fortune--2020-07-29--Tech CEOs outline how the pandemic will change the future of work

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
A quartet of top tech CEOs–HP’s Enrique Lores, Microsoft’s Satya Nadella, Accenture’s Julie Sweet and Intel’s Bob Swan–met with members of the Fortune CEO Initiative yesterday to give their view of how the pandemic will change the future of work. All agreed the changes in store are huge. “We are in a point of time which is really going to be defining for our lifetimes,” Lores said. “The most unprecedented situation–a massive experiment at scale,” agreed Nadella. “The largest behavioral change at any one time in history,” said Sweet.
Yet they cautioned it’s too early to say precisely what those changes will be. The crisis has led to an “acceleration of the future,” said Swan. “But clarity of the future? Not so clear.”
A few takeaways:
–Collaboration has to be reinvented. “We are burning up a lot of social capital built up when people were working together,” Nadella said. How to rebuild that capital while people are apart is a challenge.
–The crisis has accelerated digital transformation but training must accelerate as well. “There will be real displacement in the workplace,” said Swan, and companies have a critical role to play in “addressing the disconnect.”
–Worker well-being needs more focus. “We can’t just measure productivity in the narrowest way,” said Nadella.
–And perhaps most importantly, the nature of leadership must evolve. “As leaders, we all have changed. We all have learned how important it is to lead with empathy and build a different level of trust with our employees,” said Lores. “How we build into this digital acceleration the opportunity to be more responsible businesses is absolutely critical,” said Sweet. “The role that purpose and social responsibility is going to play (must increase) as technology plays a bigger and bigger role,” said Swan.
More from the conversation here. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Kodak pivot
Thanks to a $765 million government loan under the Defense Production Act, Kodak is moving into drug production. The former film leader is going to make a bunch of generic drugs, such as the antimalarial drug hydroxychloroquine, to reduce the U.S.'s dependence on countries such as China and India. President Trump: "It’s a breakthrough in bringing pharmaceutical manufacturing back to the United States." Fujifilm made a similar pivot, and health care and material solutions now makes up 43% of that company's total revenues. Fortune
Moderna vaccine
Moderna has reported positive results in tests of its candidate coronavirus vaccine on monkeys. The company said two injections of the vaccine protected against heavy exposure to the virus, in both the upper and lower airways. Now stay tuned for the results of a much larger test, involving 30,000 humans, which should start producing data towards the end of the year. Bloomberg
Conspiracy theories
Twitter temporarily limited Donald Trump Jr.'s account after the president's son retweeted a conspiracy video alleging suppression of the use of hydroxychloroquine to treat COVID-19. Meanwhile, Madonna is also being slammed after she shared, then deleted, then reposted the same video on Instagram. (If you've seen mention of the "America's Frontline Doctors" video, that's the one.) Fortune
Instagram vs. TikTok
Facebook's Instagram is reportedly trying to counter the rising popularity of TikTok by offering payments–as much as hundreds of thousands of dollars–to influential TikTok users, so as to tempt them over to Instagram's competing Reels service. Reels is apparently due for unveiling next month. Wall Street Journal
AROUND THE WATER COOLER
Green recovery
Former U.N. Secretary-General Ban Ki-moon and Global Center on Adaptation CEO Patrick Verkooijen have written an op-ed for Fortune in which they argue for the U.S. to adopt green stimulus measures. "America desperately needs an overhaul of its infrastructure," they write. "President Trump’s announcement in March of a vast $2 trillion stimulus package was a step in the right direction, one that drew bipartisan support. But his refusal to acknowledge the critical importance of rebuilding for greater climate resilience risks wasting this once-in-a-lifetime sum." Fortune
Big Tech defense
Facebook CEO Mark Zuckerberg will today argue at a Capitol Hill antitrust hearing that reducing the power of U.S. Big Tech firms would favor the rise of Chinese competitors that do not share American values. "China is building its own version of the Internet focused on very different ideas, and they are exporting their vision to other countries," Zuckerberg will say. Fortune
Scott donations
MacKenzie Scott, the writer and former wife of Amazon boss Jeff Bezos–she announced her name change on Twitter yesterday–has donated $1.7 billion to charitable causes over the last year. The causes include racial, LGBTQ+ and gender equity, as well as democracy, public health, and the fight against climate change. Scott intends to give away at least half of her $35 billion fortune. Fortune
Coronavirus test
Coronavirus is testing the stakeholder-capitalism business model, writes CVS Health EVP Karen S. Lynch in a piece for Fortune: "We are facing an inflection point as business leaders. The role that businesses play in society was already expanding, but COVID-19 and the movement to address racial injustice have radically accelerated that transformation. The public expects and trusts us to do something about these historic challenges, and by seizing that opportunity, I am confident our collective action can drive real change." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-07-29--Three questions lawmakers should ask Amazon’s Jeff Bezos

How ugly will it get ?
The U.S. is set to release a historically bad GDP report

Wednesday marks the first-ever congressional appearance of Jeff Bezos, CEO of Amazon.com and the wealthiest person in the world. Today, five months since the COVID-19 pandemic shut down large segments of the economy, Amazon reaches into 82% of U.S. households through its Prime membership service; holds an approximately 40% share of retail e-commerce, a market that grew as much this April as it had over the previous five years combined; and directly employs more than one-third of all warehousing and storage workers in the country.
Last week, a group of some of the country’s largest labor unions, including the Teamsters, the United Food and Commercial Workers, the Communications Workers of America, and the Change to Win coalition (of which I am the director), asked the Federal Trade Commission to take urgent antitrust enforcement action against Amazon, based on new evidence that suggests the company is using COVID-19 to further entrench its power. Lawmakers, too, must call Mr. Bezos to account for the anticompetitive practices that have made Amazon so dominant, and which harm workers, consumers, and small businesses.
Here’s what they should ask him.
Why did Amazon, as a retailer in direct competition with sellers on its Marketplace, assert unilateral power to decide what items sold by those small businesses are “essential” and available to customers, and conceal accurate information about how quickly customers can receive those items?
Because Amazon controls access to almost half the e-commerce market, the businesses that operate as sellers on its Marketplace are acutely vulnerable to the company’s exclusionary conduct. At the height of the pandemic, in March, Amazon used that power to bar sellers of items it deemed “nonessential” from shipping new inventory using Amazon’s fulfillment service, FBA. Amazon employees told Change to Win, and sellers reported on Amazon forums, that the designation of items as “essential” was suspicious, with Amazon promptly shipping its own products, like Kindles, but not some children’s workbooks. When sellers attempted to dispatch “nonessential” items quickly using companies other than Amazon, Amazon falsely represented to customers that seller-shipped items would take much longer to arrive, which cut even more deeply into their sales. (Amazon stated this was “unintentional.”)
When Amazon effectively diverted essential items to its own warehouses at the height of the pandemic, why didn’t the company consider the effect of the diversion on neighborhood stores and their customers?
At the same time as Amazon cut off access to the e-commerce market for some sellers, it increased its “suggested” inventory levels for products it deemed “essential,” according to a report by the nonprofit news organization ProPublica. If sellers did not maintain these levels, Amazon demoted their products in search results and rescinded the “bestseller” label that leads to improved sales. This policy change forced sellers to divert products to Amazon, and away, for example, from neighborhood grocery stores which remained open and were particularly important for customers who could not afford Amazon Prime membership or shipping fees.
Why did Mr. Bezos, as the CEO of one of the world’s largest corporations and one of the nation’s largest employers, and the richest man in modern history, participate in his company’s attempt to crush an organizing effort by workers facing a deadly pandemic?
During the pandemic, the national unemployment rate reached its highest level ever. As the overall labor market contracted, Amazon saw an opportunity. Mr. Bezos posted on Instagram hoping that laid-off workers would take jobs at Amazon, and many of them did: Amazon hired a total of 175,000 new warehousing and storage workers in a matter of months. The company now employs more than a third of all warehousing and storage workers in the country. According to economists, one of the dangers of such a concentrated labor market is that employers will take advantage of their power to suppress wages and worsen working conditions.
That’s exactly what workers say Amazon is doing. In June, a group of workers from Amazon’s massive Staten Island warehouse filed a lawsuit alleging that Amazon’s pandemic-related safety failures had caused injury and death to employees and their families. The workers drew a direct line between Amazon’s ability to operate when many other employers were not, and its power to threaten them with termination in a job market where it might be impossible for them to find work elsewhere. Mr. Bezos has been personally implicated in such retaliation. According to leaked notes published by the Guardian, he took part in a meeting where top executives focused on attacking the credibility of a single Staten Island worker who was organizing with his colleagues to make their workplace safer.
Mr. Bezos has a lot to answer for. Amazon’s business model has been raising questions for years, as the company has steadily gained power over our economy and, consequently, our country. The pandemic has shown us how Amazon operates when it is unconstrained by brick-and-mortar competition. The future has arrived, and Congress must demand answers now.
Michael Zucker is the director of Change to Win, a federation of labor unions representing over 4 million working people in the U.S. and Canada across a wide range of industries, including retail and transportation.


fortune--2020-07-29--Kodak’s shift to pharmaceuticals comes years after rival Fujifilm made the same pivot

