fortune--2020-11-09--Creating a COVID vaccine is only half the battle

Shares of drug giant Pfizer soared nearly 8% at market close Monday as the company announced that its coronavirus vaccine candidate was highly effective, according to an interim analysis of data.
Pfizer said the coronavirus vaccine made in collaboration with German partner BioNTech proved 90% effective, which is extremely rare for a vaccine and especially for one made on such an expedited time frame. The company has not yet released a complete data set from its Phase III trial.
As impressive as the accomplishment is, several epidemiologists note that the battle against COVID is far from over. The process to get a vaccine into Americans’ hands continues as Pfizer navigates issues ranging from Food and Drug Administration (FDA) emergency authorization to manufacturing to distribution.
“The news from Pfizer is encouraging, but more details are needed, such as whether the same rate of effectiveness was seen across different patient populations and how long that efficacy lasts,” said Dr. Elaine Hanh Le, chief medical officer of the health information firm Healthline, in an emailed statement. “Very few vaccines have such a high efficacy rate, and ultimately, for a vaccine to be truly effective, it needs to be broadly adopted by all in the community. Until then, we need to remain vigilant as we continue to wear our masks, keep a physical distance of at least six feet from others, wash your hands, and avoid crowds indoors.”
Pfizer has ambitious manufacturing goals. In September, the drugmaker and BioNTech reached an agreement to provide the European Union up to 300 million doses; the United States an initial 100 million doses; and eventually 1.3 billion worldwide doses of the vaccine by the end of 2021—although just 50 million doses are expected globally by the end of the year—should it prove effective and win FDA authorization.
Monday’s announcement is cause for optimism, but Pfizer will have to continue monitoring clinical trial participants who received two doses of the vaccine for two months to make sure there are no lasting safety issues. The company expects to have that information by the third week of November, setting it up for a potential late-November FDA application. Regulators will then take at least two or three weeks to review the data and make a decision.
The other question is who will receive the first doses. Given that this particular COVID vaccine requires two doses several weeks apart, the 50 million expected to be delivered by the end of 2020 would reach only about 25 million people. And an emergency authorization isn’t the same thing as full-on approval for a therapy despite President Donald Trump’s implication that everyone would be able to get a vaccine within months.
In reality, doses of what would be a hotly sought coronavirus shot would have to be triaged and prioritized for the most vulnerable and high-risk people, including the elderly and those with diabetes or heart conditions. Widespread market availability is unlikely until mid-2021, underscoring how important it is to keep up social distancing and other public safety measures.
Finally, there’s the distribution process, which will require widespread cooperation among drugmakers, governments, and logistics firms. The type of vaccine that Pfizer is working on, a so-called mRNA vaccine, requires storage at temperatures of about negative 112 degrees Fahrenheit.
That forced Pfizer to get creative and create a specialized carrying case alongside its vaccine that can store doses at those temperatures and thus ease distribution across the globe. (It also comes armed with GPS and thermal sensors so the companies can keep tabs on doses at any given time.)
“The logistics of medicines and distribution of medicines are always very complicated, because there are always storage conditions,” said Pfizer CEO Albert Bourla at Fortune’s virtual Global Forum last month. “And we knew that we had to move very fast. So we wanted to make sure that we can distribute by plane. We can distribute by any type of vehicle without needing refrigeration individually.”


fortune--2020-11-09--Who is Lael Brainard? What to know about Biden’s likely pick for Treasury Secretary

Parler is the new Twitter for conservatives .
Here ’ s what you need to know

President-elect Biden is starting to assemble his cabinet, and Democrats are angling to influence who he will choose for the positions.
One leading candidate for the high-profile Treasury Secretary slot is Lael Brainard, a member of the Federal Reserve’s Board of Governors.
A former under secretary for the Department of the Treasury during the early years of the Obama administration, Brainard also served as an economic adviser to President Clinton.
The Treasury pick is likely to be an early battle between moderates, progressives, and the GOP, Politico reports, given Biden’s likely desire to move quickly on economic recovery plans. Here’s what you should know about Brainard.
She’s a moderate pick—with a few fairly progressive leanings
The Fed governor is seen as a moderate or centrist choice for the Treasury position, according to Matthew Luzzetti, chief U.S. economist for Deutsche Bank. “The choice of a Treasury secretary is a signaling device for whether the Biden presidency will look toward more moderate or centrist economic policies or progressive ones,” Luzzetti says.
Brainard’s rumored competitors for the position, according to Politico, include Atlanta Fed president and CEO Raphael Bostic; former Fed governor Sarah Bloom Raskin; TIAA-CREF CEO and former Fed vice chair Roger Ferguson; Ariel Investments co-CEO Mellody Hobson; and progressive choice Sen. Elizabeth Warren.
Since she became a Fed governor in 2014, Brainard has “held mainstream views” and leaned doveish, meaning that she favors keeping rates low and creating economic stimulus to promote job growth, rather than worrying about inflation, Luzzetti says.
But Brainard has also voted in favor of increasing capital requirements for banks—a vote that aligns her with the Biden administration’s likely interest in regulating the finance industry.
Her record suggests that she, like Biden, believes in moderate economic policies with some level of support for the kind of regulation—and undoing of the GOP’s deregulation—that progressives are hoping for.
Still, Brainard as head of the Treasury would “sit well within the Biden administration, but be unlikely to go as far as some of the more progressive candidates would want,” Luzzetti says.
She favors economic stimulus in response to COVID-19
Throughout the coronavirus crisis, the Fed has supported additional fiscal stimulus to help the economy recover from the pandemic’s associated economic downturn. Like her colleagues, Brainard has backed those proposals.
“I would expect she would be very much supportive of rolling out a stimulus package early next year that is broader than what we’ve seen contemplated from the Republican side,” says Luzzetti. “I would view her as being very supportive of the key elements of the Democratic platform: support for unemployment benefits, state and local governments, small businesses.”
She’s an early frontrunner
Right now, Brainard is seen as the frontrunner for the post.
“She’s been at the Federal Reserve during the current crisis and worked at Obama’s Treasury department. She has signaled support for the left and the center without expressing solidarity with either. And she would make history as the first woman ever to lead the department,” reports Politico.
Her tenure in the Obama administration could be a focus of some tougher questioning during a confirmation process. Specifically, Luzzetti says, Brainard’s background in international trade—during a time when the U.S. did not take as “forceful action against China” as lawmakers now favor.
Still, the candidate is a popular choice—with the caveat that much could change in the weeks and months ahead. The incoming Biden administration itself has yet to publicly weigh in.


fortune--2020-11-09--J.P. Morgan analysts call these 25 stocks ‘short’ candidates as a COVID vaccine gets closer

A vaccine for COVID is great news for the world’s population. But it may mean the end of a good run for certain stocks.
In late October, J.P. Morgan analysts compiled a list of 25 stocks that could respond negatively to the introduction of a vaccine. Given Monday’s news that a candidate from Pfizer/BioNTech prevented 90% of infections in trials, that list appears to be newly relevant.
“As we are getting closer to a vaccine, we are introducing COVID-19 Vaccine Tactical Short Candidates,” the J.P. Morgan analysts wrote. “This is a list of stocks that are in the upper echelon of Momentum and have crowded positioning, that could see the second derivative of their profit growth decrease as consumer/corporate activity normalizes.”
Already on Monday several of their predictions appeared to be playing out, with names like Zoom down 17% and Peloton down 20% as of the close. The list also included online education provider K12, lawn care chemical maker ScottsMiracle-Gro, and retailers such as Wayfair, Overstock, and Costco that have benefited from people stocking up and staying home.
Meanwhile oil prices surged Monday, as did sectors such as carmakers, airlines, and cruise operators, on hopes that a vaccine would mean an end to lockdowns. As Fortune’s Katherine Dunn wrote: “Such a surge may be completely premature, but ‘in the eyes of traders, a vaccine will help ensure no future lockdowns are needed and will bring people back to the streets, allowing road and air transport to recover,’ said Bjornar Tonhaugen, head of oil markets at Rystad Energy in Oslo.”
Here is J.P. Morgan’s full list of COVID-19 Vaccine Tactical Short Candidates:
ScottsMiracle-Gro
Peloton Interactive
YETI Holdings
Vista Outdoor
Chipotle Mexican Grill
Chegg
K12
Wayfair
Grubhub
Fiverr International
Stamps.com
Overstock.com
Big Lots
Costco Wholesale
Boston Beer
Clorox
Central Garden & Pet
American Well
Moderna
Novavax
Zoom Video Communications
Logitech International
Bandwidth Inc. Class A
Equinix
Digital Realty Trust
To be sure, the J.P. Morgan analysts cautioned that “these screens should be viewed as tactical opportunity to express a view on the catalyst rather than a fundamental call on these companies.”
And indeed, with a pandemic still raging and Donald Trump not yet having conceded the presidential race, it might be a bit premature to short stocks like Boston Beer…just yet.


fortune--2020-11-09--Biden unveils COVID-19 task force that is 38% female and 69% underrepresented minority

