fortune--2020-10-08--Does Elon Musk even need a PR department?

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The Tesla-focused news site Electrek reported this week that Tesla has effectively given up on conducting public relations. The company, Electrek’s Fred Lambert wrote, has disbanded its PR department altogether, leaving no one to respond to press queries. The New York Post tried to get the electric carmaker to confirm the report. Tesla didn’t respond.
I confess a grudging respect for Tesla. Everything it and its unusual CEO Elon Musk do is news. The company makes the most innovative cars on the market. Its CEO is adept at drawing attention to himself and his companies. Despite prodigious yo-yoing due to scrapes with securities regulators, missed deadlines, and defiance of pandemic-driven health laws, Tesla market capitalization is about $400 billion.
Who need to suck up to reporters when the story is that good?
Tesla joins a long list of unusually successful founder-led companies with an odd relationship with the press. In Google’s earliest days its co-founders were standoffish at best with journalists. I remember telling some put-upon public-relations official at Google that if the company kept treating the media with contempt the press would return the favor when times got tough. Walmart for years had the barest of PR operations. I wrote in my 2012 book how Apple was no place to learn PR because the company barely practiced it under Steve Jobs.
There are mitigating circumstances. Jobs was a master of dealing directly the journalists he deemed worthy. Indeed, Apple deployed a two-tier strategy: It cooperated with what it deemed to be top-tier publications and ignored the rest.
Musk too communicates when and with whom he wants to. He gave a rip-roaring and revealing interview to Maureen Dowd of The New York Times. And he tweets nearly as much as a certain ailing politician. Wednesday alone the Tesla and SpaceX CEO tweeted about pastries in Germany, the history of auto-industry bankruptcies, battery pack construction, and more.
Eventually, major companies all come around to playing the PR game. It didn’t take long for Google to hire an army of professional publicists, who today are responsive to a fault. Apple under Tim Cook conducts PR like any normal company. Walmart, after taking baby PR steps decades into its existence, does the same.
Some day Tesla will too.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Nobody can be as agreeable as an uninvited guest. A night after a fly became one of the most talked-about participants in the vice presidential debate, Facebook is getting tougher on some political ads. The social network said it would crack down on so-called poll-watching posts that encourage people to intimidate voters. And, in addition to the prior ban on running new political ads the week before Nov. 3, now Facebook says it will also stop running all political ads after the election.
The scales of JSON. No flies landed during the Supreme Court's hot and heavy arguments over the biggest software case in decades. Oracle says Google's reverse engineering of some Java APIs to use in Android violates copyright protections. Google says the types of APIs in question shouldn't be protected and/or it is "fair use" to use them. Sure, you can read a summary of the day, but legal writer and lawyer Sarah Jeong's live-tweeted thread is much more interesting and entertaining.
Do that to me one more time. About 20 years ago, AT&T bought several huge cable TV providers, saw its stock price sink, and unwound the deals at a huge loss. The past couple of years, AT&T bought DirecTV and Time Warner and its stock price has been sinking. You know what comes next. Maybe they should have bought Twitch, the video game streaming service that Amazon picked up for under $1 billion in 2014. Despite YouTube and Facebook's best efforts to create competition, Twitch garnered 91% of all viewing in the third quarter.
Medium blue. Speaking of split-offs, IBM shocked investors on Thursday morning with a plan to spin off its managed infrastructure services business into a separate company. "IBM will focus on its open hybrid cloud platform and AI capabilities," CEO Arvind Krishna explained. "NewCo will have greater agility to design, run and modernize the infrastructure of the world's most important organizations." What's left of IBM will have annual revenue of about $60 billion versus $20 billion for the new issue. IBM's stock price, down 7% so far in 2020, jumped 14% in pre-market trading on Thursday.
Battle for the Planet of the Gigahertz. In the gnip-gnop world of computer processors, Intel sneak-announced its 11th-generation desktop CPU line, dubbed Rocket Lake, a day ahead of AMD's planned intro of its competing Zen 3 chips. Rocket Lake chips, arriving early next year, will be aimed at gamers who want the fastest clock speeds, Intel says. We've been stuck around 5 GHz for years, but Intel hinted at 7 GHz speeds, which would be...very fast. I would check for a giant aquarium cooler before getting too excited, though.
Shimmering just over the horizon. The U.K. Parliament's Defence Committee issued a report accusing Chinese telecom gear maker Huawei of "clear evidence of collusion" with the Chinese Communist Party. That's a step up in rhetorical broadsides from prior investigations, but as my colleague David Meyer notes, "The report did not provide any actual details of this evidence." Back in the USA, the Trump administration is considering restrictions on the payment platforms of Chinese app owners Ant Group and Tencent, Bloomberg reports.
FOOD FOR THOUGHT
The pandemic-induced move to remote schooling has shined a spotlight on the uneven availability of reliable Internet connectivity. Reporter Monica Chin at The Verge dug into how that unevenness is hurting kids in rural and exurban areas.
Cilla Green is a music teacher for the Caddo Hills school district in southwest Arkansas. Over half of Green’s students don’t have internet that allows them to stream — some have satellite, some have bad cable, and none have a high-speed connection. The district, when planning for a blend of online and in-person instruction, was taken by surprise.
“We didn’t realize how many of our students did not have that availability,” Green said. “I thought some of our students should be able to stream and most of them were like ‘No, we have internet service through our phones and it’s not very good’ or ‘I have internet service but I can’t do any streaming, it’s only good for email.’”
IN CASE YOU MISSED IT
What experts think of robots’ threats and benefits to humanity By Brett Haensel
A TikTok star’s ‘Dreams’ come true By Ellen McGirt and Aric Jenkins
How digitalization could help American states and cities bounce back from the COVID recession By Bob Ainsbury
This analyst says the U.S.-China trade deal targets were always ‘too aspirational’ By Veta Chan
What it’s like to open a new restaurant during a pandemic By Rachel King
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
I guess you could call it the ultimate skeleton in your closet, but Christie's auctioned off a complete Tyrannosaurus rex fossil set for $31,847,500 on Wednesday. No word yet on who won or what happens next to the creature, which is known as STAN.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-10-08--Kamala Harris says ‘Mr. Vice President, I’m speaking’—and women can relate

What You Need to Know About the 25th Amendment

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! Two women win the Nobel Prize in Chemistry, Laurene Powell Jobs exits some media investments, and Sen. Kamala Harris takes part in a historic debate. Have a thoughtful Thursday.
– ‘I’m speaking.’ Sen. Kamala Harris and Vice President Mike Pence engaged in the most consequential vice presidential debate in a generation on Wednesday night, given that both are second-in-line to men who will be the oldest president ever elected, no matter which one wins. Plus, it was the first time a Black woman debated a white man in a one-on-one national debate.
There was plenty of distraction from the weight of the contest: The plexiglass, a visual reminder to viewers of the on-going COVID-19 outbreak at the White House. The relative civility of the event, which was more a commentary on the horror show of a presidential debate last week than anything else. And, of course, the fly that landed on Pence’s head and stayed put for two minutes and three seconds. (Thank God someone kept track.)
But even if viewers could get past those diversions, they likely didn’t learn much, as the candidates, asked questions by USA Today Washington bureau chief Susan Page, covered already well-trodden ground. Harris criticized the Trump administration’s COVID-19 response at every turn, and Pence sought to paint Harris as a radical liberal.
What was especially interesting was Harris’s style on stage. She faced a minefield of stereotypes—the ‘angry Black woman’ trope, for instance—and double standards. The Harris campaign had reportedly advised the senator to not fact check Pence at length, for fear of coming off as too negative.
Harris did try to correct Pence’s statements on several occasions, namely the vice president’s assertion that Joe Biden will raise taxes and ban fracking. She argued that the taxes of those earning less than $400,000 would not change, and she refuted the fracking claim as false. (Joe Biden opposes leases for new fracking on federal lands but doesn’t support outlawing the practice altogether.)
There’s no way Harris could’ve pulled off the “Shut up, man!” tone Biden used in his debate—another double standard—but she did counter Pence’s interjections with a succinct line: “Mr. Vice President, I’m speaking.” It was a way to call out his behavior by spotlighting her own, a far cry from a deferential “excuse me.”
And there’s no doubt that some women watching at home related to those moments; they saw themselves trying to make a point over Zoom or attempting to wrestle back control of a meeting. The researched phenomenon of men interrupting women is a long-running undercurrent of workplace gender dynamics, and it’s been codified into pop culture with its own term—’manterruptions’—and viral political moments, from “Reclaiming my time” to “Nevertheless, she persisted.”
Even with Harris’s confrontations, Pence interrupted her 16 times by NBC News’ count; she cut him off nine times. And an episode after the debate illustrated how intractable the problem is for women, whether on a debate stage or not. Political analyst Gloria Borger, the sole woman on a CNN panel following the debate, was talking about how women might have reacted to Harris’s experience of getting interrupted when a male panelist interrupted Borger. Her line: “Mr. [Rick] Santorum, I’m speaking.”
Claire Zillman
claire.zillman@fortune.com
@clairezillman
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Award-winning chemistry. Emmanuelle Charpentier and Jennifer A. Doudna, who developed the Crispr tool to change animal, plant, and microorganism DNA, received the 2020 Nobel Prize in Chemistry for their work. The duo are the sixth and seventh women in history to earn the honor. New York Times
- Emerson exit. Recent layoffs at Pop-Up Magazine and California Sunday Magazine drew attention to Laurene Powell Jobs, who owned the publications. Now CNN reports that Powell Jobs, who also holds a majority stake in The Atlantic, has parted ways with Pop-Up Magazines Productions and cut back on media investments. The Emerson Collective said in a statement that the organizations were "proud of their five-year partnership." CNN
- 'You can do anything.' Yesterday was the fourth anniversary of the leak of the Access Hollywood tapes, in which President Trump was heard saying, "When you're a star, they let you do it." This piece dives into how Trump's continued power—after bragging about sexual assault—has influenced American society. HuffPost
- Do the robot. In the latest episode of the Fortune Brainstorm podcast, Michal Lev-Ram and Brian O'Keefe speak to Biobot's Mariana Matus and MIT's Julie Shah, author of What to Expect When You're Expecting Robots. Listen here: Fortune
MOVERS AND SHAKERS: World Rugby hall of famer Phaidra Knight was voted president-elect of the Women's Sports Foundation.
IN CASE YOU MISSED IT
- The price of a contract. In September, President Trump issued an executive order barring federal agencies and companies with federal contracts from participating in training that “promotes race or sex-stereotyping or scapegoating.” The order is now causing confusion as businesses that have long conducted diversity trainings figure out how they could be affected. Wall Street Journal
- The other debate. During a debate in the race for her Arizona Senate seat Tuesday night, Sen. Martha McSally—who was appointed to the position in 2019—was pressed on whether she was "proud of [her] support for President Trump." McSally didn't say yes. "I'm proud that I'm fighting for Arizonans on things like cutting your taxes," she said. CNN
- First separations. A NYT investigation into family separation at the Mexico-U.S. border chronicles how officials reacted as they learned about new zero-tolerance policies. "We have now heard of us taking breastfeeding defendant moms away from their infants,” one government prosecutor wrote in 2017. “I did not believe this until I looked at the duty log.” New York Times
ON MY RADAR
Women are not OK HuffPost
Taylor Swift endorses Joe Biden CNN
Jada Pinkett Smith’s Red Table Talk blew up on Facebook. Now, Gloria Estefan’s family is creating a spinoff Washington Post
PARTING WORDS
"I really want to create a body of work that’s going to count, you know? I’m never going to get my first album back."
-Singer Normani on waiting to release her first album