The U.S. government is loaning legendary camera maker Eastman Kodak $765 million to start manufacturing pharmaceutical products in a bid to increase U.S. self-sufficiency in response to the coronavirus pandemic, the company announced Tuesday.
Kodak chief executive Jim Continenza told the Wall Street Journal that pharmaceutical ingredient production will eventually make up 30% to 40% of Kodak’s business.
Shares in Kodak more than tripled after the government loan announcement, pushing the firm’s market value from $115 million to $347 million by close on Tuesday, the stock’s best performance day ever.
In its leap from film and imaging to pharmaceutical production, Kodak follows the path of its erstwhile rival, Japan’s Fujifilm Holdings Corp. The two companies formed a near-duopoly on film photography for much of the 20th century, but Fujifilm has so far proved far more adept at reinventing itself than its American counterpart.
A Kodak engineer invented the first digital camera in 1975, but the company failed to recognize the technology’s potential. Fujifilm was quicker to pivot to digital, introducing the world’s first digital portable camera in 1988, and the Japanese firm was faster to diversify away from photographic film.
Disassembling single-use, “disposable” cameras at Eastman Kodak in Rochester, N.Y. James Leynse—Corbis/Getty Images
Fujifilm is also several steps ahead of Kodak in the pharmaceutical realm. Health care and material solutions made up 43% of Fujifilm’s total revenue in 2019, and the company aims to double its health care sector sales over the next few years.
The company acquired a medical diagnostic imaging company as early as 1986. Since then, Fujifilm has acquired several more pharmaceutical and biotechnology companies and fashioned itself into a major producer of medical equipment and drugs.
In 2006, it bought the company that became the drugmaker Fujifilm Toyama Chemical, which developed the antiviral Avigan, an early contender in the race to develop a COVID-19 treatment. (Inconclusive clinical studies earlier this month have dampened enthusiasm for Avigan, however.)
Fujifilm Diosynth Biotechnologies, a pharmaceutical manufacturer that Fujifilm acquired in 2013, announced on Monday that its Texas site will support production of a coronavirus vaccine candidate as part of Operation Warp Speed, a U.S. government COVID-19 vaccine development program.
Kodak, which dominated cameras and photographic film in the U.S. for decades, filed for bankruptcy protection in 2012 after years of struggling to adapt to changes in the industry. It rebranded as a technology company focused on printing and imaging for businesses after coming out of bankruptcy in 2013.
That both firms have pivoted from film to pharmaceuticals is not coincidence. Each firm says its experience manufacturing film and other photography products lends itself to drugmaking.
Continenza told the Wall Street Journal that Kodak has a “long, long history in chemical and advanced materials” and said the company’s existing infrastructure will enable Kodak Pharmaceuticals “to get up and running quickly.”
Fujifilm, which launched its campaign to become a “total health care company” years before Kodak ventured into the space, has linked its history in photography to its success in pharmaceuticals. Fujifilm’s drug development efforts apply “proprietary technologies harnessed through Fujifilm’s long-standing operations in photographic films,” according to its website.
White House adviser Peter Navarro said the pandemic has revealed the U.S. to be “dangerously dependent on foreign supply chains” for essential drugs, and called the Kodak deal “a huge step forward towards American pharmaceutical independence.”
China is currently the world’s largest supplier of pharmaceutical ingredients, the active compounds used to make drugs, and U.S. imports from China have increased in recent years.


fortune--2020-07-29--Big Tech is likely to defend its dominance by pointing to the alternative: China

Reducing the power of American tech giants would be a huge win for China.
That is, at least, the argument Facebook CEO Mark Zuckerberg will lay out when he and Amazon CEO Jeff Bezos, Google CEO Sundar Pichai, and Apple CEO Tim Cook appear before an antitrust hearing on Capitol Hill on Wednesday, according to pre-submitted opening statements.
At the hearing, lawmakers are expected to grill the four CEOs, who run companies worth a combined $5 trillion, over their market dominance and anticompetitive behaviors in the highest-profile effort thus far to highlight the influence of Big Tech. Many lawmakers argue that the four companies hold far too much sway.
The CEOs appear prepared to defend themselves in part by arguing that their firms need to maintain their current heft in order to promote American tech values and fend off Chinese competition.
“Facebook is a proudly American company. We believe in values—democracy, competition, inclusion and free expression—that the American economy was built on,” Zuckerberg said in his statement. “Many other tech companies share these values, but there’s no guarantee our values will win out. For example, China is building its own version of the Internet focused on very different ideas, and they are exporting their vision to other countries.”
In issuing opening statements, Zuckerberg was alone among his peers in so starkly presenting American tech firms as ideological counterweights to the rise of Chinese tech.
But with less explicit references to China, the other CEOs argued that maintaining the status of American tech giants is key to ensuring U.S. tech keeps its edge globally.
Pichai said that Google’s continued success on the global stage “is not guaranteed” and is important to “maintain America’s competitive technological edge in the world.”
Amazon’s Bezos cites competition from the Chinese online retailer Alibaba in defending his firm’s position, and Apple’s Cook mentioned telecoms and smartphone maker Huawei as a fellow player in the global device market.
The CEOs’ arguments are not necessarily new. In fact, Zuckerberg told Congress last October that lawmakers’ efforts to thwart Facebook’s Libra cryptocurrency would create an opening for China’s digital currency efforts. But Wednesday’s hearing will give the executives an opportunity to deliver such defenses on a grand stage and against an anti-China backdrop. Congress, for instance, is currently weighing a ban of TikTok, the hugely popular short video platform, due to its Chinese owner and alleged ties to Beijing (which the app denies). Concerns about Beijing’s influence—politically and technologically—is one of the few issues on which Democrats and Republicans agree. Any effort by the CEOs to paint their firms as an answer to Beijing’s ascendency could find a receptive audience.


fortune--2020-07-29--Your stock portfolio is about to face a grilling by Congress

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. It’s a busy day for investors with a full lineup of corporate results, plus a Fed rate decision and Big Tech testifying on Capitol Hill. Ahead of the big fireworks, Europe and Asia are mostly in the green this morning; U.S. futures are bouncing off their lows, edging into positive territory.
Let’s check in on the action.
Markets update
Asia
The major Asia indexes are mixed in afternoon trade. The Shanghai Composite leads the way again, up 2% .
are mixed in afternoon trade. The leads the way again, up . Some promising news for Apple ahead of tomorrow’s earnings call: Q2 iPhone sales in China jumped 225% , far ahead of rivals, new research shows.
in China jumped , far ahead of rivals, new research shows. The HSBC-Huawei affair has gone from worrisome to downright weird. Fortune‘s Grady McGregor reports that the bank’s statement on the matter, posted to WeChat, was deleted by Internet censors, “replacing it with a notice that it had violated China’s Internet regulations.”
Europe
An hour into the trading session, the European bourses were off their lows with the benchmark Europe Stoxx 600 up nearly 0.3% .
were off their lows with the benchmark up nearly . Deutsche Bank shares were up 2.9% at the open following the bank’s disclosure this morning of better than expected quarterly results and a slightly more optimistic full-year guidance .
shares were up at the open following the bank’s disclosure this morning of better than expected quarterly results and a slightly more optimistic . Is Europe’s auto sector ripe for a comeback? Daimler and PSA Group have reported better than expected figures in recent days, leading PSA’s CEO Carlos Tavares to crow, “our order book is stellar.” Not all analysts are convinced the sector is on the road to recovery.
U.S.
U.S. futures are trading mostly sideways ahead of a big day for Big Tech on Capitol Hill . The CEOs of Google, Amazon, Apple, and Facebook—combined, they account for nearly one-fifth of the S&P , by value— will likely face a heated line of questions from the House Judiciary Antitrust Subcommittee.
are trading mostly sideways ahead of a big day for on . The CEOs of Google, Amazon, Apple, and Facebook—combined, they account for nearly , by value— will likely face a heated line of questions from the House Judiciary Antitrust Subcommittee. The other big news out of Washington today will come from the Fed , which is scheduled to deliver a rate decision. Yesterday, it extended to year-end seven of its nine emergency lending programs.
, which is scheduled to deliver a rate decision. Yesterday, it seven of its nine emergency lending programs. In a note to Bull Sheet, C.J. MacDonald, client portfolio manager of GuideStone Capital Management, points out the Fed “has only utilized a small part of its available monetary arsenal. In March, the Fed initiated $2.9 trillion in monetary aid measures, but to date has only used $138 billion of it. And ironically, the market knows that this huge cache of ammo is standing by, which may mitigate the need to use it at all if the economy declines again later this year.”
Elsewhere
Gold futures are climbing again, settling above $1,950 an ounce. One analyst made the bullish call of $3,500 within two years.
futures are climbing again, settling above an ounce. One analyst made the bullish call of within two years. Nobody’s bullish on the dollar . It’s down again.
. It’s down again. Crude too is in the green.
***
In the hot seat
When the titans of tech testify today on Capitol Hill, a good chunk of your portfolio, no doubt, will be in for a grilling.
Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Apple’s Tim Cook, and Sundar Pichai of Alphabet, which owns Google, have been called upon to defend and discuss the dominance they have across so many business sectors. Their market power has become more pronounced during the pandemic as huge parts of the economy have no choice but to carry out business virtually.
How big have the Big Four become? I thought I’d put it into a simple pie chart.
Google parent Alphabet, Amazon, Apple, and Facebook have a combined market cap of $4.8 trillion, a significant (and growing) piece of the S&P. (Add Microsoft, which is not testifying today, and that pie wedge swells to $6.3 trillion, or nearly one-quarter of the benchmark index.)
The massive divide between the haves and have-nots of the S&P is at historic levels, leading a number of market observers to crack that the S&P 500 should really be renamed the S&P Five.
Not surprisingly, the personal wealth of Bezos and Zuckerberg has grown by a cool $72 billion since the start of the year, according to Bloomberg. As if we need a reminder: Big Tech is having a very good pandemic.
Back to today’s testimony, Fortune‘s Danielle Abril reports the four tech CEOs will likely face a tough line of inquisition as both Republicans and Democrats have their issues with the companies’ dominance.
“Democrats will argue that Big Tech has become too big and powerful and thus needs to be reined in. Republicans will also speak to the harms of Big Tech but with a slight nuance in favor of creating new regulation specifically for the tech companies rather than changing overarching antitrust laws,” she writes.
It will be incumbent upon the CEOs to push the message that they’re a force for good—that they’re a major employer, that they’re investing heavily in innovation to make America more competitive, and that they add value to the American economy.
Shareholders can certainly vouch for the value-added argument.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
On condoms and Lysol. Consumer goods giant Reckitt Benckiser reported on Tuesday knockout first-half sales for its disinfectants and cleaning supplies business. It's condom business, however, was a different story. Love in the age of COVID is a brutal affair.
When will this pandemic be over, already? You may want to look away now... The COVID threat won't fade before 2022, says former U.S. surgeon general Vivek Murthy.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
When $1 trillion ain't enough
The Republicans and Democrats are still far apart on stimulus plan 2.0. How far apart? The $1 trillion plan the GOP lawmakers proposed on Monday just doesn't cut it, a number of Left-leaning economists and advocates say. What would they like to see? For starters, "recurring cash payments" to America's families until the worst of the pandemic passes—whenever that may be.


