fortune--2020-12-03--Bill that could delist Chinese companies from U.S. exchanges is one step closer to becoming law

The U.S. House of Representatives approved legislation that could ultimately lead to Chinese companies — including behemoths like Alibaba Group Holding Ltd. and Baidu Inc. — getting kicked off American exchanges if regulators aren’t allowed to review their financial audits.
The legislation won bipartisan support in the House after easily clearing the U.S. Senate in May. Its passage now sends the bill to President Donald Trump, who is expected to sign it, in his administration’s latest parting shot at Beijing.
While the legislation provides a phase-in period — penalties only kick in after three straight years of failure to comply — it represents intensifying scrutiny in Washington of ties with China. Chinese firms for years have relied on access to American capital markets, and more broadly to dollar-based finance, as a key funding component.
“U.S. policy is letting China flout rules that American companies play by, and it’s dangerous,” said Senator John Kennedy, one of the bill’s lead sponsors, in a statement. “Today, the House joined the Senate in rejecting a toxic status quo, and I’m glad to see this bill head to the president’s desk.”
In addition to requiring companies to allow U.S. inspectors to review their financial audits, the measure — introduced by Kennedy, a Louisiana Republican; and Senator Chris Van Hollen, a Maryland Democrat — requires firms to disclose whether they are under government control.
When asked about the legislation on Wednesday, Chinese Foreign Ministry spokeswoman Hua Chunying told reporters Beijing “firmly opposes politicizing securities regulation,” and called for enhancing dialogue and cooperation. The ministry didn’t immediately reply to a request for comment Thursday on the House’s passage of the bill.
In another hit to China, the U.S. Department of Homeland Security said Wednesday that customs officers at American ports would impound “shipments containing cotton and cotton products originating from” the Xinjiang Production and Construction Corps., a military-affiliated entity that’s one of China’s largest producers. This follows earlier U.S. against the company that bar it from making any transaction with American companies and citizens.
‘Cheated’ Investors
Van Hollen said in a statement that the delisting bill would protect people who “have been cheated out of their money after investing in seemingly legitimate Chinese companies that are not held to the same standards” as other public companies. “This bill rights that wrong, ensuring that all companies on the U.S. exchanges abide by the same rules,” he said.
The measure represents a watershed moment in a long-running dispute between Washington and Beijing. At issue is China’s refusal to let the Public Company Accounting Oversight Board examine audits of firms whose shares trade in the U.S. The requirement for the inspections by the agency, which was created in the wake of the Enron Corp. accounting scandal, is meant to prevent fraud and wrongdoing that could wipe out shareholders.
Investors have mostly shrugged off the anticipated legislative move. Alibaba, the largest U.S.-listed Chinese company, was steady in after-hours trading, following a 1% drop on Wednesday. The offshore yuan was little changed. The move may even boost Hong Kong’s role as a financing center for mainland firms.
Fang Xinghai, the vice chairman of the China Securities Regulatory Commission, last month expressed optimism that the clash could be resolved with President-elect Joe Biden’s arrival in the White House next month. “It’s not an intractable problem,” Fang said, adding that it’s important to ensure that Chinese companies have access to international capital markets.
Regulators in the two countries have been engaged in on-again, off-again negotiations amid the standoff for more than a decade. Over the years there have been moments of optimism that the two sides were closing in on a deal, but ultimately it always fell through — with China citing strict confidentiality laws. More than 50 other foreign jurisdictions now permit the PCAOB inspections.
Despite the inability of American inspectors to review audits of Chinese firms, they’ve been allowed to continue to trade in the U.S., as the dynamic has been profitable to American stock exchanges, investment banks and asset managers. According to the Securities and Exchange Commission, more than 150 of the country’s companies, with a combined value of $1.2 trillion, traded on U.S. exchanges as of 2019 and there have been a spate of initial public offerings this year.
Major companies such as Vanguard Group Inc., the New York Stock Exchange, and Nasdaq have all expressed concern that the trend could reverse, with a crackdown causing Chinese companies to move their listings to Hong Kong or countries where investor protections are weaker than in the U.S. American investors would still be able to purchase the stock.
Alibaba Pledge
Alibaba Chief Financial Officer Maggie Wu said during a May 22 earnings call that the company “will endeavor to comply” with legislation that seeks to bring transparency to investors buying stocks on U.S. exchanges. Her comments were directed specifically at the Kennedy-Van Hollen legislation, which at that point had just passed the Senate.
The bill would prohibit foreign companies from trading in the U.S. if PCAOB inspectors aren’t allowed to review their auditors’ work for three consecutive years. The businesses would also have to disclose whether they’re controlled by the Chinese Communist Party, or any other foreign government.
Jay Clayton, the outgoing chairman of the Securities and Exchange Commission, said the legislation would help “level the playing field for all issuers” in the U.S. stock market. “Today’s vote, in combination the commission’s ongoing work, will help address these long-standing issues for the benefit of U.S. investors,” he said in a statement.
The SEC has been pushing ahead with writing a rule to tackle the same issue, which would lead to the de-listing of companies for not complying with U.S. auditing rules, Bloomberg News reported last month. The effort is in response to recommendations released earlier this year by top Trump-appointed financial officials including Clayton and Treasury Secretary Steven Mnuchin.
The NYSE said in a statement that it was “hopeful this legislation’s time horizon will allow” for balancing both protection and choice for investors. Meanwhile, Nasdaq said it “stands ready to work with our listed companies to comply with any and all regulations” and looks forward to cooperating with the SEC to bolster transparency.
The bill passed on Wednesday tasks the SEC with writing a rule to implement part of the measure. As in the Senate, the bill passed the House by voice vote, underscoring the bipartisan support for the measure.


fortune--2020-12-04--Pfizer’s vaccine setback spoils Wall Street’s bullish mood

Los Angeles ’ s new COVID lockdown bans most walking , driving and use of public transport

