fortune--2020-06-20--11 deals for $15 billion in 10 weeks: Why India’s Jio Platforms is on an investment spree

Jio Platforms is on a tear.
The telecoms and digital arm of the Indian conglomerate Reliance Industries Limited (RIL) has raised $15.2 billion in 11 deals over two months amid a worldwide pandemic.
“RIL seems to have mastered [dealmaking] better than anyone else,” Sanchit Vir Gogia, CEO of digital advisory firm Greyhound Research, said in a note this month. “It’s hard to find a parallel to this anywhere else in the world.”
The fundraising flurry began with a blockbuster announcement on April 22 that RIL was selling a 10% stake in Jio Platforms to Facebook for $5.7 billion. Jio Platforms made subsequent deals with U.S. private equity firms KKR, Vista, General Atlantic, TPG, L Catterton, and Silver Lake, whose deal has two parts. It also secured investment from United Arab Emirates funds Mubadala and the Abu Dhabi Investment Authority. In the most recent deal, Jio Platforms announced that Saudi Arabia’s sovereign fund will invest $1.5 billion for a 2.3% stake in the company. After the Saudi deal, RIL claimed on Friday that it is now “net debt free,” a feat it achieved nine months earlier than expected.
All told, RIL has sold 25% of Jio Platforms and could soon part with another stake, as it reportedly considers a deal with either Google or Microsoft. Both are reportedly vying to buy a 6% share in the company. (Google and RIL did not return Fortune’s requests for comment, and Microsoft said it didn’t “have anything to share” about a potential deal.)
In addition to paying off debt, the capital will likely be used to prepare for an overseas IPO for Jio Platforms, says Ambareesh Baliga, an independent stock markets analyst in Mumbai. Analysts predict the company could debut at a valuation of $100 billion. Currently, Jio Platforms is not listed on any stock exchange; its parent is listed in Mumbai and New York.
The pandemic seems to have accelerated the ambitions of chairman and managing director Mukesh Ambani, Asia’s richest man, who wants to transition his RIL conglomerate away from oil toward digital industries. But whether Jio Platforms can ride its recent investment wave to become India’s first bona fide tech giant will depend on whether the telecom operator can morph into a digital empire powerful enough to beat out stiff competition in India and from abroad.
From textiles to telecoms
Ambani’s father, Dhirubhai Ambani, founded Jio Platforms’ parent company, RIL, as a textile manufacturer in 1973. Through the 1970s and 1980s, the senior Ambani expanded the business into producing chemical precursors for the textiles and, eventually, into petroleum.
Mukesh Ambani (right) with his brother, Anil, in Mumbai in 2006. Bhaskar Paul—The The India Today Group/Getty Images
At the time of the patriarch’s death in 2002, RIL was India’s largest conglomerate, with the majority of its revenue coming from its oil division. His passing sparked a fierce battle over the company between his two sons, Mukesh and his brother, Anil. The siblings eventually agreed to split control of the empire in a 2005 deal brokered by their mother. Mukesh took control of RIL’s oil assets, and Anil got the company’s telecom divisions.
The truce proved temporary.
In 2010, Mukesh reentered the telecom space by purchasing a small mobile telecom network operator called IBSL. Mukesh would later use IBSL as a vehicle to buy the rights to wide swaths of India’s bands in government-run spectrum auctions, eventually running his own brother out of the telecom business in 2018.
Data is the new oil
After purchasing spectrum rights early last decade, RIL’s forays into telecoms and digital industries ramped up in earnest in September 2016, when its subsidiary, Reliance Jio Infocomm, launched 4G services in India. The company claims it attracted 100 million subscribers in its first six months and has since amassed 388 million subscribers as of April 2020, according to RIL financial statements.
A company restructuring in November 2019 saw RIL bring all its digital initiatives—including Reliance Jio Infocomm—under the new Jio Platforms umbrella.
“In this new world, data is the new oil. And data is the new wealth,” chairman Ambani said last year.
Capitalizing on a crisis
As the coronavirus pandemic struck India, it created conditions conducive to RIL’s digital push. India was under complete lockdown for roughly a month starting in late March, and is now engaged in a partial reopening as COVID-19 cases continue to spike across the country.
“COVID-19 lockdown has forced even the non–tech savvy Indians to move online,” said Baliga. India’s government reported that Internet usage surged by more than 13% during the lockdown. “In normal circumstances this could have taken a few years to shift, but it happened in a few weeks,” he said.
RIL has raised over $15 billion dollars from 11 investors in the past two months through selling stakes in Jio Platforms; Silver Lake’s deal has two parts.
The lockdown Internet boom, paired with a global downturn in oil prices, saw Jio Platforms in late April become nearly as valuable as all of RIL’s other properties combined. Recent investment deals have valued Jio Platforms at $65 billion, whereas RIL’s total market capitalization on the Nasdaq is $133 billion.
Facebook’s investment helped boost the company’s overall value. Shares in RIL jumped more than 8% on the New York Stock Exchange following the April deal. The Facebook deal appealed to investors since it allows Jio to leverage the Facebook-owned WhatsApp’s wide reach in the Indian market. That synergy is now under investigation, with India’s antitrust watchdog probing the deal for potential anticompetitive conduct, according to Bloomberg. As of now, there is no timeline for the watchdog’s decision.
A digital empire?
Jio Platforms’ telecom services have the largest subscriber base among providers in India, but its other digital initiatives remain in early stages of development.
A worker transporting tires on a bike passes by a Jio store in Mumbai in 2020. Dhiraj Singh—Bloomberg/Getty Images
JioMart, an e-grocery delivery platform, launched limited services in January. The company aimed to use Reliance Retail, an RIL subsidiary with 12,000 stores in over 6,600 towns and cities across India, and a network of local corner stores across the country as the backbone of its e-commerce ambitions. Days after Facebook’s investment, Jio Platforms announced that customers could place grocery orders via the Facebook-owned WhatsApp messaging service, a useful tool for homebound consumers. But Jio Platforms had to temporarily suspend the WhatsApp service this month after orders went unfilled owing to a shortage of delivery drivers.
E-commerce is the company’s most promising frontier because 90% of India’s massive and diverse retail sector remains offline, says Amitendu Palit, a senior research fellow at the NUS Institute of South Asian Studies in Singapore.
But before Jio can become India’s “everything store,” it will have to outmaneuver foreign competitors and local companies backed by deep-pocketed outside investors. Established e-grocery players, Alibaba-backed BigBasket and the northern India–based Grofers, reported a surge in sales amid India’s lockdown. Meanwhile, Amazon and Walmart-backed FlipKart are smaller players in the grocery space but continue to dominate India’s e-commerce sector generally.
The ‘depth to do it’
Still, Jio may be better poised than others to digitize India’s retail space.
“There’s a great amount of effort that needs to be put into digital literacy, and digital businesses, across a vast segment of unorganized sector operators,” says Palit. “Reliance is probably the only company in India that actually has that kind of breadth and depth to do it.”
In its quest for tech dominance, Jio Platforms is also counting on the success of a suite of Jio mobile apps, including music streaming service JioSaavn, digital currency JioMoney, and videoconferencing platform JioMeet, which garnered 100,000 downloads in the run-up to its official release.
Signage for digital payment service JioMoney, operated by Reliance Jio Infocomm, is displayed at the entrance to a general store in Bengaluru, India, in 2017. Dhiraj Singh—Bloomberg/Getty Images
These software capabilities, combined with Jio’s vast telecom subscriber base and a network of physical retail outlets, may uniquely position Jio to dominate India’s digital sphere—or so Jio’s new investors would like to believe.
“Few companies have the potential to transform a country’s digital ecosystem in the way that Jio Platforms is doing in India, and potentially worldwide,” Henry Kravis, cofounder of KKR, said in a statement announcing the firm’s investment.
“Jio is a disruptive industry leader that is empowering small businesses and consumers across India by providing them with critical, high-quality digital services,” Jim Coulter, co-CEO of TPG, said in a statement announcing his firm’s deal.
Yet competition is likely to stiffen as American tech giants eye the telecom sector as a launchpad to strengthen their foothold in India’s growing digital market.
Amazon, for instance, is reportedly in talks to buy a 10% stake in Bharti Airtel, India’s third-largest telecom operator. Google, in addition to its reported interest in Jio, is considering taking a 5% stake in Vodafone Idea, India’s No. 2 telecom company behind Reliance.
However, as a vast conglomerate with many retail outlets, RIL gives Jio Platforms a “strong local ground presence” in communities across India, says Palit. Using this network as a base, the company says Jio Platforms aims to include millions of small merchants, micro-businesses, and farmers in its digital network. Facebook CEO Mark Zuckerberg said in April that he’s partnering with Jio Platforms for access to the “60 million small businesses [in India] and the millions of people [who] rely on them for jobs.”
Jio has a long way to go before becoming a global tech giant, Palit says, but Jio’s local focus gives it an advantage in tapping into India’s vast offline market. “Where else in the world now today can you expect to see this kind of digital growth?” he says.


fortune--2020-06-21--Trump threatened ‘complete decoupling’—but global investors are hungrier than ever for China deals

This European country may have the most ambitious green agenda yet .
Here ’ s how it plans to go @ @

