fortune--2020-02-11--Carnival cruise ship is running out of ports after 5 nations block entry on coronavirus fears

Thailand became the latest country to turn a Holland America Line cruise ship away from its ports, sparking concern for the 2,257 passengers and crew desperate to disembark after almost two weeks at sea.
Fearing some guests aboard the Westerdam may be infected with the deadly new coronavirus, Thailand’s Public Health Minister Anutin Charnvirakul announced in a short Facebook post Tuesday that he’s directed authorities to refuse entry into a port near Bangkok. The statement was confirmed by other Thai officials.
The World Health Organization seemed to offer a ray of hope — saying that health authorities may try to board the ship to assess the passengers’ health to see whether they may be allowed to get off the ship in Thailand.
Operated by Holland America Line, a brand owned by Miami-based cruise giant Carnival Corp., the ship has been refused entry by four other countries or territories, according to the WHO. Ports in Taiwan, Japan, the Philippines and Guam have sent it away on concerns over the virus, which has killed more than 1,000 people since it was first reported late last year in Wuhan, China.
The refusal and quarantine of cruise ships are the latest efforts by governments around the world seeking to contain the outbreak. Carnival’s Diamond Princess and its 3,700 passengers are quarantined in the port of Yokohama as authorities battle an increasing number of infections on board.
The WHO said Thai officials have indicated that if the ship enters the country’s waters, “authorities may seek to board the ship to determine the health status of passengers and crew, to determine whether they would be allowed to eventually disembark in Thailand,” according to a statement. The ship is currently off the southern coat of Vietnam, according to the WHO and Bloomberg data.
On board the Westerdam, passenger Stephen Hansen said he was relieved when travelers were initially told Monday that they would be allowed to disembark in Thailand. Guests scrambled to rebook flights home and everyone had their temperatures taken. By Tuesday morning, they learned from media reports that Thailand had refused the ship.
‘Back in Limbo’
“To have that snatched away at the last minute with no other solution at hand was very upsetting,” said Hansen, who is traveling with his wife. “So we are back in limbo again.”
Hansen called on the governments of passengers’ home countries to seek a solution, saying medicine, food and other supplies would soon run short. Others on the Westerdam took to social media after learning about Thailand’s refusal.
I can understand how despair can set in when hope is dashed. Ive never been one to accept Helplessness. As of now our ship hasn't told us we are not going to Thailand to disembark. First time this morning laughter was heard that has again quieted #westerdam @HALcruises — AJ (@Mountain_AJ) February 11, 2020
Oh no… looks like Thailand are not letting us in 😱😱😱@HALcruises #Westerdam — Lorraine 🦍🐉🦍🐉💚 (@lorrain34100) February 11, 2020
The cruise ship operator hasn’t had much news to offer passengers.
“We are actively working this matter and will provide an update when we are able,” Holland America Line said, adding it’s aware of the reports about Thailand’s refusal. “We know this is confusing for our guests and their families and we greatly appreciate their patience.”
In a blog post Monday evening, the operator announced the ship was headed to Laem Chabang port — about 50 miles east of Bangkok — where passengers would disembark and end their journey on Feb. 13.
Holland America Line has said that the vessel is not in quarantine and it has no reason to believe there are any cases of coronavirus on board. The ship’s plight is adding to Carnival’s woes sparked by the virus.
The Westerdam departed Hong Kong on Feb. 1 on a 14-day Taiwan and Japan cruise. The 1,455 guests, traveling with 802 crew members, were originally scheduled to disembark at Yokohama Feb. 15, according to blog posts on Holland America Line’s website. The ship has sufficient fuel and food provisions to last until the end of the voyage, according to an earlier Holland America Line blog post on its website.
While passengers wait for news, Christina Kerby said she’s been killing time learning how to fold bath towels into decorative shapes. The Northern California resident kept her posts upbeat and humorous:
Here’s a science fiction plot line for ya. Amidst a global epidemic that wipes out the earth’s population, it’s up to the people aboard one cruise ship- the only safe place on earth- to repopulate the planet. **Passengers onboard the #Westerdam begin eyeing each other nervously** — Christina Kerby (@ChristinaKerby) February 9, 2020
Editor’s note: This story was updated on Feb. 11 at 8 a.m. ET.
More must-read stories from Fortune:
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—Credit Suisse making a comeback, but spying scandal drags down outlook
—Why China is still so susceptible to disease outbreaks
—A new coronavirus red flag on the horizon—a stronger dollar
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-11--A.I. and tackling the risk of “digital redlining”

