fortune--2020-07-01--Couples can now split a Spotify premium membership

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Spotify has launched a new premium membership for couples who want to split the cost of a monthly subscription—and a share of what music gets played in the car or apartment.
The new membership, dubbed Spotify Premium Duo, costs $12.99 a month and gives two people their own separate Premium accounts in which to collect songs, playlists, podcasts, and so on. (The price point falls just slightly below the $14.99-per-month family plan, which can be applied to up to six accounts.) Additionally, both users will get access to a regularly updated Duo Mix playlist that combines the couple’s tastes. Spotify says this will allow partners to discover audio they both love.
“Premium Duo includes our extensive music and podcast catalog and everything users love about Spotify Premium,” Alex Norström, Spotify’s chief freemium business officer, said in a statement. “With two individual Premium accounts, you can both listen independently, uninterrupted, and get all of your personalized playlists and features tailored just for you.”
Spotify says each user must reside at the same address to be eligible for the Premium Duo account. The shared location will allow users who had been relying on Spotify’s free, ad-supported listening to get the first month of Premium Duo free.
Existing Spotify Premium subscribers can switch to the new subscription in the “Account” page on Spotify’s website. The current Premium account will be imported to Premium Duo, along with saved music, podcasts, playlists, and recommendations, Spotify says.
As it rolls out new features for Premium, including a recently launched shared DJ mode, Spotify continues to amp up its overall investment in audio—not just music, but focused on the podcasting space. The Swedish streaming company recently signed a deal with Warner Bros. and DC Comics to develop scripted superhero-based podcasts, as well as a reported $100 million deal for the exclusive rights to Joe Rogan’s podcast.


fortune--2020-07-01--Tesla just dethroned Toyota as the world’s most valuable automaker

Actor Ray Fisher says Joss Whedon was ‘ abusive ’ on the set of ‘ Justice League ’

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Tesla Inc. displaced Toyota Motor Corp. as the world’s most valuable automaker, underscoring investor enthusiasm for a company trying to transform an industry that’s relied on internal combustion engines for more than 130 years.
Shares of Tesla, which have more than doubled since the start of the year, climbed as much as 3.5% in intraday trading Wednesday, giving it a market capitalization of $207.2 billion, surpassing Toyota’s $201.9 billion.
Chief Executive Officer Elon Musk has ignored or broken many of the established auto industry’s rules and norms in the 10 years since he took Tesla public, selling cars online and assembling vehicles in high-cost California. But while his company’s value has soared, there remains a gulf in the scale of his company and the world’s biggest car manufacturers.
Tesla produced 103,000 vehicles in the first quarter, or about 4% of the almost 2.4 million made by Toyota, which built its brand on affordability and reliability backed by innovations in large-scale manufacturing.
Tesla became the world’s second-most valuable automaker in January, when it surpassed Volkswagen AG. It’s now worth more than twice the German giant.
After pioneering gas-electric vehicles with the Prius hybrid, Toyota was late to shift to fully electric autos and has wagered heavily on hydrogen fuel cells. The company is now making a series of high-profile investments in EVs and self-driving cars. The manufacturer has forecast an 80% plunge in profit this year and expects it could take until the first half of next year before the auto market recovers to pre-pandemic levels.
Toyota’s market valuation includes the 14.3% of shares that Toyota itself holds as treasury stock, worth around $30 billion. Tesla doesn’t hold any treasury shares, according to data compiled by Bloomberg.


fortune--2020-07-02--The end of the ‘V-shaped recovery’

The end of the ‘V-shaped recovery’

It ’ s official : Vladimir Putin wins vote that could keep in power through 2036

Good morning.
Does anyone out there really still think we are going to have a V-shaped recovery? If so, they should fold now. The surge in COVID cases in Arizona, Florida, Texas, California, South Carolina—which together account for 37% of GDP—have put the final nail in a coffin that was already pretty well sealed. Read more details in Fortune Analytics, here.
But with many restaurants suspending their reopening, that means more good news for food delivery services, like Door Dash, Uber Eats and Grubhub. Uber is clearly betting food delivery is habit forming, which is why it is reportedly in talks to buy Postmates for $2.6 billion (having failed in its effort to take over Grubhub.)
The crystal ball gets hazier when looking further out—or as Nobel physicist Niels Bohr put it: “Prediction is very difficult, especially about the future.” But there is mounting evidence that office work will never go back to where it was before the pandemic. PwC has a new survey out this week with some eye-opening factoids:
–The vast majority of office workers—83%—want to work from home at least one day a week, after the pandemic has passed.
–A majority of employers—55%—expect they will give workers that option.
–But interestingly, it’s unclear whether more remote work means less demand for office space. While 30% of executives in the PwC study foresee the need for less space, 50% anticipate needing more, to allow for either prolonged demand for social distancing or company growth.
You can find the full study here. More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
'I'm all for masks'
U.S. President Donald Trump appeared to reverse course this week when he said he's "all for masks," but maintained that they need not be mandatory to curb COVID-19's spread. That came as new U.S. cases hit more than 50,000 per day, a new record, after Dr. Anthony Fauci told senators that the U.S. was on course to hit 100,000 cases per day under the current strategy. BBC
The vaccine race
Germany’s BioNTech has yielded positive results on its COVID-19 vaccine, just as a clinical study with Pfizer in the U.S. showed people who received doses of their vaccine had "significantly elevated" antibodies within four weeks of the first injection. Meanwhile, the EU is in talks with Gilead Sciences to try and secure sources of remdesivir after the U.S. announced it had bought up most of the world's supply. FT
Bezos Bounce
Amazon CEO Jess Bezos' mammoth divorce settlement was just a blip. The executive's net worth has now risen to a record $171.6 billion, rising $56.7 billion this year alone, even as unemployment soared to stratospheric heights, heightening inequality across the country. Responding to critics, Amazon said earlier this week it would spend $500 million to give each of its front-line workers a $500 one time bonus. Lest you think that's generous, please refer to Bezos' net worth, above. Fortune
Putin stays
Unsurprisingly, early indications indicate Russian leader Vladimir Putin has secured the backing to remain in power until at least 2036, with three-quarters of the vote. But his referendum leaves another question: why did he bother with a show of votes at all? The constitutional amendments needed to clear his path to power was already in place. New York Times
AROUND THE WATER COOLER
McDonalds hits pause
McDonalds is pausing its reopening program, as states and cities across the U.S. are reversing or halting plans for loosening COVID-19 restrictions. The chain will wait three weeks to reopen its dine-in option at its 14,000 U.S. restaurants, but will carry on with delivery and takeaway. WSJ
Europe or U.S.?
Which one will fare better in the post-pandemic recovery? After 2008, the U.S. bounced back faster through a flexible labor market, while the EU suffered a "double dip" recession and economic woes that came close to threatening its union. But this is a different crisis, writes Steven Erlanger, and the continental style may be better suited, with its stricter lockdowns and social welfare states, including government schemes to limit unemployment. New York Times
A delayed bloodbath
But speaking of those unemployment programs... the U.K.'s furlough scheme is coming to an end, bringing with it tens of thousands of layoffs across the retail and aviation sectors in recent days. The government's scheme largely prevented unemployment from skyrocketing to U.S. levels by committing to pay up to 80% of workers' salaries as long as companies kept them on the payroll. But it may have simply been putting off the inevitable. FT
Did Sweden get it wrong?
Europe's pandemic outlier, Sweden, has taken a comparably relaxed approach to COVID-19, eschewing lockdowns and keeping kids in school and restaurants open. But as its death toll has soared past its Nordic neighbors, the Swedes are starting to question whether this was the right approach, launching an investigation into its strategy. (The results won't be ready for years.) Meanwhile, the state epidemiologist has defended the Swedish way, saying that strict lockdowns are simply not sustainable over the long term. Fortune
This edition of CEO Daily was edited by Katherine Dunn.


