fortune--2020-10-16--China is set to pass law restricting the export of sensitive technology

China is set to pass a new law that would restrict sensitive exports vital to national security, expanding its toolkit of policy options as competition grows with the U.S. over access to technologies that will drive the modern economy.
China’s top legislative body, the National People’s Congress Standing Committee, is expected to adopt the measure in a session that concludes on Saturday. The Export Control Law primarily aims to protect China’s national security by regulating the export of sensitive materials and technologies that appear on a control list. It would apply to all companies in China, including foreign-invested ones.
The measure would add to Beijing’s regulatory arsenal, which also includes a tech export restriction catalog and an unreliable entity list. The law would also help put China on a similar footing to the U.S., which regularly uses export controls and licenses strategically against its adversaries.
Mounting tensions between China and the U.S. have spilled over into the realm of technology. Big Chinese companies including Huawei Technologies Co., ByteDance Ltd.’s TikTok, Tencent Holdings Ltd.’s WeChat and Semiconductor Manufacturing International Corp. find themselves in Washington’s cross-hairs.
“Chinese authorities may have learned a lesson from the U.S. and other countries,” said Qing Ren, a partner at Global Law Office in Beijing.
A report carried by official Xinhua News Agency said the draft law stipulates that China could take reciprocical measures against a certain country or region that has “abused export control measures and damaged China’s national security and interests.”
The official Legal Daily reported on Thursday that some legislators had suggested source codes, algorithms and technical documents be added as controlled items, and that China should set up some restrictions on exporting technologies on which Beijing has a competitive edge, such as 5G and quantum communications.
Whether Beijing will allow the export of valuable Chinese technology is one of the biggest uncertainties hovering over the partial sale of TikTok to Oracle Corp. and American investors. China in August asserted the right to block the deal by adding speech recognition and recommendation technology — the core of TikTok’s global popularity — to a list of regulated exports.
The existing control lists are much narrower than the one used by the U.S., staying limited to materials that could be used for nuclear, chemical or biological weapons, Ren said. If it’s expanded in the future “then more products or technologies will be subject to export control in China,” he said.
While the U.S. is generally ahead of China in most spheres, China controls critical aspects of technology in industries from wireless networking to unmanned aerial vehicles.
Tech Headway
American officials have warned that Huawei — the leader in next-generation wireless patents — controls a 10th of worldwide essential 5G patents, and its deep involvement in international standards-setting could post a threat to U.S. national security. The company ranked among the top 10 recipients of U.S. patents in 2019 — helping China become the fourth-biggest recipient of American patents, behind Japan and South Korea but ahead of Germany for the first time.
Chinese companies have also made headway in dominating certain niches. Shenzhen-based SZ DJI Technology Co. controls something like three-quarters of the global consumer drones market. Display maker BOE Technology Group is aggressively filing patents in its bid to get into next-generation OLED screens for smartphones.
And in artificial intelligence, companies from Alibaba Group Holding Ltd. to Tencent Holdings Ltd. and upstarts like SenseTime Group Ltd. are taking advantage of unparalleled reserves of data to advance in areas such as facial recognition.
When approved, China’s law will be applied extra-territorially, taking a page from the U.S. Export Administration Regulations’ long-arm jurisdiction that Beijing has frequently criticized. Foreign Ministry officials have repeatedly accused Washington of stretching and abusing the concept of national security in justifying actions against Chinese companies.
China is the biggest exporting country in the world and overseas sales provide jobs for millions of people, so it will be careful not to abuse the law, said Mei Xinyu, a researcher at a research group under China’s Commerce Ministry. “We highly value China’s image as a reliable supplier in the international market,” Mei said. “So we wouldn’t expand the scope of export control at will.”
China’s Ministry of Commerce first published a draft of the legislation in June 2017. It went through two reviews by the NPC in December 2019 and at the end of June. When the draft bill was introduced for its first review, Minister of Commerce Zhong Shan explained to the national legislature that export control is a mechanism aimed at “honoring international obligations such as nonproliferation and safeguarding national security and developmental interests.”
But in a draft reviewed in June, national security was given higher priority.
“Threats to national security could come from various fields, including the economic field,” said Cui Fan, a professor of international trade at the University of International Business and Economics. “But we can’t confuse normal competition between companies with threats to economic security and national interests.”
The latest version further clarifies the scope of controlled items and punishment measures for violations. Government departments overseeing export control should publish export control guidance in a timely manner, a spokesperson of the NPC’s legislative affairs commission said on Monday, without elaborating.
Foreign companies need not fear the law since it applied equally to all companies operating in China, according to Ren from Global Law Office. Still, he said, foreign-invested companies should be careful if their activities involve the export of technologies.
“Chinese employees maybe are not allowed to release the controlled technologies to their foreign colleagues,” Ren said. “This depends on the very specific circumstances of the each individual company. But it could happen.”


fortune--2020-10-16--Biden used his town hall to expound on his policy plans, but you probably won’t hear about them

The polls are wrong .
The U.S. presidential race is a near dead heat , this A.I .
‘ sentiment @ @ @ @

Vice President Joe Biden’s town hall Thursday evening was boring but informative. And that’s why you probably won’t hear too much about it.
President Donald Trump, meanwhile, was told that he was handsome, refused to condemn QAnon, a far-right conspiracy theory about Satan-worshiping pedophiles, and said he didn’t remember whether he had received a COVID-19 test on the day of the presidential debate. All easy and emotionally triggering sound bites to repost or play over and over on news programs.
Thursday evening’s dueling town halls accomplished what many analysts feared they would by pitting the two presidential candidates against each other: The most entertaining won the evening. And President Trump knows how to command an audience.
Mastering the art of entertainment value was a large part of his winning strategy in 2016, when stations like CNN aired hours of unfiltered Trump rallies. “We wanted access, and Donald Trump gave it to us,” Jeff Zucker, the head of CNN and former president and CEO of NBCUniversal said after the election.
At a campaign rally this week, Trump blatantly announced his strategy. He told the audience that he agreed to the town hall for a “free hour” of TV coverage.
Biden, meanwhile, took his time with answers. Some went on for so long that he was cut off by ABC host George Stephanopoulos. When that did happen, he told those in the audience that he would be happy to speak to them after the special to expand on his views and policy proposals.
Biden covered a wide range of topics including COVID-19, the economy, the Supreme Court, LGBTQ rights, police brutality, and racial equality. He also largely ignored Trump, choosing instead to focus on what he would do if elected.
“I’m running as a proud Democrat, but I’m going to be an American President,” he told the audience. “I’m going to take care of those who voted against me as well as those who voted for me. That’s what Presidents do.”
A few channels away, Trump faced tough questioning from NBC’s Savannah Guthrie and friendly lobs from an audience in Miami, Florida. But despite the town hall audience, Trump often didn’t have qualified answers to the TODAY anchor’s questions.
When Guthrie asked the President why he promoted a conspiracy theory on Twitter that Biden attempted to have SEAL Team 6 killed to cover up the fake death of Osama bin Laden, the President defended himself by saying it was a retweet that he decided to “put out there.” Guthrie told the president that he wasn’t “someone’s crazy uncle who can retweet whatever.”
Guthrie also pushed the President on his recently revealed taxes. He did not deny that he owed around $400 million and instead said it was good that he was in debt.
Like much of this election, Trump was the center of attention on Thursday. But while he provided the entertainment, he made many missteps.
Biden, who suffers (or perhaps, depending on who you ask, benefits) from an inability to speak in quick sound bites made for tight news packages or Twitter videos, likely won’t see as much out of the event. But that’s not necessarily a bad thing. Ahead in most polls by double digits at this point, the former vice president likely doesn’t mind stepping out of the way and letting the President continue on his current path.


fortune--2020-10-16--Joe Biden vowed to change discriminatory transgender laws—here’s what’s on the table

At his televised town hall forum in Philadelphia on Thursday night, Joe Biden vowed to eliminate discriminatory executive orders against transgender people signed by President Trump. “I will flat out just change the law,” Biden said in response to a woman who said one of her daughters was transgender.
The Trump Administration has rolled back a number of regulations designed to protect the rights of the LGBTQ community. If Biden is elected President and follows through with that pledge, these are the actions he would need to reverse.
Ban on transgender people serving in the military
In 2017, Trump announced on Twitter that “the United States Government will not accept or allow Transgender individuals to serve in any capacity in the U.S. Military.” After facing legal challenges, the Supreme Court in 2019 granted the administration’s request to allow it to proceed with the ban.
The current ruling allows transgender people to enlist or serve in the military—but only if they stick to their original sex assignment from birth.
Bathroom rules for transgender students
In 2017, the Education Department, by order of Trump, rescinded Obama-era protections that allow transgender students to use bathrooms based on their gender identity. Education secretary Betsy DeVos was initially uncomfortable with signing off on the order but was ultimately pushed into agreeing by then-attorney general Jeff Sessions.
Reversal of transgender health protections
In June, the Department of Health and Human Services finalized a rule that would eliminate protections for transgender people discriminated against in health care settings. “Under the new rule, a transgender person could, for example, be refused care for a checkup at a doctor’s office,” NPR noted.
Rollback of transgender protections in federal prisons
The revised 2018 Transgender Offender Manual now requires the Bureau of Prisons to use an inmate’s biological sex to determine where that person will be housed and which bathrooms they can use.
Reversal of protections for transgender people in homeless shelters
In July, the Department of Housing and Urban Development rolled back a rule designed to protect transgender people from discrimination by homeless shelters and other housing services using federal funding.


fortune--2020-10-16--Trump’s town hall saw the President in typical form, inaccurate claims and all

