fortune--2020-02-07--Closed attractions, shut restaurants, and a ‘ban’ on hugs: How Disney parks are dealing with the cor

Closed attractions, shut restaurants, and a ‘ban’ on hugs: How Disney parks are dealing with the coronavirus

Mickey Mouse’s gloves apparently aren’t enough to keep the cartoon critter safe from coronavirus.
At the Tokyo Disneyland, guests have reportedly been advised that, due to the ongoing spread of a novel coronavirus, hugging is no longer allowed when it comes to the princes, princesses, villains and cartoon characters—Disney’s “cast members”—that flit across the park.
“Tokyo Disney Resort requests the cooperation of all our Guests in helping to prevent contagion and stop the spread of the new coronavirus,” the resort’s website says, advising guests to wash their hands after using the restroom and to inform members of staff if they feel unwell.
While Japan’s Disneyland continues to operate, parks in Hong Kong and Shanghai have been shut down completely. During an earnings call Tuesday, Disney said it anticipates the outbreak of the novel coronavirus will cost the company $175 million in the second fiscal quarter, which ends in March.
“The current closure is taking place during the quarter in which we typically see strong attendance and occupancy levels due to the timing of the Chinese New Year holiday. The precise magnitude of the financial impact is highly dependent on the duration of the closures and how quickly we can resume normal operations,” Disney chief financial officer Christine McCarthy said.
A jogger wearing a protective mask runs outside Walt Disney Co.’s Disneyland Resort in Hong Kong. Disney shut the park amid the coronavirus outbreak. Paul Yeung—Bloomberg/Getty Images
Disney’s parks business is especially vulnerable to the economic toll of the coronavirus. The disease, traced to the Chinese city of Wuhan, is known to be transmissible between humans, and authorities have warned citizens to avoid large gatherings in order to help prevent the virus’s spread.
Overall, Disney saw revenue from its parks, experiences and products segment grow 8% to $7.4 billion during the first quarter, which the California company attributed increased merchandising and higher spending at its domestic resorts.
Disney’s parks in the U.S. remain open as normal. Roughly 1 in 5 visitors to those attractions come from international markets, McCarthy said.
‘Precautionary’ shut downs
The Shanghai theme park, which was opened in 2016 at a cost of $5.5 billion, was closed on January 25. The older Hong Kong resort, which opened in 2005, shut its gates on January 26—the day after the local government declared the viral outbreak an emergency. Both parks anticipate being closed for up to two months but haven’t set a definite time for reopening.
“As a precautionary measure in line with prevention efforts taking place across Hong Kong, we are temporarily closing Hong Kong Disneyland park from today out of consideration for the health and safety of our guests and cast members,” the resort management said in a statement.
A security guard checks a empty square usually filled with visitors at Hong Kong Disneyland in Hong Kong on January 26, 2020, after the park announced it was shutting its doors until further notice over a deadly virus outbreak in central China. AYAKA MCGILL—AFP/Getty Images
However, according to a social media post from a man claiming to work at the resort, some “cast members” were still required to travel to the resort for rehearsals and training. The resort’s hotels continue to operate, however all but two of the restaurants inside were closed on February 1. A spokesperson for Disney told Fortune that the company is providing staff with masks and necessary protective tools during the outbreak.
Hard times in Hong Kong
The Disneyland in Hong Kong is the smallest of Disney’s six “castle lands” and one of its weakest performers. The resort, which is 53% owned by the local government, was opened in 2005 and turned a profit for the first time in 2012. Three years later, however, the park was in the red again and has reported a loss every year since.
The recent losses are in part attributable to the $1.4 billion investment the park operators made in 2016 to expand the location—opening new attractions and zones based around Marvel heroes and the Disney film Frozen.
The investment, backed by the government, cost Hong Kong tax payers $750 million and fuelled resentment towards the lossmaking park, which occupies prime real estate in a city long-suffering from a housing crisis.
Early last month, housing secretary Frank Chan urged Disney to consider rezoning land allocated for a park expansion to be used for housing instead. The 148 acres of land in question have been owned by Disney since 2000 but have yet to be utilized. Chan said he hoped Disney would “consider its social responsibility.”
Some members of government maintain that the protests that raged across Hong Kong last year were caused by a lack of affordable housing. Although the protests—which have temporarily subsided during the coronavirus epidemic— weren’t directed against Disney, the unrest exacerbated the park’s losses.
Last November, McCarthy reported the Hong Kong park suffered a $55 million decline in operating income during the final fiscal quarter of 2019 and predicted an $80 million decline the next quarter as well as a total decline of $275 million for the park throughout fiscal 2020.
Now with the coronavirus prompting a complete shutdown, the park’s dreams of returning to profit seem a long way from coming true.
Correction: This article was updated February 11 to reflect that Disney anticipates resorts in Shanghai and Hong Kong could be closed for up to two months rather than for at least two months as previously reported.
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fortune--2020-02-07--New coronavirus cases make Princess cruise ship the largest infection center outside China

All eyes are on the U.S. jobs report—plus these other factors moving the markets

Japan confirmed 41 more cases of the new coronavirus aboard a quarantined cruise ship, and denied entry to another vessel as it sought to control the spread of the deadly infection, with thousands now stranded on stricken luxury liners.
The results bring to 61 the tally of infections among 273 passengers and crew so far tested aboard the Diamond Princess, which is being kept in isolation at the port of Yokohama and is the biggest center of infection of any place outside of China.
Japan’s Ministry of Defense said Thursday it would send Self-Defense Forces medical personnel to help out with treatment on the ship, and bring alongside a commercial passenger vessel to act as a temporary base. Health Minister Katsunobu Kato said he was considering testing other elderly and vulnerable people among the roughly 3,700 people aboard.
Foreign Minister Toshimitsu Motegi said one of those infected on the ship was now confirmed to be in serious condition, while Twitter users who said they were aboard the vessel expressed increasing concern. China’s mainland has been the hardest hit with infections climbing to more than 31,000 while the death toll was at 636 people.
The developments have delivered a fresh blow for Diamond Princess owner, Carnival Corp., and other cruise companies which are being forced to cancel trips heading into the peak booking season for vacations at sea. Japan is also anxious to avoid any damage to its image as an increasingly popular tourist destination as it prepares to host the Summer Olympics this year in Tokyo.
Japan has banned a separate cruise ship — the Westerdam — from berthing at a port in the country, saying a person on the vessel was suspected to have contracted the virus.
Cruise operator Holland America, part of Carnival Corp., said earlier there were no known cases of the novel coronavirus aboard the Westerdam and the ship was not in quarantine. The vessel is currently off Ishigaki — one of Japan’s most southerly islands — and Holland America said it was trying to make alternative plans for its passengers.
A third cruise liner, carrying about 3,600 passengers and crew, is also being held off Hong Kong after three people who had previously traveled on it were diagnosed with the new virus.
Health Minister Kato said the World Health Organization would not count the 61 cruise ship passengers and crew as being infected in Japan. Twenty-five people in Japan have been confirmed as having been infected with the disease, most of them having spent time in Wuhan, China, the epicenter of the outbreak.
Nevertheless, the growing number of cases has raised questions about Japan’s capacity to cope with the outbreak. The 41 newly diagnosed cruise ship passengers are set to be transported to hospitals in Tokyo and surrounding areas, Kato said.
Meanwhile, emotions are running increasingly high on board all three stranded vessels.
“This was supposed to be a big bucket list trip for my wife and I that has now turned into a logistical nightmare and potentially put our health at risk,” Stephen Hansen, a retiree from Vancouver who said he was aboard the Westerdam, wrote in an e-mail.
“Our biggest concern is what will happen once we are accepted into some port—probably Guam. We are Canadian citizens so don’t know what our status will be. Will we be quarantined? Will we be deported? Who knows?”
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fortune--2020-02-07--Buttigieg holds thin lead in Iowa with 100% of precincts tallied

Pete Buttigieg holds a razor-thin lead over Bernie Sanders in the Iowa caucus with 100% of precincts reporting.
Buttigieg had 26.2% of state delegate equivalents to Sanders’ 26.1%, according to official results. Elizabeth Warren had 18%, Joe Biden had 15.8% and Amy Klobuchar had 12.3%. Other candidates were far behind.
The Associated Press, whose race calls are considered official, said Thursday it would not declare a winner in the Iowa caucus because of the tight margin and the irregularities in the caucus process. The final count was delayed for three days because of problems with a smartphone app that precincts used to report results and because of phone lines jammed by supporters of President Donald Trump and a large volume of calls due to the app’s failure.
Both Buttigieg and Sanders have declared victory in Iowa, based on different yardsticks. Buttigieg leads in state delegate equivalents, which the party will use to determine delegates to the Democratic National Convention.
Iowa awards 41 pledged delegates to the convention, a little more than 1% of the total. But it has held outsized influence because it’s the first opportunity for voters to have their say in the 2020 election cycle.
But Sanders is leading in the popular vote. In the first round of caucusing on Monday night, Sanders led by more than 6,000 votes. In the second round, that lead shrunk to about 2,600 votes.
Delegates can differ from popular votes because of rounding, coin flips, and a process that weights some precincts more than others based on how many Democrats have voted in previous elections.
Buttigieg said he’s happy with the result no matter how the final delegates are allocated.
“I’ll leave it to the party to get into that but you know what I’ll say is nothing can take away what happened on Monday,” he told CNN. “It’s an extraordinary moment for the movement that we have built and now we’re looking ahead to New Hampshire and beyond.”
New Hampshire holds a primary on Feb. 11.
Democratic National Committee Chairman Tom Perez has asked the state party to retabulate the results, citing the problems that caused the three-day delay.
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fortune--2020-02-07--Uber promises ‘profit’ milestone this year. Here’s its plan

