fortune--2020-03-31--Late-stage ventures are starting to shop in the public markets

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Amid a coronavirus-led market route that has scorched public valuations across the board, some late-stage firms better known for their private-market chops are finding opportunities on the Nasdaq and NYSE.
“Currently, private companies have unrealistic price expectations. So even though private companies grow faster, the public stuff is attractive right now—there are some awesome deals out there,” says Mitchell Green, founder of Lead Edge Capital.
Private valuations tend to lag months behind their public cohorts. So Lead Edge has been investing in small- to mid-cap software companies whose revenue multiples are far below that of their private market counterparts. Lead Edge is looking at stocks that it believes will bounce back strongly when the stock market recovers—or be acquired by buyout firms looking to deploy a record level of dry powder if valuations don’t return. Amid the market selloff, the firm has invested in Talend, Tenable, and Crowdstrike (which is up 100% since, says Green) through Lead Edge Capital IV. Up to 25% of the fund can be invested in public market stock, says Green.
And while Green turned down a broker trying to sell shares of still-private home-sharing company Airbnb that valued the firm at $30 billion earlier this month (Call me when they want $10 billion”), Lead Edge also tried to buy shares of publicly-traded Uber, but “didn’t mobilize fast enough.”
Many, especially the smaller, growth-stage shops—likely won’t dip their toes into the public markets. While Edison Partners, for instance, can technically invest in public markets, it’s “highly unlikely” the firm will take advantage of falling equity markets, says Managing Partner Christopher Sugden. It would be an overly concentrated bet for a fund of its size (their most recent, fund nine, raised $365 million), and their LPs at least are expecting private deals from the shop, rather than public ones.
But during financial recessions, growth equity firms are known to seek public market stock when private valuations look out of whack with an economic meltdown. I wouldn’t be surprised to see more of what Lead Edge is doing.
Another WeWork spin-off: WeWork acquired a string of companies in its heyday. But after its public-market pummeling, the office-sharing company is selling its acquisitions at a bargain. The most recent spin-off: Meetup, a social events platform that WeWork acquired for $156 million in 2017. Two years and a handful of months later, the company is selling to AlleyCorp and a team of private investors for a fraction of that figure. Fortune has the exclusive. Read more.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Via, a New York-based ride-sharing app, raised $200 million in Series E funding. EXOR led the round, valuing the company at $2.25 billion.
- ElevateBio, a Waltham, Mass.-based creator and operator of a portfolio of cell and gene therapy companies, raised $170 million in Series B funding. The Invus Group, Surveyor Capital (A Citadel company), EDBI, and Vertex Ventures were the new investors, joining existing investors F2 Ventures, MPM Capital, EcoR1 Capital, Redmile Group, and Samsara BioCapital.
- Affinia Therapeutics, a Waltham, Mass.-based gene therapy company, raised $60 million in Series A funding. Seed investors F-Prime Capital and New Enterprise Associates co-led the round alongside new investor Atlas Venture, and were joined by investors including Alexandria Venture Investments, Lonza, and Partners Innovation Fund.
- Olive AI, a Columbus, Oh.-based company building AI to automate healthcare administrative services, raised $51 million in funding. General Catalyst led the round.
- OZON Group, a Russian ecommerce platform, raised $50 million in funding from Princeville Capital as well as $100 million from existing investors Baring Vostok Capital Partners and Sistema PJSFC.
- Kyash, a Tokyo-based mobile banking business, raised $45 million in a Series C funding. Greenspring Associates and Goodwater Capital led the round.
- Strivr, a Palo Alto, Calif.-based maker of VR workforce training solutions, raised $30 million in Series B funding. Georgian Partners led the round, and was joined by investors including Franklin Templeton, Prologis Ventures, GreatPoint Ventures, and Alumni Ventures Group.
- Natel Energy, a hydroelectric equipment manufacturer and developer, raised $11 million in funding. Schneider Electric Ventures led the round, and was joined by investors including Breakthrough Energy Ventures Fund, a fund founded by Bill Gates. Read more.
- Allset, a Los Angeles-based food pre-ordering company, raised $8.25 million in Series B funding. EBRD led the round and was joined by investors including existing investors Andreessen Horowitz, Greycroft, SMRK VC Fund, as well as new investor Inovo Venture Partners.
- Phenix, a Chicago-based streaming technology platform, raised an additional $7.6 million in Series A. An affiliate of KB Partners led the round.
- Qarnot Computing, a London-based firm, raised €6 million from a syndicate of investors including Banque des Territoires, Caisse des Dépôts, Engie Rassembleur d'Énergies, A/O PropTech, and Groupe Casino.
- Orum Inc, a San Francisco based AI-sales platform, raised $4 million in seed funding. Unusual Ventures led the round and was joined by Neo.
- RoadSync, an Atlanta-based digital payments platform for the transportation industry, raised $5.7M in Series A funding. Base10 Partners led the round.
PRIVATE EQUITY
- A holding company established by Alchemist Capital Partners Korea and Credian Partners acquired MagnaChip Semiconductor Corporation’s Foundry Services Group (NYSE: MX) and the factory in Cheongju, Korea. The deal is valued at about $435 million, including about $344.7 million in cash.
- Palm Beach Capital made an investment in Allen Brothers Wholesale Distributors, a Philadelphia-based wholesale distributor to the convenience and grocery store industry. Allen Brothers, J. Polep Distribution Services, and Harold Levinson Associates will be included in the newly created National Convenience Distributors, creating a firm with $3 billion in annual revenue. Financial terms were not disclosed.
- Resilience Capital Partners invested in Leader Auto Resources, a Montreal-based car dealership buying group. Financial terms weren't disclosed.
- Culligan, backed by Advent International, completed its acquisition of AquaVenture, a Tampa-based bottleless, filtered water provider. Culligan also sold Seven Seas Water, an operating segment of AquaVenture, to Morgan Stanley Infrastructure Partners. Financial terms weren't disclosed.
- One.com, backed by Cinven, acquired Hostnet, a Netherlands-based competitor with about 210,000 customers. Financial terms weren't disclosed. Read more.
OTHERS
- Sumitomo Mitsui Banking will invest $383.8 million in Ares Management (NYSE ARES), a New York-based alternative asset manager. Read more.
- Durable Capital Partners will buy $70 million of equity stock in Redfin (Nasdaq:RDFN), a Seattle-based real estate broker, and $40 million of its convertible preferred stock—a discount to its trading price Monday. Read more.
- Gazprombank unit Gazprombank Leasing completed its acquisition of leasing company Carcade from Poland-based Getin Holding, valuing the deal at 2.9 billion rubles ($36 million). Read more.
- Owl Private Office, a London-based investment and advisory service, will separate into two businesses: Delfin Private Office, the international family office advisory business, and Owl Private Office Holdings
IPOs
- Zentalis Pharmaceuticals, a New York-based biotech developing therapies for cancers, says it plans to raise $130 million in an offering of 7.7 million shares priced at a range between $16 to $18. Recurium Equity, Matrix Capital Management, and Viking Global back the firm. It plans to list on the Nasdaq as “ZNTL.” Read more.
EXITS
- Stonepeak Infrastructure Partners completed its acquisition of TRAC Intermodal, a Middlesex, N.J.-based intermodal infrastructure provider, and its subsidiaries from an affiliate of Fortress Investment Group. Financial terms weren't disclosed.
F + FS
- Gilde Healthcare closed Gilde Healthcare V, after raising €416 million ($450 million) for its venture and growth capital fund.
PEOPLE
- Harrison Street promoted Carolyn Arida and Michael Leonczyk to Directors in its Social Infrastructure Fund.


fortune--2020-03-31--The pain is just starting for tech companies focused on small businesses

It ’ s official : The stock market had its worst quarter since 1987—and its worst Q1 ever