Less than two weeks after being hospitalized with COVID-19, President Trump was back on the national stage on Thursday night during a televised town hall event—one that saw the President defend the online conspiracy theory known as QAnon and pledge to accept a peaceful transfer of power should he lose next month’s election.
On a night that was supposed to see the second presidential debate between Trump and Democratic nominee Joe Biden, Trump fielded questions from NBC’s Savannah Guthrie and a live audience in Miami while Biden simultaneously staged a similar event—one of a completely different pace and dynamic—in Philadelphia with ABC’s George Stephanopolous.
Trump’s town hall saw the President in typical form, lobbing unsubstantiated claims and voicing controversial, factually dubious statements while also fervently defending his administration’s record. Guthrie played an assertive moderator, constantly attempting to pin Trump down on his factual inaccuracies and evasiveness, sometimes to Trump’s chagrin. Still, the President remained mostly in his element—rolling with the punches and trotting out some of his favorite lines.
He again shifted much of the blame on China for a pandemic that has killed more than 200,000 Americans to date, and insisted he “tell[s] people to wear [face] masks” while, in the next breath, noting that “people with masks are catching [COVID-19] all the time.” He hailed his administration’s economic accomplishments before the coronavirus pandemic decimated the U.S. economy, declaring that gross domestic product will climb “through the roof” next year and erroneously claiming that Biden “wants to raise taxes on the middle classes.” And in response to a question from a Black female audience member, Trump again espoused his belief that he has “done more for the African-American community than any President except for Abraham Lincoln.”
But the most flagrant elements of the President’s performance came when Guthrie pressed him on the matter of QAnon, and Trump’s refusal to condemn an online conspiracy theory that has spread prolifically—appearing repeatedly at his own rallies—despite having no basis in truth. “I know nothing about QAnon,” Trump said, despite Guthrie having just explained the theory’s far-fetched allegations to him. He then went a step further, noting that he “know[s] they’re against pedophilia” and adding that QAnon followers “may be right” in their beliefs.
It was enough to make Guthrie shoot back at the President’s dog-whistles and conspiracy-mongering. When he tried to brush off his retweeting of numerous baseless theories attacking Biden, Guthrie retorted: “You’re the President. You’re not someone’s crazy uncle who can just retweet whatever.”
The night did see Trump at least tip his cap to reason and decency, in parts. Right before the QAnon discourse, Guthrie managed to elicit a condemnation of white supremacy from the President—though he quickly pivoted to shift the blame on his opponent and radical elements on the left. “You didn’t ask Joe Biden whether he denounces antifa,” Trump said, despite Biden having repeatedly condemned violent forms of protest.
And Trump even went so far as to acknowledge that he would accept a “peaceful transfer” of power should he lose to Biden the election, after having evaded such a commitment for much of the campaign. Again, however, he was quick to qualify: “A peaceful transfer, I absolutely want that—but ideally, I don’t want a transfer, because I want to win.”
Elsewhere, the President could not say whether he was tested for COVID-19 before his debate with Biden on Sept. 29, which itself came two days before his positive diagnosis, nor how he tested before the debate—raising the possibility that he knowingly walked into the debate COVID-positive. “Possibly I did [get tested], possibly I didn’t,” Trump said, while also acknowledging that he wasn’t getting tested for the virus every day.
He also appeared to confirm some of the details of the New York Times’ bombshell report on his federal income taxes last month, describing his reported $750 tax liability as merely a “filing number” and brushing off his reported $400 million-plus in debt as “a peanut.”
Though Guthrie tried her best to hold the President accountable on various counts, he repeatedly managed to spin his way out of jams with a typically Trumpian, unapologetic deftness.
When she pressed him on having opposed President Obama’s nomination of Merrick Garland to the Supreme Court eight months before the 2016 presidential election—only for Trump himself to nominate Amy Coney Barrett for the bench less than 40 days before the 2020 election—he claimed it was Senate Democrats’ poor treatment of Justice Brett Kavanaugh, during Kavanaugh’s highly contentious 2018 confirmation hearings, that had changed his mind.
“The whole ballgame changed when I saw the way they treated Justice Kavanaugh,” he said of a Supreme Court nominee who was accused of sexual assault, as Trump himself has been numerous times. “There has never been anybody treated as badly as now-Justice Kavanaugh.”
And he even went as far as to insist his administration would “take care” of the Deferred Action for Childhood Arrivals (DACA) immigration policy, despite the fact that his administration tried and failed to rescind DACA. When Guthrie stated that very fact, as well as the administration’s failure to produce any comprehensive immigration reform bill, Trump resorted to blaming the pandemic.
In the end, no amount of truth or accountability could get in between the President and his impetuous pitch that America is—and will continue to be—a better place under his guidance. “Next year is going to be better than ever before,” Trump said, closing the evening.


fortune--2020-10-16--Let’s put Mr. Rogers in charge

Let’s put Mr. Rogers in charge

After Vice President Joe Biden’s demeanor at last night’s televised town hall was compared to Mr. Rogers, some folks wondered—would that be so bad? The candidate promised to restore protections for transgender people; also in the news, mixed messages in the art world.
But first, here’s your good neighbor week in review, in Haiku.
Would it be so bad
If Mr. Rogers were in
charge? To start every
day with a cheery
hello to the neighbors we
love as ourselves? To
accept all others
exactly as they are? Right
here and right now? To
say true things with care?
To stand up for what’s right and
fair by sitting down
for a friend? Love is
hard work, struggle: The sacred
job of all neighbors.
Wishing you a lovely and neighborly weekend.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
raceAhead is edited by Aric Jenkins.
On point
Vice President Biden vows to eliminate executive orders that discriminate against transgender people In last night’s televised town hall, Biden responded to a question posed by the parent of a transgender child, by promising to address legal restrictions imposed by the Trump Administration. "I will flat out just change the law," he said. He will have plenty of work to do; Aric breaks it all down below.
Fortune
Simone Leigh becomes first Black woman to represent the U.S. at Venice Biennale This is reason enough to endure lockdown vigilance for the chance to make it safe for the world to see her large-scale sculptures at the American pavilion when the storied convening returns in 2022. Her work addresses the experience of Black women very directly. “I feel like I’m a part of a larger group of artists and thinkers who have reached critical mass,” she told the New York Times. “And despite the really horrific climate that we’ve reached, it still doesn’t distract me from the fact of how amazing it is to be a Black artist right now.”
New York Times
What is it like to be a Black playwright? The industry is awash with racist white gatekeepers, agree some 40 (!) Black professionals who shared their stories in response to the breakout hit from Netflix, “The Forty-Year-Old Version.” Radha Blank wrote, directed, and starred in the film about her own experience in the theater world. “With these predominantly white male gatekeepers, it’s the same kind of person making the same type of choices, controlling what kind of diverse stories are told. There needs to be more of an investment in trying to make the American theater reflect what America looks like.” She’s in extraordinary company.
Los Angeles Times
Someone called the police on a sleeping homeless person Sadly, it was a statue of Jesus, depicted by Canadian sculptor Timothy Shmaltz as a homeless person sleeping on a bench, wrapped in a blanket. The sculpture had been traveling to various religious organizations when it arrived at the St. Barnabas Episcopal Church in Bay Village, a wealthy suburb in Northeastern Ohio. Father Alex Martin, the St. Barnabas pastor, greeted the police officer who was summoned just minutes after the sculpture was installed. "[The sculpture] reminds us that, even though homelessness is a not a significant problem in our immediate neighborhood, we don’t have to drive far to find those in tremendous need," he wrote in an email to the local paper. A learning opportunity that Mr. Rogers would love.
Cleveland Scene
On Background
What WOULD Mr. Rogers do? Tom Junod wrote the definitive profile of Fred Rogers for Esquire back in 1998. That experience sparked an unusual friendship that lasted for years. That story and that friendship became the basis of new movie starring Tom Hanks. Well, sort of. I’m not going to tell you anything about this extraordinary piece by Tom Junod that looks back that relationship, except to implore you to read it. Trust me on this.
The Atlantic
And while we're on the subject “I know how tough it is some days to look with hope and confidence on the months and years ahead. But I would like to tell you what I often told you when you were much younger. I like you just the way you are. And what’s more, I’m so grateful to you for helping the children in your life to know that you’ll do everything you can to keep them safe. And to help them express their feelings in ways that will bring healing in many different neighborhoods. It’s such a good feeling to know that we’re lifelong friends.”
— Fred Rogers in a video good-bye to his now-adult fans, recorded a few months before his death on Feb 27, 2003.
Today's mood board
J.DAVID AKE—AFP/Getty Images


fortune--2020-10-16--Amazon’s activist employees are sowing the seeds of unionization

