fortune--2020-04-21--‘Someone lost their shirt:’ Oil’s historic plunge continues to roil global markets

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Good morning, Bull Sheeters. It’s safe (for now) to look at the screen again. Equities may be trading lower, but at least oil markets are no longer in upside-down world. Still, the uncertainty is dragging just about everything down.
Let’s check on what’s moving markets.
Markets update
Asia
The region’s major indices are all trading lower, led down by Hong Kong ‘s Hang Seng.
‘s Hang Seng. During Asian trade, the price of U.S. crude , WTI, climbed back above zero . The May futures contract is trading at a princely 14 cents per barrel, as I type. Counting the change in my pocket, I could afford three barrels, and probably haggle for a fourth.
, WTI, climbed back . The May futures contract is trading at a princely 14 cents per barrel, as I type. Counting the change in my pocket, I could afford three barrels, and probably haggle for a fourth. Much of the turmoil this morning can be seen in South Korea. Conflicting reports from north of the border, of Kim Jong Un‘s fragile health, is sending the won and KOSPI in a tailspin.
Europe
Europe was the outlier yesterday with all major bourses ending in the green. They’re all down at the open today by more than 1% .
was the outlier yesterday with all major bourses ending in the green. They’re all down at the open today by more than . Now some good news—the coronavirus outbreak continues to show progress across the continent, in Italy, Spain, Germany and Britain.
and With oil prices so volatile, BP, Total and Royal Dutch Shell were all down significantly in the first half-hour of trading.
U.S.
The Dow , S&P 500 and Nasdaq look to open in negative territory today, though they’re all off session lows.
, and look to open in negative territory today, though they’re all off session lows. With all the excitement in the oil markets you might have forgotten it’s earnings season . There were a number of disappointments yesterday from airlines to tech, including: Halliburton, DuPont, IBM and United Airlines.
. There were a number of disappointments yesterday from airlines to tech, including: Halliburton, DuPont, IBM and United Airlines. There was a bit of good news for the airlines sector, however. The Treasury Department agreed to a $2.9 billion payroll aid package with America’s struggling carriers.
Elsewhere
Gold is up, slightly…as is the dollar .
is up, slightly…as is the . Crude is a good news/bad news story. WTI was up more than 100% in morning trade, but it was still hovering around zero. Brent crude, the global benchmark, is down more than 7%, but at least it’s trading in the twenties.
Crude joke
The May contract for WTI futures expires today, and that’s got to be good news for traders. Yesterday’s plunge was “like trying to explain something that is unprecedented and seemingly unreal,” Louise Dickson, an oil analyst at Oslo based Rystad Energy, told Fortune‘s Katherine Dunn last night.
When WTI sunk below 10 bucks a barrel yesterday, alarm bells went off everywhere. And then the price just kept falling. At one point, it cost less than a six-pack of Budweiser. Minutes later, less than a gallon of milk. Then crude was worth less than the barrel holding it, giving rise to some classic comments from energy Twitter yesterday.
The barrel-half-full crowd would say these are just contracts, that it’s the fault of technicals, that it doesn’t reflect the true price of physical stocks. But even before those contracts hit negative $38.45/barrel yesterday, it became clear this was a toxic asset. The ramifications are being felt well beyond the May contracts. Prices on July and August futures are also under pressure this morning, trading at sub-$30. June, meanwhile, fell below $20/barrel. The problem is we’re running out of places to store the stuff. It’s a textbook market crash.
Nobody is suggesting negative oil is the new normal, but the ripple effects will be felt well beyond the oil patch. It took down the equities markets yesterday, and it’s doing the same today. It’s impacting emerging markets and virtually every commodity not named gold. The concern is it will cause a wave of layoffs and bankruptcies in oil country, and that will become a political issue, too.
One of the startling things about this recent two-week bull run in equities is that it occurred as energy prices were collapsing. Usually, they trend up and down in the same direction. That makes sense. When the economy is running on all cylinders, energy prices go up. That decoupling pattern finally broke yesterday. Once oil crashed below $10, the gravitational pull proved too much for the S&P 500, and the Dow, and even the Nasdaq. The sell-off began in full.
“What’s very apparent is someone lost their shirt,” Bjarne Schieldrop, chief commodities analyst at SEB in Oslo, told Fortune‘s Dunn.
He was speaking of oil traders. But the concern amid the barrel-half-empty crowd is that other investors could fast become shirtless, too.
Postscript
While oil prices were tanking yesterday, news broke here in Italy that the number of active coronavirus cases fell over the previous 24 hours. It’s the best news we’ve had in weeks. And now the government is getting serious about officially easing lockdown measures in two weeks time. May 4 will be a manic Monday around here.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
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Today's reads
Future shock. The traumatic experience of the coronavirus crisis will have a lasting impact on our behavior, changing the ways we spend and invest, potentially for decades. Students graduating during a recession could suffer a decade of lower earnings and, if the 1918 flu pandemic is anything to go by, the crisis could even reduce the educational prospects of babies who haven’t been born yet, writes Fortune’s Geoff Colvin.
Work abroad. While U.S. companies laid off 22 million people in the last month, Europe has taken a different path, Adrian Croft explains in Fortune. European governments are spending billions on subsidies to allow private companies to keep paying their workers even when they have no work to do during the coronavirus lockdown.
Banking on trades. The wild swings in the stock market in the past few weeks as investors frantically moved their money around has been a boon for Wall Street trading desks. Trading revenues at the “big five” U.S. banks—Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley—swelled 30% in the first quarter.
Market candy
Today’s quiz
Which stay-at-home stock is now worth more than ExxonMobil?
Netflix Zoom Domino’s Pizza
Answer: A. Netflix shares have surged to record highs as locked-down viewers stream more TV. Netflix’s market value has surged to $192 billion, while the energy market crisis has sent the value of the biggest U.S. oil producer plunging to $174 billion.


fortune--2020-04-21--How Eileen Fisher became a model of sustainability in the fashion industry

Singapore was once a coronavirus hero , but now it ’ s a cautionary tale .
What happened ?

This week’s episode of Fortune‘s Leadership Next podcast zooms out a bit from the coronavirus-related coverage that has rightfully consumed attention over the last few weeks, and again shines a spotlight on a singular CEO who typifies the changing rules of business leadership.
Host and Fortune CEO Alan Murray does note that the pandemic has forced a moment of truth for many companies, where they must have a serious conversation about who they want to be when they emerge from the crisis. They might be reevaluating their core tenets, but values such as sustainability and environmental responsibility have guided how designer Eileen Fisher has done business since she founded her namesake fashion line in 1984.
Fisher has retained control for more than three decades over a brand that earns over half a billion dollars in annual revenue and has about 1,200 employees. She made an early decision to share ownership with those workers: “As soon as we started making money, the first thing I thought of was to share it with the people who help do the work and make it happen,” she explains to Murray at the five-minute mark.
Even at the expense of growth—which tends to top the list of priorities for most corporations—Fisher has let her instincts be her guide and is proud to say she isn’t beholden to outside investors.
“I don’t know that growth is what makes it better. For me, it’s always what makes it better?” she says. “I’m much more interested in growing in what we call a circular way, like how do we grow this company in a way that it’s taking full responsibility for its impact on the environment, on the people working?”
Fisher is a creative at heart, which might make it a bit easier for her to lead with these concepts at the core. But she mentors up-and-coming designers on how they can do the same. Later in the episode, the founders of award-winning streetwear brand Public School speak volumes of the best practices around sustainability they learned from Fisher via an accelerator program. She also provides concrete examples of how it looks to choose the right thing over the (immediately) profitable thing.
“Sometimes we pay more. Organic cotton, it costs 15% more, so we pay it, and it’s hard to pass it on to the customer,” she explains. “It does cost more, but we believe it’s really important. Some things end up in the long run costing less.”
Hear more of the robust conversation with Fisher on the new episode of Leadership Next now:
More must-read careers coverage from Fortune:
—How Fortune 500 companies are stepping up during the pandemic
—3 ways to put your best foot forward on a video job interview
—Everything you need to know about furloughs—and what they mean for workers
—The coronavirus could change how freelancers work in the long term
—Accenture and Verizon work to help furloughed or laid-off workers find new jobs
—WATCH: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Get Fortune’s RaceAhead newsletter for sharp insights on corporate culture and diversity.


fortune--2020-04-21--Markets drop after reports that North Korean leader Kim Jong Un’s health is in ‘grave danger’

