fortune--2020-03-04--When will PlayStation 5 and Xbox Series X debut? With coronavirus, it’s anyone’s guess

Twitter tests disappearing tweets for users who are uncomfortable with permanence

Video game console launches are always somewhat chaotic affairs, but the ongoing coronavirus outbreak could make the planned blockbuster premieres of Sony’s PlayStation 5 and Microsoft’s Xbox Series X especially complicated.
Neither Sony nor Microsoft are expected to announce the dates of their releases by mid-summer. But both have said they plan to start shipping the consoles this fall – historically, that happens in late October or early November—in order to take advantage of the holiday shopping season.
But analysts say factory closures because of the coronavirus outbreak could result in either delayed releases or smaller initial stocks that cause retail shortages.
“My gut says we’re still going to see PS5 and Xbox Series X in North America in limited quantities before Black Friday, but the concept of a global launch is out the window now,” says P.J. McNealy, CEO of Digital World Research, referring to the busy shopping day after Thanksgiving.
Both companies declined to comment to Fortune about any impact coronavirus may have on their launch timelines. Typically, in the months leading up to a launch, though, the first consoles are coming off the assembly line and multiple rounds of testing are beginning. Large-scale manufacturing doesn’t usually start until May or June.
“With COVID-19, factories are shut down right now,” says McNealy. “That means testing and supplies will be constrained, which starts backing up and starts lowering the number of [consumer-ready consoles], even seven or eight months out.”
The Xbox and PlayStation are two of the biggest video game systems in the industry. The PS4 has sold over 103 million units since its launch. And while Microsoft does not divulge sales figures for the Xbox One, it has sold tens of millions of units in its current iteration.
New console launches are critical to both companies, though. The current systems are getting long in the tooth—they’re both six and a half years old—and their makers have been touting the benefits of the next generation for a while, which dampens sales of current generation products. Console sales in December were down 17%, according to The NPD Group, and down 22% for full-year 2019.
The China factor
Virtually every video game console is made in China. In 2019, nearly 90% of consoles imported to the U.S. were made there, according to Daniel Ahmad, senior analyst at video game market research firm Niko Partners.
The recent U.S.-China trade war and increased tariffs on Chinese imports may have prompted Sony and Microsoft to shift some of their manufacturing to other countries. If so, there would be less of a shortage in consoles than there would otherwise be.
“I think each of the console manufacturers is looking to Vietnam or South Korea or Taiwan for production,” says Michael Pachter, managing director of equity research at Wedbush Securities.
Another possibility for console makers is to shift manufacturing to Mexico, which may increase production costs, but at least some of that could be recouped from lower shipping expenses, since consoles earmarked for the North American market wouldn’t have to be freighted across the ocean.
Ahmad, though, notes that even if manufacturing had been moved outside of China, a number of key console components are still produced in China.
Microsoft’s biggest market is North America, so postponing a simultaneous global launch wouldn’t impact that company as much as it would Sony, which also relies heavily on Europe and its home country of Japan for sales.
One possibility, McNealy says, is the PS5 could debut in North America by Black Friday (in limited supplies), Japan sometime in December and Europe in the first quarter of 2021.
All analysts agree that it’s too early to know the full impact of coronavirus on the next console cycle, since the disease’s impact is still in flux. But Ahmad points out that we are quickly approaching a critical date.
“If the coronavirus outbreak is contained within the next month or two, then we would expect console manufacturers to be able to meet demand for the holiday quarter,” he told Fortune. “[However,] if manufacturers are unable to operate at full capacity before the end of Q2 2020, we could see … either limited supply or delayed releases.”
Pachter, though, is more optimistic.
“My guess is there won’t be much of an impact,” he says. “If there is one, it will just be a month or two.”
And, given recent reports that component costs for the PS5, which is loaded with advanced technology are running especially high, Sony may be okay with having more limited inventory than it initially planned.
Earlier this month, news broke that the current cost to manufacture each PS5 is $450. Therefore, if Sony hopes to break even on sales, it would have to price the new console at $470 to $500. That’s a significant jump from the $399 the PS4 launched at in 2013. And to remain competitive, Sony may be forced to sell the system at a loss while trying to make up for it from game sales, although that model is becoming outdated in the video game industry.
“If Sony is going to decide to price it at $400 and the bill of materials is $450, they’re not going to lose a lot of sleep if shipments are down,” says Pachter.
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fortune--2020-03-04--Twitter tests disappearing tweets for users who are uncomfortable with permanence

When will PlayStation 5 and Xbox Series X debut ?
With coronavirus , it ’ s anyone ’ s guess

Twitter is joining the bandwagon of social media companies that let users post messages and videos that disappear after a set amount of time.
Twitter said on Wednesday that it’s testing fleets, as in fleeting thoughts, for users to post content that disappears after 24 hours. The idea is to give an outlet to users who are uncomfortable with typical tweeting, which some complain is too public and permanent.
Fleets don’t appear in Twitter’s main feed. Instead, users who want to see them must tap on someone’s profile image. Viewers can react to the fleets by clicking the a love, fire, or other buttons, which the original authors can see in direct messages sent to them. Additionally, fleets can’t be retweeted.
“We’re hoping that Fleets can help people share the fleeting thoughts that they would have been unlikely to Tweet,” Kayvon Beykpour, Twitter’s product lead, tweeted on Wednesday. “This is a substantial change to Twitter, so we’re excited to learn by testing it.”
The new feature, which is currently available only for Android and iOS users in Brazil, mimics the general idea behind Facebook Stories, Instagram Stories, and Snapchat. Ephemeral content has been a big hit on those services.
Twitter users have long clamored for changes, like an edit button, to fix typos and revise posts that risk being misinterpreted. And while Twitter CEO Jack Dorsey has suggested Twitter may overhaul its service to help users give old tweets more context, he has repeatedly said that he will not add an edit button.
Twitter’s announcement of fleets coincides with Facebook’s efforts to make more of its content ephemeral and private under the theory that users increasingly prefer to communicate within small groups rather than the public at large.
Twitter’s timeline for testing fleets beyond Brazil, if at all, is unclear. The company did not immediately respond to a request for comment.
In recent years, Twitter has been mined for past and sometimes regrettable comments by public figures and for long-forgotten political campaign promises. But it has also led to controversies that have negatively impacted people’s careers like when old homophobic tweets by actor Kevin Hart emerged that forced him to step down as host of last year’s Oscars. Similarly, Disney fired the writer and director of Guardians of the Galaxy, James Gunn, after a series of decade-old insensitive tweets about pedophilia and molestation resurfaced. Gunn was later reinstated to his job.
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fortune--2020-03-04--Limiting this governmental emergency power could curb presidential overreach

More than a year after President Donald Trump declared a “national emergency” at the southern border, Congress is just beginning to reckon with the many laws that give presidents enhanced powers when they use those words. One such law is the International Emergency Economic Powers Act (IEEPA), and the sweeping powers it confers—combined with a lack of basic checks and balances—make it ripe for abuse.
But a bill recently introduced by Rep. Ilhan Omar (D-Minn.), the “Congressional Oversight of Sanctions Act,” which is part of a larger proposed foreign policy overhaul package, would be a start toward guarding against presidential overreach.
IEEPA is one of the many emergency powers that a president can invoke under the National Emergencies Act. To deploy IEEPA, the president must declare an emergency based on an “unusual or extraordinary threat” that has its source, at least in part, from overseas. The U.S. government can then take a range of extraordinary economic measures, from blocking all financial transactions or trade with individuals, entities, or governments deemed associated with the threat to freezing designees’ property and bank accounts. And it can do all of this while merely investigating whether to designate someone.
Although the typical IEEPA order targets foreign governments or organizations, the law can be used against Americans, too. After the September 11th attacks, President George W. Bush quickly deployed IEEPA to shut down several Muslim American charities, and to freeze the assets of individual Muslim Americans, based on suspicions that their charitable contributions benefited terrorists overseas—even though this was never proven in court. Judges in Oregon and Ohio did find that the government’s actions were unconstitutional, but the Supreme Court has not ruled on the issue.
IEEPA is by far the most commonly invoked emergency power. Presidents have issued 58 IEEPA declarations in the past 40 years, and most have lasted more than a decade. There are 31 IEEPA declarations in effect today—including the longest-running national emergency, which President Carter declared in 1979 in response to the Iran hostage crisis.
Ironically, when Congress passed IEEPA in response to various Nixon administration scandals, its intent was to restrain executive power and to make the use of sanctions—in the words of one congressional committee—“rare and brief.” What went wrong?
For one thing, presidents have largely ignored the requirement of an “unusual and extraordinary threat.” Presidents typically invoke IEEPA whenever they believe it would advance foreign policy goals, regardless of whether an actual emergency—one that creates a sudden and urgent crisis for the U.S.—exists.
In addition, presidential use of IEEPA is difficult for Congress to check. Congress can terminate an IEEPA emergency only by passing a law that the president signs, or by mustering a supermajority to override his veto. To date, Congress has never attempted to terminate an IEEPA emergency.
Indeed, Congress appears quite happy to delegate the complex realm of foreign sanctions to the president. But this passivity is short-sighted. The Trump administration, for instance, has threatened to use IEEPA in unprecedented ways, including to impose tariffs against Mexico in retaliation for illegal immigration at the southern border, and to order U.S. companies out of China as leverage in the U.S.-China trade war.
The potential for domestic presidential overreach is even more frightening: In the wrong hands, IEEPA could be abused to target organizations engaged in political dissent or opposition, based on unproven claims of ties to foreign threats.
The introduction of Rep. Omar’s “Congressional Oversight of Sanctions Act” is an opening to protect against such abuse. Among other changes, the bill would limit initial use of IEEPA’s powers to 60 days. If Congress does not vote within this period to continue the sanctions, they must end. If, on the other hand, Congress votes to approve the sanctions, they may continue, but Congress must reapprove them every six months. Along with detailed reporting to Congress about how and why sanctions are being deployed, the bill would also require the president to submit periodic assessments of how effectively the sanctions are achieving their stated goals.
Granted, the bill is not perfect. Asking Congress to separately reauthorize more than 30 sanctions regimes every six months would create a burden that Congress would almost certainly be unwilling to shoulder; requiring Congress to vote on a package of sanctions every year would be a more workable solution. Moreover, the bill does not address IEEPA’s failure to provide due process for Americans made subject to its provisions. At a minimum, Congress should require the government to obtain a warrant when it seeks to freeze Americans’ assets, and to provide detailed notice of the reasons why the American was targeted—along with a hearing in which the target can present a defense—when applying other types of sanctions.
Nonetheless, the bill constructively takes on a problem that has received far too little attention from Congress. And, importantly, it could serve to launch a long-overdue conversation on Capitol Hill about how Congress can head off presidential abuse of IEEPA—and more actively fulfill its role as a check against presidential overreach.
Elizabeth Goitein is co-director of the Liberty and National Security Program at the Brennan Center for Justice.
Andrew Boyle is counsel in the Liberty and National Security Program at the Brennan Center for Justice.
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fortune--2020-03-04--Deal reached on bipartisan $8.3B bill to battle coronavirus