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At Amazon, employee activism is morphing into something more like old-fashioned union organizing.
Employee activism has been a growing trend in recent years, new and notable because workers have been speaking out against their employers on issues unrelated to pay, benefits, or working conditions. Employees of Google, Microsoft and Amazon walked out to support the Global Climate Strike in September 2019, with Amazon employees specifically opposing the company’s climate-related policies; more than 8,000 workers signed a letter to CEO Jeff Bezos demanding that Amazon cut its carbon emissions and take other steps to reduce use of fossil fuels. The day before the walkout, Bezos announced that Amazon would be carbon neutral by 2040, but the protesting employees said that target wasn’t aggressive enough.
Other employee activists have chosen other non-work-related issues. Employees at Wayfair protested the company’s sale of furniture to immigrant detention facilities. Google workers marched against the company’s generous severance deal with an executive accused of sexual misconduct. Microsoft employees called on the company to cancel its contract with the U.S. Army because the technology involved “is designed to help people kill.”
Now the group that organized the Amazon climate walkout, Amazon Employees for Climate Justice, is planning a rally on Saturday, October 17, calling on the company to give employees a day off to vote. That’s squarely a workplace issue of the type that arises in union negotiations. (AECJ has already engaged with union leaders.) When AECJ held an online conference in April, a featured speaker was AFL-CIO president Richard Trumka, followed by a local labor leader. The AFL-CIO has helped Amazon employees with their organizing efforts. Secretary treasurer Elizabeth Shuler told Fortune in September, “The tech industry is the next frontier for the labor movement.”
At the planned Saturday rally, workers intend to gather at Amazon’s Seattle headquarters campus and march to an Amazon-owned Whole Foods Market, then go by car to an Amazon distribution center. Grocery and warehouse workers, not software writers, have been the focus of organizing efforts at the company.
Amazon declined to comment on AECJ or the planned event but said, “We have supplied all of our employees with information on how to register to vote, details of their local polling locations and how to request time off to vote. In all 47 states with in-person voting, employees that lack adequate time before or after their scheduled workday to vote can request and be provided excused time off. The number of hours and pay provided to employees varies by state in line with local laws.” Amazon Employees for Climate Justice did not make anyone available before Fortune’s deadline.
Amazon is America’s second-largest employer, with an estimated 1,000,000 employees worldwide; No. 1 is its giant competitor, Walmart, with 2.2 million. Both companies are almost entirely non-unionized and by far the most attractive targets for unions, which have been in long-term decline as players in the U.S. economy. A significant question for employers and unions now is whether other employee activist movements will hold to their original beyond-the-workplace purposes or transform themselves into union organizing efforts.


fortune--2020-10-16--Nikola shares plunge after CEO says startup can go it alone

Nikola shares sank as much as 16% in Friday trading after the electric-truck startup’s chief executive officer said he sees a path for his company even if it can’t come to terms with General Motors on a proposed strategic partnership.
Talks between the two companies are ongoing, but if a tentative technology-sharing and manufacturing deal announced last month falls apart, Nikola will revert to a “base plan” without GM’s help, CEO Mark Russell said in an interview late Thursday.
“We have the ability and we have a base plan of doing it ourselves. If we have a partner, that just enables us to consider going faster and helps reduce the risk,” he said. “We’ve proven that over the years that we are a partnership company when those things are available to us.”
The Phoenix-based company’s relationship with its would-be partner has been the subject of intense scrutiny since Nikola and its founder and former chairman Trevor Milton were accused of deception. Both the company and Milton have denied those claims.
GM is eyeing an 11% stake in Nikola as part of a cash-free deal in exchange for providing access to fuel-cell technology and for manufacturing the startup’s electric pickup. Nikola has stopped referring to that vehicle, called the Badger, in its public statements as talks continue with GM ahead of a Dec. 3 deadline.
Russell said Nikola is prepared to drop the truck if it can’t secure an agreement with an original equipment manufacturer like GM.
“The Badger is part of our discussions with GM. And we’ve been clear all along that we wouldn’t build a Badger without an OEM partner,” he said.
When asked if GM’s revamped Detroit-Hamtramck plant will build the Nikola Badger alongside a planned electric Hummer pickup, GM’s Executive Vice President of Global Manufacturing Gerald Johnson said the two sides are still negotiating.
“We have not finalized a deal,” Johnson said Friday. “We’re working on the details.”
The Detroit-based automaker could push to raise its planned stake in Nikola or seek warrants to guarantee or increase its equity if the company raises more money, people familiar with the matter said recently.
Shares of Nikola pared its earlier drop to trade down 14% to $20.07 as of 1:50 p.m. in New York. The stock has fallen more than 70% from a high of $79.73 in early June shortly after the company gained a public listing through a reverse merger.
Nikola also has held talks with major oil company BP about setting up a network of hydrogen-fueling stations across North America, Bloomberg reported last month. The status of those discussions is unclear, but the company has said it plans to announce a partner by year-end.
Russell reaffirmed that timeline and declined to comment on BP or specify any other potential partner. But he also said Nikola has a plan to develop hydrogen infrastructure on its own if it’s unable to arrange a suitable alliance.
Nikola does have agreements with other technology providers, including a partnership with Robert Bosch GmbH to co-develop fuel-cell technology. Two of the startup’s heavy-truck prototypes use fuel cells from Bosch and the company has said its larger German partner will continue to supply cells for vehicles produced in Europe.
Nikola also is working on a battery-electric semi truck to be built next year in Ulm, Germany, in a joint venture with CNH Industrial NV’s Iveco unit. It ultimately plans to manufacture a fuel-cell-powered big rig at its own plant in Coolidge, Az., which is under construction.


fortune--2020-10-16--By this measure, K-pop megastars BTS struck the wrong note with their IPO

BTS made music history when it became the first K-pop band to top the Billboard Hot 100 chart with their blockbuster tune “Dynamite,” featuring lyrics penned in English. “Life is sweet as honey, yeah, the beat is cha-ching like money,” chant the seven-boy ensemble in a rap-like staccato. The rainbow-coiffed fellas scored another smash when their management company, Bit Hit Entertainment of South Korea, went public on Oct. 15. But the act could have been a bigger monster, and loads more South Korean won would be cha-chinging if BHE hadn’t struck the wrong note by underpricing its IPO.
According to news stories—the offering’s prospectus isn’t easily available in English—BHE presold around one-fifth of its shares to institutional investors and its legions of fans at the equivalent of $118. That underwriting, led by J.P. Morgan and two Korean banks, raised $840 million in cash. The shares looked like such a bargain—and maybe got the star treatment because BTS is so adored—that the offering was reportedly 1,100 times oversubscribed by major funds, while the public, led by its enraptured fans, got just one share for every 600 they applied for.
As usual, when shares opened for trading on the Seoul stock exchange, the throngs who wanted shares and couldn’t get them jumped in en masse, doubling the price to $236 at the opening. By the close, the stock had cooled a bit to $225, still good for a 91% one-day gain. BHE finished its first day as public company with a market cap of $7.5 billion.
Sounds like the IPO version of going double-platinum. But if BHE had managed to get full price for the 7.1 million shares sold in the IPO, it would have garnered not $840 million, but $1.6 billion. So BTS’s owners left roughly $760 million on the table.
That’s s big number. According to a database assembled by Jay Ritter of the University of Florida, the nation’s leading academic expert on IPOs, that phantom $760 million would rank among the two dozen highest amounts forgone in all debuts on U.S. exchanges over the past several decades. For the first half of 2020, BHE posted EBIT of around $43 million and held $172 million in cash. So collecting the extra $760 million would have multiplied its cash holdings over four times. If BHE had received full price as measured by the close on Oct. 15, it could have sold 11% instead of 21% of its shares. The founders and other backers would still be holding the extra 10% that they surrendered via underpricing.
Those owners include the seven teen idols who conquer the world’s stages as BTS. According to published reports, they hold 68,385 shares each, or 479,000 in total, for around 14% of BHE. On the second day of trading, BHE shares fell 22%, cutting its valuation to $5.85 billion. Hence, the group that reportedly accounts for over 80% of BHE’s revenues own stock worth just over $800 million. Once again, sounds great. But if BHE had gotten every won for the IPO shares it sold, the BTS management outfit would have $760 more in its cash coffers, and hence a valuation the same amount, or 13% higher. Each of the seven rock stars would be $15 million richer.
In their hit “Cypher Pt.3: Killer,” the boys mock rap singers who keep doing the same old thing, grousing, “They all still rap the same way like this,” and that “if you want to be a piece, make it original.”
BTS are originals, to be sure, but they joined the Wall Street chorus and sang the same old, tired tune on their IPO.


fortune--2020-10-16--Amazon’s Prime Day sales jumped 36%—signaling a blockbuster holiday for e-commerce

Pandemic or no, shoppers poured more money into Amazon.com’s 2020 annual Prime Day shopping bacchanal—which occurred on Tuesday and Wednesday—than they did during last year’s sale.
According to data provided to Fortune by research firm Edison Trends, spending on Amazon’s U.S. e-commerce site on Oct. 13–14 rose 36%, compared to Prime Day in 2019, when the event was held in July. Earlier this week, eMarketer, another firm, had projected total sales would hit $6.17 billion in the United States, and almost $10 billion including other markets.
Amazon does not disclose overall sales results but did say that third-party businesses sold $3.5 billion worth of goods on the site during the two-day sale, up 60% of last year’s tally.
A made-up shopping occasion created by Amazon in 2015 to drum up business during a slow period of the year, Prime Day in 2020 took place three months later than usual, owing to shipping challenges earlier in the year due to the pandemic. So this year, Prime Day, which spurred competing deals from the likes of Walmart, Target, Best Buy, J.C. Penney, and Kohl’s, has effectively turned into the kickoff to holiday shopping—despite occurring about three weeks earlier than the typical beginning of that essential retail season.
And as they have since the pandemic broke out in March, large brick-and-mortar retailers rose to the occasion. Excluding Amazon, online sales rose 76% on Tuesday, the first day of the Amazon event, according to Salesforce data.
That is consistent with the sales gain reported by Target and Walmart earlier this year and bodes well for such big-box chains as the pandemic leads them to curtail traditional Black Friday events. Walmart, for one, is limiting crowd sizes during that time and staggering its sales events, making online sales all the more important.
Total U.S. e-commerce sales during the holiday season—November and December—this year will rise 35% to about $190 billion, according to eMarketer forecasts, a significant jump over 2019’s increase of 17%. And that will propel a strong holiday season: Customer Growth Partners this week estimated that total retail sales for the period would rise 5.8% to $749 billion.


fortune--2020-10-16--This stock market indicator shows a much closer election than polls are predicting

