fortune--2020-08-04--The Fortune 500 is set to have more female CEOs than ever before

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! Elle deems Rep. Katie Porter Congress’s ‘everywoman,’ SpaceX has a new power couple, and Fortune 500 female CEOs have hit a new high. Have a thoughtful Tuesday.
– 38! Two weeks ago, The Broadsheet reported on the 36th female CEO to join the Fortune 500 when Joanne Crevoiserat took over as Tapestry’s interim chief executive. Sue Nabi will be No. 37 when she becomes CEO of Coty on Sept. 1. And as of yesterday, the Fortune 500 is set to get its 38th women CEO when Linda Rendle takes over The Clorox Company’s corner office on Sept. 14.
Should CEO ranks hold between now and then, that 38 total will represent a record-high number of female chief executives.
It will be the third time in three years that the Fortune 500 has reached such a high. It did so in 2019 with 33 and again this past May with 37. Those bright spots followed a backslide in 2018, when the figure dropped 25% over the course of a year to 24.
Experts have attributed the slow but steady progress on this front, in part, to company boards becoming more diverse, which is itself a product of institutional investors demanding new blood in boardrooms. Christy Glass, a professor at Utah State University, told me last year that her research with co-author Alison Cook “has shown that when boards are well-integrated with women, women are much more likely to be appointed CEOs.” The push for board diversity, she said, “may be paying off in terms of women appointed as CEOs.”
To be sure, 38 female CEOs is still a minuscule share of Fortune 500 leadership overall and there is little racial diversity among the women that make up the too-elite club. But the trend, at least in terms of gender diversity, remains headed in the right direction.
Rendle, for her part, will replace Clorox’s CEO of nearly six years, Benno Dorer. As my colleague Phil Wahba reports, she was named president in May, a move that telegraphed the 42-year-old’s ascent to the top job. What’s more, Rendle’s promotion does not seem to be an instance of the so-called glass cliff, as has been the case with other recent appointments. Her new role was announced on Monday as Clorox reported better-than-expected quarterly results.
Claire Zillman
claire.zillman@fortune.com
@clairezillman
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- The everywoman of Congress. When Rep. Katie Porter logged on for this Elle interview in April, she needed to vent. "I didn’t get elected because I’m rich and able to self-fund. I haven’t been in office for 20 years. ... I just want to scream at people like, ‘My life does not look like yours!'" she says of her Congressional colleagues. Read the profile of Congress's "superhero" and "everywoman" here: Elle
- Calling for change. Esther Salas, the federal judge whose son was killed by a gunman with a history of misogynist and anti-feminist rhetoric, spoke out for the first time about the tragedy. She's calling for better measures to keep judges' personal information private. Guardian
- First women. Three Chicago women—one a restaurant owner dissatisfied with her lending options, one an attorney, and one a career finance executive—together are launching First Women's Bank. They recruited Marianne Markowitz, a former head of the U.S. Small Business Administration, as CEO of the bank founded to serve women-owned businesses. Chicago Tribune
MOVERS AND SHAKERS: The Personal Care Products Council named Keech Combe Shetty, executive chair of Combe Incorporated, as chair of its own board of directors. Quicken Loans' Nicole Booth joins Notarize as EVP of public affairs. Pantheon hired former SAP Concur CMO Christy Marble in the same role. Principal Financial Group hired Decooda's Jennifer Oyler as head of customer experience.
IN CASE YOU MISSED IT
- Anonymous allegation. In the U.K., an unnamed Tory member of Parliament has been arrested, suspected of raping a parliamentary aide. The Conservative Party faces pressure to suspend the MP from Parliament, but has not yet done so. The Times
- Drinking responsibly. Ann Mukherjee took over as CEO of Pernod Ricard, the company behind liquor brands Absolut, Malibu, and Jameson, in December. Soon, she was navigating a pandemic that closed bars across the nation. In this interview, she talks about realizing she was pushing employees too hard during an extraordinarily difficult time—and agrees that some bars reopened too soon without protection measures in place. Wall Street Journal
- Out of this world. Astronaut Bob Behnken returned to Earth on Sunday from SpaceX's launch, the first successful orbit by a private company. Now, astronaut Megan McArthur will join her husband Behnken in the SpaceX pipeline, piloting the company's Crew Dragon spaceship next spring. Houston Chronicle
ON MY RADAR
COVID-19 is causing a backslide in workplace gender equality. Here’s how to stop it Fortune
The newsroom where politics is not about men The Cut
Betsy Ancker-Johnson broke a glass ceiling as a GM vice president Wall Street Journal
PARTING WORDS
"This is not just a battle wound. This is something that has changed my life forever."
-Model Ashley Graham on pregnancy


fortune--2020-08-04--How to safely go to the laundromat during the coronavirus pandemic

Here ’ s what TikTok may look like if Microsoft buys it

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Since the pandemic began, we’ve had to adapt to working from home and even learning from home. But for families without their own washing and drying machines, lugging bags of dirty clothes to the neighborhood laundromat comes with a new set of concerns.
Laundromats are shared spaces, which may be off-putting for some customers. In New York City, some laundromats are no longer allowing customers to stay inside while they wait for their laundry or fold it once it’s done. And essential workers who come in contact with new people every day are afraid their clothing could be bringing the virus home.
Venturing outside to do laundry can be scary when COVID-19 rates show no signs of slowing down. But just like grocery shopping or heading to the doctor, going to a laundry facility can be done safely with a little planning. Fortune asked public health and medical experts around the country to weigh in on using laundromats safely.
Their responses have been edited for length and clarity.
Nicolette Louissaint, executive director of Healthcare Ready in Washington, D.C.: “Doing laundry safely is important, especially for those of us who are in the city and don’t have a washing machine. I have taken the precaution of wiping down the inside and outside of the machine, including the buttons before I use the machines. Just like any other surface that I’m touching, I want to make sure that I’m being careful. I keep my mask on while I’m inside the laundromat, and when I get home, anything I used to carry and transport my laundry gets wiped down and sprayed with disinfectants. You want to be mindful about what you’re bringing back into your home. I’m also mindful that I’m not touching my face or taking my mask off before I’m able to clean your hands.”
Dr. Robert Johnson, dean of the Rutgers New Jersey Medical School: “I think staffing of the facility is really important because somebody has to make sure that everyone coming in follows all the rules. From the number of people allowed inside at a time to handing out hand sanitizer, the facility needs to make sure that everyone is being safe. Of course, that means wearing a mask at all times.
“I will only go into facilities where I know those rules will be followed. If they’re not, I just leave. It’s worth finding a laundromat that’s doing a good job managing their customers, for their sake and yours. As far as disinfecting the machines, I don’t think that’s a problem because washing is one of the things we do to remove the virus; I don’t think that by using the machines, your clothes will become infected.”
Dr. James H. Diaz, program director in the LSU School of Public Health: “A lot of people have questions about doing their laundry at a laundromat right now. Coronavirus has really impacted every aspect of our lives, even our laundry. If you’re living with someone who has been exposed a suspected or tested positive for the virus, it’s a good idea to keep their laundry separate in a separate hamper.
When you do your laundry, you may wear disposable gloves if you’d like. What’s most important is to make sure that you’re wiping down high touch areas like the door pull on the washing machine. And as research has shown, our chances of getting the virus from someone else directly is much higher than the chances of getting the virus from a surface. Just like at the grocery store or the park, make sure you’re maintaining social distancing. And a final reminder: When you get home, be sure to give your hands a thorough 20-second wash with soap and water.”
Dr. Norman Beatty, professor at the University of Florida College of Medicine: “Clothes can potentially become contaminated with the virus after direct exposure to an infected person or contact with an object that has the virus on the surface. When handling clothes that are likely contaminated, such as the clothes of someone who works in healthcare, it is likely best to wear disposable gloves when touching these clothes. If you don’t have gloves? No problem, just make sure you’re not touching your face or the clothes you are wearing while doing laundry.
“At the laundromat, it wouldn’t be a bad idea to wipe down other surfaces in the laundromat you will be using with an alcohol-based sanitizing agent or wipes. This includes surfaces such as the buttons, handles, and knobs that control the laundry machine and dryer, laundry cart, folding tables, and bench you may sit at as the laundry is washing. The good thing to report is that once those clothes are inside the laundry machine and washing, the detergents we commonly use to clean our clothes will likely disrupt or even destroy the virus. Try to use the highest temperature possible that is safe for your clothes, as hot water can also contribute to destroying the virus. Lastly, the heat of the dryer also disrupts the integrity of the virus and adds another layer of protection after washing your clothes.”


fortune--2020-08-05--Sweden’s top virologist has a message on how to defeat coronavirus: Open schools and no masks

If the U.S. had handled COVID-19 like Europe did , 60,000 Americans would still be alive