Capitol Hill negotiators have reached agreement on an $8.3 billion measure to battle the coronavirus outbreak that’s spreading and threatening a major shock to the economy and disruptions to everyday life in the U.S.
The House will vote on the deal later Wednesday and Senate leaders are pressing for a vote in that chamber by the end of the week. The agreement was announced by spokespersons for the house and Senate Appropriations panels who negotiated the legislation.
The legislation came together in little more than a week, a rarity in a deeply polarized Washington. It triples the $2.5 billion plan unveiled by President Donald Trump just last week.
Trump, however, is sure to sign the measure, which has the blessing of top Republicans like Senate Majority Leader Mitch McConnell, R-Ky., and top House Republican Kevin McCarthy of California.
“This moment calls for collaboration and unity,” McConnell said. “It’s time to give our public health experts and healthcare professionals the surge resources they need at this challenging time.”
The agreement came together after House Speaker Nancy Pelosi, D-Calif., dropped a demand, opposed by the drug industry, to guarantee that any vaccines and drug treatments developed with government-backed research — but manufactured by drug companies — be offered at “affordable” prices.
Instead, the agreement provides $300 million for the government to purchase such drugs at “fair and reasonable” prices to distribute them to those who need it — which is the standard applied in earlier crises like the 2009 H1N1 flu outbreak.
The bipartisan legislation includes: $350 million to aggressively go after the virus in “hot spots” like Washington state; $500 million to buy drugs, masks, and other medical supplies for states, local governments and hospitals; $1 billion to reimburse state and local governments for costs incurred in battling the outbreak; and $300 million for the Centers for Disease Control’s rapid response fund.
More than $800 million would fund research into a vaccine, improved tests, and drugs to treat infected people. Another $1.3 billion would be used to help fight the virus overseas.
The agreement comes as the outbreak in the U.S. appears increasingly likely to affect workers who are instructed to stay home, immigrants who may fear seeking treatment because they are in the U.S. illegally, and the potential rapid spread among homeless people. Widespread school closures are possible as well.
Vice President Mike Pence, who is coordinating the administration’s response, is returning to Capitol Wednesday afternoon to separately brief House Democrats and Republicans.
Also Wednesday, top congressional leaders are meeting to discuss what additional steps may be needed to ensure the safety of the Capitol complex — for lawmakers and staff, as well as the annual influx of visitors this spring.
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fortune--2020-03-04--Why we launched a paywall

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fortune--2020-03-04--Demystifying the ingestible beauty trend and why it’s a bigger business than ever before

“Ladies, you can be beautiful,” read a listing in a 1902 Sears Roebuck & Co. catalog. “No matter who you are, what your disfigurements may be, you can make yourself as handsome as any lady in the land by the use of our French Arsenic Wafers.”
With just a few nibbles, these wafers were a guaranteed sure cure for freckles, blackheads, pimples, redness, and rough, yellow, or muddy skin, and they were said to permanently remove any facial impurities, leaving only a “deliciously clear complexion” in their place. For decades, women flocked to their nearest drugstores and ordered tins of the wafers in masses, swallowing their false promises of beauty right alongside the poisonous metalloid.
Over a century later, the thought of consuming a deadly compound in pursuit of vanity (or for any purpose other than one’s immediate demise) now seems absurd. Yet the promise of supple skin and a glowing visage from the mere bite of a snack or swig of a drink is as tempting as ever. From apple pie–flavored collagen protein bars to beverages infused with retinol, skin-enhancing ingredients have seemingly taken over. And whether you’re grocery shopping at Whole Foods or stocking up on foundation at Sephora, it’s difficult not to encounter at least one product that touts some amazing beauty benefit as a result of mere ingestion.
Arsenic wafers may have long since disappeared from the marketplace, but ingestible beauty as a category has persisted well into the modern era and has ushered in drastic growth in recent years. According to market research conducted by the NPD Group and Euromonitor International, of the $18.8 billion in sales generated by the U.S. beauty industry in 2018, beauty supplements were responsible for $144 million—a small portion at first blush but notably a 61% increase from their $89 million in sales in 2017. But as beauty brands and retailers small and large continue to roll out innumerable pills, powders, and drinkable liquids that ensure boosted collagen production, improved hair growth, and heightened cell turnover, industry insiders and consumers alike are beginning to wonder if these miracle products are really worth all the hype.
“I like to use the term ‘hope in a capsule,’” says Rajani Katta, a board-certified dermatologist and the author of Glow: The Dermatologist’s Guide to a Whole Foods Younger Skin Diet. “It used to be that consumers turned to ‘hope in a jar,’ but now they’re hoping for impressive results from a pill or powder.” She believes that as people have come to recognize the impact diet can have on overall health, brands have capitalized on it to market and sell specific nutrients.
Dirty Lemon sells what it touts as the “first-ever drinkable retinol,” featuring a proprietary ingestible beauty serum to support more youthful-looking skin and to stimulate natural collagen production. Courtesy of Dirty Lemon
The folks on the other side, however, have a slightly more optimistic take. While brands like Moon Juice and Dirty Lemon were indeed privy to consumers’ early interest in nutritional beauty, they have always sought to simply meet the demands and desires of their customers. “We recognized the interest in nutri-cosmetics early on in our business, which led to the development and launch of our first beauty elixir, +collagen, in 2016,” says Merel Petri, vice president of communications at Dirty Lemon parent company, Iris Nova. Since the launch of +collagen, the beverage company has witnessed the exponential growth of the U.S. beauty supplement market (worth just $4 million in 2015), and it has created a number of other beauty elixirs as a result.
The sector is obviously yielding good business, but the people behind many of these brands insist they are not simply chasing the money. “What you put into your body affects not just your health or how you feel but also things like skin clarity, how you age, and skin glow,” says Whitney Tingle, cofounder of Sakara Life, the perpetually trendy meal delivery service that last fall announced a partnership with Sephora to sell its beauty supplements. “We put our products through testing and clinical trials where appropriate, and we use the products ourselves. We also know that the only way we’ll get the wider population to convert to a ‘beauty from the inside out’ mentality is to give them real results that last.”
Lily Kunin, a health coach, author, and the founder of New York’s Clean Market, concurs. “I’m a big believer in beauty from the inside out, and I think that when you look good, you feel good,” she says. “Beauty is truly an inside job, so it is important to address underlying issues that may be causing inflammation, breakouts, dark circles, and more. What you ingest has a direct impact on your skin and complexion, and ingestible supplements have ingredients and nutrients we may not have in therapeutic doses in our daily diet.”
At Clean Market, where these sorts of products are blended into smoothies at the café, integrated into IV drips in the treatment area, and available for purchase in the shop, Kunin says her team puts every item through a strict vetting process to make sure it has the highest-quality and cleanest ingredients and the best formulas to support results. “That being said, a pill is never a magic fix,” she warns. “But it can definitely support a healthy lifestyle and a consistent beauty regimen.”
Sakara Life’s daily probiotic vegetarian capsules are advertised to include 11 diverse strains and a prebiotic fiber blend to enhance efficacy and reduce bloat. But experts recommend individuals research how and when to take probiotics based on age and lifestyle first. Courtesy of Sakara Life
With so many of these ingredients—such as collagen and retinol—already available in creams, serums, and other topical forms, some consumers are puzzled as to why they might need them in supplement form as well. “It really depends on each ingredient,” says Moon Juice founder, Amanda Chantal Bacon. “My favorite is when they work synergistically, like hyaluronic acid, tocos, and silver ear mushrooms, which work best when ingested and applied topically.”
Vitamin C and probiotics are also ingredients that offer different benefits when applied topically and ingested. As Kunin explains, topical iterations of vitamin C help brighten and firm skin, but when ingested, it can boost immunity as well. Similarly, topical probiotics can balance skin bacteria and biome, and when ingested, they target the gut, where the bacteria that eventually leads to skin blemishes originates. “There is evidence that certain nutrients, such as vitamin C, can be helpful for skin health if it reaches the skin via topical use or via ingestion,” Katta says. “But, and this is an important point, we simply do not have any evidence that taking extra doses are helpful. In fact, certain nutrients can even be harmful if you get too much. I call this the Goldilocks principle: You definitely don’t want too little, but sometimes too much can be harmful as well.”
Moon Juice’s SuperHair daily complex of multi-vitamins includes Biotin. There are numerous claims about the health benefits of biotin, but studies pointing to success rates are sparse. Courtesy of Moon Juice
There’s also a question of whether certain ingredients found in ingestible beauty products, even those that are naturally occurring in the body, should be taken at all. “The best use of a supplement is to treat a deficiency,” Katta says. “For example, if you are deficient in biotin, you may experience hair loss, and it would be important to take a biotin supplement. The marketers, however, have turned that around and now market biotin supplements as a treatment for hair growth.” Yet, in all the medical research conducted on biotin, she warns, it’s never been shown to help hair growth in consumers who have normal levels to begin with.
“It’s very important to discuss the use of any supplement prior to starting them,” Katta says. “Although they may appear innocent, there are in fact many, many reports of side effects and interactions with other medications from multiple over-the-counter skin, hair, and nail supplements, so you can never be too careful.”
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fortune--2020-03-04--Super Tuesday changed the Democratic race