Uber has big plans for the end of 2020: It hopes to finally become profitable. Kind of.
The ride-hailing service announced plans to cut spending and improve profit margins in its taxi and food delivery businesses. As a result, executives expect the company to be profitable, excluding a number major expenses, a year earlier than its previous goal.
This comes from a company that, using conventional accounting, lost $1.1 billion during the fourth quarter, a jump from the $887 million it had lost during the same period a year earlier. For the entire year, by that same measure, it lost an astounding $8.5 billion.
“I think 2019 was a big, big year for us,” Khosrowshahi said during Thursday’s earnings call, mostly ignoring conventional accounting. “We know we have a lot to deliver on and the team is confident and psyched to execute.”
Uber expects to meet its shortened deadline by improving its algorithms for driver and rider incentives as well as for spending on online marketing. It also plans to do a better job of matching drivers and passengers to be more efficient with routing.
Additionally, the company wants to get better at “controlling costs” including continuing to exit the most unprofitable markets for Eats, its food delivery business. It also hopes to emphasize services with higher profit margins like Uber Comfort, which provides riders with more legroom, and its corporate-focused ride offering.
It’s unclear how the push to pseudo-profitability will affect Uber’s businesses like bikes and scooters, which are considered money losers. And Nelson Chai, the chief financial officer, gave no sign that Uber plans to cut costs in its autonomous vehicle unit, which he said had raised capital last summer and has enough money for the short term.
“They can stop discounting and stop investing in a lot of things tomorrow and force profitability pretty quickly,” said Tom White, analyst with D.A. Davidson. “The question is whether or not it’s good for their long-term trajectory to force profitability at the end of this year.”
Regardless, the news about a plan to achieve profitability on an adjusted basis, coupled with quarterly revenue that beat analyst expectations (the company had $4.07 billion quarterly sales versus the predicted $4.06 billion) helped to send Uber’s stock up at least 6% on Thursday in after-hours trading. At one point, the stock traded at $40.66 per share, though still shy of the $45 pricing for the company’s initial public offering.
“Rome was not built in a day and neither will the Uber growth story,” Dan Ives, analyst at Wedbush Securities, wrote in a note to investors following earnings. “We view these results and the company’s guidance … as key swing factors in now finally moving shares higher.”
While White, from D.A. Davidson, expects to see Khosrowshahi clamp down on spending and focus on efficiency, he doesn’t expect Uber to cut many jobs. Last year, the company laid off more than 1,000 people as part of an effort to reorganize and reduce overlapping functions, as well as to shrink costs.
“My gut, barring any country exits, is they’re probably not going to have any big rounds of layoffs,” White said. “With the employee layoffs last year, they’ll get annualized cost savings from that.”
While investors reacted positively to Thursday’s earnings, Uber’s losses continue to widen. White says that eventually Wall Street will care about true profitability, but for now improvements in adjusted profits and free cash flow are positive signs about Uber’s future.
“You have to walk before you can run,” White said.
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fortune--2020-02-07--Citadel’s Ken Griffin thinks the trade war with China will cost America its tech crown

Ken Griffin is worried.
Even if the U.S. and China signal that they are willing to resolve the trade war, the strained relationship that has resulted from the back-and-forth could cost America its global tech crown, warned Citadel CEO Ken Griffin during an event hosted by the Economic Club of New York Thursday.
“I think that is going to be the greatest cost of this trade war,” he says. “We are now going to see a bifurcated stack—the United States and our allies having one set of technology solutions and China and its allies having a second.”
The talk comes after China and the U.S. signed “Phase 1” of a trade deal mid-January, paving the way for a resolution after a year-and-a-half-long trade war between the world’s two largest economies. On Thursday, China cut $75 billion in tariffs on U.S. imports in an effort to reciprocate cuts announced by the Trump administration.
Over the course of the trade war, Griffin, who was recently in that country, says China has changed its way of looking at the U.S. and the relationship is now a more adversarial one. He notes that aggressive moves from U.S. against Chinese tech companies including telecom equipment provider Huawei, have compounded a sense in the world’s second largest economy that U.S. technology cannot be depended upon.
In particular, the U.S. has raised the alarm on several Chinese tech companies, blacklisting Huawei in May over concerns that its products could be exploited by the Chinese government to spy on Americans.
China held ambitious goals of becoming more technologically self-reliant for a while now. And the recent trade war deals don’t appear to have dampened those goals: the Chinese government laid out plans to continue lowering dependence on foreign goods last month, saying the nation aims to boost reliance on domestic key components—such as chips and controlling systems—to 75% by 2025, per the South China Morning Post.
On Thursday, Griffin painted a picture of a grim future in which commercial technology could take on restrictions not unlike those currently faced by the aerospace and defense sector.
“Compounding the problem: Where are some of the most advanced chips made today? They are made in Taiwan,” he says. “If Taiwan has to pick a country in which orbit they will be in economically, we know where that is going to fall.” He pointed to South Korea as a major technology hardware maker that may also be forced to choose sides.
And even as the U.S. seeks to ban Huawei products, “traditional allies” in Europe have not followed its those footsteps, with the U.K. allowing Huawei a limited role in the country’s 5G network—a sign of shifting world powers, he says.
Through all this, America may be resting on its laurels, says Griffin.
“The frustration I have in Washington D.C. is this sense of American supremacy in this realm,” he added. “‘The Chinese will never catch us’—I think this is a completely false sense of security…We’ve taken a real setback in the ability of the United States to continue to maintain its really unparalleled position as the world’s provider of technology.”
“Phase 1” of the trade deal signed in January aimed at a broad set of issues from agriculture to manufacturing. Among other things, China agreed provide stronger legal protection for intellectual property (something the tech sector did ask for), and also agreed to increase purchases of American goods and services by $200 billion over the next two years. But it did little to address the issues at the heart of the tech battle between China and the U.S.—which include concerns about cyber espionage by state-sponsored tech companies as well as the race for dominance in 5G.
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fortune--2020-02-07--The Trump Administration is blaming Boeing for the hit to GDP, but the math doesn’t add up

The economy is sagging. Treasury Secretary Steven Mnuchin admitted to it in an interview with Fox Business.
“I think our projections have been reduced, because of Boeing and other impacts [like the coronavirus outbreak], so it will be lower,” Mnuchin said. “We would have hit 3%.”
Blaming Boeing and its 737 Max woes for some reduction of GDP growth isn’t unreasonable. But the loss is small compared to the size of the entire economy and 3% annual GDP growth was never close to being in the cards.
Boeing’s 2019 revenue was down $24.6 billion from the prior year. Some business segments were up but the biggest one—the commercial airplanes division that is responsible for the Max—saw a year-over-year drop of $25.2 billion.
The current estimate of 2019 GDP is $21.4 trillion. In that context, Boeing’s $25.2 billion annual shortfall represents about 0.1%.
If the economy was running at a 3% growth rate, that could technically be enough for Boeing to push things over the edge. But it hadn’t been. The Bureau of Economic Analysis shows that annual GDP growth was 2.4% in 2017, a relatively blistering 2.9% in 2018, and a humbler 2.3% last year.
Signs of slowing growth abound, and a 3% number isn’t close to realistic.
“Without the coronavirus and without Boeing, the economy might be able to sustain a 2% pace,” said Gregory Daco, chief US economist for Oxford Economics USA. “Without them, it might fall below 2%—and 3% is a myth.” What drives economies are population increases, productivity growth, and fiscal stimulus.
Back in 2018, when GDP growth was nearly 3%, that came only after the tax changes of 2017, which provided a temporary stimulus. A longer one would have needed the corporate investment in equipment and workers that proponents promised. Instead, most of the money went into share buybacks and other ways to improve stock performance.
“In the current environment with moderate productivity growth, cooling demographics [and heavily reduced immigration], and businesses being cautious about what they invest, the potential of the economy is 2% or slightly under 2%,” Daco said.
In the end, the Trump administration might be lucky to see 2% growth. But by the time the numbers are in to judge how GDP fared in 2020, election season will have come and gone.
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fortune--2020-02-07--How coronavirus panic is making virus containment more difficult

Hyundai recalls over 400,000 cars for issue that could cause engine fires

This is the web version of Brainstorm Health Daily, Fortune’s daily newsletter on the top health care news. To get it delivered daily to your in-box, sign up here.
Happy Friday, readers.
Here’s a lesson in how an outbreak like the coronavirus—and the panic which comes with it—can threaten the broader efforts to contain the pathogen worldwide.
On Friday, World Health Organization (WHO) director-general Dr. Tedros Adhanom Ghebreyesus said that hospitals and other health agencies around the world are facing a shortage of essential protective gear such as masks, gloves, and other medical equipment. Where is it all going? Frightened people are snatching the equipment up in a frenzy to protect themselves.
The concerns and prophylactic measures are understandable, especially in the regions most deeply affected by the 2019-nCoV outbreak, which has now claimed nearly 650 lives and infected more than 31,000 people.
But the downstream effects underscore the importance—and complexities—of balancing personal care versus public responsibility.
“The world is facing a chronic shortage of personnel protective equipment, as you might imagine,” said Ghebreyesus on Friday.
Hoarding medical equipment could be a detriment to health professionals who rely on such products. The big lesson is one most people learn during their early years: sharing is caring. And, in this case, it’s also a lifesaving measure.
Read on for the day’s news, and have a wonderful weekend.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
A massive cancer genomics project encompasses four continents. A massive new study published in the journal Nature brings together scientists from four separate continents, hundreds of affiliations, and the sequencing of 2,658 cancer genomes across multiple tumor types. The Pan-Cancer Analysis of Whole Genomes (PCAWG) Consortium was behind the effort, which uses whole genomes (rather than partial ones) in order to parse out the complexities of cancer, and generate "a wealth of insights into the genetic basis of cancer." I'll let the researchers explain more of the details. (Nature)
THE BIG PICTURE
The benefit of covering mental health costs. There's a strange bifurcation between physical and mental health—one which doesn't make a lot of scientific (or economic sense). Liat Jarkon, director of the Center for Behavioral Health and Assistant Professor of Family Medicine at NYIT College of Osteopathic Medicine, wrote a piece for Fortune that delves into the very real societal and economic benefits of covering mental health in a more comprehensive fashion. "Refusing to cover mental health care during a suicide epidemic is absurd. It's also not economically cost effective: In 2016 alone, treating chronic diseases cost $3.7 trillion in the U.S, according to a Milken Institute report," Jarkon writes. (Fortune)
REQUIRED READING
Coronavirus fears spread to European conferences, by David Meyer
Tesla's growth problems by the numbers, by Shawn Tully
Apple extends store closures in China over coronavirus, by Mark Gurman
Sign up for other Fortune newsletters.