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 evening, Bull Sheeters. This is Fortune finance reporter Rey Mashayekhi, filling in this week for Bernhard with a special PM edition of the newsletter.
Positive data around U.S. jobless claims and economic activity drove markets in New York higher Thursday—but reports that Pfizer is having issues distributing its COVID-19 vaccine saw gains deteriorate late in the afternoon. Brexit negotiations led to an uneven day for the European bourses, while Chinese companies continue to grapple with new U.S. auditing regulations.
Markets update
U.S.
The S&P 500 hit an all-time high during Thursday’s session and was on pace for a second consecutive record close—until the aforementioned Pfizer vaccine news prompted a late-day slide. In the end, the S&P closed down slightly (-0.1%), while the Dow gained 0.2% and the Nasdaq climbed 0.3%.
hit an all-time high during Thursday’s session and was on pace for a second consecutive record close—until the aforementioned Pfizer vaccine news prompted a late-day slide. In the end, the S&P closed down slightly (-0.1%), while the gained 0.2% and the climbed 0.3%. The market’s bullish mood was partly fueled by jobless claims that beat expectations, though the Thanksgiving holiday may have impacted the Labor Department’s data model. Friday will bring the government’s more comprehensive November unemployment report, which is expected to show slowing job growth.
that beat expectations, though the Thanksgiving holiday may have impacted the Labor Department’s data model. Friday will bring the government’s more comprehensive November unemployment report, which is expected to show slowing job growth. Stimulus talks rumble on in D.C., with a compromise believed to be within reach after talks between House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell .
rumble on in D.C., with a compromise believed to be within reach after talks between House Speaker and Senate Majority Leader . After much speculation, President-elect Joe Biden has officially tapped Brian Deese to head his National Economic Council . Deese is an Obama administration alumnus whose most recent role at BlackRock —where he served as the asset management giant’s global head of sustainable investing—has drawn scrutiny from some on the left.
has officially tapped to head his . Deese is an Obama administration alumnus whose most recent role at —where he served as the asset management giant’s global head of sustainable investing—has drawn scrutiny from some on the left. The Senate has confirmed Christopher Waller to the Federal Reserve ’s Board of Governors , while President Trump’s nomination of Judy Shelton —a fierce Fed critic who believes in a return to the gold standard—to that same body appears all but dead.
to the ’s , while President Trump’s nomination of —a fierce Fed critic who believes in a return to the gold standard—to that same body appears all but dead. Movie theater operator AMC is aiming to sell more than $700 million in stock as it looks to avoid bankruptcy in the wake of the pandemic’s devastating impact on its business.
Europe
The European bourses had a mixed Thursday as all eyes remained on Brexit. London’s FTSE gained 0.4%, Frankfurt’s DAX fell -0.5%, and the CAC 40 in Paris slipped nearly -0.2%. The pan-European STOXX 600 was up marginally.
had a mixed Thursday as all eyes remained on Brexit. London’s gained 0.4%, Frankfurt’s fell -0.5%, and the in Paris slipped nearly -0.2%. The pan-European was up marginally. British and European negotiators continued their marathon, pizza-fueled Brexit trade talks , with mixed signals on how those talks are going, depending on which side you ask. With less than a month to go until the U.K.’s “transition period” out of the EU comes to an end, work remains to be done on everything from data-sharing terms to fishing rights.
, with mixed signals on how those talks are going, depending on which side you ask. With less than a month to go until the U.K.’s “transition period” out of the EU comes to an end, work remains to be done on everything from data-sharing terms to fishing rights. European business activity contracted sharply in November, as a surge in coronavirus cases across the continent forced countries to reinstitute lockdown measures.
contracted sharply in November, as a surge in coronavirus cases across the continent forced countries to reinstitute lockdown measures. Poland indicated that it would be willing to drop its veto over the EU’s proposed 1.8 trillion euro budget .
indicated that it would be willing to drop its veto over the EU’s proposed . The EU is planning to introduce new tech regulations that would impact U.S. giants like Google, Facebook, and Amazon.
Asia
The Asian markets were mostly flat-to-up on the day. While Tokyo’s Nikkei inched up only marginally, it is now trading at its highest levels since 1991 . Hong Kong’s Hang Seng and South Korea’s KOSPI each climbed more than 0.7%. On mainland China, the major indexes in Shanghai (-0.2%) and Shenzhen (+0.1%) drifted slightly.
were mostly flat-to-up on the day. While Tokyo’s inched up only marginally, it is now trading at its . Hong Kong’s and South Korea’s each climbed more than 0.7%. On mainland China, the major indexes in (-0.2%) and (+0.1%) drifted slightly. The fallout continues from a new U.S. law that will impose stricter auditing rules on U.S.-listed Chinese companies . It could well prompt more companies to pursue secondary listings in Hong Kong and mainland China, while also stemming a trend that has seen the market capitalization of U.S.-listed Chinese firms exceed $2.2 trillion.
. It could well prompt more companies to pursue secondary listings in Hong Kong and mainland China, while also stemming a trend that has seen the market capitalization of U.S.-listed Chinese firms exceed $2.2 trillion. In other U.S.-China tensions , the Department of Defense has blacklisted four Chinese firms —including chipmaker SMIC and oil company CNOOC —for their alleged ties to the Chinese military.
, the Department of Defense has —including chipmaker and oil company —for their alleged ties to the Chinese military. And a day after the U.S. banned imports from a Chinese cotton producer for allegedly using forced Uighur labor , China accused the U.S. of fabricating such allegations.
from a Chinese cotton producer for allegedly using , China accused the U.S. of fabricating such allegations. India’s central bank has hit the nation’s largest private bank, HDFC, with sanctions after a data center outage shut down its digital payment services for more than 12 hours last month.
Elsewhere
Gold gained on more stimulus conjuncture.
gained on more stimulus conjuncture. The dollar continued its decline.
continued its decline. Bitcoin climbed on the long, slow march to $20,000 .
climbed on the long, slow march to $20,000 Crude oil perked up on positive OPEC+ talks, with Brent trading at under $49/barrel.
***
That’s all for today. Please be sure to check out today’s reads below, featuring a selection of stories from Fortune‘s new December/January issue. Have a pleasant evening and see you tomorrow.
Rey Mashayekhi
@reym12
rey.mashayekhi@fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Master of cards (and more). Over the course of a decade-plus at the helm of Mastercard, CEO Ajay Banga has delivered shareholder returns that are nearly five times that of the S&P 500, grown revenues and profits at a rate outpacing the firm’s biggest rivals, and set the company on a forward-thinking path that braces for the digital economy of the future. As he prepares to leave his post at the end of this year, Banga spoke with Fortune editor-in-chief Clifton Leaf to reflect on his remarkable run and look forward to what’s next.
A startup’s second act. Robinhood has carved out an enviable position as the buzzy, stock-trading app of choice for millennials—deploying a zero-commission model that forced established competitors to adapt or risk being left behind. With a valuation now approaching $12 billion, Fortune’s Jeff John Roberts examined the startup’s meteoric rise and the challenging task that lays ahead: profitability.
Selling others short. Short selling has long been a tried-and-tested practice on Wall Street, but there’s a new generation of small activist firms now finding success at keeping overhyped companies in check. Bull Sheet's own Bernhard Warner profiled several of these investors, who are making a killing while keeping public firms on their toes.
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Market candy
“In some ways, it’s awesome and surreal to be a part of this, going public. In other ways, it just makes a lot of sense.”
That’s Austin Russell, the 25-year-old, newly-minted billionaire founder and CEO of Luminar Technologies, which develops sensor technology for self-driving cars. Russell founded Luminar eight years ago at the age of 17, after leaving Stanford University to launch the startup. On Thursday, he rang the opening bell of the Nasdaq, on which Luminar now trades via special purpose acquisition company Gores Metropoulos.


fortune--2020-12-04--COVID-19 vaccine distribution effort targeted by hackers

IBM security researchers say they have detected a cyberespionage effort using targeted phishing emails to try to collect vital information on the World Health Organization’s initiative for distributing COVID-19 vaccine to developing countries.
The researchers said they could not be sure who was behind the campaign, which began in September, or if it was successful. But the precision targeting and careful efforts to leave no tracks bore “the potential hallmarks of nation-state tradecraft,” they said in a blog post Thursday.
The campaign’s targets, in countries including Germany, Italy, South Korea and Taiwan, are likely associated with the development of the “cold chain” needed to ensure coronavirus vaccines get the nonstop sterile refrigeration they need to be effective for the nearly 3 billion people who live where temperature-controlled storage is insufficient, IBM said.
“Think of it as the bloodline that will be supplying the most vital vaccines globally,” said Claire Zaboeva, an IBM analyst involved in the detection.
The U.S. Cybersecurity and Infrastructure Security Agency later issued an advisory encouraging Operation Warp Speed, the Trump administration’s vaccine program, and other organizations involved in vaccine storage and transport, to review IBM’s findings.
Whoever is behind the operation could be motivated by a desire to learn how the vaccines are best able to be shipped and stored — the entire refrigeration process — in order to copy it, said Nick Rossmann, the IBM team’s global threat intelligence lead. Or they might want to be able to undermine a vaccine’s legitimacy or launch a disruptive or destructive attack, he added.
In the ploy, executives with groups likely associated with the initiative known as Covax — created by the Gavi Vaccine Alliance, the World Health Organization and other U.N. agencies — were sent spoofed emails appearing to come from an executive of Haier Biomedical, a Chinese company considered the world’s main cold-chain supplier, the analyst said.
The phishing emails posed as requests for price quotations and bore malicious attachments that prompted recipients to enter credentials that could have been used to harvest sensitive information about partners vital to the vaccine-delivery platform.
Targets included the European Commission’s Directorate-General for Taxation and Customs Union and companies that make solar panels for powering portable vaccine refrigerators. Other targets were petrochemical companies, likely because they produce dry ice, which is used in the cold chain, Zaboeva said.
The EU agency has been busy revising new import and export regimes for coronavirus vaccines and would be a gold mine for hackers seeking stepping stones into partnering organizations, she said.
Covax has struggled to raise enough money to compete for vaccine contracts against the world’s wealthiest nations in the race to secure doses as fast as they can be produced. But the UN and Gavi have invested millions in cold-chain equipment across Africa and Asia. The investment, in the works well before the pandemic, was accelerated to prepare for an eventual global rollout of coronavirus vaccines.
Whoever was behind the phishing operation likely sought “advanced insight into the purchase and movement of a vaccine that can impact life and the global economy,” the blog post said. Coronavirus vaccines will be one of the world’s most sought-after products as they are distributed, so theft may also be a danger.
In the U.S., the FBI has been working with other federal agencies and private industry to protect vaccine development and delivery, Tonya Ugoretz, the agency’s deputy assistant director for cyber readiness and intelligence, said Thursday at the online Aspen Cyber Summit.
The aim is to ward off not just cyberthreats but also more traditional human-centric espionage by adversaries who may seek to steal intellectual property for financial gain, to benefit another country or to “undermine confidence in U.S. efforts to provide an effective vaccine,” she said.
On the same panel, Marene Allison, the chief information security officer (CISO) at Johnson & Johnson, said that while she was confident that major pharmaceutical companies like hers developing coronavirus vaccines have strong defenses in place against hackers, some third parties involved in the process may not.
There have been reports that Johnson & Johnson has been targeted by North Korean hackers, but Allison said that doesn’t mean the attempts have been successful.
“I and all CISOs in health care are seeing attempted penetrations by nation-state actors, not just North Korea, every single minute of every single day,” she said.
Last month, Microsoft said it had detected mostly unsuccessful attempts by state-backed Russian and North Korean hackers to steal data from leading pharmaceutical companies and vaccine researchers. It gave no information on how many succeeded or how serious those breaches were. Chinese state-backed hackers have also targeted vaccine makers, the U.S. government said in announcing criminal charges in July.
Microsoft said most of the targets — located in Canada, France, India, South Korea and the United States — were researching vaccines and COVID-19 treatments. It did not name the targets.
On Wednesday, Britain became the first to country to authorize a rigorously tested COVID-19 vaccine, the one developed by American drugmaker Pfizer and Germany’s BioNTech.
Other countries aren’t far behind: Regulators not only in the U.S. but in the European Union and Canada also are vetting the Pfizer vaccine along with a shot made by Moderna Inc. British and Canadian regulators are also considering a vaccine made by AstraZeneca and Oxford University.
The logistical challenges of distributing vaccines globally are huge. The Pfizer-BioNTech one must be stored and shipped at ultra-cold temperatures of around minus 70 degrees Celsius (minus 94 degrees Fahrenheit).
Unlike the Moderna and Pfizer COVID-19 vaccines, Johnson & Johnson’s requires refrigeration but does not need to be frozen.