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Does the stock market know something the pollsters don’t?
That’s the takeaway from Ryan Detrick, chief market strategist for LPL Financial, who has been closely monitoring both the overall stock market’s moves as well as the U.S. dollar.
As he wrote Friday, “We’ve noted before that stock market gains ahead of the election historically support the incumbent party, while if stocks are lower it tends to support new leadership in the White House.” Detrick adds that the dollar is another indicator worth watching. “In fact, when stocks are up and the U.S. dollar is lower ahead of the election, or if stocks are lower and the U.S. dollar is higher before an election, the results have accurately predicted the last seven times those scenarios took place. Given stocks are up and the U.S. dollar is slightly lower, this could be one clue the upcoming election will be much closer than many are expecting.”
Indeed, despite a commanding lead in national polls, there are indications that support for Trump is somehow being undercounted. As Fortune’s Jeremy Kahn wrote this week, an A.I. tool that correctly predicted Brexit is showing a tight race. Expert.ai, explains Kahn, “uses an A.I. technique called ‘sentiment analysis’ to understand the emotions being expressed in social media posts. The company’s analysis puts Democratic candidate Joseph Biden ahead of President Donald Trump, 50.2% to 47.3%, a margin that is much narrower than the double-digit lead that Biden has over Trump in most national opinion polls.”
Other favorite Wall Street election indicators show a mixed bag. Fortune’s Rey Mashayekhi wrote that FiveThirtyEight’s Nate Silver considers the ISM Manufacturing Index to be the best metric for predicting elections. On that front, “if the ISM averages above 50 during that time (signaling an expanding manufacturing sector), that tends to bode well for the incumbent party, while an ISM average of below 50 (reflecting a contracting manufacturing sector) usually corresponds with a new party taking control of the White House.” With the index at 50.3 through the first nine months of the year, that’s another piece of data that suggests this election is still way too close to call.


fortune--2020-10-16--If Walmart wants to hear workers’ voices, it should give us a seat at the table

This month marks my 20th anniversary as a Walmart associate. Over the last eight months, I’ve seen the panic on workers’ faces as people have called in sick with COVID-19 symptoms, while Walmart gives us no information about whether we need to be tested for the virus too. I’ve also seen coworkers with symptoms afraid to call in sick, because they don’t have enough protected time off and may lose a paycheck, or their job. That’s not right.
Since the pandemic began, the Walton family fortune has swelled by nearly $43.2 billion thanks to Walmart’s hefty stock price gains. Walmart has notched $10 billion in revenue growth. Meanwhile, even after two decades with Walmart, I’m still paid less than $15 an hour. While associates like me are working on the front lines of this dangerous pandemic, making sure customers have groceries, pharmacies, home goods, and more, Walmart has slow-walked its COVID-19 response and keeps secrets about virus outbreaks in our stores.
That’s why Walmart CEO Doug McMillon’s recent folktale in Fortune about having “open ears and an open heart” sounds out of touch to associates like me. What we need is for Walmart to answer our calls for basic protections—more PPE, enforced social distancing, and hazard pay at 1.5 times our hourly wage, to start. And we need a seat at the table shaping company policy at Walmart, with real representation on the board of directors.
More than a thousand of my coworkers have reported contracting the virus, including over 80 associates in one store in Massachusetts. At least 22 Walmart associates have died, that we know of—the real number is likely higher. I found out one coworker tested positive for COVID-19 because he posted it to friends and family on Facebook. To survive this pandemic, Walmart workers have had to look out for each other, because the company sure isn’t looking out for us.
Walmart, the country’s largest retailer and employer, doesn’t have its own end-to-end testing apparatus, doesn’t test asymptomatic workers, and doesn’t share COVID-19 infection data for its roughly 1.5 million U.S. workers. For our CEO to trumpet his commitment to openness, while managers have coached workers to keep virus infections under wraps, is a slap in the face to associates like me who are risking exposure and putting our lives in jeopardy every day.
When the pandemic hit and our lives were on the line, it wasn’t Doug McMillon who took steps to protect us. Instead, associates around the country took matters into our own hands to fill the vacuum of leadership left by McMillon’s inaction.
When it became clear Walmart would rather sweep critical virus data under the rug, we created a COVID-19 tracker to paint a clearer picture of the risks. So far, we’ve reported at least 1,497 positive cases in stores. We’ve filed OSHA complaints to sound the alarm to regulators and the public. And we’ve called for representation on Walmart’s board at this year’s annual shareholder meeting, explaining to investors why Walmart’s failed COVID-19 response justifies greater worker voice, not less.
Now more than ever, hourly associates need a seat on Walmart’s board, so that we can bridge the disconnect between headquarters and the shop floor, and make sure the safety of workers and customers is put first.
Walmart delayed up to seven weeks on implementing CDC guidelines around social distancing and protective measures, and took more than three months to ask customers to wear masks. Walmart management says it has prioritized associates’ physical, emotional, and financial well-being through the pandemic. But for cash-strapped workers on the front lines, safety measures arrived too late, and the company’s measly bonuses don’t add up.
Even up to this day, more than half a year after the coronavirus hit the country, we’re still forced to interact with unmasked customers, make do without proper PPE, and carry heavier workloads driven by the boom in online orders and curbside pickup—without any hazard pay. Walmart workers across the country are forced to do more with less, worked to death with poverty wages on part-time schedules. Associates have been vocal about the ongoing need for increased cleaning and disinfecting. Our stores still are not clean, our bathrooms not fully sanitized. The air filters at my store, for example, look filthy. These are all things Walmart can fix, but hasn’t.
Even more frightening, Walmart doesn’t accept doctor’s notes as justification for missing work and just brought back a punitive attendance policy that incentivizes associates to come to work when we’re sick. It’s a dangerous policy to reinstate after a survey of 1,500 Walmart associates found 45% of respondents had gone to work sick, and 58% of those reported fear of retaliation as the reason. Now, if we need a day off but don’t have protected time, Walmart docks a point against us, and after five points over six months, we’re fired.
I have asthma and my son is immunocompromised. That’s not a sick time policy that keeps us safe. Walmart has also ushered in staff restructuring that will likely lead to layoffs for longtime associates at this time next year.
Walmart founder Sam Walton famously said, “If you want the people in the stores to take care of the customers, you have to make sure you’re taking care of the people in the stores.” If McMillon wants to posture as a humble “servant leader” who is collaborating with frontline workers to find answers, he can start by giving us a seat at the boardroom table, so associates who are building the company’s profits during a global pandemic have a real voice in shaping the company’s response to the virus, and a real share in the wealth our work creates. After all, associates have already been stepping in where Walmart’s management is failing, and their failures have already cost us dearly.
We Walmart workers remain on the front lines of the coronavirus crisis—we are scared, but we have solutions. McMillon, if you want to know what associates really think, it’s time to make associates part of the conversation where the decisions are made: in the Walmart boardroom.
Cynthia Murray is a Walmart associate in Laurel, Md., and founding member of United for Respect, a national nonprofit organization and multiracial movement seeking better treatment of retail workers.


fortune--2020-10-16--Twitter pulls back on key policy after N.Y. Post firestorm

Twitter is changing its Hacked Materials Policy, walking back a set of rules at the heart of its enforcement action this week against a controversial article that included potentially damaging allegations against U.S. presidential candidate Joe Biden.
In a series of tweets late Thursday, policy chief Vijaya Gadde said that the company will no longer remove hacked content “unless it is directly shared by hackers or those acting in concert with them.” Instead, it “will label Tweets to provide context instead of blocking links from being shared on Twitter.” Gadde said the updated policy will be put in place in the coming days.
Twitter found itself at the center of a political firestorm this week after both it and Facebook Inc. took measures to suppress the sharing of a New York Post article that alleged Biden had improper connections to an executive at a Ukrainian energy firm. Twitter has taken a more aggressive approach in policing President Donald Trump’s use of the service this year, earning it accusations from U.S. Republicans of stifling conservative speech and trying to assist Biden’s campaign.
At one point, the hashtag #TwitterCensorship was trending on the service.
Senate Judiciary Chairman Lindsey Graham and GOP Senator Ted Cruz told reporters Thursday morning that they will vote next Tuesday to subpoena Twitter Chief Executive Officer Jack Dorsey to appear before the committee to answer questions about its policies.
Twitter, like Facebook, has at times struggled to consistently enforce its policies, and both have updated their rules around important issues like voting and health-related misinformation in the run-up to the November U.S. presidential election.
Facebook said it was diminishing the Post story’s reach while it was fact-checked. Twitter blocked some people from sharing links to the story, and those who clicked on links that were shared were blocked from visiting the New York Post website.
A Twitter spokesman said the Post story would still be blocked on the platform despite the new policy because it contained people’s personal information, such as email addresses. A version of the story without those personal details, though, would be allowed.
Dorsey said Friday that Twitter’s “straight blocking of URLs was wrong. Our goal is to attempt to add context, and now we have capabilities to do that.” When the Post’s story appeared on Wednesday, Twitter put a warning on any post that included a link to the article that said “this link may be unsafe.” Twitter said the move was in line with its “Hacked Materials Policy, as well as our approach to blocking URLs, we are taking action to block any links to, or images of, the material in question on Twitter.”
The Hacked Materials Policy in question forbids people from sharing or linking to documents or other materials that were obtained via a hack. Twitter says part of the reason for the change is that it doesn’t want to stifle important journalism in the future. “We want to clarify — the policy isn’t meant to chill journalistic efforts or whistleblowers,” tweeted the company’s head of communications, Brandon Borrman.
Kate Klonick, an assistant law professor at St John’s University School of Law, said Twitter’s update reflects how incidents involving hacked materials have evolved since the policy was created. The rule was primarily intended to block links that shared information from others without their consent, including non-consensual pornography, she said, but wasn’t applied within the context of a broader news story.
“It hopefully draws a line in the sand for where the role of Twitter, Facebook and other major platforms is in regards to second-guessing journalist activity,” she said.
Dorsey acknowledged in a tweet on Wednesday that Twitter did a poor job of communicating its policy and reasoning.
“Our communication around our actions on the @nypost article was not great,” the CEO wrote. “And blocking URL sharing via tweet or DM with zero context as to why we’re blocking: unacceptable.”