fortune--2020-02-07--Venture capital, long a boy’s club, makes some progress in adding women

The number of venture capital firms with two or more female partners doubled last year to 14%, suggesting a cultural change is under way in one of finance’s most intractable all-boys’ clubs.
Last year 52 women became partners or general partners at VC firms—a record, according to a soon-to-be-published study by All Raise, an advocacy group for women in venture capital and tech. The additions mark a significant shift as more firms add multiple women, helping address concerns of tokenism in an industry that is still overwhelmingly male dominated.
“When firms double down, they are making an investment,” said Pam Kostka, All Raise’s chief executive. “People declare this a done deal and it’s not.”
Since All Raise began tracking the numbers, the percentage of female decision makers in the venture industry has increased from 9% at the end of 2017, to 13% as of this month. The number of firms with zero women as partners is still a majority, however, despite some progress. At the end of 2018, 85% of firms did not have a single female partner. At the end of 2019, that number was 65%.
Several of the industry’s top firms have now added two or more women to their leadership teams. Sequoia Capital, Lightspeed Venture Partners and Andreessen Horowitz all have multiple female partners with the power to write checks and serve on startup boards.
Index Ventures—which has invested in companies including Adyen, Robinhood Markets, and Slack Technologies—will soon join that list. Index is expected to announce the promotion of Nina Achadjian from principal to partner on Friday.
Achadjian, a former Citigroup bond trader who did a two-year stint at Alphabet Google, joined Index as a principal in 2017. She built an investing thesis around enterprise software targeting small- and medium-sized businesses. She’ll join Sarah Cannon, who previously worked at Alphabet’s growth equity fund CapitalG, and who was Index’s first female partner.
Achadjian says while she supports women’s advancement in venture capital, she’s eager to move beyond the gender debate and focus only on performance. “What I really care about is investment returns,” she said.
The venture capital industry has met with both cultural and economic pressure to consider gender diversity. Morgan Stanley recently estimated that venture firms that fail to invest in women and other underrepresented minorities risk losing out on as much as $4 trillion. Meanwhile, more than 1,000 founders signed pledges to reject checks from investors if their teams are all male. Goldman Sachs Group Inc. last month announced it would no longer take companies public without at least one board director from an underrepresented group.
Still, some minority groups remain woefully underrepresented in venture capital and have made few gains in recent years. Of the 52 women who became venture partners in 2019, only one identifies as African American or Latina, according to All Raise. That’s in part due to the anemic entry rates of black and Latino people in the industry—respectively making up just 0.67% and 3.22% of new venture employees between 2010 and 2015.
“Venture capital is still a closed network, very much based on who you know,” said Kostka. “This is not a pipeline problem, this is about breaking people out of their existing circles.”
All Raise collaborated with PitchBook and Crunchbase to collect the data, focusing on venture funds based in the U.S. with $25 million or more assets under management. Corporate, life science and health-care funds were not included in the results.
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fortune--2020-02-07--How this gene therapy drug earned its $2.1 million price tag

Swiss drugmaker Novartis recently launched a lottery-style program to allocate free doses of Zolgensma, its groundbreaking treatment for children with spinal muscular atrophy (SMA), to patients in countries that haven’t approved the drug. But with a $2.1 million price tag, Zolgensma is inaccessible to some patients even where it has been approved.
The prohibitive cost has been a source of criticism since the drug was approved. In a letter to the U.S. Food and Drug Administration’s (FDA) Acting Commissioner last August, five U.S. senators, including presidential hopefuls Elizabeth Warren and Bernie Sanders, accused AveXis, the subsidiary of Novartis responsible for the drug, of falsifying testing data to gain FDA approval in a move that “smacks of the pharmaceuticals industry’s privilege and greed.” Meanwhile, the Boston-based Institute for Clinical and Economic Review, a research group that evaluates drug pricing, claims Novartis could reasonably price Zolgensma in the $310,000 to $900,000 range.
Like most breakthrough drugs, Zolgensma’s price reflects the high cost of its development and the value it delivers—not merely a quest for profits. Discovering and bringing a revolutionary medicine to market takes billions of dollars. Those who call on drug companies to reduce their prices—or the government to do so for them—might not consider that while price controls might make drugs cheaper now, they’d forestall the development of new treatments down the line.
SMA is a rare genetic condition that affects one in every 8,000 to 10,000 people worldwide. People with the most severe form of SMA have difficulty feeding, swallowing, holding up their heads, or breathing. They suffer from frequent respiratory infections and typically die before the age of two. Those with intermediate SMA may survive into childhood or early adulthood but never gain the ability to stand.
Last May, the FDA approved Zolgensma for use in patients under two years old. In a single dose, Zolgensma replaces the function of the defective or missing gene that causes SMA and enables patients to function normally.
Zolgensma’s multimillion-dollar price tag is a reflection of the multibillion-dollar cost of drug development. According to a 2016 study published in the Journal of Health Economics, it takes, on average, $2.6 billion and over a decade to create a single new drug. And a great deal of drug research ends in failure; just 14% of drugs in clinical trials ultimately receive FDA approval, according to a Massachusetts Institute of Technology (MIT) study. Given the high failure rate, manufacturers must rely on a handful of successful—often expensive—drugs to recoup their investments and fund future research.
Treatments like Zolgensma for rare diseases also pose a separate economic challenge: The potential market for these drugs is limited. Generating sufficient return on investment from a small patient pool may require higher prices.
Zolgensma’s price reflects the value it delivers. The only other treatment for SMA, a drug called Spinraza, was approved in 2016. Spinraza treatments cost $625,000 to $750,000 in the first year, and then around $375,000 every year after, likely for the rest of a patient’s life. The single dose of Zolgensma can end up costing half as much as this chronic course of SMA therapy.
The next SMA treatment will likely bring costs down further. Expensive drugs can’t stay expensive forever, if they’re subjected to competition. The FDA found that when a drug had six or more generic competitors, the prices for those generic brands dropped by more than 95%. Encouraging competition is the best way to make drugs more affordable without sacrificing medical progress.
In the meantime, it’s possible to help people pay for expensive drugs without resorting to price controls. Novartis’s CEO has proposed implementing a value-based payment model, wherein patients and insurers only pay full price if the drug works. A 2016 report by MIT and the Dana-Farber Cancer Institute researchers proposed financing expensive drugs with the equivalent of mortgages, which could allow patients to pay for life-saving treatments over long periods of time—and only if they work.
High prices ensure that medical researchers have the capital they need to fund their research, and deliver miracle cures like Zolgensma. Arbitrary caps on those prices would effectively halt medical innovation—and prevent the next Zolgensma from ever being developed.
Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in health care policy at the Pacific Research Institute. She is author of False Premise, False Promise: The Disastrous Reality of Medicare for All. Follow her on Twitter.
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fortune--2020-02-07--Hyundai recalls over 400,000 cars for issue that could cause engine fires

How coronavirus panic is making virus containment more difficult

Hyundai is recalling nearly 430,000 small cars because water can get into the antilock brake computer, cause an electrical short and possibly an engine fire.
The recall is another in a series of problems that the South Korean automaker and its related company Kia have had with engine fires during the past few years. Past problems have triggered an investigation by the U.S. National Highway Traffic Safety Administration.
The latest recall covers certain 2006 through 2011 Elantra and 2007 through 2011 Elantra Touring vehicles.
The company says the electrical short can cause a fire even when the cars are turned off. But Hyundai said Friday that the rate of fires is so low that it’s not necessary to park the cars outside.
Hyundai said in documents filed with the U.S. government that it has three reports of fires and no related injuries.
Dealers will install a relay in the cars’ main electrical junction box to prevent short circuits while the car is turned off. The recall is to start on April 3.
Last April, NHTSA opened two new investigations into fires involving Hyundai and Kia vehicles after getting complaints of more than 3,100 fires and 103 injuries.
The agency granted a petition seeking the investigations by the nonprofit Center for Auto Safety, a consumer advocacy group.
The investigations, one for Hyundai and the other for Kia, cover non-crash fires in almost 3 million vehicles from the affiliated automakers. The probes cover the 2011 through 2014 Hyundai Sonata and Santa Fe, the 2011 through 2014 Kia Optima and Sorento, and the 2010 through 2015 Kia Soul. The complaints came from consumers and from data provided by both automakers.
NHTSA had previously said it would incorporate the noncrash fires into a 2017 investigation that examined recalls of Hyundai and Kia vehicles for engine failures. It opened the new probes “based on the agency’s analysis of information received from multiple manufacturers, consumer complaints and other sources.”
Engine failure and fire problems with Hyundais and Kias have affected more than 6 million vehicles since 2015, according to NHTSA documents. So far, Hyundai and Kia have recalled about 2.4 million vehicles to fix problems that can cause fires and engine failures.
In addition, the automakers are doing a “product improvement campaign” covering another 3.7 million vehicles to install software that will alert drivers of possible engine failures and send the cars into a reduced-speed “limp” mode if problems are detected.
The latest recall “is not related to the previous Hyundai recalls for engine issues,” Hyundai spokesman Michael Stewart said in an email Friday.
More must-read stories from Fortune:
—The next frontier of road rage is the parking garage
—Tesla’s growth problem—by the numbers
—Who is Luca de Meo, Renault’s new CEO?
—Can Tesla keep growing without critical tax incentives?
—How Renault is navigating disruption in the auto industry
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-02-07--Apple extends store closures in China over coronavirus