Twitter aims to curb misinformation about the U.S. census with new tool

This is the web version of Eye on A.I., Fortune’s weekly newsletter on artificial intelligence and machine learning. To get it delivered weekly to your in-box, sign up here.
Last week, a Dutch court ordered the government in the Netherlands to stop using a machine-learning algorithm for detecting welfare fraud, citing human rights violations.
The system, called System Risk Indicator (SyRI) in English, was being used by four Dutch cities to spot individuals whose benefits applications should receive extra scrutiny. It gathered information from 17 different government data sources, including tax records, vehicle registrations and land registries.
But the cities using SyRI did not run every application through the system—they only deployed it in poor neighborhoods where many residents are immigrants, often from Muslim countries.
The court ruled that SyRI violated the “right to private life” enshrined in European human rights law. The application of SyRI, it said, could lead to discrimination against individuals based on their socio-economic status, ethnicity or religion. It also said SyRI did not seem consistent with the requirements of Europe’s stringent data privacy law, GDPR.
Although the judgment only came from a district court and is subject to possible appeal, the decision is likely to set an important precedent within European Union—and it ought to reverberate elsewhere too, as societies around the world come to grips with how to apply fairness in a world of A.I.-driven risk models.
Nowhere is this more relevant than in the insurance sector, which is turning to machine-learning algorithms more and more in order to improve underwriting. Last week, I had a fascinating conversation with Daniel Schreiber, the co-founder and CEO of the New York-based insurance startup Lemonade. He shares concerns that the increased use of machine-learning algorithms, if mishandled, could lead to “digital redlining,” as some consumer and privacy right advocates fear.
But done right—and with the right measure of fairness—he thinks machine learning has the potential to increase access to financial services and decrease cost.
To ensure that an A.I.-led underwriting process is fair, Schreiber promotes the use of a “uniform loss ratio.” If a company is engaging in fair underwriting practices, its loss ratio, or the amount it pays out in claims divided by the amount it collects in premiums, should be constant across race, gender, sexual orientation, religion and ethnicity.
He admits that this means it is entirely possible that some categories of people—Schreiber, who is Jewish, uses the example of Jews—could be charged more on average for property insurance, because, for instance, their religious practice involves lighting candles in the home for certain holidays, and lighting candles might be correlated with a higher risk of house fire.
But, he says, no individual should be charged more because he or she is Jewish. It might turn out that a particular customer isn’t religious and doesn’t light candles. That’s why it is important not to ask people about their religious affiliation—that would be discriminatory. The key is for the insurance company to gather data that actually equates to risk: Do you light candles in your home?
In order for it to work properly, insurance companies will need to gather more data about customers, not less. Right now, Schreiber admits, the regulatory winds seem to be blowing in the opposite direction (especially in Europe, as the SyRI case shows). Most insurance regulators don’t understand machine learning. “That creates a fear of the unknown,” he says. What’s more, scandals such as Cambridge Analytica make people reluctant to share more data.
But Schreiber says customers might be willing to share more information if the insurers were transparent about why they needed to collect this data, how it was being used, and that it might result in customers paying a lower premium.
I wasn’t entirely convinced by Schreiber’s argument. If insurers become that much better at pricing risk, won’t many more people simply become uninsurable? (This is what happens in health insurance if companies are allowed to cherry-pick customers, excluding those with pre-existing conditions.)
Also, won’t people who live in impoverished neighborhoods still be forced to pay more for coverage, even though they may have little choice over where they can afford to live? Many poorer areas have higher risk of crime and fire, leading to higher home insurance premiums. (In fact, U.S. law prohibits policies that have a “disparate impact” on a protected class of people, unless a company can prove a legitimate business necessity for the policy.)
Schreiber told me that governments could mandate charging those who live in wealthy areas or who have high household incomes slightly more in premiums, and then using this excess to subsidize the premiums of those who live in poorer neighborhoods. But, he said, this was a discussion separate from the one about whether the underwriting model itself is fair.
What do you think? Feel free to write in and let us know your views.
Jeremy Kahn
@jeremyakahn
jeremy.kahn@fortune.com
A.I. in the news
More and more people are worried about being unfairly profiled by predictive algorithms. In addition to the SyRI example mentioned above, The New York Times examined governments' use of predictive algorithms in the U.S. and Europe where these systems are increasingly being used to advise on everything from parole and bail decisions to child services' selection of cases. It found growing alarm among community and civil rights groups. In many cases, those whose lives were impacted had no idea they had been assessed by a computer-driven statistical model. “You mean to tell me I’m dealing with all this because of a computer?” one Philadelphia parolee asked when a reporter told him for the first time that the conditions of his release were based on the fact that a machine-learning algorithm had judged him to be "high risk."
Twitter bans deepfakes. The social media company updated its policies to prohibit users from posting "synthetic or manipulated media that are likely to cause harm." The company is the latest to change its policies in response to concern over deepfakes, videos that are either manipulated using A.I. algorithms or entirely created by them. Twitter's policy also applies to still images and audio that has been manipulated or fabricated using a variety of other techniques, including over-dubbing. While there has been little evidence so far that deepfakes have been used for political disinformation, many security experts are concerned about their potential abuse, especially in the run-up to the 2020 U.S. presidential elections.
Arm debuts two new A.I. chips. Arm, the U.K.-based semiconductor company now owned by Japan's SoftBank Group, unveiled two new computer chips designed to run A.I. applications. The new chips, called the Cortex-M55 and the Ethos U-55 NPU, extend machine-learning capabilities to small, relatively inexpensive electronic components, the company says, enabling applications in everything from healthcare to agriculture. Arm's new chips, which can be used separately or yoked together for better speed and computing power, are among a growing number of specialized components designed for "A.I. on the edge," meaning machine learning performed on a device itself without the need to communicate with a cloud-based datacenter.
Barnes & Noble, Penguin Random House cancel insensitive A.I.-generated "diversity editions" covers. The bookseller and the publishing house canned a joint project they'd planned for Black History Month that would publish classic novels with new covers in which the main characters were depicted as non-white. The 12 books were selected for the project using an A.I. algorithm that analyzed the text of 100 famous novels, searching for cases in which the authors had not identified the race of the primary character. But critics accused the two companies of engaging in "literary blackface" and perpetuating the exclusion of diverse authors from the canon.
Facial recognition comes to schools. A New York school district has become the first in the country to install facial recognition technology and many others are considering doing so too, The New York Times reports. The schools say the technology will help them monitor who is on school property for student safety. But civil rights groups and some parents are not happy about the development. “Subjecting 5-year-olds to this technology will not make anyone safer, and we can’t allow invasive surveillance to become the norm in our public spaces,” Stefanie Coyle, deputy director of the Education Policy Center for the New York Civil Liberties Union, told the paper.
Clearview continues to court controversy
Some law enforcement agencies in the U.S. and Canada are hailing the New York-based startup's facial recognition technology, telling The New York Times that Clearview's technology has made it easier for them to locate the victims of child sexual exploitation. But, the paper says, Clearview's handling of such sensitive images raises questions about how the startup is safeguarding the information as well as concerns about how accurate its technology really is, since the consequences of a false match are particularly grave. Clearview has already been criticized for harvesting images from social media sites to train its A.I., sometimes in violation of those sites' terms and conditions, and also for potentially misrepresenting how accurate its technology is and which law enforcement agencies are using its app. Google, YouTube, LinkedIn, Twitter, Venmo and Facebook have all sent Clearview cease-and-desist letters, threatening to sue the firm if it doesn't stop using images gathered from their platforms.
Eye on A.I. talent
Cheryl Ingstad has been sworn in as the U.S. Department of Energy's first director of the Artificial Intelligence & Technology Office (AITO). The office was established in September 2019 to be the central coordinating body for the development and application of A.I. within the department. Previously, Ingstad led A.I. and machine learning research and development at the 3M Company . She had also held previous leadership roles within the Defense Intelligence Agency's Information Operations Branch.
has been sworn in as the U.S. Department of Energy's first director of the (AITO). The office was established in September 2019 to be the central coordinating body for the development and application of A.I. within the department. Previously, Ingstad led A.I. and machine learning research and development at . She had also held previous leadership roles within the Information Operations Branch. Okta Inc., a San Francisco-based company that specializes in secure identification and access control systems, has hired Craig Weissman as Chief Architect. Previously, Weissman was the chief technology officer at Salesforce and had co-founded Duetto, which provides revenue management software for the hospitality industry.
Eye on A.I. research
Language models keep getting bigger—but to exactly what end?
Microsoft has unveiled the largest pre-trained language generation model to date. Its Turing Natural Language Generation model (T-NLG for short), announced this week, takes in 17 billion different parameters. This means it can encode the relationship between words and sentences over much longer stretches of text than previous models.
It is more than twice as big as the next largest language model, Nvidia's MegatronLM, which has 8.3 billion parameters, and eleven times larger than OpenAI's GPT-2, which, with its 1.5 billion parameters, helped spawn the race for ultra-massive language models. Microsoft says its new heavyweight champion is better at answering questions—such as search engine queries—succinctly and accurately. It says it can often do "zero-shot" question answering, since it is pre-trained on such a large amount of text and may have encountered the correct answer to a question in multiple different sources during that training. And the company says T-NLG can do better abstraction and summarization than previous language models.
All of these are important potential commercial uses of the technology. But, as I mentioned in the "Brain food" section of this newsletter two weeks ago, there's not much evidence that these ultra-massive language models actually "understand" anything the way a human does. Nor is it clear that, for all of its many more billions of parameters, T-NLG is that much better than GPT-2 or even Google's BERT, which only has 350 million parameters (and was considered enormous at the time it was released in 2018). GPT-2 was already so big that a lot of people who want to use it are struggling to do so—it is breaking servers, according to Caleb Kaiser in Towards Data Science.
Which brings us to what the real point of T-NLG may be: One gets the distinct impression from Microsoft's publicity push around this new massive language model that it was created simply to demonstrate Microsoft's own expertise at being able to train something that big. (Doing so requires coordinating parallel training across a lot of different processing chips.) In conjunction with T-NLG, the company unveiled a new open-source and free-to-use library of deep learning optimization tools called DeepSpeed. It includes a tool, called the Zero Redundancy Optimizer (or ZeRO for short), that the company used to train T-NLG and that it says can coordinate the training of models with up to 100 billion parameters.
Fortune on A.I.
Startup uses A.I. to identify molecules that could fight coronavirus—by Jeremy Kahn
Click here to oust the board— Inside the A.I. startup that’s transforming activist investing—by Adrian Croft
What you need to know about new IBM CEO Arvind Krishna—by David Z. Morris
Patient or prisoner? Governments deploy surveillance tech to track coronavirus victims—by Eamon Barrett
Brain food
One of the more interesting uses of today's computer vision algorithms may be in the restoration and enhancement of archival and classic film footage.
Last week, Denis Shiryaev, showed off what's possible. He used several publicly-available, neural network-based programs to transform one of cinema's most famous films—the Lumiere brothers' 1896 L’Arrivée d’un train en gare de La Ciotat (or in English, The Arrival of a Train at La Ciotat Station)—from its a slightly blurry and flickering original (the Lumiere's film camera only shot about 15 frames per second) to a ultra-high definition 4k, 60 frame per second version. The video, posted to YouTube, went viral. Shiryaev even added realistic sound effects to the originally silent film.
One journalist, Ars Technica's Timothy B. Lee, noted that commercially-available machine learning apps could also be used to colorize old film footage.
While the results are striking, and the technique suggests an interesting avenue to make classic films "come alive" for today's audiences, one has to be careful to distinguish between enhancement, which is what Shiryaev performed, and restoration. After all, what 1896 film-goers saw (and were reportedly terrorized by on first viewing) was not something with the sharpness and fluidity of 4k, 60 fps, but rather that slightly blurry and jerky camera-work.
The technique Shiryaev used, which is known as "upscaling," does not restore information missing from the original but rather invents new information not contained in the original and slots it into the vastly expanded pixel-space of modern ultra high-definition. Doing so can create strange visual artifacts—warping images or outlines that strangely melt away.
It would be possible to use a different, but similar, machine learning technique to actually restore old films and photographs—although here too, the algorithm is taking a best guess at what information is missing from the image based on the closest surrounding pixels it can analyze. If an image is badly deteriorated there is less certainty that the restoration produced by the A.I. will be accurate.


fortune--2020-02-12--When the white gloves come off: Behind the scenes at one of London’s most historic and upscale hotel

When the white gloves come off: Behind the scenes at one of London’s most historic and upscale hotel bars

My boss wants me to travel during the coronavirus .
Do I have to go ?