The worsening COVID-19 pandemic has disproportionately harmed Black, Latinx, and Indigenous people. Now the next U.S. President is putting together a coronavirus task force whose members primarily come from those communities.
President-elect Joe Biden on Monday named 13 doctors and health experts to his transition’s COVID-19 advisory board. Five of those 13 task force members, or 38%, are female. Nine members, or 69%, are Black, Latinx, Asian, or other underrepresented minorities.
The task force will be cochaired by David Kessler, a former head of the U.S. Food and Drug Administration under Presidents George H.W. Bush and Bill Clinton; Vivek H. Murthy, a former Surgeon General under President Barack Obama; and Marcella Nunez-Smith, the associate dean for health equity research at the Yale School of Medicine and a doctor who has spent her career addressing structural inequities in health and health care.
Biden’s announcement Monday acknowledged these “ongoing racial and ethnic disparities” as one of the problems his coronavirus task force would seek to address.
“Dealing with the coronavirus pandemic is one of the most important battles our administration will face, and I will be informed by science and by experts,” the President-elect said, adding that the task force would help with “ensuring vaccines are safe, effective, and distributed efficiently, equitably, and free; and protecting at-risk populations.”
Every part of the pandemic, and the U.S. response to it so far, has been complicated by the country’s legacy of racism and ongoing disparities in health and health care. Black people are dying from COVID-19 at more than twice the rate of white people, according to the COVID Racial Data Tracker, in a health crisis that has been exacerbated by stark and pre-existing racial disparities in health and in the quality of care available to underrepresented and lower-income populations.
Yet at the same time, people of color are often largely omitted from clinical trials for vaccines and other medical treatments, despite some efforts by the government and pharmaceutical industry to increase the diversity of these studies. After a long history of being mistreated in medical research, Black people are particularly suspicious of vaccinations and clinical trials. In mid-September, only 32% of Black Americans surveyed told the Pew Research Center they would definitely or probably get a COVID-19 vaccine if one were available immediately, compared with 52% of white respondents, 54% of Hispanic-Americans, and 72% of Asian-Americans.
Pfizer and BioNTech, which on Monday reported highly encouraging results from the ongoing study of their developing COVID-19 vaccine, have made some progress toward better-than-usual representation in their clinical trials, although they do still have room to improve. Approximately 10% of the U.S. participants in their trials are Black, compared with 13% of the U.S. population; about 13% are Hispanic or Latinx, compared with 18% of the overall population.


fortune--2020-11-09--Zoom settles FTC case accusing it of privacy missteps with no fine

Videoconferencing service Zoom has settled accusations by the Federal Trade Commission that it failed to protect users’ information.
The settlement requires Zoom to implement a comprehensive security plan and cease any misrepresentation of its security or data-handling practices. Zoom must also undergo a security assessment by an independent third party every two years, and notify the FTC in the event of any data breach.
The settlement didn’t include a fine.
Zoom has been one of the most prominent of the “stay at home” tech companies benefiting from the disruptions of coronavirus, with the number of meeting participants exploding from 10 million in December 2019 to 300 million by April 2020, as everything from history classes to government committees went online. That led to heightened scrutiny of the platform and its security practices.
The missteps highlighted by the settlement are potentially serious, but the FTC didn’t say that hackers had exploited them in the real world. Nor did the agency say that user account information such as emails or credit card details had been stolen.
“We are proud of the advancements we have made to our platform, and we have already addressed the issues identified by the FTC,” Zoom said in a statement. “Today’s resolution with the FTC is in keeping with our commitment to innovating and enhancing our product as we deliver a secure video communications experience.”
Since at least 2016, according to the FTC, Zoom has claimed it offered “end-to-end encryption” to users. But in March, tech news site The Intercept reported that while Zoom calls were encrypted, Zoom itself theoretically had access to encrypted meetings—an impossibility if it was offering true end-to-end encryption.
After this discrepancy was made public, Zoom acquired the encryption startup Keybase and began building true end-to-end encryption. The first iteration of that technology was introduced to users in late October.
The FTC also said Zoom misrepresented its handling of recorded calls saved to its cloud service. Zoom claimed these recordings were encrypted immediately after a call was completed, but in fact some calls were on Zoom’s servers in unencrypted form for as long as 60 days before being transferred to secure storage.
In its announcement, the FTC argued that Zoom’s misleading encryption claims gave users “a false sense of security…especially for those who used the company’s platform to discuss sensitive topics such as health and financial information.”
The FTC also focused on a flaw in how Zoom worked on Apple’s Mac computers. To allow users to join calls faster, Zoom installed background software called ZoomOpener starting in June 2018. ZoomOpener bypassed a protocol designed to protect Mac users who click on malicious links. In July 2019, it was discovered that this work-around could give hackers access to users’ webcams. Zoom fixed the flaw almost immediately after it was publicized.
Ultimately, the settlement amounts to a public declaration that the FTC is keeping a close eye on Zoom. The FTC says it “requires Zoom to live up to its privacy and security promises and to put in place a comprehensive security program designed to protect your information for many years to come—or pay big fines.”


fortune--2020-11-09--Conservative social media site Parler shoots to the top of the download charts postelection

As Twitter has gotten increasingly aggressive about policing election-related misinformation in recent weeks, conservatives are turning to a small alternative site called Parler.
Over the weekend and on Monday, Parler was the most downloaded free app on Apple’s U.S. mobile app store and on Google’s U.S. Play store for mobile apps. It’s more popular than TikTok, Zoom, and YouTube.
The Parler apps had a total of almost 1 million installations from Nov. 3 to Nov. 8, pushing total installs to date to 3.6 million, research firm Sensor Tower said.
Parler says it has roughly 8 million members now, up from 4.5 million a week ago. “Parler is a breath of fresh air for those weary and wary of the way they’ve been treated by our competitors,” Parler chief operating officer Jeffrey Wernick says. “And now that many of their friends are already on Parler, they’ve decided it’s worth their investment of time to give us a try. We plan to earn their continued business.”
Some conservative commentators have urged their supporters to move from Twitter to Parler amid Twitter’s recent moves to add warning labels and delete tweets about the election.
For example, on Saturday, President Donald Trump tweeted that he had won the 2020 election and alleged without evidence that millions of votes for his opponent, former Vice President Joe Biden, were fraudulent. Twitter left the tweets up but added a red warning label that said, “This claim about election fraud is disputed.” Facebook removed a group called “Stop the Steal” that was posting similar charges.
Parler allowed the same kind of posts without any labels. People supporting “Stop the Steal” remained active on the site, and a related hashtag had 58,000 posts on Monday.
Founded in 2018 by University of Denver graduates John Matze and Jared Thomson, Parler takes a decidedly different approach to controversial posts than its larger social media rivals. In a September statement, the site pledged to offer “uncensored, real-time election coverage” that would “honor the right of all individuals to speak and hear freely, and to decide for themselves what to think.”
Overall, the site has a largely conservative slant, suggesting users follow conservative commentators like Sean Hannity, Dinesh D’Souza, Mark Levin, and Dan Bongino as well as Texas Sen. Ted Cruz.
Still, conservatives have not abandoned Twitter completely. Senator Cruz had a dozen original and retweet posts over the past 24 hours on Twitter, where he has 4 million followers. He posted just two times during the same period on Parler, where he has 2.8 million followers.
(This article was updated on November 10 with comments from Parler.)


fortune--2020-11-09--Trump fires defense secretary, hinting at post-election purge

Defense Secretary Mark Esper was fired in a tweet on Monday, as President Donald Trump went after a top aide he blamed for not supporting him sufficiently.
Trump said he’s naming Christopher Miller, the Director of the National Counterterrorism Center, as acting Pentagon chief.
Esper’s relationship with Trump soured after the Pentagon chief resisted Trump’s inclination to use active-duty forces to quell protests in U.S. cities earlier this year.
Esper’s departure could foreshadow a broader post-election purge of appointees who displeased the president. It also means Trump will have seen the departure of two confirmed defense secretaries in less than two years.
While Esper, 56, had worked with the president on controversial priorities such as sending U.S. troops to the border with Mexico and drawing down forces in Germany, Afghanistan, and Syria, the president voiced increasing dissatisfaction with his Pentagon chief in recent months.
Trump said privately in August that he planned to replace Esper after the election, according to people familiar with the discussions, while the defense secretary told people close to him that he intended to leave regardless of the election’s outcome.
The president was frustrated that Esper, who became secretary in July 2019 after serving as Army secretary and as a former executive at Raytheon Technologies Corp., didn’t do more to publicly defend him on key issues, including Trump’s rejection of reports that Russia paid Taliban fighters “bounties” for the killing of U.S. troops in Afghanistan.
Trump has increasingly sought overt signs of loyalty and a willingness by his top aides to engage in partisan fighting, as demonstrated by Secretary of State Michael Pompeo’s making of a video in support of the president while on an official trip to Jerusalem for the president’s behalf at the Republican National Convention in August.
But while Trump’s cabinet secretaries routinely shift praise for key accomplishments to the president, Esper sometimes showed neutrality. Last month, Esper lauded 10 NATO allies for meeting defense spending thresholds he didn’t mention that Trump had pressed for that outcome.
Trump was also angered that Esper in June publicly opposed the idea of deploying active-duty military to contain nationwide protests over racism. He confronted his defense secretary June 3 at the White House after Esper held a news conference in which he said that using active-duty military forces to perform law enforcement within the U.S. is “a matter of last resort” and that the National Guard was better-suited to the task, people familiar with the matter said.
The president again signaled fatigue with Esper on Aug. 15, when he used a derogatory nickname for his defense chief meant to suggest he’s a yes-man.
‘Mark Yesper’
“Mark Yesper, did you call him Yesper” Trump said at the time. “Some people call him Yesper. I get along with him,” he added with a shrug.
When asked if he was considering firing Esper, the president replied, “I consider firing everybody. At some point that’s what happens.”
As Esper lost support in the White House, he also found himself under increasing criticism from former top defense officials. Esper and General Mark Milley, chairman of the Joint Chiefs of Staff, came under fire for their decision to join Trump on a walk to a church across the street from the White House in early June after the park there was forcibly cleared of peaceful protesters.
Critics said Esper and Milley’s participation militarized an affair that undercut freedom of speech and assembly.
Retired Admiral Mike Mullen, a former chairman of the Joint Chiefs under Presidents George W. Bush and Barack Obama, wrote in an op-ed for The Atlantic at the time that “our fellow citizens are not the enemy, and must never become so.”
In tacit criticism of the president, Esper called the event a “photo-op” and said he hadn’t realized it was going to take place.
Trump has had a tumultuous relationship with military leaders since taking office. Retired General James Mattis abruptly resigned in December 2018 after the president announced plans to withdraw troops from Syria with little planning. Trump later nominated Patrick Shanahan, who withdrew from consideration in June 2019 after reports of a messy divorce years earlier surfaced.
More recently, Trump’s nominee for another top job at the Pentagon, Brigadier General Anthony Tata, foundered when his confirmation hearing was abruptly canceled and the White House withdrew his nomination. Tata had been dogged by controversy over his past remarks, including derogatory comments about Islam.
Esper’s tenure wasn’t significantly shorter than many of his predecessors. While Donald Rumsfeld and Robert Gates, combined, served more than 10 years in the role, most Pentagon chiefs in recent years have lasted fewer than two years. President Bill Clinton’s first secretary of defense, Les Aspin, served one year and two weeks in the position, the shortest since the Nixon administration.