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Just a month ago, Sweden was labeled the “world’s cautionary tale” for its laissez-faire approach to fighting the coronavirus. It famously decided not to close its schools, restaurants or bars, and it told its citizens that there’s no need to mask-up. When the death toll surged in late April, and the country looked overmatched by the fast-moving virus, its officials sounded defensive.
The country’s Public Health Agency developed and implemented Sweden’s approach, and its chief epidemiologist, Anders Tegnell, became the face of the crisis.
While other countries were locking down shops, schools, and public life, Sweden was the outlier, trying to manage the disease with the least possible impact on the economy. The prominent Swedish virologist Lena Einhorn, for one, called the Sweden approach “madness.” Seeing the mortality rate climb in Sweden, Norway decided to close its border with its chief trading partner.
By a per-capita basis, the coronavirus outbreak in Sweden has been one of the world’s deadliest—worse than the United States, France, or any Nordic neighbor. But in the past six weeks, Sweden has seen a remarkable turnaround. New daily cases are down to multi-month lows. Hospital admissions are close to zero, and just 44 Swedes died of COVID-19 in the past seven days, official numbers show. At the same time, coronavirus cases are spiking around continental Europe.
New COVID cases in Sweden have been consistently flat over the past month while spikes in Spain and the UK have alarmed politicians and medical professionals.
Tegnell feels vindicated by the latest batch of promising data.
Last week, he told reporters that masks are not necessary in Sweden. In an interview with Fortune this week, he doubled down on that message, saying the sustained flattening of the curve tells him to not change a thing about the country’s mask strategy—or anything else for that matter.
“We don’t have to introduce masks right now. Because, with a down-going trend,” he said, “it’s not the time to introduce new measures.”
Better than nothing
The mask debate is dividing lawmakers and scientists alike, even as a wave of new studies show that some kind of mouth-and-nose covering is better than nothing in protecting against infection and/or spreading the virus to someone else in the vicinity.
Tegnell has reviewed the body of research and isn’t convinced the mask is an effective tool in a public health threat like the coronavirus. The flaw in the mask strategy comes down to you and me, he says.
“The mask,” he allows, “is complicated. You have to decide when to use them, who should use them, and then try to find out if will you be able to use them properly in a context. I mean, we’re talking about masks in restaurants, and, of course, you cannot eat with a mask on.” And, he pointed to Spain, which has a relatively strict mask rule but where cases have spiked lately.
He adds: “I’m telling people it’s much better to keep a social distance. This is really the best thing you can do in trying to lessen the risk of [infection]—keeping distance. Try to work from home, cycle to work instead of taking the bus if you can. There are plenty of things you should do before you start with a mask [policy].”
Swedes in Stockholm take part in the Ascension Day Church Service at Gustav Vasa Church on May 21, 2020, doing their best to maintain social distancing advice. Wire photography: Linnea Rheborg/Getty Images Linnea Rheborg—Getty Images
Never mind that in, say, the New York metropolitan area, which has a population double that of the whole of Sweden, it’s not easy to maintain social sufficient social distancing. On either side of the Hudson, the Sweden model—as it pertains to masks, at least—won’t be all that applicable.
Stay in school
Tegnell believes Sweden could serve as a model on another thorny issue: schools.
In the spring, Sweden opted not to close its daycare centers or schools, and, Tegnell contends, it had little bearing on infection rates. The Public Health Agency compiled the data on its schools-policy decision and shared its results. Sweden reported 1,124 cases of school-aged children contracting COVID-19 in a period spanning from March, when the outbreak began, to the close of the school year in mid-June. That number equals 2.1% of all COVID cases in the country during that period. Of those, 14 had to be hospitalized in an intensive care unit.
Sweden contrasts those numbers with those of Finland.
“Finland kept the schools closed, and we kept them open. And it seems like, at least in our context, it didn’t make a huge difference, neither to the pandemic, nor to the number of children falling ill,” Tegnell told Fortune.
“It seems like children do get infected,” he continued. “They very seldomly get seriously ill, and they don’t seem to spread the infection very much to other parts of the society.”
The comparative data bears this out. Partly. Even though they were at home much of the final three months of the school year, Finnish school-aged children, on a per-capita basis, caught the coronavirus at a rate that was nearly four times higher than their counterparts in Sweden. But just one Finnish child was admitted to the ICU compared to 14 in Sweden.
As most parents would tell you, just 14 kids in the ICU is hardly reassuring data.
Still, Tegnell believes school kids are low-risk virus vectors who ought to be in classrooms, not at home distance-learning. “Keeping schools open is quite possible to do without having any negative effects,” he said.
Medical professionals elsewhere are not so sure. Researchers in the United States last week, for example, found that COVID-infected children under five were major carriers of the virus.
Flowers and cards
Tegnell mentioned more than once the “ethics” of Sweden’s public health policy. For example, the public health experts decided early on that a policy of achieving herd immunity, as was discussed in Great Britain, was out of the question in Sweden. “Of course, we will not let people fall ill just to achieve herd immunity. That’s not the way we’re working,” he said. Besides, he later said, sufficient herd immunity is neither achievable nor would it be sustainable with coronavirus.
And yet the “Swedish model” has become synonymous with a leave-the-people-alone approach to managing a public health crisis, a strategy advocated by small government advocates around the world. This puzzles Tegnell. The objective in Sweden was the same as everywhere else, he says: to get the infection numbers down.
“When I talk with my colleagues in the UK, for example, we could see that we were able to achieve in Sweden almost the same kind of things that they were able to achieve by legal measures—that is, to encourage people to maintain social distance and so on,” he said.
How Sweden achieved this wasn’t through a strict set of rules, it was by winning the people over. “We have a very high level of trust among the population,” he said.
Each week, the health agency collects survey data from thousands of Swedes. In it, they asked a big question: How are we doing? The approval rate has been sky high.
“It seems 80% of the people, when asked, ‘Are you following the advice of the agency?’ responded, ‘Yes, we are following the advice of the agency.’ And that’s been consistent all the way through,” he said. “The trust for the agency is high. People continue to follow our advice. I think that’s really important.”
“It’s rather unusual that an agency in Sweden gets flowers from the population—flowers and cards.”


fortune--2020-08-05--What the Beirut blast tells us about fragility and risk

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning. David Meyer here in Berlin, filling in for Alan.
Like many people, I spent much of yesterday evening and this morning slack-jawed at footage of the devastation in Beirut, caused by a monumental explosion at the Lebanese capital’s port.
Early indications are that 2,750 metric tons of poorly-secured ammonium nitrate, which had been sitting in a warehouse for six years, somehow ignited.
At the time of writing, the death toll is at least 100–given how the blast flattened a wide area around the port (and carved a sizeable chunk out of the port’s landscape) it is hard to imagine the final count not being many times that. At least three hospitals were destroyed as the shockwave tore through neighborhoods; over 200,000 people are now homeless. Lebanon’s primary wheat stores and the country’s main entry point for imports are gone.
“For someone like me, who lived through 15 years of war, it’s incredible to see that yesterday’s explosion destroyed the city worse than the war. The effect of the explosion can be only compared to that of a nuclear bomb,” says Sr. Hanan Youssef, of the Sisters of the Good Shepherd, who run a clinic in Beirut’s Roueissat neighborhood.
“The port is the only gateway for imported goods into the country. Lebanon is highly dependent on imports, over 80% of goods are imported. This is an unprecedented humanitarian crisis. Food insecurity is huge now.”
This is clearly an enormous tragedy, but what, you might ask, does it have to do with business and the rest of the world’s economies?
Apologies for the negativity, but I find it unavoidable in this case: The blast was a grim reminder that just because things are going really badly, that does not mean they cannot get substantially worse.
Lebanon was already under deep stress before this tragedy struck. Its government was mired in dysfunction and protests were on the rise; its economy was in tatters and its currency in freefall. Power outages were the norm–indeed, a lack of electricity hampered the overnight rescue efforts. And, of course, the coronavirus pandemic bit Lebanon just as it did other countries.
Then the Beirut blast happened—a hammer blow to a country already on its knees.
COVID-19 has taken many societies to what feels like breaking point, but other tragedies will strike while the pandemic rolls on. The U.S., for example, would be extremely lucky if it emerged relatively unscathed from what looks set to be an above-average hurricane season this year. How do you evacuate thousands of people while also trying to maintain social distancing in the context of a pandemic? Hopefully someone is figuring that out.
Everything is extra-fragile now and we all need to take heightened risk into account, to the extent that we can. This awful year still has a long way to go, so be alert for unknown unknowns.
More news below. And please do consider donating to the Lebanese Red Cross, the Good Shepherd International Foundation, or other organizations doing crucial work in Lebanon at this time.
David Meyer
@superglaze
david.meyer@fortune.com
TOP NEWS
Jim Hackett
Jim Hackett is stepping down as Ford's CEO after just a few years. Fortune's Shawn Tully notes that he tried to modernize the industrial icon, but failed "to perform what a bloated automaker needs most, a basic restructuring to squeeze far more dollars in profit from a shrunken, highly-efficient base of plants and design centers." Fortune
China deal
Part of the "Phase One" trade deal between China and the U.S. involves China importing $25.3 billion worth of U.S. energy this year. So far, China has achieved a mere 5% of that amount. The deal's targets always seemed fanciful, but as Fortune's Eamon Barrett explains, "the pandemic has made China’s shortfall all the more pronounced." Fortune
Kodak loan
The circumstances around Kodak's $765 million government loan, aimed at helping it produce drugs in the U.S., are reportedly now the subject of a Securities and Exchange Commission investigation. The big question is how Kodak controlled disclosure of the loan—Kodak reportedly shared information about it with media outlets the day before the public announcement, leading Kodak's share price to pop by a quarter. Some company executives were granted stock options on that day. Wall Street Journal
Vaccine nationalism
Bill Gates has urged the U.S. to think about less-developed nations, and not just itself, when producing and procuring potential COVID-19 vaccines. "We’re trying to make sure we can end it not just in the rich countries," the philanthropist and Microsoft co-founder said. Fortune
AROUND THE WATER COOLER
TikTok debate
Australia's prime minister, Scott Morrison, says his country sees no reason to ban ByteDance's TikTok video app. Morrison: "There’s nothing at this point that would suggest to us that security interests are being compromised or Australian citizens are being compromised…But people should know that the line connects right back to China and they should exercise their own judgment about whether they should participate in those things or not." Reuters
Testing delays
Coronavirus testing in the U.S. remains a shambles, and Fortune's Sy Mukherjee explains why: a variety of failures at an institutional and personal level that "are inextricably linked and feed a vicious cycle. If you’re looking for someone to blame, it’s not so much a straight line as it is a constellation of culprits." Sy adds: "The good news is that public health officials say testing capacity is growing. The bad news is that it’s still very inconsistent." Fortune
Google probe
The European Commission is investigating the potential antitrust implications of Google's $2 billion Fitbit purchase, specifically as regards the online advertising market–it fears Google could use Fitbit's health data to further cement its leading position there–and the nascent health-tech market. Google has promised the Commission it would keep Fitbit's data separate, but the regulators are not convinced. Fortune
Wirecard fallout
The Wirecard collapse hit Commerzbank harder in Q2 than the pandemic did. The German bank's loan-loss provisions for the pandemic were €131 million ($155 million) but it had to write off €175 million in loans to the now-defunct payments provider. Financial Times
This edition of CEO Daily was edited by David Meyer.


fortune--2020-08-05--Will Washington reach a deal on a new stimulus spending package? The markets are pricing it in