At London’s Connaught Bar, located in the Connaught hotel, each beverage tells a story. The sharp-suited barkeeps are the storytellers, transporting guests to cocktail Narnia. The nightly white-glove ceremony that plays out is a clever balance between extravagance and the comforts of home.
Ever since the bar’s opening in 2008, its director of mixology Agostino Perrone, a native of Lake Como, Italy, has curated menus (dubbed in-house as “collections”) that are witty, complex, and playful—traits that head mixologist Giorgio Bargiani describes as the spirit of Connaught Bar. “We have always worked to create innovation and to surprise our guests,” says Bargiani. “This has meant experimenting with and developing new techniques and ingredients, while serving a changing clientele.”
Today, that means a more discerning guest, whose curiosity pushes the bar team to meticulously engineer each collection. The result is a compendium of drinkable anecdotes, providing a sense of place inspired by the building’s architecture and history as well as the bar’s regulars. In the past, you may have sipped the Sweet & Z, a tribute to a pair of guests who were utterly different, yet the very best of friends. Drawing from their favorite drinks, it married the bitterness of a negroni with the sweetness of a Golden Cadillac.
Today’s “Of the Moment” collection draws upon specific vignettes occurring lately within the bar. “We increasingly draw inspiration from our bar and its features,” Perrone says. “We find that building on the essence of our bar makes the story of each cocktail creation more tangible for our guests who can recognize, appreciate, and feel part of our narrative.”
The glamorous bar is adorned with cubist-inspired wood paneling and long mirrors, transporting guests to a different time and era. Courtesy of the Connaught Bar
Much is the same in their process. When the white gloves come off, the bartenders roll up their sleeves to embark on an exploration that considers five major factors: ice, glassware, garnish, flair, and story. Some experiments take weeks to perfect. (Although, according to Perrone, you cannot put a limit on perfection.) Others materialize effortlessly—their wildest ideas fast becoming reality.
“One day we decided to put marble in a cocktail,” Bargiani says of Set in Stone, a cocktail inspired by the marble enveloping the Connaught Bar. “After a few days, we realized that probably we would never be able to put marble in a cocktail. However, when we launched the menu we did have a cocktail with marble, and it was one of the most successful ones.”
To realize the impossible, they cooked an entire drink sous vide—a method in which ingredients are placed in a vacuum-sealed container then immersed in a hot water bath—a blend of gin, Genever, sherry, Italicus Rosolio di Bergamotto, elicriso oil, and Vesper bitters. They then rested the concoction in a marble cask to accentuate the flavors before serving it with a stone-paper garnish that guests may inscribe with a personal message.
The process
The first element to consider is the ice: Its shape and size must cohere with the drink’s type of dilution, temperature, and texture—while also serving an aesthetic purpose. The size of the glassware very much depends on the style of drink: the lighter and easier the cocktail, the longer its vessel—the highball being a prime example.
As part of Connaught’s “Masterpieces” series, the Faraway Collins travels the world through its various flavors: Star of Bombay gin, sarsaparilla soda water, fresh yuzu juice, and eucalyptus-infused sugar syrup. Danielle Bernabe
Texture (viscous, silky, effervescent) is also a fundamental aspect of drink development, contributing to the final flavor balance. The garnish must reflect and accentuate the elixir within the glass.
Take the Gate No. 1. First, Perrone and Bargiani looked to the hand-hammered iron gate opposite the main bar, which carries bottles of gin, Genever, red wine, vermouth, and port. They knew the notes and body of the wines combined with the maltiness of the Genever would be an ideal base.
A long glass—in this case, a Kyoto—reflected the height of the gate. For a finishing touch, they designed a chocolate sweet (a natural pairing with port) to sit delicately atop the rim and emulate the iron rods.
The Gate No. 1 is a nod to Connaught Bar’s iron gates, combining Old Duff Genever, Fords gin, Lagavulin 16 whisky, Belsazar Red vermouth, Château La Coste wine, port, milk jam, and Fix 8 Strawberry Tulsi Kombucha, and garnished with a chocolate depiction of the gate’s pattern. Courtesy of the Connaught Bar
The final element tells the story and provides the flair, offering guests a takeaway—a memory, an anecdote, a feeling, the desire to visit again. With the Number 11, the bar’s legendary martini pour (a dramatically soaring movement that helps the mixture breathe) ascended to new heights.
Served tableside, it is dispensed from a machine that forcefully aerates the spirits with the power equivalent to a cascade 11 stories high. This technique opens up the flavors, enabling the cocktail to dance on the palate. A hand-cut diamond ice rock cools it in a coupe hand-painted by the bar team.
The Number 11 features the bar’s exclusive gin, vodka, Amalfi lemon oil, wine distillate, and five bitters (cardamom, tonka, ginseng and bergamot, lavender, and coriander). Courtesy of the Connaught Bar
With each step, Perrone and Bargiani brainstorm playful and endearing notes to enrich the experience. Placing each imaginative cocktail on the table, they speak with great adoration as if reminiscing about a famed descendent: telling a story and conjuring a buzzy feeling beyond the drink itself.
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—The most anticipated books of 2020, according to Goodreads
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—The magic of the wedding industry’s most exclusive conference
—High-tech fitness offerings are the newest luxury hotel must-have
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fortune--2020-02-12--My boss wants me to travel during the coronavirus. Do I have to go?

When the white gloves come off : Behind the scenes at one of London ’ s most historic and upscale @ @

As the deadly coronavirus becomes a global pandemic, companies like Apple and Starbucks have stopped operating in China, and others, like Sony and Amazon, have pulled out of global trade shows like this month’s World Mobile Congress in Barcelona.
But some experts have cautioned that the threat of outbreak beyond China is unlikely, and not all firms are taking such precautions. This raises questions about what obligations companies have to their employees, and whether employees can refuse travel as the virus spreads.
The short answer, according to legal experts, is that workers can’t cite the coronavirus outbreak as a reason not to carry out their ordinary duties—including duties that involve general travel. While a federal law called the Occupational Safety and Health Act offers some protection to workers who refuse to work in the face of danger, those protections are unlikely to apply—at least for now.
Instead, the ordinary rules related to workers compensation are likely to apply to those who catch coronavirus on a business trip.
Law professor Jason Bent of Stetson University points to a 1989 case about a woman who contracted chronic respiratory illness after being exposed to Influenza B while traveling in Asia. The Supreme Court of Minnesota ruled the woman was eligible for workers compensation because she was on work-related business, and the disease was not one she would have contracted in the United States.
For those who seek workers compensation after contracting coronavirus while traveling, the payout will not be lucrative.
“It’s not great shakes. It will cover your medical and a portion of your wages, but you can’t sue for pain or suffering or other claims available in tort law,” says Mark Neuberger, a senior lawyer at Foley & Larnder.
The level of benefits vary according to different states’ workers compensation laws and, in the case of death, the rules are no different than any other work-related fatality—providing at best a couple years of wages.
The only opportunity for an employee who contracts coronavirus to seek damages outside of workers’ compensation is if their company has behaved recklessly—such as by ordering them to Wuhan, the epi-center of the virus. According to Jonathan Segal, a partner at the law firm Duane Morris, the fact the U.S. State Department has issued a Level 4 advisory for China—a flat-out “do not travel” warning—means firms could face special liability in the event their employees contracted the virus.
For employees with a genuine fear of contracting coronavirus on a business trip, they can ask federal regulators to intervene under the OSHA law, but there is no guarantee they would succeed. If the request to travel comes with short notice, an employee could also try to rely on a part of the law that allows workers to refuse job duties if they believe they are in danger—though Bent believes they would be unlikely to succeed.
But while employees have a weak legal case for refusing to travel, this doesn’t mean companies won’t heed their wishes.
“There’s the legal answer but, from a practical management point of view, you don’t want to force people who are scared into doing something,” says Neuberger.
Segal echoed this sentiment, saying “it’s a horrible message to the workforce” to order employees to travel when they are fearful of a pandemic.
He adds that he has been fielding numerous inquiries from companies about how to address the coronavirus, but that most of these questions have been about how to help employees caught in quarantine zones or how to handle those returning from China.
In the case of returning employees, Neuberger advises companies to be flexible and to encourage them to work from home.
The coronavirus presents employers with another legal risk in the form of discrimination resulting from paranoia of the disease. Segal cites a situation where an employee refused to sit next to a coworker of Asian descent even though the latter had not traveled outside of the U.S. The employee’s boss—correctly—ordered the worker to sit in their original seat.
“It was based on fear, but it’s also unadulterated bigotry,” says Segal, adding that companies should be vigilant about the coronavirus giving rise to unjustified harassment.
For companies and employers looking for further guidance, the Department of Labor has published specific guidance about workplace issues related to pandemics.
More must-read stories from Fortune:
—Why China is still so susceptible to disease outbreaks
—Coronavirus risks universities’ reliance on Chinese students
—Stock scammers are using coronavirus to dupe investors, SEC warns
—A new coronavirus red flag on the horizon—a stronger dollar
—WATCH: Coronavirus outbreak has disrupted global economy
Subscribe to Fortune’s Brainstorm Health for daily updates on biopharma and health care.


fortune--2020-02-12--‘Years of misconduct and fraudulent activity:’ Nissan is suing its ex-chair Ghosn for $91 million

Nissan Motor Co. is stepping up its pursuit of claims against former Chairman Carlos Ghosn, suing for 10 billion yen ($91 million) in damages from the former leader of the Japanese automaker and its alliance with Renault SA.
The lawsuit filed in Yokohama District Court seeks to “recover a significant part of the monetary damages inflicted on the company by its former Chairman as a result of years of his misconduct and fraudulent activity,” Nissan said in a statement Wednesday. The amount of the claim may rise depending on fines and penalties that Nissan will be obliged to pay, the carmaker added.
Ghosn was arrested in November 2018 on charges of financial wrongdoing, and faced trial in Japan until making a dramatic escape to Lebanon at the end of December. Nissan and Japanese prosecutors claim the former auto executive under-reported his income and used company money for person gain, charges which Ghosn has denied.
The damages sought by Nissan, if successfully reclaimed, could represent a significant part of Ghosn’s net worth. The former auto executive’s fortune is calculated to be about $70 million, down from around $120 million at the time of his first court appearance a year ago, according to estimates by the Bloomberg Billionaires Index.
Representatives for Ghosn didn’t immediately respond to messages seeking comment on Nissan’s announcement.
“The legal actions form part of Nissan’s policy of holding Ghosn accountable for the harm and financial losses incurred by the company as a result of his misconduct,” the Yokohama-based company said.
Nissan isn’t the only party intent on going after Ghosn. Masako Mori, Japan’s justice minister, said recently that she will “never give up” on bringing Ghosn to trial, even though the country has so far made little progress on its efforts to have him returned from Lebanon, which has no extradition treaty with Japan.
Ghosn, for his part, is pursuing claims against Nissan, saying he was wrongly dismissed from the carmaker’s Dutch unit and by a joint venture called Nissan-Mitsubishi BV. He is claiming 15 million euros ($16.4 million) in lost income.
The 65-year-old, who was facing two trials on charges of financial misconduct in Japan, jumped bail and fled the country late last year with the help of a security detail led by a former Green Beret. Ghosn has since accused executives at Nissan of plotting with prosecutors in Japan to have him unjustly arrested.
The 10 billion yen total that Nissan is seeking is based on payments made to or by Ghosn, including “the use of overseas residential property without paying rent, private use of corporate jets, payments to his sister, payments to his personal lawyer in Lebanon,” as well as costs related to the investigation into his actions, and legal and regulatory fees.
Nissan filed a civil lawsuit against Ghosn in the British Virgin Islands in August 2019, seeking damages and the title of a luxury yacht. Nissan also said it may pursue separate legal action over “groundless and defamatory remarks made by Ghosn in comments to the media following his escape to Lebanon in violation of his bail conditions in Japan.”
More must-read stories from Fortune:
—Stock scammers are using coronavirus to dupe investors, SEC warns
—Credit Suisse making a comeback, but spying scandal drags down outlook
—Why China is still so susceptible to disease outbreaks
—A new coronavirus red flag on the horizon—a stronger dollar
—Fortune Explains: Tariffs and trade wars
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fortune--2020-02-12--‘Jail, with the chance of being drowned’—more turmoil at sea for the virus-stricken cruise ship sect