Apple is extending its retail store closures in China by a few days as the coronavirus continues to spread, potentially crimping sales in a critical region for longer than expected.
Last week, Apple said it would close all 42 stores in China until Feb. 10 in an “abundance of caution and based on the latest advice from leading health experts.”
The company is now extending this, with most of the stores remaining closed until Feb. 15 in some cases, according to a Bloomberg News review of Apple’s retail websites in China. Apple is “making preparations” to re-open the stores in China, the company said Friday in a statement, but didn’t provide specific dates.
Many stores will reopen on Feb. 13 or Feb. 14 with limited hours, while only a couple are still scheduled to re-open Feb. 10, according to Apple’s retail website. Those dates are likely to remain fluid.
In its statement, Apple said it’s working to reopen corporate offices and contact centers in China the week of Feb. 10 after “thorough consultation with public health experts and government authorities.” Its online store remains open.
“The entire Apple family is committed to helping our colleagues, communities, suppliers, partners and customers in China,” Apple said. “As we gradually return to work, our first priority is the well-being of our teams, supplier partners and customers across China. Our thoughts continue to be with those affected by the coronavirus and those working around the clock to treat, study and contain its spread.”
More must-read stories from Fortune:
—What you need to know about new IBM CEO Arvind Krishna
—Startup uses A.I. to identify molecules that could fight coronavirus
—Governments deploy surveillance tech to track coronavirus victims
—How marketers are increasingly using A.I. to persuade you to buy
—Predicting the biggest tech headlines of 2020
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-07--African journalists analyze the U.S. elections

This is the web version of raceAhead, Fortune’s daily newsletter on race, culture, and inclusive leadership. To get it delivered daily to your inbox, sign up here.
African journalists weigh in on the Iowa caucuses, Hollywood’s making mixed progress on diversity, and the House of Prada gets lessons in racial equity.
But first, your week in review in Haiku, inspired by Lewis Carroll.
The time has come, the
President said, to tweet of
many things: Of JOBS
votes, and IOWA,
from impeachment to a king.
Down the rabbit hole
of illness great and
small; looking to a cure ‘fore
it consumes us all.
Through the looking glass,
a future darkly waits, seek
out Wonderland, there’s
danger at the gate:
The sea is boiling hot, and
pigs need more than wings.
Wishing you an adventurous weekend.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
On Point
“Africa Reacts” to the Iowa caucuses The Africa program associated with the Center for Strategic and International Studies (CSIS), a bipartisan and nonprofit research organization, is providing a unique service this election season. They’re asking prominent African journalists, equity activists, and other leaders to generate analysis of the U.S. elections. The first installment of “Africa Reacts” starts with Iowa. Overall, the reporting is sharp, fair, pro-democracy, and compassionate toward voters—and keeps Africa in the conversation. “Watching from afar, the Iowa caucuses in my view was a complete replica of any controversy surrounding Africa and elections,” says Rodney Sieh, of Front Page Africa. “Second, warts and all, the Iowa caucuses are important for providing a platform for rich diversity for the DNC's aspirants—a diversity that we rarely see in our stage managed primaries and elections in West Africa despite the need for fresh faces, fresh ideas, and fresh talent for our leadership recruitment pool,” says Ayisha Osori, of the Open Society Initiative for West Africa.
CSIS Commentary
UCLA’s latest diversity report brings mixed news The Hollywood Diversity Report 2020 shows that in some areas, the industry is getting the message. The report focuses on the top-grossing films of 2018 and 2019 and paints an encouraging on-camera picture. “As of 2019, both women and minorities are within striking distance of proportionate representation when it comes to lead roles and total cast,” said report co-author Darnell Hunt, dean of the UCLA College division of social sciences. But behind the scenes he says, it’s a different story. The numbers of writing and acting jobs improved slightly in most categories, but lag significantly behind the population overall. “Getting writing, directing, and acting jobs is a critical step for women and people of color because success in the industry is largely driven by the credits you have,” Hunt said.
UCLA Newsroom
Prada employees to receive racial-equity training The luxury fashion brand has agreed to provide the training to its employees in New York and Milan as part of a settlement with NYC after a 2018 window display was removed for racist imagery. The settlement was announced by the New York Commission on Human Rights, in a first-ever enforcement action of a brand and its chosen imagery. Designer Miuccia Prada, her husband Patrizio Bertelli, and CEO Carlo Mazzi will all participate in the training as part of the settlement with the commission. Civil rights lawyer Chinyere Ezie drew attention to the display in a Facebook post calling out the "racist and denigrating blackface imagery."
NBC News
Katy Perry, who is neither British nor Asian, is a new British Asian Trust ambassador Submitted without comment. But, boy, plenty of other people had stuff to say.
CBS News
On Background
How do we grapple with Kobe Bryant’s legacy? This is a topic that continues to roil, proof that the wounds run deep, and Bryant’s impact was wide. CBS News personality Gayle King is currently under fire for bringing up the rape allegations in an interview with WNBA star Lisa Leslie, an exchange that earned a video diatribe from Snoop Dogg, and turned her briefly into a Twitter trending topic. (We also learned that Bill Cosby is able to tweet from jail.) The Undefeated breaks it all down here. But of all the takes I’ve read, this one from Tara K. Menon comes closest to parsing the fine line of what it means to love a public figure, to honor their influence over your life… and have trouble reconciling not only what they allegedly did to someone else, but what it means to grow up in a world where male excellence is the only role model you were allowed to have. A must read.
The Paris Review
A new economics paper for every day of Black History Month Economist Peter Blair is a faculty research fellow of the National Bureau of Economic Research (NBER), and an assistant professor of education at the Harvard Graduate School of Education—and a national treasure who will clearly earn a place in some economist/physicist hall of fame for his tireless boosting of “econ papers that have inspired me,” during Black History Month. “Celebrate Black History Month by reading these papers that highlight the work of black scholars, their co-authors, and work by scholars of all backgrounds that speak to the experiences of black people in the U.S. and the diaspora,” he says in his kick-off tweet. On Feb 3 he shared "Can ‘Baby Bonds’ Eliminate the Racial Wealth Gap in Putative Post-Racial America?" Then on Feb. 4, he shared a compelling study about racial disparity in voting wait times, using smartphone data. #BlackEcon Twitter is good Twitter, friends.
Dr. Peter Q. Blair
How simple rituals can keep us strong Longtime raceAhead reader Rebecca Padnos Altamirano, author, activist, and co-founder of experience design firm Tangelo Technologies, offers us a balm for difficult times. While walking her children to the school bus every morning, they sing "Woke Up This Morning," a freedom song from the Civil Rights Movement. The mad dash to the door is gone and the walk becomes about centering and readiness. “It’s a song of resilience, new beginnings, and steadfast faith,” she says. “You can’t help but feel good while singing it.” Lately, she’s found herself called to sing it at various times during the day. “I always feel better afterward. I feel connected to the struggle and it inspires me to overcome any obstacle in my way.” She has a lovely version to recommend. Take four minutes and 17 seconds to remind yourself that ain’t nothing wrong with keeping your mind stayed on freedom.
Thrive Global
Tamara El-Waylly produces raceAhead and manages the op-ed program.
Quote
"Bryant’s death has caused more collective tangible pain in Black men than I’ve ever seen. My friends are in pain. My Morehouse students are aching. We’ve never experienced anything quite like this: A celebrity of this magnitude so prevalent in our lives and our collective consciousness suddenly erased. I think part of the reason this is so hard for Black men to cope with is that we don’t have anyone to be angry at. When Nipsey Hussle or Tupac Shakur or Biggie Smalls or even Michael Jackson or Prince died, we had shooters, betrayers and pharmaceutical companies to direct our anger toward. Bryant died when a helicopter fell out of the sky. We have no place to put our anger. We have nobody to vow revenge upon. Now, thanks to the King interview, we have a target."
— David Dennis Jr., a writer and adjunct professor of Journalism at Morehouse College, on Kobe Bryant and the Gaye King interview backlash.


fortune--2020-02-07--Sundance 2020: ‘Summertime’ director and cast on crafting a ‘love letter’ to Los Angeles

