fortune--2020-12-10--Blacklist vs. ‘redlist’: What to know about China’s new corporate social credit score

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China’s Corporate Social Credit System (CSCS), a national regulatory framework intended to audit the nation’s industries and hold individual players to account, is inching toward completion—and it may pose a new challenge for foreign firms operating in China.
The CSCS, first proposed in 1999 by then-Premier Zhu Rongji, is a centralized database that gives Chinese authorities greater oversight of businesses operating in China—both foreign and domestic—and provides a system by which to blacklist those deemed out of line.
Improved regulation could help China crack down on wayward businesses—tackling issues of pollution and tax avoidance, for example. But some Western observers fear the system will be used to restrict market access to foreign firms.
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“[The CSCS is] a new source of risk to foreign companies operating in China [that] could magnify the impact of arbitrary enforcement or regulatory bias against foreign companies,” the U.S.-China Economic and Security Review Commission—a government advisory panel established by Congress in 2000—said Tuesday.
The commission was summarizing a report authored by Beijing-based consultancy Trivium China. (Trivium wrote the report for the commission.) The 95-page document is the most comprehensive assessment yet of what China’s impending regulatory system means for U.S. corporations and interests.
But the report itself is arguably more conservative than the commission’s summary. Trivium notes that while the CSCS “could evolve to disadvantage U.S. firms” as U.S.-China relations plummet, the firm seems to downplay—at least for now—the chances of a worst-case scenario in which Beijing wields the CSCS as a weapon against foreign firms that fall out of its favor.
Corporate credit
The notion of social credit scores typically sparks ire among Western commentators, many of whom view the idea as Orwellian: an authoritarian government leveraging Big Data and mass surveillance to crack down on social liberties.
China already operates a “social credit score” system for individuals and issues petty punishments for some transgressions, such as defaulting on debt. Preventing bad debtors from boarding trains is one common discipline. But social credit, and the CSCS in particular, is much more bureaucratic and technologically less advanced than fears of a moralistic panopticon suggest.
“The term ‘Corporate Social Credit System’ is somewhat of a misnomer, and the use of the word ‘system’ is misleading, as it implies that the CSCS is a single, holistic, techno-regulatory apparatus, and that each policy under the social credit banner is a node in an integrated regulatory framework,” the report from Trivium says.
Currently, the CSCS remains largely disjointed. Beijing formally proposed creating the system in 2000 and published a plan for how to implement it in 2014, scheduling the system for completion by the end of 2020.
But China might not meet that deadline. A number of provinces have issued papers on how they will enforce CSCS standards, but other provincial authorities have not. With the year racing to a close, the full system might not be online until 2023, Trivium says.
Black and red
At its core, the CSCS is a database of all companies operating in China, complete with lists of each firm’s various regulatory lapses. The system compiles data gleaned from at least 44 state agencies and their branch offices across every province in China to create one centralized list.
“The scale of this data aggregation scheme cannot be overstated,” Trivium says. According to Trivium, the scope of interagency operation is equivalent to the IRS, the FBI, the Environmental Protection Agency, the Food and Drug Administration, the Department of Agriculture, the Health Department, the Department of Housing and Urban Development, the Department of Energy, the Department of Education, and every courthouse, police station, and state agency sharing records across a single platform.
Regulators and authorities can then access the CSCS’s data banks and use the information to either “redlist” corporations that frequently perform well—marking the companies for incentives and priority treatment—or to blacklist companies that frequently violate regulations—opening the business up to sanctions and scrutiny.
In theory, companies can’t be blacklisted arbitrarily under the CSCS. Authorities have to prove the business has violated some specific rule first, which typically involves some legal proceeding. For example, the blacklist reserved for debt defaulters is overseen by China’s highest judicial authority, the Supreme People’s Court.
However, Trivium notes regulatory bias and corruption could result in abuse of the system—particularly when it comes to foreign firms.
“In the event of increased trade tensions, regulatory bias could result in regulators applying penalties more stringently to U.S. companies,” the report says, noting that there are “avenues through which the system could be politicized,” as in trade wars.
Comply
The U.S.-China Economic and Security Review Commission isn’t the first foreign body to sound alarm bells over the CSCS. In a report published in August last year, the European Union Chamber of Commerce in China warned that the CSCS should be a “wake-up call” for European business in China.
“China’s Corporate Social Credit System is the most concerted attempt by any government to impose a self-regulating marketplace, and it could spell life or death for individual companies,” said Jörg Wuttke, president of the European Union Chamber of Commerce in China, urging businesses to adapt to the new system.
But that adaptation does not necessarily mean implementing a radical overhaul of corporate morals, as the term “social credit” appears to suggest. Rather, the risk to foreign firms—excluding corruption and abuse of the system—is one of compliance.
“It is a complicated and time-consuming endeavor to detect, distill, and keep track of the concrete details of the CSCS,” the chamber wrote in its report. “As the system remains a ‘work in progress,’ with adjustments being made almost daily, keeping a continuous eye on these developments remains a necessary task.”
As China’s presence on the international stage continues to grow, there’s also a risk that the CSCS could someday surpass the international credit scoring standards set by the U.S. and led by firms like Moody’s and Fitch. China’s foreign investment schemes, such as the Belt and Road Initiative, could be used to persuade developing nations to adopt CSCS, too.
According to Trivium, CSCS’s potential to “erode” the U.S. lead in financial services like credit rating is a “more immediate geopolitical risk” than the CSCS being used against U.S. companies.


fortune--2020-12-10--Lessons from HBO Max’s streaming surprise

Stimulus update : Everything to know about the bipartisan $ 300 unemployment benefit plan

As AT&T executes the largest strategic transformation in the Fortune 500, some of what the naysayers warned of is coming true.
The company is mutating from a phone business into a giant media conglomerate, having bought DirecTV in 2015 for $67 billion and then Time Warner in 2018 for $109 billion. The vision was for AT&T to “control its destiny” by owning “a big portfolio of premium content,” as former CEO Randall Stephenson explained to Fortune in 2019. The centerpiece of that plan, the project on which the whole grand strategy’s fate will depend, is the HBO Max streaming service. It went live last May and was in the news again this month with an announcement that shocked Hollywood.
AT&T’s WarnerMedia division, which houses HBO Max, the Warner Bros. film studio, and the Turner cable networks (CNN, TNT, TBS, others), said Warner Bros.’ entire 2021 slate of films—including big-budget blockbusters Dune and Godzilla vs. Kong—will debut on HBO Max on the same day they arrive in theaters. The subtext: HBO Max needs more subscribers. With 12.6 million as of early December, it’s far behind Disney Plus, with 74 million, and way, way behind Netflix, with 193 million.
The news blew up Warner’s relations with theater chains, which were already devastated by the pandemic. AT&T CEO John Stankey tried to mollify them, saying at least Warner was “giving theater owners a predictable release of content over the next several months that they can plan around,” unlike the chaotic postponements and cancellations of films in 2020. Theater chain CEOs were not grateful. “Warner Media intends to sacrifice a considerable portion of the profitability of its movie studio division, and that of its production partners and filmmakers, to subsidize its HBO Max startup,” AMC CEO Adam Aron said. “As for AMC, we will do all in our power to ensure that Warner does not do so at our expense. We will aggressively pursue economic terms that preserve our business.”
The change also increased the odds of piracy, especially overseas, where pirates routinely point a video camera at the screen from a theater seat and then sell copies. With major films on HBO Max at day one, pirates can stay home and produce much higher-quality rip-offs.
But the most damaging effect of the announcement in the long run may well be the harm it does to Warner’s relationships with the directors, actors, writers, and others who make great movies great. The best of them are profit participants; their contracts give them a cut of a movie’s many revenue streams, and suddenly an important one, theatrical exhibition, is to be decimated.
Worst of all, Warner didn’t tell them in advance. They heard about it like everyone else. “The importance of how this is handled can’t be overstated,” analyst Craig Moffett told clients in a note. “Warner has long enjoyed a reputation as the best independent studio, where talent can go for…creative freedom, arm’s-length rights negotiations, and profit maximization. The mere appearance of self-distributing could be seen as running counter to the best-in-class culture that has long been Warner’s selling point to world-class talent.”
Or as stated by Christopher Nolan, an award-winning director whose relationship with Warner goes back 18 years: “Some of our industry’s biggest filmmakers and most important movie stars went to bed the night before thinking they were working for the greatest movie studio and woke up to find out they were working for the worst streaming service.”
Some longtime industry players saw it coming. AT&T “has zero faith in relationships” with creative professionals and their agents, a former high-level Time Warner executive told Fortune in 2019. “Those [AT&T] guys are a running team. Our business is a passing game.” The greatest creative professionals want more than freedom; they also want their work sold to the highest bidders, who will make sure it’s seen most widely. If it isn’t, trouble is certain. Or as the former Time Warner executive said, “If they think you’re suboptimizing by selling to your own network, the game’s up.”
That’s exactly what AT&T is doing. Trying to build up HBO Max by premiering all of the company’s 2021 movies on the service will “lead to lost revenue of $1.2 billion,” Moffett estimates. That’s suboptimizing, to the detriment of the moviemakers. The danger for AT&T is that it can easily calculate increased revenue from HBO Max subscriber growth, but it can’t easily measure the cost of broken relationships, which could be much greater. As Nolan warned, “They don’t even understand what they’re losing.”


fortune--2020-12-10--China will sanction some U.S. officials and curb diplomatic travel

