and in the weeks and years to come. This is by no means an exhaustive list, but it’s a good place to start.
Organizations to support
Books to read and discuss
Articles and blog posts
Films and TV shows
13th
When They See Us
Just Mercy (available to rent for free in June)
Dear White People (Netflix series)
If Beale Street Could Talk
Clemency
Fruitvale Station
I Am Not Your Negro
Instagram accounts to follow
Black-owned businesses to support
Resources for parents
Podcasts
Fortune’s raceAhead newsletter
Fortune senior editor Ellen McGirt publishes a newsletter on race, culture, and inclusive leadership. To get it delivered to your inbox, sign up here.
Other resource compilations we’ve come across


fortune--2020-06-05--What to watch this weekend on Netflix, HBO, and more

Between traditional television, video-on-demand releases, and a growing number of streaming services, it can be hard to keep up with what one should watch week to week. Fortune is here to help you keep track of new releases as well as the occasional older title worth checking out. Take a look at this weekend’s notable arrivals, a couple you may have missed earlier in the week, and what else is coming soon:
Netflix
“Queer Eye” Season Five arrives on Netflix June 5. RYAN COLLERD—NETFLIX
Queer Eye: If you’re seeking something uplifting, the fifth season of the reality makeover series arrives on Netflix June 5. This season, shot in Philadelphia, is a little longer than most, featuring 10 episodes instead of the usual eight.
13 Reasons Why: The fourth and final season of this controversial Netflix series arrives on the streamer June 5. Showrunner Brian Yorkey addressed the ending in an EW piece last month, saying, “We wanted to end on a note of hope that was earned and that was not forced and also not overly sunny in a way that wouldn’t be consistent with what had gone before.”
Also, fans of Hannibal can feast upon the series when all three seasons of the Bryan Fuller drama, starring Mads Mikkelsen, come to Netflix June 5. Could a fourth season eventually launch on the streamer?
Some great movies spanning a number of genres also joined the platform earlier this week: West Side Story, Lady Bird, Zodiac, Clueless, and Inside Man are now all available to stream.
Amazon Prime Video
Gina Brillon: The Floor Is Lava: The one-hour stand-up special, which arrives on Amazon Prime Video June 5, touches upon everything from the comic’s Bronx childhood to marrying her Midwestern husband.
On a separate note, We Are Freestyle Love Supreme, a documentary about the hip-hop improv group featuring Lin-Manuel Miranda, will not be on Hulu June 5 as originally planned, in support of protests around the country.
On TV
Yvonne Orji: Momma, I Made It! premieres June 6 at 10 p.m. ET on HBO, featuring the Insecure actress in her own hourlong special. I May Destroy You, a new half-hour series created by and starring Michaela Coel (Chewing Gum) also debuts on HBO on June 7 at 10:30 p.m. ET. The series dives into the topic of sexual consent in contemporary society.
CBS will air Grease Sing-a-Long at 8:30 p.m. ET on June 7, which was when the Tony Awards were supposed to be held, as an extension of its Sunday movie night programming.
On VOD
Michael Stuhlbarg (left) and Elisabeth Moss in “Shirley.” Courtesy of Neon
Shirley: Josephine Decker’s new film about horror novelist Shirley Jackson (Elisabeth Moss) delves into what happens when she and her husband take a young couple in. The film will be released June 5, and though streamable on Hulu, it will also be available to rent or buy on other digital platforms including iTunes, Amazon Prime, and Vudu, and will play at select drive-ins.
And in case you missed it earlier this week, the 2019 legal drama Just Mercy—based on civil rights attorney Bryan Stevenson’s work—is now available to rent for free on U.S. digital platforms through the month of June.
Coming Soon
The Bachelorette has seen its season delayed owing to the coronavirus pandemic, but fear not—The Bachelor: The Greatest Seasons—Ever! will debut on ABC, June 8 at 8 p.m. ET.
Big Hero 6 will be the next movie to air as part of ABC’s Wonderful World of Disney lineup at 8 p.m. ET on June 10.
The midseason premiere of The Bold Type will return to Freeform at 10 p.m. ET on June 11.