In the aftermath of the 2008 Global Financial Crisis, Chinese companies emerged as the world’s most swashbuckling cross-border investors. Insulated from the financial shocks that hit the U.S. and Europe, and emboldened by ready access to cheap credit at home, little-known Chinese companies embarked on a multi-billion dollar global spending spree that left them in control of Hollywood studios, European football teams, a Swedish auto manufacturer, and New York’s Waldorf-Astoria Hotel.
China’s enthusiasm for overseas assets peaked in 2016, curbed partly on orders from President Xi Jinping who saw big-ticket foreign investments as high-risk “gray rhinos” that threatened the stability of China’s domestic economy. But the global economy’s sudden collapse this year has inspired dire warnings that China’s big spenders will return, exploiting the pandemic to snap up financially distressed companies in the U.S. and Europe on the cheap.
So far, though, the Chinese buying binge hasn’t materialized. A new report by the Rhodium Group, a global consultancy, argues that Chinese investors will find it difficult to capitalize on the current economic crisis and are far more likely to focus on opportunities at home.
“Compared to the boom years, Chinese companies with global ambitions face a very different environment today, due to the combination of heavy debt loads, tighter domestic liquidity conditions, Beijing’s controls on outbound capital flows and an activated political allergy to Chinese investment abroad,” the report’s authors, Thilo Hanemann and Daniel H. Rosen, conclude.
In the first five months of 2020, Chinese outbound mergers and acquisitions declined 71% in volume and 88% in value terms compared to the same period last year, the authors note. The number of newly announced outbound transactions in January-May 2020 sank to 30 per month, compared to an average of around 90 per month between 2016 and 2018. The average monthly value of outbound transactions so far this year is $1.3 billion, a far cry from the $20 billion monthly average in 2016 at the height of China’s foreign acquisition boom.
Political allergy to China has been manifest on both sides of the Atlantic in recent months. The European Commission this week announced new measures designed to prevent foreign investors from using government support to outbid competitors for European assets. European business leaders still lament the Chinese appliance maker Midea’s 2016 acquisition of German robotics maker Kuka and Zhejiang Geely Holdings’ 2010 purchase of Sweden’s Volvo. Until recently the latter of those two deals had been seen as a success; Geely invested billions in Volvo and granted near-complete autonomy, and revenue grew tenfold over the past decade. But this year Geely CEO Li Shufu announced plans to merge Volvo Cars with Geely Auto, creating an entirely new global company—and provoking consternation in Sweden.
In the U.S., a group of seven U.S. senators warned Treasury Secretary Steven Mnuchin in a letter last month that “government-backed Chinese companies are reportedly approaching banks to identify and facilitate the purchase of American and European companies affected by the pandemic.” The group urged Mnuchin to move swiftly to protect U.S. companies from Chinese predators.
President Donald Trump, whose administration has implemented sweeping new measures to prevent Chinese firms from acquiring U.S. companies with technology pertinent to national security, took to Twitter on Thursday to threaten China with “complete decoupling.”
Hanemann and Rosen find that, while Chinese outbound investment has slowed, foreign investment in China remains resilient. Historically, foreign investment in China has tended to be for big greenfield projects rather than acquisitions. Over the past decade, foreign M&A activity in China has averaged $20 billion to $25 billion per year, which the authors dismiss as paltry for China’s $13 trillion economy. Since mid-2018, however, foreign deal-making has picked up. Last year, it reached a 10-year high of $35 billion.
The COVID-19 outbreak reduced foreign investment in China in the five months of this year to $9 billion, a big drop compared to the same period in 2019. But the authors note that foreign investment in China has been rising steadily since January and that so far this year the value of foreign M&A deals in China exceeds the value of Chinese outbound deals—the first time that’s happened in a decade.
What is stoking the global appetite for Chinese assets? Hanemann and Rosen argue the big factor is that foreign firms are betting that the continued rise of China’s middle class is still the world’s best growth story. Consider Walmart, which in April, on the day the lockdown ended in Wuhan, announced plans to spend $425 million in the city over the next five years. Or Starbucks, which recently announced plans to invest $130 million to build a roasting plant in the eastern Chinese city of Kunshan and hasn’t backed off its plan to have 6,000 stores on China’s mainland by 2022, up from the 4,200 it operates there now. Or Tesla, which aims to build 250,000 cars a month at the $5 billion Gigafactory it opened near Shanghai in January.
“[F]oreign appetite for assets in China will remain robust, despite the chorus of political decoupling and economic re-shoring talk, as long as China represents a sizable share of global growth,” Hanemann and Rosen write. “Over the past 18 months, we have recorded levels of foreign M&A into China that were not seen in the previous decade.”
It helps that Beijing has loosened restrictions on foreign ownership in key sectors including autos and financial services, enabling global firms to buy shares in their own joint-ventures. Volkswagen, for example, recently announced it would take control of its joint venture with Anhui Jianghuai Automotive Group in a $1.1 billion deal, while J.P. Morgan is acquiring full control of its Chinese mutual fund joint venture for $1 billion.
And, as Chinese companies mature, more and more foreign firms are concluding they can grow faster in China by acquisition than to insist on building from scratch.
During the lockdown, China’s local governments scrambled to support the operations of foreign manufacturers in their region. To speed reopening of Tesla’s gigafactory in Shanghai, the government there provided more than 10,000 face masks, cases of disinfectant, and helped find accommodations near the plant for workers. Officials in Hubei helped Ford cut through red tape to speed procurement of car lamps produced from Valeo SA, a supplier based in the province.
Because China has been far more effective in containing the virus than Western economies, the China-based operations of global businesses have been able to reopen quickly than operations in North American and Europe. Many economists expect China’s economy to post solid growth in the second half of this year, while few expect a U.S. recovery before next year.
All of which means that “decoupling,” however sure-fire an applause-getter on the campaign trail, remains an unappealing prospect in many boardrooms.


fortune--2020-06-21--This European country may have the most ambitious green agenda yet. Here’s how it plans to go carbon

This European country may have the most ambitious green agenda yet. Here’s how it plans to go carbon neutral

Racism is rampant on Reddit , and its editors are in open revolt

Life in the green heart of a nation with one of Europe’s most ambitious climate targets is about to get even greener, according to the woman responsible for making it happen.
The centerpiece of Leonore Gewessler’s plan is a radical revamp of Austria’s public transportation networks, giving residents nationwide access to buses, trains and subways for a flat yearly fee that works out at €3 ($3.38) a day, encouraging citizens to leave their cars at home. Austria’s minister for climate, energy and transportation policy, is drafting new laws that’ll redistribute billions of euros toward more ecologically-friendly activities in the euro area’s sixth biggest economy.
“That’s the project that is very dear to my heart,” said Gewessler in her first interview in her ministry since the outbreak of the Covid-19 pandemic. Road traffic remains a “key concern” for Austria to meet its goal of reaching climate neutrality by 2040—a decade earlier than the target set by the European Union.
The 42-year-old former environmental activist turned Green Party politician is tasked with leading a so-called “super ministry” under the government ruled by Austria’s conservative Chancellor Sebastian Kurz. Gewessler said her broad mandate over climate, energy and transport policies gives her a “systemic view” of the changes needed to keep global warming in check.
“We want to make being climate-friendly cheaper by putting a price on carbon dioxide,” she said. “It’s a way of making the tax system a lever for climate neutrality.”
Austria’s minister for climate, energy and transportation policy, Leonore Gewessler during the swearing-in ceremony of the new Austrian government on January 7, 2020 in Vienna, Austria. Wire photography: Martin Juen—SEPA.Media /Getty Images Martin Juen—SEPA.Media /Getty Images
Austria plans to reboot its tax code by 2022 and has appointed a task force led by Gewessler and conservative Finance Minister Gernot Bluemel to evaluate the best way to put a price on ecologically-destructive activities. The tax group was established a week before Austria locked down to stop the coronavirus. Now, Gewessler used the government’s 50 billion-euro aid and stimulus program to accelerate and expand green investment projects such as the new public transportation passes.
“It’s a huge economic chance because that’s where our future competitiveness is, green products and green processes,” she said. “That’s why I went into politics, because I want to use these chances.”
New laws will be in place by next year that will give Austria’s 8.9 million people incentives to adopt cleaner heating and power sources. The use of heating oil will be eliminated nationwide by 2035 and homeowners are being offered a 5,000-euro “Out of Oil Bonus” to adopt greener alternatives, Gewessler said.
Solar power is a key element of Austria’s plan to boost electricity generation to 100% renewable in 2030, from about 80% today. That will mean installing photovoltaic panels on an additional 1 million rooftops.
Gewessler grew up in a rural community in the so-called Green Heart of Austria, where most people need cars to get around.
“There was a bus but the offer was only so-so,” she said. “If you wanted to go to the city cinema in the evening it was difficult to get back home at night.”
Gewessler said that extending public transportation networks nationwide, by making connections more frequent and comfortable, as well as less expensive, will be key in determining whether Austrian can turn itself into a “front runner” in the race against climate change.
“We have to provide mobility to people in Austria that’s comfortable, efficient, affordable and eco-friendly,” she said.


fortune--2020-06-21--3 reasons why you should tune in to Apple’s WWDC

Need help with reopening your business after COVID-19 ?
There are apps for that

Apple holds its annual Worldwide Developers Conference starting on Monday, though this year it will be entirely virtual and online. The conference kicks off as usual, however, with a keynote address by CEO Tim Cook and others, starting at 1 p.m. ET/10 a.m. PT. Many other sessions that used to held in person will be switched to videos that anyone can watch on their own schedule.
As WWDC is a conference for software developers, the people who write apps for the iPhone, Mac, and other Apple devices, the emphasis will be on software. Apple will unveil new versions of the operating systems running on all its devices, including iOS 14 for iPhones and the 16th version of its MacOS software for laptops and desktops. Apple also sometimes uses WWDC to announce new gadgets or other hardware news and that could be a major focus in 2020.
Here are three important developments to watch for at WWDC:
Dumping Intel
After rumors for several years, it appears that this will be the year that Apple announces that it’s moving its Mac laptops and desktop from Intel’s microprocessor architecture. Intel has been struggling for several years to increase chip performance, a development that has reportedly delayed Apple’s hardware plans in the past. At the same time, Apple has been designing its own line of chips for iPads and iPhones using a microprocessor architecture licensed from ARM and manufactured by Taiwan Semiconductor.
Lately, the performance of Apple’s homebuilt phone chips has surpassed some of those made by Intel for laptops. Analysts say that if Apple adapted its phone chips for laptops and desktops, which have more electrical power available than a phone, they might blow away even Intel’s top chips.
At WWDC, Apple is expected to announce the shift so that developers can prepare their programs to run on machines with the new chips. Consumers likely won’t be able to buy the new machines until next year, Bloomberg has reported.
Updating the home screen
Apple introduced the iPhone in 2007 and has released a new version almost every year since. Some editions contained major upgrades and others were more incremental, but one thing has stayed almost exactly the same since the beginning: the home screen. Unlike Android phones that allow users to customize their home screens and add small app features known as widgets, the iPhone’s home screen has remained stuck as a rectangular grid of app icons.
That could change in iOS 14, according to people who have dug into the code of test releases of the upcoming operating system. The long-running code that manages the home screen, known as Springboard, may get new features such as widgets under a project code-named Avocado, web site 9to5Mac reported in April.
HealthOS
Tim Cook has said that Apple’s biggest contribution to society will be in the area of health. So far, that has largely been in features for the Apple Watch. The watch, which started out tracking exercise and activities, gained the ability to take electrocardiogram readings two years ago. Rumors over the past few years have suggested that Apple is trying to add a blood pressure sensor, sleep tracking, and other health-related features. Apple has also been working on software to aggregate people’s digital health records in one place.
Adding some of those new health features may require updates to the watch’s hardware and that means Apple may wait until the fall when it introduces the next generation of the watch to divulge them.
Still, there have been clues in beta software for the watch. Rumored features include measuring oxygen levels in the blood, detecting panic attacks, and built-in sleeptracking (which is currently available via some third-party apps).