‘Jail, with the chance of being drowned’—more turmoil at sea for the virus-stricken cruise ship sector

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. From Tokyo to London and points closer to home, there’s a lot of green on the boards today. Let’s dig in to the indices and sectors drawing the most attention.
Market movers
Again on Wednesday, global equities are chugging forward, building off yesterday’s gains. The Asian and European markets are in positive territory, as are U.S. futures.
Earnings, not contagion data, is the big trigger so far. Two stocks that are really popping in Europe are the luxury goods conglomerate Kering and Heineken, which both reported this morning. Energy too is rebounding for a second straight day, with crude up solidly. The dollar is flat.
On Tuesday, the markets made an optimistic read of the coronavirus data out of China. That’s again the case today as we see more evidence (it’s very early, mind you) that there’s a slowdown in the rate of new infections.
In hot water
One of the best performing slivers of the market on Tuesday came from the cruise ship operators. But zoom out and you quickly see these stocks— Carnival Corp, Norwegian Cruise Line and Royal Caribbean Cruises—have been ravaged by the coronavirus outbreak.
Even the most ardent cruise-goer would shiver at the plight of the Westerdam, which remains adrift at sea looking for a safe port, and that of the quarantined Diamond Princess, which has become a breeding ground for the coronavirus. Both vessels are owned by Carnival Corp.
The predicament these cruise passengers find themselves in evokes that old line by the 18th Century English author Samuel Johnson: “Being in a ship is being in a jail, with the chance of being drowned.”
Let’s hope it never gets that bad.
Still, the steady drip of dire news has triggered analyst downgrades, and we have little clarity of the full impact of coronavirus on bookings.
The market reaction has been swift. Strap on a life-preserver for today’s chart.
***
Carnival (down 17.2%) is the poorest performer of the pack since the mid-January coronavirus outbreak emerged. Peers have hardly fared much better. That all compares to modest gains in the S&P 500, up 0.8% in that period.
Just this morning I got a note from economists at Berenberg who hold one of the more bullish views out there that coronavirus won’t sink global trade. But they do have concerns. Chief among them is the contagion’s impact on travel and tourism.
“We have to brace ourselves for some further bad news,” they say in their investor briefing.
***
Let’s hope the news tomorrow is a bit better.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
Today's reads
Soft patch. SoftBank is still struggling with its startup investments. The Japanese company again lost money on its Vision Fund, three months after posting a record loss driven by the meltdown at WeWork. That impacted the larger business as SoftBank reported a slim operating profit of 2.6 billion yen, way below expectations. One bright spot for SoftBank is Tuesday’s green light for the Sprint-T-Mobile merger, reports Fortune’s Anne Sraders. SoftBank, which owns nearly 85% of Sprint, saw its stock soar on the news. It's "a huge get out of jail free card" for SoftBank, says Morningstar's Dan Baker.
Big five. Just five companies now make up 18% of the S&P 500. Microsoft, Apple, Google, Amazon and Facebook have collectively added $4.4 trillion in market cap gains since 2013, and are now the largest stocks in the index. Fortune contributor Ben Carlson wonders if such a small concentration of earning power is a good thing. Could it be the recipe for a market crash?
Rich get richer. The wealthiest U.S. households are strengthening their grip on corporate America, the Financial Times reports. The richest 1% of Americans now account for more than half the value of equities owned by U.S. households, according to Goldman Sachs. Since 1990, the wealthiest have bought a net $1.2 trillion of shares, while the rest of the population has sold more than $1 trillion. Three decades ago, the top percentage point of Americans by wealth controlled 46% of all U.S. equities.
Market candy
Quiz time. A quick quiz—woohoo!— to liven up your Wednesday. The markets have had a topsy-turvy start to the year with a big gulf between winners and losers. So which major index is the best-performer for 2020 so far? Is it:
a) S&P 500
b) Swiss MSI
c) Nikkei 225
d) Nasdaq
Answer: D. The Nasdaq is racing ahead, up 7.43% in 2020.


fortune--2020-02-12--How DoorDash took the lead in food delivery

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
Tony Xu of DoorDash stopped by Fortune’s new offices yesterday for a fascinating conversation about how his company has propelled itself past Grubhub and Uber Eats to become the market share leader in food delivery. It carried a valuation of $12.6 billion at its last funding.
A few points from the conversation stood out for me:
Although it’s viewed as a technology company, it’s not technology that differentiates DoorDash from its competitors, Xu says. It’s “operational excellence… Things that are not sexy make all the difference in differentiating yourself in this space… The hard part is not the software.”
Although it grew up in the decade of “blitzscaling,” DoorDash until recently didn’t have the seemingly unlimited access to capital that enabled Uber and others to pursue a growth-at-any-cost strategy. “We dialed in the unit economics from day one,” he says, and that’s now benefitting the company in moving toward profitability. As he sees it, the “first mover advantage” is a myth. “I’d rather be the last mover.”
Purpose matters. From the start, Xu’s goal was to help businesses do better. That’s given him a leg up in partnering with companies like Walmart—which now does the majority of its grocery deliveries through DoorDash (though it must be said that delivery is a very small part of Walmart’s online grocery; most orders are picked up by customers at the drive up outside the stores). “This company is unique in its founding DNA of wanting to help companies compete.
Xu also offered up a new suggestion for our office collection of best business books: The Score Takes Care of Itself: My Philosophy of Leadership, by Bill Walsh, the late head coach of the San Francisco 49ers. The one thing he wouldn’t talk about: whether DoorDash will IPO this year.
More news below. And see why Intel CEO Bob Swan thinks 2020 will be “a record year” for his company, here.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Smoking gun?
U.S. officials have finally made public their allegation about the threat that Huawei equipment poses to 5G (and other) telecoms networks. Equipment manufacturers always have to build spying capabilities into their products, for the benefit of law enforcement—but they're not supposed to be able to gain such access themselves, without the network operator's permission. Per the Wall Street Journal: "U.S. officials said Huawei has built equipment that secretly preserves its ability to access networks through these interfaces, without the carriers’ knowledge." WSJ
Ghosn suit
Nissan has filed a more-than-$90-million civil lawsuit against former CEO Carlos Ghosn in Japan, claiming he owes the carmaker for private use of the company jet, payments to his sister and various other allegedly fraudulent perks and payments. Ghosn won't be undergoing a criminal trial in Japan, as he's fled the country. Financial Times
SoftBank shares
SoftBank shares popped almost 12% today, after a U.S. district judge approved the merger of Sprint, in which SoftBank is a major shareholder, and T-Mobile. That's in Japan—over in the U.S., Sprint's share price rose by an astonishing 77.7%. However, the California Public Utilities Commission still needs to clear the transaction. CNBC
Internet regulation
The British government is tasking broadcast regulator Ofcom with regulation of social media. Under draft legislation, Ofcom will have to ensure that the likes of Facebook and Twitter abide by a new legal "duty of care" to protect users from harmful content ranging from bullying to terrorist material. Expect a debate about censorship. Bloomberg
AROUND THE WATER COOLER
Coronavirus named
The coronavirus that is hammering China and scaring the world now has a name: Covid-19, which is more pronounceable than its previous designation of nCoV-2019, and more specific than "coronavirus" which, after all, is a classification that also takes in everything from SARS to the common cold. "Covid" is an amalgamation of "corona", "virus" and "disease", while the 19 refers to the year the outbreak began. Future coronavirus outbreaks will follow the new naming convention. BBC
Covid-19 cases
Speaking of which, China claims the number of new Covid-19 cases is now falling, and the outbreak may be over in April. London stocks were buoyed on the news, but experts warn the contagion's peak may still be in the future. Reuters
New Hampshire
The Democratic New Hampshire primary happened yesterday and Bernie Sanders won, with Pete Buttegieg close behind, and Amy Klobuchar—riding newfound momentum—earning a respectable third place. But Elizabeth Warren and Joe Biden both polled single digits. Andrew Yang and Michael Bennet have dropped out; the pack is thinning. Fortune
Roger Stone
Four federal prosecutors have protested the Justice Department's intervention in the sentencing of Roger Stone, a longtime Trump ally who obstructed a congressional investigation, tampered with witnesses and made false statements. The prosecutors recommended a nine-year sentence; Trump's Justice Department overruled them. One resigned outright, while the others quit the case. New York Times
This edition of CEO Daily was edited by David Meyer.


fortune--2020-02-12--Amazon is No. 1 in ‘brand intimacy,’ beating some big rivals