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. Global equities are climbing, as are U.S. futures, on optimism Washington will cinch a deal on a new stimulus package.
Let’s see where investors are putting their money.
Markets update
Asia
The major Asia indexes are mixed with the Hang Seng leading the way, up 0.6% .
are mixed with the Hang Seng leading the way, up . This won’t go over well in Washington: China so far is not living up to its end of the bargain on the Phase One trade deal . It’s committed to purchase $25.3 billion worth of U.S. energy this year, but has so far bought just 5% . The two sides will meet mid-month to assess progress so far.
so far is not living up to its end of the bargain on the . It’s committed to purchase worth of U.S. energy this year, but has so far bought just . The two sides will meet mid-month to so far. The clock continues to tick on the Microsoft-TikTok courtship. The big obstacle Microsoft faces: how to value the video-sharing app.
Europe
The European bourses jumped out of the gates this morning with benchmark Stoxx Europe 600 up 0.5% at the open, before climbing.
jumped out of the gates this morning with benchmark up at the open, before climbing. The EU opened an antitrust probe into Google’s proposed $2 billion deal to acquire Fitbit. “The gist of the probe is that Google—already the leader in online advertising in Europe, where it also has a 94% share of the search market —could further fortify that position by getting access to the health data that Fitbit holds,” Fortune‘s David Meyer writes.
into Google’s proposed $2 billion deal to acquire Fitbit. “The gist of the probe is that Google—already the leader in online advertising in Europe, where it also has a —could further fortify that position by getting access to the health data that Fitbit holds,” Fortune‘s David Meyer writes. It’s still unclear whether the deadly explosion yesterday at a major port in Beirut, the Lebanese capital, was an accident or an attack. Even before COVID, Lebanon’s economy was on the rocks. The price of crude climbed on concerns the region would sink into further instability.
U.S.
The major U.S. indexes look to extend the rally on Wednesday as futures all point higher.
look to extend the rally on Wednesday as futures all point higher. The GOP and Dems are still about $2.5 trillion apart in talks on a new coronavirus stimulus package , but U.S. Treasury Secretary Steven Mnuchin says there will be a deal imminently, by the end of the week. According to a new Fortune-Survey Monkey poll, U.S. adults are overwhelmingly ( 80% ) in favor of a second round of stimulus checks.
apart in talks on a new , but U.S. Treasury Secretary Steven Mnuchin says there will be a deal imminently, by the end of the week. According to a new Fortune-Survey Monkey poll, U.S. adults are overwhelmingly ( ) in favor of a second round of stimulus checks. Disney shares are up more than 4% in pre-market trading today after the company reported its streaming subscribers number topped 100 million . Its cruise and amusement park business, in the words of Fortune‘s Aric Jenkins, “took a hammering.”
in pre-market trading today after the company reported its number topped . Its cruise and amusement park business, in the words of Fortune‘s Aric Jenkins, “took a hammering.” Remember last week when Kodak’s shares took off? The SEC is now investigating the circumstances around the company’s disclosure it had landed a $765 million federal loan, money needed to make a big pivot into pharma, the Wall Street Journal reports.
Elsewhere
Gold hit a fresh record, up near $2,050 .
hit a fresh record, up near . The dollar is down .
. Crude is up in volatile trade.
***
Retail army
App-wielding day traders are becoming a market force. According to Goldman Sachs, June was another record month for retail trading with the top four online brokers—Schwab, E-Trade, Interactive Brokers and TD Ameritrade—registering over 8 million trades in the month.
Presumably, they didn’t lose their shirts as the major indexes all performed well in June. But we’ve seen time and again in recent months the impact of retail trading on oddball corners of the markets with wildly volatile swings in select stocks. Hertz and Kodak come to mind.
Just last week, Kodak shares rocketed 25% higher to, at one point, $60, after the company announced it had secured a federal loan worth $765 million. Where’s it trading today? It’s below 15 bucks.
Hertz has been another roller-coaster. It’s essentially a penny stock now. Any move in or out of the stock will trigger big dips or gains. Retail traders bid up the stock in early June. Over the span of two days it more than doubled, then crashed. It’s down 73% since that blip. In the stock chart below, you can see the surge in volume followed by sporadic trading. This is not for the faint of heart.
The retail army is hardly an American-only phenomenon. Retail traders have lately been piling into India’s most indebted, beaten-down firms of late, too.
But lest you think this is a fringe part of the market, Goldman Sachs has more data for you to chew on. Household investors, a grouping that includes retail traders, now accounts for 36% of the $55 trillion U.S. equities market. Household investors as a trading block are three times bigger than ETFs and private mutual funds.
As the biggest single entity in the market, household investors have the power to move stocks up or down in big ways. And, no doubt, they will continue to confound the investment pros.
Note: I admit to not fully understanding some of these nutty stock swings that are presumably fueled by retail traders—the Robinhood crowd, as they’ve become known. If you are one of these traders, please drop me a line. I’d like to hear more about your investing philosophy.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Key money. President Trump's suggestion (threat?) that a TikTok buyer would have to pay the U.S. government the equivalent of "key money" continues to baffle the business world. In legal circles, "key money" is a code word for a bribe—and yes, "that violates housing laws." But what about in the world of M&A? It's not just unethical, Carl Tobias, a law professor at the University of Richmond, tells the Wall Street Journal, it "is probably illegal."
The B-word. It looks as if 2020 will be a record year for corporate bankruptcies, and it's hitting all sectors from aviation to retail. Fortune is tracking the carnage with a new bankruptcy counter that we'll continue to update as big names file for Chapter 11.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
Third CEO in 27 months
Ford Motor Co. announced yesterday that Jim Hackett will step down as CEO, putting an end to a rocky tenure. Hackett's brief run offers all kind of lessons on how to run (or how not to run) a company in this era. Fortune's Shawn Tully says his Achilles' heel was his failure to improve this one vital metric.


fortune--2020-08-05--If the U.S. had handled COVID-19 like Europe did, 60,000 Americans would still be alive

China ’ s U.S. energy imports are 95 % below what it promised in the Phase One trade deal

Last week, the U.S. crossed another sad milestone. It is not solely the more than 150,000 lives lost to COVID-19. It is that on a per capita basis, the U.S. has lost many more lives than Europe has.
Europe, a continent of nearly 750 million people—more than twice the size of the U.S.—has experienced more than 200,000 deaths due to COVID-19; if the U.S. had experienced fatalities at the same rate as the Europe, it would have lost about 90,000 people—60,000 less than it has by now.
Europe was hit hard earlier by the coronavirus than the U.S. was. Early on, European governments made plenty of mistakes. But the continent is now enduring seven times fewer new cases and fatalities than the U.S. per capita.
America’s failure to control this virus and protect its citizens is shocking. The 60,000 difference in deaths mentioned above is the equivalent of more than 20 September 11 attacks (in which nearly 3,000 people perished).
Like many other afflictions, COVID-19 has not affected us all equally.
Two particular groups are most vulnerable to COVID-19. The first of these is the health-vulnerable group, which includes those who are over 65 or have specific preconditions that make them more vulnerable to the virus. About 30% of American adults are in this group. The health-vulnerable population has about a 10 times higher risk of hospitalization than do healthy adults under 65. And those with the highest risk among us—individuals both over 65 and with preexisting conditions—are 30 times more likely to be hospitalized than are healthy adults aged 18–65.
The next segment includes those with greater vulnerability to virus exposure, or the exposure-vulnerable—who are disproportionately people of color. The disparity in fatalities from COVID-19 among people of color has been well-documented. For Latino and Black populations, the fatality rate for adults under 65 is more than four times what it is for whites.
What has been less discussed and documented is why. Boston Consulting Group’s analysis suggests that less than 15% of the difference can be explained by underlying health conditions or access to quality care, which are often suggested as the root causes. Instead, our analysis suggests that it is primarily due to a combination of heightened exposure risk—in communities or in the workplace—and a lack of sufficient testing.
The solutions to protecting Americans are hard, but not rocket science. The Business Roundtable outlined a set of actions to enable schools and businesses in many areas to reopen. We must consistently wear masks indoors and avoid large gatherings. We need to do more to protect our health- and exposure-vulnerable populations; the costs to do that are a fraction of what we are spending to keep the lights on in our moribund economy.
Such changes include distributing high-quality masks to vulnerable individuals, skewing testing resources to these groups, enabling shelter-in-place by providing new services for the most vulnerable, ensuring greater workplace health protections for workers, and applying known best practices to minimize spread in congregate living settings. Our modeling suggests these policies could reduce hospitalizations more than 50% and enable most regions in the U.S. to reopen safely, faster, and more equitably.
There is no time to waste. The U.S. is on track for two more 9/11s this week … and next week … and the week after that. And we are on track to see many of our children remain out of school, which will have devastating long-term economic and societal consequences.
We need to change tracks now. Our political leaders should work together and learn from past mistakes to make that happen, as the U.S. has done many times in its history. Business leaders must also declare loudly and clearly that now is the time to act. Defeating the virus is at the heart of saving both lives and livelihoods, protecting the vulnerable, and responsibly supporting our children.
Rich Lesser is CEO of Boston Consulting Group.


fortune--2020-08-05--China’s U.S. energy imports are 95% below what it promised in the Phase One trade deal