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Last week, I brought you a couple of stories of companies, DocuSign and PagerDuty, optimized for the all-of-a-sudden acceleration of the shift from physical to digital. Those companies have a lot going for them, though they’ll still be affected in a calamitous economic downtown. Today, I point you to two digital pioneers, Thumbtack and Yelp, whose revenues are so concentrated on small businesses that the current crisis can’t help but hurt them.
Thumbtack, a private company, is kind of the eBay for hyperlocal service providers like DJs, plumbers, and the like. It announced Monday that it is laying off 30% of its workforce, or 250 people, because the rapid decline in its business has been so dramatic. “There’s been an exogenous event that has placed a tax on human contact,” says the company’s CEO, Marco Zappacosta. He told me the cuts were to every team and at every level. He’s cut his salary altogether, and the company’s top executives will slash pay by 25%.
Thumbtack is an economic mirror of what social distancing has wrought. It says events-related job postings are down 80% year over year. House cleaning is down 66%. But the economy hasn’t shut down completely. Zappacosta says lawn care and other outdoor work has remained “robust” and the company’s home systems category, including installation of air-conditioning units, is down only 5%.
As for Yelp, it faces a double whammy. It makes its money on advertising, a market in freefall. (Marketing was among the first expenses to go at Thumbtack.) And about two thirds of its revenue comes from small businesses, including job-listing ads that compete with Thumbtack, and the category for which it is best known, restaurants.
On March 19, Yelp withdrew its earning guidance for the first quarter and all of 2020. Shweta Khajuria, an analyst with the investment bank RBC, says that while Yelp “should be okay” thanks to its more than $400 million in cash and positive free cash flow before the crisis, it is “very exposed” to the woes of small businesses.
Yelp has said nothing publicly about layoffs—or anything else since its initial warning. Its 3,600-person sales force makes up more than half the company’s workforce. Khajuria says it is one of only seven of the 40 Internet and e-commerce companies RBC covers that its analysts haven’t been able to talk to directly. Yelp said it wouldn’t grant interviews, citing prohibitions on discussing financial information until it reports results from the quarter that ends today. The company’s shares have been more than halved since mid-February and dropped 6% Monday on a day the market jumped.
As bad as things already are, the pain is just starting, and no sector of the economy will be spared.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Lives on the line. Amid concerns about a lack of protective gear for medical workers, some tech workers are also raising alarms. A group of Instacart delivery workers called for a strike on Monday over coronavirus safety issues (Instacart said its operations were unaffected). And about 60 workers walked out of an Amazon fulfillment center in New York, saying the e-commerce giant wasn't doing enough to protect them. Amazon then fired the leader of the strike, Chris Smalls, saying he repeatedly violated social distancing guidelines. Smalls says he was fired in retaliation for his labor activities.
No more excuses. Now that we've all learned about "zoombombing" and Zoom's hidden Facebook connection, New York's attorney general is stepping in to try and fix things. Letitia James sent a letter to the company noting her concerns about Zoom's security and privacy policies. On Monday, Zoom CEO Eric Yuan tried to address the controversies in a blog post as the company also clarified its privacy policy. "Zoom does not mine user data or sell user data of any kind to anyone," Yuan writes.
Pffft. In "we haven't quite closed the book on that disaster" news, WeWork agreed to sell Meetup, its social networking business, for a fraction of the $156 million it paid for the unit in 2017, Fortune reports. While the office-space startup is cratering along with the economy, Meetup is pivoting from helping arrange in-person gatherings to virtual ones.
Houston, we've had a problem here. Speaking of financial disasters, Internet-from-space startup OneWeb filed for bankruptcy on Friday. Another SoftBank-backed startup floundering for cash, OneWeb had planned to launch hundreds of satellites this year but only got about 74 into orbit before running out of money. SpaceX's Starlink is still going strong, with 360 satellites up and running and thousands more on the way.
You are not entitled to your own facts. Adam has been on the case of social networks doing more now to stop the spread of misinformation than they did before the pandemic. Another example: After giving right-wing politicians a wide berth for years, Twitter deleted two tweets from Brazilian President Jair Bolsonaro that shared videos undermining social distancing measures.
I think you're just what I needed. While coronavirus dominates the news, tech companies are still trying to find airspace for new products. Microsoft unveiled a revamp of its subscription consumer Office suite on Monday that tries to make the package more appealing and useful for regular folks and families. Now called Microsoft 365, instead of Office 365, pricing is unchanged at $7 a month for an individual or $10 for a family plan. "We want to help you and your family across work, school, and life," VP Yusuf Mehdi wrote in a long blog post highlighting the new and updated apps.
FOOD FOR THOUGHT
Few companies have discouraged working from home as strongly as Apple. The company has many secrets to protect about unreleased products, obviously, but also favors a culture of personal interaction. Nick Bastone and Wayne Ma have the inside scoop for The Information on how Apple and its employees are coping with the current remote requirement.
In the weeks since, some teams at Apple have found it harder to adjust to the new arrangements than others, especially those teams who are required to handle prototypes, many of which are locked away in secure labs on Apple’s campus in California.
Employees can no longer use Apple’s 3-D printers and milling machines, nor can they conduct stress and drop tests of their designs. One employee said prototyping in Cupertino had mostly stopped. At first, Apple didn’t have a protocol in place for employees to bring components from future products home with them, but more recently it has established a process for doing so in some instances, two employees said.
ON THE MOVE
Former Boeing exec David Carbon is going to Amazon to run the company's Prime Air drone unit, replacing Gur Kimchi...Slack's former chief product officer, April Underwood, who left the company last year, has signed on with Obvious Ventures as a venture partner...Meri Williams has stepped down as chief technology officer at British online banking startup Monzo.
IN CASE YOU MISSED IT
Your next potato chip may be flavored by artificial intelligence By Katie Sehl
A startup is building computer chips using human neurons By Jeremy Kahn
Governments worldwide are remote voting because of coronavirus. Why is the U.S. Congress resisting it? By Jeff John Roberts
Where do clothing rental and subscriptions like Rent the Runway fit in a world that works from home? By Gabby Shacknai
The coronavirus pandemic is changing broadcast and streaming TV as we know it By Radhika Marya
The Coronavirus Economy: How the private jet business changed overnight By David Meyer
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
Innovation continues amid the pandemic. NASA is inching closer to the first test flight of its experimental all-electric airplane, the X-57 Maxwell. The agency released some realistic-looking artist renditions on Monday of the X-57 in air that got me thinking, wrongly, that the first test flights had finally started. But not quite yet. I'll be sure to share that video as soon as it surfaces.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-03-31--Trump administration to release final rule on mileage rollback

President Donald Trump is poised to roll back ambitious Obama-era vehicle mileage standards and raise the ceiling on damaging fossil fuel emissions for years to come, gutting one of the United States’ biggest efforts against climate change.
The Trump administration is expected to release a final rule Tuesday on mileage standards through 2026. The change—making good on the rollback after two years of Trump threatening and fighting states and a faction of automakers that opposed the move—waters down a tough Obama mileage standard that would have encouraged automakers to ramp up production of electric vehicles and more fuel-efficient gas and diesel vehicles.
“When finalized, the rule will benefit our economy, will improve the U.S. fleet’s fuel economy, will make vehicles more affordable, and will save lives by increasing the safety of new vehicles,” Environmental Protection Agency spokeswoman Corry Schiermeyer said Monday, ahead of the expected release.
Opponents contend the change—gutting his predecessor’s legacy effort against climate-changing fossil fuel emissions—appears driven by Trump’s push to undo regulatory initiatives of former President Barack Obama and say even the administration has had difficulty pointing to the kind of specific, demonstrable benefits to drivers, public health and safety or the economy that normally accompany standards changes.
The Trump administration says the looser mileage standards will allow consumers to keep buying the less fuel-efficient SUVs that U.S. drivers have favored for years. Opponents say it will kill several hundred more Americans a year through dirtier air, compared to the Obama standards.
Even “given the catastrophe they’re in with the coronavirus, they’re pursuing a policy that’s going to hurt public health and kill people,” said Chet France, a former 39-year veteran of the EPA, where he served as a senior official over emissions and mileage standards.
“This is first time that an administration has pursued a policy that will net negative benefit for society and reduce fuel savings,” France said.
Delaware Sen. Tom Carper, the senior Democrat on the Senate Environmental and Public Works Committee, called it “the height of irresponsibility for this administration to finalize a rollback that will lead to dirtier air while our country is working around the clock to respond to a respiratory pandemic whose effects may be exacerbated by air pollution.
In Phoenix, meanwhile, resident Columba Sainz expressed disappointment at the prospect of losing the Obama-era rule, which she had hoped would allow her preschool age children to break away from TV indoors and play outside more. Sainz reluctantly limited her daughter to a half-hour at the park daily, after the girl developed asthma, at age 3, at their home a few minutes from a freeway.
“I cried so many times,” Sainz said. “How do you tell your daughter she can’t be outside because of air pollution?”
Trump’s Cabinet heads have continued a push to roll back public health and environment regulations despite the coronavirus outbreak riveting the world’s attention. The administration—like others before it—is facing procedural rules that will make changes adopted before the last six months of Trump’s current term tougher to throw out, even if the White House changes occupants.
The National Highway Traffic Safety Administration, which has been the main agency drawing up the new rules, did not immediately respond to a request for comment Monday.
Earlier drafts of the mileage rollback have shown the administration struggling to justify relaxing the mileage standards. Trump officials contend vehicles will be cheaper for Americans to buy, because automakers will have saved on emissions-cutting technology. Former EPA emissions officials say the cost of more fuel, and costs like increased healthcare bills from the extra pollution, cancel out any sticker savings.
The standards have split the auto industry with Ford, BMW, Honda and Volkswagen siding with California and agreeing to higher standards. Most other automakers contend the Obama-era standards were enacted hastily and will be impossible to meet because consumers have shifted dramatically away from efficient cars to SUVs and trucks.
California and about a dozen other states say they will continue resisting the Trump standards in court.
Last year, 72% of the new vehicles purchased by U.S. consumers were trucks or SUVS. It was 51% when the current standards went into effect in 2012.
The Obama administration mandated 5% annual increases in fuel economy. Leaked versions of the Trump administration’s latest proposal show a 1.5% annual increase, backing off from its initial proposal simply to stop mandating increases in fuel efficiency after 2020.
The transportation sector is the nation’s largest source of climate-changing emissions.
John Bozzella, CEO of the Alliance for Automotive Innovation, a trade group representing automakers, said the industry still wants middle ground between the two standards, and it supports year-over-year mileage increases. But he says the Obama-era standards are outdated due to the drastic shift to trucks and SUVs.
The Trump administration standards are likely to cause havoc in the auto industry because, with legal challenges expected, automakers won’t know which standards they will have to obey.
“It will be extraordinarily disruptive,” said Richard J. Pierce Jr., a law professor at the George Washington University who specializes in government regulations.
States and environmental groups will challenge the Trump rules, and a U.S. District Court likely will issue a temporary order shelving them until it decides whether they are legal. The temporary order likely will be challenged with the Supreme Court, which in recent cases has voted 5-4 that a District judge can’t issue such a nationwide order, Pierce said. But the nation’s highest court could also keep the order in effect if it determines the groups challenging the Trump standards are likely to win.
“We’re talking quite a long time, one to three years anyway, before we can expect to get a final decision on the merits,” Pierce said.
More must-read energy sector coverage from Fortune:
—The oil sector is quickly running out of storage for its unprecedented surplus
—The great African air conditioning boom is about to begin—and it could strain the planet
—As the U.K. goes into lockdown, London faces isolation—and clear skies
—Business is finally starting to reckon with climate change—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: PSEG CEO on climate change action: “It should have been done yesterday”
Subscribe to The Loop, a weekly look at the revolutions in energy, tech, and sustainability.