One of the most dazzling scenes in Summertime takes place on a doorstep, as a young woman finally acknowledges the emotional damage done to her by a callous ex-crush—in the form of a dizzying, scorched-earth poem, “Shallow,” that she delivers to his face.
For the poet in question, 24-year-old Angeleno wordsmith Marquesha Babers, filming such a moment was charged and cathartic, giving her the chance to wrest back control of a real-life situation that left her feeling powerless and devastated at the time, to speak her truth in a way she wasn’t able to back then.
“I say this a lot, but it was the therapy I never had,” says Babers of the scene, speaking to Fortune a few days after the film’s Jan. 23 premiere at the Sundance Film Festival. “By the final take, it was an out-of-body experience. I just let my soul go.”
Babers is gathered around a table in Park City, Utah, with her Summertime costar, acclaimed 20-year-old poet Mila Cuda, and the director, Blindspotting’s Carlos López Estrada. All three have spent the day speaking to press about their film, a spoken-word ode to 27 slam poets living and dreaming in modern-day Los Angeles, which premiered in Sundance’s NEXT section for boundary-pushing and emerging filmmakers and is now seeking distribution.
Though the lion’s share of Summertime‘s ensemble flew out for the public premiere screening, a high-energy affair filled with finger-snaps and spontaneous rounds of applause, they’ve mostly departed at this point, back to sunny, snowless California. If Babers, Cuda, and López Estrada are weary of discussing the film, it doesn’t show; they speak earnestly and with energy about constructing what they see as a deeply personal ode to Los Angeles and each other.
Experimental most through its Slacker-like structure, which flows from character to character every few minutes, Summertime is full of sequences that rise above reality. Its approach offers the young Angeleno protagonists a chance to treat scenes like blank canvases on which to stage their daydreams and declarations, however big or small. Maia Mayor struggles with anxiety and self-esteem issues accentuated by social media. The outspoken Tyris Winter spends much of Summertime longing after the perfect cheeseburger. In one vivid sequence featuring poet Paolina Acuña-González, a lecture from her on-screen mother about the dangers of wearing red lipstick spills into a gorgeously choreographed dance sequence on the street, La La Land reclaimed in a Latinx voice. In another, a young woman (Cuda) sees a homophobe shaming a queer couple on public transit and successfully stands her ground against him, reciting a fierce, crackling poem titled “Hey, I’m Gay” that eventually drives him off the bus.
“Sometimes, our surreal imaginings are a little more subtle, because what seems out of reach for us shouldn’t be,” says Cuda. “What’s magical for me is being able to speak my mind freely on a bus. That’s something I wish for.
“It’s not meant to be realistic,” adds Cuda, who pulled double duty as the film’s poetry supervisor. “It’s meant to be a world that imagines what happens when we don’t cut off the voices of young people and we allow them to express themselves.”
On this point, all three are insistent. In crafting Summertime, López Estrada never set out to create a realistic portrait of Los Angeles, though he says he does see his film as “a love letter to the city,” rather than to the mythology of Hollywood that so often overshadows public interest in the lives of people outside of it.
Maia Mayor, Marquesha Babers, Tyris Winter, Carlos López Estrada, Mila Cuda, Jason Alvarez, and Austin Antoine from “Summertime” in Park City, Utah, on Jan. 25. “You need to have empathy to watch this movie,” says López Estrada of his film. Emily Assiran—Getty Images for Pizza Hut
“It’s the same experience you’d have if you walked across the city in a day,” explains López Estrada. “If you woke up in Venice and spent the entire day walking east toward downtown, into East L.A., you’d stumble upon these people and their stories. Some would complement each other, one would take you to another, others would contradict themselves, you’d get to see some hilarious things, you’d get to see some weird-ass shit, and you’d get these beautiful moments of people living their lives.”
López Estrada is best known for directing 2018’s Blindspotting, an ambitious meditation on race relations, police violence, and male friendship in a rapidly gentrifying Oakland that also employed spoken-word poetry as the chosen language of the marginalized.
Summertime was inspired by a spoken-word showcase—part of the Get Lit program, devoted to encouraging literacy and creativity in high schoolers around L.A.—that López Estrada attended with two of the film’s producers eight months ago. As he watched, more than 25 young Angelenos (ranging in age from 17 to 27) performed some of their most personal work.
“I remember leaving that day just so inspired and so moved by the diversity of the people and their stories, the honesty with which they spoke, and how creative they were,” the director recalls.
Quickly, a plan began to form. From the beginning, López Estrada wanted to craft a film that could act as a showcase for the talents of young Angeleno poets and, in doing so, speak to a more organically diverse (and thus more honest) Los Angeles than he was used to seeing represented on screen.
Black, female, queer, Korean-American, and Latinx poets are all highlighted throughout the story, performing poems they had in many cases written years before López Estrada approached them. The net effect, he hoped, would be a “messy, imperfect mosaic” wherein each artist mattered as much as the next.
“When you’re an inch away from a mosaic, you won’t get what you’re looking at,” he says. “You won’t see the full picture. You’ll get an isolated, very confused fragment of something that isn’t whole. I think what we had to do was constantly remind ourselves that it was a mosaic, then take many steps back and not stress over the tiny details.”
Adds Babers: “You don’t have to try to make it diverse, because it’s already that way. We just came together to share our stories and experiences; it wasn’t calculated. That’s what was dope about it. It was just real.”
Summertime was met with largely warm reviews out of Sundance, though more negative ones focused on the magical realism of the film, as well as its extensive use of spoken-word to deliver essentially all of the major statements by its characters.
“You’re asking people to follow 25 stories over a day, to really suspend their disbelief, to think in metaphor, to change perspective frequently,” says López Estrada, who anticipated some critics would be more high on the film than others. “You need to have empathy to watch this movie. If you try to break it into a structure based on believability, don’t watch it, because you’ll just get angry.”
Cuda does take particular issue with the way some early reviews of Summertime characterized her poem; she feels some critics missed its point entirely. “A bus rider, sensing homophobia in a fellow passenger, stands to rhapsodize loudly on the topic of her sexuality, continuing long after the bigot has fled from her,” read one mixed-to-negative review, by The Hollywood Reporter. “This kind of tirade is why people dread public transportation, but in the world of Summertime, the entire bus applauds her.”
Cuda rolls her eyes. “That review was like, ‘She’s the reason no one wants to ride the bus,’” she says. “I was like, ‘Honey, the reason no one wants to ride the bus is because people harass you!’”
“I don’t care if you like the poem, and I don’t need you to like me,” continues Cuda. “But don’t jump to the defense of the comfort of someone being openly homophobic. That rubs me the wrong way, to be like, you see that scene and you think, ‘That poor man is being berated.’ Excuse me?”
Another section of The Hollywood Reporter‘s review calls Winter’s character “abrasive.” Summertime‘s crew of spoken-word poets think a lot about word choice, and that one did not sit particularly well with them.
“Tyris is a black, queer man, so to use the word ‘abrasive’ is charged with so many microaggressions,” Cuda explains. “The bias is very visible,” says Babers, which Cuda seconds.
Before wrapping up the interview, López Estrada acknowledges the desire he feels to defend Summertime‘s young Angelenos against such criticism, though he simultaneously knows there’s perhaps never been a young cast in Sundance better-equipped to speak for themselves.
“There’s a difference between not connecting to a poem, it not speaking directly to your experience, and questioning the right for these poets to speak, or questioning whether it’s appropriate for them to,” says López Estrada.
“I think that’s dangerous,” he adds. “I find it empowering that this group of people allowed us into their lives, were brave enough to talk about what’s most meaningful to them. That’s why we feel so at peace with what we did. We allowed for that to happen, for people to express themselves with words they chose and emotions they wanted to highlight. That’s what makes it beautiful.”
More must-read stories from Fortune:
—The best movies that came out of the 2020 Sundance Film Festival
—How the Indie Spirits and Oscars will reflect an exhilarating—and often odd—awards season
—How Randy Newman’s family built a film-scoring dynasty over the course of a century
—How much is an Oscar worth?
—Bombshell‘s Charlize Theron and John Lithgow reflect on the film’s indelible impact
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-02-07--The strange tale of Jeff Bezos’s $16,840 parking ticket bill

No one’s entirely sure why Jeff Bezos sold $1.8 billion of Amazon stock in the past week, but we’ve got a new theory: Parking tickets.
The world’s richest man is renovating a former textile museum into a home in a Washington D.C. neighborhood. And WUSA, a CBS affiliate in the city, notes that police have written $16,840 in tickets on the block his house is located on since work on the project began.
That’s a total of 564 tickets (all of which, it’s worth noting, have been paid off). Nintey-three of those were given in April 2018.
Workers (we’re assuming it was workers and not Bezos himself) apparently routinely ignored “No Parking” signs and parked in spaces reserved for residents as they worked on the house. (Contractors were required to sign non-disclosure agreements, so it’s impossible to weed out which of the tickets were not tied to the renovation.)
Bezos is converting the 34,000 square foot former factory into a mansion that includes 11 bedrooms, a ballroom, a wine cellar, a whiskey tasting room, and a movie theater, according to blue prints and permits filed with local government. He paid $26 million for the building in 2016 and has spent a reported $12 million to renovate it.
Bezos’s neighbors in the Kalorama neighborhood will include Barack and Michelle Obama and Ivanka Trump and Jared Kushner.
More must-read stories from Fortune :
—Why China is still so susceptible to disease outbreaks
—The rich own stocks, the middle class own homes. How betting it all on real estate is a wealth gap problem
—Bakkt aims to turn your rewards points into a wallet you can spend anywhere
—Stock scammers are using the coronavirus outbreak to dupe investors, SEC warns
—WATCH: Why CEOs are pessimistic about 2020 business outlook
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-02-07--Tonight’s Democratic debate: How to watch, start time—and 4 key issues to watch for during it