fortune--2020-11-09--Oil prices surge on hopes that a vaccine will end lockdowns for good

Oil prices were rallying dramatically on Monday, as the prospect of a workable COVID-19 vaccine—and an end to stop-and-start lockdowns worldwide—appeared to spark hope that demand could recover from an unprecedented drop this year.
On early afternoon Monday, Brent was up 8.09% to $42.64/barrel, while the WTI contract was up 9.18% to $40.55/barrel. Refined product markets, including gasoline, heating oil, and gas oil were also all up at least 6.6%.
Those surges were tied not to a Biden victory for President of the United States—but to the announcement of the high success rate in trials for the Pfizer and BioNTech COVID-19 vaccine, which was announced before markets opened in the U.S.
Such a surge may be completely premature, but “in the eyes of traders, a vaccine will help ensure no future lockdowns are needed and will bring people back to the streets, allowing road and air transport to recover,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy in Oslo.
Lockdowns earlier this spring had a profound impact on oil demand, producing what the International Energy Agency (IEA) called a “black April,” with consumption down 29 million barrels per day compared with the previous year, as traffic slowed to a crawl worldwide and just a fraction of flights continued.
This autumn, as cases have been rising and much of Europe has plunged back into lockdown, even the prospect of a high-stakes presidential election failed to have much of an impact on oil prices as the focus remained squarely on the impact of the pandemic.
Last month, the IEA declared that oil demand will be down an estimated 8.7 million barrels per day this year, compared with 2020.
It’s not just oil that has been hit. All forms of energy, including renewable solar and wind, saw demand fall owing to the transformation in how everyday people live their lives, particularly during the first shock in the spring. But oil has been particularly affected, because it is so reliant on demand from vehicle, aviation, and shipping traffic for consumption, areas where—electric cars notwithstanding—it faces almost no competition from other energy sources, whether coal or solar.
Of course, the prospect of a renewed demand for oil is still resting on several unknowns, including the full picture of the vaccine’s effectiveness, as even optimistic infectious disease experts have warned. And questions remain for even a successful vaccine on how and when it will be administered—raising the odds that there could be a sharp pullback when the excitement has worn off.
Meanwhile, a Biden administration represents a starkly different future on several fronts. The President-elect has pledged to reenter the Paris Agreement and pursue net-zero emissions by 2050. It remains unclear just how much political leverage Biden will have to pursue those policies if the Republican Party retains control of the Senate.
Instead, a looming vaccine may represent a medium-term chance to test whether daily habits and consumption have now changed for good. From flexible working arrangements and less air travel, to a hit to incomes from the economic crisis, to a commitment by many businesses to power operations largely from renewable sources, some analysts think several of these shifts could be here to stay. Even oil and gas companies have warned of that possibility. There is a growing consensus that oil demand could plateau, or even begin to decrease permanently, by the 2030s. Under the best of circumstances, 2021 may be the year to find out.


fortune--2020-11-09--Plant-based ‘McPlant’ burger launching at McDonald’s

McDonald’s—home of the iconic Big Mac and Quarter Pounder—announced a new burger today.
This one, however, will be made of plants.
The company said during its investor update that it will be rolling out a line of plant-based products. The new “platform” will be called McPlant, and the company said it will begin testing a McPlant burger in some markets next year. It will be served on a sesame seed bun with classic toppings, the company said.
“In the future, McPlant could extend across a line of plant-based products including burgers, chicken-substitutes, and breakfast sandwiches,” Ian Borden, president of international at McDonald’s, said during the update. “When customers are ready for it, we are ready for them.”
McDonald’s CEO Chris Kempczinski said McPlant would become a core menu option, and it would be left to regional markets to decide if customer demand was there for it.
McDonald’s tested a burger made with Beyond Meat’s plant-based meat in Canada last year. McDonald’s, however, did not specify which suppliers it would use globally for its new platform. Beyond Meat’s share price at one point dropped more than 8% on the news this morning.
Beyond Meat competitor Impossible Foods said last year that it had stopped vying for McDonald’s business because it could not produce enough product to partner with the fast food giant.
McDonald’s announced a new strategy more broadly today, which includes faster drive-thrus, a new chicken sandwich, and a points-based loyalty program.


fortune--2020-11-09--Why Vans and North Face owner VF Corp. is paying $2.1 billion for Supreme

VF Corp., a 121-year-old maker of apparel and footwear, announced a transformative deal on Monday to buy the Supreme brand, a move that will give the company a significant stake in the booming streetwear market and continue a yearslong reinvention of its portfolio away from fading brands.
The company, which also owns Vans and the North Face, is paying $2.1 billion in cash for Supreme, its biggest acquisition since 2011 when it bought boot brand Timberland. VF is buying Supreme from private equity firms Carlyle Group and Goode Partners. The company is renowned for rehabilitating brands and enjoys enormous clout with suppliers and retail landlords because of its size.
In Supreme, which VF thinks it can build from $500 million a year in revenues into a billion-dollar business within a few years, VF is getting a brand that enjoys a cult following among the younger customers it covets. Supreme has also made products featuring older pop culture icons like Kermit the Frog, expanding its appeal across generations, and collaborates just as easily with luxury brands as it does with mid-tier ones.
What’s more, Supreme has already done tie-ups with Vans—another brand with streetwear and skateboard cred—the North Face, and Timberland, so it is a known quantity to VF. Investors love the deal, too: VF shares rose 14% on Monday morning.
VF’s secret sauce with acquisitions has long been to keep brands’ management and identity separate from other labels in its portfolio rather than chase illusory synergies. Supreme, launched in 1994 in New York, will remain based in the city, and founder James Jebbia will keep creative control. The North Face is based in San Francisco, while parent company VF is based in Denver.
VF CEO Steve Rendle said of the company’s biggest deal in his three years at the helm that it offers “validation of our vision and strategy to further evolve our portfolio of brands” focused on newer apparel and footwear brands.
In addition, at a time when many top brands are eschewing the wholesale channel in favor of their own stores and website, Supreme gets more than 60% of its revenue by selling directly to customers, a key M&A criteria for VF in recent years and something VF wants to see its other brands do more of too. Another way Supreme will refresh VF: Supreme releases new products at a much faster clip—often weekly—than most apparel brands. The hope is that this can instill a faster metabolism across VF’s brands.
In recent years, as VF has looked to reinvent itself, it has been more focused on shedding brands and very deliberate in the ones it acquires. (VF is named for Vanity Fair, a lingerie brand it sold off in 2007.) Since 2011, the $10 billion-a-year company has bought six brands, while selling off 16, including Lee, Wrangler, Majestic (sports team apparel), and 7 for All Mankind.