Mystery surrounded Kim Jong Un’s health after U.S. and South Korean officials gave differing accounts of the North Korean leader’s condition following his unusual absence from recent holiday celebrations.
Kim was in critical condition after undergoing cardiovascular surgery last week and the Trump administration wasn’t sure of his current health, said U.S. officials, who asked not to be identified. One of the officials said the White House was told that Kim took a turn for the worse after the procedure, while CNN earlier cited a U.S. official with direct knowledge saying the 36-year-old leader may be in “grave danger.” The White House declined to comment.
Meanwhile, South Korean President Moon Jae-in’s office said that Kim was conducting “normal activities” in a rural part of the country assisted by close aides and no special movements were detected. Moon spokesman Kang Min-seok said earlier there was nothing to confirm on the speculation over Kim’s health.
The news around Kim’s health spurred the benchmark Kospi gauge to extend losses to as much as 3% while the won slid as much as 1.7% against the dollar. The Kospi closed 1% lower.
The health of Kim, overweight and a heavy smoker, is one of North Korea’s most closely guarded secrets, typically only known by a handful of people in the inner circle of leadership. While North Korea had scaled down major events as it battles the coronavirus pandemic, speculation about Kim had been growing since his unprecedented absence from April 15 celebrations for the birthday of his grandfather and state founder Kim Il Sung, one of the biggest days on the country’s calendar.
Even the most well-informed North Korea experts find it hard to tell what’s happening in the secretive state. The Daily NK, a Seoul-based website that gathers information from informants inside the isolated nation, separately reported that Kim underwent a “cardiovascular surgical procedure” and was now mostly recovered. Reuters cited an official with the Chinese Communist Party’s International Liaison Department saying that Kim wasn’t believed to be critically ill.
“I saw some reports, but I don’t know what these sources are,” Chinese foreign ministry spokesman Geng Shuang told reporters in Beijing Tuesday afternoon.
Any leadership crisis in North Korea could potentially have serious ramifications for regional stability, as well as for talks with the U.S. over the country’s nuclear arsenal. Kim, who took power in 2011 following his father’s 17-year reign, developed the capability to deliver a nuclear warhead to any part of the U.S. before engaging in direct talks with President Donald Trump over his arsenal and sanctions imposed on the state.
“When Kim Jong Un came to power, his path to leadership had been carefully cultivated by his father’s guidance and maneuvering,” said Mintaro Oba, a former U.S. diplomat who was specialized in Korean Peninsula issues. “Now, there is no clear transition plan and no clear future leader.”
White Horse
Kim has been shown in state media in recent months appearing at military drills and riding a white horse on the country’s revered Mt. Paektu, where state propaganda says his grandfather used as a guerrilla base to fight Japanese colonial occupiers. North Korea’s state media reported on April 11 that Kim attended a Politburo meeting of the ruling Workers’ Party. The next day it said he inspected a military unit, but didn’t reveal the date of that visit.
The South Korean Unification Ministry said Friday it was “inappropriate” to speculate about the reasons for Kim’s absence. Kim has made 17 public appearances this year that were mentioned in state media — at a pace of a little more than one a week — the ministry said. That’s slightly down from 84 public appearances last year.
South Korean intelligence said Kim Jong Un married Ri Sol Ju, a former singer, in 2009. They are thought to have three children, but there is no official mention of their offspring. Dennis Rodman, the offbeat basketball great who visited Kim in North Korea, said in 2013 he held the leader’s baby girl in his arms, a daughter named Ju Ae.
While there’s been little time for him to groom a successor, Kim raised the status of his younger sister Kim Yo Jong as a key player in the secretive state. She was thrust into the global spotlight when she served as envoy to the 2018 Winter Olympics in Pyeongchang, South Korea, and became the first member of the immediate ruling family to visit Seoul.
More must-read international coverage from Fortune:
—Controversy around privacy splits Europe’s push to build contact-tracing apps
—Crude math: Why $10 oil could be worth less than nothing
—Why China will recover faster from the coronavirus pandemic than the U.S.
—Coronavirus lockdown diets look the same the world over
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: The global crisis in recycling
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-21--Northwestern Mutual CEO: 3 lessons I’ve learned from managing economic crises before the coronavirus

Co-creating the world of inclusion that we want to come next

Companies today are making significant changes to maintain business operations while protecting their workforce, customers, and the community from the spread of the coronavirus. Although markets are volatile, and there are many unknowns, I have deep confidence in the long-term resilience of our country and economy.
Why do I feel this way? Because I’m fortunate to lead a company where we’ve seen it before.
In our 160 years, Northwestern Mutual has overcome recessions, the Great Depression, natural disasters, wars, and even a pandemic flu—and each time, society, the economy, and markets bounce back. In more than three decades at Northwestern Mutual, I’ve seen five major market downturns—and the resilience that follows.
There is no one-size-fits-all approach to overcome these challenges, which place significant pressures on businesses and people’s day-to-day lives, but there are lessons to be learned from a longer-term view. When I was named CEO in 2010, the country was still in the early stages of emerging from the 2008 financial crisis. I’m leaning on three major lessons from that period as we navigate the COVID-19 crisis.
First, financial strength—which means money in reserve, cash on hand, and a strong capital position—takes foresight and preparation, and is necessary to weather economic storms. Prior to 2008, I saw many other companies focus on how quickly they could grow, rather than the importance of a solid balance sheet. We at Northwestern Mutual knew that the challenges coming out of the market meltdown in 2008–09 could be managed, mainly because we took long-term financial strength very seriously throughout that time.
Early on as CEO, I traveled to Japan and formed relationships with leaders in the life insurance industry there. They had experienced decades of low interest rates and shed light on the consequences that had on their companies. I learned from them the importance of wisely managing expenses and maintaining financial strength in a low-interest-rate environment. Even during recent years of record-high stock markets, we have followed this advice.
While we could not predict the coronavirus and its rapid spread across the globe late last year, we knew we were deep into a bull market and needed to be prepared for any potential correction. As a result, we built up our capital reserve to ensure our financial stability. We also regularly stress-test how various catastrophic events could affect our business—including crises in a low-interest-rate environment—which has given us the confidence to face the current situation from a position of strength.
Second, businesses should plan for the long term, but maintain flexibility. In a society of immediate gratification, many businesses are tempted to make decisions based on short-term opportunities for gains. But lasting success takes discipline over time—in good times and through challenges.
It is not always easy and requires patience and practice, but those that plan for the long term are not only able to withstand challenges and market turbulence, they can also seek out opportunities in this period. (Northwestern Mutual offers financial planning services to businesses, and therefore could profit from this advice.) For organizations and individuals that have the means, now is an excellent time to seize long-term investing opportunities in the markets. Long-term investors should take advantage of buying opportunities in a down market, knowing that the economy and markets will bounce back.
Third, leaders need to communicate with authenticity and empathy. Employees and consumers will remember how companies acted and communicated in a crisis long after it’s over. The safety and well-being of employees, clients, and the community comes first, and leaders need to look at how they can provide resources and support during difficult times.
Transparent communication in a crisis is essential, and employers have a critical responsibility to relay pertinent information to their employees quickly and thoroughly. A recent Edelman survey found that employers were people’s most trusted source of information on the coronavirus, trumping government and health company websites and traditional and social media. Nearly two-thirds of respondents wanted updates from their employer at least once a day.
At my company, we have made a commitment to talking with our workforce often—even if the updates are small—so that we keep the conversation going. Our regular communications range from providing the latest guidance from the CDC, to reassurance that we’re prepared for this, to tips on working remotely and the technology that’s available. We’re ensuring that our employees feel supported and know where to go if they have questions or concerns.
At this difficult moment, America needs to remember that we have overcome significant setbacks many times in the past. We’ll get through this one too. If business leaders focus on what’s under our control and lead with confidence, we’ll come away from this even stronger than before.
John Schlifske is chairman, president, and CEO of Northwestern Mutual and a member of the company’s board of trustees.
More opinion in Fortune:
—To fight tomorrow’s pandemic, we need to think like the military today
—Prescription drug costs are spiraling, but price controls are the wrong solution
—The Fed may have fundamentally altered the nature of risk in the stock market
—Why the U.S. needs a new corporate bailout structure—one that doesn’t rely on loans
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: The CEO of Canada’s biggest bank on the keys to leading through the coronavirus pandemic
Listen to our audio briefing, Fortune 500 Daily


fortune--2020-04-21--SBA website leaks personal data of 8,000 small-business loan applicants

The U.S. Small Business Administration notified 8,000 small-business owners on Tuesday about a software bug that may have exposed their personal information online.
The glitch affected the SBA’s Economic Injury Disaster Loan (EIDL) portal, which is used by small-business owners seeking financial relief from the coronavirus pandemic. The SBA said on its website that EIDL applicants who are “currently experiencing a temporary loss of revenue” can receive up to $10,000 in financial aid.
An SBA spokesperson said it discovered the bug on March 25 and has since fixed the error.
“Personal identifiable information of a limited number of Economic Injury Disaster Loan applicants was potentially exposed to other applicants on SBA’s loan application site,” the spokesperson said. “We immediately disabled the impacted portion of the website, addressed the issue, and relaunched the application portal.”
Affected applicants will receive a year of free credit monitoring.
Some of the information that was leaked included Social Security numbers, tax identification numbers, household size, and phone numbers, according to an SBA letter sent to applicants, CNBC reported.
Sr. Admin official adds:
-the issue has been addressed, application portal relaunched
-Businesses notified and offered a year of free credit monitoring
-Discovery was made March 25th
-This impacts EIDL ONLY, not PPP #EIDL https://t.co/UxkcborvtW — Kate Rogers (@katerogers) April 21, 2020
The software glitch affected only the EIDL portal and not the SBA’s Paycheck Protection Program (PPP) portal.
However, the PPP portal experienced its own problems earlier this month when thousands of small-business owners flooded the site to apply for financial aid as part of the program’s now-depleted pool of nearly $350 billion in loans. Although the PPP portal went offline for several hours, presumably because of the large number of people applying for aid, an SBA official told Bloomberg News at the time that “it’s not accurate that the system crashed.”
More must-read tech coverage from Fortune:
—How the coronavirus stimulus package would change gig worker benefits
—Zoom meetings keep getting hacked. How to prevent “Zoom bombing”
—Why China’s tech-based fight against the coronavirus may be unpalatable in the U.S.
—Hospitals are running low on the most critical supply of all: oxygen
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-21--Co-creating the world of inclusion that we want to come next