fortune--2020-03-31--Wall Street donors forgo political campaign contributions during coronavirus pandemic

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Big donors to U.S. presidential campaigns are feeling the economic pinch from the coronavirus pandemic and holding on to their money just when the candidates — especially Democratic front-runner Joe Biden — need it most.
With stocks falling, businesses shrinking and unemployment soaring, donors of all sizes are feeling the effects. Billionaires counted on to fuel super PAC spending have seen their net worth plummet by anywhere from 10% to as much as 75%.
“There’s no question fundraising is going to be hurt,” said investor and Biden supporter Bernard Schwartz. “Biden has to do the best he can with what he has.”
The crunch comes at a particularly bad time for Biden, who was looking to capitalize on his wins in the March primaries as a selling point to donors. Since entering the race almost a year ago, the former vice president has lagged in fundraising, trailing his top Democratic rivals as well as President Donald Trump.
The $88 million he took in through February trails not only rival Bernie Sanders’s $169 million but is also less than former candidates Elizabeth Warren and Pete Buttigieg raised. Biden ended February with $12.1 million in the bank compared to $94.4 million for Trump.
Trump and the Republican National Committee have together raised $607 million for his re-election and are sitting on $225 million in cash at the end of February.
The Trump campaign did not respond to a request for comment about fundraising during the shutdown.
No More In-Person Events
Biden has relied heavily on in-person fundraising events and has yet to build the large base of donors who give smaller amounts of money online. Biden gets just 38% of his money from individuals who gave $200 or less, compared to 58% for Sanders and 53% for Trump, Federal Election Commission data shows.
“Between the global economy, between the stock market that is super confused right now, between running a small company and a small business, yes, I’m standing back,” Democratic donor Erika Karp, founder and chief executive officer of Cornerstone Capital Group, said about making political contributions at the moment. “There’s not a moment that goes by where everyone is not thinking about coronavirus.”
One of Biden’s Wall Street bundlers, who requested anonymity because he’s not authorized to speak for the campaign, said politics is a low priority right now, and he has no events, not even virtual ones, planned for Biden.
As the presumptive Democratic nominee, Biden should be raking in donations now in preparation for the convention and the general election to follow. At the end of February 2016, Hillary Clinton had raised $160 million for her campaign, and had $31 million in the bank.
Biden said he had raised $33 million in the first half of March, already topping his best monthly total. But that was before social distancing and stay-at-home policies were put in place. Biden is also spending less than before the virus shut down campaigning. The campaign has largely stopped advertising since March 22.
Sarah Morgenthau, a member of Biden’s national finance committee, said donors were coalescing behind him and she was confident the campaign could raise enough money despite the outbreak.
“Is there going to be a dip because of coronavirus? Look, this is something that’s going to affect everybody,” Morgenthau said. “But we will have a very strong month and we will have the resources that we need to take us through the next set of primaries and to build the infrastructure we will need in November.”
Biden has attempted to replace in-person fundraisers with online ones, but numbers aren’t yet available for whether they’ve been successful.
“It’s understandable but it’s disappointing,” Karp said of virtual fundraisers. She recalled meeting Barack Obama, Hillary and Bill Clinton in person as an irreplaceable part of the process.
Different Priorities
Some Democratic donors are putting their money toward coronavirus relief rather than political campaigns.
“I am not sure what other donors are feeling but for me, political donations have not been top of mind the last two weeks,” said Robert Wolf, a major Wall Street fundraiser for Obama and founder of 32 Advisors, a strategy and investment firm. “I have been focusing on the health and well-being of my family, friends and the community, working on my business from home, and giving to some charitable organizations on the front lines of the crisis.”
While donors say that Trump’s fundraising will also be hurt by a poor economy, the president is much better prepared for the general election and can weather a downturn. “Biden needs to build his election airplane and fundraising apparatus in midair,” said Dan Eberhart, GOP bundler and chief executive officer of Canary Drilling Services LLC. “Trump’s is already built and operating.”
Billionaires Taking a Break
Super PACs could step in where individual donors to campaigns could not. Priorities USA, a Democratic super PAC, says it’s on track to meet its $150 million fundraising goal before the Democratic convention scheduled for July, but some of those large donors have taken a massive hit to their net worth.
Facebook co-founder Dustin Moskovitz, who gave Priorities $6 million in 2016, has this year lost more than $1.8 billion of his net worth, which now stands at about $11.5 billion, according to the Bloomberg Billionaires Index.
Jim Simons, who with his wife Marilyn Simons gave Priorities $10 million in 2016, earned an estimated $1.73 billion in 2019. But his hedge fund Renaissance Technologies incurred double-digit losses in its two largest strategies in the first two and a half months of the year.
Michael Bloomberg in January didn’t rule out spending as much as $1 billion to defeat Trump, even if his own presidential effort failed. Instead, he said on March 20 he would transfer $18 million to the Democratic National Committee. He has also made donations to groups, including $2 million to Swing Left to aid Democrats in competitive races.
(Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)
Among Republican mega-donors, the mood could be even less generous. Many of the party’s most prominent donors have fortunes concentrated in the hardest-hit sectors, including gaming, financials and oil and gas, which have all underperformed the broader market.
Casino magnate Sheldon Adelson’s net worth has dropped by almost $12 billion this year with much of his casino business shut down. Harold Hamm’s fortune plunged 75% to $2.6 billion as low oil prices crushed fracking companies including his Continental Resources Inc.
Party leaders expected both could be counted on to make big donations to super PACs. Trump Victory, which raises money that is split between the campaign and the RNC, has canceled its events, according to a fundraiser for the party.
Trump, who gave $66 million to his own 2016 campaign, isn’t supplying any of his own money for his re-election effort. The Trump Organization has shut down six of its top seven revenue-producing properties.
Eberhart says Trump and the RNC continue to raise money and are holding on to it for the general election. “This crisis is allowing the already-built Trump machine to put more distance between itself and the emerging Biden campaign,” he said.
But Biden is also spending less than before the virus shut down campaigning. The campaign has largely stopped advertising since March 22, and Biden and his staff are no longer traveling or staging events. A Biden aide said the campaign was expecting fundraising to slow but was prepared to deal with it, but didn’t say how.
More coronavirus coverage from Fortune:
—USPS might have to shutter by June as stimulus package provides no funding
—Everything you need to know about the coronavirus stimulus checks
—There will be another pandemic after the coronavirus. It’s time to start preparing
—Political activists make sure Americans register to vote—from a distance
—Social distancing creates $8 trillion in economic benefits, study says
—Where do clothing rental and subscriptions fit in a world that works from home?
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: World leaders and health experts on how to stop the spread of COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-03-31--The coronavirus crisis puts Equal Pay Day in a new light

Good morning, Broadsheet readers! Doulas adapt to hospital bans on visitors, Sen. Amy Klobuchar’s husband is out of the hospital, and the coronavirus crisis puts this year’s Equal Pay Day in a new light. Have a productive Tuesday.
– Equal Pay Day. With everything going on in the world, you could be forgiven for forgetting about Equal Pay Day. But we’re here to remind you—today’s the day! And, advocates for equal pay say, it’s more important than ever.
The annual date marks the point this year that women have to work to earn what men earned last year alone—about 81 cents on the dollar. But this year, there are special circumstances. Think about what the long-term impact of the gender pay gap means during a crisis like the one we’re in now.
Years of a 20% or higher gap in wages with men leaves women with less in savings to weather an economic downturn. It leaves their families with fewer resources during a crisis. And the still persistent gender wage gap leaves the most essential workers on the front lines of this pandemic—women working in grocery stores and hospitals—earning less than their male peers while they’re putting their safety at risk for the public good.
You can read more details about the connection between the wage gap and the coronavirus crisis here.
So amid everything else on your plate, spare a thought for Equal Pay Day this year. Women need it more than ever.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- Doulas and delivery. Fast-changing rules at New York hospitals about who's allowed in labor and delivery rooms are leaving pregnant women confused and scared. Doulas, who act as guides and advocates for women through the birth process, are trying to adapt, now that they're barred from hospital births. Domino Kirke, founder of Carriage House Birth, shares how her doula collective is adjusting to the new reality. Fortune
- Rent the Zoom-way. The once-promising industry of clothing rentals faces an extraordinary hurdle during coronavirus social isolation: will subscribers still rent clothes when they're not leaving the house? Rent the Runway, led by CEO Jennifer Hyman, says that customers are using the service to maintain a sense of normalcy or to dress for Zoom meetings—but the brand did just lay off its retail workforce. Fortune
- Back home. Sen. Amy Klobuchar says her husband John Bessler is out of the hospital where he was being treated for coronavirus, although they couple is still living separately as they wait to find out if he is still contagious. "Every family in America is going to know what this is like," Klobuchar says, trying to spread the message that Bessler staying inside when he first thought he had a cold saved lives. Today
MOVERS AND SHAKERS: Cristina Shapiro, former head of global strategy and management at the Goldman Sachs Office of Corporate Engagement and the Goldman Sachs Foundation, joins UNICEF USA as president of the organization’s Impact Fund for Children. Turbo Systems hired former CMO of Box, Elastic and Looker Jen Grant as CEO. The Trade Desk named Facebook’s former global business marketing lead in EMEA Philippa Snare SVP in EMEA. Buckingham Palace hired Sara Latham, the former Hillary Clinton staffer who was serving as public relations head for Meghan Markle and Prince Harry until their departure from the Royal Family, to work for Queen Elizabeth II. Jessica Ditto, an original Trump White House adviser, is leaving her job as deputy communications director to enter the private sector.
IN CASE YOU MISSED IT
- Reporting hurdles. President Trump again berated PBS Newshour reporter Yamiche Alcindor when she tried to ask him questions about the federal coronavirus response. "Look, let me tell you something. Be nice. Don’t be threatening. Be nice," the president said to Alcindor, who had started to ask about his rejection of governors' requests for supplies. Washington Post
- UBI evangelist. A $1,200 emergency check for most Americans isn't quite a universal basic income—but the growing popularity of the policy proposal certainly helped get people used to the idea. Gisele Huff is an advocate for UBI, who became interested in the idea through her son, a Tesla engineer named Gerald Huff. After he died, Huff began advocating for the proposal in his honor. Mercury News
- Ventilator race. How exactly did GM prepare to produce an emergency supply of ventilators, before drawing the ire of President Trump for not moving fast enough? The automaker led by Mary Barra began working on the project on March 18, connecting with Ventec, a company that makes small, portable ventilators. After that, it was a race to figure out how to manufacture Ventec's machines on a large scale. Fortune
- Work-life balance. Rihanna is on the cover of British Vogue, where she discusses her Fenty empire, how she really writes all the copy for Fenty products herself, and why she works so hard—in anticipation of having three or four kids in a few years. "I’m working like this now so that I don’t have to in the future," she says. British Vogue
ON MY RADAR
What the Democratic Party could learn from first-term Congresswoman Katie Porter California Sunday Magazine
Carole Brookins, Wall Street pioneer, dies of coronavirus Palm Beach Daily News
Homes actually need to be practical now The Atlantic
How the coronavirus exposes the great lie of modern motherhood New York Times
PARTING WORDS
"We women are all 'that woman'!"
-Rep. Maxine Waters, on Twitter, responding to President Trump calling Michigan Gov. Gretchen Whitmer "that woman"