Amazon has a stronger bond with its customers than any other major brand, a new study has found.
The online retailer is the leader in “brand intimacy,” a measure of how emotionally connected customers are to a company, according to a survey by branding agency MBLM. Last year’s winner, Disney, came in second, followed by Apple in third place.
This year’s ranking is the first time that Amazon taken the top spot. It’s also the first time Amazon has placed ahead of rival Apple in the survey’s 10-year history.
“They can’t imagine living without [Amazon],” MBLM managing partner Mario Natarelli says about Amazon’s customers. In fact, the study found that one-third of consumers says they would never stop using Amazon’s services, which include Amazon Prime, the subscription service used by more than 100 million people in the U.S., alone, that includes free two-day delivery, video streaming, and music.
Amazon did not respond to a Fortune request for comment.
For its report, MBLM surveyed more than 6,000 people worldwide to determine their perceived relationships with major companies. Respondents could rate their connections on a spectrum ranging from “fairly detached” to “highly intimate.”
Brand intimacy has a major impact on financial performance, MBLM says, and companies that have a stronger bond with their customers generate more revenue and profit than those with weaker bonds.
According to MBLM, revenue from top 10 companies on its list rose 6.5% annually over the past 10 years, compared to 5% annually for the top 10 companies in the S&P 500. That extra revenue growth is driven partly by customers being more willing to do business with brands they trust, according to MBLM.
But actually getting consumers to care about a company and pay more for its products isn’t so simple, Natarelli says. Amazon, Apple, and Disney, among others, are successful because they’ve found how to connect with their customers in meaningful ways—and are rewarded with customer loyalty in return.
“Brands and customers bond in similar ways as we bond with each other,” Natarelli says. “The relationships are reciprocal and fluid—continually either growing or decaying.”
Natarelli describes a critical phase in the relationship between brands and consumers called “sharing,” whereby each side communicates with the other and “knowledge is being shared.” But actually getting to that stage is becoming more difficult for companies.
“One primary challenge for marketers today is that customers are increasingly in control of when, why, and how brands interact with them,” Natarelli says, referring to the consumers’ ability to use privacy settings in apps and social networks to limit a company’s interaction with them. “Brands that rise above the clutter and reach consumers in authentic and meaningful ways achieve the sharing stage effectively.”
But as recent MBLM studies have shown, success today doesn’t necessarily translate into similarly strong bonds in the future. Apple was the most “intimate” brand two years ago, but dropped to second place last year, and fell to third place this year. Meanwhile, Disney led the rankings in 2019, only to drop one position in 2020.
In keeping the top spot next year, Natarelli acknowledged that Amazon is “facing some serious headwinds” from President Donald Trump’s attacks on the company and its CEO, Jeff Bezos, along with concerns about working conditions at its warehouses. But there are fundamental aspects to Amazon’s relationship with customers that could help the company overcome those challenges.
“[Amazon] surrounds and affects a consumer’s life in more immediate and significant ways than former top brands like Apple and Disney,” Natarelli says, referring specifically to Amazon’s ubiquity in a consumer’s shopping and its integration into their daily lives though tools like virtual assistant Amazon Alexa. “It performs well across demographics and income levels in ways few other businesses of its scale and diversity can easily match.”
Here’s the full ranking of companies in MBLM’s survey:
Amazon
2. Disney
3. Apple
4. Ford
5. Jeep
6. Netflix
7. BMW
8. Chevrolet
9. Walmart
10. Sony’s PlayStation
More must-read stories from Fortune:
—The strange tale of Jeff Bezos’s $16,840 parking ticket bill
—Post-Brexit U.K.’s surveillance practices could spell problems for business
—Governments deploy surveillance tech to track coronavirus victims
—How marketers are increasingly using A.I. to persuade you to buy
—Predicting the biggest tech headlines of 2020
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-12--How is China experiencing the coronavirus outbreak? Almost entirely online

China announced on Sunday that citizens in major cities like Shanghai, Beijing, and Shenzhen would go back to work Monday, so as to “strongly support and stabilize the overall economy,” according to China’s State Council.
It marked the end of an emergency 10-day extension of the Chinese New Year holiday aimed at stemming the transmission of the coronavirus, known as COVID-19, that has so far infected some 45,000 and killed more than 1,100.
But even with that directive, some Chinese businesses like technology giants Tencent, Alibaba, Bytedance, and Meituan are not returning to operations as normal. Instead, they are asking their employees to log-on from home.
Mabel Zhang, who works for a product development company aiding startups in Shenzhen, says that she was given an additional work-from-home order on Monday. She is uncertain how long it will continue, but doesn’t anticipate any major challenges in her new work arrangement, since there’s no trouble carrying out her work tasks remotely.
Working from home “is just fine with me,” she said.
Zhang is one of the millions of white-collar Chinese workers who logged on from their kitchen tables or sofas as early worries about the coronavirus prompted the world’s largest-ever work from home experiment last week. Even outside of the outbreak epicenter of Wuhan, major cities and small villages have seemed like ghost towns.
A woman wearing protective face mask and goggles collects items that were ordered online outside her residential compound in Hangzhou, some 110 miles southwest of Shanghai, on Feb. 5, 2020. NOEL CELIS—AFP via Getty Images
With internal travel links, public sites, and most shops shut down, several people in Chinese cities—from Shanghai to Beijing to Shenzhen—told Fortune they are only emerging from their homes to purchase necessities. So it’s not just professional tasks that are being done digitally. As the disease’s spread prompts lockdowns and chases people into isolation, residents of China are turning to the Internet to carry out all sorts of tasks, presenting opportunities for China’s burgeoning work from home industry, its booming online education industry, and the world’s largest mobile gaming market. Indeed, the outbreak, which feeds on physical contact, is largely being experienced online.
Working remotely
The coronavirus is comparable to the SARS outbreak in China in 2002. But already the number of cases and deaths from the coronavirus have surpassed SARS’s grim totals. What’s more, the interceding 18 years has seen a transformation of China’s society. There were 60 million Internet users in China when SARS struck. Today that figure is close to 900 million. And China has emerged as a nation quick to adopt new technologies both on a consumer level—it has a nearly ubiquitous cashless payments system and relies on Weibo and WeChat for information sharing and messaging, respectively—and in public infrastructure, where it’s a global leader in rolling out 5G technology.
Chinese citizens are increasingly online, and the virus seems to be exacerbating the trend, though Brock Silvers, managing director of Adamas Asset Management in Hong Kong, warns that the transition to living online is, perhaps, not as seamless as it seems.
“China’s new economy companies are trying to capitalize on the public’s interest in avoiding mass social interactions,” he said. “(But) the idea that the internet can significantly ameliorate the economic wreckage of the coronavirus is being pushed both by those who seek to benefit and those who want to downplay risks and calm fears.”
End users however, didn’t have much choice in the matter. Early last week, when Chinese companies started encouraging employees to work from home, many of its smart office operating systems reported large surges in interest and traffic. According to Caixing, Huawei’s remote work platform Welink saw 50% more accounts created per day than usual. Other remote work platforms such as Alibaba’s Dingtalk and Tencent’s Wechat Work reported lags due to increases in use.
Even before the virus uptick, China’s remote-work software industry had been growing at a rapid pace, with the market’s collective valuation increasing from $5 billion in 2012 to nearly $25 billion in 2018.
Not all employees, however, seem pleased about the transition, and a number of reviewers have given remote working apps one star ratings for depriving them of extended holidays.
In one sarcastic post, a user gave Dingtalk one star out of five, writing, “I love working, Dingtalk is the best, long live Alibaba!”
Logging into school
Students are likewise having to turn to online tools to continue their studies—whether they like it or not. In late January, China’s Ministry of Education announced an indefinite postponement of the university spring semester country-wide. At the same time, it required colleges to offer students online courses as an alternative to face-to-face instruction. The government slogan that emerged from the directive describes how universities, lower level schools, and students themselves are expected to proceed as the outbreak plays out: “Stop classes, but don’t stop studying.”
Gao Yingyan L, a student of No.4 Primary School in Wanli District, attends an online class at home in Nanchang City, east China’s Jiangxi Province, on Feb. 10, 2020. As schools across the country are required to postpone the opening of the spring semester, students have been encouraged to study at home. Peng Zhaozhi—Xinhua via Getty
Li Chubing, a master’s student at Beijing’s Tsinghua University, said that over the Chinese New Year break her university was promoting classes via an internal, online platform called Yuketang, or Rain Classroom. She said that thus far she had only seen optional classes and ones to help students through the outbreak, such as home workout sessions and courses about the global consequences of the outbreak. The university has said that its 35,000 students will be required to use the platform for the upcoming spring semester when it finally commences on Feb. 17.
The shift to digital classes is likely to be welcomed by China’s thriving online education scene. Even before the outbreak, eight of the world’s 14 online education unicorns—those with valuations of over $1 billion—were located in China, according to Holon IQ. VIPKid, an online English teaching platform based in China, has not publicly reported user data since the beginning of the outbreak, but claims there has been a significant “influx” in interest.
Game on
But it’s not all work and study. Shi Jialong, a technology analyst for Nomura, wrote in a recent report that online gaming would “likely be the biggest beneficiary of the coronavirus-triggered disruption.” Shi argued that Chinese gamers would be far more active due to delays in college start dates and stay-at-home edicts.
Early numbers indicate that Shi was, in fact, correct. Tencent, the country’s largest gaming company, has reported that its flagship title Honor of Kings had up to 100 million daily active users during the recent holiday, surpassing the previous high of 70 million during past Chinese New Years. Stock of companies in China’s online gaming sector, such as Tencent and game developer Ourpalm, have also skyrocketed in recent weeks as investors recognize the likelihood of an outbreak boom.
Dylan Li, an occasional gamer who lives in Shenzhen, said that since the outbreak of the virus, in which he has largely been stuck in his apartment, he has played Honor of Kings more than usual.
Unlike tens of millions of other players, Dylan Li has not been playing a game called Plague Inc, in which players try to infect the world with a disease outbreak, which the Shenzen-based Li deemed “awful.” His fellow gamers seem to disagree. As of Sunday, Plague Inc was the most downloaded paid app in China.
For some, however, the online world of the coronavirus has become exhausting. Li Chubing, the Beijing master’s student, says she has deleted Taobao, China’s premier online shopping app, from her phone to stop from endlessly browsing for apartment furnishings. She’s limited her news intake since reports about the virus are “devastating” and because she’s having trouble determining what sources are trustworthy. And she’s trying to avoid social media platforms.
What is she doing instead?
“I’ve started reading Albert Camus’ The Plague,” Li Chubing said, referring to the 1947 novel depicting an Algerian city descending into fear, confusion, and chaos after the outbreak of a novel disease epidemic.
“It’s very relevant,” she said.
More must-read stories from Fortune:
—Why China is still so susceptible to disease outbreaks
—Coronavirus risks universities’ reliance on Chinese students
—Stock scammers are using coronavirus to dupe investors, SEC warns
—A new coronavirus red flag on the horizon—a stronger dollar
—WATCH: Coronavirus outbreak has disrupted global economy
Subscribe to Fortune’s Brainstorm Health for daily updates on biopharma and health care.