Senate approves $ 310 billion in new SBA PPP loan money .
What you should know

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.
Back in September, when people still went places and did things, my stepson became a high school freshman. He attends a different school from his older sister, so we didn’t know many of the other families. Suddenly, the fall orientation season became an interesting exercise in meeting new people and introducing ourselves.
There had been, it seemed to me, an unusually high number of “welcome” events for incoming students, and I guess that my stepson’s mother and I had been to enough of them alone together to have something happen that I did not see coming: We were mistaken for same-sex parents.
It was the most awkward and thrilling thing imaginable.
The compliments about our son. The inclusion signaling. The we-so-approve-of-you smiles. What a status upgrade! I’d gone from a modern version of the fairy tale homewrecker to a person with rights. No longer an object of suspicion, for a brief shining moment, I had a whole damn month I could claim. I hadn’t even realized how much I needed the affirmation.
Finally, my soon to be ex-wife gently broke the news. “Actually,” she began, very kindly, “she’s the stepmom.” The lovely opposite-sex couple we were chatting with blinked. “Hey,” said the wife, “however you want to call yourselves…I get it.” She beamed. I beamed. Our son smirked and sidled away.
The incident got me thinking about all the relationships in our lives—the people we interact with either by accident or design—that do not rise to the acknowledgment of an official name. It felt like an interesting and delightful moment for my stepson’s mom and me (see? no name).
But for so many others, these unnamed ties are the people who see you and the relationships that save you. They’re often found in activist spaces, filled with people forged into deep bonds by a common opposing force. These are the chosen families, the corporate resource group safe havens and other communities who should take a central role in co-creating a world that wants to come next.
If “we” let them, of course.
Mia Birdsong is an extraordinary student of human communities; an activist, writer, and author of How We Show Up: Reclaiming Family, Friendship, and Community. The book, she says, is an extension of her broader work of understanding how families, friendships, movements, and communities can sustainably thrive.
It’s smart to look beyond social norms for clues, she says.
“The people who I’ve seen build the most expansive, loving, inclusive powerful strong versions of relationships are queer people, Black people, poor people, unhoused people, sex workers,” she says. “You know, people for whom the American dream—they’re excluded from it to some degree.” What we’ve been told is a successful life—nuclear family, independence, and “pulling yourself up by your bootstraps”—is antithetical to who we are as human beings, she says.
The expertise that exists in these unnamed spaces can offer a model for what comes next. “Right now, we are all glaringly aware of our deep interdependence.” Centering that expertise also does double duty. “[It] positions marginalized people as keepers and holders of that wisdom and knowledge,” says Birdsong.
I also turned, as I often do, to David Kyuman Kim, a writer, convener, and professor whose work focuses on religious studies, race, moral theory, and public life. I asked him for his thoughts on the liminal space we’re all in together.
“This is really the work of inclusion,” he says. “It’s really to say, ‘look, everything that we thought was the norm was insufficient.’ And now, what’s coming out of this time, whatever this time is, is revealing this insufficiency, and who has always been excluded and why.”
This will lead to hard conversations, he says, calling for humility and courage.
“I know you’ve heard me say this before, that the root of the word courage is a French one, ‘coeur,’ which means heart,” he says, touching over his coeur on Zoom.
“So how do we show up with our hearts in this moment? Knowing that our hearts are battered and bruised?” Everyone is experiencing a loss, some more profoundly than others. And recognizing that business—and inclusion—as usual has been insufficient, may also feel like a type of loss. But, he says, we can build on that.
And maybe even learn a new social norm. “I don’t like being moralistic, but hopefully we come out of this with an increased impatience for the selfish amongst us,” he says.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
On point
San Francisco and Seattle are winning the battle against coronavirus. Want to know why? Tune into tomorrow at 1 pm Eastern to hear my colleagues @Adam Lashinsky and @Erika Fry discuss how two great cities have managed to get their administrative arms around the pandemic. To prepare, please read Erika’s emotional deep dive into how the business community rallied to help fight the pandemic in Seattle. Zoom details below. See you there.
How Tech’s Top Two Cities Flattened the Curve
Millions of U.S. citizens living in mixed-status families will not get their stimulus checks The $2 trillion pandemic aid package excludes people with unauthorized immigrants in their families, even those who file taxes jointly with people with a Social Security number. The loophole identifies under-documented immigrants who file taxes under an individual taxpayer number, or an ITIN. Citizen spouses are automatically eliminated, putting families and citizen children in further risk. U.S. Rep. Joaquin Castro (D-San Antonio) is asking for a “legislative fix” in the next coronavirus relief legislation.
The Dallas Morning News
Ron and Yumi Hogan: A love story that saved lives Yumi Hogan is a South Korean born abstract painter, who fell in love with a man named Ron after he became smitten with her at an art show. That was 20 years ago. Now they are married, and Ron is the governor of Maryland. In a desperate bid to secure coronavirus test kits that the Trump administration would not provide, Gov. Hogan put his wife on the phone to negotiate with South Korean officials. She built on the bond the couple had formed with South Korean Ambassador to the U.S., Lee Soo Hyuk; after a 22-day negotiation, a chartered Korean Air flight arrived in Maryland over the weekend bearing some 500,000 tests from Korea's LabGenomics. Click through for more on the story and Baltimore’s first lady. And someone give her an art show, please.
CNN
Zachary Nunn made me mad Kidding, not kidding. Nunn is the host of the Living Corporate podcast and an indefatigable champion for equity and inclusion in the workplace. We had a great conversation recently and got into all the things—how I got here, how you got here, the lack of diversity in the corporate world (and journalism), and he reminded me of a column that I wrote about a topic that made my blood boil. And like a fish on a hook, I got mad all over again! (Hint: It was about redlining.) I don’t get interviewed very often, so it was an interesting opportunity to discover what I actually think about things. Nunn’s podcast was essential before the pandemic, more so now.
Living Corporate
Coronavirus in the community
On background
Start your morning with five interesting objects John Maeda, author, educator, and the Chief Experience Officer at Publicis Sapient, has a new and probably temporary LinkedIn show called "The Eight AM-ish Get Physical Show." For about seven minutes, he starts the day by talking about five compelling objects he has in his collection. “There’s no reason for this except I wanted to focus on objects in my environment because I am fixated on Zoom, teams, video screens, and it gets a little bit boring.” He’s right! And his collection is fascinating. Today’s show was beautifully eclectic, and included a blast from Apple’s past, a cord made from kimono fabric, and ended with handmade candles that last exactly 20 minutes before expiring. “That’s kind of what time is like,” he says. “You can burn it at both ends of the candle or you can find yourself instead.” Things that make you go oooohmmmm.
The Eight AM-ish Get Physical Show on LinkedIn Live
The oldest Black bookstore in America has been saved, for now It took a village in the form of a successful GoFundMe campaign to save Oakland’s Marcus Books, which was struggling while under quarantine. Founded by Drs. Raye and Julian Richardson in 1960, the shop quickly become a bright light in the Black literary community. Marcus Books, named for Marcus Garvey, has welcomed luminaries from Malcolm X and Angela Davis to Oprah Winfrey and Toni Morrison over the years. Marcus Books is now run by Blanche Richardson, one of the children of the founders. In this Q&A, Richardson talks about the near loss of the store, encroaching gentrification, and the impact the store has had on their family. “Practically every one of Raye and Julian’s grandchildren and great-grandchildren has grown up, worked, and been nurtured in the bookstore, and several of them are still actively involved in the operation of the business,” says Richardson.
Zora
East v. West in graphic form Graphic artist Yang Liu moved from Beijing to Berlin, Germany when she was just 13. As an adult, she began to use her art to help describe the not-so-subtle differences between how people thought and behaved in her two cultures. Her work is deceptively simple, red and blue posters illustrating everything from attitudes about the boss, anger management, queuing up in a line, and telling the truth. When placed side-by-side, they become a bridge to understanding. “Many situations are better understood if they can be seen in relation.” Her posters were published in an art book called East Meets West.
Quartz
Tamara El-Waylly produces raceAhead and manages the op-ed program.
The big number
1,100
That’s the number of verbal and physical attacks against Asian Americans since late March, according to Stop AAPI Hate, an organization that has been logging self-reported incidents in a variety of AAPI languages. The dramatic rise in the attacks is particularly notable since it occurs at a time of national quarantine.
Today's mood board


fortune--2020-04-21--Senate approves $310 billion in new SBA PPP loan money. What you should know

Small businesses and lenders have been waiting with bated breath for news of additional funding for the Small Business Administration’s Paycheck Protection Program, and now Senate Republicans and Democrats have reached a deal on Tuesday for a bill approving over $480 billion in additional coronavirus relief. The bill was passed in the Senate on Tuesday afternoon, and the House could approve the bill as early as Thursday.
In addition to new funding for hospitals, testing, and SBA disaster relief loans, the new package includes $310 billion for the PPP, with $250 billion refilling the program and $60 billion set aside specifically for smaller institutions like credit unions and community banks. That latter $60 billion is key in getting funds to smaller banks and lenders (according to the bill, $30 billion to institutions with between $10 billion and $50 billion in assets, and the other $30 billion to institutions with less than $10 billion in assets).
Many small businesses were outraged over the weekend that large franchises and chains like Shake Shack and Ruth’s Chris Steak House received $10 million loans, while so many smaller businesses were still waiting for their applications to be approved. The provisions for smaller lenders to receive delineated funds could help address these smaller businesses’ needs. A portion of the new funds would be sent “exclusively to the unbanked, to the minorities, to the rural areas, and to all of those little mom and pop stores that don’t have a good banking connection and need the help,” Senate Minority Leader Chuck Schumer told CNN Tuesday.
Senate has begun process of approving additional $310B for #PPP:
-250B open all lenders; plus
-30B for lenders under 10B in assets
-30B for lenders between 10 & 50B in assets
Plus 50B for emergency loans (including agriculture) — Marco Rubio (@marcorubio) April 21, 2020
Ever since funds for the original $349 billion Paycheck Protection Program ran out on Thursday, the government has been pushed to allocate additional funds for the program. According to the SBA, the program secured loans for over 1.6 million small businesses.
Issues plagued the rollout of the program, which was designed to provide small businesses with up to $10 million loans, that could convert to grants, to help keep employees on the payroll. A variety of hitches, including intermittent outages of the SBA’s processing platform E-Tran, and a slow start on getting non-SBA lenders (like fintechs) approved made it difficult for some businesses to access the program. Initially, without those kinds of lenders able to extend loans, “ironically, the very small businesses who are the ones … most at risk from this economic crisis and least resilient … are going to be the last ones in line to get money because they’re not existing bank customers, and their lenders who they trust and rely on are not able to access the program,” John Pitts, head of policy for fintech Plaid, recently told Fortune.
Other small businesses ran into problems with bigger banks like Bank of America when applications were opened, given the fact that many banks initially prioritized current lending and business customers first. Others had better luck with smaller lenders: Leah Sherrill recently told Fortune she got a $84,900 loan approved for her Texas-based preschool and childcare center on Thursday (“not a second too soon!”) from her regional bank American Momentum, just as funds for the program were running out.
Additional funding would mean other regional banks like Sunrise Banks, based in Minnesota, could continue funding smaller companies in their area. Small businesses are “our bread and butter—This is our backyard, our neighborhood, our fabric of our community,” Sunrise Banks’ CEO David Reiling recently told Fortune.
Those smaller businesses might have a better shot at getting funding this time around, as Sen. Schumer told CNN Tuesday that “We insisted that a chunk of the money be separate from the competition with the bigger companies, you know the ones that have two, three, 400 people and a relationship with the banks,” Schumer said.
Other smaller banks like Atlantic Union Bank, a regional bank based in Virginia, were able to approve over 6,500 applications worth over $1.4 billion before funding ran out, but still have a pileup of applications awaiting another funding round. The bank has about $18 billion in assets, which could fall into the category delineated by the Senate for that $60 billion specified for smaller lenders. But even with a new funding round, “The real question in my mind is, if after the second round of funding, there is still great demand from the program from the traditional businesses that qualified, the smaller ones, will Congress support a round three of funding? I hope they will,” Atlantic Union Bank CEO John Asbury told Fortune.
The coronavirus relief bill will also include $50 billion for Economic Injury Disaster Relief (EIDL) loans and $10 billion for EIDL grants, $75 billion for hospitals, $25 billion for testing, and $2.1 billion for Small Business Administration administrative expenses.
More must-read finance coverage from Fortune:
—5 veteran investors on how to approach the coronavirus stock market
—These countries’ stock markets have been hit the hardest by the coronavirus
—China’s next coronavirus crisis: What happens after a country closes its economy
—This time, the banks were ready: How the Big Four prepared to survive the coronavirus
—How the American economy can recover from the coronavirus pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-21--Netflix earnings: 16 million new subscribers, despite pandemic