fortune--2020-03-31--Amazon fires worker who led New York strike over coronavirus safety worries

Chris Smalls, an Amazon.com Inc. fulfillment center employee, said the company fired him after he led a strike at a warehouse in Staten Island, New York, over coronavirus safety conditions.
“Taking action cost me my job,” Smalls said Monday in a Bloomberg TV interview. “Because I tried to stand up for something that’s right, the company decided to retaliate against me.”
A group of workers at the Staten Island fulfillment center walked off the job Monday to demand Amazon close the facility for extended cleaning, the latest in a wave of virus-related protests. They say a number of their colleagues there were diagnosed with Covid-19. Organizers say more than 60 workers participated in the protest.
In a statement Monday night, New York State Attorney General Letitia James called Smalls’ firing “immoral and inhumane.” James urged the National Labor Relations Board to investigate the incident and said her office “is considering all legal options” as well.
Amazon confirmed it fired Smalls, saying he violated safety regulations, including failing to abide by a 14-day quarantine required after being exposed to an employee with a confirmed case of Covid-19.
“Mr. Smalls received multiple warnings for violating social distancing guidelines and putting the safety of others at risk,” Amazon said in a statement. Smalls “was asked to remain home with pay for 14 days, which is a measure we’re taking at sites around the world. Despite that instruction to stay home with pay, he came on site today, March 30, further putting the teams at risk.”
Smalls called the company’s claim “ridiculous” and said he was being retaliated against for his activism. Federal law protects the right of employees to engage in collective action, including strikes, to protest working conditions.
“I’m still going to continue to fight for those people inside of that building,” he said.
Amazon also disputed the number of workers involved in the protest, saying it was 15 of more than 5,000 employees at the Staten Island site.
“Like all businesses grappling with the ongoing coronavirus pandemic, we are working hard to keep employees safe while serving communities and the most vulnerable,” the company said.
More coronavirus coverage from Fortune:
—USPS might have to shutter by June as stimulus package provides no funding
—Everything you need to know about the coronavirus stimulus checks
—There will be another pandemic after the coronavirus. It’s time to start preparing
—Political activists make sure Americans register to vote—from a distance
—Social distancing creates $8 trillion in economic benefits, study says
—Where do clothing rental and subscriptions fit in a world that works from home?
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: World leaders and health experts on how to stop the spread of COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-03-31--Governments worldwide are remote voting because of coronavirus. Why is the U.S. Congress resisting i

Governments worldwide are remote voting because of coronavirus. Why is the U.S. Congress resisting it?

Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.
As the coronavirus forces companies and schools to move their operations online, one institution is stubbornly holding out: the U.S. Congress.
Despite a national emergency that calls for social distancing, leaders of the Senate and House of Representatives have so far refused to implement remote voting in the U.S. Congress. The decision comes as other countries, along with a growing list of U.S. states and cities, have introduced measures letting lawmakers vote online.
According to Daniel Schuman, a policy director at Demand Progress, a nonprofit that advocates for improving democracy through technology, the EU Parliament is letting members vote by email, while Commonwealth countries—including the U.K. and Australia—have begun using a form of proxy voting initially developed to ensure pregnant members could participate.
In the U.S., Schuman notes the New Jersey General Assembly recently adopted remote voting in response to the crisis, while South Dakota is set to introduce similar measures this week. Other states, including Oklahoma and California, are poised to follow suit. (The National Conference of State Legislatures has a running list of state initiatives.)
All of this raises the question of why the U.S. Congress is not adopting similar measures. Last week, when senators were in the Capitol, Senate Majority Leader Mitch McConnell declined to ask for a vote on remote voting. Staff for McConnell did not respond to multiple requests for comment for this story.
When members of the House were in Washington, D.C., earlier this month, some urged Speaker Nancy Pelosi (D-Calif.) to propose a change in voting procedures, but she declined to do so. As such changes require members to be present, Pelosi may have missed a critical window to bring voting online.
In response to an inquiry from Fortune, Pelosi’s office referred to a message and report from Rules Committee chairman James McGovern (D-Md.). McGovern’s message acknowledges that members of Congress have expressed concern about traveling during a pandemic but states the best option is for the House to stick with its existing rules.
The report cites security and reliability concerns over remote voting, as well as legal ones. “Some may argue that it runs counter to the Constitution’s references to the House meeting to conduct business in the chamber,” it says. “While arguments can be made in favor of its constitutionality, to avoid a court challenge, it is inadvisable to use unprecedented parliamentary procedures on critical legislation.”
Schuman, meanwhile, offers a more cynical reason for the reluctance of Pelosi and McConnell to introduce remote voting.
“It’s about power,” he says, suggesting that the leaders prefer to keep control over when in-person votes are scheduled to ensure leverage over members. If members could participate in key votes from their home districts, leaderships’ leverage would decrease.
The best way forward would be for Congress to follow what many other organizations in the country are doing, Schuman says, and use videoconferencing during the pandemic.
More coronavirus coverage from Fortune:
—USPS might have to shutter by June as stimulus package provides no funding
—Everything you need to know about the coronavirus stimulus checks
—There will be another pandemic after the coronavirus. It’s time to start preparing
—Political activists make sure Americans register to vote—from a distance
—Social distancing creates $8 trillion in economic benefits, study says
—Where do clothing rental and subscriptions fit in a world that works from home?
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: World leaders and health experts on how to stop the spread of COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-04-01--The future of shared workspaces and social clubs after COVID-19