fortune--2020-07-29--Where did the coronavirus come from? New research points to a decades-old origin

The new coronavirus appears to have circulated unnoticed in bats for decades, scientists found.
Horseshoe bats are the most plausible origin of the SARS-CoV-2 pathogen, researchers led by Maciej Boni of Pensylvania State University’s Center for Infectious Disease Dynamics said in a study published Tuesday in Nature Microbiology.
The virus’s origins have been at the center of much debate as the pandemic continues to stymie economies and the death toll surpasses 654,000. The World Health Organization sent experts to China to study the issue this month after U.S. government officials stoked speculation that the pathogen escaped from a Chinese lab.
Subscribe to The Capsule , a weekly brief monitoring advances in health care and biopharma, delivered free to your inbox.
Tracing the virus’s lineage is crucial early in an outbreak because it can allow health authorities to separate people from the pathogen’s animal host, and later to help avert future health crises. The researchers warned that other virus lineages in bats could have the potential to spread to humans.
The findings highlight how “difficult it will be to identify viruses with potential to cause major human outbreaks before they emerge,” Boni and colleagues wrote. “This underscores the need for a global network of real-time human disease surveillance systems.”
The research team reconstructed the virus’s evolution by tracing its recombination history. They concluded that pangolins probably didn’t act as a host for the virus although the scaly mammals may have played a role in touching off the pandemic by simply transmitting it.


fortune--2020-07-29--Facebook and Amazon grilled over history of aggressive competitive practices at antitrust congressio

Facebook and Amazon grilled over history of aggressive competitive practices at antitrust congressional hearing

Stimulus check calculator : Find out how much your second IRS payment could be worth under the HEALS Act

Facebook and Amazon spent much of Wednesday’s congressional antitrust hearing about Big Tech trying to defend accusations that they have participated in aggressive and unfair practices while growing their massive empires.
The five-and-half-hour virtual hearing, hosted by the House Judiciary antitrust subcommittee, gave Congress members the chance to question Apple CEO Tim Cook, Amazon CEO Jeff Bezos, Facebook CEO Mark Zuckerberg, and Sundar Pichai, CEO of Google’s parent company Alphabet. While Congress members used the opportunity to dig into all four companies, Facebook and Amazon ultimately faced some of the most damning antitrust allegations.
Congress said competitors referred to Amazon as a drug dealer that bullies third-party sellers. And the subcommittee brought up former statements in which Facebook was referred to as going into “destroy mode” amid its attempts to buy Instagram and was characterized as being on a ”digital land grab” to maintain its market dominance.
While Zuckerberg disagreed with the description of his company and its practices, he did suggest that Facebook regularly works on products that are inspired by his competitors.
“We’ve certainly adapted features that others have led in,” Zuckerberg said.
Apple walked away relatively unscathed. Though Congress did address Google stifling small businesses by “stealing” information, including Yelp reviews, Google mostly fielded questions about issues like its work with the U.S. and Chinese governments and data privacy
The antitrust hearing was the first time the four CEOs of some of the largest global tech companies testified before Congress at the same time—and a first for Bezos. It also occurred as the Federal Trade Commission and the Department of Justice continue their antitrust investigations into the four companies. The tech companies have faced rising global scrutiny from regulators and users who are concerned with the amount of data these companies collect, how they manage that data, and their growing power.
U.S. Rep. Pramila Jayapal, a Democrat representing Washington’s 7th congressional district, addressed how Facebook handled its purchase of Instagram and its attempt to buy SnapChat. She accused the social media giant of cloning competitors’ products amid acquisition negotiations with the company. When Zuckerberg said he could not recall any threats to competitors, Jayapal reminded him he was under oath and that the subcommittee had emails suggesting otherwise.
“I want to respectively disagree with the characterization,” Zuckerberg said in reference to emails about Instagram. “It was clear this [mobile cameras] was a space we were going to compete in.”
Meanwhile, Rep. Mary Scanlon, a Democrat who represents Pennsylvania’s 5th district, addressed Amazon’s “aggressive” plan to win over competitor Diapers.com. She questioned Bezos about why the company temporarily slashed prices, making it impossible for Diapers.com to compete. Then when Amazon completed the purchase, the company drove the price up, Scanlon said.
“I don’t remember that at all,” Bezos said in response. “We match competitive prices.”
Congress members also expressed concern over whether Amazon is accessing third-party seller data in order to build its own product lines to compete with those brands. Amazon has a policy against viewing individual sellers’ data, though it does analyze the data in aggregate.
“I can’t guarantee that policy has never been violated,” Bezos said. “We continue to look into that. We’re not sure we’ve gotten to the bottom of that.”
At one point, Lucy McBath, a Democratic representative from Georgia’s 6th district, played a recording of a top Amazon bookseller who claimed her competing business had been removed from Amazon’s marketplace without reason—and none of her requests for assistance, including those directly to Bezos, were answered.
“We followed all the rules,” the bookseller said in the recording. “There are 14 lives at stake. Please, please, please help us get back on track.”
And while the hearing didn’t point to any specific regulatory action that may follow, it did show that across the aisle, Congress is concerned with the compounding issues related to the tech companies. Jerrold Nadler, a Democrat representing New York, suggested that the concentration of power is dangerous to a Democratic society, and that four tech companies, in particular, deserved a closer look.
But Jim Sensenbrenner, a Republican representing Wisconsin’s 5th district, indicated that Congress needed to focus on enforcement of antitrust laws versus altering them. “Congress does a poor job of picking winners and losers,” he said. “I have reached the conclusion we do not need to change our antitrust laws.”
If Congress doesn’t act following the hearing, President Donald Trump has said he intends to step in. “If Congress doesn’t bring fairness to Big Tech, which they should have done years ago, I will do it myself with Executive Orders,” he tweeted prior to the hearing on Wednesday. “In Washington, it has been ALL TALK and NO ACTION for years, and the people of our Country are sick and tired of it!”
Congress members in both parties have been arguing that Big Tech has largely been unregulated and that new laws need to be put in place to rein them in. Democrats have been mostly concerned with the companies’ power and their access to people’s personal data, while Republicans have been concerned with issues like suppressing conservative views across the tech platforms.
As expected, many Congress members took the opportunity to hammer home issues of personal interest, even if they weren’t related to antitrust concerns. Data privacy, content moderation, and political bias were common topics of discussion. Bezos also took the opportunity say, “social media is a nuanced destruction machine,” and is a harm to democracy.
Meanwhile, the four CEOs tried to show that their products and services help consumers, and that they all face competition from numerous other companies. For example, Bezos referred to Walmart, Target, and Costco as primary competitors to Amazon. And Zuckerberg listed companies including TikTok, Apple, and Google, which provide competing social media and messaging services.
“As I understand our laws, companies aren’t bad just because they are big,” Zuckerberg said in his prepared remarks that were released ahead of the hearing. “Many large companies that fail to compete cease to exist.”
Rep. David Cecilline, chair of the subcommittee and a Democratic congressman representing Rhode Island, ended the hearing with next steps. The subcommittee is expected to publish a report with the findings of their investigation and proposed solutions.
“These companies that exist today have monopoly power,” he said. “Some need to be broken up, all need to be properly regulated.”


fortune--2020-07-29--PayPal cites ‘death of cash’ as firm posts record earnings

PayPal shares jumped nearly 5% after market close on Wednesday as the payment giant announced record revenues of $5.26 billion for the second quarter, and said it added 1.7 million new merchants during this period.
In a call discussing the results, PayPal executives said society has reached an “inflection point” when it comes to the “death of cash,” and noted that 70% of consumers now fear for their health when it comes to paying in stores.
“Consumers no longer want to handle cash or any forms of payment that require physical touch at checkout,” said Schulman.
He also cited an explosion in the use of PayPal-owned Venmo in the second quarter, saying the popular payment app now has over 60 million users. Schulman noted that Venmo usage had long revolved around social occasions—such as splitting the check at a restaurant—but that it’s now being used for a much broader range of activity. This is consistent with a recent report that use of payment apps of all sorts has surged during the pandemic.
Meanwhile, the company says it is seeing an explosion in online payment from new cohorts and industries, notably seniors and online fitness services.
“The pace of e-commerce has accelerated by several years in a single quarter,” said PayPal CFO John Rainey.
In response to these trends, the company says it is investing heavily to improve its digital wallet, which it hopes will become a daily part of life for many consumers. PayPal is focused in particular on promoting the use of QR codes by merchants and Venmo users.
The company is also hoping to begin wringing more money from Venmo—which has brought PayPal many users but little in the way of income—in part through products like direct deposit and a credit card.
PayPal’s blowout quarter also led the company to reinstate financial guidance for the rest of the year after, like many other companies, it withdrew guidance due to the pandemic.
On Wednesday, the company said it expected revenue to grow by 25% over the rest of the year, and earnings per share to swell by 45% (25% on a non-GAAP basis).
One topic the PayPal executives did not discuss was cryptocurrency. The company is widely expect to make Bitcoin and other digital currencies available this year, in partnership with a startup called Paxos.
While they did not mention Bitcoin directly, Rainey may have alluded to it in citing the impending launch of “other financial services I won’t go into any detail about today.”
PayPal shares traded near $185 as of 7pm ET after opening the day around $179.
More must-read finance coverage from Fortune:


fortune--2020-07-29--Stimulus check calculator: Find out how much your second IRS payment could be worth under the HEALS

Stimulus check calculator: Find out how much your second IRS payment could be worth under the HEALS Act

Facebook and Amazon grilled over history of aggressive competitive practices at antitrust congressional hearing