fortune--2020-07-02--In an unmasked TV interview, Trump softens his stance on wearing a mask

The end of the ‘ V-shaped recovery ’

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After long resisting wearing a mask in public, President Donald Trump said Wednesday he thinks it makes him look like the Lone Ranger — and he likes it.
“I’m all for masks. I think masks are good,” Trump told Fox Business in an interview. “People have seen me wearing one.”
Trump’s comments came a day after Republican lawmakers suggested that he wear a mask in public to set a good example for Americans.
“If I were in a tight situation with people, I would absolutely,” Trump said in the interview.
Trump has long resisted being photographed in a mask. In early April, the Centers for Disease Control and Prevention recommended that people wear cloth face coverings in public settings where other social distancing measures were difficult to maintain.
Trump immediately undercut the CDC guidance by flatly stating that he wouldn’t be following it, suggesting it would be unseemly for the commander in chief to wear a mask as he meets with heads of state.
On Wednesday, he sounded a different tone, saying, “I had a mask on. I sort of liked the way I looked. OK. I thought it was OK. It was a dark black mask, and I thought it looked OK.
“It looked like the Lone Ranger,” he continued, a reference to the fictional law-and-order character from the American Old West who wore a black eye mask. “I have no problem with that, and if people feel good about it, they should do it.”
In recent days, many Republicans and members of the White House coronavirus task force have been more outspoken in advocating for Americans to wear face masks in public settings as infections have surged in huge swaths of the South and West.
No mandate needed
The presumptive Democratic presidential nominee, former Vice President Joe Biden, said last week that he would pursue a federal mask mandate, if elected. In the interview, Trump suggested a federal mandate was unnecessary and continued to frame mask wearing as a matter of choice.
Even so, Trump criticized Biden for wearing a mask while he is some distance away from his audience and for speaking through the covering at times.
“When there’s nobody around, I don’t see any reason to be wearing it,” Trump said in a separate interview Wednesday on “America This Week.”
About the virus, Trump continued to characterize it as a nuisance that he hopes will just go away.
“I think we are going to be very good with the coronavirus. I think that, at some point, that’s going to sort of just disappear, I hope,” Trump said on Fox Business.
White House senior adviser Kellyanne Conway noted Wednesday that Trump is regularly tested for the coronavirus, as are his aides. White House visitors and members of the news media who are in close proximity to him and Vice President Mike Pence are also tested.
“I’ve said wear them, the first lady has said wear them, the president’s administration has said wear them,” Conway said.
Trump also told Fox Business that people have seen him wearing a mask. But only one image has surfaced of the president wearing a mask. He donned it for a behind-the-scenes tour of a Ford facility in Michigan in May. Reporters were not allowed to accompany Trump on the tour. Afterward, he told reporters he had worn a mask in a “back area” only because “I didn’t want to give the press the pleasure of seeing it.”
Other world leaders, including Canada’s Justin Trudeau and France’s Emmanuel Macron, have worn masks in public to encourage their use.
Trump on Wednesday also continued to push back against the notion that some states may have been too quick to open up. Several states, including Florida, New York and Texas, have paused or slowed down reopening amid the recent increase in confirmed cases.
Trump suggested Democrats are hyping concerns about the spike to politically damage him.
“I think the Democrats would like to see the country stay closed as long as possible because they figure that’s probably good for the election, because it would be bad a little bit for jobs, and maybe a lot for jobs,” Trump said.


fortune--2020-07-02--In the coronavirus vaccine race, China is a surprise frontrunner