5 of the best new books to read in April

This article is part of a Fortune Special Report: Business in the Coronavirus Economy—a look at the impact of the pandemic on more than 50 industries.
As members of one table after the next tucked away their laptops and replaced them with glasses of Champagne, it was business as usual at Soho House New York on March 12. Every seat was filled, with globe-trotters and locals alike, and there was even talk of heading up to the roof to take advantage of the delightful pre-spring weather. But within just a few days, things would come to a complete halt here at the Meatpacking District venue, and Soho House would be forced to close the doors to its 29 locations across North America, Europe, and Asia.
As one of the most exclusive and legendary social clubs in the world, Soho House—and its recently launched coworking space, Soho Works—is far from alone in having to close shop in the wake of COVID-19’s spread and the panic surrounding it. But as many coworking spaces and social clubs shut down and begin rethinking their entire business strategies—including how they will handle member fees, event programming, and staff compensation—some are opting to stay open, even as local governments have asked all nonessential businesses to close.
As Soho House made the tough decision to close its venues—first in North America and Great Britain, and eventually around the world—until further notice, founder Nick Jones sent an email to all members on March 17 in order to shed some light on the situation. “As we all continue to navigate COVID-19 and the uncertainty surrounding our everyday lives, the need for us as a community to look out for and support each other becomes even more important,” he wrote, noting that safety is an absolute priority and that the company has followed local government guidelines in each of its territories and has thus closed all houses for the foreseeable future.
The email further explained that members would be given a credit for the monetary value of their memberships during the closure, which could be used for food, drink, bedrooms, spa treatments, or on Soho Home merchandise in the future, and that Soho House is hoping to offer some of its illustrious event programming digitally so that gym classes, food and drink workshops, and the like could be viewed from home.
Inside the Soho district location of The Wing in New York, N.Y. Courtesy of The Wing
The Wing—a women-focused coworking space with 11 locations throughout the United States and London—closed all of its venues on March 14, with plans to remain closed through the end of the month at least. “With over 12,000 members globally and spaces in seven major metropolitan cities, we have a responsibility to do our part in preventing the spread of COVID-19 and keeping our employees and members safe,” says cofounder and COO Lauren Kassan.
During the closure, members will not be billed, and The Wing will continue to compensate its staff, including paying all hourly employees for their scheduled shifts. The club is also making programming available digitally, not just for Wing members but for nonmembers too. Scheduled virtual happenings include a conversation between Fran Drescher and Rosie O’Donnell, a lesson on finance in the age of the coronavirus, a cooking class with Alison Roman, and a panel on working parents with New York Times Parenting. The Wing also announced on March 23 that it would make its offices available for coronavirus relief efforts conducted by nonprofits as well as medical and governmental organizations.
But not all coworking spaces are taking the same approach. Impact Hub, a global entrepreneurial network with more than 100 workspace locations worldwide, is approaching its response to COVID-19 on a case-by-case basis. “All Impact Hubs are following their local governments’ guidelines regarding closings, people’s safety, and hygiene,” says Gabriela Gandel, the company’s global executive director. “And in geographies where governments have been slow to respond, Impact Hubs have taken a strong stance and decided on preventive measures ahead of these restrictions being imposed, in support of the health and safety of their communities.”
As of March 27 it had closed 57 locations across the world, and those that remained open were operating in a reduced capacity. But because Impact Hub’s focus is more on providing a network of like-minded entrepreneurs than on offering coworking and office space, there is no immediate answer about how to handle membership fees. “It depends on local market specificities,” Gandel explains. “Some Impact Hubs are offering current members the Connect Membership, an online membership that allows members to stay in contact with their community and still have access to services, programs, and partnerships, while others offer discounts.” In some cases, members have chosen to continue paying for membership in order to support Impact Hub’s operations within their respective countries, especially where less government support is available.
All Impact Hub employees still have their jobs, with most now working from home, and all continue to be compensated, and the company has applied for local government benefits to guarantee appropriate support for staff members during this time. And despite the tough times, the company thinks there might just be light at the end of the tunnel. “The post-COVID-19 economic recovery period will be a once in a generation opportunity to address two of the most urgent global issues of our time—inequality and climate change—as we rebuild local, national, and global economies,” says Gandel. “We trust that the Impact Hub network’s activities are essential to help economies recovering from this pandemic and its consequences, and shaping a new world that will definitely come.”
Then of course, there’s WeWork, the once-revered coworking giant, which has been shrouded in controversy in recent years. Though the company has continuously cited the health and safety of its members and employees as its top priority, it has kept almost all of its 847 locations open, a decision that’s been met with scrutiny. CEO Sandeep Mathrani wrote in an email to employees on March 17 that “WeWork is in an incredibly unique position,” explaining that as a service provider, the company has an obligation to keep its buildings open: “In the same way we expect certain businesses to remain open for us—whether it be a fulfillment center to send us a package, a bank so we can handle finances, grocery stores and pharmacies who supply us our valued goods—we too have members counting on us to remain open so they can run their companies to generate revenue, pay their people, and continue serving their customers.”
As the coronavirus continues to spread, many members-only clubs and workspaces have been forced to close their doors and rethink their entire business models. Courtesy of The Wing
It’s unclear how many of WeWork’s members are deemed “essential” or from which locations those businesses operate. But as of March 30, the only WeWork building closed in North America was in Los Angeles, where someone in the building had tested positive for COVID-19.
As WeWork maintains it is up to its members to determine whether or not they will use the coworking space, no member fees have been paused or waived during this time. And even as the company has offered its own employees the option to work from home with continued compensation, WeWork is also offering daily $100 bonuses to those who come into their respective locations. In the few countries where WeWork has been forced by government order to close—such as in India and Peru—it has maintained key-card access, meaning that any companies deemed essential can still access the space.
It’s difficult to say if the coronavirus pandemic will affect the shared workspace and social club industry in the long term, even as the situation becomes more under control and people return to their normal lives. But some members are remaining loyal—for now. “As soon as they reopen, I will be back,” says Gabriela Lawrence, owner of PushingSix PR and a longtime member of The Wing. “Based on the news, it seems like they—and everything else in New York—may be closed for another month, and by that time, I will have social-distanced enough. I’ll be ready to return, this time with a bottle or two of Purell in hand.”
More coronavirus coverage from Fortune:
—How to get a refund on your Broadway tickets after coronavirus shut down
—The oil sector takes its next hit: Coronavirus on offshore rigs
—Some of the most extreme ways companies are combating coronavirus
—How luxury designers in Italy’s fashion heartland are facing coronavirus
—Amazon tells employees to work from home if they can. Warehouse workers can’t
—Why Dollar General thinks coronavirus can help business
—Coronavirus may not be all bad for tech. Consider the “stay at home” stocks
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-04-01--5 of the best new books to read in April

Trump warns Americans to brace for a ‘ hell of a bad 2 weeks ’ as models show up to @ @ @

April’s new releases are all about fresh starts, including a nonfiction debut from one of the cofounders of NPR’s beloved science podcast Invisibilia, and a popular YA author pens her first novel for adults.
Lincoln on the Verge: Thirteen Days to Washington by Ted Widmer
Available April 7
Not to be confused with the fictional Lincoln in the Bardo, historian and professor Ted Widmer shines a light on a little-addressed section of Lincoln’s professional history. That would be the time Lincoln was President-elect—and specifically the 13 days it took the 16th U.S. President-to-be (at the time) to travel by train from Illinois to Washington, D.C. Bankrupt and divided, the country was already on the brink of its worst crisis to date, requiring the incoming President to muster all the mental and physical strength (including fighting off a prophetic assassination attempt during the trip) ahead of his Inaugural Address.
Chosen Ones by Veronica Roth
Available April 7
If you’re looking for an escape, consider the latest work from the author of the YA dystopian hit Divergent. In her debut novel for adult audiences, Roth leaps over the traditional hero’s journey saga, instead questioning what happens after you’ve already saved the world. In Chosen Ones, a group of teens were deemed critical to defeating an impossibly powerful entity wreaking havoc across North America. It’s no spoiler to say mission accomplished, but being a hero probably takes more of a toll on one’s physical and mental health than comic books would let you believe.
Why Fish Don’t Exist by Lulu Miller
Available April 14
Lulu Miller is one of the cofounders of NPR’s popular Invisibilia, a podcast and radio show about the invisible forces shaping human behavior. So it’s no surprise that her new book is described as “part biography, part memoir, part scientific adventure.” That adventure was inspired by what she thought was an off-the-cuff anecdote about a taxonomist who first lost his life’s work during the 1906 San Francisco earthquake, only to find the resolve to start over and rebuild his collection of specimens and experiments. Miller use his experience to propose a blueprint for how to go on when all seems lost.
Make Change: How to Fight Injustice, Dismantle Systemic Oppression, and Own Our Future by Shaun King (Foreword by Bernie Sanders)
Available April 21
As a leader of the Black Lives Matter movement, activist and journalist Shaun King reflects on events that shaped his life, including his work fighting police brutality, while considering the ways social movements can grow and evolve in the social media era. King goes behind the scenes with his effort leading the Raise the Age initiative, which campaigned for legislation to raise the age of criminal responsibility to 18 as New York was previously one of only two states that automatically prosecuted 16- and 17-year-olds as adults. And through it all, King remains optimistic for the future, offering a road map for how to stay sane, safe, and motivated even in the worst of political climates.
The End of October by Lawrence Wright
Available April 28
One more fictional entry to consider—although it might feel too real or close for comfort these days given the subject matter. New Yorker staff writer Lawrence Wright has already written 10 nonfiction books, including the insider look at Scientology, Going Clear. So it’s no surprise that Wright would be able to write about a mysterious new deadly virus sweeping the planet. What is a surprise is how prophetic the novel is given that it was in development well before the outbreak of COVID-19 in late December.
More must-read stories from Fortune:
—The most essential travel apps you need to know about
—7 new books to read in March
—This Raja Ampat yacht trip might be the world’s most exclusive escape
—Behind the scenes of the Dalai Lama’s early history with the CIA
—WATCH: Can San Francisco Be Saved?
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-04-01--How antibody screening for previous coronavirus infections could help restart the economy

Tests that could reveal whether people have already withstood COVID-19 and gained immunity will soon be widely available in the U.S., in what could be a key step in getting workers back to their jobs and restarting the economy.
New blood tests from Henry Schein Inc. and Becton Dickinson Co. look for antibodies produced in the middle to late stages of infection with COVID-19, the respiratory illness caused by the new coronavirus. Determining whether people have been infected could allow them to return to work without fear of passing along the disease or contracting it.
The test from Melville, New York-based Henry Schein produces results within about 15 minutes using only a blood sample drawn from a pinprick, according to a news release last week. The test from Becton Dickinson and BioMedomics produces similarly fast results and should be available within two weeks, Troy Hopps, a top executive in the company’s point-of-care unit, said in a Tuesday interview.
It’s unknown whether having had a COVID-19 infection will protect someone from contracting the disease again. However, exposure to a pathogen is generally thought to confer at least a degree of immunity. COVID-19 sufferers will likely have immunity for some time, though experts aren’t sure exactly how long.
As such, antibody testing could make it easier to determine whether workers, especially health-care professionals, can return. It could also help public-health officials plot strategy for a second wave of infections.
The tests, which don’t require special laboratory equipment and may even not require a medical professional, will alleviate COVID-19 testing shortfalls in the U.S., said Hopps, the executive from Franklin Lakes, New Jersey-based Becton Dickinson.
“They’re just not going to be able to fulfill the demand,” he said.
Bloomberg Intelligence analyst Jonathan Palmer said antibody testing is a “meaningful step forward.” More diagnostics-makers will likely make similar announcements over the coming weeks, he said, while cautioning that scaling up production will take time.
Closely held BioMedomics, based in North Carolina, has been shipping its COVID-19 antibody tests all over the globe, with hundreds of thousands sold in China alone, Chief Operating Officer Brad Heidinger said in a previous interview.
More coronavirus coverage from Fortune:
—USPS might have to shutter by June as stimulus package provides no funding
—Everything you need to know about the coronavirus stimulus checks
—Everything you need to know about furloughs—and what they mean for workers
—Political activists make sure Americans register to vote—from a distance
—During the coronavirus crisis, equal pay is more important than ever
—Coronavirus fight could prove fatal for addressing climate change
—PODCAST: Two health care CEOs on why coronavirus tests and vaccines are the ammunition needed to fight COVID-19
—VIDEO: World leaders and health experts on how to stop the spread of COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-04-01--What CEOs learning from the COVID-19 crisis