China has achieved just 5% of its target for energy imports from the U.S. in the first half of the year, falling far behind on a commitment to purchase $25.3 billion worth of U.S. energy in 2020 under the so-called Phase One trade deal, Reuters reports.
The deal, signed in January, put a halt to U.S. tariff hikes on Chinese exports in exchange for China agreeing to import an additional $200 billion of U.S. goods over the next two years. China has struggled to maintain its end of the deal.
Even at the time of signing the Phase One agreement, analysts were skeptical China could match its commitments. The $200 billion figure not only far exceeds Chinese demand but also eclipses U.S. supply capacity.
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The pandemic has made China’s shortfall all the more pronounced. Oil demand plummeted in the first quarter of the year, when travel and industry shut down in China. Meanwhile, year-on-year imports of U.S. liquid natural gas (LHG) trebled in the first six months but, due to a crash in LHG prices, the value of the imports only doubled.
China is also supposed to import $36.6 billion of U.S. agricultural goods this year, as per the Phase One deal. The Peterson Institute for International Economics estimates China has so far only imported $8.7 billion worth, which is $10 billion short of what China should have imported in the first half of the year.
In an apparent bid to make up the difference, China made its largest ever single day purchase of U.S. corn last week—buying 1.94 million tonnes of it on July 30, at an estimated cost of $300 million. China set a previous record purchase volume of 1.86 million tonnes earlier that month.
Despite relations between the two superpowers continuing to deteriorate, Beijing has publicly maintained its commitment to the Phase One agreement. In July, Foreign Ministry spokesperson Hua Chunying said “China always acts on its commitments” and that Beijing “will implement the deal because we put our name on it.”
The U.S. has yet to reinstate tariff hikes on Chinese exports, despite the China’s purchasing shortfall, but has piled pressure on Beijing for other reasons. In June, Washington revoked Hong Kong’s special trade status, in response to Beijing’s imposition of a national security law in the financial hub. In July, the White House sanctioned officials and organizations in Xinjiang, where China has carried out mass detentions of the local Uyghur population.
Amid rising tensions, China’s premier Liu He and U.S. Trade Representative Robert Lighthizer are due to meet via video link next week to review the first six months of the trade deal. But the topic of conversation will likely stray into other areas too—such as Washington’s pressure on TikTok, and the tit-for-tat closure of consulates in China and the U.S.


fortune--2020-08-05--Bill Gates lays out a possible timeline for a ‘stop-gap’ COVID vaccine

Microsoft Corp. founder and philanthropist Bill Gates urged the U.S. to take a more global approach in dealing with the coronavirus pandemic, saying while the nation leads in research, “we’ve only taken care of ourselves” in producing and procuring a vaccine.
Gates said he has encouraged congressional lawmakers to consider adding $8 billion to the economic relief bill currently being debated that will be devoted to helping less-developed nations procure an eventual vaccine to stop the spread of COVID-19.
“We’re trying to make sure we can end it not just in the rich countries,” Gates said in an interview with Bloomberg News on Tuesday.
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The Bill & Melinda Gates Foundation has pledged more than $350 million toward COVID-19 research. Much of that money has gone toward funding not only research, but also manufacturing capacity that will help a vaccine be distributed globally. In particular, Gates said, he has funded vaccine development efforts by AstraZeneca PLC, Johnson & Johnson and Novavax Inc., which on Tuesday reported promising early trial data.
“Those are the ones most scalable and low-cost,” Gates said.
Around the world, there are well over a hundred vaccines in development, with more than two dozen in human clinical trials. As it becomes clear that vaccines are the best hope for reining in the pandemic and allowing countries to fully re-open their economies, nations are scrambling to get access to supplies.
Gates joins many others expressing growing concerns over “vaccine nationalism” in which one nation prioritizes producing and stockpiling vaccines for itself. His foundation has invested in an entire portfolio of potential COVID-19 therapies and vaccines, including a vaccine being developed in South Korea.
He believes a vaccine will likely be approved by the beginning of 2021, though that may be a “stop-gap” primarily available to wealthier nations. More effective vaccines, Gates said, may take longer to develop.
“The initial vaccine, in terms of its effectiveness against sickness and transmission, won’t be ideal and may not have a long duration,” he said.
In the meantime, he said he is optimistic that many therapies in development to treat the virus may help significantly reduce the death rate of the virus.
“Innovation in diagnostics, therapeutics and vaccines will get us largely out of this by the end of 2021,” Gates said. “The true end comes when between natural infection and a vaccine we have this herd immunity.”


fortune--2020-08-05--A big wrinkle in a Microsoft-ByteDance deal: Deciding how much TikTok is worth

Microsoft Corp. has six weeks to hash out details of a proposal to buy the U.S. operations of TikTok that satisfies the Trump administration and shareholders in Chinese parent company ByteDance Ltd. Of all the tricky questions that still need to be resolved for the deal to move forward, one stands out: How much is the video-sharing app’s business worth?
Analysts and bankers have pegged the value of TikTok’s U.S. business anywhere from $20 billion to $50 billion, a wide range that reflects the complexity involved in separating TikTok’s American and global businesses, in determining a reliable number of users, and how revenue breaks out just for the markets at stake in the deal. Microsoft’s discussions also include TikTok’s business in Canada, Australia and New Zealand.
TikTok’s parent is a closely held Chinese internet giant that operates a family of hit entertainment applications. ByteDance generated more than $3 billion of net profit on $17 billion in revenue last year, helping lead to a private-market valuation of more than $100 billion, making it the world’s most valuable startup, Bloomberg News reported in May.
But venture capital investors’ stakes are in ByteDance as a whole, not in TikTok, so there hasn’t been a clear valuation for a standalone TikTok. On top of that, because Microsoft is considering buying only the app’s operations in four countries, a further carving out from the broader TikTok business would be necessary. Daniel Ives, an analyst at Wedbush Securities, estimates that TikTok’s U.S. operations account for about 40% of ByteDance’s valuation, or about $40 billion.
If navigated well, Microsoft could turn the app into a $200 billion business, based on Ives’s estimates that TikTok has about 100 million active users in the U.S. and is bringing in around $2 billion in revenue already. The app could follow a similar path to Facebook Inc., which went public before it had fully revved up its advertising business. While TikTok has started displaying advertising on its app, the monetization of America’s fastest-growing social media platform is still in nascent stages.
Microsoft didn’t comment on a potential price in its blog post about its discussions to buy TikTok’s assets, and TikTok declined to comment on its valuation.
One person familiar with the White House’s discussions of TikTok said its global business would be worth about $50 billion, with its U.S. operations valued at less than that. The 5.6% increase in Microsoft’s shares Monday on news of the discussion — which added $87 billion to its market capitalization — would be enough on its own to finance the transaction, said the person, who asked not to be identified because the discussions were private.
Several analysts use Snap Inc., which owns rival app Snapchat, as a basis of comparison for TikTok. In its latest earnings report, Snap reported daily active users grew 17% to 238 million, and the company reported revenue of $1.72 billion in 2019. One banker said TikTok should be worth more than Snap, which has a market valuation of about $32 billion, because TikTok has more popular influencers and a more engaged community.
TikTok’s valuation could be based on its rate of user growth, but that measure also offers no definitive answers. Bankers, venture capital investors and analysts are grappling with a gap between what research firm Sensor Tower estimates are 165 million downloads of the app in the U.S., and how many active users remain on the platform. By comparison, Snap had 161 million daily active users right before its IPO in 2017. Facebook had 526 million in March 2012, prior to its IPO. That translated to $138 in market cap per user for Snap, compared to $198 per user for Facebook, according to Bloomberg Intelligence analyst Jitendra Waral. Using Facebook’s market cap per user before its IPO as a proxy, and assuming TikTok has 100 million users, that would imply a $20 billion valuation for TikTok.
“The biggest unknown here is the language around ‘users’ is vague,” Waral said. “But the difference between Snap and TikTok is user growth is faster than what Snap had in the U.S.” at the time of its IPO, he said. “So they might get away with a higher valuation.”
Based on the number of TikTok users and projections for $1 billion to $2 billion in 2020 sales, Waral said, the app could probably fetch around $20 billion. A $50 billion valuation would be almost double that of Snap’s at the time of its initial public offering, based on a multiple of about 25 times revenue, Waral says.
There are other hurdles Microsoft will have to overcome. The Redmond, Washington-based software maker is unpopular as a potential TikTok buyer with some China hawks in the Trump administration, including White House adviser Peter Navarro, who say the software maker is too close to Beijing. When Microsoft entered China in 1992, it helped engineer the government’s computer systems, installing special versions of Windows operating systems to comply with the country’s censorship controls.
“The Chinese Communist Party, whose software do they use to do all the things they do? It’s Microsoft. So this is not a white-hat company,” Navarro told CNN Monday.
The price for a piece of fast-growing TikTok could also depend on whether Microsoft scores a discount from picking up an app whose other alternative is being banned by the U.S. government. At least one other large company has shown interest in buying TikTok and other U.S. investors could take minority stakes, but Microsoft is the only one to confirm it’s talking to TikTok about a deal. If no other serious suitors emerge, Microsoft may have even more leverage to drive down the price as ByteDance races to save TikTok from being shut down.
“There’s no other dance partner at the prom for TikTok,” said Wedbush’s Ives. “There’s only one. It’s Microsoft.”


fortune--2020-08-05--Facebook deletes a Trump post for first time ever

What would it be like if the Internet suddenly went dark ?

Facebook has deleted a post by President Donald Trump for the first time, saying it violated its policy against spreading misinformation about the coronavirus.
The post in question featured a link to a Fox News video in which Trump says children are “virtually immune” to the virus.
Facebook said Wednesday that the “video includes false claims that a group of people is immune from COVID-19 which is a violation of our policies around harmful COVID misinformation.”
A tweet from Trump with the same video remained up on Twitter as of Wednesday afternoon. That’s even though Twitter has been quicker than Facebook in recent months in labeling posts from the president that violate its policies against misinformation and abuse. Twitter did not have an immediate comment.
This is the first time that Facebook has removed a post from Trump entirely, rather than labeling it, as it has done in the past.
Several studies suggest, but don’t prove, that children are less likely to become infected than adults and more likely to have only mild symptoms. But this is not the same as being “virtually immune” to the virus.
A CDC study involving 2,500 children published in April found that about 1 in 5 infected children were hospitalized versus 1 in 3 adults; three children died. The study lacks complete data on all the cases, but it also suggests that many infected children have no symptoms, which could allow them to spread the virus to others.


fortune--2020-08-05--Elon Musk’s Las Vegas tunnel project clears last major hurdle for expansion

Soon, Elon Musk could be a Las Vegas transportation kingpin. On Wednesday, county officials unanimously approved designs for two additional tunnels connecting hotels with the Las Vegas Convention Center, clearing the way for Musk’s Boring Co. to expand its first commercial underground transportation system.
Approval form the Clark County commission is one of the last hurdles to a proposed expansion of a Boring Co. project burrowing underneath the convention center, which was largely finished in May but has yet to open for rides. One of the hotels connecting to the Loop, Resorts World, said it expects construction on the expansion to begin by the end of this year, Scott Sibella, president of Resorts World Las Vegas, said in an emailed statement.
In May, Musk tweeted that Boring Co. would “also connect Vegas hotels & airport.” Airport officials have held introductory conversations with the Boring Co. in recent weeks, according to Chris Jones, a spokesman for McCarran International Airport.
With the coronavirus pandemic curbing travel, including to Las Vegas, Boring Co. and its hotel partners may benefit from some extra time to get their projects ready. Boring Co. has said it’s on track to finish the Vegas convention center Loop by January, in time for the massive Consumer Electronics Show, though conference organizers said last week that the event will be held exclusively online. A Boring Co. Loop to Dodger Stadium in Los Angeles is still mired in the city’s environmental review process and missed a deadline for opening this year that had been set by the baseball team’s financial chief.
A spokesman for Boring Co. said he didn’t have more information on the hotel portion of the Las Vegas project. A spokeswomen for Wynn Resorts Ltd., owners of the other Vegas hotel that the Loop will connect, didn’t immediately respond to a request for comment. The remaining procedural steps for the expansion include building permits, a license and maintenance agreement from a county department, a spokesman for Clark County said.


fortune--2020-08-05--What would it be like if the Internet suddenly went dark?