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.
It’s now a two (white) man race.
Vice President Joe Biden’s campaign roared back to life last night, sweeping all Super Tuesday states short of Vermont, Utah, and California. At press time, Biden leads Bernie Sanders in delegate count 453-373; Elizabeth Warren holds a dismal 39. It’s an unusual victory: Biden overcame in states where he didn’t campaign, didn’t organize, and didn’t spend any money.
It’s almost like people already knew who he was.
The influence of Black voters is unmistakable in these result—an influence which had been much discussed in advance and yet somehow, thoroughly underestimated. After his resounding win in South Carolina, Biden can credit Black voter turnout for his wins in Alabama, Virginia, and Texas.
Supporters of the other candidates now face tough choices.
While managing to excite large numbers of Hispanic voters, the Sanders campaign must now grapple with the failure to turn out the promised youth vote. Warren supporters are facing a reckoning of a much different sort. The charismatic woman with both the plans and the chops to take a billionaire down a peg or six on national television fell short across the board, even in her home state.
Bloomberg, who came out on top only with the American Samoan vote, ended his campaign and endorsed Biden on Wednesday m orning.
But the big loser last night was the American voter.
Thousands experienced inexcusable delays from a variety of factors, from a lack of polling sites, to poor processes, to a lack of voting machines. The delays were mostly in California and Texas but voting systems across the country are vulnerable.
A couple of examples bode poorly for the future.
The first test of a newly revamped election system at Los Angeles County voting centers seemed to have failed. “It’s a mess,” said one voter who waited for a half-hour in a line only to be told that the voting machines were broken.
And consider Hervis Rogers, the very last person in line to vote at Texas Southern University. He cast his ballot at 1:30 a.m. after a seven-hour wait, and then headed to his third shift job. Even though he was already late, he stopped to chat with reporters. “It was my duty to vote,” he told the local ABC affiliate.
Rogers’ good-natured persistence is emblematic of the kind of deep pragmatism that Black voters often embody; clear-eyed about the barriers they face on the daily, yet determined to shape a system that routinely fails to make their communities a political priority.
“I wanted to get my vote in, voice my opinion,” he said. “I wasn’t going to let anything stop me, so I waited it out.”
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
On Point
What makes a great place to work? I’ll be finding out today at the annual Great Place to Work For All Summit in San Francisco. Michael Bush, the CEO of Great Place to Work, has long believed that it’s understanding how to unlock the real human potential of the people who work there. “Here’s what we know: That treating people with respect, credibility and fairness gives you a significant edge,” he says. “We can link those leadership behaviors to economics, but those behaviors have to be real.” I’ll report back. Link to the agenda and livestream below.
GPTW For All Summit 2020
Charlottesville will no longer celebrate Thomas Jefferson’s birthday The former president’s hometown has decided instead to celebrate Liberation and Freedom Day, marking the day when Union troops arrived to free the enslaved people, on March 3, 1865. (I was surprised to learn that they were the majority of Charlottesville’s residents.) “This marks a wholesale shift in our understanding of the community’s history,” Jalane Schmidt, a professor at the University of Virginia who helped organize the weeklong event. “To take Thomas Jefferson’s birthday off the calendar and add this is a big deal.”
Washington Post
Brewer’s trade group announces grants to increase diversity in the industry The Brewers Association, the nonprofit trade association for independent brewers in the U.S., announced the winners of its 2020 Diversity and Inclusion Event Grants program. The program aims to support events that promote underrepresented brewers. The grants are part of a broad effort to diversify brewing. Last year, the Association conducted its first benchmarking survey of brewery owners and employee diversity in terms of gender, race, and ethnicity. This year expect a new mentorship program and a series of case studies on best practices. Fourteen events were selected from an applicant pool of 69 and will receive grants totaling $50,000. They sound like a lot of fun!
Brewer’s Association
On Background
Reimagining the corporate ladder People who want career growth are promoted into jobs they’re terrible at every day, so reimagining a path for growth that’s based on true talent is a compelling idea. It also requires re-thinking how people are compensated. This post from Gallup asks companies to stop thinking about careers as a ladder, and more like a jungle gym, designed on matching strengths with work and developmental opportunities. “The key is to always be thinking about When does this person shine the most? and then balancing that employee's talents, personal goals and expertise with what the company needs at the time.” Unstated, but food for thought: How would this approach help underrepresented employees?
Gallup
Making music with your data While this has nothing to do with race, it is an inspiring reminder that even information that we think we (sort of) understand can be presented and understood in a fresh way. The much fussed-over yield curve, the chart that compares the shifting yields of government bonds of different maturities, is used to assess market health and considered by analysts to be a warning bell for impending recession. Because it changes daily, animating the data — in this case, five days-worth of chart data per second — can help market-watchers track the curve’s shape. Fascinating! But to make it more powerful, this data expert mapped the Y-axis onto a four-octave scale. Each data point now makes a sound. As the yields rise, so does the pitch. So when it inverts, you can hear it in the music. Now you know what the yield curve and data sonification is.
Financial Times
The history of black women doctors in comic books Darnel Degand has written an excellent essay exploring the long history of discrimination Black women have experienced when they’ve pursued careers in medicine, and the media’s role in perpetuating specific stereotypes. Even W.E.B. Du Bois tackled the subject in a 1933 article, “Can a Colored Woman be a Physician?” (Yes, was his answer.) “The inability to see black women as doctors extends into the world of comic book superheroes,” Degand writes, with one notable exception: Dr. Cecilia Reyes, who appeared in Marvel’s X-Men in 1997. Degand is clearly a comic book fan and X-Men readers will geek out at his analysis of Dr. Reyes' plot line. Others will understand how much of an outlier she was. As her narrative grew, she became bolder, changed her bobbed hair to long locs, and was not there for any discrimination. “To the contrary, she was portrayed as a confident doctor who was in command of her operating room.”
AAIHS
Tamara El-Waylly produces raceAhead and manages the op-ed program.
Quote
"The alleged menace of universal suffrage having been avoided by the absolute suppression of the negro vote, the spirit of mob murder should have been satisfied and the butchery of negroes should have ceased.”
—Ida B. Wells


fortune--2020-03-04--James Bond sequel ‘No Time to Die’ delayed until November due to coronavirus