fortune--2020-10-09--Joining WHO’s COVID vaccine program is a chance for China to exploit the U.S.’s absence

IBM CEO will be on the hunt for acquisitions and new businesses after spinning off services unit

On Thursday, Beijing joined the World Health Organization’s Covax initiative—an international effort to develop and distribute vaccines for COVID-19 so that developing economies aren’t left behind. So far over 160 countries, including China, have joined Covax—but the U.S. remains a holdout.
“We are taking this concrete step to ensure equitable distribution of vaccines, especially to developing countries, and hope more capable countries will also join and support Covax,” Chinese foreign ministry spokeswoman Hua Chunying said in a statement Friday, as China became the largest economy to join the partnership.
China’s assent to the initiative comes as the country faces an international reckoning over its handling of the pandemic, which began in the Chinese city of Wuhan. Public opinion on China is at an all time low but joining Covax is one way Beijing might redeem itself.
What is Covax?
The UN, the Coalition for Epidemic Preparedness Innovations (CEPI), and vaccine alliance Gavi launched Covax as a collaborative effort in June. According to Richard Hatchett, the CEO of CEPI, Covax aims to vaccinate the most vulnerable 20% of every country that participates by 2021. To do that, the 75 wealthiest member countries contribute financing that supports inoculation in the poorer 90 countries.
“Ensuring fair access is not only a matter of equity; it is the fastest way to end this pandemic,” Hatchett said. The initiative insists vaccines be mass-produced in advance of receiving approval, which is a huge capital risk. In September, UN Secretary General António Guterres said the $18 billion initiative needs an additional $15 billion in support by the end of the year.
Beijing hasn’t released any details of its Covax agreement, but China’s onboarding might provide some of that funding. It’s likely as well that the WHO will be able to tap China’s huge manufacturing capacity to scale up vaccine production. China has nine coronavirus vaccines under development, four of which have entered final stage trials.
“Even when China is leading the world with several vaccines in advanced stages of R&D and with ample production capacity, it still decided to join Covax,” Hua said. But joining Covax has benefits for China too. Membership is a hedge against China’s own vaccines failing, as Covax ensures all members will receive the first readily available vaccine.
Beijing benefits
Supporting Covax is also a potential political win for Beijing,. Globally, public opinion of China has declined this year, depressed by governments lumping blame for the pandemic on Beijing.
According to Pew Research Center, a majority of people in 14 surveyed countries hold a negative view of China, while a median 61% think China handled the coronavirus poorly. Conversely, when it comes to global affairs, people have more faith in Xi Jinping to do the “right thing” than they do in U.S. President Donald Trump—19% to 17%.
China joining Covax could affirm that belief. According to Yoshikazu Kato, an adjunct associate professor at Hong Kong University’s Asia Global Institute, China would prefer to continue forging bilateral partnerships on vaccine programs outside of the WHO—cherry picking partners to suit its political needs.
In July, China agreed to grant the Philippines “priority” access to any Chinese-made vaccines after President Rodrigo Duterte announced he would not stand against Chinese action in the South China Sea. And in August, Canada—which is in disagreement with China over the arrest of Huawei CFO Meng Wanzhou in Vancouver two years ago—cancelled a vaccine partnership with CanSino after Chinese customs delayed exports of the product for four months.
That China joined the multilateral Covax framework “[shows] its ambition to be seen tackling COVID-19 instead of the United States,” Kato says. “The Chinese Communist Party still sees Trump’s reluctance on international cooperation as its own strategic chance to enhance international influence.”
Trump began the process of withdrawing the U.S.—which has the highest number of COVID-19 cases and deaths in the world—from the WHO in July, accusing the organization of being too lenient on China.
In September, the White House shunned the Covax initiative, saying the U.S. refused to “be constrained by multilateral organizations influenced by the corrupt World Health Organization and China.”
Evidently the U.S. withdrawal has left room for China to step in.


fortune--2020-10-09--MassMutual is offering free life insurance policies to frontline health care workers

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
Barely a day goes by without my hearing of another large company that is taking unprecedented action to address social problems. Cynics among CEO Daily readers roll their eyes when I say this, but something very different is going on in the world of business today—unlike anything I’ve experienced in a four-decade journalistic career.
Yesterday, I spoke with Roger Crandall, CEO of MassMutual—which is a different animal from most companies in that it doesn’t have shareholders and is governed by its policyholders. In response to the pandemic, Crandall has offered free, three-year life insurance policies to frontline health care workers. The company has created an easy online application that doesn’t require a physical. The only requirement is that the person live in the U.S., be no older than 60, make less than $250,000, and be employed or volunteer at least 10 hours per month at a health care or emergency medical service provider.
I asked Crandall how much the program ultimately will cost the company. He said anywhere from $20 million to $150 million, depending on how many people take advantage of it. “You’d be surprised how hard it is to give away life insurance,” he said. (You can take him up on the offer here.)
And since it’s Friday, some feedback. BJ objected to the optimistic words from the folks at Slack that innovation without an office can be encouraged with virtual tools.
“Offices did not simply provide white boards and water coolers; they provided a multitude of social, emotional and intellectual aspects that fueled innovation, by offering intersections of disciplines and awareness of the edges where most of the creativity lives. Imagine IBM labs, HP Labs, Bell Labs, National Labs …. seriously doubt such complicated projects will continue from home.”
Also, lots of commentary on my post Monday suggesting Trump may have made business better, by forcing companies to address issues he was avoiding—climate change, pandemic safety, diversity and inclusion. “Good reflections. I approve,” wrote BT. But WHT objected to my statement that a new administration might bring a raft of business regulatory measures, many of them ill-conceived:
“Ill-conceived? What an arrogant statement to make. You’re an expert now?”
No expert. But I know enough from three decades in Washington to say this with confidence: many regulatory schemes are ill-conceived.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Nobel Peace Prize
This year's Nobel Peace Prize has been awarded to the U.N.'s World Food Programme, for the work it does combating hunger and promoting peace—tasks that often go hand-in-hand. The Norwegian Nobel Committee said the WFP was already a deserving recipient, but its role had become even more important in the pandemic. Fortune
AMD and Xilinx
AMD is reportedly in advanced talks to buy Xilinx, a rival chipmaker that had Huawei as a big customer and is therefore smarting from sanctions on the Chinese firm. The deal could apparently be worth over $30 billion, marking the semiconductor world's biggest tie-up yet. Wall Street Journal
Borsa Italiana
The London Stock Exchange is selling Milan's stock exchange to Euronext, the top pan-European exchange. The Borsa Italiana deal is worth $5 billion, and follows discussions that began last month. It is, however, contingent on European regulators approving LSE's purchase of data provider Refinitiv for $27 billion. CNBC
IBM strategy
IBM, which yesterday announced a plan to spin off its IT unit, is on the hunt for acquisitions and new businesses that will gel with its new focus on the cloud and A.I. As CEO Arvind Krishna told Fortune: "Can we do M&A, or acquisitions, to bolster our technology platforms? An absolute yes, no qualifications. We're open for business. As we find things that are appropriate, we will go ahead and keep doing that." Fortune
AROUND THE WATER COOLER
Coinbase politics
After exhorting Coinbase's employees to avoid politics in the workplace or leave, CEO Brian Armstrong has lost 5% of them. Armstrong said around 60 employees had accepted an exit package with four to six months' severance, and they did not include a disproportionate number of people of color. Fortune
Militia plot
Thirteen people have been charged over a plot against Michigan Gov. Gretchen Whitmer, which would have involved kidnapping, attacks on law enforcement and—the militia conspirators apparently hoped—civil war. Authorities say the plotters trained with firearms and experimented with explosives. Their plan was to be carried out before the election. Washington Post
Stimulus hopes
What will the markets do if there's no fresh, comprehensive stimulus deal in the U.S.? Wedbush Securities' Dan Ives estimates a 5% bump if there is a deal, and a 5% hit if there isn't. Ives: "The Street could see some volatility as this game of high stakes poker takes place on the Hill over the coming weeks." Game update: Nancy Pelosi says no airline bailout without a wider stimulus package. Fortune
Wealth inequality
Bloomberg reports that the U.S.'s 50 richest people are worth nearly as much as the poorest 50% of Americans (both groups having a combined net worth in the region of $2 trillion.) And, in a detail that must surely come with political ramifications, millennials constitute the largest generational group in the U.S. workforce, and control just 4.6% of its wealth. Bloomberg
This edition of CEO Daily was edited by David Meyer.