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
With the increasing likelihood of yet another round of stimulus checks arriving in the mail for Americans, you may be curious what you stand to receive should the Senate GOP’s HEALS Act proposal be passed into law.
Well, look no further. After previously devising a stimulus check calculator based on House Democrats’ $3 trillion HEROES Act proposal, graduate student Jasmine Mah has returned with a new online calculator based on the HEALS Act.
Mah and partner Bogna Haponiuk have tweaked their formula to factor in the roughly $1 trillion bill’s stimulus check provisions. Like the CARES Act, which was passed by Congress in March, and the Democrats’ HEROES Act, the Senate GOP’s HEALS Act floats stimulus payments of up to $1,200 for individuals earning up to $99,000 per year, and payments of up to $2,400 for married couples making up to $198,000 annually (with the amount gradually decreasing for individuals earning more than $75,000, and married couples making more than $150,000 combined).
But where the HEROES Act would have allowed taxpayers to collect an additional $1,200 for each child or adult-age dependent that they support (up to a cap of three dependents), the HEALS Act suggests a more limited $500 payment per dependent. That is more closely aligned with the CARES Act, which provided an additional $500 for each child (but not adult-age dependents) claimed by a taxpayer.
The HEALS Act Calculator takes all of these provisions into account, and allows users to enter their tax filing status, adjusted gross income, and number of dependents to determine what they would be in line to receive—should Senate Republicans’ proposal be passed into law.
Give it a try, and see how much your next stimulus check may be worth.


fortune--2020-07-29--‘We’re nowhere close to a deal’: $600 weekly unemployment benefit to lapse

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
On Monday Senate Republicans rolled out their plan to reduce the unemployment benefit bonus—which is paid on top of state benefits—from $600 to $200 per week for the next two months. After that period, the benefit would transition into covering 70% of the unemployed persons’ previous income through the end of the year.
But Democrats aren’t onboard with reducing the benefit by that amount. And on Wednesday the negotiations on the next stimulus bill, which include the enhanced unemployment benefits, hit a partisan wall.
“We’re nowhere close to a deal … It means enhanced unemployment insurance provisions will expire,” said White House Chief of Staff Mark Meadows after an unproductive Wednesday meeting with Democratic Senate and House leaders.
That means that the 31.4 million jobless Americans who are currently receiving the enhanced benefit will go without the $600 benefit this week. The final $600 weekly federal unemployment benefit was for the week ending July 25.
And there is no guarantee the $600 will get replaced. “No deal certainly becomes a greater possibility the longer these negotiations take,” Meadows said Wednesday.
Economists have told Fortune that allowing the $600 benefit to completely phase-out without a replacement could pull the economy back into a recession. The reason? The benefit was paying out around $50 billion per month to households, which prevented deeper contractions in consumer spending—something that makes up two-thirds of the U.S. economy.
Democrats have reassured unemployed Americans this week that they would not support cutting the weekly benefit from $600 to $200. The Heroes Act passed by House Democrats would’ve extended the $600 weekly benefit into January 2021. It’s unclear by what amount Democrats would be willing to reduce the benefit.
Americans receiving the $600 weekly benefit include the 17.3 million Americans on state unemployment rolls. But there are also 13.2 million getting it through Pandemic Unemployment Assistance
benefits, and the 940,113 on Pandemic Emergency Unemployment Compensation. In all 31.4 million Americans were receiving the $600 bonus before it expired.


fortune--2020-07-29--Snap unveils diversity numbers, plans to double women and minorities on staff

Snap Inc. revealed the gender and racial makeup of its workforce for the first time, following other technology companies in acknowledging it has far more work to do.
The parent company of Snapchat said it will double the number of women in tech roles by 2023, according to a blog post Wednesday. Currently, women make up 16% of the tech workforce and 7% of the tech team leadership.
Snap will also double the representation of U.S. racial and ethnic minorities by 2025, with a long-term goal of reflecting the diversity of the places where Snap has offices. Black and Latino workers make up 4.1% and 6.8% of Snap’s workforce, respectively.
Snap chief executive officer Evan Spiegel previously critiqued the practice of releasing annual diversity reports, saying it would normalize the lack of inclusion in the industry. The company’s commitment now comes as part of a broader effort to change “things that we can most directly impact, like our pay practices, hiring and inclusion programs, tax strategy, supply chain, and energy consumption,” Spiegel said in the post. “We believe that the greatest long-term limitation on the growth of Snap is the success of our broader society, and we will invest accordingly.”
Snap’s full report, called CitizenSnap, is here.


fortune--2020-07-29--Warren Buffett’s and Milton Friedman’s favorite stock market metrics have a warning for investors ri

Warren Buffett’s and Milton Friedman’s favorite stock market metrics have a warning for investors right now

Many on Wall Street are pushing the view that despite what looks like super-rich valuations, the stock market is fairly priced and should rise from here. But that scenario flunks a pair of tests favored by two of the greatest financial minds of the past century: Milton Friedman and Warren Buffett.
Friedman, the late Nobel Prize–winning monetarist who never left academia, and Buffett, who spent his entire career in the arena building companies and backing future winners en route to becoming the most successful investor of all time, have more in common than you might think. Friedman was an ardent champion of capitalism and so is Buffett; both loved math and considered becoming actuaries; and each has rejected the theory that the stock market is “efficient,” insisting that buying frenzies and panic selloffs often send prices soaring far above, or cascading well below, the enterprises’ fundamental values.
Shortly before his passing in 2006, Friedman told this writer, “Over long periods, the stock market’s value does track companies’ earnings. But in the short term, the market is far from efficient.” Buffett couldn’t agree more. He’s famous for staying calm and scooping up bargains in tough times when the Wall Street crowd is fleeing in a stampede.
Friedman believed from long observation, and Buffett reaped billions betting, that equities are often excessively pricey or overly cheap. What’s more, both cited favorite metrics that measure when markets are drastically under- or overvalued. For Friedman, the ruling measure was corporate earnings as a share of GDP. When that ratio went out of whack because profits spiked, he told me, the jump was unsustainable. “Profits can’t keep absorbing more and more of national income,” declared Friedman. For that to happen, they’d need to outgrow wages, investment, and other GDP components for long periods, a dynamic that Friedman told me couldn’t last.
If profits rose to devour an unusually high portion of the nation’s output, he said, the boom in business that pushed them up would eventually push them back down. Why? Because the surge in sales that initially raised profits would force companies to hire additional workers, and the competition for those workers would raise payrolls and depress margins.
By implication, Friedman was saying that if stock prices soar because earnings are racing far faster than the overall economy, watch out! The trend is bound to reverse, pounding profits and, in all probability, dragging down equity prices.
For Buffett, the yardstick is the value of all U.S. equities compared to GDP. As he told Fortune in 2001, “It’s probably the best single measure of where valuations stand at any single moment.” The market cap to national income metric is often called “the Buffett Indicator.”
The Friedman and Buffett measures are closely related, and both are based on bedrock economics. Essentially, the two tests are saying that the very workings of an open, competitive economy make it extremely difficult for companies to generate outsize profits for long periods—with exceptions for great brands and highly regulated, price-protected sectors such as pharmaceuticals. In general, when a company keeps raising prices and garnering fat margins on semiconductors or sports equipment, those rich profits are a magnet for competitors to jump in. Rivals that can make and sell the same stuff better and cheaper slash prices to win customers, and margins eventually retreat to their historic benchmarks.
Friedman is talking specifically about how economic gravity governs profits. The Buffett metric also looks at earnings but encompasses a second component, valuation or price/earnings multiples. Either one of them operating separately, or the pair in tandem, can swell the S&P’s value to excessive levels of GDP. The first driver is a jump in earnings to historically lofty, unsustainable levels. The second is the lift from crazy ebullience that causes investors to pay bubble-like prices for each dollar of profits, sending P/Es soaring. Or the S&P 500’s market cap can get dangerously inflated by a combination of the two. That was the case in early 2020 before the pandemic struck. Since prices are nearly back to those levels, it’s natural to question how they can advance from here without a huge jump in profits, an outsize P/E that flashes red, or the two working together.
Let’s examine what the Buffett and Friedman measures are telling us about the remarkable exuberance that’s defying the steep economic downturn caused by the COVID-19 pandemic. At the close on Thursday, July 22, the S&P 500 stood at 3236, a shade above its near record of 3131 at the end of 2019. The index now sits just 4.4% below its all-time high of 3386 on Feb. 19. To buy an S&P index fund or a diversified portfolio of large-caps, investors must believe they’ll be a lot higher in 12 or 24 months. That’s especially true since the markets been careening through lurching swings, so that funds and individuals want to be well rewarded for what promises to remain a rough ride.
Let’s start by deploying the Buffett Indicator. It incorporates both GDP and aggregate value of equities, for which we’ll use the S&P 500, accounting for most of that total, as a proxy. The Congressional Budget Office projects that national income will tank from an annualized $21.729 trillion in Q4 2019, to $19.246 trillion in Q2 and $20.361 in Q3, drops of 11.4% and 6.3% respectively. In the CBO’s forecast, output doesn’t return to year-end 2019 levels until the end of Q4 2021. (Its figure for that quarter is virtually flat, with Q4 2019 at $21.75 trillion.) That’s around 18 months from now. It’s conservative to assume that investors would want a 10% gain over that year-and-a-half, or 6.5% on an annual basis, to brave the rapids.
We’ll get to assessing that ratio in a minute. But first let’s invoke the spirit of Friedman and look at earnings. What level of profits are needed to boost the market to 3560 in 18 months, and what are the chances they can get that big? To explore that question, I’ll introduce a new participant, the author, who, though awed to join this august company, adds his own measure. It’s called the “Tully 20 Rule.” That yardstick posits that 20 is a reasonable price/earnings multiple to project for the S&P 500 once the economy gets back on track. It’s lower than the level of the past 20 years, but much higher than the 60-year average of under 17.
At a 20 P/E, the S&P companies would need to earn $178 a share to achieve the 3560 mark that would deliver a 10% return over the next 18 months. That’s 28% higher than the record of $139.47 achieved at the close of 2019.
Keep in mind that S&P profits have collapsed so fast that the Wall Street analysts polled by S&P forecast that for all of 2020, earnings per share will hit $93, a drop of 33% from their record of $139.47 the end of 2019. The analysts further expect that by the close of 2021, when the CBO predicts that national income returns to late 2019 levels, EPS will reach $147, just above the roughly $140 mark of two years before.
To get to 3560 in 18 months, a rise the bulls view as a gimme, the S&P would need to generate 21% higher EPS than even the analysts, who are notoriously optimistic, are forecasting. Here’s the killer and the figure that would dismay Friedman. Total S&P earnings as a share of GDP would have to hit 6.7%. At the end of 2019, EPS as a share of GDP was already high by historical standards at 5.3%. In the run-up to the Great Financial Crisis in July 2007, that ratio was 5.5%; in the tech bubble of mid-2000, the number was 4.3%. We’ll dismiss the “earnings will ride to the rescue” scenario right now. The notion that profits will be almost 30% bigger heading into 2022 than in the great times of late 2019, and also far surpass the shares in previous frenzies, is a fantasy. It won’t happen.
It’s clear that the S&P won’t come close to hitting 3560 at our projected P/E of 20. Earnings can’t do the job. In theory the S&P could deliver a 10% gain from here—but only if the future P/E is far higher than our assumption of 20. To be sure, that would require an epic performance, considering how far EPS has fallen in this deep recession. If earnings rebound to nearly $140, their all-time high posted in Q4 2019, the S&P would ring the bell if the P/E ratio went to 25.4 (3560 divided by $140). That’s 27% above what we consider a reasonable projection of 20. The S&P has never posted a multiple that high for a single quarter in the past decade, and the average over that span is 16% lower at 21, a figure that’s already well above the historic norm.
Of course, it’s theoretically possible that the EPS could jump to $178, or that the P/E could climb to 25-plus, or that some combination of high EPS and an elevated P/E could lift the S&P by 10% over the next 18 months. The clincher is the Buffett Indicator. In any of those cases, the destination is the same, an S&P at 3560 that brings its value versus national income to 135%. The Buffett Indicator rates the probability that will happen as extremely low.
Why? Because a S&P to GDP of 135% is wildly out of line with almost any past precedent. It would represent a new normal that’s too abnormal to happen. In the mid-2007 boom, the S&P’s value stood at 97% of GDP. The highest figure notched in recent decades was 123%, registered twice, once at summit preceding the tech meltdown in June of 2000, and again at the end of 2019. The average since 1975 is around 90%.
The scenario that many on Wall Street are selling, that the S&P has plenty of room to rise from here, runs headlong into both the Buffett Indicator and the Friedman earnings-to-GDP metric. It gets an F on both tests. A better bet is that profits return to something like their late 2019 level of $139 in 18 months and garner a 20 P/E. That would put the index at 2780, 14% below where it is today, and 22% under the 3560 S&P level that would provide a 10% gain from here. Forget the “this time it’s different” story about “the Fed put,” unstoppable momentum in big tech, and hoards of cash on the sidelines. Believe the measures preferred by the two sages, one still with us, one for the ages, that are flashing the same signal that a reckoning is coming.