fortune--2020-12-03--The pandemic accelerated the world’s digital transformation—but Europe is still ‘lagging behind’

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The coronavirus pandemic is forcing companies across the globe to get serious about “digital transformation.”
The term has been a popular corporate buzz phrase for at least a decade. But it has meant different things to different people. Many companies have taken a piecemeal, tentative approach to adopting digital technologies that might even be called “transformation theater.”
That’s not an option in the pandemic, when employees can’t get to the workplace, and customers are afraid to shop at physical stores. For many companies, the choice is stark: go digital or go bust.
In a Fortune virtual conversation Tuesday, three experts explored the way the pandemic has accelerated digital transformation in a host of industries including health care, education, transportation, media, and manufacturing.
Paul Scanlan, chief technology officer at the carrier business group of Huawei Technologies, noted that telemedicine, remote education, and videoconferencing have became the global norm almost overnight.
Even so, speakers agreed, some regions have embraced digital transformation more readily than others. All three concurred that European companies have been significantly slower than counterparts in the U.S. and China to integrate automation, artificial intelligence, data analytics, cloud services, and high-speed sensors into all aspects of their business operations.
The challenge for Europe is getting firms in the region to “embrace” A.I. technology, said François Candelon, senior partner and managing director at BCG and global director of the BCG Henderson Institute. Europe, he said, is “not as advanced as what we can see in Asia now.”
China, by contrast, has the advantage of having homegrown tech giants willing to invest heavily in A.I., and benefits from government policies that support such technology.
Huawei’s Scanlan argued that, even before the pandemic, “China learned that A.I., [the internet of things], and 5G are essential building blocks for transformation.”
“A.I. has to be part of digital transformation plans going forward,” Michael Frank, manager of public policy at the Economist Intelligence Unit, said at the event.
The U.S., for its part, has the advantage of being a leader in A.I. research, Candelon said.
But BCG’s Candelon, who returned this year to Paris after a seven-year stint in China, warned that Europe is “really lagging behind.”
Individual European countries are pursuing digital transformation policies, but Europe needs an “ecosystem” that will connect national hubs, Candelon argued. “We don’t need 50 Silicon Valleys … a couple of them would be great.”


fortune--2020-12-03--Congress should legalize cannabis now—for the economy and for social justice

Over the course of 2020, Congress has at times acted quickly to stop the hemorrhaging of American jobs lost to the pandemic fallout. And at other times, including now, Congress has fiddled over the contents of massive relief packages. One thing is certain: As cases continue to surge nationwide, American families facing grave uncertainty have found little relief.
Meanwhile, for minorities, particularly hard-hit by the pandemic both in terms of health and economics, the long-simmering and systemic scourge of racial inequality has erupted into nationwide demonstrations. Millions of Americans have marched in the streets for social justice, despite our dual public health and economic crises, risking personal health as cases surge.
The new Congress, and the incoming Biden-Harris administration, certainly have a lot to consider. But there’s one move they could make that could address America’s economic and social problems simultaneously: the legalization of cannabis.
While federal legalization of cannabis may seem like an unexpected solution to many Americans, recent bipartisan momentum for legalization is pushing toward a vote to repeal this outdated prohibition in the lame-duck session this month. The legislation has newly influential support, too: Vice President–elect Kamala Harris was an original sponsor of the legislation in the Senate.
The bill—the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act—would address critical social justice elements, including decriminalizing cannabis and providing for expungement of certain long-outdated cannabis offenses that have disproportionately affected minority communities for decades. This would be a major departure from the antiquated “War on Drugs” model, which led to skyrocketing incarceration rates among minorities, especially in the Black community, whose members are more than three times as likely to be arrested for possession as whites.
But the MORE Act does more—alleviating economic pressure, too. The bill would establish a federal excise tax, creating a tremendous amount of new revenue annually for the U.S. Treasury. The bill also resolves the disconnect between outmoded federal cannabis policy and the varying degrees of legalization already enacted by 36 states and even Washington, D.C.—the very seat of Congress.
Marijuana activists hold up a 51-foot inflatable joint during a pro-legalization rally at the U.S. Capitol in 2019. Caroline Brehman—CQ-Roll Call, Inc via Getty Images
As Americans stare into the threat of a deep recession, it’s no surprise lawmakers are looking to Depression-era policies to steer the economy out of its nosedive. Historians note that repealing the prohibition of alcohol, in the 1930s, was an economic catalyst that created hundreds of thousands of jobs and generated the equivalent of billions in tax revenues. What’s lesser known is that the move was also an act of social justice. It halted a disastrous law enforcement experiment, which, among other things, unleashed the Ku Klux Klan to perpetuate state-sanctioned violence against people of color who had the temerity to partake in a simple drink.
There are legitimate reasons to repeat the history of repeal, now with cannabis—especially after policymakers have deemed dispensaries essential in state after state. It is estimated that the sale of recreational cannabis, if legalized in all 50 states today, would generate more than $175.8 billion through 2025 in federal sales, business, and payroll taxes, and would add nearly 1.6 million jobs by 2026.
Obviously, the new revenues would help offset critical relief spending, the price tag for which already stretches into the trillions. But bringing existing bootleg sales into the light also would wrap cannabis workers in the fold of employment law, including increasing their likelihood of getting health care coverage. And consumers would be protected by quality controls in a tightly regulated market. Truly, cannabis should never have been classified as a Schedule I banned substance in the first place. It has neither the addictive properties nor the lack of medicinal value that such categorization demands. Ulterior, racist motives contributed to the outlawing of cannabis as far back as 1937.
The time has come for change.
Our vision at Canopy Growth is to offer a remarkably safe product to adults to consume in a responsible manner while investing in the communities where we operate. As we expand in the U.S., we are committed to helping regulators ensure safe and effective standards as we have done in countless other countries.
For now, as Americans grapple with how best to dismantle systemic racism in the midst of an economic crisis, cool heads in Congress are looking in the right direction—to the past. Putting forward this critical, commonsense legislation would in one swoop create an anchor of social justice reform, while also delivering a much-needed new source of revenue.
David Culver is the U.S. vice president of government relations at Canopy Growth Corporation, a leading cannabis-producing company based in Canada.


fortune--2020-12-03--Odds of a second $1,200 stimulus check continue to fall

For the latest information on the ongoing stimulus negotiations, please check out our coverage here
For the millions of Americans waiting on another stimulus check this winter, the news isn’t good: Those $1,200 checks may not be coming.
On Tuesday, a group of bipartisan senators including Republican Mitt Romney and Democrat Joe Manchin announced a $908 billion stimulus proposal. The bill includes items like enhanced unemployment insurance and state funding, but it doesn’t include another round of $1,200 stimulus checks.
In a surprise move, House Speaker Nancy Pelosi was open to the $908 billion package, saying it “should be used as the basis” for negotiations moving forward, despite her having argued firmly for a multi-trillion-dollar package for months. It also marks the first time Pelosi voiced support for a bill that didn’t include stimulus checks.
That means both Republican and Democratic leaders appear to be poised to back a package without checks—a notable shift considering both Pelosi and President Trump supported another round of checks while negotiating before the election.
Senate Majority Leader Mitch McConnell, who has taken over for Treasury Secretary Steve Mnuchin as the chief negotiator in the talks, is still vying for a smaller bill without direct payments. The White House reaffirmed Thursday it is backing McConnell’s plan. And if any bill is going to pass this year, it’ll need McConnell’s approval.
McConnell passed around his version of the next stimulus package on Tuesday, but with a much lower price tag: Several hundred billion lower, in fact. Like the bipartisan bill, McConnell’s plan also wouldn’t include stimulus checks.
One reason stimulus checks are on the chopping block? Time is running out. Congress has until Dec. 11 to pass a spending bill to fund the government, and analysts and economists argue passing a “bridge” stimulus bill will be essential to helping the unemployed and small businesses survive until a vaccine can be widely distributed next year. Simply put: Democratic leaders so far appear willing to sacrifice some spending items in order to get more fiscally-conservative Senate Republicans on board and pass something this month.
Still, a December stimulus package doesn’t completely rule out another round of checks in 2021. If Democrats win both Senate seats heading for runoff elections in Georgia on January 5, they’d gain control of the Senate and have the power to push through another stimulus package—which could include direct payments. But if Republicans retain the Senate, chances for another stimulus check would likely be dead.
As Tom Porcelli, chief U.S. economist at RBC Capital Markets, recently told Fortune: “I think [more stimulus checks are] going to be a very hard sell. If you have a Republican Senate, I think that’s almost a nonstarter.”