China said it will sanction more U.S. officials and place new travel restrictions on American diplomats in retaliation for measures taken by the Trump administration over Hong Kong.
Chinese Foreign Ministry spokeswoman Hua Chunying didn’t provide specific names of those sanctioned, but said they included people in the executive and legislative branches and their immediate families, as well as non-government organizations. China would also revoke visa-free entry to Hong Kong and Macau for U.S. diplomatic passport holders, Hua told a regular briefing in Hong Kong on Thursday.
The U.S. announced sanctions Monday against 14 members of China’s National People’s Congress, the country’s rubber-stamp legislature, as President Donald Trump tries to ratchet up pressure on Beijing before President-elect Joe Biden takes office. The U.S. has taken a slew of actions against Beijing in recent weeks, including restricting travel visas for Communist Party members and banning cotton imports from a military-linked firm in Xinjiang.
A spokesperson at the U.S. Embassy in Beijing declined to comment on China’s latest sanctions but referred to a statement expressing concerns about Beijing’s actions toward the financial hub.
Hong Kong has continued to be rocked by political upheaval in recent weeks. Last month, China passed a resolution allowing the disqualification of Hong Kong lawmakers who weren’t deemed sufficiently loyal — prompting opposition legislators to resign en masse. Prominent activists Joshua Wong and Agnes Chow were also sentenced to prison for leading a 2019 protest outside police headquarters, the latest in a series of moves by Chinese and local officials to clamp down on the city’s battered opposition.
While Hong Kong Chief Executive Carrie Lam has complained about U.S. sanctions limiting her access to banking services, many American officials targeted by China’s “firm countermeasures” have seen little impact other than the assumption that they wouldn’t be welcomed in China. Beijing’s ability to hit back is limited by the U.S. dollar’s dominance in international finance.
The greenback accounted for a far larger share of global banking transactions, as the Communist Party resists calls to ease currency controls. That makes it more difficult for multinational banks — including China’s state-run lenders — to avoid compliance with U.S. sanctions.(Updates with US embassy comment in fourth paragraph)
–With assistance from Iain Marlow.


fortune--2020-12-10--China’s COVID-19 vaccines are here—for better or worse

This is the web version of Eastworld, Fortune’s newsletter focused on business and technology in Asia. Subscribe here to get future editions in your inbox.
Grady McGregor here filling in for Clay Chandler.
On Tuesday, the world rejoiced as 90-year-old British grandmother Margaret Keenan became the first person in the world to be injected with a fully-tested COVID-19 vaccine from Pfizer and BioNTech.
But the U.K. was not the only country to roll out a foreign vaccine candidate this week.
On Wednesday, the United Arab Emirates approved the vaccine by Chinese state-owned drugmaker Sinopharm for widespread domestic distribution and claimed that Sinopharm’s vaccine was 86% effective in preventing COVID-19 infections after analyzing data from phase III trials.
The move was a signal that Chinese vaccine makers are not far behind their Western counterparts—Pfizer, Moderna, AstraZeneca—which appeared to cross the finish line first by releasing promising phase III trial data.
But among scientists, the UAE’s announcement has raised more questions about Sinopharm’s vaccine than answers. The UAE did not disclose the phase III trial data to the public and, in stark contrast to Western vaccine makers, Sinopharm did not even acknowledge publicly that its vaccine was approved. A spokesperson for a Sinopharm affiliate in Hong Kong declined Fortune’s request for comment and a spokesperson in Beijing hung up on the New York Times when it called about the news.
Sinopharm is a state-owned enterprise that seemingly has little interest in transparency and openly flouts adherence to some international vaccine development standards. In October, Sinopharm Chairman Liu Jingzhen proclaimed that the company had already distributed its vaccine to nearly 1 million people in China before the conclusion of clinical trials as part of China’s controversial emergency-use program.
One of Sinopharm’s Chinese counterparts, the private vaccine maker Sinovac, is more transparent, but it may have a different set of issues to overcome.
Sinovac is currently testing its candidate in phase III trials in Brazil, Indonesia, and Turkey, and has pledged to adhere to scientific protocols. The company also published its phase II trial results in a peer-reviewed medical journal, something Sinopharm has not done. But Sinovac’s stock has been suspended on Nasdaq for over a year as part of a drawn-out corporate governance battle. And in 2016, Sinovac’s founder Yin Weidong admitted to paying bribes to top Chinese drug regulator Yin Hongzhang in exchange for approval of Sinovac’s drug applications. Yin Hongzhang was sentenced to ten years in prison for corruption, but Sinovac was not charged for its role in the bribery case.
But for all of Sinopharm and Sinovac’s flaws, they may fill in the gaps left by Western vaccine makers.
Sinovac and Sinopharm’s vaccines are all based on inactivated forms of the virus, meaning they can be stored at roughly the temperature of a home refrigerator (2 to 8 degrees Celsius) and are more accessible to lower-income countries like Indonesia, where setting up pricey ultra-cold shipping and storage networks appears all but impossible. British pharmaceutical giant AstraZeneca’s vaccine also doesn’t require cold chain networks for distribution, but even after AstraZeneca published its phase III interim data in a peer-reviewed medical journal this week, scientists say continuing questions over the vaccine’s efficacy may force the company to conduct more trials before its candidate can be widely used.
In November, the Nikkei Asian Review published a map showing 26 countries that have struck deals with Chinese vaccine makers or have agreed to conduct phase III trials of Chinese vaccines. It’s a constellation of mostly developing nations across Asia, South America, the Middle East, and North Africa, perhaps foreshadowing a split among countries—those that use Chinese vaccines versus those that rely on Western-developed ones.
“I expect we will see a divided world in terms of vaccine use,” Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations, told Fortune in October. “You will find that [Organization for Economic Cooperation and Development] countries will prefer U.S.-made vaccines, and many developing countries will have no other choice but to use Chinese-made vaccines.”
More Eastworld news below.
Grady McGregor
grady.mcgregor@fortune.com
This edition of Eastworld was curated and produced by Naomi Xu Elegant. Reach her at naomi.elegant@fortune.com.
Eastworld news
Miner issues
Seven years ago, Yongcheng Coal and Electricity Holding was one of China's most profitable and lauded energy firms. Today, many of the coal mining company's employees are waiting on months of unpaid wages, and some are resorting to selling flour to earn cash. Pressure from Yongcheng's parent company, the state-owned and financially-troubled Henan Energy and Chemical Group (HECG), led Yongcheng to issue bonds to help pay off HECG debts. Last month, Yongcheng defaulted on 3 billion RMB worth of bonds, attracting national attention to the firm's decline and raising speculation that other state-linked firms could face the same fate. Financial Times
Walking on eggshells
New York-listed Danke Apartment, one of China's largest apartment rental platforms, piqued investor interest by marketing itself as a technology firm, not just a property company. Danke, which means 'eggshell' in Chinese, now faces widespread protests—both online and in person. The landlords it sublets apartments to claim the firm has stopped paying them tenants' rental money, and tenants say landlords are cutting off their utilities and changing their locks because they aren't receiving the rent payments. The controversy is bringing attention to Danke's controversial business model, wherein tenants pay one year's rent upfront with money often obtained through rental loans with Danke's partner banks. Danke said in a brief November statement that it has not gone bankrupt and "will not run away." Caixin Global
More money, more problems
China's 'second generation' children of rich elites, known in China as 'fuerdai,' have built a reputation for their flashy displays of wealth and privilege. But President Xi Jinping's harder line on China's wealthy and the central government's anti-corruption and poverty eradication campaigns are forcing many 'fuerdai' to be more cautious about flaunting their money. One son of a billionaire media tycoon told Bloomberg over a champagne brunch that "my stance is really to follow the path that the government leads—I know our fate moves in tandem." His billionaire father has been careful to keep links between himself and his son off the Internet and keeps his son on a limited allowance so he won't spend too much money and draw attention to himself. Bloomberg
Social credit for corporations
China is building a social credit system to rate companies on their behavior and reward or punish them accordingly. The initiative will amass data on every corporation in China, pulling from "government records and market-generated corporate compliance data" and amassing the information on a single platform with files for each company, according to a new report by consulting firm Trivium China. Companies with poor compliance records will appear on 'blacklists' and potentially lose access to the market; companies with good records will enjoy economic incentives and appear on 'redlists.' Both lists will be public. Bloomberg
The world's tallest mountain gets taller
China and Nepal declared a new official height for Mount Everest on Tuesday, saying their survey teams had determined that the world's tallest mountain stands at 29,031.7 feet—two feet higher than the previous consensus. Tectonic activity can change the height of peaks, and Everest hadn't been measured since the 2015 Nepal earthquake. The joint undertaking is also highly symbolic for Beijing and Kathmandu—previous measurements were carried out by other countries—not China or Nepal, even though the mountain straddles their border. Nepal has become an increasingly important ally as China's relations worsen with another crucial neighbor, India. Nepal's foreign affairs minister said Tuesday that the Nepal-China relationship "will rise across the Himalayas, and it will reach a new height." New York Times
Refugee status
The U.S. House of Representatives on Monday passed a bill that would grant Hong Kong residents Temporary Refugee Status (TPS), which would let them live and work in the U.S. if they fear political persecution in Hong Kong. TPS is typically given to regions struck by war or natural disasters. Hong Kong would be the wealthiest region on the TPS list, with a GDP per capita over 10 times that of El Salvador, currently the richest country with a TPS designation. China's foreign ministry on Tuesday condemned the U.S. actions as "a cover hiding their true aim of using Hong Kong to contain China's development in the name of democracy and freedom." Fortune
A mystery illness
Hundreds of people in southeastern India have been hospitalized after experiencing seizures, nausea, and loss of consciousness with no known cause. Indian health officials on Tuesday said they had found traces of lead and nickel in 25 out of 45 blood samples from hospitalized patients, but they haven't identified lead or nickel in water samples. Now they're testing milk. So far, over 585 people have been hospitalized, more than 500 have been discharged, and one person has died. The outbreak is another health burden for India, which has the second-highest number of coronavirus cases in the world after the U.S. Associated Press
Coronavirus by country
Singapore
The Quantum of the Seas cruise ship docked in Singapore Wednesday morning, cutting short a four-day 'cruise to nowhere' after one passenger tested positive for COVID-19. The person has been hospitalized, and the remaining 2,827 passengers and staff must stay on the ship until they test negative for the virus. The 'cruise to nowhere' initiative is part of a broader government effort to jumpstart domestic tourism in Singapore to make up for the lack of foreign visitors due to the pandemic. Singapore has kept daily COVID-19 cases low in recent months, but the city-state's small size means domestic tourism options are geographically limited to the island's 280 square miles. Cruises have been a hotspot for COVID-19 outbreaks since early on in the pandemic—the first one, on the Diamond Princess cruise ship in February, led to 14 deaths and over 700 infections, which at the time represented half the world's cases outside of China. Fortune
Markets and movers
Star Market – Shanghai's answer to Nasdaq, the tech-focused Star Market, logged its 200th initial public offering on Monday with the debut of IT firm Newtouch Software. The board has grown rapidly since it launched in July 2019 to encourage innovative Chinese tech companies to list domestically. CNBC
Goldman Sachs – The investment banking giant is in the process of taking full control of its China joint venture, Goldman Sachs Gao Hua Securities Co. The bank plans to buy out its partner's 49% share of the venture, which would make Goldman the first Wall Street bank with 100% ownership of a mainland China securities firm. Bloomberg
JD Health – Chinese e-commerce giant JD.com's healthcare unit, JD Health, debuted in Hong Kong on Tuesday and raised $3.5 billion, making it the city's biggest IPO this year. JD Health closed at around 60% above its list price on its first day of trading. Nasdaq-listed parent company JD.com completed a secondary listing in Hong Kong in June. Fortune
Davos – For the first time in almost 20 years, the World Economic Forum will not hold its annual meeting in Davos, the Swiss ski town that's become synonymous with the yearly gathering of business and political elites. For the forum's 2021 in-person meeting, it's moving to Singapore, which has logged fewer than 20 daily new COVID-19 cases over the past two months. Fortune
Final figure
2.1 million
Car sales in China increased for the fifth month in a row in November. Consumers purchased 2.1 million vehicles last month—an 8% year-on-year increase. Car sales are a major driver of China's post-lockdown economic rebound. Auto industry analysts estimate that overall car sales in China, the largest car market in the world, will still drop around 7% this year compared to 2019 because of the pandemic-induced collapse in consumption in the first few months of the year. Wall Street Journal