fortune--2020-02-12--Bernie Sanders wins New Hampshire’s presidential primary election

Bernie Sanders won New Hampshire’s presidential primary election Tuesday night, narrowly edging moderate rival Pete Buttigieg and scoring the first clear victory in the Democratic Party’s chaotic 2020 nomination fight.
In his win, the 78-year-old Sanders, a self-described democratic socialist, beat back a strong challenger from the 38-year-old former Midwestern mayor — two men representing different generations and wings of their party.
“This victory here is the beginning of the end for Donald Trump,” Sanders declared.
As Sanders and Buttigieg celebrated, an unexpectedly strong performance from Amy Klobuchar gave her a path out of New Hampshire as the contest moves on to the string of state-by-state primary contests that lie ahead. Joe Biden and Elizabeth Warren posted disappointing results and were on track to finish with zero delegates from the state.
The New Hampshire vote made clear that the early days of the Democratic contest will be a battle largely between two men four decades apart in age and ideological opposites. Sanders is a leading progressive voice, calling for substantial government intervention in health care and other sectors of the economy. Buttigieg has pressed for more incremental changes, giving Americans the option of retaining their private health insurance and making a point of appealing to Republicans and independents who may be dissatisfied with Trump.
“Thanks to you, a campaign that some said shouldn’t be here at all has shown that we are here to stay,” Buttigieg told cheering supporters.
Yet Sanders and Buttigieg enter the next phase of the campaign in different political positions.
While Warren made clear she will remain in the race, Sanders, well-financed and with an ardent army of supporters, is quickly becoming the leader of the progressive wing of the party.
Meanwhile, Buttigieg still has moderate rivals to contend with, including Klobuchar, whose standout debate performance led to a late surge in New Hampshire. Biden promises strength in upcoming South Carolina, while former New York Mayor Mike Bloomberg was not on Tuesday’s ballot but looms next month.
After a chaotic beginning to primary voting last week in Iowa, Democrats hoped New Hampshire would provide clarity in their urgent quest to pick someone to take on Trump in November. At least two candidates dropped out in the wake of weak finishes Tuesday night: just-the-facts moderate Colorado Sen. Michael Bennet and political newcomer Andrew Yang, who attracted a small but loyal following over the past year and was one of just three candidates of color left in the race.
While struggling candidates sought to minimize the latest results, history suggests that the first-in-the-nation primary will have enormous influence shaping the 2020 race. In the modern era, no Democrat has ever become the party’s general election nominee without finishing first or second in New Hampshire.
The action was on the Democratic side, but Trump easily won New Hampshire’s Republican primary. He was facing token opposition from former Massachusetts Gov. Bill Weld.
Warren, among the front-runners for months, offered an optimistic outlook as she faced cheering supporters, “Our campaign is built for the long haul, and we are just getting started.”
Despite an embarrassing defeat that raised questions about her path forward, Warren vowed to move trudge on.
“Our campaign is built for the long haul, and we are just getting started,” she declared.
Having already predicted he would “take a hit” in New Hampshire after a distant fourth-place finish in Iowa, Biden essentially ceded the state. He traveled to South Carolina Tuesday as he bet his candidacy on a strong showing there later this month boosted by support from black voters.
He was not on the ballot, but Bloomberg, a New York billionaire, loomed over the New Hampshire contest as moderates failed to embrace a single alternative to Sanders. The former New York City mayor was skipping all four states that vote this month in favor of dozens of delegate-rich contests in March. He’s already devoted hundreds of millions of dollars to the effort.
Bloomberg returns to the campaign trail Wednesday with stops in Tennessee but will face fresh scrutiny after audio emerged on Tuesday raising new questions about his support for New York’s controversial stop-and-frisk policy found to disproportionately target people of color.
Sanders and Buttigieg were on track to win the same number of New Hampshire delegates with most of the vote tallied, and Klobuchar a few behind. Warren, Biden and the rest of the field were shut out, failing to reach the 15% threshold needed for delegates.
AP has allocated six delegates each to Sanders and Buttigieg and four to Klobuchar with eight still to be called.
After Iowa and New Hampshire, Buttigieg held a one delegate lead over Sanders with one Iowa delegate yet to be allocated and Buttigieg leading ever so slightly in that contested count. Klobuchar now joins a close knot in a second tier with Warren and Biden, about ten delegates behind the two leaders.
Democrats were closely monitoring how many people showed up for Tuesday’s contest. New Hampshire’s secretary of state predicated record-high turnout, but if that failed to materialize, Democrats would confront the prospect of waning enthusiasm following a relatively weak showing in Iowa last week and Trump’s rising poll numbers.
The political spotlight quickly shifts to Nevada, where Democrats will hold caucuses on Feb. 22. But several candidates, including Warren and Sanders, plan to visit states in the coming days that vote on Super Tuesday, signaling they are in the race for the long haul.
More must-read stories from Fortune:
—2020 candidates’ positions, and records, on economic issues that affect women
—How a company with 120 Facebook likes ended up at the center of the Iowa caucus firestorm
—Europe’s refugee crisis is getting worse—for these children
—Fortune Explains: The debt ceiling
—America’s young voters could sway 2020 results. What will it take to get them to the polls?
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-02-12--Approval of T-Mobile-Sprint merger just before SoftBank’s earnings may be a ‘get out of jail free ca

Approval of T-Mobile-Sprint merger just before SoftBank’s earnings may be a ‘get out of jail free card’

The troubles don’t seem to be letting up at Japanese SoftBank Group Corp.
The highly-publicized failures of its Vision Fund’s companies are expected to weigh on earnings Wednesday, which will be presented by SoftBank’s chairman and CEO Masayoshi Son. Analysts aren’t all that optimistic, predicting a 20% drop in operating profit (some $3.1 billion, or 345 billion yen) for SoftBank’s 3rd quarter earnings (October through December of 2019 for fiscal year ending March 31, 2020, a notably rough period for the company).
WeWork seemingly started it all, as SoftBank took a massive $9.2 billion write-down on the investment in November. But since then, its Vision Fund’s companies’ woes have only seemed to multiply.
On Monday, SoftBank-backed e-commerce company Brandless Inc., which sells unbranded consumer goods, said it was shuttering and laying off 70 employees, not even two years after SoftBank invested $240 million in the startup. Although SoftBank’s WeWork investment floundered in dramatic fashion, Brandless was actually the first Vision Fund-backed startup to close down.
At Indian hotel company OYO, an announcement last month of job cuts (and potentially more in the future) is another bad sign for SoftBank, as the Vision Fund reportedly invested over $600 million over time into the company, according to Bernstein’s Chris Lane. SoftBank-backed cloud robotics and AI startup CloudMinds also announced job cuts in January. And in the wake of disappointing growth, SoftBank sold back its nearly 50% stake in dog-walking startup Wag Labs in December.
One bright spot? Approval of the Sprint-T-Mobile merger (SoftBank, which owns nearly 85% of Sprint saw its stock soar on the news). It’s “a huge get out of jail free card” for SoftBank, says Morningstar’s Dan Baker. “People were edging toward valuing the equity in Sprint at nothing if the merger didn’t go ahead, so this is a very big deal for them.”
Still, the valuations of some of Vision Fund’s unlisted companies are making earnings a murky affair. SoftBank’s fund said its gains and losses were split 50/50 on its companies in the first six months up to September, but many of the companies were unnamed.
But Baker says there “isn’t that much in the actual results” for SoftBank’s earnings. “To be honest, I don’t think anyone really looks at this company as an earnings type company—it’s a sum of the parts of a bunch of businesses,” he says. And given the ambiguity around valuations of the private some-odd 90 companies in SoftBank’s Vision Fund, “we can’t be too trustworthy.”
“We look at what they’ve done with their numbers in the SoftBank Vision Fund, … but they’re not something you can be confident about going forward,” Baker tells Fortune. For investors, the private valuations that make up SoftBank’s reported performance aren’t anything they should put too much stock in—especially in the wake of WeWork (investors have “probably lost even more confidence in what their numbers will tell us anyway,” Baker says).
What to watch
What’s not so clear is what changes might be coming to SoftBank’s strategy or corporate governance in the wake of a new activist shareholder at the table.
This quarter’s earnings come at a particularly crucial juncture for SoftBank, as the company has become the latest target of notorious activist fund Elliott Management—which reportedly invested almost $3 billion into SoftBank. Billionaire Paul Singer’s New York-based fund is infamous for shaking up its investments, and per Wall Street Journal reports, the fund is pushing SoftBank to buy back between $10 billion to $20 billion in shares under the assertion it is undervalued (SoftBank’s shares currently trade below the value of its assets).
Morningstar’s Baker, for one, isn’t certain Son will play ball in terms of making big changes in the company (one “he very much dominates,” according to Baker). But investors should tune in for any news of an official announcement of buybacks.
Still, coming off of its first quarterly loss in 14 years in the July through September period (which saw an operating loss of 704 billion yen), SoftBank is in a tough spot, right when its second massive fund is struggling to hit its fundraising goal. The new fund might be as little as half its expected $108 billion size, according to a Wall Street Journal report, as investors are growing increasingly wary of the fund’s predecessor, Vision Fund, and its mixed bag of investments (which includes Uber and WeWork). Morningstar’s Baker, for one, thinks new pressure from Elliott might actually prompt discussions about winding down the Vision Fund altogether.
Yet given Son’s reputation of glossing over failures (“He is extremely bullish and rarely mentions negatives—investors are wary of what is not being talked about,” according to Morningstar’s Baker), it’s unclear whether investors will get any more transparency this time around.
To that end, this quarter and beyond might put SoftBank in a sticky situation if it is “unable to explain how it will limit risks from future investments that fail” and “unable to show financial discipline in its investments,” Jefferies’ Atul Goyal wrote in a December note.
More must-read stories from Fortune:
—The strange tale of Jeff Bezos’s $16,840 parking ticket bill
—Stock scammers are using coronavirus to dupe investors, SEC warns
—Credit Suisse braces for an awkward earnings call
—Stock scammers are using coronavirus to dupe investors, SEC warns
—WATCH: Biggest investing opportunities and risks for 2020
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-02-12--What health insurance doesn’t cover