fortune--2020-10-16--Coinbase received 1,914 requests in 6 months from FBI, ICE, and other agencies

Coinbase published its first transparency report on Friday, revealing the scope of how often law enforcement agencies targeted the cryptocurrency giant for customer information.
According to the report, Coinbase received 1,914 requests for information in the first six months of 2020 alone. Nearly 60% of those came from state and federal agencies in the U.S.—primarily from the FBI, Homeland Security, and the DEA.
Dozens of requests, however, came from other agencies, including the U.S. Postal Inspection Service and the immigration enforcement agency, ICE:
Outside the United States, the U.K. and Germany accounted for the vast majority of law enforcement requests. Coinbase received such requests from more than three dozen countries during the first part of 2020, including from Singapore and Slovakia.
Coinbase’s chief legal officer, Paul Grewal, summarized the findings in a blog post. Grewal, a former federal judge who is well known in Silicon Valley, wrote that the company “will not hesitate to push back” against unreasonable requests, citing a high-profile legal tussle between Coinbase and the IRS.
Grewal’s report, however, does not say what proportion of the time Coinbase challenged the law enforcement requests—information that is typically provided by Google and other tech companies that publish transparency reports. A source close to the company told Fortune that Coinbase, which has over 38 million customers worldwide, will include this information in future reports.
The transparency report comes after a recent call by the Electronic Frontier Foundation (EFF), a digital rights organization, for Coinbase to issue one. The EFF’s demand, as well as the findings of the report itself, underscore how law enforcement has taken an enormous interest in Bitcoin and other cryptocurrencies in recent years. While it is possible to buy and sell crypto without an intermediary—allowing users to transact in near-anonymous fashion—most users turn to services like Coinbase, which provide a link to the conventional banking system.
The new report from Coinbase, which has long positioned itself as a mainstream and law-abiding financial company, comes as U.S. law enforcement has grown more aggressive in forcing crypto companies to comply with rules such as “know your customer.” Earlier this month, the Justice Department charged senior executives at the popular exchange BitMex with violating the Bank Secrecy Act.
The Coinbase report concludes with a call by Grewal for more companies in the financial sector to follow the tech industry’s example of publishing data about law enforcement activities.
“We think it is important not just for cryptocurrency companies, but for fintechs and banks at large to shed light on financial data sharing practices and contribute to the understanding of industry trends in a meaningful way,” Grewal writes.
A final notable feature about the Coinbase report is a reference to “Civil or Administrative” requests, which made up 3.4% of overall government inquiries. While such requests may refer to demands from civil agencies like the SEC, they can also encompass controversial requests known as “National Security Letters.” These letters, which are the subject of ongoing constitutional disputes in federal courts, allow the FBI to include a gag order with demands for data—barring the company from even disclosing the existence of such a request. Coinbase declined to comment about whether it had received such requests.


fortune--2020-10-16--Not all cloud companies are keeping their pandemic boost

Happy Friday, readers.
It’s been the year of the cloud stocks (exhibit A and B: Twilio and Snowflake).
But it has not been a smooth upward trajectory for Fastly (NYSE: FSLY), a San Francisco-based company that helps deliver digital content. At one point in the pandemic, the company that counts Pinterest and GitHub among its customers was the best-performing tech stock during the crisis and achieved a valuation of about $15.5 billion.
But in recent days, the company has lost over a third of its value in a very 2020, Mad Libs-esque scenario. Fastly warned on Wednesday that earnings for the quarter would be lower than expected due to less usage from Fastly’s largest customer. That customer: TikTok, the short-form video platform backed by ByteDance.
“Due to the impacts of the uncertain geopolitical environment, usage of Fastly’s platform by its previously disclosed largest customer did not meet expectations, resulting in a corresponding significant reduction in revenue from this customer,” Fastly’s press release read.
TikTok’s side of the story is known by now: President Donald Trump’s administration threatened to ban the Chinese-owned app if it did not offload its U.S. operations to an American entity. Then Oracle and Walmart stepped in to take up stakes in those operations with Trump’s blessing. But TikTok is still seeking to finalize a deal that satisfies U.S. and Chinese regulators, and the company is also fighting restrictions that would effectively shut down the app on Nov. 12 in the U.S.
Fastly’s largest customer was not the only one to reduce usage in the quarter—“a few customers,” the press release noted without naming them, also had lower-than-estimated usage. That said, shares of the company remain elevated compared to pre-pandemic levels—up 514% since mid-March.
THE BEST WAY TO PITCH? Here’s an interesting study that came up on the wires this week from Yale researchers. Based on some 1,130 pitch videos submitted over the past decade to early-stage accelerators (Y Combinator, MassChallenge, 500 Startups, Techstars, and AngelPad), the researchers found that entrepreneurs who appeared friendly and happy were more likely to raise funding, while those that only spoke of their ability and competitiveness weren’t. But for the startups that raised funding, the accelerators’ decisions didn’t necessarily mean success in the long term (based on the company’s total employment, if it raised follow-up rounds, and, of course, if it’s still alive).
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Proterra, a Burlingame, Calif.-based maker of electric busses, raised $200 million in funding. Cowen Sustainable Investment Advisors led the round and was joined by investors including Soros Fund Management, Generation Investment Management and Broadscale Group.
- VectivBio AG, a Basel, Switzerland-based clinical-stage biotech focused on rare diseases, raised $110 million in funding. Investors included Surveyor Capital,, Cormorant Capital and Eventide Asset Management, as well as Versant Ventures, OrbiMed, Novo Holdings, BPI France, Tekla Healthcare Investors, Inserm Transfer Initiative and Cowen Healthcare Investments.
- DISCO, an Austin-based legal tech startup, raised $60 million in funding valuing it at $785 million. Georgian Partners led the round and was joined by investors including Bessemer Venture Partners, LiveOak Venture Partners, The Stephens Group, and Breyer Capital.
- M1 Finance, a Chicago, Ill.-based finance app for automated investing and borrowing, raised $45 million in Series C funding. Left Lane Capital led the round.
- Fivestars, a San Francisco-based maker of small business payments and marketing software, raised $52.5 million in funding. Salt Partners led the round and was joined by investors including Lightspeed Venture Partners, DCM Ventures, Menlo Ventures and HarbourVest Partners. Read more.
- Vineti, a San Francisco, Calif.-based gene therapy platform, raised $33 million in extended Series C funding. Cardinal Health led the round and was joined by investors including Marc Benioff, Canaan Partners, Threshold Ventures, Section 32, Casdin Capital, Novartis Pharma AG, McKesson Ventures, and LifeForce Capital,
- Whisper, a San Francisco-based maker of hearing aids, raised $35 million in Series B funding. Quiet Ventures led the round and was joined by investors including Sequoia Capital and First Round Capital.
- Sonrai Security, a New York-based cloud security platform, raised $20 million in Series B funding. Menlo Ventures led the round and was joined by investors including Polaris Partners and Ten Eleven Ventures.
- Temporal, a Seattle-based maker of an open source, stateful, microservices orchestration platform, raised $18.8 million in Series A funding. Sequoia Capital led the round and was joined by investors including Madrona Venture Group, Addition Ventures and Amplify Partners.
- Savana, a Madrid-based startup applying big data to electronic health records, raised $15 million in Series B funding. Cathay Innovation led the round and was joined by investors including Seaya Ventures and MACSF.
- Chiper, a San Francisco-based e-commerce platform for independent merchants, raised $12 million in Series A funding. Investors included WIND Ventures, Monashees, and Kaszek Ventures.
- Alpaca, a San Mateo, Calif.-based startup for companies to add commission-free equities trading to their platforms, raised $10 million in Series A funding. Portag3 led the round and was joined by investors including Social Leverage, Spark Capital, Fathom Capital, and Abstract Ventures. Read more.
- Sanity.io, an Oslo, Norway- and San Francisco, Calif.-based content platform for developers, raised $9.3 million in Series A funding. Threshold Ventures led the round and was joined by investors including Ev Williams, Adam Gross, Guillermo Rauch, Stephanie Friedman, Monochrome Capital, Heavybit, Alliance Venture, Matthias Biilman, Chris Bach, Jon Dal and Edvard Engsæth.
- Acceldata, a Palo Alto, Calif.-based maker of a data observability platform, raised $8.5 million in Series A funding. Sorenson Ventures led the round and was joined by investors including Lightspeed and Emergent Ventures.
- Urban Umbrella, a New York City-based scaffolding design company, raised $7 million in Series B funding. The investors were not named.
- Nabis, an Oakland, Calif.-based cannabis distributor, raised $5 million in Series A funding. Y Combinator led the round. Read more.
- Smartvid.io, a Cambridge, Mass.-based construction site monitoring platform, raised $5 million in funding. IA Capital Group led the round and were joined by investors including Building Ventures, Companyon Ventures, and Converge.
- WiserCare, a Los Angeles-based digital health platform, raised $3.6 million in funding. UnityPoint Health Ventures led the round and was joined by investors including Abundant Venture Partners.
- Elenas, a Bogota, Colombia-based social commerce platform, raised $2 million in seed funding. Investors included Alpha4 Ventures, Amador Holdings, Polymath Ventures, and Meesho.
- Glipmse, a Washington D.C.-based business-to-business marketplace that allows brands to reach new customers by placing products in short-term real estate rentals, raised $1.5 million in seed funding. Origin Ventures led the round and was joined by investors including GSR Ventures.
PRIVATE EQUITY
- Summa Equity acquired a majority stake in Sengenics, a Singapore-based functional proteomics company. Financial terms weren't disclosed.
Wind Point invested in Handgards, an El Paso, Texas-based food safety company. Financial terms weren't disclosed.
- EMPI, a portfolio company of Dubin Clark, acquired RacingLine Group, a U.K.-based provider of branded parts and software for Volkswagen and Audi vehicles. Financial terms weren't disclosed.
- Welsh, Carson, Anderson & Stowe invested in GovernmentCIO, a Washington D.C.-based provider of technology and digital solutions to the federal health IT services market. Financial terms weren't disclosed.
- CriticalPoint Capital acquired the power construction business of AECOM (NYSE:ACM). Financial terms weren't disclosed.
- Telestream, backed by Genstar Capital, acquired EcoDigital, a Vancouver, Wa.-based maker of a content management system. Financial terms weren't disclosed.
EXITS
- Fluence acquired Advanced Microgrid Solutions, a San Francisco-based maker of software aimed at optimizing clean energy assets. AMS has raised from investors including Arnold Schwarzenneger, DBL Partners and Energy Impact Partners.
- Salto Systems acquired Gantner Technologies, an Austrian-based maker of electronic access systems, from Ardian. Financial terms weren't disclosed.
OTHERS
- Yandex terminated talks to acquire TCS Group Holding, Russia’s biggest lender, after previously saying it reach a preliminary agreement to buy the company for $5.5 billion in cash and stock. Read more.
- ZoomInfo (Nasdaq: ZI) acquired Clickagy, a Roswell, Ga.-based buyer intent data provider. Financial terms weren't disclosed.
IPOs
- Eargo, a San Jose, Calif.-based hearing-aid maker, raised $141 million in an offering of 7.9 million shares priced at $18. The firm posted revenue of $32.7 million and loss of $44.5 million in 2019. New Enterprise Associates, Future Fund, Gilde Healthcare, and Longitude Venture back the firm. Read more.
- Aligos Therapeutics, a South San Francisco-based clinical-stage maker of therapies for viral and liver diseases, raised $150 million in an offering of 10 million shares priced between $14 to $16. Backers include Roche, Versant Ventures, and Baker Bros. Advisers. Read more.
- Tarsus Pharmaceuticals, a clinical-stage biotech developing therapies for ophthalmic conditions, raised $88 million in an offering 5.5 million shares priced at $15 apiece. Vivo Capital and Frazier Life Sciences backs the firm. Read more.
SPAC
- Bridgetown Holdings, a blank check company formed to acquire a company in Southeast Asia formed by Pacific Century and Thiel Capital, raised $550 million.
- H.I.G. Acquisition, a blank check company formed by H.I.G. Capital,now says it plans to raise $325 million rather than $450 million.
F+FS
- L Squared Capital raised $505 million for its third fund. Read more.
PEOPLE
- RedBird Capital Partners plans to open a West Coast office in Los Angeles, led by Andy Gordon who will join the firm as a Partner in February 2021.
- Global Infrastructure Partners has named Jim Amine as a partner.