This is the web version of Eastworld, Fortune’s newsletter focused on business and technology in Asia. Subscribe here to get future editions in your inbox.
A little-known Chinese biotech firm’s effort to develop a COVID-19 vaccine got a big shot in the arm this week when Beijing granted the company permission to conduct large-scale human testing on Chinese soldiers.
As Grady reported Monday, Tianjin-based CanSino Biologics said in a statement to the Hong Kong stock exchange that China’s Central Military Commission has cleared the way for the People’s Liberation Army to inject soldiers with Ad5-nCoV, the company’s leading vaccine candidate, for a period of one year.
The announcement makes Ad5-nCoV, an adenoviral vector, a clear front-runner in the global race to develop a COVID-19 vaccine. CanSino conducted Phase I and Phase II clinical trials of Ad5-nCoV in Wuhan, China, in March, becoming the first drugmaker in the world to test its vaccine on people. In May, the company notched another global first by publishing a full scientific study of those tests in The Lancet medical journal, reporting that blood samples from a group of 108 vaccinated adults showed that Ad5-nCoV is safe and induces a rapid immune response.
It’s not clear how many soldiers will get an Ad5-nCoV jab, but the potential sample size is huge; with more than 2 million active-duty personnel, the PLA is the world’s largest military. Nor is it clear whether getting injected will be optional or mandatory for China’s troops. But it seems safe to guess that collaborating with the Chinese military will let CanSino streamline the myriad legal and ethical restrictions that can slow large-scale clinical testing in other countries.
CanSino has worked closely with the Academy of Military Medical Sciences, the PLA’s medical research institute, to develop Ad5-nCoV. The organizations’ COVID-19 effort reprises their previous collaboration on an Ebola vaccine, which won Chinese government approval for widespread use in 2017.
The partnership is extraordinary in many ways. CanSino, founded by a group of China-born researchers who worked for global pharmaceutical companies in Canada, is a private company listed on the Hong Kong stock exchange. Chief executive Yu Xuefeng earned his doctorate from McGill University and is the former head of vaccine research and development at Sanofi Pasteur Canada. The PLA’s medical research team is led by Chen Wei, a major general who has become something of a celebrity in China for her work on the Ebola vaccine and for developing a therapy used by Chinese health workers to combat China’s SARS outbreak in 2003.
As this excellent Bloomberg profile notes, Yu has made the most of his relationships in Canada and China even as geopolitical relations between the two countries have soured. CanSino is working with researchers at Dalhousie University’s Canadian Center for Vaccinology, to launch Phase III trials of Ad5-nCoV as early as this fall. If those tests prove successful, Canada’s National Research Council will produce the vaccine for the Canadian market at a manufacturing facility in Montreal.
CanSino has yet to generate revenue and posted a $22 million loss last year. But its nimble pivot to develop a coronavirus vaccine has lifted the company’s stock price to HK$217, up from HK$60 at the beginning of the year—boosting its market capitalization to over $6 billion.
In the global race for a vaccine, CanSino leads a pack of Chinese competitors. Among them: China National Biotec Group, which has secured approval from health authorities in the U.A.E. to conduct Phase III testing; Beijing-based Sinovac Biotech, which has signed a deal to do final tests in Brazil; and Shanghai Fosun Pharmaceutical, which is partnering with German immunotherapy company BioNTech and Pfizer to develop an mRNA vaccine.
Of the 19 coronavirus vaccines to have conducted human trials, seven involve Chinese entities, according to the New York Times‘ coronavirus vaccine tracker.
For years, skeptics of China’s ability to innovate have pointed to pharmaceuticals, along with semiconductors, as a sector where Chinese technology would never match that of the West. In this week’s Eastworld Spotlight interview, I asked Gary Rieschel, founding partner of Qiming Venture Partners, an early CanSino investor, his take on that. His answer: “I would suggest that anyone who’s ever competed with Chinese entrepreneurs probably has many stories on how they underestimated what they’re capable of doing.”
More Eastworld news below.
Clay Chandler
clay.chandler@fortune.com
This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com.
Eastworld news
A chill over Hong Kong
At the strike of midnight on Wednesday, Beijing implemented its new national security law in Hong Kong. The details of the law were only made public upon going into effect, and it provides Beijing with sweeping powers to arrest and prosecute those in Hong Kong that it sees as engaging in separatism, subversion, terrorism, or foreign collusion. Beijing says that it will only use the law in rare cases that threaten China’s national security, but critics argue that the law overrides Hong Kong’s legal system and erodes the freedoms and relative autonomy city residents have enjoyed since the 1997 handover. In protests against the law’s passage on Wednesday, Hong Kong police arrested roughly 370 protesters, 10 of which were alleged to have violated the hours-old law. New York Times
Beyond the battlefield
In the wake of a border standoff that killed Chinese and Indian soldiers, Asia’s two largest economies are re-examining their economic ties. In India, a 'boycott China' campaign has gained popular support, and this week the Indian government took the step of blocking 59 (mostly Chinese) apps from Google and Apple app stores. Calls in India to take aggressive measures to stem Chinese economic influence in the country are only growing, and some Indian firms have pledged to stop buying from China entirely. India’s government is also considering other options to restrict Chinese goods and capital from flowing across its borders. At the same time, India's economy is deeply reliant on China, meaning India's efforts to decouple may result in self-inflicted wounds. Fortune
Chinese hackers and Canada's fallen tech giant
In 2000, Nortel Network Corps was Canada’s flagship telecoms firm and one of the world’s largest companies with a market valuation near $250 billion. At the time, the company dominated the fiber-optic data transmission sector and seemed perfectly suited to lead the charge in building 4G and 5G networks across the globe. But in 2004 Canadian authorities tipped off Nortel that Chinese hackers had infiltrated the company’s computers and stolen valuable documents and data. Former company executives say the hack played a major role in the downfall of Nortel, which went bankrupt in 2009. They also allege that the Chinese government, along with Chinese telecoms giant Huawei, may have brought down Nortel in order to scoop up its contracts and become a global telecoms leader. Huawei denies the allegations, but the story raises further questions about the relationship between Huawei and the Chinese government. Bloomberg
A (fake) gold rush
Kingold Jewelry, China’s largest privately-owned gold processor, is being accused of pretending that its copper was gold. In an investigation published on Monday, the Chinese outlet Caixin alleges that Kingold used 83 tons of gold as loan collateral with several companies—but the gold was nothing but gilded copper. Kingold denies the allegations, yet its stock on Nasdaq plunged by nearly a quarter in the wake of the report. According to Caixin, Kingold’s alleged fraud came to light in February, when Dongguan Trust, a company that had purchased gold reserves from Kingold, attempted to liquidate its assets with Kingold. Three other companies have since made claims that their Kingold gold reserves turned out to be copper. Caixin
A billionaire dreams of soccer
Asia’s richest person is facing off with India’s top soccer body over the future of the sport in India. Mukesh Ambani, the CEO of India’s largest conglomerate Reliance Industries, created the Indian Super League soccer competition in 2014 with dreams of helping transform India into a major global player in the sport. In its first five years, however, the league has struggled to make money and gain fans in a cricket-obsessed nation. Ambani and his affiliates are now hoping to employ more foreign players to help boost the league’s popularity, yet India’s top soccer governing body believes India should be focused on developing local talent since it ranks 108th in soccer, even with the world’s second-largest population. Reuters
Coronavirus by country
Since May 28, Nepal has reported over 11,000 new cases of coronavirus after recording less than 1,000 up to that point. The problem is likely twofold: the country began to relax relatively strict lockdown measures in mid-June after imposing them in March, and thousands of Nepalese workers are now returning to Nepal from India. Meanwhile, the country is on the verge of an economic crisis due to the pandemic. Nepal relies on remittances from abroad for a quarter of its annual output, and the World Bank projects that the payments will drop by over 14% this year. What's more, Nepalese youth have been taking to the streets in anti-government protests in recent weeks, alleging that government authorities have mishandled the coronavirus response and are misusing coronavirus funds. The Diplomat
For individual stories about how Nepali citizens have experienced the pandemic, check out Stories of Nepal, which features photos and testimonials of people across Nepalese society.
Markets and movers
Pinduoduo – Colin Huang, the CEO and founder of China’s fastest rising e-commerce company, announced on Wednesday that he is stepping down as chief executive and will give his job to Lei Chen, a top executive and co-founder of the company. Huang says he's stepping back to work on the company’s longer-term strategy. Bloomberg
Beyond Meat – On Wednesday, the plant-based meats company announced a new partnership with the Chinese tech giant Alibaba. Beyond Meat said its products will now be sold in China by Freshippo, a supermarket chain owned by Alibaba. Financial Times
SK Biopharm – In South Korea’s largest IPO since 2017, the South Korean pharmaceutical company raised $800 million at a market capitalization of $8.25 billion in its debut on the South Korean stock exchange on Thursday. Nikkei Asian Review
Final figure
1.6%
The International Monetary Fund (IMF) said in a blog post on Tuesday that it expects Asia’s economy to contract by 1.6% in 2020. This will be Asia’s first economic contraction in “living memory,” the blog stated, and has been revised down from an April growth projection of zero due to a weaker global economy and longer-than-expected quarantine measures across the continent. The IMF predicts a strong rebound in 2021 in the absence of a second wave of COVID-19. To fulfill that expectation, Asian countries need to allocate resources to prevent widespread bankruptcies, ensure credit flows to households and small businesses, and expand social safety nets so growth isn’t further concentrated among the elite. International Monetary Fund


fortune--2020-07-02--He invested in a top COVID-19 vaccine—and says development isn’t a U.S.-China race