The release of the James Bond film “No Time To Die” has been pushed back several months because of global concerns about coronavirus.
MGM, Universal and producers Michael G. Wilson and Barbara Broccoli announced on Twitter Wednesday that the film would be pushed back from its April release to November 2020.
The announcement cited consideration of the global theatrical marketplace in the decision to delay the release of the film. “No Time To Die” will now hit theaters in the U.K. on Nov. 12 and worldwide on Nov. 25.
The Bond films make a significant portion of their profits from international markets. The last film, “Spectre,” made over $679 million from overseas theaters in 2015 with over $84 million of that total coming from China.
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Concerns had already been brewing around the imminent release and the global outbreak. Publicity plans in China, Japan and South Korea had previously been canceled. And on Monday, the popular James Bond fan site MI6-HQ published an open letter to the producers urging them to delay the film’s rollout.
“It is time to put public health above marketing release schedules and the cost of canceling publicity events,” the letter said.
Hollywood film release and production schedules have already been affected by the outbreak. Last week, Paramount Pictures halted production on the seventh “Mission: Impossible” film, which had been scheduled to shoot in Venice, Italy. The studio also postponed the Chinese release of “Sonic the Hedgehog.”
The coronavirus outbreak emerged in China and has spread globally. In all, more than 94,000 people have contracted the virus worldwide, with more than 3,200 deaths.
More must-read stories from Fortune:
—Pamela Adlon wants you to know she has your back
—How the Beach Boys became two separate, warring factions
—Emma. star and director on updating Jane Austen’s text through blood and tears
—No, A.I. isn’t deciding which movies to green-light
—Contagion writer, scientific adviser reflect on film’s newfound relevance amid coronavirus crisis
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-04--Pamela Adlon wants you to know she has your back

It’s a frigid-for-California Monday morning in early February, and Pamela Adlon has been rendered nearly speechless. Kind of.
“Okay, I’m done,” says Adlon. “What the fuck you wanna interview me for? She hid from fucking Nazis in a basement. What are you interviewing me for? Are you fucking kidding me?”
Seated inside Corbin Bowl, a bowling alley in L.A.’s Tarzana neighborhood, she’s just had a near-gutting conversation with an octogenarian bowler from Hungary named Georgie. On her way out, the latter announced to Adlon that she’s moving to Phoenix, that she survived cancer (which explains the wig, she says), and that she also once escaped certain death at the hands of Nazis.
Adlon is stunned, rapt, and totally in her element. She was also the first to converse with the senior sports club Georgie is part of—it meets every Monday morning and calls itself Fun Group—and it’s clear she couldn’t help but engage with them. The Emmy-winning voice actor (King of the Hill), and now writer-producer-director, was even more tickled when another of the eightysomething gals quipped: “You look familiar. Are you famous?”
Such a guileless exchange between common folk and an established Hollywood figure (Adlon’s been acting since she was a kid, appearing in such 1980s gems as Grease 2 and Say Anything), especially while being interviewed by a journalist inside a bowling alley in the San Fernando Valley, isn’t typical.
But moments like these are lifeblood for Adlon, 53, and in turn, her FX series, Better Things. From the first frame of her surrealist, semiautobiographical dramedy, which debuts its fourth season on March 5, Adlon was TV’s first devoted emotional anthropologist: someone who translates life’s most bewildering moments into narrative safe spaces for women, kids, and anyone, really, who might need to know that it’s totally okay to feel totally fucked up. In playing Sam Fox, who like her creator is an L.A. actress and single mother to three girls, Adlon has also transcended the “comedy about Hollywood” trope, creating in its place one that exploits the quiet crevices between plot points that most expose who we are, and, ideally for her, just how much we love each other.
In between subsequent Fun Group diversions, Adlon spoke to Fortune about Better Things’ (very rainy) fourth season, how it feels to be the series’ only director, her filmmaking aspirations, and why she’s most inspired by “unfinished shit.”
This conversation has been edited and condensed for clarity.
“My show…is a way for me to deal with things that are weird in the world,” says Adlon, who was born into a showbiz family: Her late father, writer-producer Don Segall, was a veteran of such classic sitcoms as “The Jeffersons” and “The Love Boat.” Photographed by Maggie Shannon for Fortune
There’s little doubt about Sam’s state of mind in season four after she buys an El Camino, and declares, with a snake around her neck: “Welcome to my midlife crisis!”
Yeah, it’s pretty on the nose. [Laughs]
How much of this for you is about riffing on the midlife-crisis cliché? The idea that women aren’t allowed to indulge those feelings; that men get sports cars, and we get menopause?
That’s exactly right. When do we ever get to see a woman go through that? I’ve always wanted to get a fucking cool, old-school car. That’s why Sam’s like, “Fuck it, I’m gonna get an El Camino to replace my minivan.” I could never do that in real life, because I can’t fuck the environment up like that. But it’s fun to see Sam live out my fantasies. By the way, the real-life thing that inspired that episode was that my minivan got stolen from the Honda service department years ago. I was like, “Oh, that’s terrible. But please, don’t look for it!” Then they found it filled with porn and meth.
It’s raining throughout this season. Was that an intentional narrative device, or were you simply at the mercy of shooting during a wet L.A. winter?
The end of 2017 was a really scary time. We had to evacuate twice because the wildfires were raging all around us. Then the next year all we had was rain, rain, rain, and rain. I felt like I’d conjured it in my heart, like I was the rainmaker! So day one in the writers’ room for this season I said to my team, “It’s raining, and it rains the whole season.” There was a lot of negotiation with my line producer and my first AD. [Laughs] I just really wanted to see L.A. in the rain. People think we’re made of sugar here and can’t fucking handle it. But for me it’s the best weather. So yeah…rain, forgiveness, couples, divorce—those were themes I put on boards I have at home and in the writers’ room for this season.
“One of my camera guys worked on Food Network shows, which is very helpful!” says Adlon of executing increasingly more frequent cooking sequences on “Better Things.” “I’ve always been motivated by chefs and kitchens. [Cooking] is a form of love that’s accepted no matter what.” Suzanne Tenner—FX
Elaborate cooking sequences have also become a staple of the show. Is that a real-life respite for you?
It’s a big part of my personal life; it’s essentially occupational therapy for me. At home, I cook in silence. It’s a way for me to get anxiety out of my body because it’s purely a basic skill, kind of like blacksmithing. You put all your focus into it. I’ve been doing it for a long, long time, but I still feel like an amateur.
Really? You seem like such a pro.
It’s because my mom always did it, and I love reading cookbooks. I’ve always been motivated by chefs and kitchens. Cooking is also the easiest way to bring your family together and take care of everybody all at once. It’s a form of love that’s accepted no matter what, as opposed to “Let’s sit down and have a talk.” Ewww, no! Instead, “Here’s some fried chicken.”
This season marks more transition and growth for Sam’s daughters, including for her middle child, Frankie, played by Hannah Alligood, who begins to explore her sexuality. You’ve said you were the target of some criticism after season one for not addressing that Frankie was transgender, which many assumed she was based on her clothes. But you’ve said she isn’t. How did that feel?
Part of me resented the pressure to throw a label on a 12-year-old girl.
Adlon says her daughters have adjusted to seeing a version of their lives depicted by the “Better Things” actresses (from left): Mikey Madison (Max), Olivia Edward (Duke), and Hannah Alligood (Frankie). Suzanne Tenner—FX
The idea that because this kid doesn’t present herself in a classically feminine way, she’s automatically male.
Yeah. When I was growing up, the word was “androgynous.” I was a tomboy. I wasn’t a cute, sexy tomboy. I really was a tomboy. And every role I played was like that. I even once played the girl who grows a penis! So it was massively important to me that one of the girls on the show be fluid, because that’s how it is at home with my own kids. Thank God I didn’t succumb to the pressure to change her. Why the fuck does she have to proclaim anything? She’s a child. So I said, “In season two, I’m not saying anything about it.”
“Growing up…I was a tomboy. I wasn’t a cute, sexy tomboy. I really was a tomboy,” notes Adlon, who says her looks led to typecasting early in her career, including the role of a young woman who grows male genitalia in the 1986 feature “Willy/Milly”(left) as well as a slew of “boyish” TV guest spots, such as a 1983 stint on NBC’s “The Facts of Life.” Concorde/courtesy Everett Collection; Embassy Pictures/Courtesy: Everett Collection
Since then, Frankie’s gender expression has become just one element of who she is.
Exactly. She has quirks. OCD. By the way, one of my editors on the first three seasons was a trans woman. I told her, “I feel a lot of pressure for Frankie.” She’s like, “Fuck all of that.” I’ve also had three trans women actors in my show, but I’ve never “pointed” them out. So much of my show is “Show, don’t tell.” I’m never actually explaining anything.
Four seasons in, how often are you still pulling events from your life and recalibrating them for the screen?
Things happen, and I’ll write those on the board, too. For example, my daughter and I were in line at H&M, and this woman was frantically looking for her kid. We left the line to help her. Thankfully she found him, but when I got back in line I was like, “You motherfuckers, none of you even gave a shit!” So that’s a scene this season. Everything still has to have a shred of the truth. I learned that from my dad [the late screenwriter-producer Don Segall]. John Edward, the psychic medium, who is [on-screen daughter] Olivia Edward’s dad, talks about the “afterlife car wash.” It’s the idea that, when people die, the bad shit goes away. It’s kind of what I hope my show does; it’s a way for me to deal with things that are weird in the world.
Has it helped you better understand your relationship with your mother, Marina? Celia Imrie brilliantly plays a version of her on the show.
Completely. I used to be like, “Oh, my God, if she tells me the fucking story about calling Verizon one more time I’m gonna drive my car into a brick wall.” Then one day I just looked at her, and I was like, “Ohhh, this is funny.”
In January, Adlon—seen here with two of her daughters, Odessa and Gideon Adlon, and her mother Marina Segall—announced on social media that she’d become a dual citizen of the U.S. and the U.K. Courtesy of Pamela Adlon via Instagram
Have your kids adjusted to seeing a version of their lives depicted on-screen?
The lines get blurred for them. Now they’ll claim things in the show happened to them, and I’m like, “No that’s from my middle school experience.” [Laughs] When I showed my daughters the first three episodes of this season, Gideon, my oldest, cried through all of them. I think they’re incredibly proud of their mom. And Gideon and Odessa are superambitious, too. They wanted to get into Hollywood, and they’re succeeding.
How much have you had to quell feelings of protectiveness for them because you know how incredibly difficult it can be for young female actors?
I think now it’s more about acceptance. Also, it’s shocking how different the business is today from when I was coming up. Producers would make me feel really bad about the way I looked. But if someone is told they have a physical shortcoming now, it’s essentially against the law. Also [actress] Meredith Salenger and I were talking a few months ago about how much kids are able to work now. I mean, there are 600 scripted fucking television shows!
That certainly wasn’t the case in the early 1980s when you and Meredith were starting out. It was Grease 2 and The Journey of Natty Gann.
[Laughs] Exactly. There were 15 projects. But I’ve always said that my show is a voice for my kids and their friends. By telling their stories, they’re being seen and heard. The carefully curated moments, support from my network—it’s all enabled me to make this crazy fucking thing. I mean…what is this show? How would you describe it?
For me, it’s a show about feeling comforted.
Yes! It’s comforting. Awful, uncomfortable situations happen, but people can say, “Thank God that’s not me” or “I wish I’d done that.”
Divorce, as you’ve mentioned, is a constant theme in the series. If your own divorce hadn’t happened 10 years ago, would you still have made a show about your life?
I wouldn’t give it that much power—that’d be selling myself short. I don’t even remember when there was another person in my life. I just think I’ve always had this drive inside of me. My dad was always fighting against doors closing in his face. And when he turned 50, everything stopped for him. The irony isn’t lost on me that everything opened up when I turned 50. The world is so different now.
In a lot of ways the show is a conduit for exploring, and sometimes mourning, expectations for life that have gone unmet.
Isn’t that interesting? And I’m the person who has three children telling a story about how having children isn’t enough. It’s not everything. If we don’t put time into ourselves, we’re doing our kids a huge disservice. And they’re gonna be gone in two seconds. My baby is about to turn 17!
As the series’ only director since season two, how free are you now to indulge every instinct you have?
It’s funny, when FX got the first cut of this season’s first episode, one of the notes was “You know it’s four and a half minutes before anybody speaks, right?” I’m like, “Yeah!” [Laughs] It’s gotten exponentially easier each year to translate to them what I’m trying to do. Now they’re like, “I saw it on the page, but when you did it, it became an entirely different thing.” They trust me.
“After season two, people would ask me, ‘Will Sam ever get back together with Henry Thomas’s character, Robin?’ says Adlon. “I was like, ‘Wow. It’s really not okay for a woman to be on her own.’ Everyone’s always trying to fix her.” Photographed by Maggie Shannon for Fortune
Is making features the next step for you?
I’ve actually just optioned a memoir that a high school friend of mine wrote. I’m really excited. But I feel like I already make movies! There’s an episode this season that’s like three features in one. It’s fucking nuts. The hardest part for me is always chopping them down, because I want them to breathe.
Who are your filmmaking heroes?
John Cassavetes. The dialogue, the camera movement…it’s all so raw, scary, and uncomfortable. The line in Love Streams when Cassavetes says, “Dirty dishes in the sink make me wanna throw up.” Come on! And Bob Fosse…just look at the opening of All That Jazz. It’s the greatest thing ever.
Like the work of those filmmakers, Better Things similarly combines elements of reality and fantasy. For example, Sam was visited by her father’s ghost in season three.
Yeah. My script supervisor calls it “magical realism.” She gives me so much shit.
There’s a scene this season where Diedrich Bader’s character, Rich, who is gay, is in bed with Sam, and she’s consoling him while he sobs over a breakup. It’s one of the more beautiful depictions of intimacy and love I’ve seen on-screen in a long time.
Right? They’re the hottest couple on TV. Who needs sex? [Laughs]
Maybe that’s what the show is about? Love? Love for your kids, your friends, your work, but most important, for yourself?
Yes! That’s exactly what the whole thing is about for me. It’s funny, after season two, people would ask me, “Will Sam ever get back together with Henry Thomas’s character, Robin?” I was like,“Wow. It’s really not okay for a woman to be on her own.” Everyone’s always trying to fix her.
“I feel like I already make movies,” says Adlon (pictured on set with “Better Things” actress Olivia Edward) of her big-screen directing aspirations, which in the near future include adapting a friend’s memoir. “The hardest part for me is always chopping [episodes] down, because I want them to breathe.” Suzanne Tenner—FX
And everything about the show suggests that you rail against resolution of any kind.
I’m so happy you said that, because it’s massively important to me. It’s excruciatingly detail-oriented work I’m doing. Not having a payoff in each episode is so much harder. And it’s taken years of training my network, actors, everybody that it’s okay! It’s an act of love to not distort somebody’s feelings about what they’re seeing. People have finally stopped asking me why Sam and the girls always touch the statue at the top of their stairs. It’s whatever you want it to be. I think unfinished shit gives people hope.
More must-read stories from Fortune:
—How the Beach Boys became two separate, warring factions
—Emma. star and director on updating Jane Austen’s text through blood and tears
—No, A.I. isn’t deciding which movies to green-light
—Breaking Bad ended six years ago—but Better Call Saul and merchandise keep gaining steam
—Contagion writer, scientific adviser reflect on film’s newfound relevance amid coronavirus crisis
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fortune--2020-03-04--Coronavirus is mutating: Chinese scientists find second strain