fortune--2020-06-21--Need help with reopening your business after COVID-19? There are apps for that

Bond traders may soon be ranked by their stats on baseball cards

Many businesses are preparing to reopen their offices to employees after months of remote work due to the coronavirus pandemic.
To help with the logistical challenges, companies can use several recently introduced apps to tackle problems inherent in trying to return to some normalcy, even as the epidemic gains momentum in several states. The challenges include gauging how employees feel about returning to the office, keeping track of which rooms have been cleaned, and calculating how many people should be in an office at once to prevent overcrowding.
Jason Wong, a Gartner analyst focused on app design and development, cautioned that businesses must spend time customizing the apps for them to work well. He added that the apps are only effective if a large number of employees use them, particularly for things like indicating that they are in the office on a particular day so that the company can get an accurate count.
Here are some of the apps, which can cost several thousand dollars each, and what they do.
Salesforce’s back to work tools
Salesforce’s Work.com business reopening apps are intended to help manage a range of reopening problems that companies may experience.
The Command Center app, for instance, taps coronavirus-related data from sources like the Centers for Disease Control and Prevention and The New York Times and displays it in one place so that managers responsible for individual departments can keep up with the pandemic’s spread and engage in “quick decision making,” said Bill Patterson, a Salesforce executive vice president and general manager.
Salesforce also offers a service that can help managers determine the appropriate number of people who can be in an office at a particular time based on the space’s size and the time of day, he said. The point is for managers to plan the right number of people to be in a building by dividing them into time slots, akin to a scheduling system.
ServiceNow’s guide to reopening
Like Salesforce, business softwaremaker ServiceNow also sells apps to help companies reopen offices.
One of its app helps businesses track personal protective equipment, or PPE, that they distribute to workers. Using the app, managers can access information like the number of masks available for employees so they don’t run low and where those masks are located. ServiceNow CEO Bill McDermott said executives can use the app to ensure that their “inventory is up to snuff” and that “there is zero level of error.”
ServiceNow also sells a workplace safety management app for managers to reserve rooms and schedule employees shifts to avoid office congestion. Managers can also use the app to schedule deep cleanings of rooms so that everyone is aware of which parts of the office have been sanitized.
Appian’s plan for reopening
Business software firm Appian’s Workplace Safety app collects self-reported information, like when workers disclose that they’ve been exposed to the coronavirus, into a central hub so managers can determine when they can return to work. Appian CEO Matt Calkins said employee health data is stored in a cloud-computing service that meets federal privacy regulations that are widely known as HIPPA.
Facility managers can also use the Appian app to monitor whether their offices have been cleaned. A college, for instance, could use the app to determine which rooms are ready for classes on a particular day, depending on cleaning schedule, Calkins explained.
Surveying the workforce
Qualtrics, which specializes in corporate surveys, debuted a reopening app that contains multiple Covid-19 related questionnaires for workers. Qualtrics CEO Ryan Smith said that managers can use the tool to learn what would make employees feel more comfortable about returning to the office and what they’re worried about, such as finding childcare.
Tools for the front desk
Software company TileFive debuted its People Count app for businesses like gyms and restaurants to monitor the flow of people coming in and out of their facilities. For instance, a gym member can use the app to learn how many people are currently working out,in case they want to wait until there’s less of a crowd, TileFive co-founder Andrew Potter explained. “Some people won’t want to go to a retail location or bar when it’s packed,” Potter said. “They just want to come when it’s right for them.”


fortune--2020-06-21--Black and Hispanic communities are falling behind in answering the census

Halfway through the extended effort to count every U.S. resident, civil rights leaders worry that minority communities are falling behind in responding to the 2020 census.
With outreach efforts to motivate minority responses upended by a global pandemic, both the National Urban League and the NALEO Educational Fund are sounding the alarm that communities with concentrations of blacks and Hispanics have been trailing the rest of the nation in answering the census questionnaire.
The once-each-decade count helps determine where $1.5 trillion in federal funding goes and how many congressional seats each state gets.
“Going into 2020, we knew the census was going to be extremely challenging. We knew the Census Bureau didn’t have sufficient preparations to do all of its tests to make sure it would work out the way it should be … and then COVID-19 hit,” said Arturo Vargas, CEO of NALEO Educational Fund said this week during a virtual town hall with NBCUniversal Telemundo.
The pandemic is disproportionately affecting the Latino population, he said, so “we have to figure out how we break through the real noise affecting their daily lives to do something as ordinary as going through the mail and filling out their forms.”
People can respond either online, by phone or through the mail, but many U.S. residents haven’t taken the initiative.
The nation’s self-response rate was 61.5% this week. Arizona, Florida, New Mexico, New York and Texas — states with large concentrations of Hispanics — were lagging. California, which invested $187 million in outreach efforts, was doing slightly better, with 62.6% of its households responding, he said.
A more detailed analysis of response rates in late May and early June conducted by the Center for Urban Research at the City University of New York’s Graduate Center showed that neighborhoods with concentrations of black residents had a self-response rate of 51%, compared to 53.8% for Hispanic-concentrated neighborhoods and 65.5% for white-dominant neighborhoods.
Advocates at the National Urban League are particularly worried that the count will miss black immigrants, blacks in rural communities, formerly incarcerated men and women, and children under age 4.
The Census Bureau already plans to send out as many as 500,000 workers this summer and fall to the homes of people who haven’t responded, but the league’s president and CEO, Marc Morial, says it must do more — hiring still more door-knockers, targeting more advertising to minority communities and mailing out another round of paper questionnaires.
“They need to use their bully pulpit,” Morial said. “It’s been quiet.”
The Census Bureau had allotted $500 million for its outreach campaign. Another $160 million was added after the start of the pandemic for advertising and engaging with community partners.
With the new coronavirus spreading, the Census Bureau suspended field operations in mid-March for a month and a half, including efforts to drop off census forms at households in rural areas with no traditional addresses.
The Census Bureau on Thursday said it had finished dropping off the forms to almost all of the 6.8 million mostly rural households. Because of the pandemic, the Census Bureau pushed back the deadline for finishing the 2020 census from the end of July to the end of October, and asked Congress for a delay in handing over apportionment and redistricting numbers.
Getting a higher self-response rate is important because it saves money on door-knocking and makes for a more accurate count. The 2010 census undercounted blacks by 2.1% and Hispanics by 1.5%, according to the bureau.
“We are risking another decreased count in 2020 census,” U.S. Rep. Grace Meng, a Democrat from New York City, said Thursday during a conference call. Her Queens district is one of the most diverse in the nation.
“Any mistake or inaccurate count we make becomes a 10-year mistake and affects our neighborhoods and communities for a very long time,” she said.