fortune--2020-12-10--IPO Thursday: What you need to know ahead of  Airbnb’s big debut

This is the web version of Bull Sheet, a no-nonsense daily newsletter on what’s happening in the markets. Sign up to get it delivered free to your inbox.
Good morning. U.S. tech futures are down, and edging lower as investors are still spooked by yesterday’s bombshell antitrust cases dropped on Facebook.
But none of that has chilled investor enthusiasm for new shares. Airbnb is set to go public later today, valuing the home-rental giant at $47 billion. That’s after DoorDash raised $3.4 billion in an IPO yesterday, and shares rocketed 86% higher. C3.ai had an even more astounding debut, with shares climbing 150%.
Elsewhere, European shares are edging higher after the EU cleared an important hurdle to green-light an epic stimulus package and after a dinner in Brussels ended with an extension on Brexit trade talks.
Let’s see what’s moving markets.
Markets update
Asia
The major Asia indexes are mostly lower in afternoon trading with Japan’s Nikkei off 0.2% .
are mostly lower in afternoon trading with Japan’s off . SoftBank is on a heck of a run, up nearly 11% today, and nearly 18% since Tuesday. An early investor in DoorDash, SoftBank saw its stake balloon in value to $11.5 billion after yesterday’s mega IPO.
is on a heck of a run, up nearly today, and nearly 18% since Tuesday. An early investor in DoorDash, SoftBank saw its stake balloon in value to after yesterday’s mega IPO. Here’s a bullish call on air travel. Virgin Australia’s new CEO Jayne Hrdlicka says the prospect of flying again will be “irresistible” for us marooned would-be travelers. She predicts a surge in air travel next summer.
Europe
The European bourses ticked higher this morning with the Stoxx Europe 600 up 0.1% at the open.
ticked higher this morning with the up at the open. The British pound fell again in volatile trade after last night’s much-watched dinner between Boris Johnson and Ursula von der Leyen failed to yield a breakthrough in the deadlocked post- Brexit trade negotiations . What’s next in the world’s most tedious business story? A Sunday deadline. Oh joy.
fell again in volatile trade after last night’s much-watched dinner between and failed to yield a breakthrough in the deadlocked post- . What’s next in the world’s most tedious business story? A Sunday deadline. Oh joy. But there is progress on the European Union’s $2.2 trillion stimulus bill as holdouts Poland and Hungary have dropped their objections.
U.S.
U.S. futures are mixed this morning after all three indexes fell on Wednesday. The Nasdaq suffered its worst one-day loss since Oct. 30 as the threat of a Big Tech breakup looms larger.
are mixed this morning after all three indexes fell on Wednesday. The suffered its worst one-day loss since Oct. 30 as the threat of a Big Tech breakup looms larger. The antitrust cases have hardly dented the IPO market. Fortune‘s Danielle Abril spoke yesterday to CEO Tony Xu who explained how they intend to spend their new cash pile.
who explained how they intend to spend their new cash pile. Next up is Airbnb, and investor appetite for its new shares is brisk. It should beat the $3.37 billion DoorDash raised in its IPO. Here are six things you should know before those shares begin trading in a few hours.
Elsewhere
Gold is down, trading around $1,840/ounce .
is down, trading around . The dollar is flat.
is flat. Crude is up, with Brent futures trading above $49/barrel .
is up, with futures trading above . Bitcoin has bounced back, up nearly 4% to trade around $18,400.
***
Buzzworthy
This week’s billionaires
Real news
Reality check, No. 1
Reality Check: No. 2
Reality check, No. 3
***
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
Risks include: angry neighbors. If you read the fine print of Airbnb's prospectus, you'll see a few references to its many detractors. "Airbnb has warned prospective investors that managing its success in the face of angry neighbors and unfavorable local laws is among its biggest challenges in the U.S. and around the world," the Wall Street Journal reports.
Nine-out-of-10 failure rate. Lost in the euphoria of DoorDash's IPO was the impressive debut of C3.ai. The artificial intelligence specialist soared more than 150% yesterday. Fortune's Jeremy Kahn spoke to billionaire founder Tom Siebel who notes that nine out of 10 companies fail whenever they implement artificial intelligence software into their operations. "In that failure Siebel has found opportunity," Kahn writes. Investors are certainly betting that's the case.
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Market candy
Quote of the day
They’ve presented a strong case and could win this.
That's Charlotte Slaiman, a former FTC lawyer who assessed the strength of the government's antitrust lawsuits against Facebook. But, she adds, the remedies—specifically that the social media giant divest WhatsApp and/or Instagram—will be a tough concession. In short, it "may be a long shot," Fortune's legal whiz Jeff John Roberts writes.


fortune--2020-12-10--France whacks Google and Amazon with giant privacy fines

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Google and Amazon have both been hit with substantial fines from the French data-protection regulator, CNIL, for invading users’ privacy.
On Thursday, the watchdog fined Google €100 million ($121 million)—double the penalty it levied on the firm last year over Android privacy violations—and Amazon €35 million. Crucially, it has also ordered them to start clearly telling users why they track them.
In both cases, CNIL said the companies had illegally deposited tracking cookies in users’ browsers without their prior consent, while failing to clearly disclose to the users it was leaving the cookies in order to show them personalized ads.
Google sinned further. “When a user deactivated the ad personalization on the Google search by using the available mechanism…one of the advertising cookies was still stored on his or her computer and kept reading information aimed at the server to which it is attached,” CNIL said in a statement.
“Therefore, the restricted committee considered that the ‘opposition’ mechanism set up by the companies was partially defective, breaching Article 82 of the French Data Protection Act.”
Changing ways
Both Google and Amazon have already taken steps to fix the problems. However, CNIL wants to see more and has warned the Big Tech firms that they face further fines if they don’t act quickly.
In September, both companies stopped automatically leaving advertising cookies on the devices of visitors to their French sites. But, CNIL said, they still don’t explicitly tell their French users how the cookies will be used and that they can refuse them.
Google and Amazon now have three months in which to get in line with CNIL’s demands, otherwise they will face daily fines of €100,000.
In a statement, Amazon said it disagrees with CNIL’s decision, countering it fully complies with “all applicable laws.” However, it did not indicate its next steps in this case.
“We stand by our record of providing upfront information and clear controls, strong internal data governance, secure infrastructure, and above all, helpful products,” a Google spokesperson said in a statement.
“Today’s decision under French e-Privacy laws overlooks these efforts and doesn’t account for the fact that French rules and regulatory guidance are uncertain and constantly evolving. We will continue to engage with the CNIL as we make ongoing improvements to better understand its concerns.”
Rising tensions
CNIL has long been one of Europe’s most aggressive data protection regulators, but these fines come at a time of notable tension between the French authorities and Big Tech.
Frustrated with a lack of progress in international tax-reform discussions, President Emmanuel Macron’s government is pressing ahead with a “digital services tax” on the French revenues of the biggest online beasts, which tend to be American. Amazon is one of the companies it is known to have ordered to pay the new tax for the current year.
Both Google and Amazon are also in the EU’s crosshairs over potentially anticompetitive behavior.
The European Commission’s competition division last month charged Amazon over its alleged misuse of third-party merchants’ data in France and Germany. It claimed Amazon breaks competition law by using the data to “calibrate [its] retail offers and strategic business decisions to the detriment of the other marketplace sellers.”
The EU regulator, which has already fined Google more than $9 billion for antitrust violations, is also due to say this week whether the company’s takeover of wearables firm Fitbit can go ahead, and under what conditions.


fortune--2020-12-10--Boris Johnson faces final Sunday deadline for Brexit deal with the EU