fortune--2020-06-05--ZoomInfo raises nearly $1 billion in its IPO

Even amid a pandemic and protests, investors are hungry for new investments.
Shares of ZoomInfo, a database for business and sales contacts, soared as much as 90% in trading Thursday after the company raised $935 million in an initial public offering of some 44.5 million shares. While the amount raised implied a market cap of about $8 billion, trading in public markets values it at above $14 billion.
The fundraise comes after Warner Music Group jumpstarted the IPO market after a pandemic-induced drought with the largest offering of 2020 yet on Wednesday, valuing the entertainment company at $15.4 billion.
While ZoomInfo paused its plans for an IPO as the coronavirus roiled global markets, the company saw record demand in April as business shifted their sales efforts online.
“As the pandemic hit, we said the markets aren’t in a place [to IPO],” CEO Henry Schuck told Term Sheet. But as markets settled, “investors were telling us…the market would like to see a company like this debut on it.”
What’s more: Shift4 Payments is expected to list today, while car marketplace Vroom is expected to list next week. Amwell, a telemedicine company, filed confidentially for an IPO earlier this week too.
But the dramatic upswing in ZoomInfo’s stock on the public market ignites the debate over whether shares were mispriced—leaving capital on the table for the company. In one sense, the company could have raised nearly double what it actually did. On the other, a perceived selloff could be unbearable in the currently bizarre market conditions.
Schuck says he has no gripes.
“I’m just not looking at the stock price today,” the executive said.
It’s also a good deal for the likes of BlackRock, Dragoneer, and Fidelity, which said they would acquire up to $100 million each of shares in ZoomInfo at the offering price.
Great Hill Partners acquired ZoomInfo for $240 million in 2017 before selling the stake for an undisclosed amount to Discoverorg, then backed by Carlyle and TA Associates—creating the current company.
Based on a back-of-the-envelope calculation, TA Associates now owns a stake in the company worth $4.4 billion while Carlyle holds a stake worth $3.8 billion. Notably the holdings are in Class B and C shares of ZoomInfo, which hold different voting rights but convert on a one-to-one basis with currently trading Series A shares.
***
Many companies speak out against racial injustices, but how do they fare in their own workplaces?
Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here.
VENTURE DEALS
- Everest Medicines, a Shanghai-based biopharmaceutical company focused on patients in Greater China and other parts of Asia, raised $310 million in Series C funding. Investors Janchor Partners, RA Capital Management, and Hillhouse Capital led the round in tranches.
- Athira Pharma, Inc., a Seattle, Wash.-based clinical-stage company developing innovative therapies for Alzheimer’s, raised $85 million Series B in funding. Perceptive Advisors led the round and was joined by investors including RTW Investments, Viking Global Investors, Venrock Healthcare Capital Partners, Franklin Templeton, Rock Springs Capital, LifeSci Venture Partners, Surveyor Capital, Highside Capital Management, Logos Capital, funds managed by Janus Henderson Investors, Sofinnova Investments, Avidity Partners.
- Hyperscience, a New York-based data automation company, raised $60 million in Series C funding. Bessemer Venture Partners led the round, and was joined by investors including Tiger Global Management, Stripes, FirstMark Capital, Battery Ventures, Felicis Ventures, 3KVC, Gaingels, and Penna & Company. Read more.
- Alpha Tau Medical, a Tel Aviv, Israel-based developer of radiation-based cancer therapies, raised $26 million in Series B funding. Investors included Shavit Capital, Medison Ventures, and OurCrowd.
- RiskIQ, a San Francisco, Calif.-based application security company, raised $15 million in Series D funding. National Grid Partners led the round and was joined by investors including Summit Partners, Battery Ventures, Georgian Partners, and MassMutual Ventures. Read more.
- Atom Power, a Charlotte, N.C.-based maker of a digital circuit breaker, raised $17.8 million in Series B funding. Investors included Valor Equity Partners, Rockwell Automation, ABB Technology Ventures, and Atreides Management.