fortune--2020-07-29--Kodak stock soars 300% after pivot to pharma supply chain

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
You could say Kodak is having a moment.
The legacy camera firm announced a $765 million loan from the U.S. government on Tuesday to produce pharmaceutical ingredients—part of an effort to reduce American drugmakers’ reliance on foreign sources and ease strains on the supply chain amid the coronavirus pandemic.
In the wake of Kodak’s unexpected pivot, investors have flocked to its stock en masse, making it by far the most traded company on the New York Stock Exchange on Wednesday and sending its price soaring. Kodak’s stock gained more than 300% today—closing at north of $33 per share after hitting an intraday high of $60 at one point—and has jumped nearly 1,500% this week so far (from $2.13 per share at Monday’s open). Since closing at less than $115 million on Monday, Kodak’s market capitalization has swelled to nearly $1.5 billion.
The production of pharmaceutical ingredients will eventually comprise up to 40% of Kodak’s business, CEO Jim Continenza told the Wall Street Journal—a development that has sent the company’s stock to levels not seen since early 2014. The company’s former business model has long fallen victim to technological winds and the rise of the camera phone, which led to it shuttering its camera business and filing for bankruptcy in 2012.
For some observers, the massive spike in Kodak’s trading volumes brings to mind the dynamics that recently impacted Hertz’s stock. Retail investors on popular stock trading apps like Robinhood flocked to the bankrupt rental car firm’s shares earlier this year, after its Chapter 11 filing sent its stock plummeting. The subsequent interest in Hertz drove its share price to unforeseen highs, despite the fact that the firm’s bankruptcy rendered those shares effectively worthless.
While Kodak’s financial situation is nowhere near as precarious, it appears a similar dynamic is at play on the retail trading apps. Tens of thousands of investors on Robinhood have bought Kodak shares this week, hoping to ride the stock’s run-up in the wake of Tuesday’s announcement.
Update, July 29, 2020: This story has been updated to include Kodak’s stock price at the close of trading Wednesday.


fortune--2020-07-29--There are 3 more curves to flatten in addition to COVID-19’s

The COVID-19 pandemic has affected us all, but the most fundamentally devastated are the already vulnerable communities. The demand for care brought on by COVID-19 has exposed the fragile nature of our health system and shed light on the alarming and pervasive influence of inequities, structural racism, and health disparities.
Among the many heroes helping us survive the pandemic are frontline health care workers, first responders, and the people who have kept vital services open and accessible, despite their own personal health risks. Equally heroic are the scientists leading the desperate search for a viable vaccine and effective therapies. At the same time, we must recognize that all global citizens have made significant sacrifices and continue to demonstrate that we are all essential.
Considerable attention has been focused on the COVID-19 curve—a relatively intuitive framework that has provided the global community with an easily understood benchmark on how to measure progress in addressing the spread of the virus and reducing transmission. Some communities are just beginning to flatten the curve with evidence-based approaches, while others are moving in the wrong direction.
As we look ahead, we need to examine how we address the infectious disease curve with the reality of an unrelenting increase in COVID-19 cases and the impending onset of the annual flu season. In this context, it will be critical to adopt a renewed sense of urgency to recognize that vaccinations save lives and money, and continue to harness our collective energy around the development of effective COVID-19 vaccines.
While it is critical that we address the infectious disease curve with scientific rigor and evidence-based policies and nonpharmaceutical interventions, this pandemic is far too complex to be thought of in just one dimension. To successfully emerge from the pandemic and begin to reimagine a better health system for the future, we must confront and flatten three additional impact curves:
Mental illness
Even before the pandemic, our country faced growing rates of mental illness and a fragmented infrastructure unable to properly address the increased need for mental-health services. Now, months into shelter-in-place restrictions in many localities due to the virus, the country is on the verge of a rapidly escalating mental-health crisis.
One in three Americans report chronic anxiety driven by factors that are catalysts for psychological trauma—an overwhelming number of lost lives, increased unemployment and economic hardship, social isolation from friends and family, and a general fear for the future. Sadly, our frontline health care workers are at a heightened risk of mental-health disorders from burnout, job-related stress, and trauma, and 59% of health care workers say their mental health has declined as a result of the COVID-19 crisis.
Experts warn that a looming wave of mental-health conditions is imminent, with cases of substance abuse, intimate partner violence, and gun suicides on the rise. Our fragmented U.S. mental-health system—already vastly underfunded, stigmatized, and difficult to access—is not adequately prepared to handle the current crisis and the future post-COVID-19 surge.
Chronic diseases
Hospitals and health systems have been forced to focus almost exclusively on treating high-risk COVID-19 patients. Many medical practices and community health centers have been required to discontinue routine health and wellness visits and basic preventive services because of shelter-in-place orders. As a result, many hospitals and medical practices are facing a fiscal crisis, leaving the future operations of these vital health resources at risk, particularly when you consider that nearly all of America’s health care spending is on chronic diseases and mental illness.
Many patients have been reluctant to seek preventive care and management for chronic conditions for fear of being exposed to COVID-19. Likewise, preventive services like vaccinations and screenings for chronic diseases like cancer have essentially been put on hold, leaving millions at risk of escalating infectious and chronic diseases or missing a critical diagnosis at early stages of a disease. In fact, recent research is showing excess deaths from chronic diseases like heart disease, stroke, and diabetes.
Health inequities
After only a few months of this pandemic, half of U.S. adults live in households that have lost income, especially in low-income and minority communities. COVID-19 is also exposing the devastating health inequities that already existed in our health system. The shortcomings disproportionately impact minority communities, most notably Black Americans in urban areas. According to the COVID Racial Data Tracker, a joint project of the COVID Tracking Project and the Boston University Center for Antiracist Research, deaths from COVID-19 are nearly two times greater for Black or African-Americans, compared with the general population.
And the downstream consequences of this crisis have accelerated the economic disparities within the Black community. This is clearly evident when you consider that the national unemployment rate average is currently at 11.1%, while the jobless rate remains highest for Black workers at 15.4%. COVID-19 has only accelerated the economic divide, creating an escalating crisis of health disparity. There is a growing consensus that structural racism has contributed to the current health disparity crisis. At the same time, there is an emerging movement to not only acknowledge this injustice, but to address it in a meaningful way.
Focusing on all four
We must collectively design an integrated strategy to address and flatten all four curves—infectious diseases (with an emphasis on the coronavirus), mental illness, chronic diseases, and health inequities—with a renewed vigor and a commitment to science and collaboration. Otherwise, we leave already vulnerable communities at increased risk and our health system with even more burdens.
History has taught us that we can emerge stronger from crises. With the right focus and teamwork across the health system, I am confident we can do the same from this crisis. We must transform our health and economic systems to create a more equitable future for all global citizens—especially the most vulnerable ones.
Kyu Rhee, a primary-care physician and master of public policy, is vice president and chief health officer at IBM.


fortune--2020-07-29--Roche tried to see if its arthritis drug could fight coronavirus. It didn’t work