What health insurance doesn’t cover

This is the web version of Brainstorm Health Daily, Fortune’s daily newsletter on the top health care news. To get it delivered daily to your in-box, sign up here.
Hello, readers.
It’s understandable when the back-and-forth over Medicare-for-all (aka single-payer) gets the lion’s share of the media spotlight. After all, the idea of reforming the American health care system root and branch is, to put it mildly, massive.
But it’s important to recognize the underlying problems driving the intense debate about American health care policy. Surprise medical billing ranks high on that list. “The way we finance health care promotes economic inequality,” Dr. Adam Gaffney, president of Physicians for a National Health Program and an instructor at Harvard Medical School, told ProPublica.
Say your doctor sends you to the local hospital to see a specialist. Or you get hurt and end up getting checked in because you need immediate surgery. Seems like, in both cases, the doctor and the hospital would both be covered by the same insurance policies, right? Wrong. It’s actually pretty common for an insurance company to deny one or the other. And, depending on your circumstances, that may lead to an enormous medical bill laid on your lap.
Don’t take my word for it. A new study published in the journal JAMA outlines just how common these out-of-network bills can be. Turns out more than 20% of the people the researchers studied had been hit with an unexpected bill. And, depending on the study, between 79 million and 137 million Americans have had problems with medical debt. In some places, not paying the bills can upend a person’s life in very surprising (and pretty horrific) ways.
Lawmakers appear to agree that this is an issue worth addressing. Whether that results in anything remains to be seen. And, if anybody you know just scoffs and says people need to take care of their medical costs, tell them that the surprise is also on them.
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Digital opioid treatment platform scores a $10.5 million round. MobiHealthNews reports that Boulder, an upstart digital health firm focused on addiction services, raised $10.5 million in a funding round. The company's platform incorporates lab testing results alongside individualized counseling. (MobiHealthNews)
INDICATIONS
Novartis moves forward in the lung cancer space. Swiss pharma giant Novartis just got a boost in its quest to challenge rivals such as Merck in the lung cancer drug space. The company's experimental capmatinib, meant to treat a certain type of lung cancer, was awarded a priority view which could hasten its market arrival by months. (FiercePharma)
THE BIG PICTURE
Are new coronavirus cases slowing? The coronavirus is, understandably, the public health story of the day. A new report suggests that cases, in the region where the virus is believed to have originated, are tapering out. (Reuters)
REQUIRED READING
FTC to probe Google, Facebook, Apple over acquisitions, by David McLaughlin & Bloomberg
The case for a national primary, by Clifton Leaf
5 companies now make up the S&P 500, by Ben Carlson
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fortune--2020-02-12--Andrew Yang and Michael Bennet drop out of 2020 presidential race

Democrat Andrew Yang, an entrepreneur who created buzz for his presidential campaign by championing a universal basic income that would give every American adult $1,000 per month, suspended his 2020 bid on Tuesday. Shortly after, Colorado Sen. Michael Bennet ended his long-shot presidential bid, failing to break out of a crowded Democratic field dominated by other moderate candidates, including Joe Biden, Pete Buttigieg and Amy Klobuchar.
Yang spent most of January in the leadoff caucus state, including a 17-day bus tour during which he told voters his finish in Iowa would “shock the world.”
His national press secretary, Erick Sanchez, confirmed the decision. It came as he expected a poor performance in New Hampshire’s primary.
The 45-year-old was one of the breakout stars of the Democratic primary race, building a following that started largely online but expanded to give him enough donors and polling numbers to qualify for the first six debates.
He outlasted senators and governors, and after initially self-funding his campaign, he raised more money than most of his rivals, bringing in over $16 million in the final quarter of last year. It was a bigger haul than all but the top four candidates: Vermont Sen. Bernie Sanders, former South Bend, Indiana, Mayor Pete Buttigieg, former Vice President Joe Biden and Massachusetts Sen. Elizabeth Warren.
Yang grew his outsider candidacy by campaigning as a non-politician, someone who mixed unconventional campaign events — from bowling to ax throwing — with serious talk about the millions of jobs lost to automation and artificial intelligence and the dark outlook for American jobs and communities.
The graduate of Brown University and Columbia Law School gave campaign speeches full of statistics and studies that often resembled an economics seminar. His supporters, known as the Yang Gang, donned blue hats and pins with the word MATH — short for his slogan Make America Think Harder.
Yang promoted his signature issue of universal basic income, which he dubbed the “freedom dividend,” by announcing during a debate that he would choose individuals to receive the monthly $1,000 checks. The statement prompted questions about whether he was trying to buy votes, but also generated a buzz online and helped the campaign build a list of possible supporters.
His poll numbers were high enough, combined with his fundraising strength, to qualify for him for all of the 2019 debates, though he fell short of Democratic National Committee’s qualifications to participate in the January debate in Iowa. He qualified for the February debate in New Hampshire.
Bennet, 55, was a late entrant to the race who staked his bid largely on trying to win New Hampshire. He only formally announced his candidacy in late April, after completing treatment for prostate cancer. He was the seventh senator and second white Colorado moderate to join the field, which made it difficult for him to stand out.
Bennet ran on a centrist platform and made a point of bucking the trend among some candidates for splashy, liberal proposals. Instead of embracing “Medicare for All” and free college, Bennet ran on what he called his “Real Deal” platform of more modest but still ambitious goals. Those included annual payments of at least $3,000 to families with children under age 18, allowing people to buy into an expanded form of Medicare and a $1 trillion housing affordability plan.
But while his articulate and passionate centrism won plaudits from pundits and experienced Democratic professionals, Bennet struggled to register in the polls and he hovered in the bottom tier of the field even as he campaigned more in New Hampshire than other candidates, with 50 town halls in the final ten weeks.. After July, Bennet never polled high enough or raised enough money to qualify for the debate stage again.
The main obstacle to Bennet was Biden, who as the moderate with establishment backing took up the space that the Colorado senator’s campaign was counting on. Bennet’s late entry also hobbled him. Because of his cancer diagnosis, he had to delay his candidacy, and he barely qualified for the first presidential debate. Bennet quickly began pushing back against the Democratic National Committee’s increasingly stringent debate qualification rules, complaining it was an unfair advantage for the staples of cable television who had been campaigning months, or even years, earlier.
In the end he staked his bet on the path blazed by his political mentor, former Colorado Sen. Gary Hart, who scored a surprise win in New Hampshire in the 1984 Democratic presidential primary and almost won the nomination. Bennet pledged to hold 50 town halls in New Hampshire during the final weeks of the campaign and spent almost every spare moment there.
More must-read stories from Fortune:
—2020 candidates’ positions, and records, on economic issues that affect women
—How a company with 120 Facebook likes ended up at the center of the Iowa caucus firestorm
—Europe’s refugee crisis is getting worse—for these children
—Fortune Explains: The debt ceiling
—America’s young voters could sway 2020 results. What will it take to get them to the polls?
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-02-12--Iowa Democratic Party chairman resigns after caucus chaos

These are the Democratic candidates who qualify for the next debate in Las Vegas—so far

The chairman of the Iowa Democratic Party announced his resignation Wednesday after a disastrous caucus process beset by technical glitches led to a dayslong delay in reporting the results, inconsistencies in the numbers and no clear winner.
The embarrassing episode also threatened Iowa’s cherished status as the first voting contest of the presidential primary season and led both front-runners to request a partial recanvass of the results.
“The fact is that Democrats deserved better than what happened on caucus night. As chair of this party, I am deeply sorry for what happened and bear the responsibility for any failures on behalf of the Iowa Democratic Party,” Troy Price wrote in a resignation letter a week and a half after Iowa’s caucuses.
“While it is my desire to stay in this role and see this process through to completion, I do believe it is time for the Iowa Democratic Party to begin looking forward, and my presence in my current role makes that more difficult.”
He said his departure would occur as soon as the state party elects a replacement, and he called an emergency Saturday meeting to do so.
After a breakdown in tallying the results on Feb. 3, it took until Feb. 6 for the state party, which operates the series of roughly 1,700 local meetings statewide, to issue what it said are complete results.
In those figures, released by the party, former South Bend, Indiana, Mayor Pete Buttigieg leads Vermont Sen. Bernie Sanders by two state delegate equivalents out of 2,152 counted. That is a margin of 0.09 percentage points.
The Associated Press said it was unable to declare a winner, based on the available information. The results as reported by the Iowa Democratic Party, the AP believes, may not be fully accurate.
Price had called the delays in reporting results “unacceptable.” He said the party would conduct a “thorough, transparent and independent examination” of what caused the delays. He apologized for the breakdown in the process.
Both Buttigieg’s and Sanders’ campaigns requested a partial recanvass of the Iowa results, which the Iowa Democratic Party approved. The party says it expects the recanvass of more than 80 precincts to begin on Sunday and last two days. A recanvass is not a recount, but a check of the vote count against paper records created by caucus leaders to ensure the counts were reported accurately.
The party has said it will not change mistakes in the math and the only opportunity to correct it would be a recount, which would be the candidates’ next option after the recanvass is completed.
Price was elected to his second term as chairman of the state party in December 2018. In a statement released after his reelection, he noted that he was “incredibly proud” of the success that Iowa Democrats had in the 2018 midterms and looked forward to building on it.
“I cannot wait wait to work with them again on what could very well be one of the most consequential Iowa Caucuses of our time,” he said.
Price previously was part of several Democratic campaigns in Iowa, including those of former President Barack Obama and presidential candidate Hillary Clinton. Price also had served as the party’s executive director and led One Iowa, an LGBT advocacy group.
The Iowa Democratic Party instituted new rules for the 2020 contest that were meant to enhance transparency in the process.
In previous years, the Iowa Democratic Party reported just one number: the number of state delegates won by each candidate. For the first time, the party this year reported two other numbers — who had the most votes at the beginning and at the end of the night.
The additional data is a nod to Sanders and his supporters, who argued that the previous rules essentially robbed him of victory in his 2016 race against Clinton. That contest ended in a narrow delegate victory for Clinton in Iowa.
More must-read stories from Fortune:
—2020 candidates’ positions, and records, on economic issues that affect women
—How a company with 120 Facebook likes ended up at the center of the Iowa caucus firestorm
—Europe’s refugee crisis is getting worse—for these children
—Fortune Explains: The debt ceiling
—America’s young voters could sway 2020 results. What will it take to get them to the polls?
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-02-12--MWC, the world’s biggest mobile phone show, is cancelled over coronavirus fears