fortune--2020-12-03--On cloud nine: Why these cloud security stocks are soaring

It’s a good day to be in the cloud.
Cloud and cybersecurity stocks like CrowdStrike, Okta, and Zscaler are soaring on Thursday after the trio reported booming earnings amid a pandemic that has accelerated businesses’ shift to the cloud and remote work.
On Thursday CrowdStrike was trading nearly 14% higher in afternoon trading, while Zscaler zoomed over 25% and Okta was up roughly 4% in afternoon trading. Snowflake was also on a tear Thursday, up over 12% in afternoon trading after reporting its first quarter since its IPO in September.
Revenues for Okta were up 42% from the previous year in the 3rd quarter, while CrowdStrike and Zscaler also beat earnings Wednesday, with revenues up 86% and 52% year-over-year, respectively. Snowflake reported revenues up 119% from the previous year.
For those like Wedbush Securities’s Dan Ives, the big earnings beats are “another seminal moment in this cloud transformation underway and put more fuel into this rally in cyber security names across the board,” Ives wrote in a note Thursday. He believes the “blowout earnings across the board from these three next generation software leaders that surprised even the biggest bulls given the strength … is another key data point speaking to the cloud and digital transformation that is still in the early days of playing out.”
As has been the big theme of 2020, Morningstar analyst Mark Cash notes the pandemic “hastened digital transformation efforts and the need to adopt zero-trust security practices, which benefits Zscaler,” and believes the company can top its forward earnings estimates, Cash wrote in a note Wednesday. Wedbush’s Ives, meanwhile, believes the company “looks to be in the drivers seat on the cloud cyber security shift over the next decade.”
Many on the Street argue the big cloud theme won’t just be booming in 2020. Analysts like Ives and Morningstar’s Cash believe names like Zscaler and CrowdStrike will continue to gain share, as Cash wrote in a Thursday note that “CrowdStrike’s customer base, revenue, and margins will experience profound growth throughout the 2020s as customers update their endpoint and workload security requirements in a hybrid-cloud world.” Okta, meanwhile, “continues to gain customers at a fast clip while also showcasing larger deal sizes and impressive upsell results,” Cash wrote in a Wednesday note.
And for cloud and cybersecurity stocks overall, Wedbush’s Ives estimates “with 33% of workloads currently on the cloud moving to 55% by 2022 based on our analysis, we believe the digital transformation shift to cloud for both enterprises and governments is being accelerated by up to 12 to 18 months,” with Microsoft and Amazon Web Services (AWS) “leading the way.”
But that rush has certainly driven up premiums for many of the names in the space. Indeed, CrowdStrike, Zscaler, and Okta all currently trade at price-to-earnings multiples that register as “not meaningful” as they’re so high (All three companies, meanwhile, remain unprofitable). And the debate about a cloud and tech bubble in 2020 rages on. All three stocks are up at least 100% each this year.
But some analysts like Ives argue the “fundamental drivers and sweet spot of cloud demand continue to give us high conviction in owning the secular winners in the cyber security sector.” Pointing to the “robust” earnings from names like Zscaler and CrowdStrike, he argues “this cloud story is still in the early days of playing out and bodes well for cyber names heading into 2021.”
While investors may be on cloud nine following the strong earnings, they’d be well to remember their multiples are also sky-high.


fortune--2020-12-03--Facebook accused by Trump administration of H-1B visa abuse

The Trump administration is accusing Facebook in a lawsuit of discriminating against U.S. workers in favor of foreigners with special visas to fill more than 2,600 high-paying jobs.
The Justice Department announced the suit Thursday, alleging that the tech giant refused to recruit, consider or hire qualified and available U.S. workers for the positions that the social medial giant reserved for temporary visa holders. Facebook sponsored the visa holders for “green cards” authorizing them to work permanently.
“Facebook intentionally created a hiring system in which it denied qualified U.S. workers a fair opportunity to learn about and apply for jobs” that it instead sought to channel to temporary visa holders, the Justice Department said in a news release.
The positions at issue offered an average salary of around $156,000. The department is seeking unspecified civil penalties and back pay on behalf of U.S. workers denied employment.


fortune--2020-12-03--Warner Bros. to release all 2021 films on HBO Max and in theaters

Warner Bros., one of Hollywood’s biggest studios, plans to release all its major movies next year in theaters and on HBO Max at the same time, a dramatic change that shows just how much Covid-19 and streaming have disrupted the industry.
The 17 films affected by the shift include the new installment of the “Matrix” franchise, the Lin-Manuel Miranda musical “In the Heights,” and the DC Comics superhero feature “The Suicide Squad.” Each movie will run on the HBO Max streaming platform for one month at no additional charge — an approach that the AT&T division was already planning for the debut of “Wonder Woman 1984” on Christmas Day.
Such a move would have been considered unthinkable a year ago, but the pandemic has obliterated industry norms. Theaters have traditionally had exclusive rights to films for up to three months, an arrangement they’ve defended vociferously. Now — with Covid-19 still raging across the U.S. and much of the world, and theaters either shuttered or thinly attended — studios are taking increasingly dramatic steps to protect their investments in would-be blockbusters.
The announcement slammed shares of theater chains, including industry leader AMC Entertainment Holdings Inc. Its stock dove 16% to $3.62 in its worst intraday slide since Oct. 14. Cinemark Holdings Inc. dropped as much as 16%.
“We know new content is the lifeblood of theatrical exhibition,” said Ann Sarnoff, chief executive officer of WarnerMedia Studios. “But we have to balance this with the reality that most theaters in the U.S. will likely operate at reduced capacity throughout 2021.”
The new model could rapidly increase signups to HBO Max, a cornerstone of the long-term strategy for AT&T’s WarnerMedia. The platform launched this year, entering a crowded field that includes Netflix Inc. and Walt Disney Co.’s Disney+. Though pandemic lockdowns have helped fuel industrywide growth for online services, AT&T is under pressure to show it can transition to the streaming era.
Warner was expected to compensate some of the larger cinema chains for their decision to put the new “Wonder Woman” film on HBO Max the same day it was released in theaters. It’s not yet clear what arrangement they could potentially strike for the 2021 films, but any deal will be important to their survival. Ticket sales year to date are down 78% to $2.2 billion, according to research firm Comscore Inc., leaving many cinemas teetering toward bankruptcy. That compares with more than $10 billion at this time a year ago.
Making Concessions
Theater operators have suggested it’s better to get new movies out, even under less favorable terms than they previously enjoyed, to juice ticket sales as they try to recover from the effects of the pandemic. The alternative is allowing studios to skip theatrical runs completely and put their new content exclusively online. Already, chains have made significant concessions, which will likely last long beyond the pandemic.
Universal Studios, a unit of Comcast, forged an agreement with three large movie chains to collapse the time between a film’s premiere in theaters to when it can be sold to online audiences for $20. Previously, the studio had to wait more than two months, and it now has to wait only 17 days. Disney has also experimented with online releases. It released “Mulan” on Disney+ while showing the film in theaters overseas. But the entertainment giant hasn’t struck any new formal, sweeping arrangements with cinemas.
Jason Kilar, WarnerMedia’s CEO, said the important thing is to get movies out in front of audiences.
“Our content is extremely valuable, unless it’s sitting on a shelf not being seen by anyone,” he said in a statement. “We believe this approach serves our fans, supports exhibitors and filmmakers, and enhances the HBO Max experience, creating value for all.”


fortune--2020-12-03--Airbnb debuts new rules to prevent New Year’s Eve partying

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Airbnb is taking new steps to stop customers from using rented homes as party pads on New Year’s Eve and spreading COVID.
The company on Thursday implemented a two-night minimum for guests who lack positive reviews and who want to rent an entire home on that evening.
The home-rental service said the new restriction will apply to rentals in the U.S., U.K., Canada, Mexico, Australia, France, and Spain. Reservations that have already been booked for just New Year’s Eve, regardless of user reviews, will be honored.
Users with positive reviews will not be subject to the new rule.
“This plan marks the latest of a number of recent changes to our platform to meet this specific public health moment, prioritize safe and responsible travel, and do our part to try and stop large gatherings that can spread this virus,” a blog post from Airbnb reads.
The news comes as Airbnb grapples with the problem of customers renting homes for unauthorized parties, some of which have become violent. Last year, a Halloween party in Orinda, Calif., ended with a shooting that killed five people and injured four others. In August this year, three people were shot at an unauthorized party in Sacramento.
Airbnb has also created new cleaning standards to prevent the spread of the coronavirus.
Airbnb is trying to show that it has safety under control following filing for its initial public offering last month. The company’s stock could be adversely affected by any safety issues once it begins trading.
As part of its effort to prevent parties on New Year’s Eve, Airbnb said it will have safety agents on call throughout the night to provide immediate assistance to hosts or guests with concerns. In addition, all guests who successfully book rentals for New Year’s Eve will be required to agree not to throw unauthorized parties and to acknowledge that they could be sued for violating the agreement.
Airbnb said it also will provide additional guidance to hosts to help them reduce the likelihood that a guest will throw an unauthorized party. It’s advising hosts to update their house rules and proactively communicate them to their guests.


fortune--2020-12-03--Google ethics researcher’s departure renews worries the company is silencing whistleblowers