- Cloud9 Technologies, a New York-based cloud-based communications company, raised $17.5 million in Series B funding. UBS led the round and was joined by investors including J.P. Morgan and Barclays.
- React Mobile, a Seattle-based employee safety platform, raised $6 million in funding from Brady Corp. (NYSE:BRC).
- Searchable.ai, a San Francisco-based conversational search engine, raised $4 million in seed funding. Susquehanna International Group and Omicron Media led the round and was joined by investors including Defy Partners and NextView Ventures.
- Powerlytics, a Doylestown, Penn.-based data provider, raised $4 million in funding from Brewer Lane Ventures.
- Routinify, a Denver-based remote healthcare company, raised $1.5 million in funding. Resolute Capital Partners led the round.
- Coastal Cloud, a Palm Coast, Fla.-based Salesforce consulting partner, raised an undisclosed amount of funding from Sverica Capital Management and Salesforce Ventures.
- Caspian, a U.K.-based financial crime investigation startup, raised an undisclosed amount from Nasdaq Ventures.
PRIVATE EQUITY
- KKR and Ampersand Capital Partners offered to acquire Oxford Immunotec Global, a U.K.-based medical diagnostics company that develops tests to identify tuberculosis, for $400 million, per Reuters. Read more.
- Kinderhook Industries acquired Original One Parts, a Dallas-based provider of recycled and refinished auto parts. Financial terms weren't disclosed.
OTHERS
- Mubadala Investment Co. plans to buy a 1.85% stake in Jio Platforms for 90.93 billion rupees ($1.21 billion).
- Chegg, Inc. (NYSE: CHGG) acquired Mathway, a math solver, for $100 million in cash.
- Medley Capital Corp., the business development company, is seeking a buyer after its deal with Sierra Income Corp. collapsed last month, per Bloomberg. Read more.
- Puig will buy a majority stake in Charlotte Tilbury Beauty, a British makeup brand.
OTHERS
- Comark Holdings, a Canadian retailer backed by Stern Partners, plans to restructure. Read more.
IPOs
- Legend Biotech, a Somerset, N.J.-based cell therapy oncology biotech spinning out of GenScript, raised $424 million in an offering of 18.4 million ADSs priced at $23 apiece. It posted revenue of $57.3 million in 2019 and a loss of $133 million. It plans to list on the Nasdaq as “LEGN.” Read more.
- Shift4 Payments, a Allentown payment processing company focused on the hospitality sector, raised $345 million in an offering of 15 million shares priced at $23 apiece. It posted revenues of $731.4 million in 2019 and losses of $58.1 million. Searchlight Capital Partners backs the firm. It plans to list on the NYSE as “FOUR.” Read more.
- Dada Nexus, a Shanghai-based grocery delivery platform, raised $320 million in an offering of 20 million ADSs at $16 apiece. It posted revenue of $437.8 million in 2019 and a loss of $348.1 million. JD Group (51.4%), Sequoia Capital China (11.4%), and Walmart (10.8%) back the firm. JD.com and Walmart intend to acquire $90 million worth of ADSs in the offering. It plans to list on the Nasdaq as “DADA.” Read more.
- Applied Molecular Transport, a South San Francisco-based biotech developing oral therapies for inflammatory diseases, raised $154 million in an offering of 11 million shares priced at $14 apiece. EPIQ Capaital Group (25.9% pre-offering) and Founders Fund (20.7%) back the firm. It plans to list on the Nasdaq as “AMTI.” Read more.
- Calliditas Therapeutics, a Stockholm-based biotech developing therapies for kidney disease, raised $90 million in an offering of 4.6 million ADS priced at about $19.50 apiece. It posted sales of $184.8 million in 2019 and a loss of $32.6 million. Stiftelsen Industrifonden (14.9% pre-offering), Linc (12.5%), and Investinor (10.7%) back the firm. It plans to list on the Nasdaq as “CALT.” Read more.
EXITS
- VMware (NYSE: VMW) acquired Lastline, a cloud security solution. Thomvest Ventures backed Lastline.
- Bynder acquired We Adapt, which helps brands with video content creation. CNBB Venture Partners and Tablomonto backed We Adapt.
F+FS
- Stellex Capital plans to raise $1.75 billion for its second fund. Read more.
- Petra Capital Partners raised $208 million for Petra Growth Fund IV.
- CAPZA acquired Time for Growth, a Paris-based private equity firm. Read more.