fortune--2020-10-09--‘The best vaccine against chaos.’ Why this year’s Nobel Peace Prize went to the U.N.’s World Food Pr

‘The best vaccine against chaos.’ Why this year’s Nobel Peace Prize went to the U.N.’s World Food Programme

“The need for international solidarity and multilateral cooperation is more conspicuous than ever.” So began Berit Reiss-Andersen, chair of the Norwegian Nobel Committee, as she announced this year’s Nobel Peace Prize winner: the World Food Programme (WFP).
The WFP is the largest specialized United Nations agency, with a focus on addressing hunger and promoting food security—a task that frequently involves peacemaking efforts in countries such as Yemen and the Democratic Republic of the Congo. Its work is always important, but the committee decided that its role was even more crucial given the coronavirus pandemic.
“The pandemic strengthens the reasons for the prize,” said Reiss-Andersen, who added that there had been a rise in the number of people living on the brink of starvation. “The pandemic has increased the need for food aid.”
Reiss-Andersen, who described hunger as “one of the oldest conflict weapons in the world,” was also clear that the committee’s decision was intended as “a call to the international community not underfund the World Food Programme [and to] ensure that people are not starving.”
With the program’s current funding, she warned, around 265 million people will be starving within a year.
“In the face of the pandemic, the WFP has demonstrated an impressive ability to intensify its efforts,” Reiss-Andersen said. “Food is the best vaccine against chaos.”
The committee considered 318 candidates when deciding who should receive the world’s most prestigious award. The list is confidential, though this year it is known that submissions were made for climate activist Greta Thunberg, the World Health Organization, Saudi women’s rights activist Loujain al-Hathloul, and U.S. President Donald Trump.
“Multilateralism seems to have a lack of respect these days and the Nobel Committee wants to emphasize this aspect,” Reiss-Andersen said.


fortune--2020-10-09--The October markets rally shows no signs of cooling off

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, Bull Sheeters. The global markets continue to rally as U.S. stocks have all but recovered from the September swoon. The S&P 500 finished higher at 3446.83 on Thursday, in line with its Sept. 3 close. That’s as stimulus hopes and big M&A news take investors’ minds off increasing coronavirus cases and the steady drip-drip-drip of layoffs.
Let’s check in on the action.
Markets update
Asia
The major Asia indexes were mostly higher in early afternoon trading with the Shanghai Composite up 1.7% as the index reopened after the holidays.
were mostly higher in early afternoon trading with the up as the index reopened after the holidays. The China brand is very much a tarnished one as a new Pew Research Center survey showed that respondents from 14 countries now hold a negative view of the country. “And yet, across the 14 nations surveyed, a median of 48% of those polled identified China as the world’s leading economic power , eclipsing the U.S.,” Fortune‘s Eamon Barrett reports.
is very much a tarnished one as a new Pew Research Center survey showed that respondents from 14 countries now hold of the country. “And yet, across the 14 nations surveyed, a median of 48% of those polled identified China as the world’s , eclipsing the U.S.,” Fortune‘s Eamon Barrett reports. Sorry, oil bulls. Peak oil has already arrived for much of the world’s richest economies. The source? Some green-energy long beards? Nope. It’s OPEC, itself.
Europe
The European bourses are mixed with the Europe Stoxx 600 up 0.2% at the open.
are mixed with the Europe Stoxx 600 up at the open. As coronavirus cases spike, and ICU beds fill up, France plans to put more cities on high-alert. That’s as the numbers climb in Great Britain , Spain, Germany and Italy .
plans to put more cities on high-alert. That’s as the numbers climb in , and . EasyJet shares were up 1% at the open after the discount airline on Thursday detailed its 2.3 billion pounds ($3 billion) cash position was enough to weather a rough winter, but not much beyond that.
U.S.
U.S. futures are up slightly as the on-again-off-again stimulus talks just won’t die. That’s enough to keep investors happy despite the fact the two sides seem really far apart on an agreeable number.
are up slightly as the on-again-off-again just won’t die. That’s enough to keep investors happy despite the fact the two sides seem really far apart on an agreeable number. Meanwhile, the U.S. labor market looks wobbly. The jobless claims number came in yesterday at a worse-than-expected 840,000 . Before any reader emails me to say I’m being a real downer, consider this: That figure has been above 800,000 every Thursday for seven straight months . A lot of Americans are really suffering.
. Before any reader emails me to say I’m being a real downer, consider this: That figure has been every Thursday . A lot of Americans are really suffering. Shares in Morgan Stanley are up nearly 1% in pre-market trading after the firm announced its acquisition of mutual fund Eaton Vance for $7 billion. The Wall Street giant is looking to push into the less risky wealth management business. Here’s a reminder for why wealth management has become such a strategic imperative for banks in an era of low interest rates and in a shaky, pandemic-stricken economy.
Elsewhere
Gold is up, nudging above $1,910/ounce .
is up, nudging above . The dollar is down.
is down. Crude is flat, with Brent trading above $43/barrel.
***
By the numbers
608.61
A week ago at this time, the U.S. futures were in freefall as news broke that President Trump had tested positive for COVID. But that proved to be a mere pause in an otherwise impressive rally. The Dow Jones Industrial Average is up 608.61 points (+2.2%) over the past five trading days. And the blue chip index has now closed higher in eight out of the past 11 trading sessions. Judging by this morning’s futures, it looks set to extend those gains further. So much for the analysis that investors would be wise to pull out of the market and wait until after Election Day.
33.7%
Let’s go to commodities now. No, not to gold. Not copper. Not crude. Silver. The precious metal is up 33.7% YTD, the best performing commodity of 2020—better than gold, even. The silver trade is far more indicative of how the global economy is doing as more than half of what’s mined is used in industrial processes. As demand for silver goes up it’s a sign that vital manufacturing sectors are chugging into high gear. Now, it’s important to note that the silver trade is prone to nasty bumps. It plummeted in September, but it’s still outpacing the field this year, as this great Wall Street Journal asset-tracker shows:
50
This item comes straight from Federal Reserve Bank data. The central bank calculates that America’s most affluent—the top 1%—have a combined wealth of $34.2 trillion. The poorest 50% of wage-earners, meanwhile, top out at a combined $2.08 trillion. Trillions sounds like a lot, until you put it in that perspective. Bloomberg took this data, and then calculated from its Billionaires Index that the 50 richest Americans have a combined wealth that’s nearly equivalent to the bottom 50%. It’s a reminder that the pandemic has exacerbated wealth inequality in much of the developed world, and that the damage will endure long after data shows the economy is back to pre-pandemic levels.
***
Have a nice weekend, everyone. I’ll see you here on Monday.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's read
A 10% swing for stocks. What would a stimulus deal mean for the markets? Failure to reach an accord would translate to a 5% hit, Dan Ives at Wedbush Securities tells Fortune's Anne Sraders. And if an agreement is reached? A healthy rally.
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Market candy
Quote of the day
Can we do M&A, or acquisitions, to bolster our technology platforms? An absolute yes, no qualifications. We're open for business.
That's IBM CEO Arvind Krishna who told Fortune's Aaron Pressman and Jonathan Vanian that the tech giant is in acquisition mode after spinning off its IT services unit. The stock closed 6% higher yesterday on the news.


fortune--2020-10-09--Traders are dusting off a Trump currency trade from the 2016 election

Traders are reviving a currency pair from four years ago to bet on Donald Trump losing next month’s presidential election.
The trade involves the currencies of Mexico and Russia, the two emerging markets thought to be most affected by Trump’s foreign policy. In 2016 investors were buying the ruble and selling the peso in expectation the Republican candidate would mend relations with Russian President Vladimir Putin and cut trade ties with Mexico after winning the election. This time around, the trade has reversed as Joe Biden gains in the polls.
“Trump is very keen to ingratiate himself with Russia, so what’s good for him is good for Russia,” said Paul McNamara, who oversees $4.5 billion in emerging-market debt as a money manager at GAM (UK) Ltd in London. “Biden looks more likely to go back to a rules-based global trade regime, with Mexico and China potential beneficiaries.”
The peso has rallied more than 6% against the dollar in the past three months, the best performance among major emerging-market currencies, as investors bet that increased stimulus under a Biden presidency will help boost Mexican exports to the U.S. The ruble has slumped almost 8% in the same period, with markets predicting that a Democrat in the White House will more likely impose harsher sanctions on Russia.
Not everyone is on board. Sergei Strigo, a London-based money manager at Amundi (U.K.) Ltd. says this year’s election is too unpredictable to create any trading opportunities. In 2016 he was buying the Russian currency and selling the peso, but this year he has an overweight position on the Mexican currency, and has used the recent sell-off to add to his ruble overweight. Amundi manages over 40 billion euros ($47 billion) in emerging-market assets.
Other factors are at play. A rally in global oil prices helped the ruble in 2016, while a slump this year has hurt the Russian currency without harming the peso. Meanwhile, interest rate cuts have made ruble bonds less appealing to foreign investors.
Sanctions Risks
The aftermath of the last election is proof that using currencies to predict the outcome is tricky. Back then, the ruble continued to surge into 2017 before crashing as Trump became mired in allegations of Russian meddling in his campaign. Putin said this week that a bipartisan consensus in the U.S. on the need to contain Russia had meant Trump’s presidency wasn’t as beneficial to Russia as expected. The Trump administration imposed or expanded sanctions 46 times on Russia, more than any previous one, he said.
Most analysts and investors still agree that a Biden presidency isn’t likely to mark a big improvement in U.S.-Russia relations. A multitude of new sanctions risks have surfaced since the poisoning of opposition activist Alexey Navalny using the banned nerve agent Novichok, which was also used on former Russian military officer Sergei Skripal in the U.K. In 2018. The Kremlin has also been criticized for supporting for embattled Belarusian leader Alexander Lukashenko after a disputed election.
“Biden would be more likely to use sanctions with regard to the perceived misbehavior of Russia in the past U.S. elections, the Skripal case, the Belarusian elections and support to Minsk, and the Navalny poisoning,” said Cristian Maggio, head of emerging-markets strategy at TD Securities in London.