A prominent A.I. researcher has left Google, saying she was fired for criticizing the company’s lack of commitment to diversity, renewing concerns about the company’s attempts to silence criticism and debate.
Timnit Gebru, who was technical co-lead of a Google team that focused on A.I. ethics and algorithmic bias, wrote on Twitter that she had been pushed out of the company for writing an email to “women and allies” at Google Brain, the company’s division devoted to fundamental A.I. research, that drew the ire of senior managers.
Gebru is well-known among A.I. researchers for helping to promote diversity and inclusion within the field. She cofounded the Fairness, Accountability, and Transparency (FAccT) conference, which is dedicated to issues around A.I. bias, safety, and ethics. She also cofounded the group Black in AI, which highlights the work of Black machine learning experts as well as offering mentorship. The group has sought to raise awareness of bias and discrimination against Black computer scientists and engineers.
The researcher told Bloomberg News on Thursday that her firing came after a week in which she had wrangled with her managers over a research paper she had co-written with six other authors, including four from Google, that was about to be submitted for consideration at an academic conference next year. She said Google had asked her to either retract the paper or at least remove the her name and those of the other Google employees, she told Bloomberg.
She also posted an email to the internal employee group complaining about her treatment and accusing Google of being disingenuous in its commitment to racial and gender diversity, equity and inclusivity.
Gebru told the news service that she had told Megan Kacholia, Google Research’s vice president and one of her supervisors, that without more discussion about the way the review process for the paper had been handled and clear guarantees that the same thing wouldn’t happen again.
“We are a team called Ethical AI, of course we are going to be writing about problems in AI,” Gebru said.
She told Bloomberg that she had told Kacholia that if the company was unwilling to address her concerns, she would resign and leave following a transition period. The company then told her it would not agree to her conditions and that it was accepting her resignation effective immediately. It said Gebru’s decision to email the internal listserv reflected “behavior that is inconsistent with the expectations of a Google manager,” according to a Tweet Gebru posted.
Fellow A.I. researchers took to Twitter to express support for Gebru and outrage at her apparent firing. “Google’s retaliation against Timnit—one of the brightest and most principled AI justice researchers in the field—is *alarming*,” Meredith Whittaker, faculty director at the AI Now Institute at New York University, wrote on Twitter.
“Speaking out against censorship is now ‘inconsistent with the expectations of a Google manager.’ She did that because she cares more and will risk everything to protect those she has hired to work under her—a team that happens to be more diverse than any other at Google,” Deb Raji, another researcher who specializes in A.I. fairness, ethics, and accountability and who works at Mozilla, wrote in a Twitter post.
Many noted that Gebru’s departure came on the same day the National Labor Relations Board accused Google of illegally dismissing workers who helped organize two companywide protests: one, in 2019, against the company’s work with the U.S. Customs and Border Protection agency and a 2018 walkout to demonstrate against the company’s handling of sexual harassment cases.
The NLRB accused Google of using “terminations and intimidation in order to quell workplace activism.”
Google has not issued a public comment on the NLRB case. In reference to questions about Gebru’s case, it referred Fortune to an email from Jeff Dean, Google’s senior vice president for research, that was obtained by the technology news site Platformer.
In that email, Dean said Gebru and her co-authors had submitted the paper for internal review within the two week period the company requires and that an internal “cross-functional team” of reviewers had found “it didn’t meet our bar for publication,” and “ignored too much relevant research” that showed some of the ethical issues she and her co-authors were raising had at least been partially mitigated.
Dean said Gebru’s departure was “a difficult moment, especially given the important research topics she was involved in, and how deeply we care about responsible AI research as an org and as a company.”
The incident is likely to renew concerns both inside and outside the company about the ethics of its technology and how it deals with employee dissent. Once known for its freewheeling and liberal corporate culture, Google has increasingly sought to limit employee speech, particularly when it touches on issues likely to embarrass the company or potentially impact its ability to secure lucrative work for various government agencies.
Platformer also obtained and published what it said was the email Gebru had sent to colleagues. In it, she criticizes the company’s commitment to diversity, saying that “this org seems to have hired only 14% or so women this year.” (She does not make it clear if that figure is for all of Google Research or some other entity.) She also accuses the company of paying lip service to diversity and inclusion efforts and advises those who want the company to change to seek ways to bring external pressure to bear on Google.
Gebru says in the email that she had informed Google’s public relations and policy team of her intent to write the paper at least two months before the submission deadline and that she had already circulated it to more than 30 other researchers for feedback.
Gebru implied in several tweets that she had raised ethical concerns about some of the company’s A.I. software, including its large language models. This kind of A.I. software is responsible for many breakthroughs in natural language processing, including Google’s improved translation and search results, but has been shown to incorporate gender and racial bias from the large amounts of Internet pages and books that are used to train it.
In tweets yesterday, she singled out Dean, a storied figure among many computer engineers and researchers as one of the original coders of Google’s search engine, and implied that she had been planning to look at bias in Google’s large language models. “@JeffDean I realize how much large language models are worth to you now. I wouldn’t want to see what happens to the next person who attempts this,” she wrote.
Earlier in the week, Gebru had also implied Google managers were attempting to censor her work or bury her concerns about ethical issues in the company’s A.I. systems. “Is there anyone working on regulation protecting Ethical AI researchers, similar to whistleblower protection? Because with the amount of censorship & intimidation that goes on towards people in specific groups, how does anyone trust any real research in this area can take place?” she wrote in a Twitter post on Dec. 1.
This story has been updated to incorporate comments Gebru made to Bloomberg News and the publication of Jeff Dean’s email to Google staff.


fortune--2020-12-03--What leaders can learn from a global pandemic

Good afternoon, readers. I hope you had a wonderful Thanksgiving weekend!
There’s no shortage of COVID news from the past several weeks. For one, Pfizer’s coronavirus vaccine was cleared for use in the U.K. and doses could begin reaching certain Americans in a matter of weeks.
On the flip side, U.S. cases and hospitalizations are absolutely skyrocketing. Wednesday saw America reach the grim milestone of the most COVID deaths, more than 2800, in a single day.
Of course we’ll be delving into all of that in detail. But for once, I’m going to focus on non-depressing news: There at least some corporate leaders out there who are revolutionizing their business strategies for the better in the midst of the COVID pandemic while becoming more attached to their workforces despite not even being in the same offices.
And it’s all thanks to technologies which have become essential such as Slack and Zoom.
“The [tech] CEOs have kind of come together, and we’ve been able to share best practices, learn from each other, get through the pandemic as we’re running our businesses,” said Box CEO Aaron Levie during the Fortune virtual Brainstorm Tech conference on Wednesday, referring to a Slack channel which the Silicon Valley crowd uses to brainstorm ideas about dealing the pandemic.
Those kinds of brainstorms may range from business strategy to how employees are dealing with work from home, as well as the best way forward.
The idea of corporate America crowdsourcing coronavirus ideas with software they were already using is the definition of making the best of a horrible situation. But another comment which stuck out to me was from Jennifer Tejada, the CEO of PagerDuty.
“We acquired a company [during this period], and I think that transaction went through faster than it normally would have,” she said.
Read on for the day’s news, and see you next week.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Roche advances the science of COVID testing. Roche made major waves in the COVID testing space with a Food and Drug Administration (FDA) authorization for a more accurate kind of coronavirus diagnostic. This isn't an active infection test; rather, it's an antibody test. But it's more effective from the dozens of other tests in an important regard: It can deliver results in 18 minutes and sniff out antibodies accurately 99.98% of the time, according to the company. (FierceBiotech)
INDICATIONS
The vaccine race rockets forward. To say it's been a huge few weeks for coronavirus drug development would be an understatement. Pfizer and BioNTech applied for authorization, setting up a crucial FDA advisory committee meeting next week; Moderna filed for its own vaccine candidate's authorization this week; the U.K. became the first country in the world to approve Pfizer's vaccine; and a host of other countries like China have given other coronavirus shots the green light. Initial distribution of the Pfizer vaccine could begin as soon as mid-December (perhaps not for many readers, but more on that below). (Fortune)
Johnson & Johnson moves along with a gene therapy for blindness. Drug giant Johnson & Johnson has struck a deal with biotech Hemera Biosciences for the company's experimental gene therapy to reverse wet AMD, a type of vision loss associated with aging. If it pans out, the treatment would just be a one-stop infusion in order to protect against worsening vision loss. Drug giants like Roche and Novartis and host of other big names have been wading into the gene therapy field as these treatments offer an actual cure (though usually at an enormous price tag). (BioPharma Dive)
THE BIG PICTURE
What's in an "elective surgery?" With COVID cases skyrocketing across the country and no end in sight, hospitals from California to Ohio to New York are feeling the squeeze on their available hospital beds. That's forced some health systems to yet again pause elective medical procedures as they grasp onto every bed possible. But those procedures aren't something like cosmetic surgery; they can range from cancer biopsies to treatment for a broken limb. All it means is that the patient's condition isn't immediately life-threatening. (Fortune)
Who will get the first COVID vaccines in the U.S. A Centers for Disease Control (CDC) advisory committee, as widely expected, has recommended that health care workers and nursing home residents (including at assisted-living facilities) be the first to receive doses of a COVID vaccine once the FDA authorizes one. There will be a limited number of doses, hence the prioritization on the most vulnerable and essential medical staff, with widespread public availability likely slated for next summer or spring. (NPR)
REQUIRED READING
Fortune's latest Businessperson of the Year, by Alan Murray
How the Slack-Salesforce deal stacks up against other big tech M&As, by Jeff John Roberts
Elon Musk's rocket ride, by Andrew Nusca & Michal Lev-Ram


fortune--2020-12-03--Another first: All three top posts in Kamala Harris’ office will be filled by women