‘ Extremely doubtful ’ Americans will get a second stimulus check or enhanced unemployment benefits if deal isn ’ t @ @ @

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There’s nothing quite like being cut off from the grid to remind oneself how dependent one is on digital infrastructure.
A tropical storm barreled up the coast while Fortune closed its latest magazine issue on Tuesday. As I was sending an email laden with edits, the power flickered—once, twice, three times before everything went dead. I lost Internet, electricity, and, quite surprisingly, cell service. I suppose Isaias knocked over a cell tower with the same force it used to split a gigantic old oak tree onto my neighbor’s house.
Once the winds died down, I sought refuge at my parents’ house on Long Island, where I am writing and sending today’s Data Sheet newsletter. (Forgive its tardiness.)
As someone who covers cybersecurity, I wonder often what it might be like if the Internet suddenly were to go dark. My childhood self remembers the before-times; I’m of the last generation in the U.S. that grew up right as the commercial web was taking off. I am—or was, rather—America Offline.
These days, having that vital communications network wrenched away—especially hours before a feature story is shipping to printer—is jarring. Dear reader, I would not recommend it.
Have you ever wondered about life in an Internet-severed world? If not, no worries: Tim Maughan, a British novelist, has done it for us. His 2019 book, Infinite Detail, named last year by the Guardian as “sci-fi book of the year,” envisions such an unhappy place. While I have not yet read the work, I did catch an interview the blog OneZero recently conducted with Maughan.
Maughan imagines a world populated with people who wear “spex,” augmented reality glasses that are as integral to his near-future as iPhones are to this one. What I like most is his description of his goal in writing dystopian fiction: to reveal what’s wrong with society’s tech obsessions and make known the hidden consequences of things like pervasive corporate surveillance. As he put it:
“It’s very easy to fall into that kind of Black Mirror trap of saying, here’s an example of when surveillance went particularly bad and the wrong person was killed or the wrong person was implicated, or a stalker was following you, your nemesis or your ex-boyfriend was stalking you on social media….
“You don’t want to fall into that thing of writing a thriller about someone that gets stalked through their Alexa. I’m unfortunately taking on the task of trying to write fiction about the real implications of technology like that. It’s an incredibly stupid, foolhardy thing to do.“
It sounds neither stupid nor foolhardy to me. I plan to check out a copy of his book—and his new collection of stories, Ghost Hardware—once I’m able to recharge my Kindle and download the e-book.
Till then, I’ll be preparing meals of newly unrefrigerated, hopefully unspoiled food by candlelight.
Robert Hackett
Twitter: @rhhackett
Email: robert.hackett@fortune.com
THREATS
Boxing Day came early. Samsung released a number of new products at its Unpacked 2020 event today. Most notably, the Korean tech giant debuted the latest edition of its flagship mobile phone, the Galaxy Note 20, a $1,000 gadget that comes equipped with super-fast 5G wireless connectivity. Analysts and reviewers expect soft sales as most people cut back on discretionary spending as a result of the pandemic. Other releases: the Galaxy Tab S7 tablet, the Galaxy Watch 3 smartwatch, and Galaxy Buds Live earbuds.
Get Reels. Facebook's Instagram introduced Reels, a short-video feature that effectively clones TikTok. The release comes after Facebook shuttered Lasso, a standalone TikTok copycat app that failed to catch on. Facebook is recycling a playbook it deployed in 2016 when Instagram released Stories, an ephemeral video feature meant to rival Snapchat.
Time is money. Everyone is wondering whether Microsoft will indeed buy TikTok from Chinese parent ByteDance, a prospective deal recently instigated and blessed by President Trump. The price tag could be as high as $30 billion or as low as $10 billion, CNBC reports. TikTok, meanwhile, rolled out new content moderation policies intended to counter misinformation ahead of the upcoming presidential election.
In the clink. A Florida teen accused of hacking Twitter and gaining control of accounts belonging to politicians, celebrities and tech titans pleaded not guilty to the crimes. Perhaps predictably, a virtual bail bond hearing for the suspect did not go as planned over Zoom... Meanwhile, Anthony Levandowski, the ex-Uber executive accused of stealing self-driving car trade secrets from a former employer, Google, was sentenced to 18 months in prison.
Scrolling through the litany of doom.
ACCESS GRANTED
Obinwanne Okeke, a Nigerian entrepreneur who once appeared on the cover of Forbes's Africa edition, pleaded guilty in June to involvement in a scam to defraud a division of construction giant Caterpillar of $11 million. Okeke and his conspirators phished the unit's chief financial officer, gained access to his Microsoft email account, and then sent fake invoices to the business's finance team. Rest of World, an internationally-focused news site, chronicles the history of Nigerian scamming and its evolution into a sophisticated enterprise.
The tale of the Nigerian online scammers stretches back to the 1990s, when cybercafes sprung up across the country as internet access became increasingly widespread. Young men popularly known as “Yahoo boys” became famous for conning their unsuspecting victims out of money by posing as romantic interests — typically American soldiers based in active conflict zones in the Middle East — or as wealthy royals in need of help getting a relative’s money out of some bureaucratic logjam.... Okeke’s case reflects how much has changed since then.
FORTUNE RECON
Why COVID-19 testing in the U.S. is still plagued with delays and inconsistencies By Sy Mukherjee
Here’s what TikTok may look like if Microsoft buys it By Jonathan Vanian
Apple’s Phil Schiller moves to ‘fellow’ position, while Greg Joswiak takes on marketing role By Ian King
Bill Gates lays out a possible timeline for a ‘stop-gap’ COVID vaccine By Kristen V. Brown and Emily Chang
How antitrust investigations impact U.S. A.I. supremacy By Jonathan Vanian
Ex-Uber exec gets 18-month prison term for trade theft from Google By Joel Rosenblatt
SEC reportedly investigating Kodak’s government loan and stock spike following Trump deal By Rey Mashayekhi
ONE MORE THING
On Wednesday, Virginia became the first U.S. state to debut a COVID-19 contact tracing app using Apple and Google's technology. The app, called COVIDWISE, uses Bluetooth beaconing to exchange randomized phone identifiers among people in close proximity. Those identifiers are then cross-checked against a list that contains the identifiers of people who have reported testing positive for the coronavirus. If you come into contact with someone known to have been infected—within 6 feet for at least 15 minutes—you'll get a notification.
You can download the app here (for Apple) or here (for Android).


fortune--2020-08-05--‘Extremely doubtful’ Americans will get a second stimulus check or enhanced unemployment benefits if

‘Extremely doubtful’ Americans will get a second stimulus check or enhanced unemployment benefits if deal isn’t made by Friday

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Democratic and Republican party leaders are making little progress in their talks for another stimulus package, which would include another round of stimulus checks and enhanced jobless benefits. And if they don’t make progress or a deal by the end of the week, they might not pass anything, White House chief of staff Mark Meadows told reporters Wednesday.
“I’ve become extremely doubtful that we’ll be able to make a deal if it goes well beyond Friday,” Meadows said before going into a Wednesday meeting with Democratic and Republican leaders to try again to hash out a stimulus deal.
The White House, Senate Republicans and House Democrats all support sending another round of $1,200 stimulus checks to Americans, however, they can’t come to an agreement for the broader stimulus bill in which the checks would be included. Democrats want more money for state governments and unemployment benefits, while Republicans want the extra $600 weekly federal unemployment benefit—which expired the week of July 25—reduced and COVID-19 lawsuit immunity for businesses.
“They [GOP leaders] repeated again today which is if there’s not a deal by Friday, there won’t be a deal. At some point you have to set a deadline or just continue this Kabuki dance every day and nobody wants that,” Senator Roy Blunt, R-MO told CNN Wednesday.
Senate Majority Leader Mitch McConnell said Wednesday that he’ll delay the start of the August recess and remain in session next week. That would provide the time needed to pass legislation if both parties come to an agreement this week.
On Wednesday, House Speak Nancy Pelosi was more upbeat, telling MSNBC that she’s “confident that we will have an agreement.”
White House officials have suggested the distribution of stimulus checks could be sped up more, given the system is already in place. However, until the bill passes and the U.S. Department of the Treasury issues guidance, nothing is certain.


fortune--2020-08-05--Rackspace shares tumble 20% on first day of trading after IPO