Brexit negotiators have until Sunday to come up with a deal after talks over dinner between Prime Minister Boris Johnson and European Commission President Ursula von der Leyen ended without a breakthrough.
The leaders agreed that talks should continue in the next few days despite major differences remaining between the U.K. and European Union over what their future trade relationship should look like. By Dec. 13 a firm decision will need to be taken on the future of the negotiations, the two sides said.
Johnson’s team had hoped that a face-to-face meeting with von der Leyen would inject new political momentum into the process. But their discussion over a dinner of scallops and turbot in Brussels didn’t break the deadlock. The pound fell.
“We understand each other’s positions,” von der Leyen tweeted after the meeting. “They remain far apart. The teams should immediately reconvene to try to resolve these issues. We will come to a decision by the end of the weekend.”
Eight months of negotiations have so far failed to overcome the three biggest obstacles to a deal: disagreements over fishing rights, the governance of a deal, and fair competition rules for businesses.
Tariff Risk
If an accord isn’t reached by the end of the year, businesses and consumers will be hit by additional costs and disruption as tariffs and quotas are imposed on trade with the U.K.’s biggest and closest commercial partner.
While Johnson wants to try every route to get an agreement on a trade deal, it isn’t clear that it will be possible to resolve the significant obstacles that remain, a senior U.K. official said.
We had a lively & interesting discussion on the state of play on outstanding issues.
We understand each other’s positions. They remain far apart.
The teams should immediately reconvene to try to resolve these issues. We will come to a decision by the end of the weekend. pic.twitter.com/jG0Mfg35YX— Ursula von der Leyen (@vonderleyen) December 9, 2020
“We’ll leave no stone unturned, we would like a deal if it’s possible, but we’re not going to sacrifice the basic points of democratic principle,” Foreign Secretary Dominic Raab told Sky News on Thursday. “Come Sunday, they need to take stock and decide on the future of the negotiations. There must come some point of finality on all this.”
Von der Leyen is due to debrief the EU’s 27 leaders about the outcome of the dinner at a two-day summit that starts in Brussels on Thursday.
Still Possible
A person familiar with the EU position said the dinner was constructive and there was a good spirit between the two leaders and their officials. There is clearly a long way to go and the difficulties are real, but both sides seem to think a deal is possible, the person added.
The scale of the gap that still needs to be bridged on the so-called level playing field for businesses was laid bare on Wednesday. German Chancellor Angela Merkel warned that the dispute over what happens if British rules diverge from the EU could wreck a deal.
“If there are conditions from the British side which we will not be able to accept, then we are prepared to go away without an agreement,” Merkel said.
Johnson responded by saying no British leader could accept the terms the EU wanted to impose on business rules and fish.
A spokesman for the prime minister reiterated on Wednesday night that any deal must respect the U.K.’s independence and sovereignty.
–With assistance from Katharina Rosskopf, Charles Capel and Kitty Donaldson.


fortune--2020-12-10--How the Hunter Biden tax probe could stalk Joe Biden’s presidency

President-elect Joe Biden is set to take office with his son under federal criminal investigation, creating immediate practical and ethical challenges for his nascent administration while giving ammunition to his political enemies.
Biden’s transition team attempted to control the narrative on Wednesday by issuing a short statement that the U.S. attorney in Delaware is investigating Hunter Biden’s tax affairs, saying they only learned about it this week.
But the investigation into Hunter Biden’s foreign business dealings has been underway since 2018, and involves not only the Justice Department but also the Internal Revenue Service, according to two people familiar with the matter who discussed the sensitive inquiry on condition of anonymity. The probe is focusing on Hunter Biden’s business dealings with China, as CNN reported earlier, and Joe Biden isn’t a target, according to a third person.
The U.S. attorney’s office disclosed the investigation to Hunter Biden, a move that reveals he’s their target and that investigators have moved into a new, more aggressive phase in which they needed to contact his lawyers. The Justice Department and the U.S. attorney’s office in Delaware declined to comment.
The disclosure means Joe Biden and his team can no longer simply ignore or downplay Republican allegations of corruption by his son. And to the extent the inquiry involves Hunter Biden’s dealings in China, that could complicate the next president’s approach and policies toward Beijing.
Some Republican lawmakers seized on the disclosure of the investigation to call on Attorney General William Barr to appoint a special counsel to investigate the matter, a move that would ensure the probe carries at least into Biden’s early presidency.
No evidence has surfaced to back claims by President Donald Trump that Joe Biden benefited from, or participated in, his son’s overseas ventures. Yet it will become more difficult for the president-elect to say there’s nothing to his foes’ questions about his son’s business affairs.
Trump’s Demand
Trump demanded before the Nov. 3 election that Barr announce investigations into Joe and Hunter Biden. But the investigation, which began before Barr became attorney general in 2019, remained a secret to the public.
“I learned yesterday for the first time that the U.S. attorney’s Office in Delaware advised my legal counsel, also yesterday, that they are investigating my tax affairs,” Hunter Biden said in a statement on Wednesday. “I take this matter very seriously but I am confident that a professional and objective review of these matters will demonstrate that I handled my affairs legally and appropriately, including with the benefit of professional tax advisers.”
The Justice Department pursues cases it thinks it can win, said Mike Sullivan, a former IRS auditor who worked with U.S. attorneys on tax cases.
“No government agency like this is going to do this unless they have enough information to feel confident,” Sullivan said. “DOJ doesn’t take random cases because it makes them look foolish.”
It’s not clear how far the investigators have gotten or if they plan to bring an indictment. However, when prosecutors do bring a case, they almost always win. The DOJ Criminal Tax Division had a 97% conviction rate in fiscal year 2019, according to department data.
‘Big Deal’
“This is a very big deal for anybody. It very clearly appears to have potential criminal implications,” said Joseph Opich, a tax lawyer at the law firm Paul Hastings. “This is not that something was just left off a tax filing.”
Many Justice Department tax cases deal with hiding income and unreported offshore bank accounts, Opich said. Congress has passed stronger laws in recent years requiring more reporting of foreign income and increasing the penalties for those who don’t disclose that information to the IRS.
The president-elect’s transition office issued a statement of support for his son, whose struggles with substance abuse and foreign dealings were repeatedly criticized by Trump.
“President-elect Biden is deeply proud of his son, who has fought through difficult challenges, including the vicious personal attacks of recent months, only to emerge stronger,” the transition office said in a statement.
Before the election, Trump’s presidential campaign sought to highlight claims by a man named Tony Bobulinski who said Hunter Biden recruited him to help run an investment firm to be called Sinohawk Holdings, backed by CEFC China Energy Co., and that he personally discussed the plans with the former vice president during an hour-long meeting in 2017, after Biden left public office. But Bobulinski – whom Trump invited to appear before the second and final presidential debate – said the venture was never funded.
Gift Diamond
In an interview earlier this year with the New Yorker, Hunter Biden acknowledged receiving a 2.8-carat diamond from CEFC founder Ye Jianming but said he gave the stone to associates.
A report released by Republicans on the Senate Homeland Security Committee in September was critical of Hunter Biden’s foreign activities, alleging that he created a potential conflict of interest for his father. The report acknowledged, however, that it was “not clear” whether the younger Biden had any impact on policy in the Obama-Biden administration, and it didn’t allege that the former vice president or his son broke the law.
During the campaign, Trump’s personal lawyer, Rudy Giuliani, released materials to some news outlets purportedly from a laptop that Hunter Biden had left at a Wilmington, Delaware, repair shop. The president’s campaign said the materials, the origin of which wasn’t verified by Bloomberg News, undercut Joe Biden’s claims that he and his son never discussed overseas business dealings.


fortune--2020-12-10--Why this organic-food founder is trying to clean up the diaper business

Babies and young children spend their early lives wrapped in diapers, with each wearing an average of 2,500 every year. But are these essential products sufficiently regulated?
Not according to Shazi Visram, the organic-baby-food entrepreneur whose new company claims to sell a cleaner diaper. The founder of Happy Family Organics, who in 2013 sold that company to French food conglomerate Danone for an estimated $250 million to $300 million, has since started a new baby-products business called Healthynest. On Thursday, the company is unveiling a disposable diaper that claims to be free of many chemicals and made out of plant-based materials, and that fully discloses its ingredients list.
“Your skin is basically your largest organ. It absorbs everything you put on it…and a baby’s sitting in a diaper for three years of life, while their brain is forming,” Visram says. “And there’s no regulation on what you can put in that diaper.”
At least not from the U.S. Food and Drug Administration, which considers adult diapers to be medical devices but does not include child diapers in that definition. Instead, the products are regulated by the U.S Consumer Product Safety Commission (CPSC), an agency that has been subject to some recent criticism for its responses to faulty infant products and that does not require manufacturers to publicly disclose the ingredients or materials in their diapers. (In 2010, the agency investigated parents’ complaints that a new line of Pampers diapers was causing rashes but found no specific cause linking the products to the symptoms.)
A mother of two, Visram has built her career on paying attention to the ingredients in everything eaten and otherwise ingested by children. But her son’s diagnosis of autism, at age 2, intensified her interest in creating more products that would promote early childhood development and neurological health.
Diapers, as something that babies wear for the first few years of their lives, seemed like a natural next product for Visram—and one where regulators in Europe, where her diapers are manufactured, have pushed for more stringent rules. Healthynest has now raised an undisclosed amount of money from other organic-food and entrepreneurial celebrities, including Spanx founder Sara Blakely, Siggi’s founder Siggi Hilmarsson, Bulletproof founder Dave Asprey, and Coach chairman Lew Frankfort.
Then Visram turned to the Environmental Working Group (EWG), an advocacy organization where she already sat on the board, to develop a third-party certification for her new product. The EWG, which is known for its Skin Deep database of the ingredients in cosmetics and skin care products, is also on Thursday unveiling its new certification for diapers, starting with Healthynest. To achieve this certification, a diaper manufacturer has to limit its use of plastic; ensure that a long list of chemicals and materials (including parabens and formaldehyde) are not intentionally added to the diapers; and disclose all of its dyes, chemicals, fibers, and other ingredients on the diaper packaging and the manufacturer’s website.
EWG, which is not a regulator and receives some funding from the companies whose products it rates, also earns fees from the companies whose products receive its EWG Verified endorsement. The organization says that it’s in talks about providing this certification to other, more established diaper manufacturers.
“We’re hoping that our standard will drive the industry faster than it could be driven by a process at the Consumer Product Safety Commission, and we’re hoping that other companies jump in to follow Healthynest’s lead,” says Ken Cook, EWG’s president.
Visram says that her close relationship with the group didn’t make it easy to meet its standards. We first spoke in August, a week or two before she was initially planning to launch her Healthynest diapers. Then the EWG informed her that she had to secure additional documentation—not only from her manufacturer, but also up and down its supply chain—to verify that all of her suppliers met the EWG’s transparency requirements.
“It’s been such a slog. I can’t tell you how challenging it became, to coordinate everything,” Visram said on Monday, four months after our initial conversation. “But this process has made us truly verify it in ways I never expected.”
Update, December 11, 2020: This article has been updated to further clarify how the EWG’s certification was developed.