Netflix added nearly 16 million subscribers in the first quarter of the year—more than double the estimate of Wall Street analysts—reflecting immense growth for the company as customers worldwide grappled with coronavirus lockdowns.
The precise subscriptions figure, 15.8 million, blew past what Netflix told investors to expect for the first quarter, 7 million, though that forecast was given before the COVID-19 pandemic forced governments around the world to issue shelter-in-place orders. Total global paid memberships in Q1 rose to nearly 183 million worldwide, up from 163 million the previous quarter. Year to year, subscribers increased roughly 23%.
Netflix CEO Reed Hastings began his letter to shareholders in a solemn tone, speaking of the “terrible crisis” that has unfolded in recent months before acknowledging Netflix’s current strategic position.
“At Netflix, we’re acutely aware that we are fortunate to have a service that is even more meaningful to people confined at home, and which we can operate remotely with minimal disruption in the short to medium term,” Hastings wrote. “Like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth.”
The chief executive added that Netflix expects viewing time and membership growth to decline when lockdowns come to an end. Despite a record for quarterly gains, the company projects 7.5 million new global subscribers in the second quarter—more in line with previously expected numbers—though it cautioned the forecast was “mostly guesswork” given the uncertainty of how long home confinements will persist.
Netflix in the first quarter did take some hits to its business despite the staggering subscriber growth. The appreciation of the U.S. dollar amid the coronavirus pandemic resulted in diminished revenue growth internationally, the company said. Total revenue in Q1 came out to nearly $5.78 billion, in line with the consensus estimates. Net income equaled $709 million, or $1.57 a share, just under the $1.65 figure projected by Wall Street.
“After record subscriber additions, Netflix is and will continue to be the media company least impacted by COVID-19,” said Marketer forecasting analyst Eric Haggstrom. “Their business is a near perfect fit to a population that is suddenly housebound. Netflix faces some headwinds moving forward from a poor economic environment, but a significant chunk of consumer entertainment budgets have been opened up from the closures of movie theaters, sporting events, restaurants, and bars. Netflix will likely see minimal if any negative impacts moving forward.”
As for the pop culture’s breakout hit of the first quarter, the viral true-crime documentary Tiger King: Murder, Mayhem and Madness, Netflix projects that 64 million households will have chosen to watch the series in its first four weeks. The series debuted on the streamer on March 20.
More must-read stories from Fortune:
—Why Sonos launched a radio station
—The verdict on Quibi (so far)
—Why Mrs. America and the 1970s fight over the Equal Rights Amendment are more relevant than ever
—Coronavirus, continued: How concert venues are handling ticket refunds
—The best streaming services in 2020


fortune--2020-04-21--The Coronavirus Economy: How Samin Nosrat is sharing the joy—and constraints—of cooking under quaran

The Coronavirus Economy: How Samin Nosrat is sharing the joy—and constraints—of cooking under quarantine

Subscribe to Outbreak, a daily roundup of stories on the coronavirus pandemic and its impact on global business, delivered free to your inbox.
Samin Nosrat made a career out of cooking for other people, and became famous teaching them how to do it themselves. Now she’s trying to carry on—and stay sane—in a more quarantine-friendly format.
“I definitely am beginning to lose my mind,” says the bestselling author and Netflix star of Salt Fat Acid Heat. “I’m totally fine. I have great privilege; I’m completely aware of that. And I’m a human who’s losing my mind here.”
Before the coronavirus, Nosrat was already in a sort of self-imposed quarantine at her Oakland home, recovering from a whirlwind year of Netflix-conferred celebrity. Now that everything else has shut down, she’s spending her days gardening and thinking about how the pandemic will influence her next book. She’s also recording and producing a new, limited, quarantine-appropriate Home Cooking podcast, with West Wing Weekly cohost Hrishikesh Hirway.
Like many creative professionals used to working flexibly and often remotely, Nosrat is noticing a difference, now that those conditions are mandatory. “It’s not like I’m the best to begin with at separating work and not-work. But at least in my pre-coronavirus life, I either left my office at some point or there were clearly delineated times that I could not be working,” she says. “Now, when you’re doing all of this stuff on your own from home, there is no ‘off’ button.”
Nosrat spoke with Fortune for a new series, The Coronavirus Economy, to discuss how the pandemic has affected her podcasting plans and her finances, and how she’s overcoming isolation to continue sharing her love of cooking with others. The following Q&A has been condensed and lightly edited for clarity.
Samin Nosrat in Oakland. Smeeta Mahanti
Fortune: What were you working on before this all happened?
Nosrat: I wasn’t really working, because I was so burnt out from the last two years. Starting at the end of last year, I took a break and tried to cut away everything that was not a commitment. I had been doing a lot of responding in the moment, and my most grounded self was not making the decisions. It was not bad. There were amazing opportunities coming my way! But I was making choices based on, “Ooh, that sounds good,” or “Ooh, I like that person,” and that just led me to the brink of exhaustion. One person can only do so much.
In a weird way I feel out of sync with what others are going through, because I have been very actively restoring myself in the last few months. So when this crisis came about, I felt available to show up for people and be a source of joy and comfort. And that was why it felt totally right to do the podcast, which is something that Hrishi and I have been talking about for a long time.
Why are you only doing four episodes of the podcast?
It is an incredible amount of work. It takes a lot of time—we record hours and hours, and then edit that down into 40 minutes. Hrishi and our editor and mixer do so much of the work, and almost all the publicity has fallen to me. And we’re not making any money off of it, which is fine; we didn’t expect to, and we are happy not to, but it’s not the most sustainable thing.
So how else are this pandemic and global shutdown affecting your finances?
I had many speaking events postponed, but a bunch of them just got rescheduled for the end of this year. Because I’m so tired, I was a little bit relieved to not have to travel; I think I’ll be ready and excited to do it when the opportunity comes back. So I’m in the really lucky position to not be affected.
But I also feel incredibly aware that not so very long ago, and for the bulk of my professional career, I relied on gathering with people and essentially the event industry to pay my rent and eat. And I’m not so far away from the many, many, many cooks and food workers who are affected by this.
“We don’t realize that often constraints are a gift,” says Nosrat, the bestselling author and star of Netflix’s “Salt Fat Acid Heat.” Smeeta Mahanti
Does this affect your work on your second book at all?
Well, I haven’t really been working on my book. But it’s all about cooking, and the constraints that determine what we should be cooking. And so I feel like the language of that will be a lot more familiar to people, whenever the book finally does come out!
What I was planning to do was reporting and in-person research, and now I’m getting to pay attention to how people are coping. In our normal lives, the most typical constraint on our cooking is time. We’re rushing around, we have jobs and children, and we’re just trying to get something on the table. Right now, that’s turned upside down: a lot of people do have the time, and the constraints are mostly ingredients, or what tools you have at home, or what kind of space you have in your kitchen.
The particular set of constraints that we’re facing right now are very extreme, especially for some of our most vulnerable populations. But I also think it’s an amazing learning opportunity for people who want to become better cooks. Sometimes having anything be possible makes it harder, because you don’t even know where to start. The truth is, we’re always cooking with some constraints. We just don’t realize that often constraints are a gift.
Your work often highlights your joy in sharing food with other people. How are you dealing with not being able to cook for others?
Today it really hit me how much I miss restaurants. I definitely miss having people over, but what I really miss is that idea of the third place. For me, bookstores and restaurants are that third place; I can’t go to either of them now, and that’s a big loss.
But I live in one of four houses on the same piece of property. (East Coasters would probably think of it as a commune. It’s not a commune, it’s more like condos.) We all have a shared sense of community, and we are in effect co-quarantining. We span ages zero to 74, and we’re all being very cautious and wearing masks. But we have a table in the courtyard where if I make a lasagna or something, I just put it out there, and let everyone know. Or if people get a farm-box delivery, we share stuff. There is this way where I’m alone, but not that alone, which feels really good. It’s a saving grace.
More coronavirus coverage from Fortune:
—22 million lost their jobs in the past month—the real unemployment rate is likely near 18%
—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Inside the surreal “Mask Economy”: Price-gouging, bidding wars, and armed guards
—The IRS just launched the “Get My Payment” portal for tracking your stimulus check status
—How every sector of the S&P 500 has been impacted by the coronavirus selloff
—If you’ve been a little busy lately, here’s what’s going on with the 2020 election
—Military experts: We need to fight the coronavirus like we fight insurgents on the battlefield
—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Outbreak, a daily roundup of stories on the coronavirus pandemic and its impact on global business, delivered free to your inbox.