Good afternoon, readers.
Drug development is a weird business. It’s crucial during a pandemic and the companies trying to make drugs have to get creative in emergency moments like this.
That’s why a whole lot of pharmaceutical firms have been testing out whether their own existing products can fight the coronavirus. Roche is one of them—and, unfortunately, on Wednesday announced that the gambit didn’t work out.
The Swiss drug giant was attempting to see whether or not Actemra, an anti-inflammatory which treats rheumatoid arthritis, could be promising for patients who had been hospitalized for COVID-19 with severe symptoms.
The company said in a statement that the trial of this drug failed both its primary and secondary goals: improvement in health for those with COVID-associated pneumonia as well as lowering the risk of death for these patients.
It’s a disappointing development. But it doesn’t mean that an old drug can’t learn new tricks. Gilead’s remdesivir, one of the only authorized coronavirus treatments in the world, had been in the making for a decade. Experimental vaccines rely on old technologies for similar coronaviruses. It isn’t easy to balance expedience with effectiveness.
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Geneticist George Church and other reportedly testing a DIY coronavirus vaccine on themselves. MIT Technology Review reports that at least 20 scientists, including the renowned genetics expert George Church, are testing out DIY coronavirus vaccines on themselves. That's a pretty controversial approach in the scientific community since these products haven't been validated by rigorous trials. But this particular group defends it with a risk-benefit argument. “I think we are at much bigger risk from Covid considering how many ways you can get it, and how highly variable the consequences are,” Church tells the Technology Review. "I think that people are highly underestimating this disease." (MIT Technology Review)
INDICATIONS
Kodak stock soars on $765 million Trump administration deal to create drugs. Shares of Kodak—a company best known for its photography products—are up a shattering 320% after the Trump administration announced a $765 million deal for the company to create generic drug ingredients. The funds were authorized under the Defense Production Act (DPA), which allows for emergency funding during situations like a pandemic. "Our 33rd use of the Defense Production Act will mobilize Kodak to make generic, active pharmaceutical ingredients,” said President Trump in a press conference on Tuesday. "We will bring back our jobs and we will make America the world’s premier medical manufacturer and supplier." (CNBC)
THE BIG PICTURE
Coronavirus deaths top 150,000 in the U.S. The U.S. now has one of the highest per-capita global COVID-19 death counts, per Reuters, with the mortality toll rising beyond 150,000. If you look at other metrics, such as the Johns Hopkins COVID tracker, there are more than 4.3 million coronavirus cases in the U.S. and Florida (a "hot spot" with surging cases) had a second consecutive day of record deaths on Wednesday.
REQUIRED READING
Big Tech is likely to defend its dominance by pointing to an alternative, by Grady McGregor
Kodak's pharmaceuticals shift comes years after Fujifilm tried to do the same, by Naomi Xu Elegant
How ugly the U.S. GDP report may get, by Bloomberg
Sign up for other Fortune newsletters.


fortune--2020-07-29--Joe Biden wants to end the era of big companies paying nothing in taxes

The tax wonks have taken a look at Joe Biden’s corporate tax plan—and it appears Corporate America could be in for a rude awakening.
The Democratic presidential nominee is proposing changes to the corporate tax code that would prevent some of America’s largest corporations from using legal loopholes to reduce their federal income tax liabilities to near-zero.
In addition to raising the corporate tax rate to 28%, from 21% currently, Biden’s plan would set a minimum tax of 15% on companies’ “book income,” or profits reported to investors, the Wall Street Journal reported Tuesday. It would also double the existing tax rate on foreign profits reported by U.S. firms, from 10.5% to 21%, according to an analysis by the Tax Policy Center.
The moves would effectively reverse the Trump administration’s significant overhaul of U.S. corporate tax laws, via the Tax Cuts and Jobs Act of 2017. Coupled with income and payroll tax increases on high-income individuals, plus other proposals, the Biden plan would increase federal revenues by $4 trillion through 2030, according to the Tax Policy Center.
It would also likely spell an end to an era that has seen hugely profitable corporate behemoths like Amazon use the tax code to their advantage—and in the process lower their federal income tax bill to a relatively minimal amount.
Amazon, for its part, has previously shot back at the Biden campaign’s attacks on its tax practices. And there are no shortage of critics who claim that corporate tax policies like those proposed by the Biden campaign discourage companies from using tax breaks meant to incentivize investments that create jobs and bolster the U.S. economy.
How do CEOs of America’s largest companies feel? According to data from the Center for Responsive Politics, most of the biggest political donors who lead S&P 500 firms ramped up their donations to GOP fundraising groups during the second quarter.


fortune--2020-07-29--Round 2 stimulus checks are likely coming for college age dependents—but there’s a catch

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
On Monday Senate Republicans rolled out their stimulus bill, which would send out another round of stimulus checks that are almost identical to the first round.
The proposal outlined by Senate Majority Leader Mitch McConnell would send a stimulus check worth as much as $1,200 for individuals or $2,400 for married couples, plus $500 for each qualifying child. That amount would decrease for adjusted gross income above $75,000 per individual or $150,000 per qualified couple. And the checks phase out for individuals earning above $99,000, head of household filers with one child above $146,500, and joint filers with no children at $198,000.
But there is one big change: This time $500 would be sent for each qualifying adult dependent. The first round of stimulus checks did not include adult dependents.
But there is a catch: If the Republicans plan were enacted as proposed, money would be sent to the income tax filer (aka the parent) not the adult dependent.
House Democrats in May passed the HEROES Act which would have provided $1,200 stimulus checks for each adult dependent.
Why the bipartisan support for sending money for older kids? Since the CARES Act passed in March college student groups and think tanks have pushed for aid to be set asides for these Americans who got overlooked in the first bill.
“Any subsequent round of payments should fill gaps left by the CARES Act rebates and their implementation. In particular, it should extend rebates to people with modest incomes who were previously left out … [an estimated] 15 million older children and adult tax dependents,” wrote researchers at the Center on Budget and Policy Priorities in May paper arguing for adult dependent to be included in the next round of stimulus payments.


fortune--2020-07-29--To recharge America’s job market, build a green electric grid

Sadly, due to the COVID-19 pandemic, we now have the highest unemployment we’ve seen since the Great Depression. Many of those jobs will disappear forever in the post-COVID world, and others will take years to return to normal. But with great crises come great opportunities. Today we have a once-in-a-lifetime chance to solve our current economic crisis: by switching to clean energy.
At Rewiring America, we estimate we can create some 25 million U.S. jobs if we move on from fossil fuels and electrify the economy by 2035, as we’ve detailed in a recent study . This estimate comes from an in-depth energy and engineering analysis from comprehensive datasets of energy, labor, and materials, conducted by the two of us and MIT engineer Sam Calisch. We know, with great precision, where our energy currently comes from, how much we use, what we will need to build to transform our system to one with zero carbon emissions–and how many people it will take to build those things.
Simply put, clean energy technologies require more labor in manufacturing, installation and maintenance than fossil fuel technologies. It takes more people to install and keep a wind farm running than it does to drill a well and keep it pumping to produce the same amount of energy over time. All those jobs have a multiplying effect: The woman installing wind farms will get a handsome paycheck that she’ll spread around her local economy, reviving restaurants, shops, and other hard-hit businesses.
To power our lives without fossil fuels to the level of comfort we enjoy today (cars, heated homes, and other push-button conveniences), we’ll need to build capacity to generate approximately 1500 GW of electricity, which is more than three times the amount of energy that the U.S. currently generates. The scale of electrification will be more massive than any project America has seen in decades. We will need hundreds of thousands of wind turbines, six million zero-emission trucks, a million miles of transmission lines, hundreds of millions of electric vehicles, heat pumps and electric induction ranges, billions of solar cells and more than a trillion batteries. And we’ll need tens of millions of jobs to manufacture, build, install, and manage all those things.
When we get to work, we’ll have clean energy jobs in every zip code, because we’ll need to install solar panels on our homes and wind turbines in our fields. These aren’t jobs we can outsource to other countries; they will stay close to home. People hit hard by the current crisis will have an opportunity for good new jobs, while helping to transition their communities to cleaner and safer sources of power.
We have the technological solutions to electrify America renewably, but we’ll also need new policies and financing in place. Transitioning to clean energy will require higher up-front costs, building new, more widely distributed electrical infrastructure. Since much of this infrastructure will be personal–the solar panels on your roof and the electric vehicles in your garage–we’ll need access to inexpensive financing to make it work.
Following the Great Depression, the job programs and financial innovations of the New Deal offered some Americans an opportunity to buy a house, appliances, and new-found stability (though African-Americans were excluded from federal mortgages). Today, we have the opportunity to make similar “climate loans” more inclusive and equitable, helping everyone make the switch from fossil fuel-powered machines to electric ones.
What will this all cost? With the proper financing, this jobs solution will not cost the average American any upfront investment. In addition, once we build our infrastructure, renewable electricity will be very cheap—the sun shines and the wind blows for free—saving the average household about $2,000 per year and providing predictable energy bills. This is an especially big win for low-income Americans, who are hardest hit by fluctuations in fuel prices. When energy is cheap, everything is cheaper.
In addition to smart financing, we also need regulatory reforms to update building codes to make it easier to electrify and install rooftop solar. To make the system run smoothly, we’ll need “grid neutrality,” so that everyone can exchange energy freely and democratically, the way we exchange information over the Internet.
Accomplishing this task will require a historic mobilization and government investment, but America has done it before. During World War II, for instance, when the U.S. government had to quickly ramp up its military arsenal to fight Hitler and save democracy, it offered capital plus a guaranteed 7% profit to manufacturers who would turn their engineering know–how into producing armaments –“patriotism plus 7%.” It worked: at the height of the Great Depression, U.S. unemployment was over 24%. With the wartime production effort, in 1944, unemployment was 1.2%. We estimate that the cost of transitioning to a zero-carbon economy will be relatively less than the effort to produce the “arsenal of democracy” that won World War II.
Now, as during World War II and the Great Depression, we have a rare opportunity to rise from a crisis, defeat a mortal threat, and rebuild America for a cleaner, more prosperous future.
Saul Griffith is an engineer, physicist, and MacArthur “Genius Award” Fellow. Alex Laskey is a clean energy entrepreneur and founder of Opower. They are co-founders of the nonprofit Rewiring America.


fortune--2020-07-29--Can a seltzer-making company build a better device to help COVID patients breathe? SodaStream thinks

Can a seltzer-making company build a better device to help COVID patients breathe? SodaStream thinks so