fortune--2020-11-09--SoftBank Vision Fund 2 is open for business

This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox.
The SoftBank Vision Fund is most certainly back in the black, according to the Japanese telecom giant during its Monday earnings call.
After missteps last year such as WeWork, SoftBank said its 83 Vision Fund 1 investments are now valued at $1.4 billion more than their cost.
And while Vision Fund 2 struggled last year to raise outside funding, SoftBank emphasized that the smaller second fund has had a substantial gain, in part after a single IPO. Riding on the back of Ke Holdings, a Chinese online property platform that listed in the U.S. in August, Vision Fund 2 was valued at $7.6 billion compared to a cost of $2.6 billion.
That’s significant: The second Vision Fund is held up only by SoftBank’s own capital. And should new investors want to put their capital into the fund and its new strategy as it seeks more modest bets, CEO Masayoshi Son said the fund is always open to outside investors.
A clear comparison of the Vision Fund to its past operations though is somewhat more difficult than before, as the firm decided to forego disclosures related to operating profits or losses earlier this year.
But SoftBank’s financials reveal a surprisingly quick comeback for the company: It posted a profit of over $6 billion in the quarter ending in September as markets rose, after a stunning loss in 2019. Firm-wide attempts to bring its share value back in line with those of its assets, including the sale of part of its hefty stake in Chinese e-commerce giant Alibaba, have played a big role.
Not every bet has worked out, however. The company also recorded an investment loss of about $1.3 billion from “investment in listed stock” and other derivatives in the six months ending September.
Also of note: As activist investor Elliott Management has pressured the company to bolster corporate governance with a higher proportion of outside directors, four internal directors resigned from the board. Those names are SoftBank COO Marcelo Claure, Chief Strategy Officer Katsunori Sago, and Vision Fund CEO Rajeev Misra. The head of Saudi Arabia’s Public Investment Fund, Yasir O. AI-Rumayyan, also stepped down.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Pony.ai, a Fremont, Calif.-based developer of self-driving cars, raised $267 million in funding, valuing it at over $5.3 billion. TIP led the round and was joined by investors including joined by investors including Fidelity China Special Situations PLC, 5Y Capital, ClearVue Partners and Eight Roads.
- VIPThink, a Chinese edtech platform also known as Wandou Siwei, raised $180 million in Series C funding. SoftBank Vision Fund 2 led the round and was joined by investors including Sinovation Ventures, New Oriental, DCM, and Enlight Growth Partners. Read more.
- Congenica, a Cambridge, U.K.-based maker of rapid analyses of complex genomic data, raised $50 million in Series C funding. Tencent and Legal & General co-led the round and were joined by investors including Xeraya, Puhua Capital and IDO Investments.
- Apollomics, a Foster City, Calif.-based biopharmaceutical company focused on oncology and incubated by OrbiMed Asia, raised $124.2 million in Series C funding. Ping An Capital led the round. Read more.
- Yuntongxun, a Beijing-based cloud communication service provider, raised $120 million in Series F funding. Capital Venture Investment Fund led the round. Read more.
- Eko, an Oakland, Calif.-based cardiopulmonary digital health company, raised $65 million in Series C funding. Highland Capital Partners and Questa Capital led the round and were joined by investors including Artis Ventures, DigiTx Partners, NTTVC, and 3M Ventures.
- Mind Foundry, an Oxford, U.K.-based A.I. company spun out of the University of Oxford’s Machine Learning Research Group, raised $13.6 million in Series A funding. Aioi Nissay Dowa Insurance Co. led the round and was joined by investors including Parkwalk Advisors, Oxford Sciences Innovation, the University of Oxford, and the Oxford Technology and Innovations EIS Fund.
- Slintel, a Mountainview, Calif.-based platform determining when potential b2b clients are buying, and what, raised $4.2million. Accel led the round and was joined by investors including Sequoia Capital India and Stellaris Ventures.
PRIVATE EQUITY
- The Carlyle Group agreed to acquire Japan Asia Group, a Japan-based maker of environmental solutions, for ¥37 billion ($357 million).
- The Carlyle Group acquired a majority stake in Manna Pro Products, a St. Louis-based maker of specialty pet care products, from Morgan Stanley Capital Partners. Financial terms weren't disclosed.
- Clayton Dubilier & Rice and Triton Partners are among the firms considering an acquisition of Bilfinger SE, a Germany-based industrial services provider, per Bloomberg citing sources. Read more.
- Huntsworth, a portfolio company of Clayton, Dubilier & Rice, agreed to acquire Nucleus Global, a London-based medical marketing and communications firm. Financial terms weren't disclosed.
- New Mountain Capital invested in HealthComp Holding Company, a Fresno, Calif.-based administrator of healthcare benefits for self-funded employers. Financial terms weren't disclosed.
- Pacific Defense acquired Spear Research, a Nashua, N.H.-based national defense tech company. Financial terms weren't disclosed.
- Priority Power Management, backed by Ara Capital Partners, acquired Texas Power Consultants, a Tyler, Texas-based energy advisory and consulting firm. Financial terms weren't disclosed.
- Wheel Pros, backed by Clearlake Capital, acquired the assets of Performance Replicas, a distributor of replica wheels. Financial terms were not disclosed.
EXITS
- PAI Partners agreed to acquire a majority stake in Winterbotham Darby, a supplier of chilled foods to U.K. supermarket chains, from Equistone Partners Europe. Financial terms weren't disclosed.
- Endless acquired a majority stake in Hovis, a U.K.-based bakery brand, from the The Gores Group. Financial terms weren't disclosed. Read more.
- Brown & Brown (NYSE:BRO) acquired CoverHound, a San Francisco based insurance policy marketplace for individuals and small businesses that is also behind CyberPolicy. CoverHound was backed by investors including Chubb, Core Innovation Capital, and American Family Ventures. Financial terms weren't disclosed.
OTHERS
- Traton, Volkswagen AG's truck unit, agreed to acquire the stake it does not own in Navistar International, a U.S.-based truck maker, for $3.7 billion.
- Novo Nordisk agreed to acquire Emisphere Technologies, a Roseland, N.J.-based developer of an treatments that can be orally taken, for $1.8 billion. Read more.
- Walmart said it will sell its retail operations in Argentina to Grupo de Narváez, a South American supermarket chain operator, taking a non-cash loss of about $1 billion. Read more.
- Take-Two Interactive Software (Nasdaq: TTWO) offered to acquire Codemasters Group Holdings (LON: CDM), a U.K.-based videogame developer, valuing it at about 739.2 million pounds ($973 million). Read more.
- Apple and Sony Music Entertainment have each held talks about potentially acquiring Wondery, a podcasting producer backed by Greycroft and Lerer Hippeau. Wondery is seeking a valuation of as much as $400 million . Read more.
- Descartes Systems Group (Nasdaq:DSGX) acquired ShipTrack, a Canadian e-commerce final-mile tracking solution. Financial terms weren't disclosed.
IPO
- SUSE, a German enterprise software developer, is weighing an IPO for next year that could value it at €5 billion ($5.9 billion). EQT backs the firm. Read more.
SPAC
- Paysafe Group, a London-based payments group, is weighing an IPO or a combination with a blank check company, including with one backed by Bill Foley, per Bloomberg. Blackstone Group and CVC Capital Partners back Paysafe. A deal could value the firm at $10 billion including debt. Read more.
- Roman DBDR Tech Acquisition, a blank check company targeting the technology, media, and telecom sectors, raised $220 million.
F+FS
- Graham Partners closed its fifth fund with $937 million in commitments.


fortune--2020-11-09--Stocks rise on game-changing news: A new President and a possible vaccine

Investors are optimistic Monday morning as stocks soared on news that Joe Biden will become the 46th President of the United States and that a late-stage Pfizer vaccine might soon be ready for use.
The S&P 500 is up roughly 3% in morning trading, with the Dow soaring over 4% as many of the more beaten-down names jumped on positive developments for a potential vaccine.
The stock gains Monday come after a strong week for markets, as those like Michael Reynolds, investment strategy officer at Glenmede Trust, argue, “In a sense, the market has already reacted to what it’s seen as the most likely outcome” of the election.
Indeed, despite a nail-biting four days awaiting the election outcome, markets soared roughly 7%—with the S&P 500 just shy of its all-time high—as investors priced in a Biden victory and a split Congress.
Then pharma giant Pfizer and German firm BioNTech announced early Monday that their coronavirus vaccine, currently in late-stage trials, prevented 90% of infections in participants—sending global markets and U.S. stocks (save for stay-at-home names) higher.
If it turns out to be legitimate, the Pfizer vaccine could be a “game changer,” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said in a note Monday, and “to the extent that consumer spending and economic activity have been suppressed by concerns of the increasing COVID cases, anything that can reverse that trend will be welcomed by the markets.”
An election ‘sweet spot’
But apart from the encouraging early report on the vaccine, the election result over the weekend finally gives investors some certainty about the next administration following a tumultuous year, an ongoing pandemic, and a contentious election season that saw stocks fall and soar from one week to the next.
“We’re seeing some of those risks resolve, politically certainly, and that’s meaningful,” Brad McMillan, chief investment officer for Commonwealth Financial Network, tells Fortune. “Political uncertainty is only going to ratchet down as we move forward, once we get through the Georgia elections, [and] that’s going to help,” he adds, referring to the runoff elections for two Senate seats in Georgia.
Though President-elect Biden is projected to secure the White House handily, Democrats in the Senate haven’t had such decisive victories. The likelihood of a Blue Wave, or a Democrat-controlled House and Senate, has dimmed in recent days, though the Senate races are tight, and Democrats could still secure the necessary seats to control the chamber in January.
But for markets a split Congress scenario would be the “sweet spot,” McMillan says.
Indeed, “the legislative environment, what can actually get done in Washington, matters more” than the President for investors, LPL Financial’s Jeff Buchbinder recently told Fortune. A split Congress would likely quell some of the bigger policy changes President-elect Biden has proposed and “has major implications for tax policy, which is probably the No. 1 market issue with regard to the election,” Buchbinder argued.
Even if Democrats are able to eke out enough seats to hold a 50/50 split with Vice President–elect Kamala Harris holding the tiebreaker vote, those like Reynolds aren’t convinced it will make the Democrats’ policy proposals all that much easier to pass with such slim margins.
“[The Democrats would] really have to thread the needle if they’re going to try to get anything through,” notes Reynolds. “It’s a difficult environment to maneuver some of these very large changes Biden has been putting forward, whether it’s changes to the Affordable Care Act or the tax increases they’ve been talking about.”
In other words? Investors are likely already breathing a sigh of relief that more aggressive policies, in their view, will be avoided.
For now, strategists say, all eyes on the Street are turning to another fiscal stimulus package to boost the recovery further and any ongoing vaccine news that could signal turning the corner on the coronavirus. Though it’s possible another stimulus package could come during the lame-duck session before the next Congress sits in January, some economists find it unlikely.
Glenmede’s Reynolds argues, “The way things are going now, we perhaps get a smaller package that sort of is a stopgap measure to make sure, in the short run, people are getting what they need with enhanced unemployment insurance, or if they do another round of stimulus checks.”
But should further evidence of a successful vaccine hit the wires, those like Brian Price, head of investment management for Commonwealth Financial Network, note the Pfizer news “is coming at a time when the number of daily cases is increasing at a worrisome rate, so any positive news that could potentially reverse these trends will be viewed favorably by the market.”
Indeed, Wall Street firms like UBS are now looking beyond the race for the White House: “Election Day is behind us, but corporate earnings can still improve with further stimulus, an end to COVID-19, and continued economic recovery. Fiscal stimulus should be supportive even if it is less than expected, and we still expect a vaccine to become widely available by the second quarter of next year,” strategists at UBS wrote in a note Friday.
In the meantime, one thing investors can likely expect with a Biden administration? Less Twitter noise roiling the stock market. Says Reynolds: “A little bit more stability in terms of executive policy is something that will be a positive in a Biden administration.”