fortune--2020-12-11--JP Morgan warns investors that Tesla stock is ‘dramatically overvalued’ in new report

DoorDash soared in its IPO debut .
Now it ’ s Airbnb ’ s turn to test the markets

To add or not to add, that is the question.
As investors anticipate Tesla’s December 21 addition to the S&P 500, investors who benchmark their performance against the index have a tough decision to make. As JP Morgan analysts wrote this week: “We have recently fielded a number of calls from long-only investors who are faced with or shortly will be faced with the decision of whether or not to buy Tesla shares.”
The bank’s answer?
“We recommend investors not weight Tesla shares in their portfolio in equal proportion to the S&P because Tesla shares are in our view and by virtually every conventional metric not only overvalued, but dramatically so.”
Tesla shares closed at $627 on Thursday. As the analysts led by Ryan Brinkman wrote, investors should “consider that in the two years since December 8, 2018 during which TSLA shares have risen +808% and during which analysts have on average increased their 12 month price targets by +451%, analysts have simultaneously lowered their estimates for Tesla EPS for 2020, 2021, 2022, 2023, and 2024.”
The contrarian JP Morgan take comes as other Wall Street banks have grown more bullish Tesla’s outlook. Last week Goldman Sachs upgraded the stock from neutral to buy, ratcheting up their 12-month price target from $455 to $780. As Fortune wrote, “Goldman’s analysts cited a few reasons for their change of heart. They believe EV adoption is accelerating due to battery prices falling faster than they had expected, combined with an increase in regulatory proposals to limit or ban the sale of internal combustion engines over the next few decades. As a result, the analysts ‘now expect EVs to comprise 18% of sales globally in 2030 and 29% in 2035 (with 50% adoption in 2035 in both the US and in Western Europe).'”
Wedbush analyst Dan Ives also upgraded the stock, sticking a “bull case” target of a $800-$1,000 on TSLA shares (his 12-month target, meanwhile, is below Goldman’s at $560).
Indeed, betting against Tesla has been a trying proposition in 2020. As Fortune‘s Aaron Pressman wrote recently, “Short sellers, including Enron-conquerer Jim Chanos, have lost so much money betting that Tesla’s stock price would collapse (it’s up almost eightfold this year) that Institutional Investor dubbed it the ‘widow-maker trade of 2020.’ By this month, the cumulative loss of shorters on Tesla exceeded $35 billion.”
And while a Biden Administration is anticipated to be a positive for Tesla and its ilk, the primary concern about the stock remains the fact that the company is overly reliant on a declining business of selling emissions credits, and that it simply cannot sell enough cars to justify its current market cap. As JP Morgan concluded: “We do not believe Tesla will grow to approximate 2x the combined size of Toyota & VW at the same margin (or 1⁄2 the combined size at 4x the margin, or any of the other combinations of volume and margin that could be reverse engineered” to justify the current valuation.
Which is why the bank has an “underweight” rating on the stock, with a price target of—yes you are reading this right—$90.


fortune--2020-12-11--Visa, Mastercard won’t allow charges for services on Pornhub

Mastercard and Visa said Thursday they would block their customers from using the credit cards to make purchases on Pornhub following accusations the pornographic website showed videos of rape and underage sex.
They reacted following an investigation by opinion columnist Nicholas Kristof of The New York Times that also alleged the site depicts revenge pornography and video taken without the consent of participants.
Mastercard said it is terminating use of its cards on Pornhub after its own investigation confirmed violations of standards prohibiting unlawful conduct on the site. Mastercard said it also investigating other websites for potential illegal content.
Visa said it was suspending use of its cards on Pornhub Thursday even though its own investigation was incomplete.
Pornhub, in a statement, called the actions “exceptionally disappointing.” Two days ago, the company announced steps to protect against images of abuse, nonconsensual activity and underage models on the site, including a ban on unverified users uploading material.
“This news is crushing for the hundreds of thousands of models who rely on our platform for their livelihoods,” Pornhub said.
The company said it had more than 42 billion visits to its website last year.
Diane Hawkins, senior vice president and executive director of the National Center on Sexual Exploitation, said her organization had met with Visa and Mastercard earlier this year to ask them to stop processing payments for Pornhub “and we are grateful that both companies will make these significant changes.”


fortune--2020-12-10--The new Biden administration signals an era of historic ‘firsts’

Thanks in part to the incoming Biden administration, we are being treated to another round of long overdue firsts.
If confirmed, Army Gen. Lloyd Austin will become the first Black Secretary of Defense, and Xavier Becerra, the attorney general of California, will become the first Latino secretary of Health and Human Services. Alejandro Mayorkas, whose parents immigrated from Cuba to the U.S., has been tapped to be the secretary of Homeland Security, and Janet Yellen will be the first woman to be Treasury Secretary. Cecilia Rouse would be the first woman of color to chair the Council of Economic Advisers, and Neera Tanden would be the first South Asian American and first woman of color to become director of the Office of Management and Budget. Avril Haines would become the first woman to serve as director of national intelligence.
While Rep. Marcia Fudge would become the second Black woman to lead the Department of Housing and Urban Development (Patricia R. Harris under President Jimmy Carter was the first), she’s still a compelling choice. And, plenty of smart folks are holding out hope that New Mexico Rep. Deb Haaland, an enrolled member of the Pueblo of Laguna and with Jemez Pueblo heritage, will head up the Interior Department, which manages U.S. public lands and Indian affairs.
While it is vital to discuss the candidates on their merits, I’ve been thinking about our now bittersweet ritual of noting—if not always celebrating—trailblazing hires. It’s 2020! This number of “firsts” can feel disheartening. So, it is the bitter part—the opportunity costs associated with the longstanding absence of meaningful representation—that preoccupies me lately.
That said, sometimes my preoccupations take me to some amazing places.
A friend recently shared a link to an extraordinary performance of an orchestral piece by composer Anthony Davis featuring clarinetist Anthony McGill. Both are African American, both are clearly national treasures. And yet, I didn’t know their names until this week.
The piece is called You Have The Right To Remain Silent, and was premiered recently and virtually with the Cincinnati Symphony. It addresses in the starkest musical terms the experience Black and brown communities have with the police and the carceral state. McGill is a revelation, a performance made even more powerful by a socially distant and masked (depending on instrument) orchestra.
I was utterly unprepared for the emotional jolt of hearing the cry of my community emitted via classical music forms and emanating from the type of stage that has typically leaned more Mozart than McGill. It took me down a rabbit hole of music and left me in awe of the power of representation to transform even a stubbornly white arena, like classical music.
Lost in the swirl of a pandemic-battered year was the extraordinary news that Davis won the 2020 Pulitzer Prize in Music for the opera The Central Park Five. (The librettist was the equally trailblazing playwright Richard Wesley.) The subject, the 1989 arrest and convictions of five Black and Latino teens in the rape of a white woman named Trisha Meili in New York’s Central Park, is still a tender one. The five were exonerated by DNA evidence in 2002. “What I think the artist is trying to get at is empathy,” Davis told NPR. “In watching it on stage—whether you’re African-American, Caucasian, Asian, whatever—you become one of the five. You feel like you’re the one being interrogated. You feel how you could have been coerced [into giving a false confession]. And then the loss of innocence that the five experienced, that is a very universal emotion.”
And yet, not a universal impulse for an opera. By way of firsts still to come, Black performers make up less than 2% of orchestras in the U.S., and the Metropolitan Opera still has yet to put on a work by a Black composer.
McGill is the artistic director of the music advancement program at the Julliard School, and the principal clarinet of the New York Philharmonic, its first African American principal player. This year, he won the Avery Fisher prize for his extraordinary body of work, which is inextricably linked with his anti-racist activism and resolve to increase representation in classical music and education.
This past spring, McGill launched the #TakeTwoKnees performance series, and spoke directly to the murder of George Floyd and our unresolved history. “What the news this week and most weeks of my life demonstrates, however, is that Black lives didn’t matter in our glorified past, and still don’t matter that much today,” he wrote on Facebook.
One of his #TakeTwoKnees performances is called #MEMORIALforUSALL, which acknowledged by name some of the people lost in the U.S. during the twin pandemics of COVID and racism. “We are also battling another serious illness—racism—a plague upon our nation since its founding, and we are still struggling for equality,” he said in his opening remarks.
If you’re going to head down a classical music rabbit hole anytime soon, and I sure hope you do, start there. It ends with McGill’s poignant, minor key arrangement of “America the Beautiful,” as sweet as it is bitter. Trust me on this.
I now think of it as the perfect musical soundtrack for all the overdue firsts we’re celebrating now, and all those still yet to come.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
On point
Speaking of firsts yet to come, a new startup called OneTen is poised to make sure promising Black talent from non-traditional backgrounds (think: no four-year degrees) are identified and trained for corporate jobs. OneTen is backed by more than 30 CEOs from major firms like Merck, IBM, and Nike, and aims to create a million “family-sustaining” jobs over the next ten years. The murder of George Floyd, in part, sparked the alliance. “What brought people together is that they looked at our country and said, it’s this generation of CEOs who don’t want to pass this down to the next generation,” Frazier told the Wall Street Journal. Click through for their plan.
WSJ
Rashida Jones becomes the first Black woman to run a general news cable network Her hiring is a promise kept by NBCUniversal News Group Chairman Cesar Conde, who vowed to diversify ranks as part of his mandate. Phil Griffin is leaving his post as president of NBCUniversal’s MSNBC, and NBC News senior vice president Rashida Jones will be taking his spot. Jones has had a busy 2020; Conde said in a statement that she “masterfully” guided NBC News coverage of the pandemic, the social justice protests and unrest, and the election. And best of all, she got to cover her own promotion.
NBC News
Mellody Hobson is set to become the first Black woman to chair the board of Starbucks Hobson, a co-CEO of the asset management firm Ariel Investments, is a powerhouse of leadership, finance, and inclusion and has previously called for companies who are serious about inclusion to take it to the very top. "Companies right now have to get their houses in order," she said. "The board of directors have to hold the leaders of these organizations accountable around these issues of diversity."
CNN
Big Brothers Big Sisters of America appoint first Black CEO in its 116 year history His name is Artis Stevens, and he is currently the senior vice president and chief marketing officer at the National 4-H Council. He seems awesome.
Big Brothers Big Sisters of America
Monica Richardson is set to become the first Black executive editor of the Miami Herald in its 117 year history Richardson is a veteran in Metro reporting and a digital news expert, and is coming from a senior position at the Atlanta-Journal Constitution. The announcement came via McClatchey, the parent company of the Miami Herald. “I’m pleased to be working in a newsroom where journalism is the core mission of everything. That’s what drives me in my career. It’s the passion,” Richardson told her new paper. “I wouldn’t be coming to Miami if I didn’t see that passion for journalism.”
Miami Herald
Mansfield Texas has the first Black mayor in its 130 history Dr. Michael Evans, Sr. is also the pastor for the Bethlehem Baptist Church Pastor and former school board trustee. He won his election, which he entered to runoff election with nearly 54% of the vote. It’s an opportunity to serve, he says. “All of us are where we are because we really are standing on the shoulders of generations who have come before us. Period…I did not want to squander their legacy.”
WFAA
Today's mood board
Americans can soon feel like this medical staff celebrating Margaret Keenan, center, becoming the first person in the U.K. to receive Pfizer's COVID-19 vaccine. On Thursday, an FDA panel recommended approval of the same vaccine, clearing the way for the American public to start receiving it within days.