Akiva Nachshon, a senior physician in the intensive care unit at Hadassah Ein Kerem Hospital in Israel, made a call to SodaStream on a whim.
The doctor, who is on the front lines of the nation’s battle against COVID-19—which has surged after Israel reopened schools—was lamenting to a friend about the current state of respiratory devices used to treat patients amid the pandemic. Ventilators, the default technology used by hospitals, are not only in short supply but they’re also expensive and invasive, often leading to longer recovery times and damaging side effects.
Nachshon’s friend suggested he reach out to SodaStream, the Israel-based PepsiCo business behind the countertop carbonated water machines, thinking there might be something to the company’s technology that could be helpful.
Nachshon called and left a note with SodaStream’s customer service, which made its way to Avi Cohen, the company’s head of research and development. The two met that same day, and within an hour Cohen realized the very physical principles behind the sparkling water maker could meet Nachshon’s needs.
Less than three months later, a device called StreamO2—a collaboration between SodaStream and Nachshon’s hospital—is in the midst of a 40-person clinical trial after being approved by the Israeli Ministry of Health.
The StreamO2 works by pushing a mixture of oxygen and air through a patient’s nose at a high flow rate. The device controls not only the flow of that mixture but also its temperature and its humidity, which is kept at more than 80%. This combination of flow, temperature, and humidity is critical to the quality of the respiration, according to a press release about the new device issued Wednesday.
The StreamO2 is designed to treat COVID-19 patients with mild to moderate conditions, who are in respiratory distress but are still breathing spontaneously. Unlike a mechanical ventilator, the StreamO2 does not require intubating patients, and it allows those machines to be freed up for the most critical cases.
PepsiCo acquired SodaStream in 2018 as part of its broader push to add healthier and more environmentally friendly products to its portfolio.
“Upon successfully passing clinical trials,” Cohen said in an email, “StreamO2 can potentially be next to every hospital bed.”


fortune--2020-07-29--What getting hacked will cost you ($3.86 million, approximately)

This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox.
How much does a data breach cost?
Approximately $3.86 million, according to a new report sponsored by IBM. That’s the average amount companies spent to recover from hacks, including the costs of forensic investigations, legal fees, regulatory fines, and lost business. The study surveyed more than 500 breached organizations about digital break-ins that occurred between August 2019 and April 2020.
This year’s headline figure dipped a bit compared to last year’s, when companies reported spending $3.92 million on average. The authors say the slight decline in expenses reflects maturing security programs for some companies, but note that costs were “much higher for organizations that lagged behind.” (Even so, the costs have remained pretty consistent over the years.)
Although the study took place mostly before the coronavirus pandemic hit its stride, it included prescient questions. The pollsters at the Ponemon Institute, the nonprofit cybersecurity research outfit that conducted the interviews, asked companies how they expected working from home to affect their ability to recover from breaches, for instance.
Three quarters of the respondents said they believed it would be harder to identify and contain breaches with remote staff.
Tell that to Twitter, which recently suffered an extraordinary security failure after, notably, green-lighting an indefinite work from home policy. (An insider told me that, as the hack was unfolding, Twitter warned its employees not to trust online communications with colleagues, as the company could not immediately ascertain the extent of the compromise. No doubt sitting side-by-side would have helped there.)
Another finding that caught my eye: The costliest breaches apparently involved the compromise of personally identifiable information—like customers’ names, addresses, and Social Security numbers—rather than thievery of intellectual property. Surely, this is an artifact of the ease of measuring certain costs—fees for notifying victims, paying for credit monitoring, etc.—versus the harder-to-measure, deleterious effects of industrial espionage.
Chris Scott, director of security innovation for IBM, acknowledged this disconnect. When trade secrets are stolen, “those costs can be longer term and difficult to quantify,” he said. Such breaches “can actually have a huge long term financial impact on a company, particularly if the information stolen impacts their business performance or competitive advantage.”
To ignore that would be to fall for the same trap that ensnares the worst short term-thinking on Wall Street. Fixating on the most obvious and immediately apparent quarterly numbers can provide a temporary boost, sure. But if a business is not managing for the long term—and protecting its most valuable, vital assets—it’s guaranteed to wither.
Same goes for cybersecurity investment decisions. If intellectual property is not your top priority, you may as well prepare for a company like Huawei to eat your lunch.
Robert Hackett
Twitter: @rhhackett
Email: robert.hackett@fortune.com
THREATS
Kings of the Hill. The CEOs of America's biggest tech companies—Amazon, Apple, Facebook, and Google—are set to appear before the House antitrust committee today to argue they are not monopolies. Jeff Bezos's opening statement paints Amazon as a relative pipsqueak fending off a horde of rivals, including Target, Costco, Kroger, Walmart, Shopify and Instacart. Google's Sundar Pichai name-checks competition everywhere from Amazon Alexa to Twitter to WhatsApp. Tim Cook tries to argue that Apple's App Store is fair. And Mark Zuckerberg raises the China specter, arguing that Facebook, alternatively, represents "the American way." You can tune into the livestream here at noon.
Misanthrope vs. philanthrope. While her ex-hubbie Bezos was preparing to be grilled on the Hill, McKenzie Scott released a record of her recent charitable givings. The novelist-turned-billionaire donated $1.7 billion to a host of nonprofit organizations. She has vowed to give away all of her money in her lifetime. Apparently Scott, not Bezos, got "generosity" in the divorce settlement.
Do you hear what I hear? Music-streaming service Spotify reported mixed earnings for the quarter that ended June 30. Revenue rose 13% to €1.89 billion, in line with guidance, and listening levels, which dropped off during the pandemic, mostly returned to normal, it said. But the company lost €356 million, a huge leap over the €76 million it lost during the same period last year. The cause: steep payroll taxes in Sweden owing to a 70% price run-up in shares since end of May.
Chip on your shoulder. Chipmaker Advanced Micro Dynamics, or AMD, is celebrating a fantastic quarter. The company posted $157 million in profit, up from $35 million a year earlier, and it raised its full-year sales-growth guidance to 32%—$2.55 billion in total—from an earlier forecast of 20% to 30%. Intel, meanwhile, is reorganizing its executive team in light of delays of its upcoming 7-nanometer chip tech; chief engineering officer Murthy Renduchintala, formerly of Qualcomm, is out.
"Hack the planet!" Surprise, surprise: Russia has been spreading disinformation about the coronavirus pandemic, according to U.S. intelligence agencies. Beijing is said to have hacked the Vatican in recent months, ahead of sensitive negotiations over the appointment of Catholic Church leadership in China. And U.S. prosecutors are mysteriously pushing to dismiss a case against two former Twitter employees charged with spying on behalf of Saudi Arabia.
Ender's Game IRL.
ACCESS GRANTED
Where do cybercriminals lurk? One popular haunt, at least virtually: a dingy underground bunker built by the West German Army in the 1970s. In this bizarro world-spelunking feature, The New Yorker investigates a notorious Dark Web server farm called the CyberBunker.
In 2012, a foundation controlled by a fifty-three-year-old Dutchman named Herman-Johan Xennt proposed to buy the bunker complex. Xennt travelled to Traben-Trarbach to explain his plans to a closed session of the town council. He was a striking man, with a cascade of shoulder-length gray-blond hair, and wore a dark suit, which highlighted the pallor of his face. Xennt told the council that he intended to set up a Web-hosting business at the bunker complex, and promised to create as many as a hundred jobs for local people, but he was vague when pressed for details.
FORTUNE RECON
Americans remain politically divided on wearing a mask By Sy Mukherjee
Jeff Bezos’ ex wife McKenzie Scott says she’s donated $1.7 billion to racial equity and other causes By Emma Hinchliffe
Google’s upcoming Grace Hopper subsea cable will span the Atlantic Ocean By Jonathan Vanian
When will the pandemic end? Not before 2022, ex-U.S. surgeon general warns By Maria Aspan
Amid pandemic, top CEOs say digital transformation is accelerating. Where it’s headed? Less clear By Andrew Nusca
Quibi actually got 10 Emmy nominations—and other surprises By Mark Kennedy
CES is going to be a virtual event in 2021 By Joseph Pisani
ONE MORE THING
North Korea has recorded its first suspected case of COVID-19. The Hermit Kingdom, infamous for its isolation, declared a national emergency and closed down the border city of Kaesong, where the suspected virus carrier has been placed in quarantine alongside others who were potentially exposed. The "patient zero," in this case, is supposedly a onetime defector who returned from South Korea this month to escape sexual assault charges.