For the first time, the top three positions in the office of the vice president will be held by women—and all serving under the first woman to hold the office.
Vice President-elect Kamala Harris announced her top aides on Thursday, including Tina Flournoy as chief of staff, in addition to naming her domestic policy adviser and national security adviser.
“Together with the rest of my team, today’s appointees will work to get this virus under control, open our economy responsibly and make sure it lifts up all Americans, and restore and advance our country’s leadership around the world,” Harris said in a statement.
President-elect Joe Biden and Harris have made a point of making historic appointments to staff jobs and cabinet positions, pledging to build a team “that looks like America.” It stands in contrast to the cabinet and staff for President Donald Trump and Vice President Mike Pence, which is largely White.
Biden has chosen Janet Yellen, who would be the first female Treasury secretary, and a diverse group for national security and economic jobs as well as White House staff. Earlier this week, Biden announced his senior communications team, all of whom are women, including two—Ashley Etienne and Symone Sanders—assigned to Harris.
Nevertheless, Biden is already facing some criticism for not choosing enough African Americans or Latinos for key jobs, as he continues to build out his cabinet. Representative Jim Clyburn, the highest-ranking Black member of Congress and who is credited with turning the primary campaign in Biden’s favor, has expressed concern about the number of Black appointees.
Harris is expected to continue to build out her roster of aides. Flournoy is former President Bill Clinton’s chief of staff. She had also worked as assistant to the president for public policy at the American Federation of Teachers. Flournoy served various roles in the Clinton administration, beginning with his 1992 campaign. The last woman to hold the position of chief of staff to the vice president was Ann Whitman under Vice President Nelson Rockefeller beginning in 1974.
Rohini Kosoglu will serve as domestic policy adviser to the vice president. Kosoglu currently is a senior adviser to Harris. She was the first South Asian-American woman to serve as chief of staff in the U.S. Senate, having worked for Harris’s Senate office as well for her primary presidential campaign.
Nancy McEldowney, the former U.S. ambassador to Bulgaria, will serve as Harris’s national security adviser. McEldowney was director of European affairs on the National Security Council staff in the Clinton administration as well as the principal deputy assistant secretary of State in the Bureau of European and Eurasian Affairs.


fortune--2020-12-03--The problem with VC-backed founders who say they don’t care about getting rich

This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox.
In the legend, Robin Hood is a beloved outlaw stealing from the rich to give to the poor.
Now the company named after the folktale—the decacorn stock trading app Robinhood—is at the center of an identity crisis as critics accuse the company of giving up their populist roots in favor of hyper-growth. While its founders may not have sought to become wealthy, they are still likely to become billionaires if Robinhood goes public, and the company’s investors are likely to be significantly enriched by a deal expected to be announced in coming months.
Robinhood’s rise and struggles in recent months are the topic of my colleague Jeff John Roberts’ most recent magazine feature, detailing the founders’ motivations and the inherent issues with them as a company scales up into a business worth $11.7 billion:
“Those who knew Tenev and Bhatt at Stanford say the pair were more bookish than boorish. Tenev says personal wealth has never been their primary motivation—notwithstanding that they will likely become billionaires if Robinhood goes public. “We both wanted to be physics or math professors,” says Tenev. “You don’t do that because you want money.” (Bhatt was on paternity leave and unavailable for interviews during the reporting of this story.) When they launched Robinhood, the duo said they were inspired by the ideals of Occupy Wall Street; their corporate namesake, of course, is a folk hero who stole from the rich.
Still, like many of their tech-startup forebears, the founders have been criticized for forsaking populist principles in the pursuit of hyper-growth. For Robinhood, that criticism has revolved around both its gamified, casino-like design and its business model. And in the arena of options trading, the combination of those factors has put the startup on the defensive.”
Herein lies the issue for startups that say they are driven by a mission rather than money. Yes, it is possible that such founders want to make the world a better place, but they also must deliver real financial results to their venture capital backers. Hyper-growth is, after all, the name of the game.
Robinhood’s influence is hard to deny. While the company hasn’t become a verb akin to Google, its name has made its way into financial vernacular. Nothing has made that more apparent than the pandemic, when Robinhood helped fuel strange moves in the market. Remember how shares of bankrupt car rental company Hertz and equally bankrupt department store J.C. Penney soared over the summer? I can’t help but wonder to what extent Robinhood’s name has become a proxy for this new class of retail traders as a whole. In short? Read the full story here.
BLING RINGS UP A NEW FUND: Bling Capital, an early-stage venture fund founded by former Khosla Ventures General Partner Ben Ling, has raised $110 million across two funds, $77 million for its second seed fund and $36 million for a fund to make follow-on checks. Ling, who has invested in Palantir and Lyft personally and made bets on fintech Vise and at-home fitness company Tempo through Bling, plans to keep check sizes steady at $400,000 to a million per company through its second seed fund.
Ling told Term Sheet he will stick with his wheelhouse of subscription-based businesses and mobile marketplaces. And as vaccine news stirs hopes of a return back to normal, Ling says he sees an opportunity for “a new generation of companies” to serve what will be “younger, more tech-savvy” small businesses that will spring up as others shut down in the pandemic.
The investor is also considering leaving San Francisco for either Texas or Florida, largely due to tax reasons. Ling says that the city has become increasingly unsafe; his brother has been attacked on the city’s streets, he says, and one of his portfolio CEOs was robbed. “I have no issue with paying taxes,” says Ling, “but in S.F. these days you aren’t getting the quality of life associated with those taxes.” In his dissatisfaction with the city, he wouldn’t be alone.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
Clarification: This post has been updated to reflect additional details about why Bling is considering leaving San Francisco.
VENTURE DEALS
- Everlywell, an Austin-based digital health company with a Covid test, raised $175 million in Series D funding. Investors included BlackRock, The Chernin Group, Foresite Capital, Greenspring Associates, Lux Capital, Morningside Ventures, and Portfolia, as well as existing investors Goodwater Capital, Highland Capital Partners, and Next Coast Ventures.
- Amount , a Chicago-based provider of digital banking services to financial institutions,raised $81 million in Series C funding. Goldman Sachs Growth led the round and was joined by investors including August Capital, Invus Opportunities and Hanaco Ventures.
- Monzo, the U.K.-based challenger bank, raised £60 million ($81 million). Investors included Novator, Kaiser, TED Global, and Goodwater. Read more.
- Virta Health, a San Francisco-based type 2 diabetes company, raised $65 million in Series D funding. Sequoia Capital Global Equities led the round.
- Sourcegraph, a San Francisco-based company with a tool for fixing code, raised $50 million in Series C funding. Sequoia Capital led the round.
- HODINKEE, a New York-based content maker focused on watches, raised $40 million in Series B funding. TCG and was joined by investors including including LVMH Luxury Ventures, True Ventures, Future Shape, Tom Brady, GV, and John Mayer.
- ultimate.ai, a Helsinki and Berlin-based company building a virtual customer service agent, raised $20 million in Series A funding. OMERS Ventures led the round and was joined by investors including Felicis Ventures, HV Capital, and Maki.vc.
- Shop-Ware, a San Francisco-based aftermarket shop management software maker, raised $15 million in Series A funding. Insight Partners led the round.
- Fylamynt, a San Francisco-based maker of cloud automation software, raised $6.5 million in seed funding. Gradient Ventures led the round Mango Capital and Point72 Ventures.
- AgentSync, a Denver-based maker of infrastructure for insurance compnies, raised $6.7 million in seed extension funding. Craft Ventures led the round and was joined by investors including Operator Collective.
- Supergreat, a New York-based app for beauty enthusiasts, raised $6.5 million in Series A funding. Benchmark led the round and was joined by investors including TQ Ventures led the round and was joined by investors including Scooter Braun, Schuster Tanger and Andrew Marks, Michael Kives’ K5 Global, Shrug Capital, Thrive Capital, Hannah Bronfman and Rent the Runway co-founder Jenny Fleiss.
- Welcome, a New York-based HR software maker, raised $6 million in seed funding. FirstMark Capital led the round and was joined by investors including Ludlow Ventures, Nat Turner, Zach Weinberg, Keenan Rice, and Ben Porterfield.
- Planned, a Canadian-based provider of a software for event planner, raised $4.7 million in venture funding. Investors included Inovia Capital, Telegraph Hill Capital, and N49P.
- Orbit, a San Francisco-based platform for developers, raised $4 million in seed funding. Andreessen Horowitz led the round and was joined by investors including Heavybit and Harrison Metal.
- Minerva Knows, a New York-based company making a way to share instructions, raised $4 million in funding. Craft Ventures led the round and was joined by investors including GGV Capital, Max Ventures, Charge Ventures, Sagehill Capital, Bayes Ventures, New York Venture Partners, and CapitalX.
- Soil Connect, a New York-based company focused on the soil and aggregates industry, raised $3.3 million in seed funding. TIA Ventures and Heartland Ventures led the round and were joined by CEMEX Ventures, Great Oaks Venture Capital, Situs Real Estate, Altmark Group, AB Investment Group, J.G. Pertucci Company and Bazella Contracting.
- Sketchy, a Los Angeles-based online education company, raised $3 million in additional funding from Reach Capital.
- Okay, a San Francisco-based dashboard for engineers, raised $2.2 million in seed funding. Sequoia Capital led the round.
- Segmed, a Stanford, Calif.-based way for curating medical data by anonymizing, standardizing and labeling, raised $2 million. Blumberg Capital led the round and was joined by investors including Nina Capital.
- Dorm, a London-based education platform for influencers, entrepreneurs and creators, raised $1 million in funding. Investors included Plug & Play Ventures, Playfair Capital, and RLC Ventures.
PRIVATE EQUITY
- GardaWorld raised its takeover offer for G4S, a London-based securities services company, to 3.7 billion pounds (US$4.9 billion), per Reuters. Read more.
- Stark International Lux, backed by Charterhouse Capital Partners, plans to acquire BTG Specialty Pharmaceuticals, a Pennsylvania-based pharmaceuticals company, for $800 million from Boston Scientific Corporation.
- BBH Capital Partners recapitalized Chime Solutions, a Morrow, Ga.-based customer service firm, with $30 million.
- Insight Partners invested in CommerceHub, an Albany, N.Y.-based provider of ecommerce solutions. Existing investors GTCR and Sycamore Partners will continue as investors in the company. Financial terms weren't disclosed.
- Heartland Home Services, a portfolio company of North Branch Capital, acquired Action Plumbing and AC Engineers. Action, based in Sun Prairie, Wis., provides residential plumbing. AC, based in Shelby Township, Mich., focuses on heating and cooling. Financial terms weren't disclosed.
- NuWave Solutions, backed by AE Industrial Partners, acquired BigBear, a provider of cloud-based big data analytics solutions to the national security community within the U.S. Government. financial terms weren't disclosed.
- Riverside Partners backed the merger of Convergence Networks and Grade A, providers of IT services. Financial terms weren't disclosed.
EXITS
- Lightspeed POS acquired Upserve, a Rhode Island-based restaurant management software company, for $430 million from Vista Equity Partners. Financial terms weren't disclosed.
- FedEx Corp. (NYSE: FDX) agreed to acquire ShopRunner, a Chicago-based e-commerce marketplace backed by August Capital. Financial terms weren't disclosed.
- Mar’s KIND agreed to acquire Nature’s Bakery, a Carson City, N.V.-based family-owned maker of soft baked foods. VMG Partners backs Nature’s. Financial terms weren't disclosed.
- Novacap and Investissement Québec acquired Logibec, a Montreal-based healthcare software company from GI Partners. Financial terms weren't disclosed.
- TCP, backed by Providence Equity Partners, acquired Humanity, an employee scheduling platform backed by Team Builder Ventures. Financial terms weren't disclosed.
OTHER
- Macquarie Group agreed to acquire Waddell & Reed Financial, a U.S.-based investment management firm, for $1.7 billion in cash.
- Roblox acquired Imbellus, a developer of edtech and simulation-based testing company. Investors of Imbellus have included Owl Ventures, Upfront Ventures, and Thrive Capital.
- Merck & Co. sold its stake in Moderna (Nasdaq: MRNA), the biotech company with a Covid vaccine. Financial terms weren't disclosed.
- XPO Logistics, a Greenwich, Conn.-based logistics company, plans to split into two public companies, spinning off its spin off its global contract logistics business while keeping its trucking and freight brokerage operations. Financial terms weren't disclosed.
- Content Partners acquired the library of FilmDistrict including Olympus Has Fallen, Looper, and Insidious 1&2. Financial terms weren't disclosed.
- Uber is in advanced talks to sell Uber Elevate, its flying taxi unit, to Joby Aviation, per Axios. Read more.
- Amazon is in talks to acquire Wondery, a West Hollywood, Calif.-based podcasting company, valuing it at over $300 million, per the Wall Street Journal. Read more.
- Microsoft plans to acquire Smash.gg, a San Francisco-based esports company backed by Accel and Spark Capital.
SPACS
- Dyal Capital Partners and Owl Rock Capital are in talks to merge with Altimar Acquisition, a SPAC. The combined company would be valued at about $13 billion, per the Wall Street Journal. Read more.
SPAC
- OTV, an Israeli digital health focused venture capital firm, raised $170 million.
PEOPLE
- Newark Venture Partners named Michelle Morris as a venture partner and named Allison Williams to principal.
- OMERS Ventures named CNBC reporter Christina Farr as a partner based out of its Bay Area office.