This article is about the Feb. 7 Democratic debate. For information on the Feb. 19 debate, click here.
Following a brutal week for the Democrats in Iowa and in Washington, D.C., the party’s seven top presidential candidates will battle it out in New Hampshire during the eighth debate Friday night.
The debate begins at 8 p.m. E.T. and will be held at St. Anselm College’s Thomas F. Sullivan Arena in Manchester, N.H. The contest will be co-hosted by ABC News, the network’s New Hampshire affiliate WMUR-TV, and Apple News. It will be moderated by ABC News chief anchor George Stephanopoulos, World News Tonight anchor and managing editor David Muir, and ABC News correspondent Linsey Davis.
Also joining the moderators to question the debaters will be WMUR-TV political director Adam Sexton and WMUR-TV News Anchor Monica Hernandez.
This eighth debate for the rattled Democrats comes four days before the New Hampshire primary. The war of words also comes on the heels of the Iowa Caucus chaos, the acquittal of President Donald Trump, and the ever-growing uncertainty about which candidate can persuade voters they are electable.
Will former South Bend, Ind., Mayor Pete Buttigieg or Sen. Bernie Sanders (I-Vt.) claim frontrunner status, after each claimed victory in Iowa? Can Sen. Elizabeth Warren (D-Mass.) and former Vice President Joe Biden each have standout moments to regain some momentum in their campaigns? And, can Sen. Amy Klobuchar (D-Minn..) have another strong debate showing?
“It’s going to be among the most intriguing debates in a few months,” said Brian Sobel, a San Francisco Bay Area political analyst. “There are some candidates fighting for the top, and others fighting for relevancy—period.”
Here’s what you should know ahead of tonight’s Democratic debate.
Which candidates qualified for tonight’s debate in New Hampshire?
Seven candidates—one more than last month’s debate in Iowa—have qualified for Friday’s contest:
Former vice president Joe Biden
Former South Bend, Ind., Mayor Pete Buttigieg
Massachusetts Senator Elizabeth Warren
Vermont Senator Bernie Sanders
Minnesota Senator Amy Klobuchar
Tech entrepreneur Andrew Yang
Billionaire activist Tom Steyer
Meanwhile, former New York City Mayor Mike Bloomberg, who is climbing in several polls, Hawaii Congresswoman Tulsi Gabbard, former Massachusetts Governor Deval Patrick, and Colorado Senator Michael Bennet, will not be on the debate stage.
With even stricter requirements than previous debates, candidates had to qualify through a combination of poll results and fundraising. The DNC demanded that candidates need to receive 5% or more support in four national or early state (Iowa, New Hampshire, Nevada, and South Carolina) DNC-approved polls, or at least 7% support in two DNC-approved early-state polls.
Additionally, campaigns needed to show that they’ve received donations from a minimum of 225,000 unique donors, with at least 1,000 unique donors in at least 20 states or territories.
New Hampshire may have more meaning because of the chaos in Iowa as the caucus gave an unexpected boost for Buttigieg, a show of stability for Sanders and slides for Biden and Warren as the latter two try to regain momentum Friday night.
How to watch tonight’s Democratic debate online—even without cable
Friday’s debate will air live on ABC, WMUR-TV, which is owned by Hearst Television.
You can also watch the debate online and on mobile devices via a live stream available at Apple News, on ABC News Live, ABC’s streaming channel available on the ABC News site, and its app on iOS, Android, as well as streamers, including Roku, and Amazon Fire TV.
YouTube will also stream the debate. And SiriusXM Radio channels 116 and 124, TuneIn, and ABC News Radio will broadcast the event.
4 things to watch for during the debate
Besides the “Bernie and Buttigieg” show, the other five candidates will be battling to show their value onstage to New Hampshire voters and the nation. Sure, there will be some talk about the caucus failure in Iowa and the Senate acquitting Trump, but the candidates will quickly pivot to preach their own aspiring presidential platforms.
1. A showdown between Buttigieg and Sanders
All eyes will be on Pete Buttigieg and Sen. Bernie Sanders coming out of Iowa after they both claimed victory in the days following the chaotic caucuses. Justin Sullivan—Getty Images
Friday’s debate could turn out to be a spirited discussion between the self-proclaimed winners of the Iowa Caucus, the surprising Buttigieg and the resilient Sanders.
Each candidate comes in with momentum as Buttigieg, at age 38, seeks to become the youngest president in U.S. history, and Sanders, at 78, wants to become the oldest U.S. president ever elected. Will the two take issue over the other’s healthcare plans, the economy, and climate change as they vie for the top spot?
If Buttigieg does well, it will give him another notch in his belt as he’s been attracting standing room only crowds during his gatherings more than even his organizers would have expected, said Emily Baer-Bositis, an assistant political science professor at the University of New Hampshire.
“His small-town charm is resonating as he’s been coming here quite a bit as voters do care about someone who can win and he beat expectations,” said Baer-Bositits about Buttigieg. “He has a folksy charm that those in New Hampshire respond to.”
Sobel said he’s surprised Buttigieg did well in Iowa and expects the candidate to have plenty of confidence coming into Friday’s contest.
“He kind of rocked the Democratic party as a disruptor this week,” Sobel said about Buttigieg. “If there are some in the party who may think that Sanders isn’t electable, I don’t believe they were looking at Buttigieg after his impressive showing.”
While Vermont’s Sanders may win in the neighboring “Granite State” of New Hampshire as he did in spectacular fashion in 2016, Sobel said Buttigieg is starting to “check a lot of the boxes” so far in terms of his viability as a candidate.
Buttigieg still needs to work on attracting support from Black and Latino and black voters, key pieces in the upcoming Nevada caucuses and South Carolina primary.
“He’s certainly a threat,” Sobel said.
2. Will Warren rebound in an effort to possibly win New Hampshire and save her flailing campaign?
Sen. Elizabeth Warren wants to be the “unity candidate.” Will she be able to make the case on the debate stage in New Hampshire? Elijah Nouvelage—Bloomberg via Getty Images
Look for the Massachusetts senator to come out swinging on the debate stage as Warren is trying to rebound from a third-place finish in Iowa and seeing her once frontrunner status continue to downslide.
The incline for Warren has gotten steeper and it was always going to be that way, Sobel believes, as the debate and the New Hampshire primary becomes a test for her, her campaign and the fundraising needed to remain in the presidential race.
“You will see Warren hitting Biden, Sanders, and Buttigieg strongly than the other candidates,” Sobel said. “She’s in danger and fading fast enough that she’s almost not important in the current discussion. She might have the biggest challenge of any of the former frontrunners.”
Warren is seen as a bridge between the progressive Sanders and a non-traditional candidate like Buttigieg, Baer-Bositis said. But voters likely don’t want a bridge candidate as Warren simply can’t afford a third- or fourth-place finish in New Hampshire on Tuesday, the college professor said.
“Warren would want to make up for her standing in Iowa with a strong performance,” Baer-Bositis said. “She needs to come in second place or higher, and she certainly needs to receive more votes than Biden.”
3. Which Joe will Biden show up?
The stakes for former Vice President Joe Biden are high after finishing fourth in the Iowa caucuses. Spencer Platt—Getty Images
Earlier this week, Biden said it would be a “risk” for the Democrats to nominate a small-town mayor like Buttigieg.
Now, some wonder if it will be a risk nominating the former vice president who has the look of a frontrunner but hasn’t performed consistently well during the seven previous debates.
That has to change after a fourth-place finish in Iowa, in which he admitted had been a sobering “gut punch.”
Biden, who was taken an above the fray approach among his fellow Democratic rivals and resorting to taking shots mostly at Trump, now has to the aggressor going forward, Sobel said.
The stakes are higher now as Biden has shown some signs he’s shedding some of his common decency mantras during his campaigning this week.
He told supporters in Somersworth, N.H., earlier this week that Sanders is too liberal to win the presidency.
“He calls himself a democratic socialist. Well, we’re already seeing what Donald Trump is going to do with that,” Biden said.
Then he took a shot at the moderate Buttigieg: “I do believe it’s a risk, to be just straight up with you, for this party to nominate someone who’s never held an office higher than (the) mayor of a town of 100,000 people in Indiana. I do believe it’s a risk.”
Sobel still doesn’t think Biden “has it in him” to really take an aggressive stance.
“It’s not in his recent nature to be overly snarky and throw someone into a fight,” Sobel said. “Party stalwarts say he hasn’t had some good debates and he’ll get stronger. Well, it better start sooner than later.
“The voting will signal whether Biden stays in the race, not the party bigwigs,” Sobel said.
Something has to change or Biden may be an afterthought even before getting to the South Carolina primary in which he’s favored to win.
4. Klobuchar’s and other longshot candidates’ last stand?
Sen. Amy Klobuchar risks getting lost in the shuffle as Biden and Warren look to regain their footing in New Hampshire. Caroline Brehman—CQ-Roll Call/Getty Images
Klobuchar’s surprising finish in Iowa may be attributed to tapping into her neighboring Minnesota roots. But New Hampshire might be a make-or-break moment as she continues to try breaking in the top tier of candidates.
But with Warren and Biden both trying to step up their games to garner votes, Klobuchar might get lost in the shuffle on the debate stage Friday as likely will the charismatic Yang and the Trump-bashing Steyer.
The question is will any of the lower-tier candidates survive as the 2020 debate season ramps up. After Friday’s debate, there’s another in Nevada, on February 19, ahead of that state’s Feb. 22 caucuses.
Also, South Carolina will have a debate on Feb. 25, four days ahead of the state’s primary on Feb. 29.
Three days later, on March 3, it will be Super Tuesday when 14 states, including California, Texas, and Virginia, to name a few, will hold its primaries.
However, at this moment, Sobel thinks the Democratic party is “not confident” that whoever emerges from the field could beat Trump.
“It’s heavy stuff. New Hampshire is going to probably send a couple of more candidates packing as the Democratic party wants to rally around someone,” Sobel said. “But right now, we don’t know who that’s going to be?”
More must-read stories from Fortune:
—2020 candidates’ positions, and records, on economic issues that affect women
—How a company with 120 Facebook likes ended up at the center of the Iowa caucus firestorm
—Europe’s refugee crisis is getting worse—for these children
—Fortune Explains: The debt ceiling
—America’s young voters could sway 2020 results. What will it take to get them to the polls?
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-02-07--What to watch (and skip) in theaters and on Netflix this weekend