fortune--2020-07-29--Big Tech’s investments raise fear of the invest-and-copy

This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox.
The tech giants often get roped into the same category as startups—both seek to upend traditional industries.
It’s easy to forget that means startups are also Big Tech’s competitors and potential acquirees.
Some startups have apparently regretted taking an investment from Amazon’s Alexa Fund, and sharing information with the company, per a story from the Wall Street Journal. Entrepreneurs accused Amazon of using the deal-making process to develop competing products. (An Amazon spokesperson responded, “Any legitimate disputes about intellectual property ownership are rightly resolved in the courts.”)
Now, Facebook is approaching smaller venture capital firms about becoming an investor in their funds, the Information reports. Facebook, which also plans to invest directly in startups, has appointed Sunita Parasuraman to run the project. But Facebook has a reputation for, well, copying ideas from other companies (the company has products similar to both Snapchat and Houseparty, released after the popularity of both). Certainly its brand and reach will attract takers—but that reputation will certainly invoke pauses.
Investing in the opposite of Gen Z: Companies are investing in ever younger generations—today, millennials are old news compared to Gen Z.
So it’s interesting to see a contrary take. Eighty-five-year-old Alan Patricof (who founded Greycroft in 2006) and 45-year-old Abby Levy (who was at SoulCycle) have launched a $32 million early-stage fund aimed at startups creating products for seniors, and at entrepreneurs over the age of 40. The fund has already invested in companies like Bloom, which offers seniors online activities and learning ventures at a time when many fear the pandemic is sparking an epidemic of loneliness among the elderly.
“The more I looked at it, the more I realized it was a fertile area, a total white space. Older people’s needs are so different, from food to entertainment to technical assistance,” Patricof told my colleague Jeff John Roberts about the fund aptly called Primetime Partners. Read more.
Housekeeping note: I’m off for the next week and a half. Don’t worry, the newsletter will be in good hands, thanks to Anne Sraders and my other colleagues. Please send deal news to Anne.sraders@fortune.com.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
Anne Sraders curated today’s Term Sheet.
VENTURE DEALS
- TransferWise, a London-based fintech, announced a secondary sales of shares worth $319 million at a new valuation of $5 billion, an uptick of 43% since May 2019. Lone Pine Capital led the round and was joined by investors including D1 Capital Partners, Baillie Gifford, Fidelity, and LocalGlobe. Vulcan Capital also came on as a new investor.
-Thrive Earlier Detection, a Cambridge, Mass.-based early cancer detection company, raised $257 million in Series B funding. Casdin Capital and Section 32 led the round, and were joined by investors including Bain Capital Life Sciences, Brown Advisory, Driehaus Capital Management, Intermountain Ventures, Janus Henderson Investors, Lux Capital, Moore Strategic Ventures, Perceptive Advisors, Rock Springs Capital, Sands Capital, and fund managed by T. Rowe Price Associates.
-Pharmapacks, an Islandia, N.Y.-based e-commerce marketplace for health and beauty goods, raised financing of up to $150 million from GPI Capital and JPMorgan Chase Bank.
-Sema4, a Stamford, Conn.-based health care intelligence firm, raised $121 million in Series C funding. BlackRock led the round and was joined by investors including Deerfield Management Company, Moore Strategic Ventures, Blackstone, Section 32, Oak HC/FT, Decheng and the Connecticut Innovation Fund.
-Heal, a Los Angeles-based on-demand physician house calls platform, raised $100 million in Series D funding from Humana.
-Remitly, a Seattle, Wash.-based mobile provider of financial services and sending money, raised $85 million in funding. Prosus’s PayU led the round and was joined by investors including Generation Investment Management, Owl Rock Capital, Stripes, DN Capital, Top Tier, Princeville Global, and Threshold Ventures.
-Stack Overflow, a New York City-based platform for developers and technologists to develop skills, raised $85 million in Series E funding. GIC led the round and was joined by investors including Silver Lake Waterman, Andreessen Horowitz, Index Ventures, Spark Capital, and Union Square Ventures.
-Nura Bio, a South San Francisco-based biopharma company focused on neuroprotective drugs, raised $73 million in Series A funding. The Column Group led the round, and was joined by investors including Samsara BioCapital and Euclidean Capital.
-Eargo, a San Jose, Calif.-based medical device company for hearing loss, raised $71 million in funding. Gilde Healthcare and Longitude Capital led the round, and were joined by investors including New Enterprise Associates, the Charles and Helen Schwab Foundation, and Nan Fung Life Sciences.
-Tempo, a San Francisco-based at-home weights training fitness company, raised $60 million in Series B funding. Norwest Venture Partners and General Catalyst led the round, and were joined by investors including DCM, Bling Capital, SignalFire, Founders Fund, and Y Combinator.
-DNA Script, a Paris, France-based enzymatic DNA synthesis technology developer, raised $50 million in extended Series B funding. Casdin Capital led the round and was joined by investors including Danaher Life Sciences, Agilent Technologies, Merck KGaA, M Ventures, LSP, Bpifrance Large Venture Fund and Illumina Ventures.
-Chorus.ai, a San Francisco-based sales conversations intelligence platform developer, raised $45 million in Series C funding. Georgian Partners led the round, and was joined by Emergence Capital, Redpoint Ventures and Sozo Ventures.
-Thought Machine, a London-based cloud-based banking software firm, raised $42 million in extended Series B funding. Eurazeo Growth led the round and was joined by British Patient Capital and SEB.
-Dialogue Technologies, a Canada-based telemedicine provider, raised $32.7 million in funding from Sun Life. It was joined by Caisse de dépôt et placement du Québec (CDPQ), Portag3 Ventures, White Star Capital, HV Holtzbrinck Ventures, First Ascent Ventures and Walter Ventures.
-Explorium, a San Mateo, Calif.-based data science platform developer, raised $31 million in Series B funding. Zeev Ventures led the round, and was joined by 01 Advisors, Dynamic Loop, Emerge and F2 Capital. Read more.
-ExeVir Bio, a Belgium-based company working on a coronavirus therapy derived from llama antibodies, raised €23 million ($27 million) in Series A funding. Fund+ led the round, and was joined by investors including VIB, UCB Ventures, and the Belgian Federal Government via SFPI-FPIM, V-Bio Ventures.
-ClimaCell, a Boston-based weather forecasting platform that uses AI, raised $23 million in Series C funding. Pitango Growth and Square Peg Capital led the round. Read more.
-Ermetic, a Tel Aviv, Israel-based secure cloud access company, raised $17.3 million in Series A funding. Accel led the round, and was joined by investors including Glilot Capital Partners, Norwest Venture Partners and Target Global.
RangeForce, a Manassas, Va.-based cloud cybersecurity training company, raised $16 million in Series A funding. Energy Impact Partners led the round, and was joined by Paladin Capital Group, Trind, and Cisco Investments.
-Cybellum, a Tel Aviv, Israel-based car cybersecurity risk assessment platform, raised $12 million in Series A funding. RSBG Ventures GmbH led the round, and was joined by Blumberg Capital and Target Global.
-Hevo, a San Francisco-based cloud-based data integration platform, raised $8 million in Series A funding. Qualgro and Lachy Groom, a former Stripe executive, led the round, and were joined by Chiratae Ventures and Sequoia Capital India’s Surge. Read more.
-AstrumU, a Seattle-based company that uses machine learning to put values to educational experiences in the workforce, raised $7.7 million in Series A funding. Kingdom Capital led the round, and was joined by KC Rise Fund and City Light Capital.
-boostr, a New York City-based CRM and order management platform for media companies, raised $7 million in Series A funding. Vocap Partners led the round, and was joined by Bertelsmann Digital Media Investments, Math Capital, and C2 Ventures.
-Mountain Health Technologies, a Dallas-based healthcare company geared toward millennials, raised $1.5 million in seed funding. Matchstick Ventures led the round, and was joined by Northwestern Mutual Future Fund, Techstars Ventures, Bread and Butter Ventures, and Route 66 Venture.
-Trilogy Mentors, a Richmond, Va.-based online learning management platform for tutors, raised $1.1 million in pre-seed funding. Felton Group led the round, and was joined by investors including CAV Angels.
-TrekIT Health, a Philadelphia-based electronic health records and predictive data provider, raised $1 million in a seed round. Tech Council Ventures led the round, and was joined by Boston Millennia Partners Founders Fund, Front Row Fund, IP Group, DreamIT Health, and Ben Franklin Technology Partners.
PRIVATE EQUITY
-CORE Industrial Partners formed Incodema Holdings after acquiring Incodema, an Ithaca, N.Y.-based precision sheet metal engineering manufacturer, and Newchem, Newark, N.Y.-based photo chemical etching services provider. Financial terms were not disclosed.
-Superior Plus Group, backed by Brookfield, agreed to acquire Champagne’s Energy, an Arundel, Me.-based propane distributor. Financial terms were not disclosed.
-American Discovery Capital acquired Clear Capital Advisors, a Los Angeles-based investment banking firm. Financial terms were not disclosed.
-Equality Asset Management, AXA Venture Partners and Morgan Noble Healthcare Partners invested in Mindoula, a Silver Spring, Md.-based behavioral health management company. Financial terms were not disclosed.
-Providence Strategic Growth and Verdane agreed to invest in Hornetsecurity Group, a Germany-based cloud security provider for email and data protection. Financial terms were not disclosed.
-Industry Dive, backed by Falfurrias Capital Partners, will acquire New York-based NewsCred’s content marketing studio and services businesses. Financial terms were not disclosed. Read more.
OTHERS
-Intesa Sanpaolo will takeover UBI Banca, a Bergamo, Italy-based banking group, for €4.1 billion ($4.8 billion). Read more.
-Acrisure acquired Pittsburgh-based holding company Tulco’s artificial intelligence insurance business for $400 million, Bloomberg reported.
-Cognizant will acquire New Signature, a Washington, D.C.-based Microsoft cloud-based provider of technology. Financial terms weren’t disclosed.
-Metamorphosis Partners acquired Barkly Pets, a Brooklyn, New York-based online platform for scheduling pet care. Financial terms weren’t disclosed.
BREAKUPS, HANGUPS, AND BANKRUPTCIES
-Remington Arms Co., a gun manufacturer, filed for bankruptcy protection.
IPOS
-Rocket Companies, a Detroit-based parent company of mortgage titans Quicken Loans and Rocket Mortgage, plans to raise $3.2 billion by offering 150 million shares priced between $20 to $22 in an IPO. It plans to list on the NYSE as “RKT”. Read more.
-RedBall Acquisition, a New York City-based blank check company backed by RedBird Capital Partners, plans to raise $500 million in an IPO. It is led by co-chairman Gerald Cardinale, the founder and managing partner of RedBird, co-chairman and Oakland Athletics executive Billy Beane, and CEO Alec Scheiner, a partner at RedBird and former NFL executive. It is targeting investments in sports, media, and data analytics. It plans to list on the NYSE as “RBAC.U.” Read more.
-ACE Convergence Acquisition, a Wilmington, De.-based blank check company formed by ACE Equity Partners, raised $200 million by offering 20 million shares at $10 in an IPO. It is led by CEO and chairman Behrooz Abdi, a strategic advisor at TDK. It is targeting investments in IT infrastructure software and semiconductors. It plans to list on the Nasdaq as “ACEV.U”. Read more.
EXITS
-Five Arrows acquired Juvare, an Atlanta-based emergency preparedness and response software company, from Thomas H. Lee Partners. Financial terms were not disclosed.
-Zebra Technologies agreed to acquire Reflexis Systems, a Dedham, Mass.-based retail management software provider, from Great Hill Partners and Sageview Capital for $575 million.
-Thomas H. Lee Partners and Cannae Holdings plans to co-invest in a company formed after Black Knight, Inc (NYSE:BKI), agreed to acquire Optimal Blue, a provider of secondary market solutions (for an enterprise value of $1.8 billion) from GTCR, and combine it with Compass Analytics. Cannae and THL will each own roughly 20% of the new company while Black Knight will own about 60%.
F+FS
-Antin Infrastructure Partners, a private equity firm focused on infrastructure investing, closed its fourth fund, raising €6.5 billion ($7.6 billion). Read more.
PEOPLE
-HKW added Lilly Green as a vice president. Green was previously at Welsh, Carson, Anderson & Stowe.