fortune--2020-04-21--Venmo bumps up sending limits

Venmo bumps up sending limits

With people under stay-at-home orders throughout the nation, many are finding themselves short on cash. That’s increasing their reliance on electronic payment services. Now, Venmo is easing some of its rules to facilitate payments.
The company has increased its sending limits to $4,999.99 per week for person to person payments. That’s a 40% increase from the previous limit of $2,999.99.
Authorized payments can now reach as high as $6,999.99 per week.
While cash transfers of that size are uncommon for most users, the relaxed limits do give Venmo consumers more flexibility to conduct transactions without having to go to an ATM or bank teller and possibly expose themselves to the COVID-19 coronavirus.
It could be especially useful as people receive their $1,200 stimulus checks and look to either pay bills, assist others whose financial straits are more dire than their own, or spend the downtime shopping online.
More must-read tech coverage from Fortune:
—As businesses adapt to remote work, tech isn’t their biggest problem
—Thermal-imaging tech is on the rise. Can it help fight the coronavirus?
—More surveillance and less privacy will be the new normal after the coronavirus
—AMD CEO Lisa Su on supercomputing and leading a global company through a pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-21--As the pandemic rages, designers race to create more face masks and shields

This is the web version of Business x Design, a newsletter on the power of design. Sign up here to get it in your inbox.
Last week Tokujin Yoshioka, the Japanese designer who created what would have been the next Olympic torch, drew plaudits for an ingenious face shield solution. Made from ordinary sheets of PVC plastic, his template can be downloaded for free and made at home. It’s clever—have a look.
Yoshioka says his design is a “quick and simple” hack for emergencies, not a panacea for the global shortage in personal protective equipment (PPE). But he is among the many designers and design-led manufacturers turning their talents and resources towards protecting frontline medical workers during the pandemic.
Nike has developed face shields for medical workers wearing powered air-purifying respirators. Foster + Partners has designed shields that can be disassembled, sanitized, and reused. Researchers at the Massachusetts Institute of Technology have devised disposable shields for flat-pack shipping. Apple is doing the same, but including an adjustable strap on its design. Fast Company reports that “hospital epidemiologists in Iowa suggest that face shields like Yoshioka’s are an even better solution because they cover a great surface area and help keep wearers from touching their face.”
That hasn’t calmed the worldwide scramble for masks. Don’t miss Shawn Tully’s outstanding piece in Fortune detailing the insanity of the “mask economy” in which American hospitals now pay upwards of $5 for masks that only months ago cost five cents. Shawn highlights one of the major ironies of the coronavirus crisis: When it comes to masks and other protective gear, the U.S. overwhelmingly depends on China, where manufacturers, middle men, and transport firms are now jacking up prices and cashing in. Wuhan, the epicenter of the outbreak, “was and remains the world capital of mask manufacturing,” Shawn writes.
The U.S. government is trying to source masks domestically. But companies like 3M that make surgical-grade masks can’t keep pace with demand. Meanwhile, textile manufacturers, clothing retailers, and luxury fashion houses are rushing to do their part. The list of brands retooling supply lines to manufacture masks now includes Brooks Brothers, Gap, Louis Vuitton, New Balance, Prada, Yves Saint Laurent, Under Armour, Zara, and many more. But few are capable of producing the tight-fitting respirator masks that block the very tiny droplets that may contain the coronavirus.
The mask shortage in Western countries reflects the explosion of new infections in those countries as well as the dearth of suppliers. But, as Fortune’s Naomi Xu Elegant has explained, it’s also driven by a belated shift in Western understanding of the utility of such equipment.
Here in Hong Kong, where Naomi and I are based, residents began wearing masks in January after first reports of the outbreak in Wuhan. We’re still wearing them even as the summer heat sets in and the number of new cases per day has dropped into the single digits. Americans, by contrast, are only beginning to recognize that while homemade masks—or, for that matter, quick-and-easy face shields like Yoshioka’s—may not bestow immunity, they may still help prevent community transmission—if everyone wears them.
Almost every day I discover new ways designers and design-led businesses are trying to help contain the virus. Some of the pandemic’s most urgent problems are the result of design fails. But many, if not most, look to me like failures of governance, leadership, decency, and common sense.
More design news below.
Clay Chandler
@ClayChandler
Clay.Chandler@Fortune.com
NEWS BY DESIGN
This edition of Business By Design was curated by Margaret Rhodes.
Fashion industry bailout. The Council of Fashion Designers of America and Vogue are providing grants to struggling clothing retailers and designers. Meanwhile, Neiman Marcus is filing for bankruptcy, and the near future looks grim for popular direct-to-consumer brands like Everlane and Outdoor Voices.
Liquid gold. Microsoft designed a bot to screen recovered COVID-19 patients who may be eligible to donate antibody-infused blood plasma.
Pandemic tech. Thermal imaging—and thermal imaging equipment—is on the rise at in-person events. By displaying body temperature, the cameras purport to reveal who in a crowd of people may have a fever.
Even more protective gear. A Boston architect has developed an open-source design for a clear plastic hood that fits over coronavirus patients, protecting medical staff—particularly the doctors who intubate patients—from the virus.
Cultural artifacts. Face masks are becoming a politicized symbol. Some view them as protective public health gear on par with condoms; conservative protesters are pointing to them as signs of left-wing elitism.
Surveillance. Whole Foods is using heat maps to track potential unionization efforts at its stores. The data visualizations combine information like employee demographics, calls made to employee tiplines, and proximity to union offices.
EXECUTIVE SUMMARY
In a new study on COVID-19 transmission, CDC researchers explain how asymptomatic carriers of the virus can easily do so through respiratory droplets. Using the layout of a restaurant as an example, the report supports a theory that the airborne virus spreads in patterns that mimic air flow from air conditioners. It “shows why closed spaces are so dangerous today,” tweeted renowned epidemiologist Larry Brilliant. As businesses begin to consider how they can interface with customers again, and states like Georgia announce plans to reopen intimate settings like nail salons and movie theaters, reconsidering the architecture of these establishments will be critical.
EVENTS BY DESIGN
April 30: OpenIDEO and Fortune’s COVID-19 Business Pivot Challenge is seeking submissions through the end of the month.
Mid-May: Sight Unseen will launch Offsite Online, a digital version of its annual design show.
Ongoing: Virtual Design Festival, a collaborative effort from Dezeen, Dutch Design Week and Design Indaba continues to exhibit work from a global roster of designers; The Social Distancing Festival has a full calendar of livestream concerts and art on display; Harvard University’s Graduate School of Design is offering virtual public lectures.
BRAINSTORM SESSION
PowerPoint politics
Courtesy of NBC News Now/YouTube
New York Governor Andrew Cuomo has emerged as a leading voice during the pandemic, thanks in part to his daily TV briefings. Each day, as Cuomo speaks, blue-and-gold slides beside him flash new charts, lists, and edicts across the screen. These slides—familiar in their conference room banality, but unique enough to inspire amusement on social media—are becoming an accidental visual trope, a marker of the times.
“The motley aesthetic of Cuomo’s briefings mirrors our own confusion and disorientation,” writes anthropologist and media studies expert Shannon Mattern in Art in America. Mattern breaks down the accessible design choices made on screen: Arial font, intermittent use of all capital letters, dramatic typesetting. When Cuomo wants to hammer a point, big, bold, red letters spill across the screen.
The slides telegraph what Mattern calls “dad-like concern and (inadvertent) comedy,” and with remarkable consistency. Cuomo, along with his slides, keeps showing up, and his team keeps communicating. “Cuomo’s slideshows project a reassuring image of managerial order,” Mattern says. “[They have] captured national attention by cultivating an image of accountability, credibility, and empathy.”
QUOTED BY DESIGN
From one recession to another
“In early 2009, in the depths of the Great Recession, Time magazine declared ‘The End of Excess.’ Conspicuous consumption dating back to the 1980s had caught up with us in the form of a recession so brutal that ‘now everything really has changed,’ wrote Kurt Andersen, who’s built his career on astute cultural observations. ‘The party is finally, definitely over.’ Optimistically, he imagined a healthy societal reset marked by a more temperate and frugal approach to consumption.
Anything is possible, but take a closer look at how often definitive predictions about permanent change are simply extrapolations of recently observable trends taken to some maximum extreme. In other words, the future will be like this new present—only much more so.”
— Journalist Rob Walker writing for Marker about the fallacy of sweeping economic predictions


fortune--2020-04-21--Wednesday deadline looms for $500 child stimulus payment

If you receive Social Security, disability, or veteran’s benefits, your time is running short to claim a $500 stimulus payment for any eligible children in your home.
The Internal Revenue Service has announced that Wednesday at 12:00 p.m. ET is the deadline for those individuals to register their children with the non-filer tool on the IRS website. People who filed tax returns in 2018 or 2019 do not need to register on the site.
The reason for the extra step is that while the government has your bank information, thanks to those benefits, it doesn’t know if you have any children eligible for the stimulus checks.
The $1,200 payments to individuals are being sent automatically, but have not yet gone out to benefits recipients. And once the payment has been issued, you won’t be able to use the non-filer tool to add kids, meaning you’d have to wait until next year to receive the cash. (Stimulus payments are formally an advance credit on 2020 tax returns.)
People who receive Railroad Retirement benefits and Supplemental Security Income (SSI) will also have to make the IRS aware of eligible children.
While millions of taxpayers have already received their stimulus checks, millions more have not—and have grown frustrated with the IRS’s “Get My Payments” portal, which has posted vague messages that have frustrated and confused many users.
More personal finance coverage from Fortune:
—What to do if you can’t pay your bills this month
—Stimulus checks are being deposited: How people are spending the money
—Couldn’t track your stimulus check? Errors and long waits plague IRS portal rollout
—What you should know about mortgage forbearance and skipping payments
—Everything you need to know about furloughs—and what they mean for workers
—Freelancers and independent contractors can now apply for SBA Paycheck Protection Program loans. What you need to know
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—VIDEO: 401(k) withdrawal penalties are waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-21--YouTube sued by crypto firm Ripple over scam videos, in major challenge to tech giant