Good morning.
About 40 chief executives who are members of Fortune’s CEO Initiative gathered virtually yesterday for a discussion of how to respond to the COVID-19 crisis. The meeting was under the Chatham House Rule, so I can’t quote particular participants. But the big takeaway for me was the degree to which this crisis is provoking business innovation. The general sense of the group was not just that we won’t return to normal soon, but that we won’t return to the old normal ever. Some general takeaways:
—Companies that previously had been slow to adopt to digital transformation now find themselves on a “burning platform.”
—The need for community is more important than ever, but the crisis is inspiring new digital methods for nurturing community that won’t go away.
—Responding to a crisis is “not about perfection,” which permits more innovation.
—“Work from home” rules have given everyone a better sense of the challenges working mothers face, and will spark progress in addressing those challenges in the future.
Two bits of wisdom for navigating the path ahead: Every organization should think about “what do we want to be when we come out?” And the emergence from crisis shouldn’t be thought of as a “great restart,” but rather a “great reset.”
Separately, Hyatt CEO Mark Hoplamazian spoke to Fortune’s Susie Gharib yesterday about having to furlough most of Hyatt’s U.S. employees. “It has been a very, very torturous time,” he said. “The way I would describe it is a conflict between our purpose as a company, which is to care for people, and the things we have to do because we are charged with ensuring the financial future of Hyatt.”
And GM CEO Mary Barra wrote a post responding to President Trump’s tweet attack on her—without ever actually mentioning the president. “In a time of crisis, we have to transcend the personal and come together for the greater good,” she wrote.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com TOP NEWS 'Very, very Painful' President Trump said Tuesday that coronavirus deaths in the country could reach 240,000 and warned of "two very, very painful weeks" to come. The U.S. now has more cases than any other country, with a higher death toll than China. In Asia and Europe, that meant markets were opening even lower after yesterday closed a bad quarter. AP About that quarter It was bad. As Fortune's Anne Srader's writes, "There's one positive thing to say about Q1 and the stock market: It's finally over." It was officially the worst first quarter ever, and the worst quarter overall since 1987. The Dow fell about 23% in the last three months, while the S&P 500 dropped about 20%—and volatility was unprecedented. Fortune The return of China's factories In March, China's workers returned to factories—but it's not back to normal yet, with production slow as global demand has suffered amid the spread of the virus to the rest of the world. The Caixin China manufacturing purchasing managers index hit just above 50, the mark for expansion rather than contraction, but one expert warned that the "bounce" in March had to be put in the context of the previous month's steep contraction. WSJ Uber Eats Expands As Uber's ride hailing business has been hit by coronavirus measures, its food delivery business is booming—accelerating a push into delivering groceries, toiletries, and cleaning products across the world. That comes as established supermarket delivery services have become overwhelmed by orders in recent weeks, creating large backlogs. The Uber Eats push—which had already been trialled in Australia—will involve partnering with supermarket giants and delivering smaller orders of essential goods in about half an hour. FT AROUND THE WATER COOLER Don't forget about climate change Lest we forget, the world was facing a crisis even before coronavirus: climate change. Now, people who work at the intersection of climate change and business—like Mark Carney, the head of the Bank of England until just earlier this year—are asking where this leaves the fight to lower emissions. Could this be an opportunity to reimagine economies for a net-zero age—or a potentially fatal loss of momentum? Fortune To make a ventilator John Carlson, a former Johnson & Johnson executive who now oversees medical manufacturing for multinational Flex, talks about the challenges of making ventilators—quickly—as well as all the other components that companies must now race against time to produce: from IV systems to wall vacuum systems. The company is now doing things in days that used to take weeks or months, he says. Fortune Liquor companies step up Bars are empty, and bartenders are out of work. But liquor companies from Bacardi to Jameson Whisky are stepping up with six- and seven-figure donations to industry groups that provide aid and support for restaurant workers and bartenders, and their families. But as for many industries right now, the real questions are not only is it enough (it's not), but whether this could lead to systemic change—including more job security—in the industry longterm. Bloomberg Lockdown for a travel blogger You're a travel influencer—who suddenly can't travel. How do you survive? A diversified portfolio, says Instagram influencer Lindsay Silberman. In the Fortune series "The Coronavirus Economy", she talks about how she's turned to other areas of her business, from makeup to home videos, while stuck at home—and how she polled her followers to see what kind of content they wanted: reality, or escapism. (They chose escapism.) Fortune This edition of CEO Daily was edited by Katherine Dunn


fortune--2020-04-01--The global markets sink on Trump’s ‘painful’ warning

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, and welcome to a new quarter. Nobody is sorry to see the backside of Q1.
Let’s take a look to see if the turn-of-the-calendar is improving market sentiment.
Markets update
We begin in Asia where the Hang Sang and Shanghai Composite are both trading lower this morning, erasing yesterday’s gains. HSBC and Standard Chartered dragged down the Hong Kong session after saying they’ll scrap dividends and buybacks. Making matter worse, the region is on alert for a possible second wave of coronavirus, a devastating scenario.
***
Now to Europe. The European bourses finished Q1 on an up note yesterday. Today, they fell at the open. The markets are rattled by the number of companies suspending buybacks and withdrawing full-year outlooks—from automotive parts manufacturer, Continental AG, to Adidas.
Meanwhile, the airlines are on life support as global air travel grinds to a halt. IATA, the industry trade group, warned yesterday that airlines will run out of cash by the summer if lawmakers fail to deliver meaningful aid to the sector. IATA director general Alexandre De Juniac told Bloomberg TV that airlines are expected to burn through $61 billion this quarter alone.
***
As I type, the Dow and S&P 500 futures are edging lower. Both indices just wrapped up their worst first quarter ever.
The U.S. future and global markets sank after President Trump yesterday evening warned Americans to brace for a “painful” and “tough” next two weeks in which the number of coronavirus dead could rise to as much as 240,000.
***
Elsewhere, the dollar climbs for a third straight day. Gold is flat, and oil is down. Gasoline is cheap and plentiful, with it falling below a buck-a-gallon across parts of the United States. I haven’t driven my car or motorino in three weeks so I couldn’t tell you how much it costs around here.
***
Worst. Q1. Ever. That sums up the dismal start of the year for the Dow and S&P 500. Looking deeper into the record books, it was the Dow’s worst quarter overall since 1987, the year of the infamous Black Monday crash. And you have to go back to the height of the 2008 financial crisis to find a quarter this bad for the S&P 500.
And equities aren’t even the worst performer, as today’s chart shows.
***
The worst behind us?
Unless you were long dollar, you and your portfolio had a quarter to forget. Oil prices fell by a whopping 60%, its worst quarter ever. And crude is down again this morning.
Now let’s drill down on the S&P and Dow figures for a moment. It wasn’t that long ago—mid-February to be precise—that both had hit all-time highs. Weeks later they were in bear territory. The Nasdaq, meanwhile, had an even more volatile quarter—it recorded seven new 52-week highs and 13 lows in Q1.
Postscript
Warning: there will be some Latin in today’s postscript.
In recent days, I’ve been puzzling over a neighbor’s sign that greets me once I exit my apartment building. It reads, Hic Manebimus Optime. The words stop me in my tracks every time.
I’ve read enough ancient maps and inscriptions to know how to decipher hic (“here” as in “here be…”) and optime (“optimal” or “very well”). But manebimus really threw me.
This sign hangs from my neighbor’s window. It translates to roughly: “We’ll stay here, most excellently!”
So I turned to my wife, What’s that mean?
“We will stay,” she responded. “We’ll stay here, very well.” (It’s also translated to “We’ll stay here, most excellently!”)
I’m embarrassed that I didn’t spot its significance (and prominence) straight away. The phrase can be found on T-shirts, and has been adopted by hardcore Italian soccer fans, according to the English writer Tobias Jones in his book Ultra.
The phrase was evidently uttered by a defiant Roman centurion in the fourth century, during the sack of Rome. At the height of the panic, with the invaders bearing down on the city, this soldier uttered these words to calm the masses, to convince them not to flee.
Optime!
I’ll see you here tomorrow, most excellently.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
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Today's reads
Confidence craters. The American consumer is shut inside her home. She can't travel. She can't dine out. And that confinement is weighing on the monthly consumer confidence index, Fortune reports. "March’s decline in confidence is more in line with a severe contraction—rather than a temporary shock—and further declines are sure to follow,” the Conference Board's Lynn Franco explained, putting the numbers into context.
How low can it go? Two weeks ago, Goldman Sachs rattled the markets when it reported a big downward revision to its full-year U.S. GDP. Yesterday it revised those numbers again...down even further. It now forecasts "an annualized 34% in the second quarter, compared with an earlier estimate of 24%," Bloomberg reports.
Copy and delete. It was always a bit of a long shot, and now Xerox's $34 billion hostile bid to buy HP is off the table. The much smaller Xerox said it pulled the offer as market turmoil and the uncertainty of the coronavirus outbreak mounts.
Market candy
Quiz time
True or false. Bitcoin outperformed gold and the S&P 500 in the first quarter? (Careful. It's a bit of a trick question).
Answer: Bitcoin did beat out the S&P, but it got clobbered by gold. Here's by how much. The answer is false.


fortune--2020-04-01--Trump warns Americans to brace for a ‘hell of a bad 2 weeks’ as models show up to 240,000 coronaviru