Chinese biotech firm CanSino Biologics received approval from Beijing this week to inject Chinese troops with its COVID-19 vaccine after seeing positive results in Phase I and Phase II clinical trials.
The trial of the vaccine on Chinese troops is a “huge step forward,” said Gary Rieschel, founding partner of Qiming Ventures Partners, a venture capital firm and CanSino investor. The development cements CanSino’s status as having one of the world’s leading coronavirus vaccine candidates. It was the first globally to begin clinical trials in March.
Even with CanSino’s progress, Rieschel urges against framing the development of a COVID-19 vaccine as a race.
“I’ve been a little bit frustrated with this idea that there’s a race between China and the U.S. to develop a vaccine,” he said. “The real key thing is you want multiple shots on goal on this because there’s not going to be one vaccine that is going to be ideal for everybody, and there’s risk in literally every single vaccine.”
Also key is developers’ ability to ramp up production so a vaccine’s supply can meet demand as soon as it’s proved safe and effective. Rieschel discussed the vaccine industry as well as CanSino’s early edge with Fortune’s Clay Chandler this week. The conversation below has been edited for length and clarity.
Fortune: CanSino is one of your portfolio firms, and it’s just received clearance from Beijing to proceed to the next step of testing. What’s next for CanSino?
Gary Rieschel: The key with CanSino was that the Chinese government approached them in January and wanted them to help in working on [a COVID-19 vaccine]. There was a precedent for that because they worked with the Chinese government to develop an Ebola vaccine several years ago. They had a very good reputation, very good relationships within the medical infrastructure in China.
I’ve been a little bit frustrated with this idea that there’s a race between China and the U.S. to develop a vaccine. The real key thing is you want multiple shots on goal on this because there’s not going to be one vaccine that is going to be ideal for everybody, and there’s risk in literally every single vaccine.
I think that what you’re seeing with CanSino is, having done Ebola, having done COVID, they clearly have a platform and an approach that can handle multiple different viral families in terms of looking at vaccines.
Vaccines are seen as less profitable compared to daily drugs. Are we looking at a shift in which vaccines actually become quite profitable on their own now?
I think so. With flu, there is typically a flu vaccine every year. We are in the very early stages with COVID. We need to understand which vaccine will be most effective for which patient population. So I think you are going to have multiple companies in the market for an extended period of time. We may very well wind up needing to have a yearly COVID vaccine because the version [of the virus] that’s coming out that year may be slightly different, just like we have with the flu.
Why is it hard for vaccines to be profitable?
Over the last five or 10 years in the pharmaceutical industry, there has not been a great deal of attention paid to vaccines. Because even with Ebola, the number of cases was so small, it was hard to build a multibillion-dollar business out of that. Vaccines were really kind of a niche.
I think what you are going to see now is a serious rethinking of that. Because all it takes is one example of COVID with millions of cases and potentially hundreds of millions of vaccinations every year.
How far away are we from having a COVID-19 vaccine?
Some companies are ramping up production of vials and syringes. They’re doing all that in advance of knowing whether or not the vaccine is going to work. Private enterprises are taking huge business risk in order to facilitate getting vaccines into the market at scale as soon as possible. There’s an awful lot of private capital that’s being put at risk to achieve that.
Having said that, I don’t think, for this flu season, we will have vaccines in volume. I think the earliest that you’re going to see volumes of vaccines available [is] next spring.
Do you have any thoughts as to how much cross-border sharing of vaccines there will be?
This will depend largely on what the fall looks like with the virus. Let’s say the U.S., Brazil, and India start to trend down by the fall, and what you see are small little spikes, you don’t have this feeling that we need to give a vaccine to the entire population. If you have that situation, then I think you’ll get a relatively broad distribution of the vaccine.
If China starts to see hundreds or thousands of cases…if I am the Chinese, I’d say, “Well, we are going to need a billion vaccine kits here.” The same thing may very well happen in the U.S.
Will China be capable of manufacturing hundreds of millions of doses of vaccines?
A significant percentage of the vaccine [production] capacity in the world is in China, and a fair amount in India. Those two countries have a pretty large ability to manufacture vaccines at scale. From our perspective, that can ramp up relatively quickly. The interesting thing in China will be, can CanSino find other places that would license and enter into business relationships to manufacture [the vaccines]. If [CanSino] is left to just doing everything itself, that’ll make it a challenge for them to scale [the production] quickly.
One of the things I’ve seen in the U.S. that I am actually very happy about is where Pfizer is willing to let another company use its manufacturing capacity. That type of collaboration needs to be applauded. That’s extremely unusual.
Cooperation among competitive companies in China is sometimes a little more challenging than the U.S. I honestly don’t know how that will play out. I think the [Chinese] government will have a pretty heavy say in wanting to make sure that the Chinese population gets access to as much vaccine as possible. So I think there’ll be pressure on that.
This story is part of Eastworld Spotlight, a series of conversations on matters of business, tech, and finance with executives, experts, entrepreneurs, and investors in Asia. Subscribe to Fortune’s Eastworld newsletter to get them in your inbox.


fortune--2020-07-02--It’s official: Vladimir Putin wins vote that could keep in power through 2036