fortune--2020-06-21--How Chinese-American restaurants are ensuring their future

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The future is a particularly immigrant concern. For any immigrant family, the future is all encompassing. The past has been severed, and the future is a gamble that’s been entirely cashed in on. In the era of the coronavirus pandemic, how to reopen is not a question of, “Will I succeed?” It is a vow: “I must succeed or else.” The steeliness of that hope is what drives one through crisis.
Chinese restaurant owners will need to double down on that resolve: While restaurants nationwide have lost business owing to lockdowns, Chinese restaurants have been among the hardest hit. An April study conducted by the data subscription service Womply found that over half of them had stopped taking debit and credit card transactions during the pandemic, indicating closed operations—more than any other type of establishment (the next most closed being “sandwich and deli concepts” at 23%). According to Yelp data, half of the worst days for Chinese restaurant searches in the U.S. over the past year occurred since the coronavirus broke out. During the pandemic’s peak, most Chinese restaurants in New York City had ceased operations, according to the Chinatown Partnership Local Development Corporation. While small businesses everywhere have struggled to nab SBA loans, many Chinese restaurants aren’t even around anymore to receive such aid.
Even before the shutdowns, Chinese restaurants saw a significant drop in customers. Certainly racism played a part: Some restaurants faced discrimination from consumers wrongfully wary of Chinese food spreading the coronavirus in the U.S. Others have been the subject of racist graffiti and broken windows.
Many restaurants also began to struggle because some Chinese-Americans, who made up the majority of their clientele, started avoiding restaurants in January as they heard about the coronavirus from family in China and became fearful of large gatherings. “Restaurants that had mostly Chinese customers were hit really badly,” Larry La, the owner of Meiwah in Chevy Chase, Md., says, pointing to those in Rockville and Silver Spring, towns with large Chinese populations.
As dining rooms emptied and restaurants pivoted to delivery and takeout models, you might assume mom-and-pop Chinese restaurants would be ahead of the game. Chinese food is frequently synonymous with takeout, after all. But these restaurants in particular have been struggling.
The thing is, Chinese restaurants in America have been vanishing for a while. Yelp data showed in 2019 that the number of Chinese restaurants has been consistently declining in the country’s top 20 cities. From 2014 to 2018, they saw a 7% drop nationwide. Part of it is a generational shift—the kids doing homework behind the counter have grown up and don’t want to, or need to, take over the family business. “The goal is to not come back to the restaurant, because the restaurant is [a] crutch to get [immigrants] through society,” says Wilson Tang, owner of Nom Wah Tea Parlor in New York City’s Chinatown.
Old-school Chinese restaurants—the mom-and-pop shops marked by General Tso’s chicken, happy-face plastic takeout bags, and lazy Susans—have been used to orders placed over the phone, not through the tech-savvy solutions accelerated by social distancing. They may be less used to third-party apps such Grubhub or Uber Eats. They may be less likely to have a major presence on social media.
The blow to Chinese restaurants during the coronavirus pandemic is less of a sudden hit and more the result of years of pummeling.
Let’s get the worst-case scenario out of the way: Chinese restaurants in America won’t go extinct. They’re accustomed to existential threat—in fact, they’ve thrived in the U.S. in direct spite of it. After the Chinese Exclusion Act, a moratorium on immigrant laborers from China, was passed in 1882, one of the few ways Chinese workers could still enter the country was through the “merchant status” of a restaurant owner. Waves of immigrants were diverted to the restaurant business as their only livelihood option. “Chinese restaurants always pop up and survive,” the writer Jennifer 8 Lee says. “They can survive nuclear disasters. If [places] can support life, they can support Chinese restaurants—that’s one school of thought.”
But to survive, they’ll need to adapt.
Preparing to reopen
Nom Wah Tea Parlor is Manhattan’s oldest Chinese restaurant, dating back to 1920. As a tourist destination, it has lost many diners as a result of travel halts. Out of its four locations, only the Nolita site has stayed open during the city’s shutdown and only for takeout. It’s been selling frozen dim sum.
Nom Wah has persisted for a century, and Tang is looking forward to still more years. The restaurant is already preparing to reopen. It has secured infrared thermometers for the front of the house to check customers with. It has stockpiled masks and gloves for staff. Nom Wah is also considering at-home experiences, such as offering tutorials on dumpling wrapping. It is talking with the city’s Department of Transportation to potentially open up Doyers Street, in the heart of Chinatown, so customers can dine outside while socially distanced. Nom Wah is even thinking about providing branded bags for customers to put their face masks in while they dine.
Wilson Tang is the owner of Nom Wah Tea Parlor in Manhattan’s Chinatown. Natalie Chitwood Photo
“These are little steps we intend on taking, but none of it is bulletproof,” Tang says. They are hard measures to take, because “a restaurant’s main goal is for people to come together and enjoy,” he notes. These measures are counterintuitive to that.
Brandon Jew, the chef and owner of Mister Jiu’s in San Francisco, feels the same. “We’ll need to limit interactions but also be hospitable. It’s a real fine line. The restaurants good at that in-between will probably be successful,” he says. “I don’t think people should expect great hospitality until this is sorted. Until we can give recommendations, tell them about the food from farms, or tell them that this pairing will be great, everything is going to be a very orchestrated, very planned experience.”
Mister Jiu’s is expecting half occupancy. It will go from a restaurant that seats 100 and a lounge that seats 65 to a restaurant that seats 45 people and a lounge that “is up in the air,” says Jew.
The restaurants that manage to reopen will need to rely on technology. Mister Jiu’s is going to try contactless payment and will allow food to be ordered ahead of time. The restaurant is currently using Tock, a reservation platform. For delivery, La says Meiwah, which has been around in various locations for 20 years, now uses Grubhub, Uber Eats, and DoorDash. “So we don’t have to prepare a lot. Just make sure the computer is working, the phone is working, that’s it,” he says.
Restaurants will need to be handy with digital payments and social-savvy to thrive during socially distanced reopenings. Many Chinese restaurants that fit that bill are owned and operated not by immigrants but their children, as is the case with Tang and Jew. They’re not run out of financial necessity but rather an abiding love for food and heritage. Many of them trend toward regional foods or push the envelope on culinary creativity. Some of them, like the Michelin-starred Mister Jiu’s, which blazed onto San Francisco’s dining scene a handful of years ago, are considered fine dining in a way their predecessors never were.
These businesses seem as if they’d be fine, but even Mister Jiu’s isn’t in the clear. “The amount of restaurants that are going to be able to survive after this—it’s going to really surprise people, unfortunately in a bad way,” says Jew. “There’s going to be a lot of closures.”
Says La: “It will take a long time to get back to where we were. Maybe three, four months? We don’t know. An unpredictable second wave could kill a lot of business.”
Even if they get the green light to fully reopen, the restaurateurs Fortune spoke with say their restaurants might not. “It depends on the comfort of the staff,” Tang says. Many of his staff are elderly, but many of the younger folks also live in multigenerational households, with parents or grandparents, and are hesitant to go into work. “Bringing the virus back home is a concern.
“Customers still wouldn’t have full confidence in dining out, lockdown or not,” he continues. “We’ve got to weather the storm for the next year and half or two years, when a new vaccine comes out. It’s cloudy for the foreseeable future. We can only take it one day at a time and hope for the best.”
Tang thinks Nom Wah can afford to keep its locations closed for another few months. He says they’re lucky because the spaces themselves are family-owned, so they don’t need to worry about rent.
La also thinks another few months are manageable—though he originally thought Meiwah would need to be closed for only two weeks. But any longer than that, especially if restaurants need to close through September in the event of a second wave of outbreaks? “That’s just unthinkable right now.”
Larry La is the owner of Meiwah in Chevy Chase, Md. Courtesy of Larry La
If even the relatively wealthy restaurants are stumbling, then the mom-and-pop shops, many of which are immigrant-owned and operate cash only, are really in danger. The ones that are run by and serve low-income communities are the most vulnerable.
Running as cash-only businesses, as a lot of old-school Chinese restaurants do, hinders these small businesses from taking advantage of aid as part of the federal stimulus package. “That’s the problem,” Tang says. “A lot of places will fail because they can’t get PPP or FDA loans, because all through the years they’ve been operating under the radar.”
For a PPP (Paycheck Protection Program) loan, a business must have good documentation, enough employees, and a relationship with a bank. “Everything about that program is tricky for mom-and-pop Chinese restaurants,” writer Jennifer 8 Lee says. For example, many Chinese restaurants provide housing and food through costs that aren’t reflected in employee salaries. “It hurts them in a really big way.”
The coronavirus-induced shrinkage of small Chinese restaurants is exacerbated by a broader problem. “Chinese restaurants are a function of Chinese immigration,” Lee notes. The Trump administration’s severe stance on immigrants, including those from China, may squeeze the flow of immigrants opening up new restaurants: “It’s not the best time to be an immigrant from China or an immigrant in general.”
Anti-Chinese discrimination
The coronavirus pandemic casts a double shadow over Chinese restaurants: the specter of losing business and the fear of anti-Chinese discrimination.
“Because of the President’s comments, and what some people believe about what they hear, I think the Chinese community as a whole and Chinese cuisine have another layer of complications or hurdles to try to get over,” Jew says. “I just…It kinda pisses me off because it’s just not needed. There’s so much already.”
The majority of Nom Wah’s employees live in the Sunset Park and Bensonhurst areas of Brooklyn. It takes them over an hour to commute to Chinatown. Tang says Nom Wah’s staff fear going into work because of the virus, along with the potential racism they might experience on the subway. He cites reports of verbal abuse, harassment, and even assault that occurred during the peak of the pandemic. “There’s a chat group for cooks in Chinatown,” Tang says, where his employees share news. Some of the information may be exaggerated or misleading, but the news of racist attacks has “added to the stress, for better or for worse.”
Tang expects anti-Chinese discrimination to continue after lockdown, which low-income immigrants are most vulnerable to. “It’s taken us so long as a culture to move forward. This one pandemic really set us back as a culture,” he says.
“People might get upset about what happened, that they had to stay home, and they might blame it on the Chinese. They might carry that into Chinese restaurants or Chinese food too,” La says. “So the future of Chinese restaurants in general is going to be very tough.”
Jew sees it as a rally for reopening. “It’s something I’m concerned with, but it’s also part of what’s motivating me to reopen,” he says. “If people are really not going to come out to Chinatown, I want to experience that so I can tell people this is bullshit.”
Many Chinese restaurants employ an all- or majority-immigrant staff. For a Chinese restaurant to struggle—and shut down—is for an entire community of immigrants to face financial precarity at once. Jew employs some undocumented workers, including a prep cook who’s worked with him for almost 10 years.
On the other hand, that immigrant makeup may be the very reason why a restaurant may better survive the pandemic, according to restaurateurs. “Typical for first-generation immigrants, they are very frugal,” Tang says, referring to his older employees. “They save money.”
“Immigrants, we usually save money for the rainy day,” La, an immigrant himself, says about his staff’s well-being. “We don’t just use all the pennies we make, so I think that’s helped too.”
Chinese cuisine isn’t going anywhere
Though stressed about their businesses, these restaurateurs do expect Americans will still have an appetite for Chinese food. “I believe in Chinese cuisine,” Jew says. “I know, no matter what, people will crave this food and its flavors, and I still feel strongly about this cuisine as a whole.”
Brandon Jew is the owner and chef of Mister Jiu’s in San Francisco. Courtesy of Brandon Jew
“Even as restaurants suffer, the American taste for Chinese food is not on the decline,” Lee says. Indeed, even though small Chinese restaurants have been struggling since before the pandemic, Grubhub data from a few years ago also revealed General Tso’s chicken to be among the app’s top five most ordered dishes.
While Chinese restaurants have suffered in the wake of coronavirus panic, much of the clientele lost were actually Chinese-Americans themselves. “I don’t think white people are staying away [from Chinese restaurants] because of COVID,” Lee says. “To them, it’s so American.”
There are more Chinese restaurants than McDonald’s locations in the country, as the cliché goes, and Chinese food itself is “more American than apple pie,” as Lee wrote in her book The Fortune Cookie Chronicles. (She asks the reader: How often do you eat Chinese takeout versus apple pie?)
“People were understanding Chinese cuisine more because they were traveling and interested in different regions of China and being more educated on Chinese palates and some of the flavors, and that comes back to really valuing the cuisine,” Jew says. Mister Jiu’s is decidedly not a mom-and-pop shop; it’s one of many examples of the expanding definition of what Chinese food in America is. “In the last couple of years, we’ve been really lucky because of that surge of interest in Chinese cuisine,” he says.
During the pandemic, despite the general decline in business for Chinese restaurants, an interesting trend has proved the popularity of next-generation purveyors of the cuisine: Some online pantries selling Chinese ingredients, such as Xi’an Famous Foods’ deliverable chili oil, have enjoyed blockbuster sales. Jew also recently started a grocery concept, in which customers can order premade meals, alcohol, and favorites like organic eggs, Japanese vinegars, braised pork, and lap cheong.
So he and the others hope Americans will continue the classic dream of family dinners gathered at lacquered round tables, lunch buffets piled high with crab legs and fried bananas, hasty work-break lo mein slurped up on the way back to the office, and late-night takeout, plentiful and warm. And the wilder dream of lap cheong stuffed into roasted quail and tomalley-adorned Dungeness crab congee. After the pandemic, the dream of Chinese food in America, they hope, and the enduring possibility of it, even if briefly endangered, will continue.