fortune--2020-10-09--Indra Nooyi: Why I’m optimistic about business’s role in solving climate change

One of the narratives emerging from the lockdowns that have taken place around the world this year is that the human cost of the coronavirus is nature’s gain, as we have traveled less and consumed less, and more of us have reacquainted ourselves with our natural habitat.
In India, we saw a large improvement in air quality, especially in urban areas, as industries, transportation, and tourism stalled. Remarkably, the Himalayas were visible from Punjab for the first time in 30 years.
Sadly, though, the drops in carbon emissions had little impact on the health of the planet. According to the UN, the climate is changing much faster than anticipated as unsustainable consumption and production patterns persist. Despite the temporary decline in emissions, the world is not on track to meet the targets in the 2015 Paris agreement to keep the global temperature increase well below 2 degrees Celsius. If we don’t act now, the harm that we are doing to the planet will be irreversible.
But despite the scale of the challenge ahead in a short space of time, I still have cause for hope.
This year, as the pandemic exposed the fragility of our societies, it was the private sector that often provided innovative solutions. For example, private firms across the U.S. clothing industry reorganized supply chains to switch production from T-shirts to masks for emergency workers, and Danish shipping giant Maersk altered its operations to supply PPE for Denmark and Sweden.
Companies that stepped up and challenged their own status quo won praise and loyalty. This has resulted in a dramatic shift in the expectation people have of the role of business and its leaders.
As CEO of PepsiCo in 2006, I decided that we needed to change our entire business model to be more sustainable, and to deliver positive financial performance by finding innovative ways to minimize our impact on the environment. Our Performance with Purpose initiative was introduced with three main focus areas—people, performance, and planet—ensuring that sustainability was informing all of our activity across our operations, value chain, and the food and beverage industry at large.
It wasn’t easy, and I faced significant resistance. But gradually, over time, as the public increasingly clamored for businesses to play their part in protecting our precious resources, that resistance changed to enthusiastic support.
Businesses have a crucial role to play in changing consumer behavior: the push factor. If companies like PepsiCo change their model to use less water and more recyclable packaging, then by purchasing these products, consumers are helping to protect the environment.
But businesses also need the pull factor to help incentivize that change. They need consumers to purposefully not buy things that damage the environment. Our goals at PepsiCo would have been far easier to achieve if our consumers had voted with their wallets and forced us to change. Consumers are exercising this pull factor more vocally than before, but they also have some way to go.
Innovation must be at the heart of this change. It is not just about putting climate responsibility at the heart of business models; it’s also about companies being braver, fostering new innovations, and championing new ideas.
But the private sector cannot do this unilaterally. Businesses need to work with individuals and organizations across the board, harnessing the talents of a new generation of thinkers, leaders, and dreamers to help repair the Earth.
The reason I’m an optimist is that never before has the world been so aware of a problem and businesses so aware that they are part of the solution. Consumers have found their voice, and businesses—from JPMorgan Chase to Microsoft to BlackRock—are acting. Board members have to embrace change if they are to keep their customers loyal. We’re at a tipping point, and I’m hopeful that massive, global change is possible—as long as we keep pushing and pulling!
I have the honor of serving as a member of the Earthshot Prize Council, a new 50-million-pound-sterling global prize for the environment led by Prince William and a team of leaders from different parts of the world, which aims to incentivize change and drive a new wave of creative solutions that will save the planet.
By awarding five 1-million-pound prizes each year for the next 10 years, it will help provide at least 50 potential solutions to the world’s greatest environmental problems by 2030. These can be new technologies, systems, policies, or solutions and can come from anywhere in the world.
I believe that this prize has the potential to create real impetus and to provide a global platform for a newly galvanized private sector that will play an essential role in repairing the planet, by fostering new ideas, nurturing talent, maximizing impact, and taking solutions to scale.
We are at a crossroads. The time for platitudes and promises is over. We must create a better planet for future generations, and business must be at the vanguard, partnering with projects like the Earthshot Prize to create a movement rooted in optimism and achievement.
Indra K. Nooyi is the former chairman and CEO of PepsiCo.


fortune--2020-10-09--What might COVID winter dining look like? IDEO and Chicago have some out-there ideas

Back in August, city of Chicago officials knew that piercing gusts of wind and sub-zero temperatures were only a few months away from deterring residents from eating outside and, in turn, devastating many of the city’s restaurants and bars. According to the National Restaurant Association, restaurants who utilize outdoor/patio areas have derived 44% of their revenue from outdoor dining since the start of the pandemic.
To envision how restaurants might survive the winter, the city of Chicago and global design firm IDEO crowdsourced over 600 ideas for the future of winter outdoor dining. Rather than just seek the expertise of a limited group of stakeholders, the city and IDEO made the contest open to anyone––whether a resident of Chicago, Stockholm, or anywhere between––with the hope that innovative solutions could be spread to other cities around the country and world.
“I’d say [weather- and pandemic-related challenges] were both pretty tricky,” Catherine Corbin, Managing Director of IDEO Chicago, said. And though there were no “easy answers” she says the competition sparked some thoughtful ideas that balanced keeping customers warm, safe, and providing owners with enough capacity to make operating worthwhile.
Judges––a mixed panel of local restaurant stakeholders, community members, and government officials––were tasked with whittling down the entrants to three winners, whose ideas are outlined below.
Heated Tables
Ubiquitous in Japanese households, the heated table is certainly an economical way of keeping patrons warm when the temperature dips below freezing.
The idea, created by Ellie Henderson, only requires the following: a table (restaurants can simply repurpose existing ones), a blanket, a heating device, and another flat surface. The heating device, either a specific Kotatsu heater or another method like a heated mat, would be placed under the table. The blanket would then be draped over the table, trapping the heat and not letting it escape into the cold air. Finally, another flat surface would be placed on top of that blanket.
The solution of having heated tables allows patrons to be safe and stay comfortably warm while still patronizing their favorite restaurants. Courtesy of Ellie Henderson
Simple enough. Will it actually keep away the cold? It remains to be seen, especially if it’s windy and wet out, but the heated tables could provide a cozy way for patrons to dine outside in a fairly comfortable, safe, and standard way. Seating for this type of table design would typically entail pillows or lawn chairs if sitting Japanese-style, but restaurants could also use chairs if they prefer.
Using only existing hardware outside of the heaters, this solution was one of the simplest to implement.
Cozy Cabins
An enclosed little hut that can fit within a standard parking space, the ‘cozy cabin’ is not too different than some of the ‘igloo’ or ‘greenhouse’ designs that have popped up from time to time.
Inspired by ice fishing huts and “warm, glowing cabins”, according to Amy Young who submitted the idea on behalf of design firm ASD | SKY, these cozy cabins would include radiant floor heating along with ceiling vents that allow for air circulation. The cabin walls are transparent, allowing patrons a community feel while still keeping them socially distant. Provided that the cabin interior is thoroughly cleaned after use, it should check the boxes as far as COVID-19 safety protocols are concerned.
Adjoining cozy “cabins” with radiant floor heating, designed to fit within the footprint of a standard parking space. Courtesy of ASD | SKY
With regards to feasibility, construction of the cabin does not require any special materials, according to Young. Rather, it can be made from “wood, corrugated metal, polycarbonate plastic, and standard framing hardware,” which allows for the cabins to be prototyped immediately and relatively cost-effectively at scale.
Involving a more complicated set-up than the heated table, the cozy cabin makes up for it with better protection against the elements.
Block Party
The third winner combines the open-air benefits of the heated table design with the structured feel of the cozy cabins.
Submitted by Neil Reindel, the idea envisions rectangular blocks large enough to seat a party of two spaced out down a street’s parking lane. Each block would come with a built in table and chairs as well as radiant heating. However, each of the blocks would not be fully enclosed, allowing for air circulation and a community dining experience similar to that of the transparent cabins.
These “rectangular blocks” could be placed on streets outside restaurants. Courtesy of Neil Reindel
If patrons are too chilly, though, each block can be equipped with a curtain to provide insulation and pack in the heat. Blocks can also be fastened together to accommodate different party sizes.
As this idea heads into the prototyping phase, details about cost and construction will need to be worked out.
All three winners will receive $5,000 along with the opportunity to pilot the ideas in restaurants throughout the city. Now the process of prototyping, piloting, and reiterating begins, which the Illinois Restaurant Association will oversee and which will be funded by BMO Harris Bank.
“As we all know, restaurants are the soul of every neighborhood,” Sam Toia, President and CEO of the Illinois Restaurant Association, said. “We got to keep them alive.”


fortune--2020-10-09--Is Trump still contagious?

Is Trump still contagious?