In an unmasked TV interview , Trump softens his stance on wearing a mask

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Russian President Vladimir Putin won a resounding endorsement of his bid to extend his two-decade-long rule potentially to 2036, even as some polls show his approval ratings near historic lows.
The Central Election Commission said 78% of Russians voted for the proposal, with 99.9% of precincts counted. Turnout was 65%. Authorities released the first vote counts even before polls closed.
Amid rising public discontent about stagnant living standards, the Kremlin pulled out all the stops to ensure a high turnout and resounding approval in balloting that started last week. Authorities wooed Russians with populist sweeteners such as an effective constitutional ban on gay marriage, along with prize drawings for voters, while playing down the removal of term limits for Putin and blocking any campaigning against a ‘yes’ vote.
“The main result is the formal legitimization of the zeroing” of presidential term limits for Putin, said Mikhail Vinogradov, head of the St. Petersburg Politics Foundation. “Plus the ability to maintain a relatively high level of declared approval for the actions of the authorities, even though the pandemic hasn’t scored many points for them.”
Putin, a former KGB colonel who was first elected in 2000, is already the longest-serving Russian leader since Soviet dictator Josef Stalin. The plan would give him the right to run for two more six-year terms after his current mandate runs out in 2024. While insisting he hasn’t decided if he’ll run again, Putin said last month speculation over a possible successor would be destabilizing.
A ratings slump
The 67-year-old leader is confronting a slump in poll ratings as Russia’s economy reels under the impact of the coronavirus epidemic and a collapse in oil prices. Once the referendum is out of the way, the Russian president will face the task of navigating through one of the deepest recessions of his time in office.
The referendum failed to pass only in the Arctic Nenets Autonomous Region, where the proposal got only 46% for and 53% against, according to RIA Novosti.
Putin caught even many in his inner circle by surprise in January when he announced plans to carry out the most extensive reform of the constitution since it was adopted in 1993. But the clause allowing him to sidestep term limits didn’t appear until March, even if some officials later suspected that had been his plan all along.
Putin’s popularity rating at 60% — though still respectable by western standards — is around the lowest levels since he became president in 2000, according to the Levada Center, an independent pollster in Moscow.
After years of stagnation, Russia’s economy may shrink by 6.6% this year, the worst contraction since 2009 in the wake of the global financial crisis, according to the International Monetary Fund. Real incomes are falling, while unemployment climbed to 6.1% in May from 4.7% in March.
On the eve of the vote, Putin sought to win over ordinary Russians by unveiling fresh cash payments for families and the unemployed and a tax increase for the rich.
“Polarize society”
Small, scattered protests were reported around the country, including one in the capital that drew a significant police presence. In Moscow and St. Petersburg, where critical views of the Kremlin are stronger, opponents of the plan said their small exit polls showed ‘no’ votes prevailing. Official results contradicted that.
“This vote will even more strongly polarize society and divide the majority from the minority,” said Boris Makarenko, president of the Center for Political Technologies, a Moscow political consultancy.
“This is a dangerous precedent of the complete destruction of electoral procedures,” he added. “The temptation will be very strong to repeat these practices at later elections.”
State workers were pressured into voting, according to election monitoring group Golos, that the use of large-scale online balloting for the first time and the week-long process made it harder for independent observers to uncover any violations.
“Unprecedented compulsion on the part of employers was reported,” said Grigory Melkonyants, Golos co-chairman. Local election commissions “took advantage of the completely intransparent nature of the procedures to manipulate turnout and ballots,” he said.
The official result of 78% for the proposals came in higher than an exit poll conducted by state-run pollster Vtsiom, which found 71% of Russians had supported the plan.
Elections chief Ella Pamfilova said Wednesday no significant violations had been detected.