Whether you’re standing in the theater lobby or curled up in bed, deciding what to watch next is often the most difficult part of any pop-culture junkie’s day. And with dozens of films in theaters on any given weekend, plus virtually endless layers of streaming purgatory to sort through in search of your next binge-watch, there’s more out there—and tougher decisions to make—than ever.
Fortune‘s here to help you navigate the week’s latest offerings, boiling all the entertainment out there down into three distinct recommendations: should you see it, stream it, or skip it? Find out below.
SEE IT: ‘Birds of Prey’ (In theaters)
The official name of DC’s latest is Birds of Prey (and the Fantabulous Emancipation of One Harley Quinn). And though few journalists will ever be caught addressing it as such, that subtitle neatly tees up what director Cathy Yan and writer Christina Hodson have managed to deliver with this superhero caper: a particularly cheeky, propulsive slice of action-cinema cheesecake that makes one Harley Quinn, played by one Margot Robbie with all the colorfully explosive force of fireworks shoved up an exhaust pipe, the star of her own show.
Yan’s film opens with a slick animated prologue in which we learn Harley and the Joker, her giddily deranged partner and paramour, have called it quits, sending Harley into a post-breakup depression that involves blowing up chemical plants and picking up a pet hyena, as one does. But with Harley’s heartbreak arise complications. Minus the immunity that came with being Joker’s girl, it’s suddenly open season on Gotham City’s premier mischief maker, a declaration that’s music to the cauliflowered ears of every thug she’s ever crossed.
Even more troublingly, Harley’s attracted the attention of Roman Sionis (Ewan McGregor), a gloriously preening nightclub owner and criminal kingpin who’s associated with the sadistic heavy Zsasz (Chris Messina). They share a beautiful friendship, maybe more than a friendship, and enjoy slicing people’s faces off together. Roman can’t decide whether he wants to kill Harley or own her, both disconcerting possibilities to our newly single antiheroine. Luckily, she has some backup, mostly in the form of Black Canary (Jurnee Smollett-Bell), a singer at Roman’s club with hidden gifts of her own, though it must be said Harley’s not much for making friends.
Hodson’s script pinballs back and forth in time to match Harley’s scatterbrained narration of this setup, and it’s a bold choice just about held together by the batty charm with which the character is written and inhabited. That technique, however messy, also allows the film’s other female protagonists to enter the story early on, even if its zig-zaggy mechanics don’t bring them together until late in the game.
There’s Renee Montoya (Rosie Perez), a hard-nosed cop on Harley’s trail, and the Huntress (Mary Elizabeth Winstead), a crossbow-wielding new arrival in Gotham with Kill Bill-shaped baggage of her own. A young thief (Ella Jay Basco), whose name I’ll leave unmentioned, ends up in the picture after stealing something valuable from Roman.
But, mostly, Birds of Prey is the Harley Quinn show, reaffirming Robbie’s talent early and often, most cleverly by adopting fizzy voiceovers and a playfully screwball energy to suggest a Harley Quinn movie made not only on her block but from the character’s uniquely anarchic perspective. There’s no question that Robbie is deserving of this big-studio vehicle for her movie-star talents; from the start, she was perfectly cast. It was the rest of her first film in the role—2016’s roundly rancid Suicide Squad, directed leerily by demolition fetishist David Ayer—that let her down, badly.
Birds of Prey feels like an emancipation most from that sorry chapter of the DC universe, its candy-shell exterior and subversive sense of humor standing in impressive contrast to the dour, incoherent morass of Ayer’s film. Yan (scouted for Birds of Prey off her Sundance-minted debut Dead Pigs, which still doesn’t have U.S. distribution) exhibits visual imagination and a knack for orchestrating organized chaos, particularly in the fight sequences, which are far and away the most kinetic and eye-popping offered thus far by DC, from a pitch-perfect street pursuit throughout Harley wants nothing more than to enjoy her breakfast sandwich, to a bruising escape from Gotham’s police headquarters that makes inventive use of space and props (all the firepower in the world couldn’t protect John Wick from Harley with a Louisville Slugger).
That the story eventually settles into rote grand-finale kick-punching is almost beside the point. Birds of Prey exists to give Robbie’s Harley Quinn a lurid, loopy, neon-drenched spotlight, and it’s through remaining committed to that maniacal mission—Harley on rollerskates! Harley lobbing glitter bombs! Harley leading her own fantasy dance sequence!—that these Birds truly soar.
STREAM IT: ‘Horse Girl’ (Netflix)
Horse Girl is two-thirds the film you think it is—before a visual stunner of a third act heightens it into something more curiously surreal and unknowable than any of its indie-beige trappings could have possibly prepared you for.
Alison Brie, in a sensational performance, stars as Sarah, a crafts store employee whose mental health gradually unravels as she experiences lucid dreams about two people she hasn’t yet met, only to wake up in unfamiliar locations. That her mother recently took her own life, and that mental illness runs in Sarah’s family, are both factors in this deterioration considered more by the film than Sarah herself, who rather swiftly accepts that something much more unearthly is afoot than her own trauma processing.
Increasingly convinced that she may in fact be both a clone of her grandmother and even the victim of an alien abduction, Sarah steadily isolates further from the few people in her orbit, including a kindly coworker (Molly Shannon), well-meaning roommate (Debby Ryan), and dorky romantic prospect (Josh Reynolds). There’s a tragically innate loneliness to Sarah, whose initial quirks—including an obsession with the supernatural crime procedural Purgatory, and with the horse she once owned and continues to visit, much to its new owner’s vexation—darken with her escalating paranoia. And, in a refreshing change of pace for this specific subgenre of psychological thriller, those around her are alert to Sarah’s impending collapse and intent on intervening.
Written by Brie along with director Jeff Baena, Horse Girl rides a tricky tonal line between questioning Sarah’s increasingly unmoored mental state and indulging it, so as to better chart the ordeal from her perspective. Some may fault it for leaning too far into the latter category toward the end, especially throughout an extended psychosis that finds Sarah tumbling uncertainly through dream reality. But the film’s unquestionably intelligent in how it frames that rabbit-hole odyssey, coming up with clever visual and narrative cues to couch Sarah’s uncontrollable fantasies in a more firmly rooted reality.
When Sarah’s first introduced, her cheery disposition and warm manner of interacting with those around her cuts a sunny but reserved figure—the kind that always shows up in indies executive-produced, like Horse Girl, by mumblecore CEOS Mark and Jay Duplass. But there’s a latent darkness to Sarah, too, one the film teases out with a quiet insistence and sincerity that subverts, then entirely rebukes, the twee artificiality of that subgenre. As delightful as it is to watch Brie snatch this kind of role away from Kristen Wiig, Horse Girl leaves a decidedly solemn and melancholy after-taste, implicating the audience in their own enjoyment of this character’s splintering state. It’s an ambitious, odd project, and one that sticks stubbornly in the mind’s eye.
‘Horse Girl’ premiered at the Sundance Film Festival.
SKIP IT: ‘Locke & Key’ (Netflix)
“Echoes can come to life in this place,” warns the woman in the well, her voice coy and comforting to the little boy above, who’s too naive to sense its underlying darknes—until it’s too late.
She’s discussing Keyhouse, the New England manor where 9-year-old Bode (Jackson Robert Scott) and the rest of the Locke family uncover magical keys to all kinds of bizarre, extra-dimensional side-pockets. But the woman (Laysla De Oliveira) might as well be talking about Locke & Key as a series, a decently fun haunted-house ride that nevertheless cycles through elements of nearly all its genre contemporaries—not to mention most of Netflix’s proven hits—in search of an identity to call its own.
First and foremost is Netflix’s own Haunting of Hill House, evoked especially throughout the series’ early going, as the Locke clan are drawn back to Keyhouse following the death of family patriarch Rendell Locke (Bill Heck). The manor is eerie and expansive, darkened by years of disrepair. When mother Nina (Darby Stanchfield) and children Kinsey (Emilia Jones), Tyler (Connor Jessup), and Bode are met at its entrance by Rendell’s brother Duncan (Aaron Ashmore), it looms behind them like a gaping maw. Every family is grieving Rendell in their own way, though Locke & Key doesn’t seek to externalize this across the house in ways as ambitious or unsettling as Hill House did.
Instead, as the kids begin to turn up those aforementioned keys, the series settles into a well-worn fantasy groove somewhere between The Chronicles of Narnia and Stranger Things, with the former’s hidden doors to strange realms and the latter’s more horror-tinged approach to the characters navigating them. Bates Motel (with whom this adaptation shares showrunner Carlton Cuse) is a better reference point for the ancillary high school dramas enveloping Kinsey and Tyler, from flirtations with classmates to whispers regarding their father’s violent death. It’s Supernatural, though, that comes to mind most in the depiction of that woman in the well, who doesn’t stay confined there for long, entering the real world in an oddly kinky sequence out of step with the series’ lighter tone.
Such patchwork pastiching does not make Locke & Key “bad” per se, and this review has not come to bury it. But the first season of this series feels deeply uncertain about what tone to strike, which complicates questions of who exactly it’s meant to please. With more episodes, perhaps, will come a sturdier sense of self.
Locke & Key‘s tone flips the ratio of horror to fantasy present in Joe Hill and Gabriel Rodriguez’s original comics, likely a product of its new home at Netflix. The series spent a decade in development, during which time it’s been set up as a TV pilot at Fox, a film franchise at Universal, and (most tangibly) a series at Hulu last year. Each time, Locke & Key fell through, making its arrival at Netflix early this spring all the more exciting. But the finished product is evidence of what Netflix saw in Hill’s novels (a Stranger Things-style spooker) and what they didn’t (a scary and sometimes gloriously weird affinity with all things unmoored and uncanny). Few adaptations of tonally tricky comics succeed in capturing their source material, but Locke & Key does feel, disappointingly, like a flattened reflection of itself.
The best of the rest
On Disney+, original feature Timmy Failure: Mistakes Were Made (streaming Dec. 7) gives Tom McCarthy his first such directing vehicle since his Spotlight won the Oscar for Best Picture. Based on a children’s book, the quirky setup finds an 11-year-old boy (Winslow Fegley) moonlighting as an amateur detective with the help of his best friend, a CGI polar bear named Total.
Amazon now has the Starz spy thriller Counterpart, which ran for two seasons to relatively sparse viewership, available for streaming. Set in modern-day Berlin decades after a portal between two worlds has been discovered, leading to a new Cold War between parallel dimensions, it stars the great J.K. Simmons in dual roles as an analyst in one universe and a stone-cold killer in the other.
Also streaming on Amazon is Honey Boy, Shia LaBeouf’s gorgeous, experimental passion project in which he plays a version of his own father, with A Quiet Place‘s Noah Jupe in the role of a child actor struggling to reconcile his love for his father with the heartbreak and confusion of being abused by him. A dark horse that never crossed the finish line in the ongoing Oscars race, it’s nevertheless an invigorating, tremendously moving watch.
Meanwhile, on Tubi, a packed February slate includes Jake Gyllenhaal’s 2015 boxing drama Southpaw, an emotionally bruising affair highlighted by one of the actor’s most sincere and committed performances (though one that went largely unappreciated back in 2015). Other highlights include Peter Jackson’s The Adventures of Tintin (2011), a globe-trotting and beautifully rendered adaptation of the comics, and Ella Enchanted (2004), a thoroughly charming fairy tale that remains still one of Hathaway’s best roles more than 15 years on.
More must-read stories from Fortune:
—How the Indie Spirits and Oscars will reflect an exhilarating—and often odd—awards season
—How Randy Newman’s family built a film-scoring dynasty over the course of a century
—How much is an Oscar worth?
—Bombshell‘s Charlize Theron and John Lithgow reflect on the film’s indelible impact
—Taika Waititi on Kiwi humor, directing as Hitler, and why kids should see Jojo Rabbit
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-02-07--5 things Beats president Luke Wood always packs when traveling