fortune--2020-11-09--Web inventor Tim Berners-Lee’s Solid data-privacy project enters the real world

Major British institutions such as the BBC and the National Health Service (NHS) are among the early adopters of Solid, a decentralized-data project that is being spearheaded by web inventor Tim Berners-Lee and that announced its first version for companies and organizations on Monday.
Solid is intended to “evolve the web in order to restore balance,” Berners-Lee said in 2018, when he unveiled the project as a reaction against the takeover of online life by data-hungry Big Tech firms.
It’s a platform that lets people store their own personal data in “pods”—or “personal online data stores.” If an online application, such as a social network or shopping site, wants to access the data, they can do so with the user’s permission.
Ultimately, the aim of the Solid project is to remove the tradeoff between privacy and the functionality that can be gained by combining data from different sources—as companies commonly do without strong privacy protections, earning scrutiny from data protection regulators in Europe and elsewhere.
‘There had to be a better way’
On Monday, Berners-Lee and his Boston-based Inrupt startup announced the release of the first enterprise version of Solid, promising the technology “will fundamentally change how organizations connect people with their data and create value together.”
“Today, business transformation is hampered by different parts of one’s life being managed by different silos, each of which looks after one vertical slice of life, but where the users and teams can’t get the insight from connecting that data,” wrote Berners-Lee, Inrupt’s chief technology officer, in a blog post. “Meanwhile, that data is exploited by the silo in question, leading to increasing, very reasonable, public skepticism about how personal data is being misused. That in turn has led to increasingly complex data regulations. There had to be a better way. The Solid architecture provides that better way.”
Solid’s various early adopters have been using it for very different things. For example, the BBC has been working on a way to improve online viewers’ media recommendations, based on their history using other commercial streaming services.
The NHS, meanwhile, is building an application that lets doctors and caregivers access data from—and add data to—patients’ pods. Patients can also upload data from lifestyle apps so it can be combined with the medical data, Berners-Lee told the Financial Times.
The Flanders region of Belgium has also been building a Solid-connected service called My Citizen Profile that lets people control the data they share with local government and companies. This gives citizens a way to make sure everyone has their up-to-date contact details, for example, and to reuse their own data that might otherwise be locked away in some government department’s database.
Network effects
According to Berners-Lee, these early deployments will “kick off the network effect necessary to ensure the benefits of Solid will be appreciated on a massive scale.
“Once users have a Solid pod, the data there can be extended, linked, and repurposed in valuable new ways,” he wrote. “And Solid’s growing community of developers can…rest assured that their apps will benefit from the widespread adoption of reliable Solid pods, already populated with valuable data that users are empowered to share.”
The history of the web is littered with open-source attempts at decentralization, few of which have gained prominence: Facebook was never bothered by Diaspora, nor was Twitter by Mastodon, though blockchain technology is doing pretty well for itself.
Solid, however, has a lot going for it, particularly regarding the leadership of Inrupt, the company that is trying to make the open-source project a commercial success.
Not only is the highly esteemed Berners-Lee the figurehead for Inrupt, but the company also has cybersecurity guru Bruce Schneier as its chief of security architecture. Its CEO, John Bruce, used to head up cybersecurity firm Resilient, which sold to IBM in 2016. Glasswing Ventures founder Rudina Seseri is a director.
As for whether the network effect touted by Berners-Lee will be enough to create a future where people genuinely have more control over their own data than they do in this era of Big Tech, time will tell.


fortune--2020-11-09--Infectious disease experts are very excited about the Pfizer and BioNTech vaccine

As news broke of a successful trial of Pfizer and BioNTech’s vaccine on Monday morning, the reaction of epidemiologists and virologists came pouring in. Reader, they’re excited.
Always a cautious bunch, scientists—so far, reaction skews European- and U.K.-heavy as the U.S. wakes up to the news—measured their words, but some, like Cambridge University’s Gordon Dougan, declared the results could be a “game changer” for life under COVID-19.
Cautious but good news on the first efficacy data for a COVID-19 vaccine. Can expect more news on other COVID vaccines shortly. It will then be about how they are used but a safe 90% efficacious vaccine is a game changer. — Professor Gordon Dougan (@GordonDougan1) November 9, 2020
On Monday, the two companies said trials had shown that their vaccine prevented more than 90% of infections in a trial that spanned thousands. The reaction has been swift. Politicians—including President-elect Joe Biden—have already reacted, while the stock market has offered a swift turnaround: punishing so-called pandemic stocks like Zoom and Amazon, while giving a boost to seemingly everyone else.
That may be, scientifically, jumping the gun. But epidemiologists and virologists from top universities and research centers reinforced that this is, indeed, a big deal.
They weren’t alone: On Monday, the Washington Post reported that Dr. Anthony Fauci had said that “the results are really quite good. I mean extraordinary.” Fauci also said the results could also bode well for a vaccine in development by Moderna.
“This is very encouraging news—and provides grounds for optimism that other vaccines will also show benefits,” said Fiona Watt, executive chair of the U.K.’s Medical Research Council, in a statement this morning.
Watt also pointed to the apparent diversity of the trial, and the fact that it was undertaken by volunteers.
“What really strikes me though is the fantastic contribution of the many volunteers who have taken part in the trial, including over 40% from diverse backgrounds. Without their altruism the trial could not have gone ahead,” she said.
Most scientists, of course, advocated for some caution: Full details of the trials have not yet been made public, and with so many theories flying about COVID-19 and vaccine production, that transparency is key for many to say they will be fully confident about the scale of this breakthrough.
Eleanor Riley, professor of immunology and infectious disease at the University of Edinburgh, said that the results at face value represent “exceptional good news” but also noted in a statement that while the companies mention that the participants were ethnically diverse, they did not clarify that the study accounts for age.
“If a vaccine is to reduce severe disease and death, and thus enable the population at large to return to their normal day-to-day lives, it will need to be effective in older and elderly members of our society. We also know nothing yet about the severity of cases that were seen in the trial, whether infection or infectiousness was prevented, or how long the immunity is expected to last,” she noted.
However, she added, “we have reason to be cautiously optimistic.”
Others pointed to the scale of the vaccinations in the U.S. alone, with Jonathan Reiner, professor of medicine and surgery at George Washington University, noting that it would equate to 520 million inoculations.
If the vaccine is truly 90% effective we will need to vaccinate at least 80% of the US (260 million people) twice. (520 million inoculations). In our best years with influenza we administer about 160 million doses. This will be a massive undertaking. We’re up to the challenge. — Jonathan Reiner (@JReinerMD) November 9, 2020
There’s also the difficulty, if a vaccine is successful, of getting people to actually take it.
“There is growing concern about public attitudes towards COVID-19 vaccines, with increasing numbers of people expressing doubts as to whether they would receive a vaccine when ones becomes available,” said Andrew Preston, a researcher in microbial pathogenesis at the University of Bath. Tackling public concern over vaccine safety requires “full transparency,” he said.
But a successful vaccine would not have to be administered to the entire population. Herd immunity is usually achieved when at least 80% of the population has developed immunity to a virus.
Although some governments have flirted with the possibility of herd immunity through exposure, the possibility of reinfection and the high death rate have caused scientists to warn that such an approach wouldn’t be effective from early on in the pandemic. Instead, herd immunity would require a workable vaccine.
Great news on #SARSCoV2 #mRNA #vaccine front. If nothing else it means people can safely talk about #HerdImmunity without being pilloried 🤣. Will be intrigued to see actual data, especially protection in vulnerable groups. If it truly protects these people then #happy days! — Jonathan Ball (@JonathanKBall) November 9, 2020
But the feeling was, still, one of elation. Professor Stuart Neil, head of the infectious diseases department at King’s College London, tweeted, “At last some positive news!” He warned that more information was needed but said that “there is some light at the end of the tunnel.”
Meanwhile, Brian Ferguson, principal investigator at the Ferguson Lab at Cambridge University, declared on Twitter that it was “potentially a day to remember.”