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As healthcare officials fight to stem the outbreak of coronavirus, researchers in China say preliminary research shows that COVID-19 is mutating and there are at least two types of the virus now.
One of those, the more aggressive strain, has infected 70% of the people tested, while a less aggressive strain was linked to the rest, according to doctors at Peking University’s School of Life Sciences and the Institut Pasteur of Shanghai.
Scientists dubbed the aggressive strain “L type” and the less prevalent version “S type.” The L type strain was seen more frequently in Wuhan, where the outbreak began, but researchers note that the frequency of infection has dropped off. They also cautioned that the data they had available for study was “very limited” and follow-ups were necessary to understand the evolution of the COVID-19.
“Whereas the L type was more prevalent in the early stages of the outbreak in Wuhan, the frequency of the L type decreased after early January 2020,” they wrote. “Human intervention may have placed more severe selective pressure on the L type, which might be more aggressive and spread more quickly.”
Researchers say the different strains were likely caused through a mutation of the ancestral version of the virus. And that could mean more are coming. They urged the scientific community to come together to battle and contain the outbreak.
“These findings strongly support an urgent need for further immediate, comprehensive studies that combine genomic data, epidemiological data, and chart records of the clinical symptoms of patients with coronavirus disease 2019 (COVID-19),” they wrote.
More must-read stories from Fortune:
—How to think about COVID-19
—Coronavirus spreads to a previously healthy sector: corporate earnings
—Coronavirus is giving China cover to expand its surveillance. What happens next?
—Coronavirus shows why we need vaccines before, not after, an outbreak
—Before coronavirus, there were SARS and MERS. Do epidemics ever really end?
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fortune--2020-03-04--Ikea recalls 800,000 children’s dressers for risk of tipping over

Ikea is recalling 800,000 dressers that it says could tip over and injure small children, possibly fatally. The company says it has received six reports of the Kullen dressers tipping over, including two with minor injuries.
In conjunction with the U.S. Consumer Product Safety Commission, the recall of the three-drawer Kullen dresser is the latest in a long string of recalls for the company, which recalled 17.3 million dressers in 2016 for the same reason. At the time, Ikea had received reports of eight children being killed by the chests.
The company is warning people who own one that is not properly anchored to the wall to immediately discontinue use and either return it to the store or properly anchor it. (The retailer will either send a kit for consumers to anchor the dresser themselves or provide in-home installation for free.)
The popular dresser was sold at Ikea stores between April 2005 and December 2019. It sold for roughly $60 and was available in a variety of colors.
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—Contigo children’s water bottles recalled for possible choking hazard
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fortune--2020-03-04--Why it’s so hard to find the next Warby Parker