fortune--2020-06-05--Lego pauses all digital ads after reports it stopped marketing police-themed products

Toymaker Lego has temporarily paused the digital marketing of all products, a company spokesperson told Fortune, after reports that it had stopped advertising toy construction sets featuring police-themed pieces and the White House in the wake of George Floyd’s death last week while in police custody.
According to an email obtained by trade publication The Toy Book, Lego reached out to affiliates this week requesting that they remove and cease marketing products featuring an array of police-themed pieces, as well as fire department-themed pieces and representations of the White House.
When reached for comment, the Lego spokesperson clarified that the company had paused “all digital marketing” of its products in the U.S. beginning earlier this week, “including content that could be perceived insensitive if promoted at this time,” and had asked affiliates to do the same. Lego plans to restart marketing its products next week.
Lego has not removed any of its toy construction sets from store shelves or its online store, the spokesperson added, describing reports that it had done so as “false.”
“Generations of children have loved playing with our Lego police and firefighter sets, which can often be found in our Lego City line and is a constant in our collection,” the spokesperson said. “These were available last week and will always be available to our fans.”
Floyd’s death last week sparked nationwide protests that have brought attention to the treatment of the black community by police departments across the country. The Trump administration’s response to those protests has also proven controversial, after riot police forcefully broke up a seemingly peaceful protest outside of the White House on Monday.
“We stand with the black community against racism and inequality,” the Lego spokesperson said, noting that the company plans to donate $4 million to organizations “dedicated to supporting black children and educating all children about racial equality.”


fortune--2020-06-05--Slack’s great earnings aren’t good enough for Wall Street

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
Think of the market these days as a perpetual confusion machine. Much has been made of the dichotomy between robust valuations for stocks and the sorry state of the world.
For further confirmation, check out the reaction to the earnings report Slack released Thursday for its quarter that ended in April. The messaging company is much in the news, what with office workers having been sent home. Its stock price has been on a tear, as has its business, which has notably been pitted against a product from Microsoft called Teams. (A digression on stock tickers: TEAM is the ticker for a different collaboration-software company called Atlassian; Slack’s ticker is WORK; Zoom’s ticker isn’t ZOOM, but rather ZM; Salesforce’s symbol, CRM, for customer relationship software, must have seemed really clever years ago.)
As for Slack, it added 12,000 new paid customers, a big number. It lost money, as fast-growing tech companies are wont to do, but it added cash quarter over quarter, a good thing. It grew revenue 50% to just over $200 million.
Here’s the catch: The revenue growth was about the same as the previous quarter despite a month and half of sheltering in place. Investors expected better. Slack’s stock slumped. It’s down 17% in pre-market trading now.
Sometime bad doesn’t matter and good isn’t good enough.
***
The Abu Dhabi sovereign wealth fund Mubadala is investing $1.2 billion in Jio Platforms, the Indian cell-phone carrier owned by petrochemical giant Reliance Industries. You need a scorecard to tally the recent investors in Jio: Facebook, KKR, Vista Equity, Silver Lake, and General Atlantic.
***
It has become popular for companies to publish their commitment to racial justice. Fortune is starting a project to track the experiences of black employees inside those companies. Please submit your anonymous thoughts and anecdotes here.
Fortune
***
Also, my friend and former colleague Dan Primack is hosting a Peloton ride Saturday morning at 8:00 am PT/11:00 am ET to raise money for the NAACP Legal Defense and Education Fund. The on-demand session is the 45-minute Black History Month ride from Feb. 8 co-led by Alex Toussaint and Tunde Oyeneyin. More details, including how to donate, are here. I’ll be on the ride. If you can figure out my handle, please high five me.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Who you calling a pinhead? In case you're dragging a little bit at the end of this very difficult week, Elon Musk is here for you. After seemingly taking it easy on Twitter for a few days ("Off twitter for a few days," he wrote on June 1), the Tesla CEO got angry at fellow tech billionaire Jeff Bezos. "This is insane @JeffBezos," Musk wrote, adding: "Time to break up Amazon. Monopolies are wrong!" Musk got angry after Amazon's ebook publishing unit took down a book called Unreported Truths About COVID-19 and The Lockdown. Amazon subsequently said the removal was a mistake and the book would be relisted.
We've seen this movie before. State-sponsored hackers are going after the 2020 presidential campaigns, according to Google's Threat Analysis Group. Iranian hackers phished for emails at the Trump campaign while Chinese hackers went after Joe Biden's organization.
A penny for your thoughts. Maybe Google employees can't avail themselves of free snacks and dry-cleaning pick up at work anymore, but the company is thinking up new perks. Work-from-home workers will get a $1,000 allowance to pay for equipment to kit out their space.
Opening the window. On Wall Street, after a long drought, the market for tech initial public offerings is heating up again. Cloud data company ZoomInfo, which we mentioned the other day, priced its shares on Thursday at $21. The new stock closed up 62% on the day at $34. That values the startup at over $13 billion. Telemedicine service Amwell filed to go public soon, too.
FOOD FOR THOUGHT
Self-driving cars should make driving safer, but how much safer? A new study by the Insurance Institute for Highway Safety says not that much, as Associated Press reporter Tom Krisher explores in an article analyzing the issue. Humans cause 94% of all car accidents but autonomous vehicles would prevent only about one-third of them, the study concludes.
Just how many crashes are prevented depends a lot on how autonomous vehicles are programmed, [institute vice president of research and co-author of the study Jessica] Cicchino said. More crashes would be stopped if the robocars obey all traffic laws including speed limits. But if artificial intelligence allows them to drive and react more like humans, then fewer crashes will be stopped, she said.
“Building self-driving cars that drive as well as people do is a big challenge in itself,” IIHS Research Scientist Alexandra Mueller said in a statement. “But they’d actually need to be better than that to deliver on the promises we’ve all heard.”
FOR YOUR WEEKEND READING PLEASURE
A few long reads I came across this week:
The Incredible Story of the US Army's Earth-Shaking, Off-Road Land Trains (The Drive)
Oh, your pickup has a lift? That's cute.
The Stockbrokers Of Magic: The Gathering Play for Keeps (Wired)
The market for the popular strategy game’s cards has started to resemble Wall Street, complete with speculation, arbitrage, and yes, insider trading.
What Is the Stock Market Even for Anymore? (New York Times Magazine)
With the economy in free fall, the resilience of share prices defies the misfortunes of most Americans.
The Woman Who Found a Snail in Her Soda and Launched a Million Lawsuits (Narratively)
Sixty-six years before the infamous spilled McDonald’s coffee, May Donoghue drank a ginger beer with a dead mollusk in it and changed personal-injury law forever.
IN CASE YOU MISSED IT
After the tragedy of George Floyd’s death, where do A.I. and policing go from here? By Jonathan Vanian
Facebook to label state-owned media outlets’ posts, pages, and ads By Danielle Abril
As major scooter companies struggle, upstarts seek inroads By Lucinda Shen
How Tractor Supply Co is using tech to deliver e-commerce to its rural customers and fuel a sales surge By Phil Wahba
Trump seeks new ways to crack down on Chinese stock listings in the U.S. By Eamon Barrett
The year in leadership: Everything to know about the most recent crop of leaders to score top CEO jobs By Shawn Tully
How we can set up America’s insurance system for a future pandemic By Daniel S. Glaser
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
The other day, I linked to comedian James Veitch's hilarious video showing what happened when he replied to a scammer's email. This week, Veitch's publisher is out with a new edition of his book replaying multiple encounters with various scammers. It's called DOT CON: The Art of Scamming a Scammer. And while it's not exactly deep, it's a diverting read that may bring you some needed laughs. Have a good weekend.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-06-05--The U.S. unemployment rate fell in May to 13.3%, signaling a move from recession to recovery