fortune--2020-12-10--Disney plans to stream a galaxy of Star Wars, Marvel series

Disney unveiled a galaxy’s worth of new streaming offerings on Thursday, including plans for 10 “Star Wars” series spinoffs and 10 Marvel series that will debut on Disney+. But even as Disney emphasized its expanding streaming portfolio, the company said theatrical release remains an important component of its big-budget spectacles.
In a virtual presentation for investors, Disney chief executive Bob Chapek laid out super-sized ambitions for it direct-to-consumer efforts, leaning heavily on some of the company’s biggest brands. Over the next few years, Disney is planning to premiere directly on Disney+ not just an armada of “Star Wars” and Marvel series but 15 live-action, Pixar and animated series, and 15 live-action, Pixar and animated movies.
Chapek said Disney+ subscribers worldwide have reached 86.8 million, up from 74 million last month. The service has easily exceeded most forecasts, reaching that number 13 months since its launch in November 2019.
Disney said one of its upcoming films, the animated “Raya and the Last Dragon” will in March debut simultaneously in theaters and by premier access on Disney+. That’s the same approach the company took earlier this fall for “Mulan,” with a $30 early-access fee on top of the $8 monthly subscription.
Disney made other adjustments to reorient its film operations around streaming. Hulu, which this year debuted the Andy Samberg comedy “Palm Springs” and Sarah Paulson thriller “Run,” will be home to more original films from 20th Century Studios and Searchlight Pictures.
Many in Hollywood had eagerly awaited Disney’s response following WarnerMedia’s announcement last week that it will release all 17 of its 2021 films — from “Dune” to “The Matrix 4″ — simultaneously on its streaming platform, HBO Max, and in theaters.
That move set off shockwaves prompting a backlash from much of the film industry, including theater chains, producing partners and some of the studio’s top talent. Christopher Nolan criticized the plans as “a bit of a mess.” Some said the long-forecast end times for cinemas had arrived. Others questioned the economics of one of Hollywood’s top studios sacrificing a year of box office — and the cascading windows of release that follow a theatrical run — to salvage the rocky rollout of HBO Max — a service that many HBO subscribers have yet still haven’t activated.
Wall Street approved. Stocks for WarnerMedia’s parent company AT&T are up about 6% since the announcement by Jason Kilar, chief executive of WarnerMedia and a veteran of Hulu and Amazon. John Stankey, the AT&T chief executive, on Tuesday said the pandemic had unleased a new media reality unlikely to fade after COVID-19. “That horse left the barn,” he said.
But Disney signaled that while it will continue to be flexible during the pandemic in distributing its films and series, it still sees theatrical release as valuable. After several postponements, the Marvel film “Black Widow” is scheduled to open in theaters May 7.
Compared to WarnerMedia, the present situation is very different for Disney, which has already laid the foundation for a formidable Netflix competitor in Disney+ and which has for years dominated the box office. Disney has experimented with the premium digital release of “Mulan” and the upcoming Pixar release “Soul,” but its box-office might has been the envy of Hollywood. The company’s films accounted for more than $13 billion in ticket sales worldwide last year and 38% of moviegoing in the U.S. and Canada. Seven Disney films topped $1 billion worldwide.


fortune--2020-12-10--Side effects, dosage, price, and more: Everything you need to know about Pfizer’s COVID-19 vaccine

The Food and Drug Administration granted Emergency Use Authorization to the COVID-19 vaccine developed by Pfizer and BioNTech on Friday, marking a significant milestone in the U.S.’s battle against the deadly coronavirus. The authorization means millions of Americans will have access to doses of the vaccine in a matter of days, though the first available jabs will go to frontline health care workers and high-risk individuals.
The FDA’s authorization followed a Thursday recommendation from the Vaccines and Related Biological Products Advisory Committee (VRBPAC), made up of virologists and other medical experts, which urged the FDA to make the Pfizer vaccine available on an emergency basis.
Here is what we know about the Pfizer vaccine, including how effective it is, how widely available it will be, who will have access to it first, how much it may cost—and whether it will end the pandemic.
How effective is the vaccine?
Compared with most vaccines, the Pfizer coronavirus vaccine is extremely effective. The FDA has affirmed Pfizer’s finding that its vaccine is 95% effective in protecting recipients from becoming infected with COVID-19. That’s much better than the flu vaccines Americans line up to get in a typical fall, which are at most 60% effective.
It was also recently confirmed by the FDA that this effectiveness includes preventing severe cases, not just mild or moderate infections.
Just as important, the vaccine shows similar effectiveness across age, gender, and racial groups, although Pfizer’s trial subjects were disproportionately (80%) white, so that data may be incomplete.
The first round of trials did not include recipients under 16 years of age, and the timeline of vaccine approval for children is currently unclear.
What are the side effects of the vaccine?
Broadly, the vaccine has minimal side effects, based on tens of thousands of trial recipients and thousands more already receiving the vaccine in the U.K. Side effects can include fatigue, aches, or flu-like symptoms lasting about a day. There were four reported cases of recipients suffering Bell’s palsy, an often temporary and non–life threatening paralysis of facial muscles, but the FDA has said those occurrences were consistent with the rate in the general population.
Could the vaccine trigger an allergic reaction?
However, two British health workers with a history of severe allergies did have serious reactions after receiving the vaccine. British health authorities are advising caution for patients with similar histories while they investigate how serious the risks might be.
How many doses of the vaccine will be available after it is approved?
Initially, very few. Pfizer and U.S. officials currently project that 40 million doses of the vaccine will reach the United States by the end of 2020. That’s enough to give the two-dose vaccine to 20 million people, or 6% of the U.S. population. Another 80 million doses, enough for 40 million Americans, will be available in 2021. But because the Trump administration declined to lock in additional supply, no doses beyond that are expected to be available until July 2021.
However, this may not be as scary as it sounds, because other vaccine candidates—particularly Moderna’s—are close behind Pfizer’s in the approval pipeline.
Who will be eligible to receive the vaccine first?
With so few doses initially available, the Centers for Disease Control recommends prioritizing medical staff and the residents of long-term-care facilities. But distribution is being handled separately by each state. The CDC has compiled each state’s vaccine game plan here.
How much will the vaccine cost?
The U.S. government has paid Pfizer and BioNTech $39 per dose for the first 100 million doses, and Americans are expected to pay very little out of pocket to be vaccinated. Medicaid, Medicare, and most forms of private insurance will be required by government mandate to cover vaccine costs for patients. Even uninsured patients should be able to get vaccinated at low or no cost: A special fund has been set up to reimburse providers for those shots.
What’s an Emergency Use Authorization?
The FDA gave the green light to the vaccine on Friday by issuing an Emergency Use Authorization, or EUA. Crucially, this is not a form of FDA approval, but a go-ahead to use the vaccine before it obtains full approval. Pfizer will have to continue the process for full approval, including conducting more trials.
What is the FDA evaluating?
The FDA authorization followed the recommendation of the advisory committee on Thursday. The panel of medical experts issued its recommendation after reviewing findings about the vaccine’s basic safety and effectiveness.
The committee on Thursday also discussed secondary implications of the emergency authorization, including questions of how to continue randomized trials after the emergency authorization is approved. The issues were not a barrier to the EUA.
What is in the vaccine?
Unlike most current vaccines, the Pfizer vaccine does not contain material from the virus it’s designed to block. Instead, it contains synthesized messenger RNA, or mRNA, a kind of genetic cheat sheet that mimics COVID-19’s biology just enough to train your body’s immune response to fight it. That mRNA is encased in a shell made of lipids, or fats, for delivery.
Why does the Pfizer vaccine require two doses?
Pfizer’s vaccines require two doses, three weeks apart. This is primarily to increase its effectiveness. The FDA has released data showing the vaccine is somewhat effective after one dose, but both doses are needed to build up full immunity.
How long is the vaccine effective?
This is still unknown because the vaccine trials were so recent. The World Health Organization hopes the vaccine is effective for at least six months. Experts speaking to New Scientist expect annual booster shots to be necessary.
Can you still transmit COVID after being vaccinated?
Trials for the Pfizer vaccine measured its safety and its effectiveness in preventing symptoms in individuals. It did not determine whether immunized people could still carry the coronavirus without showing symptoms. Mario Ostrowski, an immunology professor at the University of Toronto, told Canada’s CTV News that we will only find out if vaccinated people can be asymptomatic transmitters if infection rates remain high after a majority of the population is vaccinated. That means that masks and social distancing will remain the norm even after the vaccine has reached tens of millions of Americans.
Will the vaccine end the pandemic?
Eventually—but not immediately. Even if the Pfizer vaccine halts transmission as well as symptoms, highly infectious diseases like COVID-19 require very high levels of immunity to break the “chain of transmission” that can keep an infectious disease circulating in a population. For measles, which is also highly infectious, that threshold is 94%. It seems likely it will take most of next year to get to that level of COVID immunity in the U.S., through a combination of vaccinations and those already infected. Until that happens, the pandemic won’t really be over.
This story has been updated to reflect the FDA’s emergency authorization of the Pfizer vaccine on Friday.