If you’ve got a pulse and an Instagram account, you’ve likely noticed that almost weekly there are new direct-to-consumer brands vying for your attention and loyalty: beautifully designed toothbrushes, houseplants, paint, loafers, window treatments, smoothies, vitamins, and mattresses delivered exactly how and when you need them.
“Consumers are searching for more authentic brands,” says Mark Elkins, a partner at McKinsey who specializes in consumer products. The direct-to-consumer market is made of brands selling their own products on their own branded sites (with total control over content, pricing, and consumer data), and it is absolutely exploding. New research from Diffusion shows that one-quarter of Americans are shifting purchases in wellness, apparel, big retail, and tech from traditional outlets to direct-to-consumer brands. Sonya Brown, a investor at Norwest in Silicon Valley, where her firm has invested in many direct-to-consumer startups, from loafers maker Birdies to men’s activewear Vuori, says the space “is really about building an enthusiast brand.”
The gold standard? Warby Parker. Having just celebrated a decade in business this February, the company has opened more than 115 stores, reached profitability in 2018, and was reportedly valued at $1.75 billion in 2018. “When the four of us launched the company as students at the Wharton School of the University of Pennsylvania, ‘direct to consumer’ wasn’t a widely used phrase, much less an industry,” says cofounder and co-CEO Neil Blumenthal. “Our thesis was if you have direct relationships with customers, you can provide greater value and create better experiences. Customers like that.”
Indeed, myriad startups and their VC backers have taken to dubbing themselves the “the Warby Parker of [insert consumer product here]” in ads, magazine articles, and on social media to communicate some standard of efficiency and value. But it turns out that positioning your startup as the next Warby Parker, and actually becoming the next Warby Parker, are two very different things.
“These questions are at the heart of what we’ve been beating our chest about for a while,” says Morgen Newman, cofounder at feminine care company Cora. “Warby was one of the first and most classic examples of this new wave of business-to-consumer opportunity.” Newman, whose company uses its website, a subscription service, Target, and Amazon to reach its customer base, notes that since he and his partner Molly Hayward started Cora the market has changed. “When we launched in 2016, subscription boxes were all the rage. You could get beef jerky for your dog delivered to your door every month,” says Newman. “Advertising on Facebook, you could find incredible growth and efficiency. But now the rest of the world is online. The market catches up and rectifies these business models.”
A quick scan of recent headlines reflects the market challenges too. Popular brands such as Birchbox (25% layoffs in staff worldwide), Casper (a touch-and-go IPO and reported drop in valuation), and now Outdoor Voices (layoffs following founder Tyler Haney’s departure) have all been struggling to make their businesses work, despite high visibility, tons of capital, and celebrated products. Elkins contends that a clear view of purpose and an unwavering commitment to the consumer fall at the root of a brand’s success or failure. “When I see companies with a serious business,” says Elkins, “they are built on a different level.” Data rules the day, and how brands use that data to communicate with and understand their customers is paramount.
It’s no surprise that at Warby Parker, building out a data-science team came early in the company’s growth, with collection and analytics at every level of the business. “Warby people are more proud of their Warby glasses than any other pair they’ve had before, and they were a better deal,” says Newman. “Brand is the root of it, but it goes back to founders who actually thought about their customers, versus the ones who thought about a business model innovation.”
That’s where scalability comes into play and where the Warby model really resonates with so many founders and CEOs. There’s a difference between leveraging different channels (direct mail, social media, original content) and truly, very precisely meeting your customers where they need you to be, says Elkins. For Blumenthal’s part, his best advice to budding entrepreneurs is to do the required legwork to deeply understand not only the problem you’re solving but also the market, its size, and its limitations. Showing some restraint and growing thoughtfully are tough, too, particularly when there’s plenty of capital to go around and there are incentives to prioritize growth above all else.
Marisa Sharkey, cofounder and president at Birdies, notes that sometimes bringing your business back to basics with brick and mortar goes a long way in keeping tabs on the market—and your customers. Opening a flagship Birdies store in San Francisco, she says, has been a huge asset to her company. “The furniture layout has customers sitting, chatting, and trying on shoes together in a way that fosters connections,” says Sharkey. “Creating that camaraderie and support for women in their real life is our broader mission…We also get immediate feedback and use it in all aspects of our decision making.” Andrew Dudum, CEO at health care and wellness company Hims & Hers, agrees. After two years in business selling prescriptions, supplements, and health care services online, the company is planning to open its first pharmacy, in Columbus. “You need to be able to talk to customers in very different ways,” he says. “This is about a multi-touch approach, at its core, starting at the basics and adding value. A lot of that can’t be done in the digital world.”
As is the case in every business, says Brown, execution is everything, and it isn’t always a simple play. Scaling and growing your good idea is the tough part, particularly if you’re not first to market. “It is so easy to trip over your feet,” says Hayward. “If you’re starting something because it’s a cool idea, but you don’t know how to run that business, it’s easy to misunderstand how complex it becomes. There’s only so much shelf space. You really have to stand out and pull ahead of the pack pretty quickly.”
Of course, the pack is growing daily, and Blumenthal is rooting for all sorts of new brands on the horizon. “Businesses are going to start, and businesses are going to fail,” he says. “That’s not an indictment on the direct-to-consumer model. People love value. And what’s value? The ratio of quality to price. They prefer better customer experiences to worse customer experiences. Those principles will never go away. And businesses that are direct to consumer are best positioned to provide great value and great customer experiences because of their direct relationships with their customers. I’m as optimistic as I’ve ever been, provided the fundamentals are strong.”
And, of course, while brands vie to be the next Warby Parker, it’s still fun to root for Warby Parker too.
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—Coronavirus spreads to a previously healthy sector: corporate earnings
—A Fed rate cut won’t cure what’s ailing the stock market
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—Credit Karma was acquired rather than pursuing an IPO. Will more companies follow suit in 2020?
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fortune--2020-03-04--H&M made its former sustainability chief its CEO. Now it wants to help other fashion houses become s

H&M made its former sustainability chief its CEO. Now it wants to help other fashion houses become sustainable—for a fee

Sweden’s Hennes & Mauritz, one of the world’s top three fashion retailers, has been on a sustainability kick in recent years. Now it wants to share its progress with rivals—for a price.
In one of its first major moves since appointing former sustainability chief Helena Helmersson as CEO in January, H&M on Wednesday launched an initiative called Treadler that will give other companies access to H&M’s global supply chain and even help them with product development.
H&M’s aim here is—in the words of Treadler managing director Gustaf Asp—to “utilize the full potential of H&M Group’s extensive investments and progressive sustainability work by catering to clients’ needs and contributing to driving long-term growth for H&M Group, while driving change in our industry.”
The company is not providing many details, but said Treadler’s clients will be able to draw on its expertise and its established supplier partnerships. A spokesperson also said some “midsize” companies had expressed a demand for services such as these.
There is certainly a need out there for sustainable supply-chain expertise and access. This is an industry that, according to United Nations estimates, may be responsible for as much as a tenth of the world’s carbon emissions. Almost three-quarters of its output ends up burned or dumped in landfill. Big investors are increasingly calling for fashion houses to be able to demonstrate accurate monitoring of their supply chains, in order to fix these problems.
But, as Zilingo CEO Ankiti Bose wrote for Fortune last year, the supply chain’s fragmentation makes it difficult and overly expensive for smaller fashion brands—who lack serious economies of scale—to produce environmentally and socially responsible garments.
It is not surprising to see the Treadler initiative coming from H&M. Not coincidentally, the firm’s new CEO was its head of sustainability from 2010 to 2014 before becoming head of production and then chief operating officer. Helmersson’s appointment as chief executive was seen as a signal that H&M intended to ramp up improvements in the sustainability of its supply chain. Now the group is set to capitalize on that work in a new way, earning a service fee by plugging other fashion outfits into that supply chain.
However, H&M has also frequently found itself under fire on sustainability grounds, despite its very public efforts to present itself as a leader in the field.
It may tout its use of recycled materials, its emissions-reduction goals, and its use of artificial intelligence to make “sustainable business decisions”, but H&M is nonetheless a “fast fashion” firm that makes a lot of cheap, disposable clothing. Environmental campaigners have accused it of over-selling its recycling claims, and consumer advocates have charged it with misrepresenting its “sustainability credentials” in its marketing.
According to Deborah Drew, the lead researcher on sustainable fashion at the World Resources Institute in Washington, D.C., it is “good to have avenues to sustainable action be paved a little bit, especially for smaller companies [but] ultimately the volume being produced [by the fashion industry] can outweigh the efficiencies of sustainability practices.”
What the industry really needs is new business models that slash the need for so much production and consumption, Drew said.
“There is a lot we don’t know about the future, but we do know that the need for affordable clothing will continue to increase and our industry is expected to grow,” a Treadler spokesperson said when asked how H&M reconciles its sustainability driver with its fast-fashion nature. “As fashion and apparel will continue to be produced, our goal is to do that in a more sustainable way. The fashion industry cannot continue to operate as it has in the past…We believe that the best way forward is through partnerships, knowledge sharing and transparency.”
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fortune--2020-03-04--Bloomberg drops out of presidential race, endorses Biden