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The unemployment rate dropped from 14.7% in April to 13.3% in May. It’s a surprising drop; many were expecting it to surge to Great Depression levels in May. And it signals a recovering job market.
Economists were expecting today’s number to show an unemployment rate of 19.5%, according to a Bloomberg consensus estimate.
Moody’s Analytics chief economist Mark Zandi told Fortune on Wednesday that recent economic data point to the recession having ended in the month of May, and that we’ve moved into the recovery phase. He expects the jobless rate to drop again in June.
“I think the recession is over. The recession ended in May, and in June we’ll see job growth,” Zandi said.
The jobs report finds the U.S. economy added 2.5 million jobs in May, following the 7.1 million jobs lost in April. The total number of unemployed Americans now sits at 21 million, according to the U.S. Bureau of Labor Statistics (BLS). In May 2019, that figure was 6 million, demonstrating how long this recovery could take.
The falling unemployment rate isn’t the only reason to think we’ve moved into recovery. The overall number of Americans on unemployment insurance—known as continuing claims—is down 3.4 million from its peak of 24.9 million the week ending May 9. That points to companies rehiring workers they let go as states ease their lockdowns. And that hasn’t manifested itself in the jobs report yet given the May jobless rate is tabulated through just the middle of the month.
The latest data shows that the shutdowns are hitting some communities harder than others. The jobless among white Americans is 12.4%, compared with 15% for Asian workers, 17.6% for Hispanic workers, and 16.8% among black workers. Among adult men the rate is 11.6%, compared to 13.9% among adult women.
This official unemployment rate of 13.3% is likely to be a gross undercounting of the actual level of joblessness in mid-May. The BLS defines the unemployed as people without jobs who are also looking for new positions. The current U.S. labor market is far more complicated than that. A Fortune-SurveyMonkey poll of 4,717 U.S. adults between April 25–28 finds that 17% of workers who recently lost their jobs aren’t currently looking for work. Given the nature of the virus and the stay-at-home orders, some laid-off workers may be waiting it out before starting their job search.