President Donald Trump said Thursday he doesn’t think he’s contagious anymore, but medical experts say that’s impossible to know a week after his diagnosis with COVID-19.
Most people with COVID-19 can stop isolating and be around others about 10 days after they first showed symptoms, according to the Centers for Disease Control and Prevention. That’s provided their symptoms have improved, they have not had a fever for 24 hours and are no longer on any medication to reduce a high temperature. But there’s no way to know for certain that someone is no longer contagious so soon after falling ill, experts say.
“At this point, there’s no diagnostic test that tells you whether a person that’s infected remains infectious,” said Dr. Benjamin Pinsky, who leads Stanford University’s virology labs. “There is absolutely a chain of unknowns.”
According to Trump’s latest medical update, he completed his COVID-19 treatment on Thursday and had responded “extremely well.” Earlier in the day, Trump said he was still taking dexamethasone, a steroid that can reduce fevers. In Thursday’s update, Dr. Sean Conley, said Saturday was day 10 after Trump’s Oct. 1 diagnosis and that he anticipated the president’s safe return to public events “at that time.”
Trump’s aides were weighing travel options for the president, including trips for small events next week. During a telephone interview with Fox Business, Trump said Thursday: “I think I’m better to the point where I’d love to do a rally tonight.” He also said “I don’t think I’m contagious at all.”
Since his return to the White House Monday evening, only a few staffers — and no reporters — have laid eyes on the president, who has announced updates to his condition via Twitter and a few online videos. His doctors haven’t held a press conference since Trump left the hospital, only releasing statements with limited information.
“We who are watching from the outside only have intimations, I’d even call them hints,” about Trump’s health and when he might not be contagious, said Dr. William Schaffner, an infectious disease specialist at Vanderbilt University Medical Center.
Earlier this week, the president’s doctors suggested they would work closely with military medical research facilities and other laboratories on “advanced diagnostic testing” to determine when the president was no longer contagious, but did not elaborate. They have not released any details about his test results, including when Trump last had a negative virus test before he got sick.
Dr. Anthony Fauci, the government’s top infectious disease expert, said two negative PCR lab tests 24 hours apart are a key factor in determining whether someone is still contagious.
“So, if the president goes 10 days without symptoms, and they do the tests that we were talking about, then you could make the assumption, based on good science, that he is not infected,” Fauci said Thursday on MSNBC.
Sensitive lab tests — like the PCR test — detect virus in swab samples taken from the nose and throat. Using these, the president’s medical team could hypothetically measure and track the amount of virus in samples over time, said Dr. William Morice, who oversees laboratories at the Mayo Clinic.
“If they did daily testing, you could watch it go down,” Morice said. “If his viral load is low, the chance he can spread the virus is low as well.”
Another potential strategy: Take the president’s samples and try to get the virus to replicate in a cell culture, which would indicate it’s still active. This approach would be less sensitive than molecular tests and sometimes doesn’t work. And it wouldn’t be scalable, or safe, to use it more widely for other COVID-19 patients.
“It would take much longer, cost much more and we don’t have that many laboratories that can do it,” Schaffner said.
There is a third possibility: Novel tests available at some research labs that look for minute molecular evidence that the virus is still replicating in cells. But the technology is still too new to be used to rule out if someone is infectious, Pinsky said.
“You’re not going to get perfection with any of these tests,” said Gigi Gronvall, of Johns Hopkins Center for Health Security. “That’s why you need to think about other mechanisms of public health control” like wearing masks, washing hands and keeping socially distant to stop the spread of coronavirus.


fortune--2020-10-10--IBM showcases latest A.I. advancements on Bloomberg’s “That’s Debatable” TV show

Stimulus update : White House unveils $ 1.8 trillion offer—but it ’ s unclear if Congress has the appetite to @ @ @ @ @

Is it time to redistribute the wealth?
That’s the topic two former Clinton administration officials, a former Greek finance minister and a researcher who has studied the economics of prostitution, explored in a televised debate tonight—with a little help from IBM’s latest artificial intelligence software.
The debate, which aired on Bloomberg’s cable television channel in the U.S. at 7 p.m. New York time, is the debut episode of a series called “That’s Debatable.” Each episode will feature a debate on a different topic. The show is produced by the media and events company Intelligence Squared and Bloomberg, with sponsorship from Big Blue. John Donvan, an Emmy-winning journalist who has moderated debates for Intelligence Squared since 2008, is serving as the show’s host and moderator.
The first debate featured four esteemed economists: Larry Summers, the former U.S. Treasury secretary and former president of Harvard University, Robert Reich, the former U.S. Labor secretary, Yanis Varoufakis, the outspoken former Greek finance minister, and Allison Shrager, a senior fellow at the Manhattan Institute known for her 2019 book, An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.
But IBM is no doubt hoping that, at least to some extent, its Watson A.I. software will have stolen the show. In particular, the television program highlights one of Watson’s newest capabilities: categorizing and summarizing thousands, or even hundreds of thousands, of individual comments and opinions, and distilling them down to a handful of key points.
Called “key point analysis,” the capability has grown out of IBM’s “Project Debater” research, spearheaded by a team in its A.I. lab in Israel, which has involved building A.I. software capable of successfully debating humans—and helping humans surface strong arguments from a variety of different types of sources.
IBM hopes that it will be able to sell the technology to companies as a new way to conduct market research and solicit views from both employees and customers. The company also thinks the technology could be used by governments to better understand the views of citizens.
“Topic clustering and argument generation, those capabilities came from Debater and these are now being used with select customers,” Dakshi Agrawal, IBM’s chief architect for AI, said. He said key point analysis will allow businesses to “collect tens fo thousands of data points and distill them down to make more data-driven decisions.”
Big Blue on the small screen
The company has staged a series of “grand challenge” public events in the past three years designed to showcase the A.I.-based technology, of which the “It’s Debatable” T.V. program is the latest.
The key point summarization tool being featured in the television show can analyze thousands of comments that users submit through a website in response to a question, in this case, the debate proposition: “It is time to redistribute the wealth.”
Using natural language processing—the kind of A.I. that can analyze and to some extent “understand” language—the IBM system scores these comments for relevancy, discarding those it sees as not being germane to the topic. Then it groups the remaining ones into two broad categories: those that support the proposition, and those that oppose it.
It then further groups the comments in each camp into a handful of key points, using its language processing algorithm to summarize the essence of each point and avoiding repetition of points that are simply expressing the same idea using different language.
The software also tells a user know how often each key point was mentioned by those submitting comments. “Actually conveying the prevalence of each keypoint in the data, this is important for decision-makers,” Noam Slonim, the IBM engineer who leads the Project Debater team, said.
“Off in outer space”
Donvan, the “It’s Debatable” host, said that the technology was a much better way to allow the audience to participate in the debate compared to what he and other debate moderators have typically done in the past, which is to simply call on audience members interested in making a comment more or less at random.
“Audiences can be very tricky for me in that I randomly call on people to raise their hands and ask a question of the debaters, and to be honest I have to throw out a large number of the questions because they are repetitive, or they off in outer space, or they are just not well articulated,” he said. “This helps with that challenge.”
Clea Conner, Intelligence Squared’s chief executive officer, said the key point analysis A.I. allowed the company to incorporate views from a much broader and diverse group of people. It does so by enabling people anywhere in the world to submit opinions via a Web page. “This innovation is really helping us understand what a much larger group of people than the four or six hundred that could attend the event live previously, in this case thousands of people, where they really stand on the issue,” she said.
Slonim said he thought the technology could even be used to make future U.S. Presidential Debates more participatory.
To train an A.I. system to score arguments for quality, IBM had to create a database of 30,000 human-generated positions on a wide variety of topics which were then assessed by small human focus groups of 10 to 15 individuals, Slonim said. The results of this exercise were then used to teach the A.I. what constituted a coherent, strong argument.
The key point analysis feature is a refinement of a technology, which IBM called “speech by crowd,” that it unveiled last November in a debate held at the Cambridge Union debating club at Cambridge University in England.
The ability to summarize large amounts of text and pull out key points is an active area of A.I. research with big potential commercial applications. In just the past three months, both OpenAI, the San Francisco research company that was co-founded by Elon Musk and has received funding from Microsoft, and Primer, another startup in San Francisco, have unveiled tools that can summarize long text documents. Researchers at Facebook have also been pursuing this capability too.
This story has been updated to correct the spelling of the Intelligence Squared CEO’s last name. It is Conner not Connor.


fortune--2020-10-09--Ford Foundation President Darren Walker believes in you

The Ford Foundation president is literally doubling down on their mission to support essential justice and arts organizations, through a creative and unprecedented financial tool. But, says Walker, the rest of the work is ours to do.
But first, here’s your Hamilton-and-presidential-meltdown inspired week in review in Haiku.
It must be nice, to
have Washington on your side:
No masks, no problem!
It must be nice, to
have Washington on your side:
New justice? That’s fine!
It must be nice, to
have Washington on your side:
Steroids? Sign him up!
It must be nice, to
have Washington on your side:
POTUS, on line two!
It must be nice, to
have Washington on your side:
Let’s try it and see
Wishing you a healthy, musical, and uplifting weekend.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
In brief
Ford Foundation president Darren Walker believes in you.
He makes his feelings plain in this beautiful and necessary essay he posted on the Ford Foundation blog earlier this week. He begins by sharing the way he is thinking about the pain endured by so many people at this terrible, terrible time.
“A couple of weeks ago, clicking through the channels late at night, I landed on C-SPAN’s Washington Journal. The producers had opened the phone lines and invited Americans to share how the pandemic had affected them. Some people had lost their jobs, but not received the unemployment checks promised to them. Others were staring down an eviction or a foreclosure. Thea, from South Carolina, openly wept as she described her situation—her desperation and anxiety about merely caring for herself. As she spoke, I found myself weeping with her. Her story was a gut punch—a visceral reminder of how much people are hurting.”
Where Walker lands—which is a direct extension of his work sitting atop a charitable foundation with a $13.7 billion endowment and a very big mission—is on the role we all have to play in pushing back against injustice while making deeper commitments to the many stakeholders we may never meet, but who deserve our unalloyed attention.
“I do believe, however, that in every theater of our lives, we need more people focused on the bigger, broader objective beyond the next earnings call or election: a long-term vision for a more just society,” he says. Courage needs to come in a new form. “[B]usiness leaders who serve the interests of all their stakeholders, not only their shareholders; more elected officials who serve a common good, not only the donors and partisans who comprise their base of support.”
I spent a half hour on the phone with Walker this week, to ask him more about his extraordinary idea to increase the amount of money they were able to grant this year with a deft maneuver worthy of the Wall Street trader he once was: A billion dollar bond for social justice.
From my story:
The Ford Foundation announced $180 million in new grant funding for U.S. racial justice and civil rights groups, the organizations large and small who are doing essential work to address systemic racism and support full democratic inclusion. This latest funding doubles the Foundation’s existing commitments in the civil justice arena to $330 million. This latest allocation has been made possible by a deft use of capital markets—unprecedented in philanthropic history. In June, the Foundation announced its plan to borrow $1 billion in social bonds to increase its grant-giving capacity at a time when mission-critical organizations large and small are losing revenue due to the coronavirus. “What was creative was figuring out a way to increase our giving while not diminishing the current value of our endowment,” Ford Foundation president Darren Walker tells Fortune.
Walker, with his capital market bona fides—and who also sits on three corporate boards—has his finely tuned antennae as much on the business case for diversity as he does on the business leader's responsibility for social transformation.
Which is how we landed on you. Yes, Walker believes in you.
It's up to all of us to take the investment the rest of the way, he says. Consume art, yes, especially from makers different than you. But don't stop there. Find a smaller justice organization near you and share your strengths. "Find ways to offer the expertise that lies within corporations to help organizations be more resilient," he says. "And by that I mean join their board. Support their fundraising efforts. Be their advocate. Introduce them to your network. Make your in-house talent in marketing or financial services available to strengthen the infrastructure of these organizations."
The piece of the puzzle he’s looking for is courage, but at scale.
“I think what it will take is for us to incent courage. I mean, we really don't have a system that incents courage.” CEOs are forced to focus short-term, skewing the system away from transformation.
The first step to get there, he believes, will be mastering the art of active listening. “As I spend time circles of leaders, particularly at the senior level….there are few active listeners.” You can’t mentor someone or change a system without understanding the perspectives of people who are different from you, he says. “This is my case for the arts and empathy. They show us how to see the dignity in every human being.”
Today's mood board