The CEO of Ripple, a San Francisco-based finance and cryptocurrency firm, filed a lawsuit on Tuesday that accuses the streaming giant of turning a blind eye to scams that have defrauded consumers.
In a complaint filed in San Francisco federal court, Garlinghouse and Ripple accuse YouTube of damaging their brand and reputations, and demand an unspecified amount of financial compensation. The complaint also asks the court to forbid YouTube from profiting from the scams, or from allowing them to continue.
The alleged scams in question resemble those found on other social media platforms, and typically use the image of prominent executives, including Bill Gates and Richard Branson, to offer “giveaways.” In most cases, the scammers ask the victims to send a small sum in order to receive a larger windfall—only to abscond with whatever funds they receive.
In the case of YouTube, the complaint cites numerous instances where hackers took over the channels of legitimate creators and replaced their videos with ones advertising Ripple-related scams. The scammy Ripple videos often show media interviews with Garlinghouse lifted from reputable sources, and overlaid with invitations to participate in “giveaways” of the cryptocurrency XRP.
According to the complaint, YouTube fails to adequately restrict the spread of such videos, and even profits from them by letting the scammers pay to promote them. These promotions allegedly involve the scammers buying keywords like “Ripple” and “Brad Garlinghouse” in order to target the videos to people searching for such terms.
The complaint adds that Ripple employs a third party firm to track such scams, and instruct social media companies to remove such scams. Yet, despite sending hundreds of notices to YouTube, Ripple says the media giant has responded slowly or not at all.
“YouTube regularly touts its robust tools for self-regulating content on its platform, which purportedly include “cutting-edge machine learning technology” and a sprawling network of human reviewers,” the complaint reads. “But in this case, faced with a pervasive Scam, YouTube chose, and continues to choose, inaction.”
A recent search of YouTube by Fortune unearthed a handful of videos that appeared to be scams using Garlinghouse’s image as a lure. The majority of search results for “Ripple” or “Garlinghouse,” including the top ones, however, seemed to be legitimate content.
A spokesperson for YouTube, which is owned by Google, provided the following statement, “We take abuse of our platform seriously, and take action quickly when we detect violations of our policies, such as scams or impersonation.”
In an interview with Fortune, Garlinghouse said he decided to sue YouTube in response to the troubles he encountered in trying to remove a wave of social media accounts impersonating him. He also expressed sympathy for the victims of the scams, and described a spate of violent threats he has received from those who falsely believed he had conspired to steal their money.
Legal uncertainty over YouTube’s responsibility
Impersonator scams involving cryptocurrency are pervasive on social media. These include a recent one where hackers took over a popular YouTube channel, and purported to run an “ask me anything” Q&A with the CEO of the cryptocurrency giant, Coinbase. And on Twitter and Instagram, crypto enthusiasts have frequently encountered scam accounts displaying the name and face of prominent people in the industry, including Ripple’s CEO.
Garlinghouse, however, says he and Ripple chose to single out YouTube because the other social media platforms have been relatively more responsive to complaints about scammers and fake accounts. He added that more crypto crooks are migrating to YouTube in recent months, and accused the media giant of failing to make a serious effort to curtail them.
“YouTube generated $15 billion in ad revenue last year, and you’re telling me they can’t spend more money to police obvious scams that violate their own terms of service?” he said.
Ripple and Garlinghouse could face an uphill struggle with the lawsuit. The obstacle is the same one that critics of social media platforms have long confronted: A law that shields Internet companies from liability for the actions of their users.
Commonly known as Section 230, the law ensures that startups don’t face ruinous litigation when a user posts a comment on their website, and also protects tech giants like Facebook and Amazon from many forms of liability.
On its face, YouTube would appear able to invoke Section 230 to deflect responsibility for the cryptocurrency scammers. Garlinghouse, however, notes the complaint accuses YouTube of damaging its trademark—and that trademarks are intellectual property, which is excluded from the general Section 230 shield.
Ripple’s lawsuit, which also accuses YouTube of unfair competition and violating Garlinghouse’s right of publicity, also has the potential to win political support. In recent months, lawmakers from both parties have called for Congress to narrow the scope of Section 230 and to place more legal obligations on big tech companies. In this sense, the lawsuit could provide new grist for politicians, including Sen. Josh Hawley (R-Mo), who are outspoken critics of platforms like YouTube.
The lawsuit is also notable because Ripple, which recently took in $200 million in outside investment, has the means to take on YouTube in a protracted court battle.
Garlinghouse says Ripple will use any damages or settlement money it receives from the case to reimburse victims fleeced by the YouTube scams. A former senior executive at Yahoo, he also acknowledged that Silicon Valley companies have enjoyed many advantages from Section 230 but that the law, passed in 1996, is now inadequate.
“The world changes. Times change. I can understand why the 1996 Act was written, but that was 25 years ago. Platforms have been abused in a way not anticipated and now tech leaders need to be out front, and evolve and adapt.”
An earlier version of this story wrongly quoted Garlinghouse as stating platforms had abused their power, rather than having been abused. The story has also been updated to include a comment from YouTube.
More must-read finance coverage from Fortune:
—5 veteran investors on how to approach the coronavirus stock market
—These countries’ stock markets have been hit the hardest by the coronavirus
—China’s next coronavirus crisis: What happens after a country closes its economy
—This time, the banks were ready: How the Big Four prepared to survive the coronavirus
—How the American economy can recover from the coronavirus pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-21--After stocks, the housing market could be next to plunge

The economic ripple effect of the COVID-19 coronavirus pandemic is starting to spread. And the next victim looks to be the housing industry’s seller’s market.
March home sales fell 8.5%, according to the National Association of Realtors. And the months ahead will likely be notably worse, according to the group’s chief economist.
While sales were down compared to February 2020, they still managed to top March 2019 (though by a mere 0.8%). The figure could be easily misunderstood, though, as the sales figures are based on closings that were signed mostly in late January or February.
That means figures in upcoming months will drop precipitously as the effects of stay-at-home orders and a huge surge in unemployment begin to factor in.
“Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak,” said Lawrence Yun, NAR’s chief economist, in a statement. “More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
For now, at least, home prices aren’t suffering. The median existing home price in March was up 8% from a year prior to $280,600—the 97th consecutive month of year-over-year gains.
A potential stumbling block for the industry is a growing lack of inventory. People are taking their house off the market now or choosing not to list, perhaps to avoid potential exposure to the virus. At the end of March, there were 10.2% fewer houses on the market.
More personal finance coverage from Fortune:
—What to do if you can’t pay your bills this month
—Stimulus checks are depositing: How people are spending the money
—Couldn’t track your stimulus check? Errors and long waits plague IRS portal rollout
—What you should know about mortgage forbearance and skipping payments
—Everything you need to know about furloughs—and what they mean for workers
—Freelancers and independent contractors can now apply for SBA Paycheck Protection Program loans. What you need to know
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-21--Crypto site The Block names new CEO

Crypto site The Block names new CEO

At a time when many media companies are reeling from the economic damage of the pandemic, a startup focused on cryptocurrency news and research says it is thriving. On Tuesday, New York-based The Block boasted of soaring revenues while announcing its 24-year-old Chief Operating Officer, Mike McCaffrey has taken on the top job at the company.
Launched in April of 2018 as a news site, The Block’s initial mission sought to demystify the growing cryptocurrency industry. While still producing news, the company has since turned its focus to offering paid research, including bespoke research for individual clients.
In an interview with Fortune, McCaffrey said The Block booked several million in revenue in 2019, after bringing in none at all in 2018. He added the company has cut its burn rate (the rate at which it is spending money in excess of income) by half, while expanding its headcount to 24.
McCaffrey also said The Block’s niche of producing credible reporting on the cryptocurrency industry has spared it from the larger economic pullback related to the coronavirus.
“None of our sponsors has wavered and our subscription rate hasn’t fallen off. We are also not reliant on conferences like other media companies,” said McCaffrey, adding that twin revenue streams of news and research has produced a stable business model.
A person close to The Block, who spoke on the condition of anonymity, said the company is on the cusp of raising a $2 million investment round, which would come in addition to the $3.5 million it has raised so far. The person also said the company’s research clients include big financial firms like UBS, Visa and Fidelity, as well as agencies of the federal government.
In taking on the top job, McCaffrey succeeds founder and outgoing CEO, Mike Dudas, a veteran of Google who also founded a mobile commerce startup called the Button. Dudas, who will now serve as Chair of The Block’s board, is a well-known figure in the cryptocurrency world, but also a controversial one as a result of a series of Twitter outbursts.
In seeking to consolidate its position in crypto media, The Block will have to compete with CoinDesk, a much larger news and information service that hosts Consensus, the industry’s flagship conference series.
Meanwhile, The Block will also have to safeguard its reputation as independent authority in a cryptocurrency industry where relations between companies and journalists can be cozy.
McCaffrey says he is confident The Block will be able to avoid conflicts of interest, in part because of strict divisions between the company’s news and research operations, later clarifying these division exist between business and editorial operations. He also predicts that interest in blockchain and cryptocurrency will only grow in coming years, pointing to the growing interest in crypto by financial technology firms.
“At a high level, digital assets will continue to take hold in larger firms. Look at the acquisition deck for Plaid [a financial services firm bought by Visa], which listed 26 fintech companies—14 of which had invested in crypto,” he said.
More must-read finance coverage from Fortune:
—5 veteran investors on how to approach the coronavirus stock market
—These countries’ stock markets have been hit the hardest by the coronavirus
—China’s next coronavirus crisis: What happens after a country closes its economy
—This time, the banks were ready: How the Big Four prepared to survive the coronavirus
—How the American economy can recover from the coronavirus pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-21--Stocks are now overpriced by 22%, according to this rule