fortune--2020-10-16--Is Netflix recreating the old broadcast TV network?

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
Good morning Data Sheet readers. We’re starting on our new schedule. I’ll write the entire newsletter on Monday, Wednesday, and Friday from now on. Robert Hackett will switch to Tuesday and our West Coast colleague Danielle Abril will take over on Thursday. Enjoy!
If you reach page 1,168 of Harlot’s Ghost, the very last page of Norman Mailer’s rollicking faux history of the CIA, the story doesn’t quite finish. “TO BE CONTINUED,” it says. That was 1991 and Mailer, who died in 2007, never published the sequel, leaving readers frustrated.
But what if the author, or the auteur as we say in the case of TV and movies, does have an ending, but the publisher or the network has other plans?
Lately, Netflix has made news over early cancellations, in some cases drawing protest from the auteurs and actors involved. “No more GLOW. Sorry. Stinks,” actor Marc Maron tweeted the other day when Netflix dropped the award-winning show about 1980s female wrestlers. Creators Liz Flahive and Carly Mensch have said they had “hundreds of ideas” for continuing the story. In the past year or so, Netflix also axed The Chilling Adventures of Sabrina, Patriot Act with Hasan Minhaj, Altered Carbon, and many more—two dozen in all. That’s sparked fan protests, calls for moves to other networks, and concern over loss of representation, given many of the lost shows featured women, LGBTQ+ people, or people of color in the lead.
It’s an age-old drama in Hollywood. The age of streaming has put a new twist on finishing unfinished stories, however. When Comcast’s Syfy network cancelled The Expanse a few years ago, Amazon swooped up the still-running space opera for more seasons. Arrested Development, Lucifer, and Designated Survivor are among shows that Netflix has saved from another network’s trash bin.
Now Netflix’s cancellations are a sign of changes at the streaming leader.
Seven years ago, when Netflix had only 30 million subscribers worldwide, its then-head of content Ted Sarandos famously crystalized the company’s goal: “to become HBO faster than HBO can become us.” That meant taking chances on risky fare and giving the auteurs freedom—and big budgets. HBO rarely cancelled anything after one or two seasons and, for years, Netflix followed suit. Sarandos let one of his early hits, House of Cards, finish its sixth and final season even after its star Kevin Spacey got fired.
Sarandos’s quippy strategy turned out absolutely correct. Netflix caught up to HBO and now, with almost 200 million subscribers, has far surpassed it.
Sarandos is co-CEO now, and his emphasis has clearly changed. It’s one thing to attract tens of millions of viewers with niche-y shows. But now Netflix is aiming for an audience of hundreds of millions. And it’s looking more and more like one of the big networks from the pre-cable TV landscape, when shows needed big names and broad appeal and those that didn’t rate well could get axed at any time. Even after airing just one episode. (AT&T seems to have similar goals for broadening HBO itself, with the streaming version rebranded as HBO Max and now rerunning Friends and The Office.)
That may be a shame for fans. But so many smaller services are picking up the mantle. It’s a good bet that Apple TV+ or another rival can become the new “old Netflix.” And that would be a very good thing.
***
Fortune has been upping its podcast game and the latest can’t-miss episode is from my colleagues Michal Lev-Ram and Brian O’Keefe exploring how tech companies are trying to bring innovation to the fight against California wildfires.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
NEWSWORTHY
Love to hear the robin go tweet tweet tweet. The magic of A.I. continues to impress. News out of the Googleplex on Thursday that the search giant has figured out a way to identify songs that people can only hum or whistle for 10 to 15 seconds. People already ask Google to identify 100 million songs a month the old-fashioned way, by having the service hear the actual music playing.
Clean up on aisle four. As Danielle noted yesterday, the social networks still struggle to police themselves and stop toxic filth from spreading. The same week that Twitter and Facebook decided Holocaust deniers should be banned, Google's YouTube followed Facebook in banning videos promoting deranged conspiracy theories like QAnon. But self-policing may only last for so long. After Twitter and Facebook initially limited the spread of a dubiously sourced New York Post story, Republican lawmakers renewed their attacks on the companies Thursday. And Federal Communications Commission chair Ajit Pai announced that he would take up the president's call to narrow the legal protections for social networks in Section 230 of the Communications Decency Act.
Inspiration or duplication. The knock on Peloton's business model is that it's just peddling a lot of hype and overpriced exercise equipment. If so, then why is the parent of rival NordicTrack suing for patent infringement on Peloton's new bike? Icon Health & Fitness accuses Peloton of building its "entire businesses on the back of Icon’s patented technology.” Oh yeah, Peloton also sued Icon in May over patents related to showing pre-recorded classes.
Not the good kind of bookworm. Hackers stole customer data from Barnes & Noble including billing and email addresses as well as order history. Payment information was not accessed, the bookseller said. The incident forced B&N to take many systems offline, including its Nook e-book service. Software mogul Robert Brockman may be going offline for a while, too. Federal prosecutors charged Brockman, who made a fortune selling apps to car dealerships, with evading taxes on $2 billion of income—the biggest tax evasion case ever. Brockman pled not guilty.
Take a picture if you can. In gadgetland, Fujifilm unveiled a new camera aimed at vloggers. The $1,000 X-S10 is a lot less retro in design than most of Fuji's prior models and has a fully articulating rear screen. Thursday was also the review embargo date for Google's new Pixel 5 phone. CNET's Lynn La loved the Pixel's camera but found the phone overpriced. Michael Fisher, aka MrMobile on YouTube, liked it more. Also, it's iPhone 12 pre-order day if that's your bag.
FOOD FOR THOUGHT
The U.S. military has long used complex unmanned aircraft in combat, but simpler and cheaper drones are proliferating across battlefields all over the world. In a piece for NBC News, military writer Sébastien Roblin outlines the risks from the unchecked spread of combat drones.
In short, drones are giving smaller countries affordable ways to project force with greater lethality at lower risk. And that is likely to tempt many countries to resort to force more often if the United States' rampant use of drones to assassinate "high-value targets" is anything to go by.
And there are other places beyond Nagorno-Karabakh where long-standing "frozen" conflicts might be reawakened if one side obtains what it perceives as game-changing drone capabilities. Countries with outstanding border conflicts like India, Pakistan, Serbia and Ukraine are all purchasing attack drones.
FOR YOUR WEEKEND READING PLEASURE
A few great long reads I came across this week:
This spacecraft is being readied for a one-way mission to deflect an asteroid (MIT Technology Review)
Can slamming into a space rock at 15,000 miles per hour prevent it from hitting Earth? The DART mission aims to find out.
The rise and rise of creativity (Aeon)
Once seen as the work of genius, how did creativity become an engine of economic growth and a corporate imperative?
The Making of My Octopus Teacher (Sea Change Project)
My Octopus Teacher follows the story of the year Craig Foster spent with a wild octopus. It was created by the Sea Change Project and showcases the Great African Seaforest.
The life and death of SNET, Havana’s alternative internet (Rest of World)
As Cuba sluggishly got its population online, the shadow internet developed by volunteers provided a lifeline for thousands of people.
IN CASE YOU MISSED IT
Google makes finding voting locations easier By Danielle Abril
How fast will Apple’s new 5G iPhones be? By Aaron Pressman
The polls are wrong. The U.S. presidential race is a near dead heat, this A.I. ‘sentiment analysis’ tool says By Jeremy Kahn
Influencers beware: The U.K. is cracking down on undisclosed Instagram shilling By David Meyer
Russian and Chinese spacecrafts could collide in space junk super-spreader By Robert Hackett
COVID could reinvent how we go to the movies By Austin Bunn
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
Drones have many benign and positive uses, too. Siena Awards announced its annual drone photography awards and the winners are beautiful. Check out the shark in the "heart" and this very geometric wedding party. Have a great weekend.