fortune--2020-12-03--President-elect Joe Biden receives huge post-election favorability boost

President-elect Joe Biden is enjoying a post-election, pre–White House bounce in popularity, according to a new Fortune-SurveyMonkey poll.
The former Vice President currently has a net favorability of +16, more than 2.5 times the +6 favorability rating he had heading into the November election against President Donald Trump. At the time, Trump had a net favorability of -13.
Historically, incoming Presidents tend to receive an approval bounce at the beginning of their first term in office and watch it slowly decline over the next four or eight years, with a quick bounce up or down based on events or actions they take.
Since 2000, the winning presidential candidate has seen his approval rating increase post-election, and every President with the exception of Donald Trump reached the majority level of favorability upon winning. But typically, the numbers only grow by a few points; the growth is tempered. Biden’s increase is atypical.
Numbers aren’t always as high leading into an election either. In November of 2016, Democratic presidential candidate Hillary Clinton was net -12.6, and Trump was net -21.
A Gallup poll put Biden’s approval rating at 55%, the highest it has been since February 2019, which was two months before he declared his candidacy for President. Biden’s sudden jump may have been propelled by negative reactions to Trump’s inability to accept the results of the presidential election. The President refuses to concede the election and has taken legal action in a number of states to challenge voting results. Nearly all of those challenges have been unsuccessful in the courts. Many battleground states have begun the process of certifying their election counts.
Biden’s favorability is largely bolstered by women, the Fortune-SurveyMonkey poll found. The President-elect is +28 with women and +0 with men. Favorability fell neatly along party lines with the majority of Democrats approving of the President-elect and the majority of Republicans rating him unfavorably. Independent votes, however, overwhelmingly viewed Biden in a positive light.
While the majority of age groups hovered between 56% and 59% favorability ratings for Biden, just 51% of Generation X, those between the ages of 40 and 55, gave Biden the nod of approval.
Fortune-SurveyMonkey polled 2,247 U.S. adults between Nov. 30 and Dec 1. The margin of error is 3 percentage points.