Ask Beats president Luke Wood the most random of questions in jest—which animal he sees himself most similar to—and the answer comes to him quite easily.
“I tend to move like a shark,” says Wood. “I just always move, because I think it is just, it’s habitual for me. It goes back to being in a band when I started when I was 14, getting in a van and going on tour—and I just kind of never stopped going on tour.”
That’s not to say that Wood, who lives with his wife, Sophia Nardin, and two daughters in Los Angeles, isn’t a constant presence for his family. But travel remains an integral part of the job for Beats’ president, who spent nearly two decades as an executive in the music industry at record labels such as Interscope, DGC, and DreamWorks Records before joining Beats in 2011.
In the years since, Beats became as iconic an audio brand as Bose but retained its hipper appeal to younger generations of music listeners—even after Apple’s $3 billion acquisition of the audio business in 2014.
For that, thank the tireless Wood, who has spent a good chunk of the past nine years championing the Beats brand in different countries and helping sign up musicians and artists for design collaborations, from DJ Khaled to designer Alexander Wang and French luxury fashion house Balmain. (Indeed, when Fortune recently sat down with him, Wood had just returned from Shanghai, where Beats has offices.)
Here, in Wood’s words, are the five things this executive jet-setter never travels without:
“I love soft goods from Japan,” Wood says. “This bag is from Nanamica, which makes beautiful and functional technical outerwear and other stuff. This bag has a rolled reversible canvas top, which comes in handy for last-minute expansion when I’m traveling home and my shopping has gotten out of hand.” SRP: $302.
“When I first started playing guitar, I was a little too aggressive and would break strings several times during a show. This quickly led me to find superlight guitar picks, which I have stuck with to this day. I have found if you ask if there’s a guitar around, someone usually finds you one, but you don’t want to push your luck by asking for a certain spec of Tortex pick.” SRP: $3.31 for a 12-pack.
“This is a bandage invented for the care of surgical incisions,” Wood notes. “I have found myself occasionally (usually from a skateboard or mountain bike crash) in need of serious bandages that sit well under a suit, and these are the best I have found. No infection, quick healing, and you don’t look like a mummy.” SRP: $6.29 for a six-pack.
“I use a Head Porter (recently rebranded Ramidus) card case as a wallet,” Wood says. “It is remarkably efficient in that it forces me to carry very little of anything in my wallet, which is especially good when I lose my wallet.” SRP: $35.
“I am a huge fan of Apple Music and an even bigger fan of offline mode for when you are on an airplane and have no Internet connection. I cache vast amounts of music offline, putting the 512GB hard drive to good use. You never know when the mood will require Bad Bunny or Bad Brains, so it is better to be prepared. I think I have over 116 days of listening without repeating one song—about the same amount of time it takes to get from Logan to LaGuardia in the winter. I am also, of course, addicted to traveling with three Beats products. I use the Solo Pro as the perfect noise canceling travel headphone, PowerBeats Pro for running, and Beats Pill+ for hotel room listening. The Pill+ speaker is a remarkably versatile speaker that can fill surprisingly large spaces but still allow music to feel intimate and emotional.” SRP: $9.99 per month for an Apple Music subscription; $179–$249 for Beats headphones.
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—The mental health benefits of cow cuddling
—Couples are including cannabis at their weddings. How you can, too
—These tailors show that custom suiting is no longer just for men
—The food scene in South Philly is more than just cheesesteaks
—The best travel destinations for every season of 2020
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-02-07--14,000 recalled baby carriers could drop infants on ground

The Consumer Product Safety Commission is recalling 14,000 infant carriers after learning that the buckles on the device could break, resulting in the children falling to the ground.
Infantino’s Go Forward 4-in-1 Evolved Ergonomic, Flip Front2back and Up Close Newborn infant carriers are all being recalled. All totaled, roughly 14,000 carriers are included in the action.
The were widely sold by both Target and Amazon last November and December, with a price range of $30 to $50.
To date, no injuries have been reported.
Four specific carriers are included in the recall (lot codes are sewn into the inside of the carrier):
Go Forward 4-in-1 Evolved Ergonomic Carrier – lot code: 2018 0619
Go Forward 4-in-1 Evolved Ergonomic Carrier – lot code: 2018 0719
Flip Front2back Carrier – lot code 2018 0719
Up Close Newborn Carrier – lot code 2018 0719
Products can be returned for a free replacement at the place of purchase.
The recall follows last year’s scare involving another popular baby product. Fisher Price recalled 4.7 million Rock ‘n Play Sleepers, which saw 30 infant fatalities in the product’s 10 year history. That recall followed immense pressure from the American Academy of Pediatrics (AAP).
In December 2018, infant ibuprofen was recalled over concerns the dosage was too strong. Nearly two months later, the same company recalled more ibuprofen for the same reason. And last August, Pfizer recalled children’s Advil on overdose fears.
More must-read stories from Fortune:
—Why China is still so susceptible to disease outbreaks
—The rich own stocks, the middle class own homes. How betting it all on real estate is a wealth gap problem
—Bakkt aims to turn your rewards points into a wallet you can spend anywhere
—Stock scammers are using the coronavirus outbreak to dupe investors, SEC warns
—WATCH: Why CEOs are pessimistic about 2020 business outlook
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-02-07--Apple hit with $27 million fine for slowing down French iPhones

France is taking Apple to task for slowing down older iPhones with software updates. The country has fined the tech giant €25 million ($27.4 million) for “deceptive commercial practice[s] by omission”.
Consumer watchdogs in the country say owners of older iPhones should have been notified that upgrading their operating system in 2017 would have resulted in worse performance. (Apple admitted to throttling the phones three years ago, prompting lawsuits and eventually forcing the company to offer discounted battery replacements as compensation.)
The fine will let Apple avoid a public and potentially embarrassing trial around the matter.
“This is a historic victory against scandalous ready-to-rubbish practices, for consumers as well as the environment,” Laetitia Vasseur and Samuel Sauvage, co-founders of Halt Planned Obsolescence, which pushed French prosecutors to open the inquiry, told AFP.
The pair have not ruled out filing claims for additional damages for iPhone users.
Apple, starting in 2016, would issue operating system updates for the iPhone 6, iPhone 6s, iPhone SE and iPhone 7 that included a feature “to smooth out” power supply from batteries that are cold, old or low on charge. That resulted in decreased performance that cold have prompted owners of those phones to buy a new device, rather than getting a new battery (which could have fixed the problem).
More must-read stories from Fortune:
—What you need to know about new IBM CEO Arvind Krishna
—Startup uses A.I. to identify molecules that could fight coronavirus
—Governments deploy surveillance tech to track coronavirus victims
—How marketers are increasingly using A.I. to persuade you to buy
—Predicting the biggest tech headlines of 2020
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-07--Coronavirus fears spread to European conferences

There are signs that coronavirus fears are starting to have an impact on European conferences—even though contagion risks remain low in the region for now.
The phenomenon has already been already established in Asia, with contagion fears leading to the cancellation of events on mainland China and in Hong Kong. Even outside the region, events such as the AAAI artificial intelligence conference in New York have seen a drop in delegate numbers from China, due to travel restrictions and risks.
But this week, two non-Chinese technology giants have pulled out of major European events, citing the same concerns. On Wednesday, South Korea’s LG said it would be staying away from the enormous Mobile World Congress (MWC) gathering in Barcelona at the end of this month. The next day, LG also pulled out of Integrated Systems Europe, an Amsterdam audiovisual trade show with over 80,000 attendees. And on Friday, Ericsson followed LG’s lead in dropping out of MWC.
“After an extensive internal risk assessment, Ericsson has decided to take further precautionary measures by withdrawing from MWC Barcelona 2020, the largest event in the telecom industry,” the Swedish telecoms firm said.
Ericsson said it appreciated the efforts made by MWC organizer and mobile industry body GSMA to control the risk—the GSMA announced a range of measures earlier this week, such as the heavy disinfection of surfaces. However, it continued: “As one of the largest exhibitors, Ericsson has thousands of visitors in its hall each day and even if the risk is low, the company cannot guarantee the health and safety of its employees and visitors.”
The GSMA responded with regret to Ericsson’s decision, noting that the cancellation “will have some impact on our presence at this time and will potentially have further impact.”
But the show must go on, the organization said, because—as is true, thanks to developments such as 5G—the telecoms industry is in the midst of upheaval. “It is of great importance to the GSMA to continue to convene the industry at this critical time where connectivity is on the cusp of a new industrial revolution,” the GSMA said.
As for whether conferences should be going ahead at all right now, LG seems to think not. In its Thursday statement about its withdrawal from Integrated Systems Europe, the company pointed to advice issued by the World Health Organization (WHO) last week, when the body upgraded the coronavirus outbreak to global health emergency status.
“With the WHO recommending that individuals ‘promote social distancing,’ LG management believes that the most responsible decision is to avoid participating in large public events until the situation stabilizes,” the company said.
Mike Blackman, the managing director of Integrated Systems Events, the company running the Amsterdam show, gave a very different interpretation of the WHO’s advice, telling Fortune it “really talks about when you’re meeting people who you believe may be sick.”
The WHO has recommended that everyone should “maintain at least 1 meter (3 feet) distance between yourself and other people, particularly those who are coughing, sneezing and have a fever.”
“There is no evidence at present to suggest that there is community spread in Europe, so WHO/Europe is not currently requesting that large gatherings are cancelled,” a WHO spokesperson said in a statement. “This type of issue is for national authorities to address, based on their assessment of the risk of holding the event in their country. Similarly, companies and other organizations are at liberty to make their own decisions according to their specific circumstances and their assessment of the risk to business. WHO works closely with organizations that plan mass gatherings to provide advice and support on any potential impact on health.”
Blackman said almost 50 Chinese companies, out of 250 that signed up to exhibit at the show, had withdrawn from Integrated Systems Europe because of Chinese travel restrictions. Three non-Chinese companies have pulled out—LG and two unnamed German and Japanese firms—all of which were worried about contagion.
Leading exhibition organizers met this week at a long-planned summit of UFI, the global association of the exhibition industry, in Rome. Blackman was there, and he said everyone was facing the same situation.
“Yes we are being affected [but] there is more effect from the rumor about the virus than the virus itself,” he said.
Indeed, on Friday the European Centre for Disease Prevention and Control said there were still just 29 confirmed coronavirus cases in the EU and U.K., and the risk of contagion in the region remained low.
But then again, Singaporean authorities reported Wednesday that several businesspeople—from Singapore, Malaysia and South Korea—came away from a conference there with a coronavirus infection. The question now is whether this reality does spread to European events, or whether such fears remain unfounded.
More must-read stories from Fortune :
—Why China is still so susceptible to disease outbreaks
—Startup uses A.I. to identify molecules that could fight coronavirus
—Stock scammers are using coronavirus to dupe investors, SEC warns
—Governments deploy surveillance tech to track coronavirus victims
—WATCH: Coronavirus outbreak has disrupted global economy