fortune--2020-10-16--The Brexit trade negotiations aren’t dead yet, but they’re not far from it

It’s time to prepare for a no-trade-deal Brexit, U.K. Prime Minister Boris Johnson said Friday, just hours after the country’s biggest grocer warned of potential food shortages if there is disruption after the Brexit transition period ends.
Johnson’s announcement heralds a final showdown between the U.K. and the European Union over the question of whether the two sides can strike a free-trade agreement that can be in place by Jan. 1. It comes the day after the Prime Minister’s self-imposed deadline for reaching a deal—that has definitely not yet been reached.
In a statement, Johnson said the U.K. had always wanted a loose relationship, along the lines of the EU’s trade deal with Canada, but the EU wouldn’t play ball. Indeed, on Thursday the EU’s national leaders indicated they wouldn’t budge on key demands about fishing rights and the U.K. continuing to stick to EU rules on things like state aid. They said it was up to the U.K. to “make the necessary moves to make an agreement possible.”
“They want the continued ability to control our legislative freedom, our fisheries, in a way that is obviously unacceptable to an independent country,” Johnson said. “And since we have only 10 weeks until the end of the transition period on Jan. 1, I have to make a judgment about the likely outcome and to get us all ready.”
He went on to say the U.K. should prepare for “arrangements that are more like Australia’s based on simple principles of global free trade”—in other words, a no-trade-deal scenario, since the EU doesn’t have one with Australia.
However, Johnson did not address the question of whether or not the talks would continue.
When pressed on this point, his press office pointed Fortune to a tweet by European Commission President Ursula von der Leyen, who responded to Johnson’s speech with, “The EU continues to work for a deal, but not at any price. As planned, our negotiation team will go to London next week to intensify these negotiations.”
🇪🇺-🇬🇧 talks: the EU continues to work for a deal, but not at any price.
As planned, our negotiation team will go to London next week to intensify these negotiations. — Ursula von der Leyen (@vonderleyen) October 16, 2020
It is at this point difficult to tell whether the negotiations are indeed doomed—Johnson’s command to prepare for no deal could signal just that, or it could be a display of brinksmanship.
But time really is running out. Johnson’s Oct. 15 deadline was based on the fact that the EU side hoped to have a deal ready for approval by national leaders at their summit on Thursday (the meeting after which they made their statement about the U.K. needing to give way). And that loose target was based on the need for each EU country to ratify the deal in time for its entry into force on Jan. 1.
However, Johnson and von der Leyen agreed at the start of October that the negotiations should continue for a further month, as some progress had been made.
Food shortages
The U.K. technically left the EU at the end of January, but it is still acting as a rule-following member of the bloc until Dec. 31. If there is no trade deal to govern what follows, the result is likely to be chaotic for companies, particularly those operating just-in-time supply chains spanning EU-U.K. borders.
John Allan, the chairman of supermarket giant Tesco, said earlier Friday that “we can’t rule out the possibility that if there is dislocation at the ports of entry to the U.K., there will be some shortages of some items of fresh food, at least for a short time.”
“The nation’s supply chain for food will continue, but there may be some things we have to learn to live without for a few weeks, possibly a few months,” Allan added.
Following Johnson’s speech, the U.K.’s largest business association, the Confederation of British Industry (CBI), reacted with a note of dread.
“After four years of negotiations and so many hurdles crossed, this is no time to give up,” CBI director-general Carolyn Fairbairn said in a statement. “Neither side can afford to fall at the final fence. A deal is the only outcome that protects COVID-hit livelihoods at a time when every job in every country counts.”
Fairbairn said a deal would be needed to avoid customs checks at the border between Northern Ireland and the Republic of Ireland to its south and west, to “safeguard investment critical for future jobs,” and to allow for a data-sharing agreement that is “so vital for the U.K.’s 80% services economy.” This agreement is already an uncertain thing, due to the U.K.’s surveillance laws.
Banks have already shifted an estimated $1.5 trillion in assets, and 7,500 financial-services jobs, from the U.K. to continental Europe, in case a no-deal scenario removes their “passporting” rights to serve EU clients from the U.K.


fortune--2020-10-16--Do female politicians face a ‘motherhood bind’?

This is the web version of the Broadsheet, Fortune’s daily newsletter for and about the world’s most powerful women. To get it delivered daily to your in-box, sign up here.
Good morning, Broadsheet readers! Fortune has a deep dive on the NBA bubble and the Wubble, Patrisse Cullors inks a Warner Bros. deal, and we explore the motherhood bind. Have a wonderful weekend.
– Walking the motherhood tightrope. The Broadsheet has spent plenty of time covering the “double bind” that women face in the workplace. It goes something like this: Stereotypes tell us women are supposed to be nurturing, gentle, and empathetic—but somewhere along the way, it was decided that those aren’t qualities that align with strong leadership. So, if a woman ticks all those boxes, she can’t possibly be a good leader. Yet, if she leans the other way, conforming to more “masculine” traits, like toughness or assertiveness, she is likely to be seen as abrasive, bossy—or worse.
This New York Times story suggests that the double bind has a sibling—I’ll call it the motherhood bind. The piece, by Claire Cain Miller and Alisha Haridasani Gupta, looks at the “tightrope” that women in public office walk when it comes to being—or not being—a mom.
On one hand, researchers have found that being a mother makes female politicians seem warmer or more approachable to voters. On the other, many Americans remain somewhat suspicious of working moms, and wonder how effective they can really be at their jobs while also fulfilling their parenting duties. Implied, of course, is that women still bear the true responsibility for taking care of children—the fatherhood bind does not exist.
The Times looks to two very different women to illustrate the phenomenon: Judge Amy Coney Barrett and Senator Kamala Harris. Barrett has seven children, a fact that Republican senators have been performatively cooing over all week. As the NYT puts it: “They described her mothering as ‘tireless’ and ‘remarkable,’ clear evidence that she was a ‘superstar.’” Want a laugh? Just try to imagine a group of senators taking the time to praise a male judge in these terms.
Harris, meanwhile, has leaned into her identity as stepmother, which some observers see as an attempt to sand any scary edges off her identity as prosecutor and her ambition—another trait voters sometimes punish female candidates for possessing—for the nation’s second-highest office.
Some analysts told the Times that there’s an upside here: at least women like Harris and Barrett get to talk about their personal lives, to present themselves as “complex human beings”—something an earlier generation of women were urged to avoid.
Perhaps. Or perhaps women in public office—and, in some cases, the business world—have just traded one set of inflexible and stereotypical expectations for another.
Kristen Bellstrom
kristen.bellstrom@fortune.com
@kayelbee
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- DC to NYC. Former Obama White House adviser Valerie Jarrett is getting involved in the New York City mayor's race, co-chairing a new bid by Citigroup vice chairman Ray McGuire. His announcement follows the debut of attorney Maya Wiley's campaign. CNBC
- Deals on deals. Two entertainment deal stories this morning: Patrisse Cullors, a founder of the Black Lives Matter movement, signed an overall deal with Warner Bros. to develop and produce programming amplifying Black voices across broadcast, cable, and streaming. And six women who took part in a screenwriting lab cofounded by actor Margot Robbie all sold feature films.
- Three years of #MeToo. Yesterday was the third anniversary of the reinvigorated #MeToo movement, sparked by a tweet in October 2017. Leaders, including Tarana Burke, say the path forward is to address inequality. AP
- Hello, Adam. Ousted WeWork founder Adam Neumann made a return to investing with a $30 million bet on Hello Alfred, the residential concierge and apartment management startup cofounded by Marcela Sapone and Jessica Beck. CEO Sapone says she and Neumann share "the perspective that real estate can do more for people." Bloomberg
MOVERS AND SHAKERS: Steph Korey has officially stepped down as Away's co-CEO, four months after the luggage brand announced that she would depart the business a second time. Annie Young-Scrivner, former CEO of Godiva, has been named chief executive of Wella. Merkle promoted Margaret Wagner to president, Merkle EMEA. The Washington Football Team hired Julie Andreeff Jensen, former chief corporate affairs and communications officer at Citadel, as SVP of external engagement and communications.
IN CASE YOU MISSED IT
- Inside the bubble. A Fortune feature by Adam Lashinksy and Brian O'Keefe dives into how the NBA pulled off its bubble—for both the league and the WNBA. In related news, beauty brand Glossier is now an official sponsor of the WNBA.
- Athletic legacy. U.S. women's hockey team Olympic captain Meghan Duggan announced earlier this week that she would retire from the sport. In this piece, the athlete says that the proudest moment of her career was advocating with USA Hockey for equal pay and treatment of female hockey players. ESPN
- Roe report. This piece analyzes not the often-debated issue of whether Roe v. Wade will be overturned—but what would happen if it is. Data analysis shows the parts of the United States that would see the most significant declines in legal abortions. New York Times
ON MY RADAR
Cristina Cuomo is immune to your criticism Elle
Maine's referendum on Susan Collins's reputation The New Yorker
George Floyd’s sister Bridgett calls Biden ‘the change we need’ in a new ad New York Times
PARTING WORDS
"I have a lot of ideas for amendments."
-Playwright and actor Heidi Schreck on her play What the Constitution Means to Me. A taped version debuts on Amazon Prime Video this weekend.