Shares of business technology company Rackspace tanked on Wednesday following an initial public offering, just like they did in 2008 after a previous IPO.
Rackspace shares fell over 20% to $16.17, a similar performance to their first day of trading 12 years ago.
Similar to how the nation’s economy was reeling from the Great Recession when Rackspace originally went public, the business world is now suffering in the wake of the coronavirus pandemic.
Still Rackspace CEO Kevin Jones was positive during a conversation with Fortune on Wednesday, calling his company’s public debut, which raised $700 million, “one of the largest tech IPOs of the year.” That would include the IPOs of business software company ZoomInfo (which raised nearly $1 billion) and online used-car seller Vroom (which raised about $468 million).
“Today’s Day One,” Jones said.
In 2016, private-equity firm Apollo Global Management took Rackspace private in a deal worth $4.3 billion. That leveraged buyout saddled Rackspace with considerable debt (the company’s total debt is about $3.9 billion), Jones explained. Rackspace plans to use part of the $700 million raised in its IPO to help pay off the debt.
When Rackspace was founded in 1998, it was focused on website hosting services, and by 2008, at the time of its first IPO, it was heavily investing in cloud computing, in which companies sell computing resources on-demand to customers. But Amazon and Microsoft ended up being too much competition for the smaller Rackspace, prompting the company to shift to selling software that helped customers manage multiple cloud computing services, a trendy IT concept known as multi-cloud.
“The company is completely different than we were before we were taken private,” Jones said.
Therefore, Jones no longer views Amazon and Microsoft as competitors. They’re now “my partners,” he said, and an extension of Rackspace’s salesforce and research and development teams.
Still, Rackspace faces tough competition from much larger companies. IBM, Accenture, and Hewlett Packard Enterprise also pitch similar cloud management products—either consulting services, software, or a combination of the two—to help customers control their IT infrastructure.
Jones described Rackspace as being “much more agile” than bigger rivals like IBM, which often sell hundreds of other services and therefore aren’t as specialized.
In Rackspace’s latest quarter ending March 31, overall sales were $652.7 million, a 7.5% year-over-year increase. During that period, it lost $48.2 million, or 16% less than in same quarter during the previous year.
As for taking Rackspace public during a pandemic, Jones acknowledged that it was odd. The traditional IPO roadshow, usually held with potential investors in hotel ballrooms in cities across the country, was done virtually through video-conferencing.
“It would have taken us weeks to fly over the world,” Jones said.
Still, “there’s not as much chit chat and informal relationship building” as there used to be, Jones said before adding, “But I think over time that will get to normal.”


fortune--2020-08-05--The fate of stimulus checks and $600 weekly unemployment extension could depend on these vulnerable

The fate of stimulus checks and $600 weekly unemployment extension could depend on these vulnerable Senate Republicans

A small but singularly influential group is a driving force for an agreement on a stalled coronavirus relief bill: endangered Senate GOP incumbents who need to win this fall if Republicans are going to retain control of the majority.
Confronted with a poisonous political environment, vulnerable Senate Republicans are rushing to endorse generous jobless benefits, child care grants and more than $100 billion to help schools reopen. Several of them are refusing to allow the Senate to adjourn until Washington delivers a deal to their desperate constituents.
Sen. Martha McSally, who has fallen behind in polls in Arizona, is breaking with conservatives to endorse a temporary extension of a $600 per week supplemental benefit. Republicans up for reelection such as John Cornyn of Texas and Lindsey Graham of South Carolina are demanding results before returning home to campaign. And Sen. Susan Collins is in overdrive, backing help for cash-starved states and local governments — and Maine’s shipbuilding industry.
The opinions of senators up for reelection are of more consequence to Senate Majority Leader Mitch McConnell than those held by conservatives like Ted Cruz, R-Texas, and Pat Toomey, R-Pa., who are broadcasting their opposition to the emerging legislation as costly and ineffective. As other Republicans gripe that they’re going to have to swallow a deal brokered by House Speaker Nancy Pelosi, D-Calif., the vulnerable Republicans are craving just such a bipartisan result.
“Maybe eight Republicans who are up in tough states have a bigger interest in getting this COVID-19 bill done,” said Sen. Rob Portman, R-Ohio. “I think that’s accurate.”
Republican strategists, grappling with a political environment for their party that has worsened over the summer, said it’s imperative for GOP lawmakers to be able to head back to their states and districts with a deal in hand to show voters they are taking the pandemic and the economic fallout seriously.
“GOP Senate candidates need a deal, a good deal … so they can get home and campaign on helping small businesses get up and moving again,” said Scott Reed, the chief political strategist at the U.S. Chamber of Commerce.
Republican operative Corry Bliss said it was crucial for incumbents facing tough re-election fights to “have wins” to highlight through the fall.
“This is the most important issue facing the country right now,” Bliss said. “There’s no better message for Congress to deliver heading into the election than a big bipartisan victory to help families and small businesses get through this difficult time.”
Republicans control the Senate by a 53-47 margin, meaning Democrats must gain at least three seats to capture Senate control. But Republicans are defending 25 of the 38 seats in play, and are on the defensive even in traditionally red states due to Trump’s deteriorating standings in polls.
Meanwhile, in blue and purple states like Iowa, Colorado and Maine, GOP incumbents are lining up to break with party orthodoxy on issues like child care, unemployment benefits and aid to cash-starved state and local governments.
In Colorado, Sen. Cory Gardner recently pushed for more virus relief after an appearance with Ivanka Trump at a child care facility in the Denver suburbs. “It needs to get done now,” he told reporters.
His opponent, Democrat John Hickenlooper, has been hammering Gardner over the GOP’s decision to “pause” the coronavirus negotiations for most of the summer. On Tuesday, his campaign held a virtual press conference to press for more relief. “We’ve seen Sen. Gardner stay silent while Mitch McConnell and President Trump refuse to help millions of Americans,” Hickenlooper said.
In South Carolina, Graham’s opponent has called out what he has characterized as the Republican’s flippant attitude toward real-world concerns over lost wages and unemployment. Jaime Harrison has said Graham is “leading the charge” to cut additional unemployment relief, referring to Graham’s April comment that Congress would extend the current benefits past July “over our dead bodies.”
Graham is now offering a jobless benefit proposal that is more generous than other GOP proposals.
Cornyn helped start a bandwagon of senators who are demanding the Senate stay at work in Washington until a coronavirus bill is passed. Voters expect a deal — including renewed unemployment benefits that have helped millions of people avert a descent into poverty — and returning home to campaign without one in hand could be a political disaster. With progress coming slowly in the talks, GOP leaders said the Senate will be extending its session into next week and possibly longer.
Back home, Cornyn is facing the first serious reelection challenge of his 18 years in the Senate as Trump’s sagging approval and Texas’ rapidly changing suburbs has the GOP nervous about their grip on America’s biggest red state. His opponent, Democrat M.J. Hegar, is attacking Cornyn for opposing the $600-per-week benefit as too generous in a majority of cases since it pays most people more to not work than to work. He said in June that the benefit would not be reinstated.
At a closed-door GOP lunch last month, conservative Sen. Tom Cotton, R-Ark., urged a freer-spending approach to the legislation that could help endangered colleagues keep their seats — and allow everyone else to hold onto their gavels.
It’s difficult to overstate the stakes. Republicans are in their sixth year holding the Senate, and that majority could be the only obstacle to all-Democratic control of Washington next year if Joe Biden, the presumptive Democratic nominee, defeats Trump in November.
Democrats controlling the chamber could rubber-stamp Biden’s Cabinet and judicial picks, if he wins, including likely Supreme Court vacancies. Even a narrow Democratic majority could reverse the GOP’s 2017 tax cuts — and that’s before the party considers eliminating the legislative filibuster that has been the defining characteristic of the chamber for decades.
“This is the most important thing we need to be doing,” Cornyn said Tuesday of the coronavirus response measure.


fortune--2020-08-05--The U.K. lifted border controls just as COVID took off. Lawmakers call this ‘a serious error’

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The British government has pushed back against lawmakers who, in a damning cross-party report, accused it of dithering over border controls as the COVID-19 pandemic gathered steam in March—dooming thousands of people to infection as a result.
The U.K. only instituted strict entry controls in early June, when it started requiring everyone arriving in the country to self-isolate for two weeks or face fines. This was nearly three months after many other countries introduced controls requiring quarantine or at least health screening on arrival.
The country had imposed some controls on people arriving from China, Iran and Italy quite early in the crisis, in February and early March, but then it abruptly lifted them on March 13. The U.K. went on to be hit harder than any other European country, with a death toll that currently stands above 46,000, and a confirmed infection count of 306,000.
Why did Boris Johnson’s government make that fateful mid-March decision? That’s what Parliament’s Home Affairs Committee wanted to know, and on Wednesday it delivered its verdict.
“The Committee was unable to find any scientific evidence to justify this inexplicable decision and says that the failure to have any special border measures in place in mid-March was a serious error,” it said in a Wednesday statement.
“Had stronger early measures been taken—such as requiring legally-enforceable quarantine for arrivals—it is likely that the spread of the virus could have been slowed,” the committee stated in the accompanying report. “The failure to advise people travelling or returning from Spain in particular to self-isolate for 14 days… or, at the very least, to monitor symptoms and call [the National Health Service or NHS’s hotline] was a mistake.”
The Home Office—the government department responsible for border controls—was quick to hit back.
“The Home Affairs Select Committee are incorrect in their assertions,” the Home Office said. “All of our decisions throughout the pandemic have been guided by the science, with appropriate measures introduced at the right time to keep us all safe.”
“And with passengers numbers significantly reduced, the scientific advice was clear that quarantine measures for those entering the country from abroad would be most effective when the U.K. has a lower level of infection. Therefore, as the virus was brought under control here, border measures were introduced on June 8 to protect public health and help avoid a second peak that would overwhelm the NHS.”
U.K. COVID cases (dark blue line) have shown a different trajectory from that of its European neighbors. Some health experts blame the U.K.’s protracted curve on its hesitance to act in the initial weeks of the outbreak.
Indeed, many experts have pointed out that border closures have limited effect when a virus is already rampant in the community, and have argued that the focus under such circumstances should be on testing, treatment and contact-tracing.
But the committee rejected the Home Office’s argument about passenger numbers in its report.
“Although passenger numbers started to fall, a further one million people were to arrive between 13 March and lockdown on 23 March, and possibly hundreds of thousands more by mid-April. That is likely to have included thousands of people with COVID-19,” it said.
The Home Office countered that it had not in fact dropped isolation guidance on March 13, but rather that this guidance had been “superseded by the national stay at home guidance.”
“As has been explained to the committee, this meant that anyone entering the country, like the rest of the population, was required to self-isolate if they developed symptoms,” the department said in response to the report.
The problem there is that the government only introduced a proper lockdown in the U.K. on March 23. That 10-day gap—with no national lockdown and no strict border controls—”was a serious mistake that significantly increased both the pace and the scale of the epidemic in the U.K., and meant that many more people caught COVID-19,” the committee wrote.
Medical experts seem to be on the committee’s side.
Andrew Freedman, head of Cardiff University’s School of Medicine, said in a statement that it is impossible to be “certain how many fewer infections there would have been, had things been done differently,” but “it is hard to disagree with the conclusion that the removal of any requirement for arriving travelers to self-isolate in mid-March, as well as the lax arrangements earlier on, did lead to a large influx of imported cases.”
“The U.K. policy was clearly at odds with those of many other countries in Europe and around the world.”