Investors are brimming with fresh optimism that’s brought one of the greatest rallies ever. But if they’re right, then future earnings will need to be to be terrific. Don’t fall for the wishful thinking. The coronavirus crisis will hammer profits that were already in a bubble, and due for a fall.
Since hitting a low of 2237 on March 23, the S&P 500 surged 638 points or 28.5% by the close on Friday, April 17, regaining well over half of its drop from the record high of mid-February. That extraordinary jump means Wall Street believes that future earnings are looking a lot better now than they did three weeks ago.
But current prices point to a level of profits that defies reality. Stock prices reflect the stream of profits companies are expected to generate for many years come. Depressed results in 2020 and 2021 caused by the COVID-19 outbreak are far less important than where earnings settle when they’ve recovered to what we’ll call “normal” levels, meaning a benchmark where they start expanding again with the newly-growing economy.
So based on the S&P’s close at 2875 on April 17, where do investors put the normal earnings for America’s big cap stocks? Over the past 60 years, the market’s median price-to-earnings multiple stands at 17.4. But the PE has been a lot higher over the past three decades, averaging 21.3, a legacy of record-low interest rates that may or may not continue, and perhaps, excessive enthusiasm. We’ll start with the average of the two, 19.4, and round it up to 20-times, estimating that a magic wallet sprouting $100 a year in earnings should sell for $2000.
Deploying the 20 PE is Part 1 of what we’ll call the “Tully-20 Test.” If the “normal” profits you get by dividing the S&P by 20 look unreasonably high, then stock prices are inflated.
At our 20 PE, the S&P’s sturdy earnings-per-share, when the U.S. gets chugging again, should be $143.75 (2875 divided by our PE of 20). But wait, that’s higher than the $139.47, based on four quarters of trailing GAAP earnings, where the S&P finished 2019! That mark was an all-time record, a gain of 48% from the close of 2016. It also capped something of a golden interlude for profits. Operating margins averaged 11.1% in 2019, 1.9 points higher than the margin in 2016, and sales over the last three years jumped by almost a quarter, at an annual pace of 7.3%.
Those trade winds have since turned into a tornado. It’s impossible to predict how hard the pandemic will hit profits. But we know that projections are a moving target that’s rapidly getting worse. On April 9, analyst polled by Refinitiv posited a drop of 8.5% for the year. A week later, their estimate had almost doubled to 15.5%. Look for forecasts to keep dropping.
Once again, what matters most is where earnings land when the turmoil ends. The bull run means that investors believe that EPS will surge past the 2019 peak to $144, and increase from there. But earnings were in something of a bubble at the end of 2019 due to the unusual confluence of margins and sales growth that far exceeded their historic levels. We don’t know for sure if big caps earnings will quickly rebound to $144, but we do know where they need to go in the three years after the good times return to reward investors. Assuming companies continue paying 40% of their profits in dividends, and 60% in buybacks and cash reinvested in plants and products, earnings should wax at 5% a year––a pretty good number in an economy projected to grow at a long term “real” rate of 2%-2.5%, or 4%-4.5% including inflation.
Investors’ view that profits will replant the flag at greater heights than the 2019, golden age record, is probably a fantasy. So the S&P flunks Part 1 of the Tully-20 Test. Let’s move on to Part 2. If $144 is an inflated starting point for a comeback, what’s a reasonable base? And where does that put a reasonable value for the S&P?
An excellent guide is the Cyclically Adusted Price Earnings ratio developed by economist Robert Shiller. The CAPE uses a 10-year average of inflation-adjusted profits to smooth their erratic course, including spikes like the one before the virus struck. The CAPE’s most recent reading for “adjusted” profits is $107.
Of course, that figure will decline somewhat with the blow from the pandemic. But since Shiller’s methodology spreads earnings over a long period, the downward adjustment is most likely to be just a few dollars. I’ll also add 10% to the Shiller number because using a price level ten years old to adjust earnings over the next decade makes the current number look artificially low. After fiddling with the CAPE’s figure, I calculate a base for earnings per share, the footing where they’re most likely to settle when the U.S. emerges from the trough, at around $118.
The Tully-20 Rule reaches its judgment by applying the PE of 20 to that benchmark. That formula yields a fair value for the S&P of 2360 (20 times $118). The S&P actually dipped 5% below that number on March 23. But as of April 17, the index floats 22% above where the Tully-20 rule put fair value.
Conclusion: The latest party was a bash. Get ready for the hangover.
More must-read finance coverage from Fortune:
—5 veteran investors on how to approach the coronavirus stock market
—These countries’ stock markets have been hit the hardest by the coronavirus
—China’s next coronavirus crisis: What happens after a country closes its economy
—This time, the banks were ready: How the Big Four prepared to survive the coronavirus
—How the American economy can recover from the coronavirus pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-21--How a pharmacy delivery startup has capitalized on the coronavirus pandemic

Like many people, Nicholas Potts feels as though the coronavirus has warped time—that he’s lived months in days.
For Potts, the founder and chief executive of ScriptDrop, a technology company that enables pharmacies to deliver prescriptions to customers’ homes, the coronavirus pandemic has meant a sevenfold increase in order volumes—and the execution of a multiyear business plan in just six weeks.
Potts founded ScriptDrop in 2016 in the not-so-trendy tech hub of Columbus. The company sold software to pharmacy networks and established integrations with the prescription-management software pharmacies use to run much of their business. The company partnered with specialized courier services, all of whose drivers had to be compliant with the Health Insurance Portability and Accountability Act (HIPAA), for same-day delivery. ScriptDrop charged the pharmacy a fee for each delivery, which the pharmacy either passed on to the consumer or chose to absorb.
ScriptDrop was growing rapidly, Potts says, but it was a strictly business-to-business company. It didn’t have a consumer-facing app or interface—although one was on the company’s long-term road map, Potts says: “We had built a pilot app and tested it about six months ago. But we weren’t planning on rolling it out yet.” With ScriptDrop’s B2B model growing so quickly, there seemed little reason to complicate life with a consumer-facing service.
Then the coronavirus pandemic hit. Suddenly a trip to the pharmacy, an essential journey for those with chronic health conditions, became potentially fraught with peril. And with social distancing measures taking effect, more and more pharmacies wanted to offer home delivery. In addition, busy pharmacists wanted to make it simpler for a patient to initiate a delivery request, rather than relying on the pharmacy to inform the customer about the service.
So ScriptDrop accelerated its business plan, sprinting to put in place a consumer-facing ordering system. “It has been a lot of long days and long nights for a lot of the team,” Potts says.
In the end, he says, the company decided against making its already built pilot app the centerpiece of its new consumer-facing offering. Instead, patients can just text the word “deliver” to a number on their phone—helpful for older people who might not be proficient at installing apps—and walk through a series of messages that will route their order to whichever pharmacy the patient wants to use.
Patients provide their prescription and insurance information, make their co-payment, if needed, and pay a delivery fee. For most addresses in the U.S., ScriptDrop can provide same-day delivery if an order is placed before 11 a.m.
In the midst of the coronavirus pandemic, the company has instituted a nationwide pricing plan: $8 for same-day service, as long as the pharmacy is within five miles of the delivery address. “Ninety-five percent of the country lives within five miles of their pharmacy,” Potts says. As before, the fee is charged to the pharmacy, which can pass it on to the customer or absorb it.
The company contracted with UPS and FedEx to handle deliveries nationwide for less time-sensitive prescriptions, and has expanded its network of HIPAA- compliant local couriers. It’s even started helping courier companies screen prospective applicants for jobs as drivers. “We now have 15,000 drivers available, and we’ve had thousands of drivers apply through our website,” Potts says.
ScriptDrop gives the pharmacies special packaging for prescriptions, with an outer label containing only the patient’s name and address, preserving their privacy. If there’s room in the package, Potts says, pharmacies can include over-the-counter medication or other items in an order, too.
Before the outbreak, ScriptDrop required its couriers to view a patient’s identity documents, like a driver’s license, and to get a signature. Now it allows it couriers to simply place a prescription on a doorstep or front porch—although they still ensure someone is there to pick up the package, usually coordinating with the recipient by phone.
In this time of explosive unemployment, Potts has spent many of the past few weeks hiring. At the beginning of the pandemic, the company comprised 90 workers—but Potts says he thinks ScriptDrop will employ double that number within five weeks. Its order volumes have already surged at least 600%, and he says he expects another 200% to 300% increase in the next month. The company had expected to achieve $30 million in annual sales this year, but now Potts thinks the figure may be even higher.
To date, ScriptDrop has raised $26 million in venture funding, from backers that include angel investors, the Ohio Innovation Fund, and Chicago-based venture capital firm M25.
Potts thinks one benefit of the pandemic is that it may persuade tech investors—particularly those in Silicon Valley, who often insisted they would only invest in companies in their backyard so they could have lots of face-to-face contact with the founding teams—to look farther afield for promising startups.
“I think the fact that everyone is having to work remotely is going to make investors more comfortable with people outside the traditional tech hubs,” he says.
More must-read tech coverage from Fortune:
—As businesses adapt to remote work, tech isn’t their biggest problem
—Thermal-imaging tech is on the rise. Can it help fight the coronavirus?
—More surveillance and less privacy will be the new normal after the coronavirus has been contained
—AMD CEO Lisa Su on supercomputing and leading a global company through a pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: Best earbuds in 2020: Apple AirPods Pro vs. the Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-21--The chaos behind SoftBank’s scrapped $3 billion deal