Billionaire Mike Bloomberg ended his bid for the Democratic presidential nomination on Wednesday and endorsed former Vice President Joe Biden. It was a stunning collapse for the former New York City mayor, who had his 2020 hopes on the Super Tuesday states and pumped more than $500 million of his own fortune into the campaign.
Bloomberg announced his departure from the race after a disappointing finish on Super Tuesday in the slate of states that account for almost one-third of the total delegates available in the Democratic nominating contest. He won only the territory of American Samoa and picked up several dozen delegates elsewhere. Biden, meanwhile, won big in Southern states where Bloomberg had poured tens of millions of dollars and even cautiously hoped for a victory.
Two of his former Democratic rivals, Amy Klobuchar and Pete Buttigieg, dropped out of the race and endorsed Biden as the moderate alternative to Vermont Sen. Bernie Sanders just the day before Super Tuesday.
Bloomberg ran an unprecedented campaign from the start. His late entrance into the race in November prompted him to skip campaigning in the first four voting states of Iowa, New Hampshire, Nevada and South Carolina. He hung his success on Super Tuesday, spending at least $180 million on advertising in those states, but had planned to continue deep into the primary calendar, already spending millions on advertising in states like Florida, Michigan and Pennsylvania. Before results poured in on Tuesday, he projected confidence while campaigning in Florida, only to have his aides say the campaign would reassess the next day.
Voters ultimately rejected Bloomberg’s argument that he was the candidate best poised to take on Republican President Donald Trump. The president, for his part, had paid close attention to the Democratic nominating contest and had been especially fixated on Bloomberg. Trump regularly railed against his fellow New Yorker on Twitter, mocking his short stature by calling him “Mini Mike” and claiming Bloomberg was the candidate he wanted to run against. On Tuesday, he called the results a “complete destruction” of Bloomberg’s reputation.
Bloomberg, 78, is one of the world’s richest men, worth an estimated $61 billion. His fortune flows from the financial data and media company that bears his name, which he started in the 1980s. In addition to serving 12 years as New York mayor, he endeared himself to progressive groups by pouring hundreds of millions of dollars into fighting climate change and curbing gun violence.
In the early weeks of his campaign, he used his vast fortune to introduce himself to voters outside New York on his own terms, and his rivals accused him of trying to buy the party’s nomination and the White House. As voting drew closer, the former Republican was forced to confront his Democratic rivals head on by appearing alongside them on a debate stage. His first performance was shaky and uneven and caused voters to view him with a more critical eye.
He proved unable to overcome consistent criticism of New York’s use of the stop-and-frisk police practice under his tenure as mayor, which disproportionately targeted young black and Latino men for searches aimed at finding weapons. The practice ended after a federal judge declared it unconstitutional, and Bloomberg apologized for using it weeks before announcing his presidential run.
He similarly faced pointed criticism — primarily from rival Elizabeth Warren — about the treatment of women at his company, Bloomberg LP. Under pressure from Warren, he said in mid-February he would release three women who sued him for harassment or discrimination complaints from confidentiality agreements. Women who worked for Bloomberg were featured in a commercial praising Bloomberg’s and the company’s treatment of women, and his longtime partner Diana Taylor defended him as a champion of women.
Bloomberg was dogged by accusations he was trying to buy the Democratic presidential nomination. His vast fortune proved a perfect foil for Sanders, who has said billionaires should not exist at all. Indeed, Bloomberg had a vast circle of influence from his spending on key causes like gun control as well as his philanthropic efforts to boost American cities and provide leadership training for mayors. Dozens of prominent mayors rallied behind his candidacy.
That, combined with Biden’s resurgence in South Carolina and the rallying of the party’s moderate wing behind him, doomed Bloomberg’s case that he was the best candidate to take on both Sanders and Trump.
What’s next for Bloomberg is unclear. He’d pledged to keep campaign offices open in key general election battleground states to help the Democrats defeat Trump even if he lost the party’s nomination. But Sanders’ campaign has said they do not want the help.
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fortune--2020-03-04--Why investors suddenly turned on pot stocks