fortune--2020-06-05--How Stacey Abrams and Condoleezza Rice are thinking about the protests

Good morning, Broadsheet readers! Meghan Markle speaks out on the George Floyd protests, what history tells us about protesting amid a pandemic, and we dig into two must-read op-eds. Have a reflective weekend.
– Two takes. With the U.S. media (finally!) turning to black women for counsel and insight, two of the big national papers are featuring op-eds from prominent black female political figures—the New York Times with Stacey Abrams and the Washington Post with Condoleezza Rice.
In many ways, Abrams and Rice seem worlds apart; Abrams, the former Minority Leader of the Georgia House, made a powerful bid to become Governor of that state and is now seen as a possible Veep pick for Democrat Joe Biden. Rice worked for two Republican Presidents, serving on the Security Council staff of George H.W. Bush and then as Secretary of State in the administration of his son, George W. Bush.
But one thing they share—in addition to blazing new professional territory for black women—is a willingness to wrestle with the outrage over racism and injustice that’s sweeping our nation.
Abrams’s piece focuses on voting—no surprise from the founder of Fair Fight Action, an organization dedicated to voting rights. But it’s careful to avoid the Pollyanna attitude that voting is a cure-all that can single-handedly eliminate racism. Abrams writes:
“To say that the answer is to go cast a ballot feels not just inadequate, but also disrespectful. ‘Go vote’ sounds like a slogan, not a solution. Because millions of us have voted. And too many still die.”
Yet she’s not willing to give up on the power of the ballot box, describing voting as “a first step in a long and complex process, tedious but vital.” Along with casting their votes, she says, citizens must understand what’s broken in our county and how it might be fixed—and they must protest when their voices are not heard. She concludes: “Voting will not save us from harm, but silence will surely damn us all.”
Rice’s op-ed attempts to put the current unrest in a historical context, citing the many times the country has risen up to object to injustice born of America’s “birth defect: Africans and Europeans came to this country together—but one group was in chains.” Too often, she writes, these feelings have eventually faded and we’ve all returned to our “regular” lives.
This time, though, she thinks it may be different. To Rice, that would mean taking action. Yes, that includes structural change, but also honest conversations and acknowledgement of the depth of racism in the United States. “Let us talk with, not at, each other — in our homes, schools, workplaces and places of worship,” she writes.
Ultimately, Rice writes, whether this time really will be different depends on each of us taking responsibility to make it so. So she asks the big question: “[M]y fellow Americans: What will each of you do?”
Kristen Bellstrom
kristen.bellstrom@fortune.com
@kayelbee
ALSO IN THE HEADLINES
- Rest in power. Today should have been the 27th birthday of Breonna Taylor, the black EMT in Louisville, Ky. who was killed by the police in March. Taylor was shot while asleep in her own bed in a police raid using a “no-knock warrant.” Taylor's death hasn't yet gotten the same attention as that of George Floyd, but some protestors and activists are working to change that. New York Times
- Words matter. Congresswoman Maxine Waters, who represented portions of the area of L.A. that reacted to the acquittal of the officers who beat Rodney King with violent protest, talks about the importance of the language we use to describe social unrest. The Cut
- The talented Ms. Union. Gabrielle Union has filed a complaint with the state of California against NBC and the producers of America’s Got Talent, saying she was harassed and discriminated against because of her race, and experienced retaliation for reporting the racist on-set environment. Fortune
- A royally good speech. Meghan Markle gave a virtual commencement speech to the graduating class of Immaculate Heart High School—the Duchess's alma mater—this week, and seized the moment to address the death of George Floyd and countless others at the hands of the police. "We’re seeing people stand in solidarity, we are seeing communities come together and to uplift," she told the grads. "You are going to be part of this movement." Essence
IN CASE YOU MISSED IT
- Values over virus. This isn't the first time citizens have protested injustice amid a pandemic. Women's suffragists were out in force demanding the right to vote amid the flu of 1918. Time
- Who gives? This piece asks how many of America's billionaires have really put their money where their mouth is when it comes to funding COVID-19 relief. Unsurprisingly given the subject matter, there aren't many women in the story, but it's worth a look for info on Melinda Gates, Laurene Powell Jobs, and Sam Walton heirs Alice and Christy Walton. Washington Post
- Herstory. It's a good time for wildly inaccurate but still insightful movies and TV shows about historical female figures. From The Great (focused on Catherine the Great) to Shirley (Shirley Jackson) to Dickinson (Emily Dickinson) there's probably one you'll be into. (I've been binging The Great over the last week or so, and highly recommend it!) The Guardian
ON MY RADAR
Everything to know about the most recent crop of leaders to score top CEO jobs Fortune
Coronavirus frustrates Saudi women's push for financial independence Reuters
She's an essential worker, helping the homeless. But ICE plans to deport her next week LA Times
PARTING WORDS
"So I'm here to tell you guys that we must first love each other no matter what."
-Tennis star Coco Gauff, 16, addressing a peaceful demonstration in her hometown of Delray Beach, Florida