This is the web version of Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.
Earlier this year, SoftBank scrapped a $3 billion deal to buy up shares from existing stakeholders.
That deal would have given WeWork co-founder Adam Neumann nearly $1 billion for his shares alone in a company that had sunk from $47 billion in valuation to a single billion-dollar digit.
Which meant Neumann was set to walk away from the coworking company as a billionaire last year, when SoftBank agreed to the deal. Now, he’s an estimated multi-millionaire and one who intends to sue SoftBank, according to the telecom giant’s lawyers.
Attorneys representing Neumann have sent a letter to SoftBank saying he is reserving his rights, a source with knowledge of the matters told Term Sheet.
Meanwhile, what wasn’t previously revealed in the deal: the amount other investors could stand to gain from it. Benchmark tendered shares worth $627 million, and entities tied to WeWork board member Lew Frankfort tendered some $40.3 million, according to a new Bloomberg report. In a separate statement, WeWork’s special committee also added that 850 WeWork employees had also tendered stock worth over $450 million.
WeWork’s special committee, on which Frankfort and Benchmark Capital’s Bruce Dunlevie sit, previously filed suit on April 7 over the failed deal. SoftBank has argued that the committee lacks the authority to represent WeWork.
An important subnote: It’s not just about liquidity for existing shareholders. SoftBank’s pullback also prevents WeWork from accessing some $1.1 billion in debt financing from the Japanese giant.
Debt on debt: The coronavirus has devastated retailers that rely on foot traffic. Now, Neiman Marcus is set to become the first major U.S. department store chain to seek bankruptcy protection owing to the pandemic. The already debt-laden company is reportedly negotiating a loan “totalling hundreds of millions of dollars” to sustain itself through the bankruptcy process. Ares Management Corp and Canada Pension Plan Investment Board back the company.
But as department stores suffer, discount retailers could come out of the coronavirus in better shape.
$350 billion isn’t cool, you know what’s cool? $1 trillion: The Senate plans to meet today for a potential vote on a stimulus measure that would provide more funding for the Paycheck Protection Program, after the first $350 billion PPP round ran out in a mere two weeks and left many out in the cold. As of now, the package would include $370 billion directed to small businesses, $75 billion for hospitals, and $25 billion for testing.
Expect another mad scramble. The second round is expected to dry up even faster than the first, as banks are more familiar with handling large volumes of PPP funding. Banking industry representatives tell Politico that the program needs closer to $1 trillion to meet demand, given a burn rate of about $50 billion a day.
The new vote comes after a messy rollout for the initial program, as Washington prioritized speed over finesse. Now, small businesses are suing banks tasked with meteing out the loans such as JPMorgan and Wells Fargo, claiming that banks prioritized the most lucrative deals (lenders are paid between 1% to 5% in fees to process PPP loans).
Meanwhile, hedge funds and large hospitality chains are lining up for PPP payouts—parties that, while technically qualified for the forgivable loans under the program’s loose eligibility guidelines, probably aren’t the intended recipients.
VENTURE DEALS
- Qingju, the China-based bike-sharing unit of Didi Chuxing, raised $150 million from SoftBank and Legend Capital, The Information reports citing sources. Another $850 million comes from Didi itself, per The Information. Read more.
- Unacademy, an Indian education startup, raised $110 million in funding. General Atlantic, Sequoia, and Facebook led the round, and were joined by investors including Sequoia India, Nexus Venture Partners, Steadview Capital, and Blume Ventures. Read more.
- ForgeRock, a San Francisco-based provider of digital identity, raised $93.5 million in Series E funding. Riverwood Capital led the round, and was joined by investors including Accenture Ventures, Accel, Meritech Capital, Foundation Capital, and KKR Growth.
- Aledade, a Bethesda, Md.-based operator and service provider for a national network of primary care providers, raised $64 million in Series C funding. OMERS Growth Equity led the round.
- Vestiaire Collective, a Paris-based platform for pre-owned fashion, raised €59 million ($64 million) in funding. Investors included Korelya Capital, which is backed by Naver, Fidelity International, Vaultier7, and Cuir Invest.
- Guru, a Philadelphia-based collaborative management software company, raised $30 million in Series C funding. Accel led the round and was joined by investors including Emergence Capital, FirstMark Capital, Slack, and MSD Capital. Read more.
- Vercel, a San Francisco-based platform for front-end developers, raised $21 million in Series A funding. Accel led the round, and was joined by investors including CRV, React creator Jordan Walke, and GitHub CEO Nat Friedman.
- Profitero, a Boston-based enterprise eCommerce SaaS analytics platform, raised $20 million in funding. Scaleworks led the round, and was joined by investors including Conviction Capital.
- YFood, a Munich-base maker of drinks, bars and powders, raised €15 million ($16.3 million) in funding. Felix Capital led the round, and was joined by investors including Fonterra, Five Seasons Ventures, and New Ground Ventures.
- Parsyl, a Denver, Co.-based supply chain data platform for perishable goods shipments, raised $15 million in Series A funding. GLP and Ascot Group led the round.
- Moshi: Sleep and Mindfulness, a London-based app telling bedtime stories to children, raised $12 million in Series B funding. Accel led the round, and was joined by investors including Latitude Ventures and Triplepoint Capital.
- Bokio, a Swedish AI-based accounting tool for small businesses, raised €7.4 million ($8 million) in funding and merged with Stockholm-based competitor Red Flag. Creandum and Svea led the round, and were joined by investors including Mojang cofounder Carl Manneh.
- Zikani Therapeutics, a Watertown, Mass.-based biosciences company focused on novel ribosome modulating agents for the treatment of rare, nonsense mutation-driven diseases, raised $7.5 million Series A1 funding. Advent Life Sciences, Gurnet Point Capital, and Roche Venture Fund were the investors.
- Helium Health, a West African electronic medical records provider, raised $7 million in funding. Global Ventures led the round.
- Ureeka, a San Francisco-based platform connecting female and minority entrepreneurs to resources to scale their business, raised $8.6 million in funding. Bullpen Capital, Chicago Ventures, and Salesforce Ventures were the investors.
- FitOn, a Los Angeles-based wellness platform, raised $7 million in Series A funding. Telstra Ventures, Accel, and Crosscut Ventures led the round.
- Libeo, a Paris-based Fintech company processing supplier invoices for SMEs, raised €4 million ($4.9 million) in funding. LocalGlobe led the round, and was joined by investors including Breega and Business Angels.
- Fat Snax, a New York based snack business, raised $4.5 million in Series A funding. BFG Partners and BIGR Ventures led the round.
- ClearFlame Engine Technologies, a Woodridge, Ill.-based developer of clean combustion engine technology, raised $3 million in funding. Clean Energy Ventures led the round.
- Applied Blockchain, a London-based blockchain startup, raised £2 million ($2.5 million) in funding. QBN Capital led the round.
PRIVATE EQUITY
- Envision Healthcare, the KKR-backed medical staffing firm, has hired advisers to help it restructure its $7 billion debt in a bid to avoid bankruptcy amid the coronavirus crisis, according the Financial Times, citing sources. Read more.
- Vista Equity Partners has put the sale of a stake in Finastra, a London-based payments giant, on hold, Bloomberg reports citing sources. Vista was seeking to sell as much as 50% of Finastra in a deal valuing the business at over $10 billion including debt, per the report. Read more.
- Investors including Hg halted the sale of a minority stake in Visma Group, a Norwegian cloud software developer. The deal would have valued the company at about 7 billion euros ($7.6 billion) including debt, Bloomberg reports citing sources. Read more.
- The Cheesecake Factory (Nasdaq: CAKE) raised $200 million from Roark Capital. Roark received convertible preferred stock.
- Top Gun Pressure Washing, a portfolio company of Osceola Capital, acquired Bob Popp Building Services, a Denver-based window cleaning services for commercial businesses across Colorado. Financial terms weren't disclosed.
OTHERS
- Novartis acquired Amblyotech, a Phoenix, Ariz.-based startup using video game software to treat amblyopia (known as "lazy eye"). Financial terms weren't disclosed.
- Alimentation Couche-Tard shelved plans to acquire Caltex Australia, a petrol station operator, for $5.6 billion. Read more.
- Rapyd plans to acquire Korta, an Iceland-based payment card service provider. Financial terms weren't disclosed.
- Riot Games acquired Hypixel Studios, a Londonderry, Northern Ireland-based gaming developer. Financial terms weren't disclosed.
- Fandango has agreed to buy Vudu, Walmart’s on-demand video streaming service Financial terms weren't disclosed.
IPOS
- Kingsoft Cloud, a Beijing, China-based cloud services provider spinning out of Kingsoft Group, filed for an $100 million IPO. It posted revenue of $568.3 million in 2019 and losses of $166.8 million. Kingsoft (53.8% pre-offering) and Xiaomi (15.8%) back the firm. It plans to list on the Nasdaq as “KC.” Read more.
- ORIC Pharmaceuticals, a South San Francisco-based Phase 1 biotech developing molecule therapies for cancer, plans to raise $75 million in an offering of 5 million shares priced between $14 to $16. It has yet to post a revenue and posted losses of $27 million in 2019. The Column Group (22% pre-offering), Topspin Fund (16%), and OrbiMed (12%) back the firm. It plans to list on the Nasdaq as “ORIC.” Read more.
F+FS
- Updata Partners closed Updata Partners VI with $308 million in committed capital.
- Pantheon Ventures raised $263.5 million for its Pantheon Participation Partners fund. Read more.
PEOPLE
- BC Partners added Pascal Heberling as a Partner to its investment team in Europe.