fortune--2020-07-02--Global markets surge ahead of today’s big jobs report

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Happy Thursday, Bull Sheeters. It’s jobs day in America. Global stocks are climbing on hopes of a vaccine breakthrough, and on a trickle of decent manufacturing and sales data, a further sign of a rebounding economy. Investors are again shrugging off America’s dismal handling of the coronavirus pandemic.
Let’s see where investors are putting their money.
Markets update
Asia
The major indexes are all in the green, with Shanghai leading the way, up 2.1% .
leading the way, up . After an arrests- and protests-marred holiday yesterday, Hong Kong’s Hang Seng resumed trading with a big boost from mainland investors.
resumed trading with a big boost from mainland investors. There are further tensions between Washington and Beijing this morning after the U.S. House unanimously passed new sanctions on any banks that do business with the Chinese architects of the highly controversial national security law.
Europe
It’s a risk-off day as the European bourses jumped out of the gates. The benchmark Stoxx Europe 600 was up 0.8% at the open.
out of the gates. The benchmark was up at the open. According to Angela Merkel , EU member countries remain “far apart” in whether to green-light the €750 billion coronavirus recovery plan. The big summit date is July 17 .
, EU member countries remain “far apart” in whether to green-light the coronavirus recovery plan. The big summit date is . German MPs yesterday grilled the head of the country’s financial regulator, BaFin, over its handling of the Wirecard collapse. An epic shareholder revolt is brewing after the payments-processing firm filed for insolvency and faces a major financial fraud investigation.
U.S.
The S&P 500 and Nasdaq started 2H on a positive note yesterday. Pfizer closed up 3.2% on Wednesday after the company reported positive trial results for a potential COVID-19 vaccine, news that lifted the wider markets.
and started 2H on a positive note yesterday. Pfizer closed up 3.2% on Wednesday after the company reported positive trial results for a potential COVID-19 vaccine, news that lifted the wider markets. Apple fell on news it was closing stores in its coronavirus-stricken markets . The U.S. reported a new record of cases yesterday, nearly 50,000 .
. The U.S. reported a new record of cases yesterday, . The last jobs report, in early June, was a humbling one for a lot of doom-mongering economists. What’s the forecast today? The expectation is that roughly 3.1 million jobs were added in the past month.
Elsewhere
Gold is down.
is down. The dollar is flat.
is flat. Crude is up, in line with equities; Brent is trading 0.7% higher.
By the Numbers
$171.6 billion. That’s Amazon founder Jeff Bezos’ net worth this morning. The company, the prototypical stay-at-home stock, is on a tear, up 48.8% in the past year. Bezos clearly has had a good pandemic. His net worth, according to Bloomberg, has soared $56.7 billion this year alone, padding his post-divorce bank balance, but also making him a poster child for inequality in the U.S. Amazon has promised to give its front-line workers one-time $500 bonuses for valiantly working through the pandemic. But as Robert Reich recently pointed out, that’s downright stingy compared to the profit-sharing schemes that were fairly common in Corporate America in the 1950s and ’60s.
$205 billion. That’s Tesla‘s market cap, as of yesterday’s markets close, making it the world’s most valuable automaker, surpassing Toyota. Tesla bulls have long ago ignored the fact that Toyota sells roughly 30 times more cars, and its top-line sales is 10X higher than that of Elon Musk’s e-powered creation.
56%. Let’s finish up with the American consumer. S&P Global shared with me its latest survey data showing consumer confidence is on very shaky ground. According to S&P Global, a majority of consumers — 56% — said that they were planning to spend less over the next 90 days than during the same period last year; just 14% plan to spend more. The consumer is the engine of the U.S. economy. That reluctance to spend could put a damper on economic growth in Q3, a bad sign for the Trump Administration.
***
Postscript
I’m not impressed with your barbecue. Gas, charcoal, pellets. Yawn. (Now, if you’ve invested in a smoker, let’s talk.)
I’ve been trying to convince one of my brothers, an engineer, to build in his spacious back yard in PA a forno della pizza—a pizza oven. Everybody has a barbecue, I chide him. If you really want to impress your friends and neighbors, then build a pizza oven.
We have one here in Amandola. They’re fairly common in the Italian countryside. Powered by good old fashioned wood, they make the most fabulous pizzas. Once the pizzas are all cooked, the old-timers like to re-arrange the coals to roast something meaty in the ovens, too. When I’m feeling particularly ambitious, I’ve done the same.
Ours is handsome little creation, built of cinderblocks, cement and terra-cotta roof tiles. When it’s in use, it always attracts a real crowd. Eccolo. Behold.
The mighty forno della pizza. Original Photo: Bernhard Warner
Last week, we had a house full of 10-year-old girls—my daughters’ school friends. We did pizza night under the stars. The girls prepared the dough, lavished it with toppings (some combo of tomatoes, mozzarella, basil, salt, olive oil, sausages, oregano) and slid their creations into the glowing oven.
Pizza margherita quasi pronta. Original photo: Bernhard Warner
I’ve been to a lot of BBQ bashes over the years. Pizza-cooking derbies are way more fun. The unrestrained delight from the various cooks in attendance is unmatched. That moment when the pizzaiolo slides her pallet out of the oven to reveal a perfectly crispy pizza always generates cheers, as well as the inevitable I-can-top-that jeers. Pizza-making is competitive business. Even for 10-year-olds.
Mangia! Mangia! Original photo: Bernhard Warner
Don’t get me wrong. I love a good barbecue. But it’s no pizza party.
***
Have a nice weekend, everyone. I’ll see you here on Monday.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
If you were to assemble the people who could help you truly understand health care and how it’s affected businesses today, who would you pick? Here’s a few on Fortune’s list:
The CEOs and presidents of healthcare giants Johnson & Johnson, Moderna, Novartis, Aetna
Johnson & Johnson, Moderna, Novartis, Aetna co-discoverer of CRISPR-Cas9 Dr. Jennifer Doudna
Dr. Jennifer Doudna Dean of Stanford Medicine Dr. Lloyd Minor
Dr. Lloyd Minor chief medical officers from IBM, Verily, Google Health
from IBM, Verily, Google Health healthcare venture capitalists like Sue Siegel
like Sue Siegel Thrive Global CEO Arianna Huffington
Arianna Huffington CEO of REFORM Alliance Van Jones
Van Jones NBA Commissioner Adam Silver
Hear from them and more at FORTUNE Brainstorm Health, our virtual health-care conference on July 7-8. As a newsletter subscriber, you’re invited to use this code—BSH20HALF!—and get half off.
Today's reads
Uber's latest binge. What is Uber Technologies thinking as it reportedly circles to snatch up Postmates, the unprofitable meals-delivery company, for $2.6 billion? Remember: its bid for Grubhub, Postmate's in-the-red rival, fell through just last month, and Uber itself is barely on the road to break-even itself. Fortune's Lance Lambert breaks down the numbers of the food-delivery market, and there's plenty to get excited about.
Ghost yachts. Europe officially opened its borders yesterday to more than a dozen relatively disease-free countries. The Economist correspondent in the French Riviera (tough job!) is on the spot to report on an eerie scene from La Ciotat, perhaps the world capital of super yachts. The boats are sitting idle. No oligarchs. No business titans or nephews of despots. "It's not busy at all," one restaurateur clucks.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
Thursday Quiz
The Nasdaq had a killer first-half, gaining 12.1% YTD through the June 30 close. But it doesn't take the crown for best-performing index of 2020. That honor goes to which of the following indexes (not based in Caracas):
A) Warsaw Stock Exchange
B) Dax (Germany)
C) Shenzhen SE Constituent A Share Index
Answer: It's C, Shenzen, which, according to Refinitiv, climbed an impressive 17.08% in 1H 2020. Incidentally, Warsaw also outperformed the Nasdaq over the first half.
There's a bit of an asterisk in today's quiz... Because of currency effects, Venezuela's Bursatil Index almost always comes in ahead of all other indexes. And, sure enough, it was up 286% in 1H. Bull Sheet does not advise sinking your earnings into Venezuelan stocks.


fortune--2020-07-02--Australia keeps its borders closed—except for one group

While Australia’s borders remain firmly closed to overseas visitors, the government plans to make a notable exception as it races to save its fourth-biggest export: Education.
In time for the new semester, authorities are working on a plan to allow 350 international students to be flown into Canberra, the nation’s capital, later this month to resume classes. Under a trial program that could be rolled out nationally, the universities and territory government will foot the bill for their two-week mandatory quarantine in hotels.
It’s a sign of just how reliant Australia’s higher education sector has become on overseas students, who make up roughly a quarter of all enrollments — the second-highest ratio in the world after Luxembourg — and 40% of student revenues due to the higher fees they are charged.
But the extraordinary steps to help the A$38 billion ($26 billion) export industry recover from the coronavirus lockdown may not be enough to guarantee its long-term future.
Australia has fallen behind the U.S., U.K. and France in the highly competitive market by opening fewer offshore campuses. And with 37% of its international students at universities coming from China in 2019, it serves as a warning to other nations of the perils of growing too dependent on a single market.
Relations with Beijing are in the deep freeze after Prime Minister Scott Morrison led calls for an inquiry into the source of the Covid-19 outbreak. China has since warned its citizens they face the risk of racist attacks in Australia if they study or holiday there.
“It’s a really risky situation for Australia’s universities because we’re dealing with two very major events” with the virus and increasing diplomatic tensions, said Angela Lehmann, education analyst at the Lygon Group, a Melbourne-based consultancy. “We are on a precipice at the moment.”
It may be several months before the impact of China’s warning shows up in enrollment numbers, which had already been plateauing for the past three years. But a recent survey conducted by the state-run Global Times was ominous. More than 80% of respondents said they would “definitely or somewhat consider” bilateral relations when choosing their study and travel destinations.
The education sector’s most pressing concern is to get as many overseas students as possible into Australia in time for the July semester.
“We don’t have a one year problem — we have a two-, three-, four-year problem,” if students are unable to return to Australia and the delays drag out across their degrees, said Catriona Jackson, chief executive of Universities Australia, the peak body for the sector. The group forecasts lost revenue of as much as A$16 billion by 2023.
The clock is ticking before the semester begins on July 27. From a pool of thousands, the two universities participating in the pilot program must whittle the list of students down to 350 through an online application process. Those chosen will have to make their own way to a departure city, presumably somewhere in Asia, that’s not yet been named for a chartered flight to Australia, before completing the mandatory two-week quarantine.
The program could yet come adrift if final approval isn’t granted by the federal government. Morrison insists that states and territories that have closed their borders must first reopen to ensure domestic students from other parts of the country can return to class before international students are allowed in. That may scupper South Australia’s own plan to fly in international students, after it backflipped on a decision to lift border restrictions.
Higher education is a fiercely competitive global industry and the battle to lure overseas students begins long before they graduate high school.
The U.S., Canada and the U.K. have been proactive in rolling out their curricula in international schools in countries such as China, effectively paving a pathway to their universities, according to Phil Honeywood, chief executive of the International Education Association of Australia, an organization that aims to boost Australia’s standing in the global market.
Over the past six years, he said, the number of such schools in China has ballooned to 500 from 150 and of those, only 39 teach an Australian final year matriculation certificate.
American and British universities are also the most active in opening overseas university campuses. Along with France and Russia, the nations accounted for nearly two thirds of the world’s 294 transnational campuses, while Australia had just 19, according to data supplied by the Cross-Border Education Research Team. With many international borders closed, having an in-country presence is even more important.
“It’s been easier for Australian universities to rely on recruiting students to come and study in Australia,” said Honeywood. “Clearly they need to be looking at offshore delivery.”
While Australia has six universities in the top 100 of the Times Higher Education World University Rankings, the sector isn’t considered as prestigious as Ivy League colleges in the U.S., or leading institutions in the U.K.
The importance of the sector to the Australian economy is clear. As an export, education ranks only behind iron ore, coal and natural gas.
A 2018 London Economics report showed that every A$1 spent on research at Australia’s Group of Eight Universities produced almost A$10 back in benefits to the private sector and the wider economy.
The fees paid by overseas students help prop up “a lot of the fundamental research” in Australian universities, said Michael Spence, vice chancellor of the University of Sydney, where nearly a quarter of the entire student cohort come from China. “The current situation has revealed how vulnerable to shock the system is.”
The University of Sydney has enough cash reserves and borrowing capacity and is undertaking significant savings measures including reducing capital expenditure, said Spence. As it stands, many institutions have slashed subject offerings while others have axed hundreds of staff.
Still, Australia has a compelling advantage over global competitors, according to Honeywood — its success to date in containing the coronavirus to just over 7,500 cases and 104 deaths.
Provided the pandemic eases, Australia’s academic year beginning in February should also give it an edge over Northern Hemisphere institutions that typically begin in August or September, with students keen to get their studies underway.
If Australia can “provide a more comprehensive narrative about our genuine care for international students’ welfare, then we’ll be better placed against many other” countries, Honeywood said. “If we move quickly.”