fortune--2020-10-09--The second presidential debate is officially canceled

The second presidential debate between President Donald Trump and Democrat Joe Biden is officially off.
The nonpartisan Commission on Presidential Debates confirmed Friday that the Oct. 15 faceoff would be scrapped. The decision was made a day after the commission announced the debate would take place “virtually” because Trump had contracted the coronavirus.
Trump balked at holding the debate in that format, and Biden scheduled a town hall with ABC News for that night once Trump said he would not participate.
Trump’s team later countered with a call to hold the debates as scheduled once the president’s doctor said he would be cleared to hold public events beginning on Saturday.
But the commission said it would not reverse its decision not to have the candidates on stage together, citing an abundance of caution with health concerns — particularly for the town-hall-style debate that was set to feature questions from average voters.
The third debate, scheduled for Oct. 22 in Nashville, Tennessee, is still on.


fortune--2020-10-09--Stimulus update: White House unveils $1.8 trillion offer—but it’s unclear if Congress has the appeti

Stimulus update: White House unveils $1.8 trillion offer—but it’s unclear if Congress has the appetite to pass anything before the election

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Just three days after President Donald Trump tweeted that stimulus negotiations were over, the White House on Friday offered a $1.8 trillion counter-proposal to Democratic leaders.
That’s up from the $1.6 trillion offer the White House gave last week—but still shy of the $2.2 trillion Democratic leaders want.
House Speaker Nancy Pelosi and Treasury Secretary Mnuchin Speaker discussed the offer on Friday, but they didn’t reach a deal. Pelosi’s chief of staff tweeted that the offer lacks “a strategic plan to crush the virus,” a key focus Pelosi highlighted in a press event Thursday.
Yet despite the rift, the two parties are numerically the closest they’ve been since July—when Democratic leaders were asking for $3.4 trillion, while the White House was still under $1 trillion. But as the White House inches closer to Democratic leaders’ ask of $2.2 trillion, Trump risks alienating fiscally conservative Senate Republicans who are already wary of going above $1.5 trillion. Many Senate Republicans are strongly opposed to the amount of economic aid Democrats want to send to state and local governments, with Senator Mitt Romney on Wednesday tweeting that it’s a “bail out” for states.
Read: Biden polling lead is stronger than Obama’s 2008 landslide
On Friday Senate Majority leader Mitch McConnell told reporters that another stimulus bill is unlikely to pass before the election. That could be bad news for Trump’s election campaign: As of Friday, Democratic nominee Joe Biden has a +9.7 point lead over President Donald Trump, according to RealClearPolitics poll average.
Yet for months the federal government has failed to heed economists’ calls for more stimulus. The $2.2 trillion CARES Act passed in March helped to ignite the strong economic rebound in the late spring and summer, but in recent months that recovery has slowed: U.S. employment rose by 661,000 in September, down from 1.5 million jobs added in August and 1.8 million added in July.
“The risk is we slide back into the hole if we don’t get continued, additional support from policymakers,” Mark Zandi, chief economist at Moody’s Analytics, recently told Fortune.
While the two parties disagree on the dollar size of the next stimulus package, they do agree on lots of the spending areas. Both parties reaffirmed support this week for another round of $1,200 stimulus checks for adults and $500 for dependents. Both parties support more funding for education, coronavirus-related projects, mortgage and rental assistance, food programs, and state and local government funding.
Still, analysts at LPL Financial wrote in a note Wednesday that “despite the president coming back to the negotiating table Wednesday morning, prospects for the speedy passage of a stimulus bill have weakened significantly,” the analysts wrote, while LPL’s Jeff Buchbinder argued in a note Thursday the “odds are against it.”


fortune--2020-10-09--The Ford Foundation announces $180 million in new racial justice grants, supported by proceeds from

The Ford Foundation announces $180 million in new racial justice grants, supported by proceeds from social bonds

The Ford Foundation announced $180 million in new grant funding for U.S. racial justice and civil rights groups, the organizations large and small who are doing essential work to address systemic racism and support full democratic inclusion. This latest funding doubles the Foundation’s existing commitments in the civil justice arena to $330 million.
This latest allocation has been made possible by a deft use of capital markets—unprecedented in philanthropic history. In June, the Foundation announced its plan to borrow $1 billion in social bonds to increase its grant-giving capacity at a time when mission-critical organizations large and small are losing revenue due to the coronavirus.
“What was creative was figuring out a way to increase our giving while not diminishing the current value of our endowment,” Ford Foundation president Darren Walker tells Fortune.
He recalls the time in March and April when the Foundation was facing a confluence of issues, including a “very choppy” market: “I’m sitting in my apartment in New York watching the panic in the market and in what was happening in the nonprofit sector. So many nonprofits canceling their fundraisers, canceling their fees, and pulling back on their programs. Panic in the sector. So we knew we needed to step up.”
The IRS requires philanthropies to pay out five percent of their endowment, which may be acceptable in good times. “The problem is there is the inverse relationship between returns and need,” says Walker. “When the market’s going down, it’s usually when these needs are going up.”
Not to mention, the endowment itself. Ford’s endowment, currently $13.7 billion, lost $3 billion in the volatility of 2008. “We were paying out five percent of a much smaller denominator,” he says.
The breakthrough came from the Federal Reserve.
“Fortunately, [Federal Reserve] chairman Powell’s decision to lower interest rates [to near zero] created an opportunity to make the markets work for justice,” says Walker. “And make it possible for us to think more boldly about possible solutions.”
While Walker, who spent eight years on a trading floor at UBS earlier in his career, spoke fluent Wall Street, others did not. “I was at meetings where people would say things like ‘explain a bond,’ or ‘what is debt,’” he says. But once the learning curve was complete, the ripple effect was profound.
Four other leading charitable foundations have also pledged to give more money beyond the five percent mandate this year—the John D. and Catherine T. MacArthur Foundation; the W.K. Kellogg Foundation; the Andrew W. Mellon Foundation; and the Doris Duke Charitable Foundation. The MacArthur and Doris Duke foundations also plan to issue bonds, according to the New York Times.
Now, the giving continues.
In September, Ford committed an additional $85 million of the bond funds to Black, Latinx, Asian, and Indigenous arts and culture organizations, as part of as part of an unprecedented $160 million-and-growing initiative called “America’s Cultural Treasures.”
The news was a life preserver for smaller institutions, many of which received its largest ever single donation in the first round. It is also a profound form of justice. New York-based Ballet Hispánico, long overlooked by typical ballet patrons, will receive $4 million, more than half of its $7 million annual budget. “It takes an ice pick to this huge glacier of structural white supremacy,” Eduardo Vilaro, the artistic director and chief executive told the Washington Post. “This is reorganizing and saying, ‘We have other national treasures that we need to refocus on.’”
Walker says supporting smaller organizations is essential to make a difference. Especially now, when it comes to civil rights, think small and roll your sleeves up, he says.
“These large organization, large, prominent racial justice organizations are critical to advancing equality. We also need grassroots organizations demanding justice on the ground,” he says.
And they need real help.
“Find ways to offer the expertise that lies within corporations to help organizations be more resilient,” he says. “And by that I mean join their board. Support their fundraising efforts. Be their advocate. Introduce them to your network. Make your in-house talent in marketing or financial services available to strengthen the infrastructure of these organizations.” It’s part of his broader call-to-action for moral leadership.
“It’s time we all got creative and got involved.”


fortune--2020-10-09--President Trump’s latest appeal to seniors is no coincidence

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President Donald Trump appealed to senior citizens in a Twitter video Thursday, calling them his “favorite people in the world.” Included in the message were several jabs at Democratic challenger Joe Biden, who Trump says is incapable of delivering effective medicine and treatment for COVID-19—a virus with increased mortality rates among elders.
The video comes days after a NBC/Wall Street Journal poll found that Biden has a staggering 27 point lead over Trump among Americans aged 65 and up (62% to 35%). A CNN/SSRS poll two days later showed similar results, with Biden leading in the age group by 21 points (60% to 39%).
The trend can also be found on a state level as well. Take Michigan, for example, a state Trump narrowly won in 2016: A WDIV/Detroit News poll from Oct. 5 shows Biden leading Trump by roughly 30 points among voters 65 and older (59% to 29%). Since early September, that voting bloc within the state moved 22 points towards Biden.
Exit polls showed that Trump won this group by seven points in 2016, but even more surprisingly, it’s not just a contrast to 2016 that’s so shocking. Democrats haven’t performed this well among older Americans since 1996, when older voters primarily made up of the Greatest Generation heavily favored Bill Clinton, as CNN’s Harry Enten points out.
An obvious reason for Trump’s poor performance among seniors in 2020 is the coronavirus pandemic. The age group is the most vulnerable to the virus, and federal response to managing it has been questionable, to say the least. What’s more, Trump has made openly flippant comments suggesting a lack of concern about the senior population. Take what he said at a rally in Ohio in September: “It affects elderly people. Elderly people with heart problems and other problems. If they have other problems, that’s what it really affects. That’s it. You know, in some states, thousands of people, nobody young. Below the age of 18, like, nobody.
“They have a strong immune system, who knows?” Trump continued. “You look—take your hat off to the young because they have a hell of an immune system. But it affects virtually nobody.”
Seniors would be the first to say they’re not “virtually nobody.” They still need a government response that will protect them from COVID-19.
And, at 74, Trump is a senior himself. The scare over his own infection with COVID-19 illustrates that. He’s pledged to make treatment for the virus free, along with sending everyone on Medicare a $200 drug discount card. The President, in theory, should have some pull over this age group.
Related: Biden polling lead is stronger than Obama’s 2008 landslide
Beyond reaction to the administration’s handling of the virus, deeper generational shifts appear to be at work here. Trump’s decline among seniors predates the pandemic: A year ago, Biden had a hefty 11 point lead over seniors in a CNN poll.
“Ten thousand people turn 65 every day in America,” noted Nora Super, the senior director of the Milken Institute’s Center for the Future of Aging, in an interview with Politico. “And Baby Boomers—they go from age 56 to 72—that’s a huge number of people. But then as you look at the differences between people who are at the tail end of the baby boom—like I am—and those who were on the leading edge—who are old enough to have taken part in the March on Washington, the Vietnam War, etc.—the issues that engage ‘older’ voters today aren’t necessarily the same that did even four years ago.”
Super points out that issues surrounding Social Security, unemployment, and expensive health care coverage are at the top of the minds of seniors more than ever, particularly during an ongoing pandemic. Compared to previous generations, the average life expectancy of Americans has increased—meaning seniors have concerns that extend far beyond retirement.
Older Americans make up nearly a quarter of all voters, and it would be a huge blow to the Trump campaign to lose them by such significant numbers. The GOP can only hope that this year’s polls are limited to the election and don’t point to a long-lasting shift in the U.S. electorate.