fortune--2020-11-09--Why Apple is dumping Intel—and what we might get out of it

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
If the tech industry was an episode of The Great British Baking Show, this week would be chip week.
For its showstopper challenge, the judges would like Apple to make a new computer. It can be any size and shape you like, laptop or desktop, and you can use any materials you’d like. But it cannot have a central processor chip from Intel or AMD or anyone else. The chip must be an original design. Now, this is a showstopper challenge, so the judges are expecting a gorgeous creation with stunning looks, long battery life, and good performance. You have 24 hours (until it is revealed).
Now bake!
Kidding aside, the tech event of the week and perhaps the year is Apple’s Tuesday unveiling of its first Macintosh computers that use chips of its own design. The original Mac, back in 1984, ran on a Motorola processor. About a decade later, Apple switched to the PowerPC line, a joint venture with Moto and IBM. And about a decade after that, in 2006, came Macs with Intel processors, which have had a good long run.
But as with the prior transitions, one of the main reasons for Apple’s upcoming switch away from Intel is stagnation at the source.
Motorola’s 68000 processors in early Macs fell behind the chip trend of the 1990s: Known as reduced instruction set computing, or RISC, the big idea was to eliminate programming complexity, freeing the processor to work more quickly.
Then the problem with the PowerPC was that IBM had little interest in optimizing chips for laptops to make them run cool enough without big fans (Tim Cook once called it “the mother of all thermal challenges”).
Intel’s chips, sadly, have also fallen behind in multiple ways. Intel was years behind in shrinking a transistor from a scale of 14 nanometers to 10 nanometers, or about 1/10,000 the width of a human hair. Even now, not all Intel’s parts have moved to 10 nanometers, and the company says its switch to 7 nanometers is also running late. The delays have allowed rivals Samsung and Taiwan Semiconductor to leap ahead in chip manufacturing.
And Intel has long been behind in making low-power chips that run cooler for use in portable devices. That’s why Apple didn’t use Intel chips for the iPhone and the iPad (and nearly every other smartphone and tablet maker followed suit). That’s also a relevant concern for laptops.
When Apple switched to the PowerPC, Mac users got a tremendous increase in performance that enabled software to leap forward. When Apple switched to Intel, Mac users got a decent performance boost. But since the exact same chips were also used in Windows computers, a sneaky side benefit was Macs could suddenly run Windows programs more easily. That ignited one of the greatest increases in Mac sales (and market share) ever.
This time around, with Apple switching to chips of its own design using basic frameworks from ARM and manufactured by Taiwan Semiconductor, it’s unclear exactly what will be the most important benefit. It could be amazing performance. It could be extreme low-power usage. It could be something else that isn’t obvious.
But when Apple brings its showstopper up to the judging table tomorrow, I’m betting they will be awarded “star baker.”
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
NEWSWORTHY
Hold me accountable. Speaking of old Tim Cook quotes, the CEO's public explanation of Apple sales problems in November 2018 was not accurate, and now a judge is allowing a shareholder lawsuit over the comments to proceed. District Judge Yvonne Gonzalez Rogers, who is also hearing the Apple-Epic Games lawsuit, said it “strains credulity” to believe Cook didn't know about lagging sales in China when he said sales in China were not lagging. Apple had to cut its sales forecast weeks later, blaming the shortfall on China. Apple says shareholders were not defrauded.
In other problematic Apple news, the company suspended major Taiwanese supplier Pegatron amid reports of student worker and overtime violations that included falsified paperwork. Pegatron conceded it had problems and said it is taking quick action to correct the violations. In happier Apple news, YouTubers liked the iPhone Mini and iPhone Pro Max.
Vaccination recalibration. News out Monday morning that Pfizer has almost perfected a COVID-19 vaccine sent the stock market skyrocketing. Well, not the entire market. Many tech stocks that benefited from the pandemic plunged in pre-market trading. Peloton fell 15%, Zoom lost 14%, and Netflix and Shopify dropped.
Money money on my mind. Popular podcasts like Dirty John and Dr. Death have producer Wondery in the spotlight. Apple and Sony Music Entertainment are considering buying the startup for $300 million to $400 million, which would be the biggest deal yet for a podcaster, Bloomberg reports.
Filter patrol. Despite the best efforts of mice and men, election misinformation is running rampant on social media. Facebook, YouTube, and Twitter have tried to pull or post warning labels on the misleading posts and videos, but can't keep up, a tech policy expert at the nonpartisan Center for American Progress tells Fortune. Meanwhile, conservative-run Twitter clone Parler has become the most downloaded app in the country over the weekend (and sent a lot of traffic to my June piece "Parler is the new Twitter for conservatives. Here’s what you need to know").
Good egg makes good. AT&T added one of my favorite people to its board of directors. Seriously. Bill Kennard, who was chair of the Federal Communications Commission in the 1990s when I covered the agency, will replace Randall Stephens as chairman of the board of the troubled telecom giant in January. Kennard has also been ambassador to the European Union in the Obama administration and a managing director at the Carlyle Group.
First, you've gotta get mad. Debt collectors for the first time will be allowed to harass, sorry, I mean communicate, with consumers via voice mail, email, and text message under new rules from the Consumer Financial Protection Bureau issued on Friday. My bet is this statement from CFPB director Kathy Kraninger will not age well: "With this modernized debt collection rule, consumers will have greater control when communicating with debt collectors.”
FOOD FOR THOUGHT
As debate over the treatment of political content on social media rages on, Joan Donovan, director of the Technology and Social Change Research Project at Harvard Kennedy’s Shorenstein Center, has some ideas to make things better in an essay for the MIT Technology Review.
We need more transparency. Misinformation is not solely about the facts; it’s about who gets to say what the facts are. Fair content moderation decisions are key to public accountability.
Rather than hold on to technostalgia for a time when it wasn’t this bad, sometimes it is worth asking what it would take to uninvent social media, so that we can chart a course for the web we want—a web that promotes democracy, knowledge, care, and equity. Otherwise, every unexplained decision by tech companies about access to information potentially becomes fodder for conspiracists and, even worse, the foundation for overreaching governmental policy.
IN CASE YOU MISSED IT
What’s in a name? For Tesla’s Full Self Driving, it may be danger By David Z. Morris
Amidst an explosion in personal finance apps, this startup wants to bring back the spreadsheet By Brett Haensel
The Facebook ad boycott ended months ago. But some big companies continue the fight By Danielle Abril
China’s markets welcome homegrown tech—but Ant’s suspended IPO is a reminder of the risks By Grady McGregor
Why a Biden presidency won’t end the U.S.-China trade war By Eamon Barrett
To take control of your career, ask for what you want—directly and explicitly By Kara Goldin
Gift Guide: Books for everyone on your gift list By Rachel King
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
The events of last week's actual episode of the Great British Baking Show are too sad to discuss, especially while avoiding spoilers. So instead, please check out a diverting and lyrical essay I came across this weekend by Massachusetts writer Steve Edwards, as he time travels in his mind and ponders the seasonal comings and goings of the night-time chirping of crickets. Have a calm start to your week.


fortune--2020-11-09--McDonald’s responds to the pandemic with faster drive-thrus, loyalty points, and a new chicken sandw

McDonald’s responds to the pandemic with faster drive-thrus, loyalty points, and a new chicken sandwich