fortune--2020-08-05--Wayfair finally turns a profit thanks to COVID-19 spending surge

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Wayfair defied the cynics on Wednesday by finally reporting a profit after years of losses, bolstered by a surge in shopping from homebound consumers—but analysts warn the growth might be unsustainable.
The online home furnishings retailer reported revenue in the second quarter spiked 84% to $4.3 billion. Americans focused on their homes during the coronavirus lockdowns, opting for online shopping, helped Wayfair report a profit of $273.9 million dollars after a long string of quarterly losses. In 2019, the company lost nearly $1 billion on revenue of $9.13 billion, raising questions about the longer term viability of its business model.
As concerns about the close quarters of physical stores grew, Wayfair capitalized on a big shift to online shopping for home goods. The company proved deft at marketing, something it has been criticized for spending too much on in the past, to attract new shoppers and get existing ones to shop more often. The number of active customers rose 46% to 26 million, as of the end of the quarter on June 30, 2020.
Wayfair’s stock has more than tripled this year on the strength of that spending surge since the pandemic broke out in March. The company’s blockbuster quarter was unimpeded by the bizarre online conspiracy started by an anonymous Reddit user claiming the e-commerce company was involved in child trafficking, in part because some of the cabinets it was selling shared names with missing children.
The company’s shares were down 5% in morning trading on Wednesday as some shareholders have sold to turn a profit and others are concerned about the sustainability of its performance.
With millions of Americans largely done setting up home offices for themselves and demand for other furniture unlikely to stay at the same levels, there are worries Wayfair’s results could be short lived.
“Without the favorable tailwinds that have blown more customers its way, Wayfair will start to revert to its old model of having to use extensive advertising and marketing to keep customers coming back,” Neil Saunders, managing director at GlobalData Retail, wrote in a research note. “This will drive down profitability and likely push the company back into the red.”
Still, Wayfair CEO Nirah Shah anticipates that shoppers will keep spending on beautifying their homes absent the ability to travel or go to concert as the COVID-19 crisis drags on. Shah says that plays to the company’s strengths—all the more if customers have a good experience.
“What we have seen thus far would suggest that even as economies reopen, our customers remain focused on the home and are extremely satisfied with Wayfair,” Shah told investors on a conference call.


fortune--2020-08-05--Blackstone is hunting heads and cutting checks as it doubles down on tech

Good morning, Term Sheeters. This is Fortune finance reporter Rey Mashayekhi, filling in again for Lucinda.
The Blackstone Group is, by most measures, the largest private equity firm in the world. Yet in past years, as competitors like KKR and TPG ramped up efforts in the vaunted technology, media, and telecom (TMT) sector, Blackstone remained more focused on brick and mortar—becoming perhaps the largest commercial real-estate landlord in the world in the process. (Such is real estate’s importance to the firm that it chose to elevate Jonathan Gray—Blackstone’s former global head of real estate, who masterminded its world-beating strategy in the sector—to the rank of president and COO in 2018.)
But these days, there’s been a slight recalibration at the firm. Blackstone is now scaling up its operations on the tech side—staffing up with new hires who are well-versed in the TMT sector, and pursuing an array of tech-related investments in areas as diverse as health care, data centers, and social networking.
Monday’s announcement that Blackstone has lured former Amazon executive Christine Feng to the firm goes hand-in-hand with this new emphasis. In her new gig, Feng—who specialized in mergers and acquisitions at Amazon Web Services, and previously held a similar role at Microsoft—will focus on tech sector investments through the firm’s Tactical Opportunities platform.
Feng arrives a few months after Blackstone poached former KKR managing director Vini Letteri, who played a leading role in guiding KKR’s investments in growth-stage tech companies. Letteri now holds a senior role at Blackstone Growth, the firm’s own growth equity investing platform; Blackstone launched that platform in early 2019, having hired Jon Korngold away from General Atlantic to helm it.
Beyond talent, a raft of recent deals demonstrate Blackstone’s commitment to beefing up its presence in the tech space. In the past two years, it has acquired a majority stake in Thomson Reuters’ financial data unit, which it rebranded as Refinitiv; purchased mobile marketing platform Vungle for a reported $750 million; and picked up a majority interest in the startup that owns the popular dating app Bumble. This year, it has acquired health care technology firm HealthEdge Software and invested in Chinese data center provider 21Vianet.
Blackstone is poised to throw its considerable weight around in private equity tech investing in the years to come. Both Feng and Letteri are based in San Francisco, where Blackstone is actively looking to expand its footprint.
The world’s biggest private equity firm has its eyes firmly set on Silicon Valley; the rest of us would be wise to take notice.
Rey Mashayekhi
@reym12
rey.mashayekhi@fortune.com
Anne Sraders curated today’s Term Sheet.
VENTURE DEALS
-ShareChat, an India-based social media app, is in early talks with investors including Sequoia Capital to raise up to $200 million, Reuters reports citing sources. The deal could value ShareChat at $1 billion, Reuters reports. Read more.
-Rippling, a San Francisco-based payroll, benefits, and employee data management platform, raised $145 million in Series B funding. Founders Fund led the round, and was joined by investors including Greenoaks Capital, Coatue Management, Bedrock Capital, Kleiner Perkins, Initialized Capital, and Y Combinator.
-Sight Diagnostics, a Tel Aviv-based blood count analyzer developer, raised $71 million in Series D funding from investors including Koch Disruptive Technologies, Longliv Ventures and OurCrowd.
-Radish, a New York City-based mobile platform for serialized fiction, raised $63.2 million in Series A funding from SoftBank Ventures Asia and Kakao Page. Read more.
-Springboard, a San Francisco-based career mentoring platform, raised $31 million in Series B funding. Telstra Ventures led the round, and was joined by investors including Vulcan Capital, SJF Ventures, Costanoa Ventures, Pearson Ventures, Reach Capital, International Finance Corporation (IFC), 500 Startups, Blue Fog Capital, and Learn Capital.
-Zencity, a Tel Aviv, Israel-based AI-based provider of data to give local governments insights, raised $13.5 million in funding. TLV Partners led the round, and was joined by investors including Salesforce Ventures, Canaan Partners Israel (CPI), Vertex Ventures, Microsoft’s venture fund M12, and i3 Equity Partners.
-ROOM, a New York City-based company that makes portable phone booths, meeting rooms and other products for offices, raised $12.5 million in Series A funding. Slow Ventures led the round, and was joined by investors including SJF Ventures, Lerer Hippeau, and FJ Labs along with individual investors including Bjarke Ingels.
-Qualified, a San Francisco-based marketing platform that lets businesses chat with buyers on their sites, raised $12 million in Series A funding. Norwest Venture Partners led the round, and was joined by investors including Salesforce Ventures and Redpoint Ventures.
-Zibo, a Redwood City, Calif.-based platform for independent landlords to manage finances, raised $10.5 million in seed funding. Canaan Partners led the round, and was joined by investors including QED Investors, Khosla Ventures and SVB Capital.
-FleetOps, a Toronto-based AI-based freight marketplace that matches freight shipments with drivers, raised $6 million in seed funding. Inspired Capital and Resolute Ventures led the round, and were joined by investors including Hike Ventures, Basecamp Fund, Newark Venture Partners, BCF Ventures, Panache Ventures, and Brian Thomas.
-ANA Therapeutics, a Foster City, California-based biotech exploring a coronavirus treatment using niclosamide, raised $5 million in seed funding from investors including On Air Investments, Refactor Capital, SV Tech Ventures, SV Angel, SOSV, and several individual investors. Read more.
-Proper, a San Francisco-based accounting and bookkeeping service for property managers, raised $4.8 million in seed funding from investors including MetaProp, Expa and Bling.
-GreyNoise Intelligence, a Washington, D.C.-based cybersecurity platform that sifts through harmless security alerts, raised $4.8 million in seed funding led by CRV. Read more.
-Goodfair, a Houston-based thrift shopping platform, raised $3.6M in seed funding. Imaginary led the round, and was joined by investors including MaC Venture Capital, Global Founders Capital, Willow Ventures, Watertower, Amplify.LA, Capital Factory and Texas Ventures.
-Gero, a Singapore-based AI platform focused on discovering drugs for anti-aging, raised $2.2 million in Series A funding led by Bulba Ventures.
-Cashdrop, a Chicago-based small business commerce platform, raised $2.7 million in seed funding. Harlem Capital led the round, and was joined by investors including Founder Collective, Long Journey Ventures and M25, and several individual investors. Read more.
PRIVATE EQUITY
-Blackstone Group agreed to acquire Ancestry.com, the Lehi, Utah-based DNA testing and heritage tracing company, from Silver Lake, GIC, Spectrum Equity, Permira, and other investors, for an enterprise value of $4.7 billion. Read more.
-Blackstone Group is joining Clearlake Capital Group and Insight Partners to invest in Diligent Corp., an executive and board communication software provider. The deal would value the company at over $4 billion, The Wall Street Journal reports citing sources. Read more.
-NZ Super Fund and Ontario Teachers’ Pension Plan split the purchase of Asia Pacific Healthcare Group, a New Zealand-based pathology services provider and healthcare business of Healthscope. The deal is valued at over NZD 550 million ($365 million). Read more.
-Peloton Capital Management, Heal Partners Trust, and other investors invested approximately $90 million in debt and equity in The Fertility Group, a Canada-based network of fertility clinics.
-Thoma Bravo agreed to acquire Foundation Software, a Strongsville, Ohio-based accounting and payroll software provider for construction. Financial terms were not disclosed.
-DSP, backed by YFM Equity Partners, acquired Explorer UK, a U.K.-based Oracle consultancy. Financial terms were not disclosed. Read more.
-AA, a U.K.-based roadside assistance service and insurance company, has received three takeover offers from Platinum Equity Advisors, Centerbridge Partners Europe and Towerbrook Capital Partners together, and Warburg Pincus. Read more.
-EDBI invested in Vesta, a Lake Oswego, Ore.-based fraud protection and payments company. Financial terms were not disclosed.
-TruFood Manufacturing, backed by AUA Private Equity Partners, acquired Simply Natural Foods, a Commack, N.Y.-based maker of nutrition and healthier chocolate and diet bars. Financial terms were not disclosed.
-Gen Cap America acquired TFM Services, a Wichita, Kansas-based building maintenance company for janitor services, together with the company’s management. Financial terms were not disclosed.
-James Alpha Advisors acquired an interest in Easterly, an asset management firm with offices in Boston and New York. Financial terms were not disclosed.
-TSG Consumer Partners invested in American Technologies, an Anaheim, Calif.-based environmental restoration and disaster recovery firm. Financial terms were not disclosed.
OTHERS
-Teladoc Health agreed to buy Livongo Health, a Mountain View, Calif.-based platform for people to manage chronic diseases, and will merge for cash and stock valued at $18.5 billion.
-AlixPartners acquired Freeh Group International Solutions, a Wilmington, De.-based risk management firm founded by former FBI director Louie Freeh. Financial terms were not disclosed.
-TouchBistro acquired TableUp, a Boston-based guest retention and marketing platform aimed at improving customer loyalty for restaurants. Financial terms were not disclosed.
BREAKUPS, HANGUPS, AND BANKRUPTCIES
-Fieldwood Energy, a Gulf of Mexico-based offshore oil driller, filed for bankruptcy protection.
-Virgin Atlantic, a U.K.-based international airline which is 49% owned by Delta, filed for bankruptcy protection. Read more.
IPOS
-RackSpace Technology, a San Antonio, Texas-based cloud hosting services provider, raised $704 million in an IPO in an offering of 33.5 million shares priced at $21. Apollo Management and Searchlight Capital back the firm. It plans to list on the Nasdaq as “RXT.” Read more.
-TWC Tech Holdings II, a San Francisco-based blank check company and second of its kind formed by True Wind Capital plans to raise up to $525 million in an IPO. It plans to target investments in technology. It plans to list on the Nasdaq as “TWCTU”. Read more.
-GO Acquisition, a New York City-based blank check company, raised $500 million in an IPO in an offering of 50 million shares priced at $10. It is targeting investments in travel. It plans to list on the NYSE as “GOAC.U”. Read more.
-BowX Acquisition, a Menlo Park, Calif.-based blank check company formed by Bow Capital Management, raised $420 million in an IPO in an offering of 42 million shares priced at $10. It plans to list on the Nasdaq as “BOWXU”. Read more.
-Yucaipa Acquisition, a Los Angeles-based blank check company formed by The Yucaipa Companies, raised $300 million in an IPO. It is targeting investments with strong sector growth and management, among other criteria. It is listed on the NYSE as “YAC.U”. Read more.
-Colonnade Acquisition, a West Palm Beach, Fla.-based blank check company, plans to raise up to $200 million in an IPO. It is targeting investments in energy, natural resources, real estate, and agriculture. It plans to list on the NYSE as “CLA.U” . Read more.
-FAST Acquisition, a New York City-based blank check company led by Ruby Tuesday founder Sandy Beall, plans to raise $200 million in an IPO. It is targeting investments in restaurants and hospitality. It plans to list on the NYSE as “FST.U”. Read more.
-Health Sciences Acquisitions 2, a New York City-based blank check company formed by RTW Investments, raised $139 million in an IPO in an offering of13.9 million shares, 1.4 million more than expected, priced at $10. It is targeting investments in biopharmaceuticals and medtech. It plans to list on the Nasdaq as "HSAQ". Read more.
-Alpha Healthcare Acquisition, a New York City-based blank check company, plans to raise up to $100 million in an IPO. It is targeting investments in healthcare. It plans to list on the Nasdaq as “AHACU”. Read more.
EXITS
-Kio Networks, a Mexico-based data center provider backed by Tresalia Capital, is considering an up to $1 billion sale, Bloomberg reports citing sources. Read more.
F+FS
-KKR has raised $11 billion for its fourth buyout fund in Asia. Read more.
PEOPLE
-Raymond James added Jay Hernandez as a managing director and head of industrial technology. Hernandez was previously at Moelis & Company.
-Lincoln International added Emily Wildes and Roderick O'Neill as managing directors in its healthcare group.
-North Square Investments added Oran Walsh as a senior vice president. Walsh was previously at Backstop Solutions Group.