The Mobile World Congress, the largest trade show for mobile phone manufacturers and related businesses, has been canceled in response to the global spread of coronavirus.
The conference’s organizer, GSMA, said in a statement that “global concern regarding the coronavirus outbreak, travel concern and other circumstances, make it impossible for the GSMA to hold the event.”
The cancellation of the event, which could have significant business implications, is one of the most dramatic examples yet of the global impact of the continuing coronavirus outbreak that began in Wuhan, China. The outbreak has significantly disrupted other economic activity, triggering corporate travel bans, the temporary shutdown of Tesla’s Shanghai factory, and the closure of casinos in Macau.
But the MWC shutdown may be the largest single disruption so far outside of Asia. The event was scheduled for February 24-27 in Barcelona. Most other disruptions outside of Asia have so far been limited to the cancellation of flights or other travel to and from China. The MWC, which in the past has attracted more than 100,000 attendees from around the world, may have risked further spreading coronavirus, whose transmission method is still not entirely understood.
Major phone manufacturers had already pulled out of the conference. Ericsson announced its withdrawal on February 7. Amazon did the same on February 9, quickly followed by Sony, Intel, China’s Vivo, and Japan’s NTT Docomo. Samsung, Huawei, and Xiaomi had also scaled back their presence at the event.
Mobile World Congress is often a showcase for new technology, and its cancellation will be a major disruption to the marketing plans of some mobile tech companies. Sony previously announced that a press conference originally planned for MWC will instead be conducted as a YouTube livestream on February 24. Vivo had been slated to debut the latest version of its Apex “concept phone,” but delayed that showcase to an unknown future date.
The coronavirus death toll in China has topped 1,100, and an expert on infectious diseases told Reuters on Wednesday that the spread of the virus was still “at the beginning” outside of China. For now, infections remain centered in Asia, but there have been a handful of cases elsewhere, including in Germany and the United States. At least one case has been confirmed in Spain.
The GSMA had made efforts to allay concerns about coronavirus, including banning attendees who come from China’s Hubei province, the origin of the outbreak. It had also required a 14-day ‘quarantine’ for attendees arriving from China, and had planned to implement temperature screenings for attendees.
That was not enough, apparently, to allay fears about an outbreak that started half a world away.
More must-read stories from Fortune:
—The strange tale of Jeff Bezos’s $16,840 parking ticket bill
—Post-Brexit U.K.’s surveillance practices could spell problems for business
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—How marketers are increasingly using A.I. to persuade you to buy
—Predicting the biggest tech headlines of 2020
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fortune--2020-02-12--These are the Democratic candidates who qualify for the next debate in Las Vegas—so far

MWC , the world ’ s biggest mobile phone show , is cancelled over coronavirus fears

This article was last updated on Feb. 18 at 6:45 a.m. E.T.
The first two Democratic primaries in Iowa and New Hampshire are intended to do two things: Build momentum for potential frontrunners and winnow the field by forcing unviable candidates to grapple with hard data. In both of those regards, they were successful.
Senator Bernie Sanders (I-Vt.) and former South Bend, Ind., Mayor Pete Buttigieg emerged from the pack as the candidates to beat, and quite a few others took a long, hard look in the mirror and decided to end their bid for the Oval Office.
Businessman Andrew Yang, Senator Michael Bennet (D-Colo.), and former Massachusetts Governor Deval Patrick all dropped out of the race within hours of one another.
“I am the math guy, and it is clear tonight from the numbers that we are not going to win this race,” Yang said to supporters in New Hampshire Tuesday evening. “So tonight I am announcing that I am suspending my campaign.”
Eight Democratic candidates remain in the presidential race, and so far only six have qualified for the next debate on Feb. 19 in Las Vegas ahead of the Nevada primary.
As the debate stage becomes less crowded, candidates are finding it easier to break out from the rest of the field. Senator Amy Klobuchar (D-Minn.) had a standout moment during the last debate in New Hampshire, which in part, led to rise to third place on Tuesday.
To score an invite to the ninth Democratic debate, candidates will have to either receive 12% of voter support in two polls in Nevada or South Carolina or receive 10% in four polls that are national, from Nevada, or South Carolina. Candidates who received at least one delegate in the Iowa or New Hampshire primaries will also qualify.
Here’s who you’ll be seeing onstage next Wednesday:
Mike Bloomberg
Billionaire and former New York City Mayor Mike Bloomberg will take the debate stage for the first time, after a new NPR/PBS NewsHour/Marist poll shows him with 19% support.
Joe Biden
Former Vice President Joe Biden has received 10% or more in six state or national polls and has passed the delegate threshold.
Bernie Sanders
Sanders qualifies for the debate through his state and national polling and delegate count.
Elizabeth Warren
Senator Elizabeth Warren (D-Mass.) crossed both delegate and poll thresholds.
Pete Buttigieg
Buttigieg has received the delegates necessary to enter the debates.
Amy Klobuchar
Klobuchar has also received more than one delegate.
Former New York City mayor Michael Bloomberg remains on the cusp of qualifying for his first debate. All he needs to gain entry is one more state or national poll that puts him at more than 10%.
Previous debates had donor thresholds, as well as polling qualifications. Bloomberg, who is eschewing donations and instead funding his campaign with his own cash, was automatically disqualified from participating.
More must-read stories from Fortune:
—2020 candidates’ positions, and records, on economic issues that affect women
—How a company with 120 Facebook likes ended up at the center of the Iowa caucus firestorm
—Europe’s refugee crisis is getting worse—for these children
—Fortune Explains: The debt ceiling
—America’s young voters could sway 2020 results. What will it take to get them to the polls?
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.
Only eight Democratic candidates remain, and so far only five have qualified for the next round of debates ahead of the Nevada primary on February 19th in Las Vegas.


fortune--2020-02-12--Essential, a once-buzzy smartphone-maker led by a controversial ex-Google executive, folds

Consumer technology startup Essential, co-founded by a former Google executive who was accused of sexual misconduct, plans to close.
The startup, which debuted a smartphone in 2017 that failed to gain traction, said Wednesday in a blog post that executives “have made the difficult decision to cease operations and shutdown Essential.”
Essential had faced a number of setbacks over the past few years, including poor sales of its flagship smartphone after its glitzy debut followed by reported layoffs in 2018. More recently, the company said on Wednesday that it had failed to get its latest planned phone, called GEM, ready to ship.
The closure marks a huge change in fortune for a company that was once heralded as a potential challenger to Apple and Samsung. The company had raised nearly $330 million from big-name investors like Amazon, Chinese tech giant Tencent, and electronics manufacturer Foxconn, achieving a private valuation of $1 billion as of 2017, according to deal-tracking service PitchBook.
The buzz was largely based on Essential’s co-founder Andy Rubin, the inventor of Google’s mobile Android operating system that is used in hundreds of millions of phones. He was pitched as Essential’s version of Steve Jobs, someone who could build the next big thing in tech.
But in 2018, The New York Times reported that Google’s leadership had hid allegations about Rubin’s sexual misconduct while employed there and that the company paid him a $90 million when he left in 2014. The news of Rubin’s payout and the initial silence about it triggered a wave of anger among some Google employees, who staged a high-profile employee walkout in 2018. That protest was the start of increased tensions between Google and its employees over corporate culture that is still ongoing.
Essential had discussed future products including an Internet-connected speaker that would come with a voice-powered digital assistant that would challenge Apple and Google. But none of those ever came to market.
Essential said that it released one last security update for its PH-1 smartphone on Feb 3, and while the smartphone should still function after the company closes, there will longer be “any additional updates or customer support.”
“We are incredibly grateful to our employees in Palo Alto and Bangalore as well as our global partners for their help and dedication bringing this concept to life,” the blog post said.
More must-read stories from Fortune:
—The strange tale of Jeff Bezos’s $16,840 parking ticket bill
—Post-Brexit U.K.’s surveillance practices could spell problems for business
—Governments deploy surveillance tech to track coronavirus victims
—How marketers are increasingly using A.I. to persuade you to buy
—Predicting the biggest tech headlines of 2020
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.