fortune--2020-12-10--Biden will bring back climate diplomacy, and the planet will benefit

Throughout his campaign, President-elect Biden repeatedly declared that climate change would be central to his administration. Some people may have worried: Was he just paying lip service to get activists and young voters on board, or was he truly going to see this through?
If the early actions of the President-elect are any indication, he is clearly committed to this vision.
In his first round of international and national security staffing decisions, President-elect Biden created a new position for John Kerry as special presidential envoy for climate and put him on the National Security Council. This means that for the first time there will be a dedicated seat for climate change among the top tier of national leaders who make foreign policy and national security decisions. He named Jake Sullivan, a highly regarded climate hawk, as the new national security adviser. Antony Blinken, as secretary of state, will be charged with making climate change a cornerstone of U.S. foreign policy. And Biden has chosen Janet Yellen—a cofounder of the Climate Leadership Council, a bipartisan group that supports a national price on carbon—to be Treasury secretary, a post in which she’ll wield significant influence by elevating climate risks and opportunities in U.S. economic and financial systems.
That’s a lot of climate leadership, and we haven’t even gotten to the Department of Energy or the Environmental Protection Agency yet!
Gone are the days when climate change was a niche issue that could only be discussed behind closed doors. In a matter of weeks, climate will play a major role in the U.S. government’s decision-making process on national security, economic, humanitarian, and other issues vital to U.S. foreign policy.
All of this is welcome news—as the U.S. and the world face not only the pandemic and economic turmoil but the climate crisis too. We have all seen the devastating wildfires in the Western United States and a record number of hurricanes in the Atlantic this year. In 2020, 54 million people worldwide faced climate-related disasters, including wildfires, according to the International Federation of Red Cross and Red Crescent Societies. A COVID-19 vaccine may soon be on its way, but there is no vaccine for climate change.
Biden has already announced that he will have the U.S. rejoin the Paris Agreement. After taking office, he is expected to commit the U.S. to a net-zero carbon target and will need to put forward a new national climate plan. Importantly, World Resources Institute (WRI) experts suggest that the U.S. should set a 2030 target to reduce its emissions by at least 45% compared with 2005 levels. This is both ambitious and achievable.
Our economic understanding of climate action has evolved over the past decade. We have strong evidence that climate policies promote strong and equitable economic growth. Smart action on climate change will increase economic efficiency, drive innovation and new technologies, and reduce investment risks. This is why Biden said on the campaign trail that when he thinks of climate change, he sees jobs. And it’s why many labor unions and manufacturers have gotten behind Biden’s proposed climate plans.
The administration’s international climate commitments must be backed by domestic policies at the federal level and with continued support from U.S. cities, states, and businesses. This is an approach that we at WRI call Climate Federalism. As President, Biden will have multiple tools at his disposal, including through executive action and in federal agencies, and ideally he can build congressional support. U.S. cities, states, and businesses must stay engaged to drive ambition and push the federal government.
Thankfully, other countries helped fill the void while the U.S. federal government was MIA. The European Union, Japan, and South Korea have all recently committed to achieve net-zero emissions by mid-century. China has committed to do this by 2060. The EU is also poised to approve an ambitious 2030 climate target that will help set the pace for others.
John Kerry and German Chancellor Angela Merkel in Berlin, January 2020. Christoph Soeder—picture alliance via Getty Images
Undoubtedly, these countries are pursuing climate action that is in their own self-interest. China, for example, is looking to maintain its lead position in the global market for renewable energy and electric vehicles. Meanwhile, U.S. automobile manufacturers are stepping up their game. General Motors recently dropped its opposition to California’s clean air standards and set a goal to have 40% of its fleet electric by 2025. Ford is set to roll out an electric version of its iconic Mustang. This is healthy economic competition that will benefit the planet.
The Paris Agreement, forged five years ago this month, was built primarily on trust and cooperation. The agreement is only as effective as world leaders make it. By reentering the Paris Agreement and setting an ambitious U.S. emissions target, President Biden can drive job growth and increase U.S. competitiveness, while recharging the agreement and encouraging other countries to raise their game.
The benefits of climate action are abundantly clear. Climate diplomacy can help bind countries together, rather than divide them.
Historically, international partnerships and rivalries have been characterized not just by policies but by relationships. Churchill and Roosevelt. Reagan and Gorbachev. President Biden can form similar bonds, backed by his deep and experienced team who are more than up to the task of building bridges and finding common ground.
The path ahead will not be easy. Tackling climate change requires decisive shifts in economies and personal behaviors. It requires global cooperation and action. With the U.S. back in the climate race, Biden is positioning his administration to be a force for climate diplomacy that can deepen trust, improve global stability, and create economic opportunities.
For an incoming administration that will face crises on multiple fronts, building international goodwill on climate change is a good place to start.
Andrew Steer is president and CEO of the World Resources Institute.


fortune--2020-12-10--What happens next: 10 non-COVID health care predictions for 2021

Good afternoon, readers.
We’ve had an annual tradition as of late here at the Capsule: Featuring the sage wisdom and insights of Venrock partners Bob Kocher and Bryan Roberts, a duo of veteran health care investors, on what the coming year holds for the industry.
Bob and Bryan have been sharing their thoughts with us for years and, as strange and chaotic as 2020 was, this year is no different.
For the 2021 edition of their crystal ball-gazing, the pair offer up 10 predictions for the coming year. And in a twist, they span important medical topics and trends that don’t all have to do with COVID.
The full list is here. But here are some choice selections:
Virtual care for Medicare takes off
“While there are not many silver linings to COVID-19, one benefit has been the dramatic increase in telemedicine adoption. Medicare is covering telemedicine for the first time on an emergency basis.”
“We think Medicare will make telemedicine coverage permanent. This will lead to seniors, similar to millennials, preferring telemedicine to in-person visits for much of their care.”
Recent evidence and an explosion of telemedicine use during the pandemic certainly supports that prediction.
No action on drug pricing
“With the promise of multiple COVID-19 vaccines being invented and brought to market in record time, public opinion will turn very positive for pharmaceutical companies. This will squash all efforts to regulate drug prices for the next year (at least).“
And of course, no predictions list would be complete without an Amazon shoutout…
Amazon pharmacy gains traction
“We have been perennially skeptical of big tech gaining traction in healthcare. One exception is Amazon’s new pharmacy.“
“We think that Amazon will gain traction since COVID-19 has led to dramatically more eCommerce for all things and made pharmacies akin to nursing homes: scary places to visit since they are filled with sick and possibly COVID-19 contagious people.“
“Amazon’s consumer trust, incredible delivery speed, and low prices will allow them to take meaningful share from retail pharmacies.“
Get more insights from Bob and Bryan here, read on for the day’s news, and see you next week.
Sy Mukherjee
sy.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
AWS launches health data standardization tool. Amazon Web Services (AWS) has launched Amazon HealthLake, a new web-based data organization tool meant to serve the health care and life sciences industries. In essence, the service can pull disparate data streams which may be disorganized and pool them into a centralized database with a standardized set of information that's easier to decipher. Of course, machine learning and AI play a central role in deciphering the data and transforming them into a centralized hub. (FierceHealthcare)
INDICATIONS
Pfizer's big day at the FDA. As you're reading this, a panel of experts who advise the Food and Drug Administration (FDA) are debating the merits of Pfizer/BioNTech's COVID vaccine candidate. The FDA is actually live-broadcasting the debate on YouTube as this meeting will inform the agency's decision to grant the vaccine emergency authorization. If the advisory committee issues a positive verdict from the clinical trial data Pfizer has submitted, the full agency could grant emergency authorization in just a matter of days, with doses being handed out to priority groups such as health care workers and nursing home residents by some time next week.
THE BIG PICTURE
Our depleted health care workforce. My colleague Erika Fry spoke with Susan Salka, the CEO of the largest health care staffing company in the country, AMN Healthcare, on the pressures the pandemic has put on the industry's workforce. "What demand looks like now versus a year ago, versus what it looked like in the March, April, May time frame? It's considerably different," says Salka. "And that changes the dynamic a lot. First of all, the sheer numbers are enormous. In terms of the number of open positions that we have for nurses, they are roughly four times the levels that we saw during the first phase of the pandemic. Then it was pretty much all just ICU and COVID-related; now it's that plus just normal positions that can't get filled." (Fortune)
President-elect Biden's COVID priorities. President-elect Joe Biden, whose health care team has taken considerable shape in the past week with significant announcements such as California Attorney General Xavier Becerra tapped for HHS Secretary, has laid out three major priorities for fighting the COVID pandemic: Urging all Americans to voluntarily wear a mask for 100 days; administer 100 million COVID vaccine doses; and reopen a majority of the nation's schools within his first 100 days in office. Alongside Biden will be the likes of Surgeon General nominee Vivek Murthy and CDC director pick Rochelle Walensky, a prominent infectious disease specialist. (Fortune)
REQUIRED READING
Facebook's big fat lawsuit, by Danielle Abril
The hacker 'ceasefire' with hospitals is over, by Peter J. Beshar & Jane Holl Lute
U.S. airline workers seek priority for COVID vaccine, by Bloomberg


fortune--2020-12-10--Why Intuit bought Credit Karma in one of the biggest fintech deals of 2020