fortune--2020-07-02--Jeff Bezos’s net worth hits a new high after recovering losses from divorce

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Jeff Bezos’s net worth has smashed through its previous peak, even after he relinquished a quarter of his stake in Amazon.com Inc. as part of a divorce settlement last year.
Shares of the Seattle-based retailer surged 4.4% to a record $2,878.70 Wednesday, boosting the founder’s world-leading fortune to $171.6 billion. That tops his previous high of $167.7 billion, set on Sept. 4, 2018, according to the Bloomberg Billionaires Index.
His gains — $56.7 billion this year alone — underscore a widening wealth gap in the U.S. during the worst economic downturn since the Great Depression. Initial public offerings and buoyant equity markets have bolstered mega-fortunes, even as tens of millions of people have lost their jobs. This week, after receiving complaints about ending pandemic hazard pay, Amazon said it would spend about $500 million to give one-time $500 bonuses to most front-line workers.
The company declined to comment on its founder’s wealth.
Amazon has been on a tear, with the pandemic accelerating the consumer shift to e-commerce from brick-and-mortar retail. Bezos owns 11% of the stock, which comprises the bulk of his fortune.
Most of those with the biggest wealth gains also hail from the tech sector. They include Tesla Inc. Chief Executive Officer Elon Musk, who added $25.8 billion to his fortune since Jan. 1, and Zoom Video Communications Inc. founder Eric Yuan, whose wealth has almost quadrupled to $13.1 billion.
Mackenzie Bezos, who acquired a 4% stake in Amazon after the couple split, has a net worth of $56.9 billion and climbed to No. 12 in Bloomberg’s ranking. She recently leapfrogged Alice Walton and Julia Flesher Koch to become the world’s second-wealthiest woman, and now trails only L’Oreal heiress Francoise Bettencourt Meyers.
Not every billionaire has come out ahead this year. Spain’s Amancio Ortega, the titan behind the Zara fast-fashion brand, has lost $19.2 billion, the most of anyone on the Bloomberg index. Berkshire Hathaway Inc. Chairman Warren Buffett has dropped $19 billion and French luxury-goods tycoon Bernard Arnault is down $17.6 billion.
But most have weathered the downturn. The collective net worth of the world’s 500 richest people now stands at $5.93 trillion, compared with $5.91 trillion at the beginning of the year.


fortune--2020-07-02--Hong Kong stocks surge in first trading under new security law—with a boost from mainland buyers

Stocks in Hong Kong rose on their first trading day since new national security laws were imposed on the city, amid signs mainland Chinese buying was behind some of the gains.
The Hang Seng Index added as much as 1.7%, led by property companies, and the city’s currency was near the strongest it’s allowed to trade. Stock volume was about 50% higher than the 30-day average at this time of day, which is unusual for the first session of the third quarter.
The positive reaction in stocks divided analysts and traders. Some said the gains reflected investor expectation that the legislation will deter protesters, which could help bring stability to the city’s streets and in turn encourage consumption. The analysts pointed to gains in local landlords like New World Development Co. — which owns hotels and shopping malls — as well as railway operator MTR Corp. as evidence.
“Though there were protests yesterday, the number of people that took to the streets was much fewer, and severity of the clashes was far less than some of the violence we saw last year,” said Raymond Cheng, property analyst at CGS-CIMB Securities. “That’s reassuring for business.”
Others pointed to the guiding hand of the state, citing the Communist Party’s history in ensuring market stability around key anniversaries and politically-sensitive events. One Hong Kong-based trader, who declined to be identified discussing client flows, said he handled several buy orders on behalf of a state-backed Chinese fund. Mainland-based buyers had snapped up about HK$2 billion ($258 million) worth of Hong Kong stocks within the first hour of trading.
The city’s financial markets have been resilient to the crackdown, although no one had seen the contents of the legislation until Tuesday evening. While the Hang Seng Index sank the most in five years the day after the planned law became public knowledge, the benchmark took less than two weeks to recover from that shock. The gauge is at a higher level than where it was before China’s move to crack down on dissent in the city was first reported, with cheap valuations and steady inflows from mainland-based investors supporting local financial markets.
The Hong Kong dollar is also showing few signs of stress — trading near the strong end of its trading band against the greenback. Its 12-month forward points have dropped since spiking to the highest level since 1999 in May, showing demand to speculate against the currency is also waning.
There are clear signs that Beijing intends to prop up Hong Kong’s financial system through inflows and a flood of stock listings by mainland companies. Whether that support will be enough to maintain (or replace) the confidence of the global business community will need to be seen.
Drawn from mainland China’s system of governance, the laws complicate the city’s reputation as a place with a robust rule of law. They will also likely ignite concern about capital flight, especially after Boris Johnson’s government said it will allow millions of Hong Kong citizens to move to the U.K.
Investor confidence remains muted. The Hang Seng is in a bear market even as stocks in the U.S. and a benchmark of Asian shares recovered. Hong Kong equities lost almost 7% in May, the biggest drop relative to the MSCI All-Country World Index since the Asian financial crisis in 1998. That made the Hang Seng so cheap it still trades below book value, meaning traders are pricing firms’ assets at less than their stated worth.
Hong Kong’s economic outlook is clouded. The coronavirus pandemic has halted the daily influx of mostly mainland Chinese shoppers, hurting retail sales. The city’s wider economy contracted 8.9% in the first quarter from year-ago levels, suffering its worst quarter on record and extending the first recession in a decade.
With the new laws creating doubt over what could land people in trouble, global businesses will need to reassess Hong Kong’s attractiveness as a financial center. Further retaliation by the U.S. could also place the city even more firmly on the frontline of a battle between Beijing and Washington. All of which makes investing in Hong Kong assets a gamble on an increasingly uncertain future.