It wasn’t until August that Mark Noble realized what was happening.
As the executive vice president of ETF strategy at Horizon ETFs, Noble had a perfect perch from which to watch cannabis stocks. “This was a bubble that burst,” he says. Horizon’s Marijuana Life Sciences ETF, which holds names like Canopy Growth, Tilray, and Aurora Cannabis, plunged from over $20 in 2018 to around $7 this month.
He still remembers the day things changed. “At the time we didn’t think we’d go below $15, and it hit $14 on August 26—from there it kind of just continually went down,” Noble recounts to Fortune. A slew of disappointing earnings reports for the 2nd and 3rd quarters last year were only the beginning of a sell-off in pot stocks that has caused most of the biggest names to lose over 50% of their market caps.
Last year, investors clamored to buy into the burgeoning cannabis industry in a moment of market zeitgeist. A new kind of investor was coming of age—millennials poured money into the flashy new stocks that promised growth and green. In fact, back in June, the most popular trade on Gen Z and millennial investment app Robinhood was Aurora Cannabis—beating out tech giant Apple.
But within six months those wide-eyed investors were looking at an entirely different picture. Wall Street grew weary as major cannabis companies reported disappointing earnings, laid off employees, and even in some cases, faced compliance scandals. Pop! The bubble had burst.
Big names like Aurora and Tilray plunged around 70% and 60% respectively from June to the end the year. The Canadian Marijuana Index (which tracks some of the biggest public pot companies like Tilray, Canopy, and Aurora) is down over 77% from March of last year.
It’s an incredible disconnect with the widening popularity and spreading legalization of pot in the U.S. And the catalysts are many. But one thing is for sure: in a very short time, a lot of money went up in smoke.
Green management?
Perhaps no company better illustrates the wild ride of the past year better than MedMen.
According to an ongoing lawsuit, James Parker, the former CFO at MedMen, alleged that executive management including co-founders Adam Bierman and Andrew Modlin, the firm’s ex-CEO and chief brand officer, respectively, were engaged in unlawful behaviors that forced Parker’s ousting in November of 2018. The suit alleges that the unlawful behavior included “profligate spending of company funds for [the co-founders’] own personal benefit,” attempts to buoy MedMen’s stock, and a work culture “replete with racial, homophobic and misogynistic epithets and slurs,” Parker’s suit claims. The allegations have been denied by MedMen.
According to the suit, executives at MedMen spent company money on “24-hour armed Executive Protection (security) for the CEO, President, and their families,” private jets, … and “tens of thousands of dollars apiece on multiple extravagant custom conference room tables,” despite burning cash at a rapid rate, according to the lawsuit.
MedMen declined to comment to Fortune. In a statement, Bierman denied the allegations, stating that “Mr. Parker’s inflammatory allegations are a transparent attempt to gain attention for his meritless lawsuit.” Fortune was not able to reach Bierman or Modlin for further comment. MedMen’s board also issued a statement calling the allegations “baseless.”
MedMen co-founder and CEO Adam Bierman (second from right) with State Sen. Tick Segerblom (D-NV, second from left).
Wire Photograph: Bryan Steffy/Getty Images for MedMen Bryan Steffy/Getty Images for MedMen
Regardless of the legal situation, cash problems abound. An email viewed by MarketWatch shows (and the company confirmed) MedMen has been trying to offer stock as payment to vendors for cannabis products, as the company’s dire cash situation has prompted them to “[modify] payment terms,” per a statement from MedMen to MarketWatch. Since February of last year, the stock has shed about 90% of its market cap.
But MedMen wasn’t alone in giving investors a bad trip.
Over the summer, a regulatory scandal unraveled at one of Canada’s biggest cannabis companies, CannTrust. The company made headlines last summer when internal communications and emails came to light showing members of the company’s C-suite were aware that cannabis was being illegally grown in unlicensed rooms—sending the stock plummeting over 20% when news broke.
That was preceded in 2016 by several compliance violations with Health Canada—including having $6 million worth of seized product in its vault at the time, four times more than it was licensed to have, and having mold in the grow rooms—according to inspection findings by Health Canada.
Since February of last year, CannTrust has lost over 90% of its market cap. CannTrust told Fortune in a statement that since the summer, the company is “focused on remediation and governance activities,” and that “significant steps have been taken to improve the company’s corporate culture and regulatory compliance and remediate its facilities.”
CannTrust Holdings Inc. made headlines last summer when internal communications and emails came to light showing that the company’s C-suite were aware that cannabis was being illegally grown in unlicensed rooms—sending the stock plummeting.
Wire Photography: Galit Rodan/Bloomberg—Getty Images Galit Rodan—Bloomberg/Getty Images
When he first started working with cannabis companies in 2014, Maruf Raza, the national director of the public companies practice at Canadian accounting firm MNP, was tasked with handling audits and accounting for public cannabis companies. What stood out about the management? Namely, their products weren’t the only thing that was green.
“Initially, there was a lot more hand holding,” working through accounting and audits with young companies, Raza recounts to Fortune. He says it’s not unusual for younger companies in general with smaller teams to need more assistance at the beginning, but that challenges in raising capital in the private markets had pushed these companies into the public eye perhaps sooner than others in different industries would be pressured to.
“The genesis of these companies is that a lot of [them] were effectively startups four years ago,” says Raza. “They’ve gone from zero to now, in some cases, multi-national companies with multi-billion dollar market caps.”
But now, Raza says that the board composition at these companies is “night and day” from even four years ago. Professionals from Fortune 500 companies have been slowly filling seats at some of the top cannabis companies and “driving the bus,” like at Canopy Growth (where many of the seats are filled by current or former executives at beverage giant Constellation Brands, which owns a nearly 40% stake in the company).
From the vantage point of David Belsky, the founder and CEO of FlowerHire, a cannabis-specific executive search and staffing company, there’s more demand from cannabis companies for C-suites and lower management with turnaround experience. FlowerHire is now helping companies fill roles in investor relations and communications.
Although there may have been some tense C-suite departures, Raza says, many founders and management teams are realizing on their own that they are not the right teams to lead companies into their next phase as large public companies.
The revenue problem
Meanwhile, supply and demand issues have wreaked havoc on that Holy Grail of pleasing Wall Street—earnings estimates.
Despite the roll-out of legal marijuana in Canada, many companies struggled to gauge demand and product mix amid a lackluster number of retail stores in Canada, resulting in an oversupply of product for some. And in the U.S., where cannabis is still federally illegal, the regulatory climate and a vaping crisis last summer only exacerbated cash problems.
Back in September, one of the biggest names in the public markets, Aurora Cannabis, missed guidance it issued for its 4th quarter and full year earnings, estimating roughly $75 million to $80 million USD in net revenue after accounting for net excise taxes paid. Instead, the company posted roughly $74 million in net revenue—an over $1 million miss from guidance it provided weeks before reporting. Canopy Growth, another heavy hitter in the space, wildly missed earnings estimates in its 2nd fiscal quarter for 2020—reporting a loss of about $0.72 in USD per share versus roughly $0.30 estimates.
Cannabis producer Hexo was also hit hard after warning of a fiscal 4th quarter revenue miss of $10.9 million in USD to roughly $12.4 million, well below Street estimates of $18.5 million in October—sending investors into a frenzied sell-off.
As GreenWave Advisors founder Matthew Karnes (who describes himself as someone who isn’t “ra, ra, ra, pot, pot, pot”) tells it, “There was a big hype and sense of over-exuberance, but when push came to shove, and these companies reported, they didn’t come near it,” sending valuations into a nosedive for many. “Managing Street expectations has been challenging, and I think that’s really been driven by lack of experience throughout many of these organizations,” he says.
Another challenge for many cannabis companies has been navigating the arcane tax and accounting burdens for a product that largely falls into a legal grey area.
A sore spot for Canada-based cannabis companies (like Aurora Cannabis and Canopy Growth) is that they are required to estimate the market value of their products when they’re sold while they are still growing them—called “fair value.” Or, as Raza surmises, “you’re effectively recognizing income before you’re selling the product.” Cannabis companies are required to fair value their growing plants as biological assets under the International Accounting Standard 41 Agriculture (IAS 41), by the International Financial Reporting Standard (IFRS).
The problem when this standard is applied to cannabis companies is that, unlike other companies producing more traditional agricultural goods (like wheat or cattle) that have commodity-based pricing and futures to help them fair value their product, “cannabis is not there yet,” Raza says. “As a result, you have a lot of estimates and judgement that’s gone into some of the accounting.” While one strain may go to market for a certain price one month, it might be worth more or less the next. These estimates and judgement have created a somewhat uneven playing field across different pot companies—it’s not “apples to apples,” says Raza.
But Raza maintains these inconsistencies aren’t nefarious: “Most of these cannabis companies, if not all, would like nothing more than to not apply this agricultural standard,” he argues, and instead recognize the income when they sell it. But despite the drain on time and resources estimating the value of companies’ growing products, “Unfortunately they’re handcuffed by the standard,” Raza says.
As an auditor, MNP’s Raza says he sees these companies trying to “figure out what the right bridge for the actual versus the projected [is],” which has made things a bit messy for MNP as auditors and for management, “so there’s been a lot of criticism about the math involved.”
Case in point: in Aurora Cannabis’ Management’s Discussion & Analysis filed with the Securities and Exchange Commission, the company disclosed that, in the quarter ending in March 2016, Aurora’s net income (of roughly $1.9 million in USD) was “primarily attributable to the unrealized gain on the changes in fair value of biological assets,” whereas in the quarters ended September 30, 2016 and June 30, 2016, the net losses (of roughly $4.2 million in USD and $5.6 million respectively) were primary due to a “decrease in unrealized gain” on changes in fair value.
This is a frustration point for investors because it shows that, due to the challenges of estimating fair value, companies might have to substantially report different income or losses depending on how their fair value estimates actually match up with what they make off the plant—making it a challenge for investors or analysts to determine which cannabis companies have the most efficient production (and which are performing the best).
Sources at the IFRS Board tell Fortune that investors have raised concerns with the Board regarding insufficient information provided through the standard to help assess profit margins of some of these companies. While the IFRS does have standards for fair valuing biological assets en masse, there is no specific literature addressing how to fair value cannabis in particular (and their requirements of what information cannabis companies need to provide in their income statements regarding fair value are “not very prescriptive”). Sources at the IFRS Board tell Fortune there are currently no plans to reexamine IAS 41 in regard to cannabis specifically, but the Board is in the process of proposing to require companies (not limited to the cannabis industry) to report more detailed financial performance, including operating profit or loss and non-GAAP transparency.
Tax and accounting complexity
GreenWave Advisors’ Matthew Karnes has seen a thing or two in his day as a former auditor.
He recalls touring a pot facility once and asking an employee (“not just a low-level employee”) who kept the company’s books for auditing. “[The employee] is like, ‘what do you mean, like the library books?'”
“So I’m thinking to myself, ‘Houston, we have a problem,'” Karnes recounts to Fortune. But while inexperience may have been the thorn in the side for certain companies, he asserts there’s a bigger issue—altogether above-board—that’s hurting cannabis companies’ bottom lines.
Some pot companies in the U.S. have been hit hard with massive tax burdens due to the nature of their product—in other words, the cost of prohibition. U.S. pot companies operate under Section 280E of the Internal Revenue Service tax code—which has been draining many pot companies of cash.
Under Section 280E, businesses aren’t able to deduct ordinary business expenses from gross income associated with the “trafficking” of Schedule I or II substances, as defined by the Controlled Substances Act. In other words: most of the operating expenses for pot companies are nondeductible (although certain overhead costs can be allocated to cost of sales, but Karnes says this provides an opportunity for some companies to “push the envelope,” which could make them targets for IRS scrutiny).
“Even if they’re suffering losses, they still have to pay taxes—[which could be] millions of dollars. That’s a drain on cash that would otherwise be [deployed] as reinvestment into these companies,” says Karnes.
According to an analysis by GreenWave Advisors of public U.S. cannabis companies with a market cap of over $500 million (with the exception of MedMen), tax rates among the only three companies that were profitable in calendar year 2018 had varying effective tax rates, from 30% to 59%—but generally, depending on how the companies are structured, the tax benefit of operating loss carryforwards (which are intended to reduce tax liability by applying the current year’s net operating loss to future years’ net income) for cannabis companies are generally not permitted to offset future income.
The eight publicly-held multi-state operators (MSOs) GreenWave examined from the 1st quarter of 2018 through the 3rd quarter of 2019 collectively incurred net losses of roughly $542 million. And of those eight companies, all but one of which was operating at a net loss for the first nine months of 2019, GreenWave Advisors’ analysis estimates a total loss of around $114.5 million of lost net operation loss tax credits. (In short: in the worst case scenario, these cannabis companies are missing out on over $114 million in tax credits).
What’s next for cannabis stocks?
The fallout? Significant job cuts at some of the bigger cannabis companies. In the past several months alone, the sector has seen around 2,000 jobs cut across various companies.
Embattled MedMen cut 190 jobs in November. In February, Tilray announced it would cut about 10% of its staff in a ploy to reduce costs. That same month, Aurora Cannabis followed suit, cutting about 500 jobs. Canopy, CannTrust, MedMen, and Aurora have all replaced their CEOs.
Raza likens it to public startups: “The reality is, a lot of the stuff that’s happening in the public markets normally plays itself out in the private market. When you think of Silicon Valley, how many tech companies does the Silicon Valley ecosystem fund? Thousands. Of those companies, how many ultimately survive?”
The overenthusiastic (and often missed) revenue estimates of 2019 will likely no longer fly in 2020 —”[Investors] are going to come back in with a chip on their shoulder, saying, ‘no, fool me once, shame on you. Fool me twice, shame on me,'” FlowerHire’s chief revenue officer Sloane Barbour notes.
Still, from an operational standpoint, MNP’s Raza thinks many of these companies may be only in “the second inning.” And Morningstar’s Kristoffer Inton suggests cannabis investors need to think of themselves as venture capitalists—”They don’t think about one year’s time—they think about the market [potential],” he says.
That growth potential is there, experts say. MNP’s Raza believes many will end up getting to where they said they would, but it’s a “function of time and patience, and as we know, public markets are not always going to be patient,” he contends. But just as dozens of hopeful startups in nascent industries have choked out before hitting their stride, not all cannabis companies are created equal.
“The entire rise and fall of these companies is being played out in a public setting,” Raza says. “And not all of them are going to survive.”
Horizon’s marijuana ETF still hasn’t recovered. Noble says that at $7, the ETF is trading at $3 less than the price it began trading in 2017. But Noble hasn’t entirely lost faith. He says he remains committed long term to the potential of the space, and that “there’s more doom and gloom than upside priced in.”
In other words, the sector may currently be at a low. But you never know, there could always be another high around the corner.
This article has been updated to clarify language.
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