fortune--2020-08-05--Samsung tests the health of the global phone market with expensive new devices

Samsung released several new high-end 5G mobile devices on Wednesday, even as the global phone market has been hit hard by the coronavirus pandemic.
The new Galaxy Note 20 comes with a 6.7-inch screen, connects to super-fast 5G wireless networks, and starts at $1,000. A larger version with a 6.9-inch screen, dubbed the Note 20 Ultra, starts at $1,300. Like prior models of the Note, the new devices include a stylus that slips into the case.
The phones will be available for preorder starting on Friday and go on sale Aug. 21. Perhaps in a nod to the economic reality of the times, Samsung is offering a slight discount of $100 and $150, respectively, on preorders of the Note 20 and Note 20 Ultra and a trade-in offer of up to $650 for customers who trade in a recent device.
Also on Wednesday, Samsung introduced its first 5G-compatible tablets, the Galaxy Tab S7 with an 11-inch screen for $650 and the 12.4-inch Galaxy Tab S7+ priced at $850.
The global smartphone market was crushed by the COVID-19 pandemic, with sales dropping 25% in the second quarter from a year ago, according to market tracker Counterpoint Research. Sales of Samsung’s flagship S20 phone line, introduced in February, trailed sales of the company’s 2019 flagship. But many countries are recovering from the virus and reopening their economies, so sales of the new Note 20 may indicate the strength of the phone market. Still, Samsung is forgoing Apple’s successful strategy of releasing a highly-capable low-end phone like the iPhone SE for $400.
The addition of 5G, which allows downloads at 10 to 100 times the speed of an average 4G LTE connection, to the Note 20 comes even as the U.S. carriers are still working to build reliable and widespread 5G networks. AT&T and T-Mobile currently offer a type of 5G that is not much faster than 4G in most of the country. And Verizon has rolled out a super-fast version of the technology that is available to only 0.4% of people in the U.S. according to one recent study.
The Note 20 and Note 20 Ultra also have screens that refresh at 120 Hz, twice the rate of typical phones, meaning video and graphics appear smoother. Both phones have a single front-facing camera and three cameras on the back. The zoom lens on the Note 20 can magnify an image 3X optically while the Note 20 Ultra has a 5X zoom.
Samsung also rolled out several other updated gadgets on Wednesday. The Galaxy Watch 3 comes in two sizes and starts at $400. A version with 4G connectivity starts at $450. New earbuds called the Galaxy Buds Live include active noise cancellation and cost $170.


fortune--2020-08-05--Neil Young sues ‘divisive’ Trump campaign for copyright infringement

Neil Young sued President Donald Trump’s reelection campaign Tuesday for copyright infringement, saying he doesn’t want his music used as a theme song for a “divisive un-American campaign of ignorance and hate.”
The Grammy-award winning Canadian-born musician filed the lawsuit through his lawyers in Manhattan federal court, seeking up to $150,000 in statutory damages for each infringement.
A message seeking comment was left with a campaign spokesperson.
The legendary singer cited repeated use of two songs: “Rockin’ in the Free World” and “Devil’s Sidewalk.”
The campaign has used the tunes numerous times at rallies and political events, including on June 20 in Tulsa, Oklahoma, the lawsuit said.
Young said he was not suing to “disrespect the rights and opinions of American citizens, who are free to support the candidate of their choosing,” the lawsuit said.
“However,” it added, “Plaintiff in good conscience cannot allow his music to be used as a ‘theme song’ for a divisive, un-American campaign of ignorance and hate.”
Young first complained about the use of the 1990 single, “Rockin’ in the Free World,” in June 2015, when the song accompanied Trump’s announcement of his presidential campaign, according to the lawsuit.
The campaign’s insistence in a statement then that it had obtained permission to use the music only proved that it was aware it needed permission, the lawsuit said.
It said Young has voiced continuous and public objections to the use of the music.
“The campaign has willfully ignored Plaintiff’s telling it not to play the Songs and willfully proceeded to play the Songs despite its lack of a license,” according to the lawsuit.
New York attorney Ivan Saperstein, who filed the lawsuit on Young’s behalf along with attorney Robert S. Besser of Santa Monica, California, declined comment.
On July 3, Young lodged a complaint on the “Neil Young Archives” website, where a copy of Tuesday’s lawsuit was also posted, after Trump visited Mount Rushmore for an event.
“I stand in solidarity with the Lakota Sioux & this is NOT ok with me,” he said in support of over 100 protesters who forced the closing of a road leading to the landmark.
He complained after “Like a Hurricane” and other songs were played when Trump visited the site.
“Imagine what it feels like to hear ‘Rockin’ in the Free World’ after this President speaks, like it is his theme song,” Young said on the website. “I did not write it for that.”
Other artists have also complained after their songs were played at Trump’s events.
In June, the Rolling Stones threatened to sue after the 1969 classic “You Can’t Always Get What You Want” was played at Trump’s Oklahoma rally, where critics said the indoor event threatened to spread the coronavirus.
The family of the late rock musician Tom Petty said it had issued a cease-and-desist order after Trump used the song “I Won’t Back Down″ in Tulsa.
“Trump was in no way authorized to use this song to further a campaign that leaves too many Americans and common sense behind,″ the statement said.
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Associated Press Writer Jonathan Lemire contributed to this story.