fortune--2020-10-16--How four Midwest women-owned businesses launched a nationwide voting initiative

Betsy Blancett Nacrelli knew how she wanted to use her platform this election year. The founder and CEO of Joya, a St. Louis–based jewelry shop, was already donating 10% of her sales to nonprofits that improve women’s lives, and she felt getting women to vote was a natural extension of that mission. So Nacrelli teamed up with three other women-run businesses—Golden Gems, Leisa Renae, and 2Lu—to form She Votes, a campaign that provides resources and information about the voting process with the ultimate goal of getting more women to the voting booths by Nov. 3.
Prior to Missouri’s voter registration deadline, the organization focused on registering first-time voters, especially at high schools. Now, they are spending their time helping people cast their ballots by running about a dozen ballot notarizing tents per week. Missouri changed its voting guidelines this year in response to the coronavirus pandemic, and Nacrelli says that many people they met were simply confused about how to follow the law.
“One of the most important things that we’ve provided for people is a very comfortable, nonjudgmental place for people to ask questions,” she says.
She Votes also has a line of voting-themed merchandise featuring shirts, hats, accessories, and, of course, jewelry, with proceeds benefiting three nonprofits. Nacrelli expects they’ll be able to donate more than $10,000 by the end of the year.
The following conversation has been edited and condensed for clarity.
Fortune: How did She Votes come together?
Nacrelli: We’re always stronger together with partners, especially women-owned businesses. I feel like we can accomplish so much when we work together. So I reached out to several friends in the local business community: people who we have worked with in the past; people who we value; people whose designs we love, as well as their dedication and passion for their business. Everyone unanimously, immediately [said yes]. We started having meetings on Wednesday evenings to brainstorm and come up with ideas around the initiative, and it kind of just took off from there. It turned into something beyond my wildest dreams as far as the support, the branding, the product, and everything. It’s been an amazing journey for sure.
As with everything in the advent of COVID, so much of our world feels beyond our control. It was very important for us to try to effect change or amplify women’s voices in whatever way that we could knowing that there’s so much beyond our control in this world. After learning so much about voter suppression and voting rights, we [wanted to] try to do what we could.
She Votes is decidedly nonpartisan. Why was that distinction important to you?
Everything seems so partisan right now; everything seems so polarized. Women are the majority in this country. And if women vote and show up to exercise their right that other women worked so hard to gain over 100 years ago, we can be the change, and we can decide who’s in office. Women need to continue to be empowered to amplify their voices and raise their voices, and it’s about time that we’re in the driver’s seat. We just wanted to make sure that all women knew the power that we have if all of our voices are used together.
You are located in a state that is not considered a swing state. FiveThirtyEight gives Missouri a very small percentage chance of not going for Trump. Many people get really discouraged when they feel like their vote doesn’t count. How have you approached that being from a state that’s pretty much already decided?
That’s the root of the problem. It’s very, very easy for folks to look at the voting process and feel discouraged and look at the electoral college and feel discouraged and confused. In our state of Missouri, it is intentionally made very difficult to vote and to learn about the process of voting. The easy thing to do is to say, “My vote doesn’t matter, and I’m going to stay home.” The difficult decision to make as an individual is [deciding] that I’m going to get up and stand up and learn about the process and at least cast my vote. It takes millions of people to effect change, but if all of us are in the mindset that our vote doesn’t matter, then nothing is going to ever change. We proved in the last two election cycles that it comes down to a very small number that really can make that change.
We’re not talking just about a presidential election here. It is equally as important to vote in every election, in every primary, and for your local and state elections because you’re voting for your local municipality changes. You’re also voting for people there that are going to climb that political ladder. Those decisions mean just as much as a presidential election does.
I’ve been encouraged by the number of young people that I’ve seen getting behind all of the voting initiatives. I’ve been encouraged by the various ways that people are approaching it, especially these new generations. So much of what their focus is is on social media. One of the things that was important to us [is having] really fun merchandise that people want to post and tag. It all starts from that one little seed, and it spreads from there.
Courtesy of She Votes
We are a national organization. Even though we’re based in St. Louis, and a lot of our in-person pop-ups are in St. Louis—[like our] big voter registration drive and now our big voter notarizing ballot drive—we have clients and followers from all over the country. For us, that’s been the most encouraging thing. If our little initiative and our little engine-that-could group of women businesses can reach 50 states in two short months, imagine what voices can do at the polls if everyone exercises their right.
What are you planning on doing after the election?
Our initiative will continue. It’s been so much hard work because we all own small businesses, and we basically started another business, another full-time job in the middle of a pandemic. But we’ve felt so much reward from starting this, and we have so enjoyed working together that our initiatives are going to continue. We plan to very quickly pivot to other local and state elections that will be going on regularly.
We really want to make sure we throw our voice behind amplifying women’s voices in all capacities, so we are going to be working with a lot of local and national women’s organizations. We already have some partnerships lined up for post-election. One of the crises that we’re facing right now as a nation is a lot of women are being forced to leave the workplace and leave their careers to stay home with their kids through the pandemic. There is a very scary number of women doing that. A couple of local organizations are working to provide childcare and other alternatives for women to be able to continue their careers in the middle of the pandemic. So we’re going to work with those organizations. We’re also going to be working a lot with victims of domestic violence and getting them reintegrated into the workforce providing mock interviews and teaching modules. And we’re going to be working with other small-business owners who are women and help to build their brands, get them funding, and make those connections with banks and accountants and partners that can help them get their businesses off the ground.
I envision that She Votes will turn a focus on amplifying those voices and empowering women through various different channels.
More on the most powerful women in business from Fortune :


fortune--2020-10-17--‘Virtual marathons’ see a spike as runners crave a fix and organizers fight to keep them engaged

Over the next two weeks, some 25,000 runners will line up to run the New York City Marathon—hearing Sinatra croon “New York, New York” before the boom of the cannon and listening to the race director’s final instructions that herald the start of the 26.2 mile race—as they have for almost every year since 1976.
But in 2020, the year of COVID, these runners will be scattered all over the world, running separately at a time of their choosing within a two-week window ending Nov. 1, instead of being gathered at the foot of the Verrazzano-Narrows Bridge on Staten Island. They will be connected via an app, supported by TCS (Tata Consultancy Services) and available as of Saturday. The app uses augmented reality and tracks runners, feeding them information such as a description of the course as they progress. (Think “On your left is the entrance to the 59th Street Bridge!” when they near mile 15, regardless of where in the world they really are. Or “Half a mile more and you’ll be entering Central Park!” soon after they’ve run their 23rd mile).
As every major marathon, from Berlin to Chicago to New York, along with the vast majority of small local ones, has grappled with cancellations since March, and no guarantees that 2021 will be better, runners and event organizers alike have turned to virtual events to fill the void. Runners need their fix, and organizers like New York Road Runners (NYRR) want to avoid athletes drifting away while the pandemic halts in-person events. “The primary benefit for NYRR is providing runners with motivation and ways to stay engaged,” says Christine Burke, senior vice president of strategic partnerships and runner products at NYRR. While NYRR, the largest amateur road racing organization in the U.S. with revenue of $113 million last year, started offering virtual races in 2018 to get a jump on a new trend, many other organizers didn’t jump in until they had to.
That includes Boston Marathon organizer, the Boston Athletic Association (BAA), which in early September offered a virtual version of its legendary footrace. “In 2019, race organizers realized they should have virtual experiences,” says Jeff Matlow, president of the board of Running USA, an industry group. “Then we get a global pandemic, and nobody has any choice anymore.”
In a development akin to how e-commerce has emerged as a big part of shopping without replacing in-store shopping, the pandemic is speeding up adoption of virtual races, as more runners come around to the idea. In a Running USA poll last year, only 7% of runners saw virtual races as being on par with in-person events. But in the absence of much choice, runners are taking to it. NYRR for one says that as of early October, there had been 96,000 finishers in its virtual races in 2020, almost twice the tally at the same time last year.
Boston has added a series of virtual races this autumn, building on the success of its virtual marathon in which 18,000 runners participated. The BAA limited participation to those who’d been registered for the canceled in-person race and still got more than half to take part. “You can’t replicate it, but you provide the accoutrements to people who trained hard,” says BAA CEO Tom Grilk.
That includes goodies to entice runners such as medals and a shirt, swag runners of the in-person race also get. At $50 a pop, the virtual New York and Boston race registration fees are at best a small financial consolation prize for the two organizers, which normally rake in tens of millions of dollars from their marquee marathons.
But on top of making sure people don’t lose interest in their events during the hiatus, lest they not come back when the pandemic recedes, the virtual marathons are key to offering corporate sponsors something too during the downtime. “It’s also a way to offer sponsors value,” says Burke. So New Balance, a major NYRR sponsor, for instance, can still promote its new shoes to runners in the interim, or Honey Stinger can push a new food item.
Even if big-scale races resume next year, we might not be heading to events with 50,000-plus runners for a while. So as technology gets better, as Burke says it already has, big marathons might mitigate some of that pain by eventually having thousands of runners take part remotely in a race at the same time as the athletes competing in person. The marathon industry’s leaders expect virtual events to become a fixture of the racing calendar well after COVID has receded. “There will always be folks who want the experience of the finish line at the location of the race, and folks that can stay challenged by virtual events,” says Tim Hadzima, executive director of the Abbott World Marathon Majors, a group that works for six of the biggest marathons. “It can all live together.”