fortune--2020-06-21--Bond traders may soon be ranked by their stats on baseball cards

Wall Street bond traders may soon be immortalized in the fashion of baseball legends Honus Wagner, Willie Mays and Pete Rose if a plan by a former Goldman Sachs Group Inc. executive takes off.
That’s right, baseball cards are coming to finance.
The brainchild of Chris White, founder of bond trading and analytics firm BondCliQ, the digital cards reflect a new statistical approach to measure the effectiveness of individual traders and salespeople on dealer bond desks. White brought in as an investor Paul DePodesta, who used novel statistical methods to elevate the Oakland Athletics baseball team to a title contender, a story captured in the Michael Lewis book “Moneyball.”
The bond market has historically leaned on one metric for success — did a trader make money? BondCliQ wants to shed some light on whether rainmakers are good or lucky. It is collecting data that can allow buyers such as hedge funds or other institutional investors to identify the best dealer traders in a given sector or security. And dealers can see how they rank among competitors. Presumably, traders who top the list year after year could use the stats to argue for better pay.
“Here we are in a market where data is king, but we have very little information on who is qualified,” White, the firm’s chief executive officer, said in an interview. “The buy side wants to know who they should engage. The dealers want an opportunity to show why it should be them.”
The data will include market sector, average maturity of debt bought and sold and the number of quotes provided, according to a mock card provided by White. The firm will also calculate stats called specialist percentage and market-maker percentage.
The specialist percentage is “when you make a price that’s normally the best price in the market,” White said. The market-maker stat denotes traders who “are the market,” he said. The end goal is to create better bond prices by putting both individual and bank reputations on the line.
The effort comes as the market is bigger and perhaps riskier than it’s ever been. U.S. investment-grade companies have sold more than $1 trillion in new corporate debt in each of the last eight years — and the fastest pace was set in 2020, when the mark was reached in May.
BondCliQ is creating a system to collect, maintain and publish stats on bond traders and salespeople by bank. It has 34 dealers that voluntarily provide pricing data, White said. The firm supplements that with some public information such as Trace-reported deal size and price to derive the stats.
White was at Goldman Sachs from 2010 to 2015, where he created GSessions, a bond-trading system that has since been shut down. He’s also CEO of advisory firm ViableMkts LLC.
Bloomberg LP, the parent of Bloomberg News, competes with BondCliQ in providing bond-price information.
DePodesta joined the Oakland A’s as an assistant to general manager Billy Beane in 1999 and was general manager of the Los Angeles Dodgers from 2004-05. Now the chief strategy officer for the National Football League’s Cleveland Browns, he said in an interview that he was attracted to BondCliQ by the chance to bring a systemic organizing approach to the market.
“What we were able to do in baseball is aggregate a lot of the data to better understand the world we were operating in,” he said. “I saw the same opportunity here but on a much greater scale.”
DePodesta said he’d assumed there was a certain level of price transparency in the bond market, but there isn’t.
‘Can’t Believe This’
“With each conversation there was almost an ‘I can’t believe this’ moment — this is the way it’s done?” he said. If a bond desk makes $500 million a year “is that good?” he said. “Should that have been $1 billion or should it have been $2 million and they hit it out of the park?”
DePodesta said the use of stats to improve bond-trading performance will mirror his experience in professional sports, which was part of the inspiration for Jonah Hill’s character in the movie adaptation of Lewis’s book.
“It’s a march to the inevitable here. It was the same with baseball, it’s the same with football,” he said. “The need is so overwhelming you won’t be able to resist it.”
White wants BondCliQ to show bond traders how they stack up against counterparts at other banks so that pricing improves across the board. He said his firm will send report cards to dealer-desk heads by the end of this month and the rankings will be visible to buy-side clients in early July.
“Dealers really want to compete for order flow,” he said. “The best way to compete is if there’s more data around performance.”
–With assistance from Dan Wilchins.


fortune--2020-06-22--The Coven’s founders on helping protesters, pivoting after the pandemic, and surviving the reckoning

The Coven’s founders on helping protesters, pivoting after the pandemic, and surviving the reckoning for coworking offices

The pandemic ’ s unequal effects are becoming ever more obvious

This is an installment of Startup Year One, a special series of interviews with founders about the major lessons they have learned in the immediate aftermath of their businesses’ first year of operation.
This year began auspiciously for The Coven, a Minneapolis-based women’s coworking startup that aims to be an inclusive, middle-America rival to The Wing. Then almost everything went awry.
Founded by four women who met working in advertising, and who bonded over that industry’s failures to create equitable and inclusive workplaces, The Coven opened its first location for women and nonbinary and trans people in 2018. By late January, the startup had opened a second location in neighboring St. Paul and was eyeing an expansion to Nashville later this year.
Cue the pandemic, which temporarily shut down The Coven’s two existing locations and undermined its ambitious growth plans. CEO Alex West Steinman and her cofounders quickly pivoted into digital memberships and events—which have been popular, if not as lucrative as they once hoped 2020 would be.
“We’re still in the middle, and it looks really messy,” Steinman told Fortune earlier this month. “It’s not even like we’re stepping back into anything that looks familiar. We’re stepping forward into something brand-new.”
In the past few weeks, after George Floyd’s killing in The Coven’s hometown launched anti-racism protests across the nation, The Coven has also stepped sideways into community organizing. The company is using its closed Minneapolis coworking space to collect food and other donated items for locals affected by the protests and police violence.
“It’s a painful time here,” says Liz Giel, another cofounder and The Coven’s chief growth officer. “It’s been helpful for all of us to know that we’re supporting the community.”
She and Steinman say that The Coven’s close ties to community organizing have helped create an inclusive and racially diverse customer base—and to avoid some of the criticisms flung at its national coworking rivals. (For every five memberships The Coven sells, it donates one to someone from an underserved community.) Most recently, The Wing has been the subject of employee complaints over mistreatment, racism, and failing to live up to its feminist ideals. This month, cofounder Audrey Gelman stepped down as CEO, and most of The Wing’s remaining employees joined a digital walkout.
In an interview after Gelman’s resignation, Steinman called The Wing’s reported problems “obviously disappointing on many levels.”
She added that at her company, “our job is to continue plowing forward in conversation with our community…and being open to accountability. I think that’s one of the most important things of this era: being held accountable, and then showing action.”
Steinman and I first met last summer when I edited Inc. magazine’s 2019 Female Founders 100 list, which included both her and Gelman. (Full disclosure: Steinman has since asked me to speak at a digital event for Coven members.) In a joint interview for Fortune this month, she and Giel discussed how their startup is navigating its way through the pandemic, the protests against racism and police brutality, and the post-Wing, post-WeWork questions about the coworking business model.
This interview has been lightly edited and condensed for clarity.
CEO Alex West Steinman (right) and chief growth officer Liz Giel Photograph from Cadence & Eli Photography/Courtesy of The Coven
Fortune: How did you decide to start collecting donations for people affected by the Minneapolis protests and police violence?
Steinman: We’ve always been really close to organizers, so we have connections with folks who knew which grocery stores had been burned down or closed. We were activated by a group called Women for Political Change, a group of young, mostly BIPOC women; they reached out to see if we could use our space to collect supplies for both protesters and for community members. We send out about 20 cars a day, stuffed to the gills. And we’ve been doing it every day.
Every morning at 8 a.m. we’re giving each other updates in a text group: What’s needed, what was depleted yesterday. There were a lot of folks without homes in South Minneapolis before all of this, and they’ve been moved around because of the curfews. So there might be an extreme need for tents or food that can be eaten without a microwave. We’ve had hair care companies and feminine hygiene companies reach out and offer products; they don’t know how to distribute them to where they need to go, so we do that work on the ground. It made sense to dedicate our space to this movement, and I think we’re in a unique position as a startup to be flexible in that way.
Obviously 2020 has been very different from what we were all expecting. How did the onset of the pandemic affect your business?
Steinman: Minnesota is in the middle of the country, so it felt like a storm coming from the coasts. We’re like, “This is getting very bad!” But we opened up community digital memberships within 24 hours of closing our business. We had a full calendar of events within a week of announcing that, and we’ve been iterating for the better half of three months.
The Coven is meant to be an inclusive community of women and nonbinary and trans people from all walks of life. Courtesy of The Coven
How has this all affected The Coven financially?
Giel: Badly. [Laughs.] Our revenue took a significant hit. There are a lot of businesses that are closed, and that is not the position that we’re in, so we’re quite fortunate and grateful that we can look to the future. But it hasn’t been a great financial situation.
Steinman: When we opened the second location, there was a surge in excitement and awareness. And the first quarter is typically our largest quarter because annual memberships renew then, so to lose steam was a big challenge. But we’ve been able to bring in corporate partners and foundations to keep our lights on over the second quarter. We’re going to be catching up heading into the back half of the year; we know that rent is due. But we’ve done a lot of innovating.
How are you planning to reopen your physical spaces?
Steinman: We opened up to our handful of private office–holders on June 1, and then we opened up to 25% in our St. Paul location; both locations will be open at 50% on June 22. There’s a whole bunch of new regulations, and we’ve partnered with folks from all over the state to build a really robust reopening plan, so that people feel comfortable and our staff are safe. We’re slowly stepping into things as we learn more about what’s happening in our state, and in the rest of the country, and we’re certainly ready to understand what the implications of any rollbacks might be.
Inside The Coven’s St. Paul location Courtesy of The Coven
Between the employee walkout at The Wing, the implosion of WeWork, and the pandemic, are you rethinking coworking as a successful business model for a startup?
Giel: WeWork used to be helpful for us [to explain The Coven]: “Hey, we’re kind of like WeWork.” And now we’re like, “We’re nothing like WeWork!” You hate to think of looking at what other businesses have done, and trying to capitalize on their mistakes. That’s not really the intent. But it has been eye-opening for us to look at what is happening with some of the bigger spaces that preceded ours. We’re small enough that we can be nimble and move quickly. So as we grow, what is that going to look like? And as we navigate this pandemic together, how attractive is it going to be to come to a physical community space?
We are talking about new membership types and ways that we can make The Coven more accessible to everybody. We did launch a digital membership when the pandemic started, and we will be offering that as an ongoing option to the community. We’re also going to be announcing some new membership options that have equity at the core of them, in more accessible price options.
Starting at $1,800 per year, annual membership includes unlimited access to all locations, six hours per month of conference room time, and five hours of guest passes per month. Courtesy of The Coven
How has the pandemic changed your plans to expand to Nashville and some 20 locations?
Giel: We’d still love to get to Nashville. But the whole world has changed. And we’d be remiss to not use this as an opportunity to think through our options.
Steinman: The murder of George Floyd, as tragic as it was, has activated people in new ways that are incredible. People are doing anti-racist work that they’ve been putting off for their entire lives. This is a moment in history that I just feel so honored to be a part of, and so the expansion of our business right now? It’s like, sure, whatever. It’s my guess we’ll get there, but I feel like there’s just so much more that we’re contributing than physical space.
I hope that people feel like we’re amplifying their voices and amplifying their efforts. I think we’re close enough to the work and have been doing the work for quite a long time. There’s still room to grow and ways to go, but I feel really passionate about the work that we’re doing.