Trump warns Americans to brace for a ‘hell of a bad 2 weeks’ as models show up to 240,000 coronavirus deaths

President Donald Trump warned Americans to brace for a “hell of a bad two weeks” ahead as the White House projected there could be 100,000 to 240,000 deaths in the U.S. from the coronavirus pandemic even if current social distancing guidelines are maintained.
Public health officials stressed Tuesday that the number could be less if people across the country bear down on keeping their distance from one another.
“We really believe we can do a lot better than that,” said Dr. Deborah Birx, the coordinator of the White House coronavirus task force. That would require all Americans to take seriously their role in preventing the spread of disease, she said.
Added Dr. Anthony Fauci, the government’s top infectious disease expert, “This is a number that we need to anticipate, but we don’t necessarily have to accept it as being inevitable.”
Trump called it “a matter of life and death” for Americans to heed his administration’s guidelines and predicted the country would soon see a “light at the end of the tunnel” in a pandemic that has killed more than 3,500 Americans and infected 170,000 more.
“I want every American to be prepared for the hard days that lie ahead,” Trump said.
“This is going to be one of the roughest two or three weeks we’ve ever had in our country,” Trump added. “We’re going to lose thousands of people.”
The jaw-dropping projections were laid out during a grim, two-hour White House briefing. Officials described a death toll that in a best-case scenario would likely be greater than the more than 53,000 American lives lost during World War I. And the model’s high end neared the realm of possibility that Americans lost to the virus could approach the 291,000 Americans killed on the battlefield during World II.
“There’s no magic bullet,” Birx said. “There’s no magic vaccine or therapy. It’s just behaviors. Each of our behaviors, translating into something that changes the course of this viral pandemic.”
Fauci called the numbers “sobering” and urged Americans to “step on the accelerator” with their collective mitigation efforts.
“We are continuing to see things go up,” Fauci said. “We cannot be discouraged by that because the mitigation is actually working and will work.”
Birx said pandemic forecasts initially predicted 1.5 million to 2.2 million deaths in the U.S. But that was a worst-case scenario, without efforts to slow the spread of the coronavirus through social distancing. She added that states that have not yet seen a spike in cases as New York has could take action to flatten the curve of rising hospitalizations and deaths.
It’s not only social distancing that could make a difference, but also the frantic efforts by hospitals around the country to prepare for an onslaught of seriously ill patients. The better prepared hospitals are, the greater the chances of lives being saved.
There’s also a wild card when it comes to treatment: whether the experimental drug combination Trump has touted — a medicine for malaria and an antibiotic — will actually make a difference. That combination is already being used on thousands of patients, and Fauci said he would want to see a rigorous test of its effectiveness.
Trump’s comments came after he announced Sunday that he was extending to April 30 the social distancing guidelines that advise Americans to cease large gatherings, work from home, suspend onsite learning at schools and more in a nationwide effort to stem the spread of the virus.
It was an abrupt reversal for Trump, who spent much of last week targeting April 12 as the day he wanted to see Americans “pack the pews” for Easter Sunday services.
Trump called the data “very sobering,” saying it was his understanding that 100,000 deaths was a minimum that would be difficult to avoid. He also sought to rewrite his past minimization of the outbreak, saying he rejected those who compared the new coronavirus to the flu — when in fact he repeatedly did so publicly.
“This could be a hell of a bad two weeks,’” Trump said. He added: “You know 100,000 is, according to modeling, a very low number. In fact, when I first saw the number … they said it was unlikely you’ll be able to attain that. We have to see but I think we’re doing better than that.”
Trump played down concerns from New York’s Andrew Cuomo and other governors that their states’ hospitals don’t have enough ventilators to treat an anticipated crush of patients. Trump said the federal government currently has a stockpile of 10,000 ventilators that it plans on distributing as needed.
“Now, when the surge occurs, if it occurs fairly evenly, we’ll be able to distribute them very quickly before they need them,” Trump said. “But we want to have a reserve right now. It’s like having oil reserves.”
Birx said the experiences of Washington state and California give her hope that other states can keep the coronavirus under control through social distancing. That’s because they moved quickly to contain the early clusters of coronavirus by closing schools, urging people to work from home, banning large gatherings and taking other measures now familiar to most Americans, she noted.
“I am reassured by looking at the Seattle line,” she added. “California and Washington state reacted very early to this.” Many other states and local governments already have stiff controls in place on mobility and gatherings.
Trump said he would also ask Florida Gov. Ron DeSantis to allow the docking of two cruise ships with passengers who have had contact with patients suffering from COVID-19. Passengers are anxious to disembark once they reach Florida, but DeSantis said the state’s health care resources are already stretched too thin to take on a ship’s coronavirus caseload.
“They’re dying on the ship,” Trump said. “I’m going to do what’s right, not only for us for but humanity.”
Trump also said he planned to curtail his travel for the month ahead and stay close to the White House to safeguard his health. The president hasn’t held one of his signature big-stadium rallies since early March, and it’s unlikely he’ll be holding another one anytime soon.
“I think it’s important that I remain healthy. I really do,” Trump said. “So for the most part we’re staying here.”
Trump spoke after another troubling day for the stock market, which has been in a free fall as the cononavirus ground the economy to a near-halt and left millions unemployed. The Dow Jones Industrial Average plunged more than 400 points, or roughly 1.9%, to seal the worst first-quarter finish of its 135-year history.
More coronavirus coverage from Fortune:
—USPS might have to shutter by June as stimulus package provides no funding
—Everything you need to know about the coronavirus stimulus checks
—Everything you need to know about furloughs—and what they mean for workers
—Political activists make sure Americans register to vote—from a distance
—During the coronavirus crisis, equal pay is more important than ever
—Coronavirus fight could prove fatal for addressing climate change
—PODCAST: Two health care CEOs on why coronavirus tests and vaccines are the ammunition needed to fight COVID-19
—VIDEO: World leaders and health experts on how to stop the spread of COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-04-01--China releases new data on asymptomatic coronavirus cases—but doubts about its COVID-19 numbers rema

China releases new data on asymptomatic coronavirus cases—but doubts about its COVID-19 numbers remain

China this week released additional data about its coronavirus crisis, but so far the disclosures are not quelling concerns that the country is underreporting the true scope of its COVID-19 outbreak.
On Tuesday, China revealed for the first time its number of asymptomatic coronavirus cases. The National Health Commission said 1,541 asymptomatic COVID-19 cases were under medical observation. It said it would start including asymptomatic infections in its official coronavirus count, which had until then excluded the figures. On Wednesday, China’s updated data included 1,367 asymptomatic cases, down from the previous day. Of the asymptomatic cases, 130 were reported within the last day, making up over three-quarters of the 166 new cases overall in China on Wednesday.
The new figures reflect the current number of asymptomatic cases; what remains unknown is how many asymptomatic infections China has had over the course of its outbreak. Without that comprehensive total, the extent of China’s experience with the disease, which it says has infected 83,225 people and killed 3,312, is incomplete.
China’s underreporting
Carriers of the coronavirus can indeed pass it on to others even if they don’t have symptoms of the disease themselves; that’s what makes containing it so tricky. China’s government has acknowledged this fact, but since Feb. 7, its health commission has excluded these cases from its official public coronavirus count, even as it asks local authorities to report such cases to the central government.
Leaked documents obtained in March by the South China Morning Post, a Hong Kong–based newspaper, reportedly reveal that the number of asymptomatic cases in China is far greater than what China disclosed this week. The classified government documents said that more than 43,000 people in China were confirmed carriers of coronavirus by the end of February but were left off official tallies because they hadn’t presented symptoms. Taking the leaked figure at face value would mean that the number of all confirmed cases in China exceeds 125,000, a full third higher than the country’s official total.
As those outside China cast doubt at its data, Beijing indicated recently that it had questions about its own, internal figures.
Last week, Chinese Premier Li Keqiang ordered local authorities to be more forthcoming in their daily reports, signaling that the central government was aware that local officials had underreported case counts to the central government.
“I think there were municipalities and localities that didn’t want to fully admit the extent of the crisis,” said professor Nicholas Thomas, an expert in infectious diseases and governance at the City University of Hong Kong. He added that pressure from Beijing to restart the economy had likely caused local governments to undercount coronavirus cases.
There is also evidence that the Chinese public is skeptical that the virus is as contained as the data suggests. Over the weekend, citizens attempting to leave Hubei Province, the epicenter of the coronavirus outbreak in China, clashed with police from nearby provinces, who were reluctant to let arrivals from Hubei cross their borders even though Hubei’s lockdown had lifted.
Bracing for a second wave
China’s push for more transparency from local officials and its own decision to share more data comes as the country tries to stave off a second wave of the coronavirus, this time from imported cases.
In recent weeks, the vast majority of new coronavirus cases in China have come from returning travelers. China had 806 total imported infections on Tuesday. The threat of such cases has prompted renewed social restrictions, even as China’s factories, offices, and shops try to get back to business.
After roughly 600 movie theaters in the country reopened in late March, China’s film commission announced that all of the country’s movie theaters would once again close eight days later.
On Saturday, China closed its borders to all foreign visitors, even those with valid visas and residence permits, and announced that airlines could fly only one roundtrip journey per week to any given country. There’s also growing unease directed at the foreigners who remain. They’ve been turned away from hotels, restaurants, shops, and other establishments out of fear that they might be carriers of the disease, even though many of them likely weathered the crisis from within China.
In releasing more data on asymptomatic carriers, China is hoping to instill more confidence among peer nations and its own citizens that it can successfully avoid a second wave of the pandemic. But outside the country, there’s still skepticism of the data, and inside the country, everyday life remains on edge.
More coronavirus coverage from Fortune:
—USPS might have to shutter by June as stimulus package provides no funding
—Everything you need to know about the coronavirus stimulus checks
—Everything you need to know about furloughs—and what they mean for workers
—Political activists make sure Americans register to vote—from a distance
—During the coronavirus crisis, equal pay is more important than ever
—Coronavirus fight could prove fatal for addressing climate change
—PODCAST: Two health care CEOs on why coronavirus tests and vaccines are the ammunition needed to fight COVID-19
—VIDEO: World leaders and health experts on how to stop the spread of COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-03-31--What to do when your bills are due: A guide to coronavirus finances