Credit Karma is in the business of providing free credit score tracking—but apparently it’s worth billions to Intuit, which just closed its acquisition of the company in a deal valued at $8.1 billion including cash and stock.
That’s up from the original value of $7.1 billion when the deal was initially announced in February. Since then, the stock price of Intuit had appreciated some 24%, which combined with an uptick in Credit Karma’s working capital, boosted the price tag of the deal. Still, the increase is somewhat surprising considering Credit Karma sold its tax-prep product to Square last month to avoid antitrust concerns ahead of its combination with Intuit, which makes TurboTax. (And an Intuit spokesperson says the revised purchase price was not based on proceeds from that sale, in which Square paid $50 million.)
Yet Sasan Goodarzi, the CEO of Intuit, says he isn’t concerned about acquiring a now smaller company. “For us this was never about tax, so it wasn’t important to us,” Goodarzi tells Fortune. “We felt our platform was very strong.”
Rather, Intuit was intrigued by the reach of Credit Karma, a 13-year-old startup with 110 million members, as well as its other financial products— including credit card and loan comparison tools along with checking and savings accounts—an area into which Intuit has long sought to expand.
“Credit Karma set out to do exactly what we’re trying to do—they’re just 10 years ahead of us,” Goodarzi says, noting that Intuit plans to let Credit Karma operate as an autonomous subsidiary.
“They are the largest, most powerful fintech company out there,” Goodarzi adds. “But what makes Credit Karma the most special is not just the scale of customers—which by the way has not been replicated by anyone—it’s their data.”
Indeed, combining with Intuit gives Credit Karma access to much of the same valuable information that its tax-prep offering did—insight into customers’ income and ability to make loan payments—allowing it to improve its financial product recommendations.
“One of the biggest frustrations for consumers is the lack of certainty around whether you’re qualified for a product,” says Ken Lin, the CEO and founder of Credit Karma. While Credit Karma could predict someone’s eligibility for a personal loan using credit reports, credit worthiness is only 60% to 80% of the final approval decision. Other factors, like customers’ ability to repay the loan, are harder to estimate without more visibility into their personal finances—such as tax returns. “Now obviously with Intuit and TurboTax, we’re able to increase our certainty much higher,” says Lin.
Still, despite the value of the tax software data, Goodarzi says he’s not worried about now having to compete with Square in that arena. “We welcome competing with Square, and we’re not at all concerned,” he says. “The tax business is very, very sticky.”


fortune--2020-12-10--U.S. airline workers seeking priority for COVID vaccine

Airline employees should move near the front of the line for receiving the coronavirus vaccines to ensure its smooth shipment by air cargo, a coalition of 17 industry groups told U.S. health officials Thursday.
Airline workers face higher risks of infection because they must interact with the public or work in close proximity to coworkers, and therefore deserve to be treated the same way as other critical infrastructure workers, the groups said.
“Given the scientific, implementation and ethical considerations, we ask that you prioritize these frontline aviation workers in the next phase of vaccine allocation,” the letter to the Centers for Disease Control and Prevention said.
The largest union of U.S. airline pilots, which signed the letter, is separately asking lawmakers to give cockpit crews preference for receiving the coronavirus vaccine.
Cargo-airline pilots “have experienced an alarming increase in Covid-19 exposure and infections,” Joseph DePete, president of the Air Line Pilots Association, said in a letter to Senate lawmakers dated Wednesday.
Congress and the administration should recognize pilots as a critical link in the supply chain, DePete said.
“Ensuring this prioritization will allow the logistical component of transporting the vaccine to continue unencumbered,” he said in the letter. ALPA is also seeking an extension of federal aid to airlines protecting jobs “to ensure a robust supply chain,” DePete said.
The U.S. government is expected to approve initial use of a coronavirus vaccine as soon as this week. The 17 groups — which include the Airlines for America trade group, other pilot unions and associations representing cargo haulers — want airline employees to begin receiving the vaccine after the initial wave of health care workers and assisted living residents.
The Federal Aviation Administration issued a statement earlier this week saying it’s closely monitoring the vaccine trials and weighing whether it will impose any restrictions on how pilots receive it. In some cases, when the vaccine prompts side effects, the FAA will require pilots to wait from one to three days before flying after receiving a jab.
FedEx Corp. hired 70,000 workers to support both the surge in holiday package delivery and vaccine distribution in the coming weeks, Richard Smith, the company’s regional president of the Americas and executive vice president, told a Senate hearing Thursday.
ALPA, which represents FedEx pilots, has about 59,000 members in the U.S. and Canada.


fortune--2020-12-10--Airbnb shares skyrocket  135% on first day of trading

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Airbnb’s stock soared 135% shortly after its public debut, catapulting the home-rental company’s market valuation above $100 billion following a high-profile initial public offering.
The company had priced its IPO at $68 per share. But on Thursday, its stock opened on Nasdaq at $148 and then shot up to $160.
“In March and April, I didn’t think it was going to be possible to still go public this year,” said Nathan Blecharczyk, Airbnb cofounder and chief strategy officer. “But I think this pandemic has demonstrated how resilient the Airbnb business is.”
Airbnb plans to use the money raised to help it expand its home rentals and Experiences business, in which travelers link up with locals to do things like attend a cooking class, learn to surf, or take a tour. Prior to the pandemic, the company was considering expanding into other areas of travel, such as helping travelers with transportation and what to do after they arrive. Blecharczyk said that is still a long-term goal, but the company has shifted focus to its primary services.
Airbnb’s IPO comes during a rocky year for the travel industry. The company’s reservations slowed amid the pandemic, creating massive upheaval that had some people questioning whether the business could survive.
The IPO also comes a day after food delivery service DoorDash stock soared more than 80% during its debut on the New York Stock Exchange. On Wednesday, DoorDash’s shares had retreated 7% in midday trading.
But while DoorDash has seen a massive increase in customers during the pandemic, the story for Airbnb has been quite the opposite. During the second quarter, which was the height of the pandemic, Airbnb’s revenue dropped 72% year over year to $334.78 million, while its losses widened to $575.6 million.
But following some cost-cutting measures, including laying off 2,000 employees, slashing marketing, and reducing executive salaries, the company started to see some recovery in May. Airbnb reported a third-quarter profit of $219.3 million, which the company credited to customers booking rentals for local travel and remote work.
Looking ahead, Airbnb said it will explore how to leverage the increasing trend of nearby travel and remote work. Blecharczyk called it a “phenomenon” and said that the company plans to highlight more experiences and local stays on its app.
“That’s something we want to explore more fully,” Blecharczyk said. “Allowing people to use Airbnb not just when they’re traveling, but when they’re living their everyday life.”


fortune--2020-12-10--Airbnb CEO Brian Chesky could be worth over $11 billion after IPO

Brian Chesky is now the “host” of a multibillion-dollar fortune thanks to his company Airbnb’s massive IPO.
The popular home-sharing platform began trading at a whopping $146 per share on Thursday after pricing late on Wednesday at $68 per share, raising roughly $3.5 billion in its IPO—a big bump up from its previous target of between $56 and $60 per share earlier this week. The stock is trading on the Nasdaq under the ticker ABNB.
What is Brian Chesky’s net worth?
With the stock’s pricing and current trading price, CEO and cofounder Chesky’s net worth could be around $11.2 billion, based on Fortune’s back-of-the-envelope calculations. As with most founders, the majority of Chesky’s net worth is likely tied to his company—with the Airbnb IPO offering the first detailed look into the CEO’s holdings in the home-sharing business.
According to Airbnb’s most recent IPO filing, Chesky sold 517,241 shares priced at $68 each and still holds 76.4 million in Class B shares following the offering. While Chesky is also compensated in restricted stock units (RSUs) that vest over the next 10 years based on stock price targets, he has chosen to donate those net proceeds to charity and philanthropic causes, per the filing.
To be sure, with a rough net worth of over $11 billion, Chesky’s fortune is dwarfed by that of many of the biggest tech CEOs, but it’s on par with the likes of Twitter’s Jack Dorsey ($11.9 billion) and even tops Snapchat’s Evan Spiegel ($9.2 billion) and DoorDash’s Tony Xu, whose Wednesday IPO boosted his net worth to nearly $3 billion, per Bloomberg data and estimates as of Wednesday.
Chesky cofounded Airbnb in 2008 with Nathan Blecharczyk and Joe Gebbia and raised a total of $6.4 billion in the private markets, according to PitchBook data.
The San Francisco–based company’s IPO is one of several big year-end public debuts to round out a “record-breaking” year for companies going public, New York Stock Exchange president Stacey Cunningham recently told Fortune. With a valuation of nearly $100 billion in early trading, Airbnb is one of the largest IPOs of 2020.
And based on what some market insiders are seeing, 2021 is looking to be another busy year for making billionaires of executives.
Fortune writer Lucinda Shen contributed to reporting.