fortune--2020-06-22--The pandemic’s unequal effects are becoming ever more obvious

The Coven ’ s founders on helping protesters , pivoting after the pandemic , and surviving the reckoning for coworking @

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning. David Meyer here in Berlin, filling in for Alan.
We continue to get a fuller picture of how the coronavirus pandemic is feeding on and exacerbating inequality.
The Resolution Foundation, an independent British think tank, said in a new report today that many of the country’s richest people saw lockdown increase their savings, because they had to cancel overseas trips and were less likely to go out for meals.
However, those in lower-income households—with smaller buffers to cope with the crisis—were twice as likely to have sunk further into debt by relying on credit cards and overdrafts to keep going.
“The early evidence from the impact of the coronavirus crisis on family wealth suggests that it has had a starkly different impact for those on lower and higher incomes,” the report’s authors wrote. “Evidence on families’ financial preparedness before the crisis indicates that the workers likely to be worst affected by the lockdown also had less wealth to fall back on in hard times.”
Those who were able to continue working from home typically had two and a half times more net financial wealth than those working in shuttered sectors, and were significantly less fearful about making ends meet if their income were to dry up.
The U.K.’s inequality is nowhere near as bad as that in Brazil, but there are echoes there too—many Brazilians don’t have the financial means to maintain proper social distancing, and that’s one reason why case numbers are shooting up.
The exacerbated nature of inequality in the U.S. is also well documented, with recent survey data showing that while just 4% of white Americans know someone who died from COVID-19, 11% of black Americans could say the same.
All of which is to say that, overall, the coronavirus pandemic is making life significantly worse for poorer people than it is for richer people. This fact is not going unnoticed, and across the world it is reasonable to predict that the pandemic will push inequality up the policy agenda.
If that push produces results, that could make for a positive long-term impact of a situation that isn’t exactly replete with silver linings right now. If not, the political tensions we see today could soon seem mild.
News below.
David Meyer
@superglaze
david.meyer@fortune.com
TOP NEWS
Wirecard cash
After Wirecard's share price crashed on news of a missing $2.1 billion of cash on the fintech's balance sheet, the company has said the money probably doesn't exist. The German payments firm has now withdrawn its latest set of financials and is looking at full-scale restructuring to enable survival. Its share price halved this morning, taking its losses over the last three trading days to 87%. Bloomberg
Tyson imports
China has suspended poultry imports from a Tyson Foods plant where hundreds of workers were found to have COVID-19. A few days ago, Chinese authorities said food was unlikely to be connected to a new Beijing outbreak, but this new move is raising fears of threats to meat plants around the world—and to China upholding the agricultural-purchase parts of its trade deal with the U.S. Fortune
Lufthansa bailout
The German billionaire Heinz Hermann Thiele will meet with the country's economics minister today to discuss his objections to the $10 billion bailout of flag carrier Lufthansa, in which he holds a 15.5% stake. Thiele doesn't like the idea of the government taking a 20% stake in Lufthansa, and would prefer it to participate indirectly through the state development bank KfW. Without shareholder approval for the bailout, Lufthansa could be forced to file for bankruptcy protection. Reuters
German infections
Germany's coronavirus reproduction rate has soared above 2 (a rate at which one infected person would likely infect another two people) as localized outbreaks have forced hundreds of people into quarantine. One massive outbreak was at an abattoir in North Rhine Westphalia; another in a Berlin community where an infected priest visited many families. In the central town of Goettingen, the quarantining of 700 people in a tower block led to a riot on Saturday, as 200 people tried to get out. CNBC
AROUND THE WATER COOLER
Mukesh Ambani
Reliance chair Mukesh Ambani has entered the top 10 of the world's richest people—the only Asian tycoon in that exclusive club. Ambani, who own 42% of the conglomerate, has a net worth of $64.5 billion that edges him ahead of Oracle's Larry Ellison and the world's wealthiest woman, Francoise Bettencourt Meyers. Fortune
Apple cut
At Apple's big developer conference this week, headlines are likely to be generated by those who are fed up with the tech giant taking a 30% cut of in-app purchases and making it harder for rivals to compete with Apple Pay. The issues are not just concerns for European antitrust regulators, who last week launched a pair of probes, but are also prompting heavy pushback in the U.S. Financial Times
British diversity
Black people make up 3% of the British population, but just 1.5% of top bosses at U.K. companies are black. The national business response group Business in the Community is calling on companies to do more, with race director Sandra Kerr saying: "Black livelihoods matter and employers need to take urgent action to ensure that their organization is inclusive and a place where people of any ethnic background can thrive and succeed." BBC
Nascar flags
A noose was reportedly found in the garage stall of Nascar driver Bubba Wallace, whose calls for reform led to a ban of Confederate flags at races. Wallace: "Today’s despicable act of racism and hatred leaves me incredibly saddened and serves as a painful reminder of how much further we have to go as a society and how persistent we must be in the fight against racism." Wall Street Journal
This edition of CEO Daily was edited by David Meyer.


fortune--2020-06-22--Global markets turn choppy as investors weigh the threat of a second wave