McDonald’s today announced a new growth strategy that’s designed for the fast food giant to capitalize on a consumer landscape radically altered by COVID-19.
“We think we have an opportunity to get aggressive, and that’s what we’re trying to do,” McDonald’s CEO Chris Kempczinski told Fortune in an exclusive interview. “We expect to be a winner in this.”
McDonald’s entered the pandemic well positioned to operate in an environment where diners are looking to minimize contact with others. Nearly 95% of McDonald’s U.S. restaurants have a drive-thru, and the company expects digital sales that come through its app, a kiosk, or via delivery to surpass $10 billion, or nearly 20% of its sales, across its top six markets this year. Kempczinski says these trends will only continue to gather steam.
“I do think that this idea of a contactless experience—one that I’m able to control for myself, one that I’m able to do as fast and as quickly as I want to—that’s something that will be enduring,” Kempczinski says. “Our expectation is we’re going to need to be living with the virus for a prolonged period of time.”
McDonald’s new holistic strategy, called Accelerating the Arches, is focused on not just the company’s food but how consumers will order it, with an emphasis on drive-thru, delivery, and digital (the “three Ds” in McDonald’s parlance). The company is bringing together these three channels in what it is calling MyMcDonald’s—an experience that includes elements like mobile ordering and digital menu boards and kiosks. It also incorporates a point-based loyalty program that the company will start piloting in Phoenix in the next few weeks.
Kempczinski says the company entered the pandemic in a healthy financial place, which helped it weather a 24% decline in same-store sales—an important industry metric—during the second quarter. But by the fall business had bounced back, and in September the company reported its best monthly performance in almost a decade.
After suspending guidance earlier this year for any outlook for the business, Kempczinski says the company is “now at a point where we can start talking with some good confidence” about what the future holds. Based on current conditions, McDonald’s expects mid-single-digit sales growth in 2021 (compared with 2019) and in 2022.
Kempczinski says several elements of McDonald’s new strategy were already underway before the pandemic, and that the company had been laying the groundwork by upgrading bandwidth and installing digital drive-thru menu boards. Last year the company acquired machine-learning startup Dynamic Yield to use A.I. to make order suggestions, and voice-activation startup Apprente to speed up time customers spend at the drive-thru.
McDonald’s says it has shaved 30 seconds off its drive-thru times over the past two years in its biggest markets, and Kempczinski says the goal is to make the McDonald’s experience even faster and more convenient. The company plans to test the likes of express drive-thru pickup lanes for digital orders and a restaurant concept that offers only drive-thru, delivery, and takeaway.
Kempczinski says that faster service is also answering a new emerging consumer need: “Convenience now has also evolved to encompass safety,” he says. “The idea of ‘The faster I can get in and out of a place, the safer it is.’”
Kempczinski told Fortune that smaller restaurants and those focused on dine-in will struggle through this period. “The idea of eating out is now blurring,” he says, with many consumers bringing what used to be an eating-out experience back to their homes—a practice that was previously dominated by pizza.
The company has also upped the speed of its service during the pandemic by simplifying its menu as customers opted for their familiar favorites. It plans to continue its focus on core products like Big Macs, Quarter Pounders, McNuggets, and fries, which make up about 70% of its menu. Kempczinski says the company is making small twists to certain items like its spicy line of McNuggets, which it launched in September, or offering products that don’t add a lot of complexity, such as new bakery items like apple fritters.
One exception is in the chicken category, which McDonald’s says is growing faster than beef. McDonald’s was only a bit player in the fast food chicken sandwich wars in 2019 and plans to introduce a new crispy sandwich early next year to up its game.
The company is also announcing a “refreshed purpose” that ranges from focusing on climate change to equity. The company says it will launch a new advertising campaign, called “Serving Here,” which highlights the company’s values.
The new emphasis on purpose comes as McDonald’s has faced a slew of major issues in the past 12 months that go beyond the pandemic. The company is locked in a legal battle with its former CEO, Steve Easterbrook, who the company alleges had multiple sexual relationships with employees. McDonald’s is also being sued by a group of Black franchisees who claim the company discriminated against them. And that is on top of ongoing criticism about fast food’s contribution to the obesity crisis in the U.S.
Kempczinski predicts a more challenged economic environment with increased unemployment rates as stimulus activity in the U.S. and Europe rolls off—something that, he says, “shielded the economy from the full impact of COVID. Making sure that we are very focused on providing great value, which is one of our strengths,” he notes, “is going to be critical.”
For more from Kempczinski, listen to this week’s episode of the Reinvent podcast.


fortune--2020-11-09--McDonald’s CEO says the fast food giant has ‘an opportunity to get aggressive’

The restaurant industry has been decimated by COVID-19, with one of the sector’s major trade organizations reporting in September that 100,000 establishments had already shut down permanently or long term over the past six months.
However, the restaurant industry is not a monolith, and there’s one kind of eatery that’s already bouncing back: fast food, which is set up to cater to the strange consumer demands of this COVID-19 era. It may even come out of this period stronger than before.
“We think we have an opportunity to get aggressive, and that’s what we’re trying to do,” says McDonald’s CEO Chris Kempczinski.
Kempczinski spoke with Fortune for this week’s episode of the Reinvent podcast in an exclusive interview as McDonald’s announces today the rollout of a new strategy designed to capitalize on a consumer landscape remade by COVID-19.
Kempczinski lays out a vision in which consumers are able to control their entire McDonald’s experience digitally: choosing the nearest location; having the restaurant anticipate orders or make suggestions. And then, once customers are on-site, McDonald’s would know they have arrived, alerting them to the fastest way to pick up their orders—say drive-thru versus curbside. Kempczinski says customers would get the same sort of experience if they opted for delivery.
This model is likely to be particularly appealing to consumers during the pandemic, when they are trying to limit interaction with others. “When you think about the elements of what will be successful to run a restaurant business in the future, certainly having a contactless experience is going to be one part that’s a lasting change out of this,” Kempczinski says.
McDonald’s has an advantage here because it dominates at the drive-thru. Now the company is trying to remove pain points and make the process even faster. Kempczinski gave the example of perhaps giving loyalty members their own drive-thru lane. “There is no end to the innovations that we can be doing in drive-thru,” he says.
McDonald’s has also sped up service through the simple act of taking items off the menu—something made easier during COVID-19 as customers return to its core products like Quarter Pounders and Big Macs.
Says Kempczinski: “What we saw from the customer here was, ‘I’m not looking to go try the greatest new truffle-mushroom-onion burger. I want familiar favorites that I can count on and depend on.’”
Kempczinski argues that with speed comes another benefit customers are looking for right now: safety. “This goes to a fundamental need, which is, ‘I want to feel safe. And the faster I can get back home, I feel better about that,’” he says. “Customers surprisingly have been very forgiving about losing some of their familiar favorites. We haven’t seen a lot of complaints.”
Prior to COVID-19, McDonald’s had gone through a period where it was fighting to stay relevant and compete with fast-casual restaurants (think Panera and Chipotle) and better burger concepts like Shake Shack.
Industry analyst Aaron Allen says McDonald’s then “woke up and realized that the business changed more outside the four walls than they had inside the business over the previous five years.” That led them to a “modernization strategy that really has helped propel them ahead competitively.”
While McDonald’s has spent a lot of time and money sprucing up the inside of its stores to compete with higher-end chains, this is a moment when in many cases restaurants wish they had the infrastructure and technology of McDonald’s to meet the demands of the COVID-era consumer.
“Certainly the landscape of what dining out looks like and what the restaurant industry looks like is going to be very different,” Kempczinski says. Expect “lasting changes on the experiential side of what it means to eat out at a restaurant.”


fortune--2020-11-09--Kamala Harris makes history

Kamala Harris makes history

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! There’s a new highest-ranking female CEO in the Fortune 500, Pfizer makes progress on a COVID-19 vaccine, and the United States elects its first female Vice President. Have a historic Monday.
– History in the making. What a weekend, right?
I’m writing to you from New York City, where voters took to the streets on Saturday to celebrate Joe Biden’s victory in the U.S. presidential election—and, of course, history being made. Kamala Harris, the California senator, is now Vice President-elect of the United States, the first woman, first Black woman, and first Indian-American woman to ever serve in the nation’s second-highest office.
Regardless of your politics, it’s a historic moment for the United States, and one that has been a long time coming—whether you’re counting the country’s 244-year history or the interminable week of waiting for election results.
Harris’s ascension to the White House is especially meaningful to women of color—and, specifically, to Black women, the voters who, yet again, proved so crucial in getting her there; 91% of Black women voters chose the Biden-Harris ticket.
I spent much of Sunday talking to Black female voters (some of whom you may have seen in the Broadsheet before) about what the past few days have been like for them. Jotaka Eaddy, the founder and CEO of Full Circle Strategies, told me that the moment she saw Harris take the stage in her white suit for her acceptance speech in Wilmington, Delaware on Saturday night was one of “pure joy.” Others, like Washington, D.C. resident Ashley Hicks (who is an Alpha Kappa Alpha sorority sister alongside the incoming VP), are concerned that the outpouring of praise for Black women who “put democracy on our backs” will fade the next time they’re seeking justice.
But these two stories—the importance of Black women to the Democratic Party and the historic nature of Harris’s win—intersect. “This showed the collective power Black women have to help each other rise,” Minda Harts, the author of The Memo: What Women of Color Need to Know to Secure a Seat at the Table, told me yesterday. “When we collaborate, we can change history.”
Watching Harris take the stage as the nation’s Vice President-elect on Saturday, Eaddy says she reflected on the history that brought us to this moment:
“I thought about the rich legacy of Black women that made this moment possible that are no longer with us. I thought about the Black women of Delta Sigma Theta who marched for suffrage in 1913. I thought about Fannie Lou Hamer. I thought about Shirley Chisholm, and how she was mistreated. I thought about all the Black women that have been organizing together—you just are grateful to be able to witness such a moment in your lifetime. … You have those moments, and then you know there’s work to do.”
You can read my full story here. And for more on the women who paved the way for Harris’s historic victory, from the suffragists who ran for office before they could vote to Chisholm and her bold 1972 presidential run to Hillary Clinton, read this piece.
One thing’s for certain: we at the Broadsheet are looking forward to following what our first Madam Vice President does next.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- Power moves. Now that you might be able to digest some more news outside of politics, take note of this new CEO appointment: Karen Lynch, the former CEO of Aetna, will step into the chief executive role at CVS Health, which acquired Aetna in 2018. Lynch will be the highest-ranking female CEO in the Fortune 500, a distinction that previously belonged to GM CEO Mary Barra. Fortune
- Progress at Pfizer. On Monday morning, some good news: Pfizer has announced that the COVID-19 vaccine the pharma giant has in trials is "90% effective in preventing the disease." "This is a historical moment,” says Kathrin Jansen, Pfizer SVP and head of vaccine research and development. New York Times
- White House counsel. While President Trump has not yet conceded to President-elect Joe Biden, First Lady Melania Trump has reportedly advised her husband to accept his loss in the presidential election. CNN
- Interesting interview. This wide-ranging Rep. Alexandria Ocasio-Cortez interview has been widely shared over the past few days. AOC offers her perspective on the future of the Democratic Party, from the progressive/moderate divide to how campaigns run their digital operations. New York Times
MOVERS AND SHAKERS: WME hired former TikTok global talent acquisition leader Gisselle Ruiz as head of inclusion.
IN CASE YOU MISSED IT
- Influential adviser. Who might guide the Biden administration's economic policy over the next four years? One likely influential adviser is Heather Boushey, CEO of the Washington Center for Equitable Growth, which aims to tackle inequality through economic growth. Fortune
- The world's watching. World leaders, from European Commission President Ursula von der Leyen to Paris Mayor Anne Hidalgo, extended their congratulations to President-elect Joe Biden and Vice President-elect Kamala Harris. See those global reactions here: Fortune
- Power couple. One more notable race from last week's elections is the Arizona Senate seat that flipped from GOP Sen. Martha McSally to Democrat Mark Kelly. Kelly is the husband of former Rep. Gabby Giffords, the Arizona congresswoman who was shot in the head in 2011 and is now an activist against gun violence. CNN
- Georgia goes blue. Still want to know more about how Stacey Abrams and other activists helped flip Georgia? Read about Abrams's longstanding strategy in the state, the legacy of her 2018 race for governor, and the role of anti-voter suppression work in increasing Black turnout: Fortune
ON MY RADAR
Nithya Raman unseats L.A. city councilman David Ryu Los Angeles Times
Why I love women who wallop New York Times
Johnny Depp forced to exit Fantastic Beasts franchise Variety
PARTING WORDS
"I can't explain how fundamentally life-changing this is for every little Black and brown girl in this country."
-Valyncia Saunders, an attorney and Alpha Kappa Alpha sorority sister, about Kamala Harris