The coronavirus has dealt a financial blow to millions of Americans and now April’s bills are coming due.
The good news is there is help available. Reach out immediately to your mortgage lender, student loan servicer or utility provider to see what’s available. Other assistance, such as stimulus checks or unemployment benefits, will take more time. The bottom line is that you need to take action to seek certain forms of relief.
Here is help navigating the biggest issues:
Housing
Numerous mortgage lenders have said they are willing to work with distressed borrowers, including potentially suspending or reducing payments. Contact them immediately to find out about your options.
If you hold a mortgage backed by Fannie Mae or Freddie Mac—about half of all mortgage holders do—there is help. The mortgage buyers have suspended all foreclosures and evictions for homes owned by their companies. They’ve also expanded their forbearance program, which could suspend payments for up to a year. Ask the company you make your payments to if you hold a Fannie or Freddie loan.
The federal government has also halted foreclosures and evictions for mortgages insured by the Federal Housing Administration.
Renters’ fate depends on where they live and who they rent from. Reach out to your landlord or property management company to ask for leniency. Several cities, such as Seattle, San Francisco and Boston, have halted evictions due to the coronavirus.
Utilities
Gas, electric, and other utility providers often have assistance programs for customers who cannot pay in full. There are also government and charitable programs to help low-income or struggling households. Ask the utility provider for referrals or call 2-1-1 for help finding local social service programs or charities. Several cities and regions have opted to halt utility shutoffs.
Health insurance
COBRA allows laid off workers at large employers to pay to continue their health insurance coverage, but it can be prohibitively expensive. Being laid off also qualifies as a life event for most insurers, which means someone could get on a partner’s insurance outside of the normal open enrollment period.
Due to the coronavirus, a handful of states have reopened their individual insurance exchanges to people who didn’t find coverage during the regular sign-up windows that started last fall. People who have lost coverage through their employer are allowed to shop on the exchanges outside the regular enrollment period.
Some households may qualify for their state’s Medicaid program too.
Debt
If you are struggling to pay your credit card, auto loan or other debt, reach out to your lender. They’ve been instructed by federal regulators to work with borrowers impacted by the virus. Banks have said they are willing to make a variety of arrangements such as waiving fees, temporarily lowering interest rates or making other payment arrangements.
Student loans
Federal loan borrowers can now seek an emergency administrative forbearance, which would allow them to postpone payments for up to 60 days. Borrowers must contact a servicer to apply.
The federal government also lowered the interest rate on all federally held student loans to 0%. However, that will not lower the monthly payment; instead it will apply the payment entirely to the principle balance.
The government has also temporarily halted collections and wage garnishment for borrowers who’ve fallen behind on their federal student loans. It has instructed private collection agencies to follow suit.
If you have private student loans, contact your servicer for their repayment options.
Budget
It’s time to cut any non-essential expenses,. That means ending your gym membership and trimming phone or internet plans. Daycare or monthly commuting passes might be paused or lowered during unemployment.
Consider extra work if you can to bring in income. If you still come up short, stay calm.
“Companies are rolling out programs to help with missed or late payments,” said Kristin Pugh, a certified financial planner. “If you can’t make a payment or can only make a partial payment you need to be proactive and reach out.”
FPA is offering free financial guidance to Americans in need. A nonprofit credit counseling agency can also provide low cost help managing debt and creating a household budget.
If necessary, consider seeking aid for basic needs such as food and shelter. Or consider local food banks, which have more leniency in who they can help. United Way and 2-1-1 can also help you find social service support you may qualify for in your area.
Government help
Yes, the government is delivering one-time payments to adults but those are still weeks away.
Evelyn Zohlen, a certified financial planner and chair of the Financial Planning Association, urges people to use that money for needs not wants. If you are not in need, consider dropping that money into an emergency savings fund as anyone’s economic picture can change quickly.
If you are laid off or your income has been reduced, apply for unemployment as soon as possible.
Congress is beefing up what states can offer—including allowing part-time, self-employed and gig economy workers who typically weren’t covered to seek benefits. People who are quarantined, left work due to risk of exposure or to care for a family member can also apply.
Applications can typically take two to three weeks to process, thought the surge in applications could extend that time frame.
More personal finance coverage from Fortune:
—Everything you need to know about the coronavirus stimulus checks
—5 things to know about unemployment benefits in the COVID-19 stimulus package
—Everything you need to know about furloughs—and what they mean for workers
—How to defer your student loan payment due to coronavirus
—What to do if you’re worried about getting laid off
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: U.S. tax deadline moved from April 15 to July 15


fortune--2020-03-31--SBA small-business loans: 8 things to know about the Paycheck Protection Program

Subscribe to Outbreak, a daily roundup of stories on the coronavirus pandemic and its impact on global business, delivered free to your inbox.
The $2.2 trillion coronavirus stimulus bill signed into law by President Donald Trump last week set aside $349 billion for a new small-business loan program.
If small businesses maintain payroll during this economic crisis, some of the money borrowed through the newly created Paycheck Protection Program can be forgiven. The goal is to help small-business owners and their employees ride out this economic storm.
We learned more details Tuesday on the $349 billion effort, called the Paycheck Protection Program—which is larger than the GDP of Arizona—from Treasury Secretary Steven Mnuchin and the U.S. Small Business Administration (SBA). A senior government official said it is possible millions of loan applications could roll in on Friday when these loans become available.
Here’s what prospective small-business loan applicants need to know.
Who is eligible for the SBA’s Paycheck Protection Program? What are the qualifications?
Small businesses with fewer than 500 employees are eligible to apply to the Paycheck Protection Program. These include firms that are nonprofits. It also includes sole proprietorships, self-employed individuals, independent contractors (a.k.a. gig economy workers), and veteran organizations.
Borrowers must certify that their business has been affected by the coronavirus slowdown. And businesses must have been in operation as of Feb. 15 to be eligible to apply.
Lenders will not require collateral or a personal guarantee.
When can I apply?
Treasury Secretary Mnuchin said Tuesday that small businesses will be able to start applying for the Paycheck Protection Program loans on Friday. Loans will be given on a first-come, first-served basis, according to a senior SBA official.
How much can be borrowed?
The Paycheck Protection Program provides small businesses loans that can be up to 2.5 times the borrower’s average monthly payroll costs. The amount that can be borrowed tops out at $10 million. The date range for calculating that average cost is different for seasonal businesses, nonseasonal businesses, and firms that opened in 2020.
Payroll costs include everything from salaries, bonuses, and retirement benefits to parental leave and health care benefits. The portion of employee salary in excess of $100,000 is excluded in the payroll calculation.
Do I have to pay the loan back?
Borrowed money used for expenses relating to payroll, mortgage interest, rent, or utilities in the eight weeks following the date of origination can be forgiven. That means business owners will not have to pay the government back the full principal amount of the money borrowed. Borrowers will need to provide documentation of these expenses in their loan forgiveness application. A decision on forgiveness of the Paycheck Protection Program loan will be made within 60 days of forgiveness submission.
“The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses,” said Treasury Secretary Mnuchin.
The forgiven money will be reduced for employers that lay off employees or reduce wages by more than 25%.
Laid-off employees must be rehired by June 30 for companies to recoup their wages through loan forgiveness, according to a senior SBA official.
How do I apply for the SBA’s Paycheck Protection Program?
Borrowers can apply for these federally backed loans at the more than 1,800 banks that already offer Small Business Administration loans. However, the number of lenders offering loans through the Paycheck Protection Program will end up being greater and includes many more traditional banks, credit unions, and fintech firms. The first step prospective borrowers should take is contacting their current bank.
“Businesses can go to a participating SBA 7(a) lender, bank, or credit union, apply for a loan, and be approved on the same day,” Mnuchin said.
There is no cost to apply for this loan, but businesses will be charged a fixed interest rate.
What interest rates will be charged?
Money borrowed from the Paycheck Protection Program will have a 0.5% fixed interest rate. The first payment is deferred for six months.
How long will it take to receive the loan?
The loans will be approved far more quickly than previous SBA-backed loans. A senior government official said these “stripped down” applications will not require SBA approval and funds could be made available on the same day you apply.
Should I apply—and is it a good deal for my small business?
It’s an incredible deal for small businesses, contractors, and self-employed folks. A forgivable loan like this should help small businesses retain payroll during the coming weeks when they’re likely to watch sales continue to dry up. For more information, here are two fact sheets published by the U.S. Chamber of Commerce and the SBA.
Editor’s Note: If you’d like to share your small-business story or expertise with Fortune’s Lance Lambert, please reach out via email to Lance.Lambert@fortune.com or on Twitter at @NewsLambert.
More must-read finance coverage from Fortune:
—Even with the Paycheck Protection Program, small-business owners say it’s not enough to ensure they can survive
—Millions of Americans won’t be able to pay their bills this month. What financial experts advise
—What to know about the coronavirus stimulus checks
—Social distancing creates $8 trillion in economic benefits, study says
—Everything you need to know about furloughs—and what they mean for workers
—The lessons learned from the past 3 bear markets
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: The U.S. tax deadline was pushed from April 15 to July 15
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