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. Stocks have been trading sideways as virus concerns intensify. Central banks have taken the morning off. Investors, you’re on your own—for now.
Let’s check in on the action.
Markets update
Asia
Asia starts the week in the red. The Hang Seng is down 0.8% in afternoon trade.
is down in afternoon trade. A new COVID-19 outbreak in Australia (yes, I’m including Australia here in this part of the world) is prompting Victoria officials to extend lockdown measures there by an additional four weeks.
outbreak in (yes, I’m including Australia here in this part of the world) is prompting Victoria officials to extend lockdown measures there by an additional four weeks. Sticking with coronavirus… Chinese authorities over the weekend suspended imports from one of Tyson Foods’ American processing plants where hundred of employees had tested positive for Covid. It puts a cloud over the on-again-off-again Phase 1 trade deal.
Europe
The European bourses dropped at the open with Paris, London and Frankfurt all down at least 1% , before steadily recovering, and even creeping into positive territory by late-morning.
dropped at the open with Paris, London and Frankfurt all down at least , before steadily recovering, and even creeping into positive territory by late-morning. The E.U. and China convene a big summit today. On the agenda: new tariffs , the Hong Kong -focussed security law and an explicit warning to Chinese M&A investors to stay away from weakened European companies.
and convene a big summit today. On the agenda: new , the -focussed security law and an explicit warning to investors to stay away from weakened European companies. Germany’s Lufthansa is hitting more turbulence. The airline’s biggest investor doesn’t like the terms of the €9 billion state-funded bailout, and is vowing to block it. Shares were down more than 7% at the open, and its bonds sank.
is hitting more turbulence. The airline’s biggest investor doesn’t like the terms of the state-funded bailout, and is vowing to block it. Shares were down more than at the open, and its bonds sank. Wirecard shares have fallen nearly 87% over the past three days. The fallen German fintech darling updated the markets this morning saying the $2.1 billion in missing revenues it reported last week probably doesn’t exist.
U.S.
The Dow , S&P 500 and Nasdaq all notched gains last week despite choppy trade on Thursday and Friday. Here’s one of those “voodoo spirits” data points: in 26 of the past 30 years, the Dow has fallen by an average of 1.07% in the week after a June triple-witching event. Friday was a quadruple-witcher. Futures this morning points to gains.
, and all notched gains last week despite choppy trade on Thursday and Friday. Here’s one of those “voodoo spirits” data points: in 26 of the past 30 years, the Dow has fallen by an average of in the week after a June triple-witching event. Friday was a quadruple-witcher. Futures this morning points to gains. American Airlines plans to raise an additional $3.5 billion , partly by selling shares and bonds, to give it a bit of financial cushion as air travel slowly rebounds.
plans to raise an additional , partly by selling shares and bonds, to give it a bit of financial cushion as air travel slowly rebounds. What’s on the calendar this week? Sales of existing homes (today) and new homes (tomorrow): IMF’s updated 2020 growth projections (Wednesday); U.S. jobless claims (Thursday); Nike earnings call (Thursday).
Elsewhere
Gold is up.
is up. The dollar is down. Again.
is down. Again. Crude is flat this morning, with Brent trading above $42/barrel.
One man’s junk…
In late February I called a bond analyst here in Europe to check in. Stocks were just beginning to tank, but the red-flashing warning light was coming from the other side of the markets, from bonds. For a few days in February, there were few takers for corporate debt of any rating, and that was really freaking out traders—and others higher up.
On cue, the central banks stepped in with a series of dramatic moves to jumpstart bond markets around the world. In April came the capper when the Fed vowed to go all in and buy something even pension funds wouldn’t dare touch—corporate junk. Economists are going to be studying that move for ages. It’s had the effect of sending stocks and bonds into the stratosphere, as it’s become clear to investors that the Fed will now backstop a lot of fragile corporates.
Since April, “the high-yield market has evolved from a truly broken state, to opening for secured rescue financing packages, to allowing companies to refinance debt at opportunistic and unprecedented rates, aided by our helicopter parents at the Federal Reserve,” Christian Hoffmann, a portfolio manager at Thornburg Investment Management, told Bloomberg.
That helicopter money is causing a run on junk bonds, which suddenly don’t seem so junky. In fact, the rally in junk bonds this month could approach record territory as investors seek high-yield payoffs. Why buy low-yield Treasurys backed by Uncle Sam when you can buy high-yield debt backed by Uncle Sam?
Bloomberg’s Lisa Abramowicz broke down the frenzy in the high-yield bond market in a Tweet over the weekend:
2020 started off great with big demand for corporate debt. The party crashed in late February and March, as the chart above shows. But that was a mere pause. The central bank intervention has goosed the bond markets to levels, by Bloomberg’s calculations, last seen in 2013.
To be clear, this run on junk won’t save all troubled companies. For starters, the Fed has drawn a line on the kinds of junk it will buy. That means the worst financed companies will fail to find takers for their debt, and be forced into bankruptcy or liquidation. That was the case in February. It’s still the case today.
Every week there are fresh predictions of the coming wave of bankruptcies. Those dire forecasts aren’t going away. But that also won’t stymie investors’ demand for high-yield debt. As long as the Fed is in the market, one company’s junk will be treasure for investors.
***
Postscript
Apologies in advance for the length of this postscript.
On the day my twin girls were born I got a crash course in anatomy. The twins were really premature. And one—the smaller one—was born with a host of medical problems. It wasn’t a surprise to us. But we didn’t exactly know what she’d be facing until after her birth.
Her condition was so rare and complicated it went beyond the capabilities of the hospital where she was born. And so, about an hour after her birth, she took her first trip through Rome traffic—in an ambulance bound for the children’s hospital for special surgery across town. I followed on my motorino. There, I met Dr. Pietro Bagolan, the head of neonatal surgery. He explained the situation.
His words were literally Greek and Latin to me. Atresia = a missing connection (Greek). Esophagus, Trachea. I knew those two. Fistula = a passage (Latin). Teodora, my daughter, was born with atresia of the esophagus (the food pipe dead-ends before reaching the stomach) with the added bonus—a tracheal fistula (the air tube takes a mischievous detour, connecting to that truncated esophagus instead of the bronchi). He explained the whole thing slowly in Italian, and how he would surgically repair the organs. I comprehended tutto. But what hit me like a gut punch were the pronouns. This was my daughter he was talking about. Our ordeal. Her operation.
Esophageal atresia is exceedingly rare, occurring in about one out of every 3,500 births globally. While rare, a baby in Rome is just as likely to be born with it as a baby in Rochester, Minn., or a baby in Rwanda. Most pediatric surgeons will go their entire career and never see a single case. But, it turns out, Bagolan had done hundreds. His name can be found all over the medical literature on esophageal atresia. I knew none of this. The guy is so unassuming. He never said a thing about his resumé. All he told me was, “don’t worry. She’s a girl. Girls make it.”
He was right. He patched up Tea in an hourslong surgery on the first Monday morning of her life. Another doctor would tell me later it was like operating on a tiny bird. After surgery, EA survivors, as they’re called, can have all manner of complications—from gastric reflux to asthma to difficulty swallowing to developing more grave scenarios, including esophageal cancer. A successful first surgery means everything for the patient’s quality of life. Tea has had various unrelated complications, but her esophagus and trachea, thankfully, have been mostly problem-free. We have Bagolan and his team to thank for that.
The following spring, in May, 2010, Bagolan called my wife and I. He laid out his vision for a patients support group, which would help Italian families with children born to this disease navigate the experience we went through. “Great idea,” we nodded. “Good,” he said. “You’re going to build it.” I looked at my wife. She looked at me. Sleep-deprived, royally stressed about our new life with twins, we accepted the task. There was no way we could say no.
I would quickly learn what this would mean. We (mostly, my wife) get a fair amount of phone calls from expecting moms, numb fathers or anxious grandparents. The calls all start off the same way: their child was diagnosed with… (thankfully, the diagnoses are more of the prenatal variety these days, a huge benefit). Yep, we know, we jump in. And then she or I give them the same explanation we got all those years ago. There’s the same Greek and Latin, plus a lot of supportive adjectives and adverbs. Bagolan has trained us well.
Over the years, the support group we’ve co-founded has grown in ways that have truly astounded me. We now have about 115 families as members, hailing from Sicily in the South to Turin in the North. This weekend we held our annual meeting. On Zoom, of course. We had over 50 families tune in, including an expecting mom and her mother who’d patched in from a hospital room in Bologna. Also on the call were about 20 surgeons and doctors of all disciplines. Together, we caught presentations on best-practice in surgery, post-surgical care. Afterwards, there was a lively discussion on where we should direct our funds for outreach and education. Our association is called FATE. It’s part of EAT, the international federation of member support groups (of which I’m on the board). EAT works directly with Europe’s medical network specializing in rare diseases, plus with surgeons and medical specialists from Sydney to Cincinnati.
In Europe, funding for basic research into rare diseases increasingly won’t get the green-light unless patient support groups are involved. As a result, we work closely with Bagolan and his peers around Europe on pushing best-practice. We’ve become partners in treating this disease. The model works.
Back to this weekend…It was a real joy to see all those faces on Zoom. We’ve become really close over the years, in ways that really surprise me. Our annual meeting is a chance to reconnect with people who have become family.
Zoom call with members of FATE, the Italian patient support network for EA survivors.
I had feared the virtual nature of the event would kill that vibe, but instead the opposite happened. The discussion forum was jumping with ideas on how to use Zoom to engage and involve more families, and more medical specialists. That’s been a problem for us over the years. Our network of doctors is in the bigger cities, but few know about us in the smaller provinces. By this morning, we had commitments from the neonatal unit in Genoa to host another event in September.
It will almost certainly be on Zoom. There will be plenty of Greek and Latin spoken.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
A note from my Fortune colleagues on a timely new initiative:
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here. https://bit.ly/WorkingWhileBlack
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Boeing bounce. The aircraft and defense giant's share price has been on a killer run over the past three months. Is the rally sustainable, or just bottom-feeders betting on a Boeing bounce? Fortune's Shawn Tully analyzes the company's financials and lays out six reasons for Boeing bulls to cheer.
Bonds rookie card. As Matthew Leising at Bloomberg notes, bond traders have historically been graded by whether or not they can make the client money. Chris White, founder of bond trading and analytics firm BondCliQ, for one, wants to answer the big question: is their success down to luck or legit trading skills? ...His idea? Put bond traders' stats on a card—akin to a baseball card—so the discerning observer can rank them.
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Market candy
$18,000
Workplaces can become unhygienic pits in the best of times. In the age of COVID, all manner of refits and deep-cleans are required to bring the office into virus-proof compliance. "Air-conditioning systems need to be outfitted with better filters and bring in more outside air. Lids might have to be added inside bathroom stalls to avoid the spread of coronavirus-carrying toilet plume. Covered trash cans should be placed at entrances and exits for employees to dispose of masks," writes Bloomberg's Jennifer Surane. For Wall Street bankers, that adds up to a cost of about $18,000 per head.


fortune--2020-06-22--Apple chip contract would help Taiwan Semiconductors fill a Huawei-shaped hole

At its 2020 Worldwide Developers Conference on Monday, Apple is expected to cut or curtail its partnership with Intel, which has supplied semiconductors for the Cupertino, Calif., company’s Mac computers since 2005 but has fallen behind competitors in recent years.
Apple is likely to partner with Taiwan Semiconductor Manufacturing Co. (TSMC) instead, tapping the Taiwanese firm to make Mac chipsets more advanced than those Intel can provide. The companies did not immediately return requests for comment.
“This is good for Apple. If Apple switches to designing its own chips for MacBooks—like it has done for iPhones—then it can design a chip with better and more targeted performance than those provided by Intel,” said Brady Wang, an analyst at Counterpoint Research.
The chip shake-up is good for TSMC, too, since the new business arrives shortly after the U.S. forced TSMC to drop Huawei, the giant Chinese telecom equipment maker, as a client.
Manufacturing only
Unlike Intel, which designs and manufactures its own chips, TSMC only manufactures chips. With that narrow focus, TSMC has become the world’s largest and most advanced contract manufacturer for chipsets.
According to Wang, rumors that Apple might switch from Intel to TSMC for its Mac processors have been swirling since 2012, as TSMC’s chip performance surpassed that of Intel.
TSMC already does business with Apple; it manufactures iPhone and iPad chipsets. Apple designs the chips itself using architecture developed by U.K.-based chip designer Arm—acquired by SoftBank in 2016. Apple has reportedly tapped TSMC to provide cutting-edge five-nanometer chips for the upcoming iPhone 12, too. Only TSMC and Samsung are capable of making 5nm chipsets, which are revolutionary for their small size. Intel will begin manufacturing less-advanced 7nm chipsets next year.
Filling the Huawei hole
Analysts say the blow to Intel will be more symbolic than financial. Macs account for 5% of Intel’s revenue, but losing Apple as a client could erode confidence in the Silicon Valley icon.
Meanwhile, gaining the Mac contract from Apple will help TSMC offset some of its potential revenue loss from abandoning Huawei as a client. Orders from Huawei make up roughly 15% of TSMC’s income, but a new directive from the U.S. Department of Commerce forced TSMC to sever the relationship, at least temporarily.
The regulation, passed on May 15, prohibits manufacturers from supplying semiconductors to Huawei if U.S. equipment is used at any stage of production. Huawei’s chip design unit, HiSilicon, relies on U.S.-made software to design its semiconductors; elements of TSMC’s manufacturing equipment are also made in the U.S.
TSMC refused to accept new Huawei orders as of May 18. At a shareholder meeting on June, TSMC chairman Mark Liu said the company would wait until a public comment period on the new rule ends in mid-July before deciding whether to apply for a special license that would allow it to keep selling equipment to Huawei.
“We do see other customers and players hoping to fill any gap HiSilicon might leave,” Liu said.