fortune--2020-11-09--Pfizer’s blockbuster vaccine report flips the markets on their head—pandemic stocks sink, nearly eve

Pfizer’s blockbuster vaccine report flips the markets on their head—pandemic stocks sink, nearly everything else soars

European markets and U.S. futures soared Monday on the announcement by Pfizer and its partner, BioNTech, that their candidate COVID-19 vaccine has proved much more effective than they hoped.
The pharma firms revealed preliminary results from the third and final phase of the vaccine’s trials, which are still ongoing, showing it prevented more than 90% of infections in participants. That’s way above the 60% to 70% range Pfizer and BioNTech expected to see.
The effect on the markets was giddying. Many of the sectors hardest hit by the pandemic—airlines, energy, and financials, to name a few—rocketed higher. Crude prices took off, too. The stay-at-home stocks, meanwhile, cratered, as did gold.
In Europe, currently in the throes of a devastating second wave of the coronavirus pandemic, the Stoxx 600 shot up by 5%, and France’s CAC 40 by more than 7%. Germany’s DAX rose around 6%, and London’s FTSE 100 by more than 5%. U.S. futures reached similar heights, with Dow futures up more than 5% and S&P 500 futures up over 4%.
Pfizer’s and BioNTech’s share prices were up more than 6% and 18% respectively, and rival Moderna—whose own candidate vaccine uses similar technology—also rose more than 5%. Shares in AstraZeneca, which is also developing a candidate vaccine, fell 2%.
Airlines’ share prices took off—EasyJet was up as much as 26%, Lufthansa by 20%, and Ryanair by 15%. British Airways owner IAG was up an astonishing 30%. Faced with the prospect of transport recovering from the pandemic, Brent crude was up 8% and WTI nearly 9%. Auto stocks, too, were cruising—Volkswagen was up 6%, Daimler climbed almost 6%, and General Motors was up 3.5%. Cruise ship operator, Carnival, jumped nearly 30% at one point.
Not all market participants were having a great day, though.
In premarket trading, Zoom, the videoconferencing company whose service became a household name during the pandemic, saw its shares fall as much as 20%, with Peloton off 14%. Amazon was down over 3%, as was Shopify.
The fine print
Pfizer and BioNTech’s preliminary results come with some big warnings that should temper everyone’s excitement. The companies still don’t know if their two-dose vaccine prevents the kind of severe cases that land COVID-19 carriers in the hospital, nor do they know if the vaccine prevents people from carrying the virus asymptomatically.
What’s more, the vaccine causes side effects—aches and fevers—that may be worse than those that are sometimes suffered by people taking Pfizer’s pneumonia or flu vaccines, Pfizer vaccine research chief William Gruber told Stat.
However, Gruber characterized the preliminary results as “extraordinary.”
“This really bodes well for us being able to get a handle on the epidemic and get us out of this situation,” he told the publication.
If all goes well in the rest of the trial, and with regulators, Pfizer and BioNTech’s vaccine could be in circulation before the end of the year, though only in the tens of millions of doses, likely limiting distribution to health care workers and others who need it most critically.
“This news made me smile from ear to ear. It is a relief to see such positive results on this vaccine and bodes well for COVID-19 vaccines in general,” said Peter Horby, an infectious diseases professor at the University of Oxford, in a statement.
“Of course we need to see more detail and await the final results, and there is a long long way to go before vaccines will start to make a real difference. But this feels to me like a watershed moment.”


fortune--2020-11-10--Europe lays out Amazon antitrust charges, targeting its use of merchants’ data

Europe’s antitrust regulators have been officially looking into Amazon’s dual role as marketplace owner and marketplace participant since mid-2019, and it turns out they don’t like what they found.
On Tuesday, EU competition chief Margrethe Vestager—best known for hammering Google with $9 billion in antitrust fines—sent a statement of objections to Amazon over its alleged misuse of the data it holds on third-party merchants using its platform.
That’s a formal step on the road to an antitrust decision that could potentially include a fine of up to 10% of Amazon’s global revenues, plus an order to stop breaking the rules. It’s now up to Amazon to convince the European Commission that it shouldn’t take the matter that far.
The Commission is specifically worried about how Amazon uses its data about third-party sellers’ activities—such as their revenues on the platform, how many units they ship, past performance and so on—to adjust its own offerings that compete with those merchants. The case relates to Amazon’s behavior in France and Germany, its biggest EU markets.
Playing fair
“The Commission’s preliminary findings show that very large quantities of nonpublic seller data are available to employees of Amazon’s retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon’s retail offers and strategic business decisions to the detriment of the other marketplace sellers,” it said in a statement.
“For example, it allows Amazon to focus its offers in the bestselling products across product categories and to adjust its offers in view of nonpublic data of competing sellers.”
Also on Tuesday, the Commission’s competition department opened a second probe into Amazon’s logistics activities. It wants to know if Amazon is illegally favoring its own retail offers, and those of third-party sellers who sign up to use its “fulfilment by Amazon” logistics and delivery services, by featuring those items in its coveted “Buy Box.” It also wants to check if other merchants get to “effectively reach Prime users” as easily as Amazon can.
“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” said Vestager.
“Data on the activity of third-party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favor Amazon’s own retail offers or advantage the offers of retailers using Amazon’s logistics and delivery services.”
Amazon has responded by saying it disagrees with the Commission’s preliminary findings, arguing that “Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate.”
Global pressure
Vestager’s move adds to global antitrust pressure on Jeff Bezos’s empire. In the U.S., lawmakers recently floated the idea of breaking up Amazon and other Big Tech firms such as Alphabet and Facebook, because of their concentrating effects on the digital economy. In Canada, authorities are looking into a variety of potentially anticompetitive practices, including any Amazon strategies that might steer customers toward its own products, rather than those of third-party merchants.
In Europe, Vestager has already targeted Amazon previously, but over the issue of tax. In 2017, her department hit Amazon with a $294 million back-tax bill for its Luxembourg operations, on the basis that the company got a sweetheart deal from local tax authorities that amounted to illegal state aid.
Amazon continues to fight that decision in court. In a similar but much-higher-stakes case involving Apple, the Irish tax authorities, and a $15 billion back-tax bill, the EU General Court in July struck down Vestager’s decision on the basis that she didn’t prove Apple got special treatment. The Commission is appealing that ruling. The same court also previously reversed a similar decision regarding Starbucks’ treatment by Dutch tax authorities.
Vestager’s assault on tax deals under an antitrust banner demonstrated a willingness to use her tools in novel ways when tackling Big Tech.
In the same spirit, she has for years been keen on probing the possible anticompetitive effects of market-dominating companies’ troves of data. Indeed, that’s how her Amazon probe initially came about, and the same concept underpins her recently launched investigation into Google’s proposed $2 billion takeover of Fitbit.