fortune--2020-10-09--Biden polling lead is stronger than Obama’s 2008 landslide

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Barack Obama went into 2008 election day with a +7.6 point lead over John McCain. The junior Illinois senator would go on to beat the senior Arizona senator in an electoral landslide of 365 to 173.
In 2020, we could be on the cusp of an equally large—or even larger—Democratic victory.
As of Friday, Democratic nominee Joe Biden has a +9.7 point lead over President Donald Trump, according to RealClearPolitics poll average. That’s up from his 6.6 point lead prior to the September 29 presidential debate in Cleveland and Trump’s hospitalization last week.
If Trump doesn’t begin to close the polling gap with Biden, then the president would need an even bigger polling upset to pull out a 2020 victory. Four years ago Democratic nominee Hillary Clinton went into election night polling ahead of Trump in Pennsylvania (+1.9 percentage points), Michigan (+3.4 points), and Wisconsin (+6.5 points). Trump won all three and took White House. Clinton won the popular vote by +2.1 points after leading by +3.2 points in the RealClearPolitics poll average.
This go around, Trump will likely need to win at least six battleground states where Biden is currently leading: Arizona (+2.7 points), Florida (+3.7 points), Iowa (+1.4 points), North Carolina (+1.4 points), Ohio (+0.6 points), and Wisconsin (+5.5 points). If he wins those, Trump can likely afford to lose swing states like Michigan (+6.7 points) and Pennsylvania (+7.1 points), where Biden is currently leading. If Trump wins either of the latter states, he can afford to lose Wisconsin.
While Biden leads RealClearPolitics poll average in Iowa, FiveThirtyElection forecast still gives Trump a slight advantage in the state. FiveThirtyElection gives Biden the edge in the seven other 2016 Trump states where the Democratic nominee is ahead in RealClearPolitics poll averages.
As of Friday, FiveThirtyEight forecast the odds of Biden winning at 85%, while The Economist forecast the Democratic nominee having a 92% chance of winning the electoral college.
Related: President Trump’s latest appeal to seniors is no coincidence


fortune--2020-10-09--Coinbase says 60 employees are leaving over its apolitical stance

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Coinbase CEO Brian Armstrong started a maelstrom when he said his company would engage “minimally” around politics. Those who didn’t agree, he said, could leave.
On Thursday, Armstrong revealed in a blog post just how many took him up on the offer: About 60 employees, or 5% of Coinbase’s staff, took up the exit package that offered severance of between four to six months. The figure, he added, could be higher as some negotiations are wrapped up.
Armstrong’s initial missive reportedly came after employees called for the company to say the words “Black Lives Matter.” Coinbase hesitated to comply—apparently over concerns whether the phrase would also mean support for defunding the police—but Armstrong eventually did on Twitter after a virtual walkout. Then Coinbase tightened its guidelines on discussions around politics at work, culminating in Armstrong’s post, according to Wired.
In that message, Armstrong said that it had been a distraction for companies to engage in a wide variety of social activism. But ironically, by attempting to free Coinbase of any political stance, he has made it the center of a political conversation.
Now the question is, what will it do when the next sociopolitical issue crops up?
UNICORN FACTORY: At least four new unicorns crossed my radar this week alone. There was Unqork, Tipalti, and Dialpad on Tuesday, not to mention MessageBird on Thursday. It seems like a robust time for unicorn creation.
But what does the data say? According to numbers from Pitchbook, some 93 unicorns globally have been created so far this year, or about one every three days. And while the assembly line is going strong, figures are still trending below that of 2019, an outsized year for new unicorns. Some 106 companies crossed the $1 billion threshold by the end of the third quarter in 2019.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- goPuff, a Philadelphia-based food delivery platform, raised $380 million funding at a $3.9 billion valuation. Accel and D1 Capital Partners led the round and were joined by Luxor Capital and Softbank Vision Fund,
- Everlywell, an Austin-based startup that sells Covid-19 home-testing kits, is in talks to raise new funding at a $1 billion plus valuation, per Bloomberg. Read more.
- Aledia, a French startup developing technology for microLED displays, raised €80 million of a planned €120 million in Series D funding. Société de Projet Industriel led the round.
- Lark Health, a Mountain View, Calif.-based chronic care platform, raised $55 million in Series C funding. King River Capital led the round and was joined by investors including Franklin Templeton, SteelSky Ventures, and Olive Tree Capital.
- Hyperice, an Irvine, Calif.-based maker of muscle recovery devices, raised $48 million in funding at a $700 million valuation. Main Street Advisors and SC.Holdings led the round.
- Datavant, a San Francisco-based life sciences data management firm, raised $40 million in Series B funding. Transformation Capital led the round and was joined by investors including Johnson & Johnson, Cigna Ventures, Flex Capital and Roviant.
- Accurics, a Pleasanton, Calif.-based cloud cybersecurity firm, raised $20 million across seed and series A funding. Intel Capital led its Series A and ClearSky led the seed.
- OXIGEN, a maker of pH balanced water, raised $15 million in Series B funding. Investors include recording artist Brett Eldredge and the Cleveland Cavaliers’ Kevin Love.
- Bloom Credit, a New York-based API platform company that helps businesses integrate with credit bureaus for access to scores and monitoring, raised $13 million in funding. $10 million was led by Allegis NL, along with Resolute Ventures, Slow Ventures, and Commerce Ventures. Another $3 million came from angel investors.
- NOCD, a Chicago startup treating obsessive compulsive disorder, raised $12 million in a Series A funding. Health Enterprise Partners led the round and was joined by investors including 7Wire Ventures, Chicago Ventures and Hyde Park Angels.
- Lingokids, a Spain-based early learning skills company, raised $10 million in funding. Ravensburger Group led the round and was joined by investors including HV Holtzbrinck Ventures, JME Ventures, All Iron Ventures, 500 Startups, Athos Capital and Sharpetown.
- Evrythng, a London-based platform seeking to help businesses track physical products, raised $10 million in funding. IDC Ventures led the round and was joined by investors including Sway Ventures and Generation Ventures.
- SiteAware, a Houston-based A.I. construction verification software company, raised $10 million in Series A funding. Axon Ventures and Robert Bosch Venture Capital led the round and were joined by lool Ventures, Oryzn Ventures, The Flying Object and Power Capital Venture.
- Andie Swim, a New York-based swimwear company, raised $6.5 million in Series funding. Investors include CityRock Venture Partners and Trail Mix Ventures.
- Headroom, a San Francisco-based video conferencing startup with transcripts, raised $5 million in seed funding. Gradient Ventures led the round. Read more.
- Veritonic, a New York-based company seeking to predict the effectiveness of advertising, raised $3.2 million in Series A funding. Greycroft led the round and was joined by investors including Lerer Hippeau and Audible. Read more.
- JobGet, a Boston-based mobile hiring app maker, raised $2.1 million in seed funding. Pillar VC led the round and was joined by investors including Data Point Capital Partners, Crocker Mountain Capital, and EO Venture.
- Earthly Technologies, a Redwood City-based company with software build tooling, raised $2 million in seed funding. Investors included 468 Capital, Bessemer Venture Partners, Uncorrelated Ventures, and Hack VC.
PRIVATE EQUITY
- LLR Partners recapped YCharts, a cloud-based investment analytics and communications platform for RIAs, broker-dealers and asset managers. Financial terms weren't disclosed.
- Warburg Pincus agreed to invest about $95 million in Home First, an Indian affordable housing finance company.
EXITS
- Ardian acquired a majority stake, in Syclef, a French refrigeration company, from Latour Capital. Financial terms weren't disclosed.
- Centerbridge Partners agreed to acquire American Bath Group, a maker of bathtubs, from Lone Star. Financial terms weren't disclosed.
OTHERS
- Advanced Micro Devices is in advanced talks to acquire Xilinx Inc., a rival chip maker, in a deal that could value the latter at $30 billion, per the WSJ. Read more.
- Morgan Stanley agreed to acquire Eaton Vance Corp (NYSE: EV), the investment management company, for about $7 billion in a cash-and-stock deal.
- Citadel Securities agreed to acquire the market-making unit of IMC Financial Markets. Financial terms weren't disclosed.
- Otto Group plans to sell the French operations of its parcel delivery service Hermes Group, per Bloomberg. The group is seeking a valuation of about 500 million euros ($588 million) for the unit. Read more.
- Euronext agreed to acquire Borsa Italiana, the Italian bourse, from The London Stock Exchange for €4.3 billion.
IPOs
- Affirm Holdings, the U.S. fintech lender, filed confidentially for an IPO. Investors include Thrive Capital. Read more.
- Miniso Group Holding Ltd, a Chinese retailer, plans to raise $532 million in a listing of 30.4 million ADSs priced between $16.50 to $18.50 apiece. The company posted revenues of $1.2 billion in the 12 months ending June and a loss of $35.9 million. Tencent backs the firm. Read more.
SPAC
- Thayer Ventures Acquisition, a Valencia, Calif.-based blank check company formed by seeking a travel and transportation target, plans to raise $175 million. Thayer Ventures formed the company. Read more.
- Forest Road Acquisition Corp., a SPAC formed by three former Walt Disney Co. executives, Shaquille O’Neal, and one of Martin Luther King Jr.’s sons, plans to raise $250 million. It is seeking an acquisition in media and technology. Kevin Mayer, who was recently CEO of TikTok, is also among the team. Read more.
F+FS
- Pontifax AgTech Management closed Pontifax Global Food and Agriculture Technology Fund II with $302 million in commitments.
- Genstar Capital is targeting $10 billion across two funds. Read more.
PEOPLE
- General Atlantic named Brett Zbar as a managing director and global head of life sciences.
- Ara Partners hired Katy Terrell as a vice president and promoted John Baik to senior associate.