fortune--2020-06-22--China suspends poultry imports from Arkansas Tyson Foods plant with coronavirus cases

China suspended poultry imports from a Tyson Foods Inc. plant where hundreds of employees tested positive for Covid-19, stoking concerns over the broader implications for U.S. and global meat exports.
All products from the plant in Springdale, Arkansas, where Tyson is based, that are about to arrive in China or have arrived at the country’s ports will be seized by customs. The suspension announced Sunday is an about face from just a few days ago, when Chinese officials said food was unlikely to be responsible for a fresh virus outbreak in Beijing.
The move is a potential new threat to meat plants across the world that have seen slaughter disruptions because of the virus. In the U.S., hundreds of workers have become ill, and dozens have died. There’s also been a recent uptick in infections at facilities in Brazil and Germany.
If China continues to suspend shipments based on coronavirus cases reported at processing plants, it could also threaten to undermine promised agricultural purchases as part of the Washington-Beijing trade deal.
Tyson in a statement Sunday said it was looking into the report and cited that the World Health Organization and the Centers for Disease Control and Prevention say there’s no evidence that virus transmission is associated with food. The company late Friday said 13% of its workers tested positive for the virus at plants in northwest Arkansas.
China has backed off from its previous stance linking food to virus cases. A customs official at a briefing on Friday said the country was taking the advice of international organizations that there’s a low risk of imported food transmitting the virus, and no food restrictions would be imposed.
But the move to block the Tyson shipments runs counter to that, and reverts the country back to increasing its scrutiny over imported food. Meanwhile, a German abattoir last week voluntarily halted pork exports to China after workers were found to be infected.
A new outbreak in China had been blamed on imported salmon after the head of a food market where clusters were detected said the virus had been traced to a chopping board used by a fish seller. Fears over whether food can transmit viruses had led salmon to be boycotted in the Asian country.
China’s customs authorities had started testing all shipments of imported meat for the virus, while officials in some major cities were also checking the products at domestic markets. In a statement Thursday, China Customs said all 32,174 samples of imported seafood, meat, vegetables, fruit and other related products had tested negative.
The country’s scrutiny may end up having a big impact on global food shipments. Its surging imports of meat had helped to buoy U.S. and Brazilian producers of poultry, pork and beef, both before the nation’s virus outbreak in January and as global trade has staged a nascent recovery in recent weeks with the country exiting lockdowns.
Through April, U.S. exports of poultry meat and products excluding eggs to China were valued at $152 million, up from only about $7 million in the comparable period in 2019, U.S. Department of Agriculture data showed.
But the new outbreak in China was already threatening to derail shipments, and moves by officials to block shipments over virus concerns would compound the problem.
Beijing is the site of a recent jump in new cases in China after a two-month lull. Some residents are back under partial lockdown and transport links are disrupted, with more than 800 flights canceled on Friday.Play Video
On Sunday, PepsiCo China said it shut a food plant in the Chinese capital after a case of the virus was confirmed earlier in the week. The company conducted tests on all employees at the plant and quarantined 480 workers, even though they all tested negative, one of its officials, Fan Zhimin, said at a local government briefing. PepsiCo China later said in a WeChat post that none of its beverage plants in the country have reported any cases of the virus.
Meanwhile in the U.S., meat plants have almost returned to pre-virus production levels after outbreaks in April and May forced facilities to shutter.


fortune--2020-06-22--Club of world’s 10 richest people finally gets a member from Asia

Asia’s richest man has entered a new league of wealth.
The net worth of Mukesh Ambani, chairman of Reliance Industries Ltd., has jumped to $64.5 billion, making him the only Asian tycoon in the exclusive club of the world’s top 10 richest people, according to the Bloomberg Billionaires Index. He overtook Larry Ellison of Oracle Corp. and France’s Francoise Bettencourt Meyers, the wealthiest woman, to reach the No. 9 spot.
Ambani, who owns 42% of Reliance, has benefited from a flurry of investment into the company’s digital unit, Jio Platforms Ltd., that Reliance said has made it net-debt free ahead of a March 2021 target. The shares of the Indian conglomerate have doubled from a low in March, just as other billionaires on the list have been hit by the impact of the coronavirus pandemic.
While the Indian economy “has been nearly decimated” during the lockdown to control the spread of Covid-19, “Mr. Ambani’s companies (particularly the telecom giant Jio) have prospered, and his personal wealth has increased substantially,” said Jayati Ghosh, chair of the Centre for Economic Studies and Planning at the Jawaharlal Nehru University.
A media representative for Reliance declined to comment on Ambani’s fortune.
Economic Divide
The rise of the 63-year-old as India heads for its worst-ever recession is a reminder of the nation’s deep economic divide, in which the top 10% hold more than three-quarters of the total wealth, and where most new fortune creation stays in the hands of the richest 1%. Ambani lives in a 27-story mansion in Mumbai, known as Antilia, that has three rooftop helipads, parking for 168 cars, a 50-seat movie theater, a grand ballroom with crystal chandeliers, three floors of Babylon-inspired hanging gardens, a yoga studio, and a health spa and fitness center.
While a crash in oil prices caused uncertainty in a stake sale of Reliance’s oil and chemicals division, in just two months Jio managed to attract some $15 billion — more than half the investment into telecom companies worldwide this year. Facebook Inc., General Atlantic, Silver Lake Partners, KKR & Co. and Saudi Arabia’s sovereign wealth fund are among those trying to get a slice of one of the world’s fastest-growing online commerce markets. A June report by Sanford C. Bernstein predicted that Jio is likely to capture 48% of India’s mobile subscriber market share by 2025.
In the latest potential deal slated to bolster Ambani’s e-commerce ambitions, Reliance is close to acquiring stakes in some units of Future Group, which already has a partnership with Amazon.com Inc., people familiar with the matter have said.
Ambani got his start in the family’s business in the early 1980s, when his father, Dhirubhai Ambani, summoned him back to India to oversee construction of a polyester mill after a year at Stanford Business School. The Ambanis began to buy up suppliers as well as petrochemical plants and oil refineries and eventually built the company into a fabrics, textiles and energy empire. Dhirubhai died of a stroke in 2002 without leaving a will, triggering a feud between Mukesh and his brother, Anil.
In a settlement brokered by their mother, the brothers split the family business. Mukesh retained control over the refining, petrochemicals, oil and gas, and textiles operations, while Anil took the telecommunications, asset-management, entertainment and power-generation businesses. In 2013, the brothers announced a $220 million pact to share a fiber-optic network, their first deal since splitting the Reliance empire. Parts of Anil’s operations have since struggled, with a unit of his Reliance Communications Ltd. filing for bankruptcy last year.
Mukesh revels in being the biggest. In India, Reliance officially became just that last year, when it surpassed state-owned Indian Oil Corp. to become the country’s largest company by revenue. At Reliance’s annual shareholder meeting in August, which is covered like a national event — including by its media and entertainment arm, Network18 — Ambani called it the “golden decade of Reliance.” He celebrated the group’s growing list of superlatives: the largest telecom enterprise by subscribers, revenues and profit; a retail arm larger than all other major retailers combined; an oil giant that makes India’s largest export.
“We are also incubating newer growth engines,” Ambani said at the time, adding that he hoped the digital-driven expansion could be more inclusive. “No power on earth can stop India from rising higher.”
At least on the global wealth ranking, that seems to be the case.


fortune--2020-06-22--Trump set to announce new restrictions on H-1B visa program for foreign workers

President Donald Trump’s plan to restrict employment-based visas could affect an estimated 240,000 people seeking to work in the U.S. across industries from technology to finance and hospitality.
Trump said in a Fox News interview Saturday that he will announce new restrictions on various work visas Sunday or Monday. The plan won’t affect certain workers who are already in the U.S., he added.
There will be very few exclusions, Trump said, when asked about upcoming rules on several different visa categories, including the H-1B program for high-skilled workers, the L-1 program for managers transferring within their companies, and H-2B visas for non-agricultural temporary workers.
“In some cases you have to have exclusions. You need them for big businesses where they have certain people that have been coming in for a long time,” he said.
One possibility under consideration would restrict people from entering the U.S. on visa categories including the H-1B program for as long as 180 days, Bloomberg News reported June 12, citing two people familiar with the proposal. Workers who were granted those visas but remain outside the country may not be able to enter until the order expires.
The move would affect hundreds of companies and thousands of people: In fiscal year 2019, the H-1B visa was awarded to about 133,000 workers starting initial employment with a company. More than 12,000 people were granted L-1 visas in initial applications, and more than 98,000 people were issued H-2B visas. Barring exclusions, Trump’s plan could affect more than 240,000 applicants just based on these three work visa categories.
Trump tweeted at the height of the coronavirus pandemic that he planned to “temporarily suspend immigration into the U.S.” Industry groups, such as the U.S. Chamber of Commerce and the Information Technology Industry Council, wrote to Trump to express concerns that restrictions would disrupt business and hamper growth.
In the past few years, the administration has been moving to tighten the H-1B program, and the approval rate for applications has fallen. The technology industry has relied on H-1B visas to hire foreign talent, particularly in the fields of science and engineering. Critics say some companies have abused the program to displace American workers.