fortune--2020-06-05--Net zero by 2050: Diageo, H&M, and Rolls-Royce join drive to avert climate catastrophe

While the coronavirus lockdowns temporarily improved air quality in many places, the measures weren’t enough to stop May being the warmest on record. Unlike the economic crisis, the climate crisis has not taken a significant pause.
So, on World Environment Day, the timing is good for the launch of a new United Nations–backed campaign called Race to Zero, a coalition of big businesses, investors, academics, cities, states, and regions that have committed to achieving net-zero carbon emissions by 2050.
Some companies, such as Nestlé and Unilever, had already committed to the UN Framework Convention on Climate Change and its goal of limiting global heating to 1.5 degrees Celsius above preindustrial levels (it’s already up around 1.2 degrees, and the 1.5-degree limit is looking very optimistic.) New participants announced Friday include the likes of booze giant Diageo, fashion firms H&M and Inditex, software developer Adobe, and plane-engine maker Rolls-Royce.
“The world on the other side of this pandemic will need the power that we generate to fuel economic recovery,” said Rolls-Royce CEO Warren East in a statement. “I absolutely believe the call for that power to be more sustainable and net zero will be stronger than ever. Few companies on the planet are better placed than Rolls-Royce to help. We will use our capabilities to play a leading role in enabling the vital sectors in which we operate to achieve net-zero emissions by 2050.”
The Amazon-led Climate Pledge organization has also joined the Race to Zero campaign.
Perhaps to preempt accusations of greenwashing, the campaign has publicly released a set of minimum criteria for those wishing to join, involving clear pledges and explainable steps for achieving the targets.
The drive to achieve net-zero emissions over the next few decades has already gathered significant momentum. According to figures released Friday by the U.K.-based Energy & Climate Intelligence Unit (ECIU), 53% of the global economy has already set or is intending to set such a target—that includes not only countries such as Germany, the U.K., and Cambodia, but also powerhouse states such as California and New York.
“With the Race to Zero campaign, the UN High-Level Climate Champions are firing the start gun on a race to the top on climate action. Their aim is to accelerate the groundswell of climate ambition we’re already seeing across the real economy as we invest in the recovery from the pandemic,” said Alison Doig, the international lead at ECIU, in a statement.
However, Doig also stressed that “no entity can reach net zero in 2050 without starting now, and so it’s entirely sensible that in order to qualify for entry to the Race to Zero, participants will have to present delivery plans, including setting interim targets for the next decade,” by the time next year’s UN Climate Change Conference takes place in Glasgow.
Also on Friday, a group including the Organization for Economic Cooperation and Development (OECD) and several UN agencies launched a renewed call for coronavirus stimulus measures to be green in nature.
“There are already some inspiring examples of countries and decision-makers taking leadership to prioritize green and pro-poor stimulus packages,” said the Partners for Inclusive Green Economies. “If these efforts can build towards deeper and more integrated policy approaches, developed in consultation with stakeholders and civil society, the response to COVID-19 could provide a powerful accelerator for achieving the [UN’s] Sustainable Development Goals and the Paris Agreement.”
Many countries are putting an environmental sheen on their recovery packages—something of a no-brainer, given that stimulus measures without this element would leave little money for rescuing the climate later on. Recent examples include the French and German governments increasing subsidies for people buying electric cars, and the European Union steering some of its stimulus cash toward sealing up drafty buildings and boosting the use of clean hydrogen fuel.


fortune--2020-06-05--Where things stand on extending the weekly $600 federal unemployment bonus past July