fortune--2020-10-09--All eyes are on HBO Max’s low subscriber numbers

The heat is on at AT&T’s WarnerMedia, and it won’t be cooling down anytime soon. The principal hotspot is the HBO Max streaming service, the linchpin in AT&T’s gigantic strategic shift toward video content.
WarnerMedia, which AT&T bought for $109 billion in 2018, will be cutting thousands of jobs, as the Wall Street Journal first reported. The company issued a statement to the media saying the business will be reorganized to “prioritize growth opportunities, with emphasis on direct-to-consumer…. it will involve increased investments in priority areas and, unfortunately, reductions in others.”
At WarnerMedia, direct-to-consumer means HBO Max, which launched in late May against formidable competition, notably Netflix, Amazon’s Prime Video, and Disney+, as well as Disney-owned Hulu, Apple TV, and smaller streamers; NBCUniversal launched its free Peacock streaming service nationwide on July 15.
HBO Max is the centerpiece of AT&T’s grand bet on content. It’s the service that’s intended to deliver HBO’s top-quality programming, the storied Warner Brothers film library, and more to hundreds of millions of AT&T cellphone customers and cable cord-cutters. The company had announced that HBO Max would launch last fall, but technical and programming challenges postponed the premier by six costly months. By the time HBO Max went live, Disney+ had amassed 55 million subscribers, helped by pandemic lockdowns that kept much of the world stuck indoors and desperate for entertainment.
AT&T has reported HBO Max subscriber numbers only once, when it announced second-quarter earnings in July. The service had 4.1 million subscribers after about a month, the company said. That was not encouraging; HBO Max had automatically signed up the 23.6 million customers who already get HBO through their pay-TV provider, but only 5% of them had downloaded the app. About three million subscribers signed up on their own.
At the same time, Disney+ and Netflix were adding subscribers at unprecedented rates. In early August, Disney+ said it had 60.5 million subscribers, reaching the low end of the range the company had told investors it would reach by 2024. Netflix, with a 13-year head start, had 193 million subscribers worldwide.
Making a tough situation tougher, activist investor Daniel Loeb on October 7 urged Disney to cancel its dividend and redirect that $3-billion annual payout to programming for Disney+. If he’s successful, HBO Max’s competition will become even fiercer.
AT&T CEO John Stankey told Fortune last year, when he was chief of WarnerMedia, that he thought four or five streaming services would survive. “Who is going to win the footrace, establish scale early enough, and be one of the sustaining platforms?” he asked. After HBO Max’s late start and the pandemic’s boost to its competitors, establishing scale early enough has become the central challenge for HBO Max. Thus the new mass layoffs and redirection of investment.
AT&T will report third quarter earnings on October 22, when it will presumably update HBO Max’s subscriber count. Investors, employees, and the entire entertainment industry will be paying rapt attention.


fortune--2020-10-09--IBM finally gets rid of some business to focus on the one that matters

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International Business Machines, still the legal name of century-plus-old IBM, has managed over the years to pull off a dubious feat. Despite selling goods and services in one of the most dynamic industries in the world, the IT sector the company helped create, it has managed to avoid growing.
The company that was synonymous with mainframes, that dominated the early days of the personal computer (a “PC” once meant a device that ran software built to IBM’s technical standards), and that reinvented itself as a tech-consulting goliath, lagged while upstarts and a few of its old competitors zoomed past it.
What IBM excelled at more often was marketing a version of its aspirational self. Its consultants would advise urban planners on how to create “smart cities.” Its command of artificial intelligence, packaged into a software offering whose name evoked its founding family, would cure cancer. Its CEO would wow the Davos set with cleverly articulated visions of how corporations could help fix the ills of society.
What IBM did not do was grow or participate sufficiently in the biggest trend in business-focused IT, cloud computing. Now, in the words of veteran tech analyst Toni Sacconaghi of research shop Bernstein, new IBM CEO Arvind Krishna is pursuing a strategy of “growth through subtraction.” The company is spinning off its IT outsourcing business, a low-growth, low-margin portion of its services business that rings up $19 billion in annual sales. Krishna told Aaron and Fortune writer Jonathan Vanian that he plans to bulk back up after the spinoff via acquisitions. “We’re open for business,” he said.
The move is bold, if risky. The reason it took so long, and presumably a new leader, to jettison the outsourcing business is that it was meant to drive sales of IBM hardware and other services. But Krishna, promoted for his association with IBM’s nascent cloud-computing effort—just as Microsoft Satya Nadella ran his company’s cloud arm before taking the top job—recognizes that only by discarding a moribund business can IBM focus and invest properly in the one that matters.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
When the chips are down. While IBM's CEO dreams of the acquisitions he wants to do in the future, Advanced Micro Devices CEO Lisa Su is using her strong stock price to go shopping. She is reportedly looking to buy Xilinx, which makes field-programmable gate arrays, for $30 billion, the Wall Street Journal reports. Elsewhere in stock market news, PayPal mafia member-in-good-standing Max Levchin is taking his online lending startup Affirm public soon. The company, which partners with Walmart, Peloton, and many others to offer consumers monthly installment payment plans, filed confidentially, so stay tuned for more details.
Truth in labeling. Speaking of AMD, the company also detailed its newest generation of desktop CPUs. The Ryzen 5000 series goes on sale November 5 for $300 to $800 with chips including up to 16 cores. The new feature that Yelp announced on Thursday is a lot less technical. Business profiles may be tagged with a new alert, "Business Accused of Racist Behavior,” which will have a link to news of the reported incident.
Queen's browser gambit accepted. I had been debating in my head what to do when my year of free Apple TV+ ran out next month. Apple has postponed my dilemma, saying last year's promotion will be extended until at least Jan. 31, 2021. Nice. Now I can use that freed-up thinking time to ponder getting a Microsoft Game Pass subscription for the fam. Though Apple barred the Game Pass app from iPhones, Microsoft is thinking of using Amazon's end-run strategy that I explained the other day: offer streaming games via the iPhone's web browser.
There must be 5G ways to leave your network. Amid a lot of confusing chatter from the Trump administration on a nationalized 5G wireless network comes word that the Pentagon is investing $600 million in a series of 5G trials for military applications. The money in this case is going to big corporations, including AT&T, Samsung, Nokia, and Ericsson.
I just love this headline: Five Hackers Found 55 Bugs in Apple Products in 3 Months and Made $51,500.
FOOD FOR THOUGHT
While we're all getting expert at Zooming and Slacking and so on, tech moves ever onward. Ethan Murray, a partner at Oliver Wyman, has an essay in the Harvard Business Review about future office collaboration developments.
Practically every large corporation we speak with today is asking for innovations to make virtual working sustainably productive.
This will drive the next wave of mixed reality, with solutions like artificial intelligence tools that can create optimal rotations of “serendipitous” encounters across teams and functions; affordable home smart boards and large multi-monitor displays that will move virtual collaboration from laptop screens to a more immersive full-size format; 3-D printers that will allow design teams to physically test prototypes around the world from their home offices; and for things that can’t be produced at home, fast cross-town home deliveries by drones of virtual happy hour supplies like wine and painting kits.
FOR YOUR WEEKEND READING PLEASURE
A few great long reads I came across this week:
Scars, Tattoos, And License Plates: This Is What Palantir And The LAPD Know About You (BuzzFeed)
Newly revealed documents show how Los Angeles police were trained to use the flagship product of the most secretive company in law enforcement.
The economics of vending machines (The Hustle)
The pandemic has boosted interest in vending machine ownership. But just how lucrative is the business?
Amazon Wants to ‘Win at Games.’ So Why Hasn’t It? (Wired)
After brute-forcing its way to dominance in so many industries, the tech leviathan may finally have met its match.
A Columnist Makes Sense of Wall Street Like None Other (See Footnote) (New York Times)
Finance journalism isn't known fro its writerly voices. Matt Levine, the author of Money Stuff, is an oddball exception.
IN CASE YOU MISSED IT
Why Square went on a $50 million Bitcoin buying spree By Jeff John Roberts
How MessageBird became a tricorn By Lucinda Shen
How venture capital can increase diversity where it matters most By Alejandro Guerrero
Coinbase sees 5% of employees depart in wake of politics controversy By Jeff John Roberts
‘The best vaccine against chaos.’ Why this year’s Nobel Peace Prize went to the U.N.’s World Food Programme By David Meyer
Sheryl Sandberg: Senior-level women are leaving the workforce. If businesses don’t act, we’ll lose our best leaders By Sheryl Sandberg and Rachel Thomas
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
We made it to Friday—what a week. If you're in need of some diverting entertainment this weekend, I'd heartily recommend Ted Lasso on Apple TV+, the silly but uplifting series about an American football coach (played by Jason Sudeikis) hired to manage a British soccer team.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com