fortune--2020-12-03--3 lessons tech leaders are learning from the pandemic

During the final day of our virtual Brainstorm Tech conference, we heard from executives from some of the world’s leading tech companies. They spoke on a particularly timely topic affecting a wide range of businesses: the coronavirus pandemic and its long-lasting impact.
Some of the big names featured on Wednesday included Deirdre O’Brien, Apple’s senior vice president of retail and people; Donna Langley, chair of Universal Filmed Entertainment Group; Patrik Frisk, CEO of Under Armour; and Jennifer Tejada, CEO of PagerDuty—all of whom gave Brainstorm Tech attendees an inside look at how the pandemic changed their strategies ahead. Here’s a look at some of the takeaways:
• While Apple has adapted to working remotely and shifted some of its products online, the company still thinks in-person collaboration and in-store experiences are best. O’Brien suggests there’s something special about walking into an Apple store and taking a seminar, learning about its latest devices, or getting tech help from its Genius Bar. It’s an experience that can’t be replaced.
• It seems that making movies has never been so complicated. Langley said that Universal’s crew of more than 1,000 people working on Jurassic World: Dominion took a total of more than 40,000 COVID-19 tests during production. On top of that, producers changed the way they filmed to avoid crowding too many people in one place. And due to the virus, company released another big-budget movie Trolls World Tour on video and on-demand the same day it hit theaters. Moving ahead, Langley said the company’s latest deal with theater chains to make the movie available for rent 17 days after release will strike a better balance.
• As people have adapted to their new lifestyles, they’re creating habits that could last well beyond the pandemic. That includes how they work out. Under Armour’s Frisk said he’s watched more customers take to running, biking, and other outdoor activities. And Brynn Putnam, CEO of home fitness company Mirror, said her company has benefited from the rise in people opting to work out from home as they avoid crowded gyms. But for fitness companies aiming to capitalize on consumers’ changing habits, one challenge remains: Can they provide a unique product or service personalized for their customers?
And finally, Box CEO Aaron Levie casually mentioned a random tidbit that revealed how Silicon Valley leaders have been navigating the crisis: They’re doing it together. Fortune’s Sy Mukherjee writes, “Evidently, there’s a special Slack channel filled with Silicon Valley types hashing out ideas and picking one another’s brains.”
Seems like this might be useful post-pandemic for a number of different issues. Diversity, I’m looking at you.
Danielle Abril
@DanielleDigest
danielle.abril@fortune.com
NEWSWORTHY
Google under fire for firings. Google has been slapped with a complaint from the National Labor Relations Board, which alleges that the company illegally spied on several workers and then fired two for their activism. The complaint, filed on Wednesday, refers to former Googlers Laurence Berland and Kathryn Spiers, whom Google claims were fired for violating its data security policies. The NLRB says their investigation suggests otherwise.
Wondering about Wandery. Amazon has pulled ahead as the lead potential buyer of podcast startup Wondery, according to The Wall Street Journal. The startup, one of the largest independent podcasters, is said to be valued at more than $300 million. Amazon expanded into podcasting in September, offering 70,000 podcasts on Amazon Music at the time.
Want to stream Shark Week? Fans of Food Network, HGTV, and, yes, Shark Week will soon be able to stream their favorite shows. Discovery plans to debut its streaming service, called Discovery+, on Jan. 4. The service will cost $4.99 per month, the same price as NBCUniversal’s Peacock service. And for $2 extra, customers can watch Discovery+ shows ad-free.
Almost equal pay. Adobe has stepped up to become the first large tech company in the U.S. to offer data on how it pays men and women at its company. And the results were somewhat promising. Adobe said female workers earn 99% as much as males doing the same job. Almost there, Adobe. Almost.
New rules against hate. Twitter has expanded its hateful conduct policy to prohibit any language that dehumanizes people based on race, ethnicity, or national origin. Any tweets that violate the policy will be removed from Twitter and repeated offenses could lead to temporary suspension, the company said on Wednesday. The change follows a March policy update prohibiting posts that dehumanize people based on age, disability, or disease. Facebook already has similar policies.
FOOD FOR THOUGHT
Researchers from institutions including Harvard and MIT have published a new study in the IEEE Open Journal of Engineering in Medicine and Biology that suggests mobile health technologies may help health professionals monitor coronavirus patients and predict worsening symptoms. They say that combining electronic devices that help patients report their condition, wearable sensors, and digital contact-tracing technology could create a "holistic" solution to tracking and treating patients who contract the virus.
“When combined with diagnostic and immune status testing, [mobile health] technology could be a valuable tool to help mitigate, if not prevent, the next surge of COVID-19 cases. Specifically, [mobile health] technology could provide the means to estimate the probability of infection and prioritize diagnostic testing in individuals whose data suggests a moderate to high probability of infection,” the study reads.
IN CASE YOU MISSED IT
Silicon Valley investing legend Ron Conway on the lessons learned from Napster By Aric Jenkins
How the Slack/Salesforce deal stacks up to history’s other Big Tech acquisitions By Jeff John Roberts
Hyperloop wants to connect people to opportunity, but city leaders are asking who benefits the most By Nicole Goodkind
Japanese ecommerce giant Rakuten has a plan to conquer the telecom industryBy Jeff John Roberts
The number of Black female founders who have raised more than $1 million has nearly tripled since 2018 By Emma Hinchliffe
WhatsApp is on its way to becoming the world’s next super-app By David Z. Morris and Robert Hackett
Did Salesforce just jumpstart a productivity dealmaking bonanza? By Lucinda Shen
BEFORE YOU GO
It’s a big week for fans of the late Tejano star and cultural icon Selena. On Friday, Netflix will release the long-awaited series Selena: The Series, starring Christian Serratos of The Walking Dead.
I recently saw an interview with Serratos in which she explained that the series offered producers more time to explore Selena’s life. So viewers may see some new details on screen that weren’t showcased in the 1997 biographical film starring Jennifer Lopez.
The role is no short order. Serratos’ performance could earn her widespread praise or massive criticism from loyal Selena fans—fingers crossed that Serratos does Selena justice.


fortune--2020-12-03--Are female founders being unfairly targeted?

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! The number of Black women to raise $1 million nearly tripled, New Zealand declares a climate emergency, and we ask whether female founders are being treated fairly. Have a productive Thursday.
Today’s guest essay comes to us from Fortune senior writer Maria Aspan:
-Female founders under fire. The Wing. Away. Outdoor Voices. Reformation. Refinery29.
In the past 18 months, one high-profile female startup founder after another has stepped back from or been forced out of her company. These departures have been messy, surrounded by employee complaints and press coverage about each woman’s management style or her company’s internal culture, as you know if you’ve been reading the Broadsheet. And they’ve provided mounting evidence to many entrepreneurs, investors, and Silicon Valley executives that female founders are held to an impossibly high standard, as I report in a new feature for Fortune’s latest issue:
“There are very few women leaders who rise to the level where they get press and attention, and at some point, they’re all disappearing,” says Sara Mauskopf, the cofounder and CEO of Winnie, a San Francisco-based childcare platform that has raised $15.5 million. Throw in a slew of other female founders who remain atop their companies but who have faced pointed scrutiny of their management styles and cultures—including the CEOs of beauty startup Glossier, retailer Rent the Runway, dating app Bumble, and lingerie company ThirdLove—and it’s hard not to wonder, as Mauskopf does: “What the heck is going on? And why is this only happening to women?”
So are these women leaders really being unfairly targeted—by the employees who believe in their company missions, by the reporters who cover them, and by the venture capitalists who barely invest in them? Most (although not all!) of the 25 founders, investors, executives, and startup employees I interviewed for this story agreed that yes, it is massively more difficult to be a female founder.
But it’s also more complicated than that. The very few women who do secure venture-capital backing for their startups tend to be privileged white or Asian women building consumer businesses, who often lean into a feminist or socially-driven mission as they personally market their companies. That can publicly tie female founders to their companies’ failings, especially if they promise Black and brown employees an inclusively feminist workplace and then fall short.
There’s also the question of who really has the power to enforce the gendered double standard—and whether the answer is to be more lenient with female founders or to hold men to a higher standard, as I explore more in another story for Fortune today. When a founder comes under fire, her investors and especially her board of directors are the ones who have the ultimate power to protect her, or not. And this year, as female founder after female founder has stepped down amid scrutiny, several male founder-CEOs have survived similar employee complaints and negative press reports.
As Pam Kostka, CEO of All Raise, told me: “Boards do have an accountability and a responsibility here. There’s just a different standard. When something does happen, it seems like they will allow more evidence and more time for a man.”
Venture capitalist Charlie O’Donnell, an early investor in The Wing, agrees that startup boards aren’t generally serving their female founders well. As he puts it: When a leadership problem is far enough along that “it gets to, ‘Should the board save this CEO?’—well, where was the board in helping to prepare the CEO?’
Read the full story here.
Maria Aspan
maria.aspan@fortune.com
@mariaaspan
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Funding Black women. Speaking of female founders, the organization digitalundivided is out with its biennial report on the state of Black and Latinx women-run startups. First, the good news: the number of Black women to raise $1 million nearly tripled since 2018. But Black and Latinx women still take in only 0.64% of venture capital. Fortune
- BPOY. Plus, Fortune's Businessperson of the Year list is out. While the top spot went to controversial pick Elon Musk, other leaders on the list of 20 include AMD's Lisa Su, Fortescue Metals Group CEO Elizabeth Gaines, and Nasdaq's Adena Friedman. Fortune
- Genius takeaways. Apple retail and HR SVP Deirdre O'Brien joined the Fortune Brainstorm Tech conference yesterday, where she talked about remote collaboration and the pandemic-era in-store Apple experience. Fortune
- Calling for change. Can an interim police chief deliver change in Louisville, Kentucky, where police killed Breonna Taylor? Yvette Gentry stepped into the job in October, and she's better prepared for the difficult task than nearly anyone. New York Times
MOVERS AND SHAKERS: Discover Financial Services EVP and president of U.S. cards Julie Loeger will join eBay as global chief growth officer. Former Citigroup exec Rebecca Macieira-Kaufmann joins European fintech company Revolut's U.S. board of directors. Alchemy 43 hired former Stitch Fix global head of styling field Kimberly Joerger as COO; Kindbody founder Gina Bartasi joins its board of directors. Silicon Valley Bank hired Bank of America SVP of workforce strategy and development Angela Morris Lovelace as chief diversity, equity, and inclusion officer. Mind Cure promoted COO Kelsey Ramsden to CEO and president.
IN CASE YOU MISSED IT
- State of emergency. New Zealand this week declared an official climate emergency. Prime Minister Jacinda Ardern says that the symbolic measure shows the country's "intent as a nation" and “acts as a catalyst for change." Bloomberg
- Network effects. Accenture CEO Julie Sweet joined the Fortune Brainstorm Tech conference on Monday, where she discussed how the pandemic has affected the personal and professional networks—so crucial to career advancement—of employees of color. "Those networks, smaller and more fragile before COVID, have been really challenged in a world where things are remote and it's harder to connect," she said. Fortune
- Libertarians for leave. How did Colorado pass paid family leave legislation? The proposal became wildly popular, even garnering the support of libertarians in the state. Slate
ON MY RADAR
Women's movement sweeps Latin America to loosen abortion restrictions Reuters
Taylor Swift debuts her first re-recorded song Vanity Fair
In rebrand, the Women's Tennis Association highlights the 'driving force' in athletes' lives Adweek
PARTING WORDS
"I want to show people that you can do positive things, but you can also be yourself."
-Cardi B, who was named Billboard's Woman of the Year