A staggering 42.6 million Americans have filed for unemployment benefits since the shutdowns started. Right now those out-of-work Americans on state unemployment rolls are receiving an additional $600 per week in unemployment insurance (UI)—regardless of their previous income—on top of their state benefits.
The extra $600 per week in UI was included in the March stimulus bill as a financial cushion for those who lost their jobs, with payments going through July 31. But an extension of the benefit past July is looking less likely.
Democrats in the House included an extension of the benefits through January 2021 in the $3 trillion relief package they approved in May. However, Senate Republicans oppose the bill and the measure. Many on the political left see extending the unemployment bonus as critical to keeping families and the economy stable through the pandemic. Meanwhile, many business leaders and conservative representatives claim these generous benefits will deter workers from returning to jobs and could gum up the recovery.
Republican Sen. Lindsey Graham of South Carolina tried to hold up the bill in March because of the UI benefits, and he said in April that it would get extended “over our dead bodies.” Meanwhile Republican Sen. Rob Portman of Ohio wants to add a provision to the next relief bill that would allow the unemployed to keep $450 of the $600 a week if they go back to work—in an attempt to financially encourage them to return. And Rep. Don Beyer (D-Va.), vice chair of the Joint Economic Committee, has proposed cutting the weekly benefit from $600 to $300 in stages but keeping it through the end of the year.
That political divide is also shared by rank-and-file voters. A Fortune-SurveyMonkey of 4,109 U.S. adults between May 20–26, found 37% of U.S. adults support that extension, including 20% of Republicans and 54% of Democrats.
The political battle to extend these benefits comes as employers are having trouble convincing employees to return, according to the Federal Reserve’s Beige Book released last week. The culprits? Bosses cited Americans’ health concerns, childcare scarcity, and the “generous unemployment insurance benefits.” Certainly with most schools, summer camps, and childcare arrangements disrupted because of the pandemic, many parents who cannot work from home are facing suboptimal choices about when—and if—they can return to work. According to the Federal Reserve, some employers have even implemented temporary wage increases to compete with the unemployment benefits and entice workers back.
Before passage of the March stimulus bill, many lawmakers wanted to replace 100% of unemployed workers’ wages. Designing such a system, however, would have bogged down the disbursement of the funds. That’s why they turned to the additional $600 in weekly UI. It ended up replacing more than 100% of income for many people.
Researchers at the University of Chicago found that seven in 10 jobless Americans are receiving more in unemployment benefits than they did while working. The researchers found the median person on UI saw their overall total income rise 34%, and 20% of those on UI are receiving benefits equal to double their pay.
“Some employees are saying, ‘Forget it. I’m making more sitting at home,’” says Dan North, a senior economist at Euler Hermes. Such generous benefits, on top of coronavirus fears, make it less likely employees will return to reopened businesses.
If the additional weekly benefits are extended past July 31, North says, it could hamper the economic recovery. He points to research that found the extension of UI during the 2008–10 Great Recession slowed the recovery and helped make it the slowest post–World War II recovery. The extended UI benefits during the Great Recession raised the average duration of unemployment by 7%, according to research by Robert G. Valletta, an economist at the Federal Reserve Bank of San Francisco, and Henry Farber, an economics professor at Princeton University.
But other economists see extending these benefits as a way to boost household income and help families financially through this storm. And by doing so, they argue it could prevent a deeper economic contraction in consumer spending.
Pavlina Tcherneva, an associate professor of economics at Bard College and author of the upcoming book The Case for a Job Guarantee, says if Congress wants to remove the disincentive, then it should allow workers to keep the bonus once they go back to work. But Tcherneva says that should be done while also extending the benefits past July.
“Without generous relief, these workers and their families would have had to run down meager savings and go into debt just to survive during the lockdown period. Besides causing avoidable human misery, this would severely hamper spending—and, by extension, the overall economic recovery—when the public health all-clear is eventually sounded,” wrote Josh Bivens, director of research at the left-leaning Economic Policy Institute, and Heidi Shierholz, director of policy at the Economic Policy Institute, in a post for the organization’s site.
Though the additional $600 in weekly unemployment benefits is slated to expire July 31, other provisions of the Pandemic Unemployment Assistance will remain through the end of the year. That includes the expansion of who is eligible for UI, like part-timers and independent contractors, and the extension to 39 weeks of benefits for anyone who is added to the unemployment rolls before the end of the year.