fortune--2020-07-03--Airbnb cracks down on customers booking homes for parties

The NFL ’ s journey from banning kneeling to playing the ‘ Black national anthem ’ before every game in @ @ @ @ @ week

Airbnb will ban some younger U.S. guests from booking homes in their area as part of a continuing effort to crack down on unauthorized parties.
The San Francisco-based home sharing company said U.S. guests under age 25 with fewer than three positive Airbnb reviews won’t be allowed to book entire homes close to where they live. Airbnb wouldn’t reveal how it defines what is “close.”
Those guests will still be allowed to book entire homes elsewhere, and they will be allowed to book hotel rooms or private rooms within homes, the company said.
Guests under 25 with at least three positive Airbnb reviews and no negative reviews won’t be subject to the restrictions.
Airbnb began stepping up efforts to ban “party houses” last November after five people were shot and killed during an unauthorized party at an Airbnb rental in Orinda, California. At the time, Airbnb set up a rapid response team to deal with complaints from neighbors and started screening “high risk” bookings, such as reservations at a large home for one night.
Earlier this year, Airbnb piloted its new policy for younger guests in Canada. The company said the policy has led to a “meaningful drop” in unauthorized house parties.
In a message to hosts, the company said reducing unauthorized parties is even more of a priority right now as states try to avoid coronavirus outbreaks.
“With public health mandates in place throughout the country, we’re taking actions to support safe and responsible travel in the United States,” the company said.


fortune--2020-07-02--FedEx ramps up pressure on Redskins to finally change the team’s name

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The National Football League’s Washington Redskins are facing renewed pressure over their racist team name. And this time, it’s coming from Wall Street.
On Friday, FedEx—the delivery and freight giant that has sponsored the NFL franchise’s home field for more than 20 years—said that it has “communicated to the team in Washington our request that they change the team name,” according to a statement obtained by ESPN.
The move comes after FedEx, as well as fellow team sponsors Nike and PepsiCo, received letters from shareholders demanding they cut ties with the organization unless it changes its name, Adweek reported Thursday. The three companies are said to have each heard from nearly 90 different investment firms and shareholders worth a combined $620 billion, who are calling on them to end their relationship with the team so long as it is nicknamed after a Native American racial pejorative.
The Redskins organization did not immediately respond to a request for comment.
FedEx has owned the naming rights to the franchise’s Landover, Md., stadium since 1998, under a $205 million deal that runs through 2025, according to ESPN. FedEx founder, chairman, and CEO Frederick Smith also owns a minority stake in the team.
The reignited controversy is the latest chapter in a decades-long saga over the Redskins name, which has been used since 1933 and is again in the spotlight in the wake of social justice protests following the killing of George Floyd. For years, team owner Daniel Snyder has been steadfast in his refusal to budge on the matter, once telling USA Today: “We’ll never change the name. It’s that simple. NEVER—you can use caps.”
Yet in a cultural moment that has seen statues of racist American luminaries taken down and the state of Mississippi finally remove Confederate imagery from its flag, it’s clear that tolerance for the archaic views and symbols still featured in American society is hitting an all-time low. Corporate America has proven no exception, as PepsiCo has witnessed firsthand; the company’s Quaker Oats subsidiary announced last month that it would be renaming and changing the logo of its Aunt Jemima breakfast brand.
Washington’s NFL team has budged to the pressure somewhat, having removed the name of founder George Preston Marshall from the “Ring of Fame” at its stadium, FedEx Field. Marshall was a vocal segregationist and under his ownership, the franchise was the last NFL team to integrate Black players into their roster, in 1962.
But not even multiple, high-profile court cases in which opponents sought to cancel the franchise’s trademarks—arguing that they violated federal laws prohibiting the trademarking of “disparaging” terms and symbols—have been able to divorce the team from its racist nickname and logo.
This time, however, things feel “different,” as one former team employee told ESPN this week. The intolerance for racist symbols and signifiers has even forced NASCAR—as culturally tied to the southern United States as any professional sports enterprise—to ban Confederate flags from its tracks.
More importantly, the current backlash threatens Snyder and his franchise where it hurts the most: their bottom line. Time and again, Snyder has proven himself one of the more profit-driven owners in league awash with them; he once infamously charged fans for parking and admission to the team’s preseason training camp, one in a series of price-gouging tactics that have characterized his more than two decades at the organization’s helm.
Snyder’s steadfastness on the matter is already costing him a chance to return the team to Washington, D.C., where he hopes to build a new state-of-the-art stadium on the site of its former RFK Stadium. That site is located on federally-owned land, and government officials reiterated this week that there is “no viable path” for Washington’s NFL team to return to the city without changing its name first.
Yet it’s unlikely any argument will be as convincing to Snyder and his organization as the one now being made by FedEx—and potentially other sponsors facing pressure from their own investors. If corporate America really is beholden to the interests of its shareholders above all else, then it may well be capitalism that ends up accomplishing what no socially-driven interest group could: succeed in getting the Redskins to give up that old, racist nickname.


fortune--2020-07-02--The NFL’s journey from banning kneeling to playing the ‘Black national anthem’ before every game in

The NFL’s journey from banning kneeling to playing the ‘Black national anthem’ before every game in this season’s opening week

Only 4 % of fraud is caught by outside auditors .
It ’ s time for accounting to change its @

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My, how times have changed.
The NFL is hoping to step “out from the gloomy past” by playing “Lift Every Voice and Sing,” a song commonly known as the Black national anthem, prior to kickoff of every game played during the season’s opening week, according to a source that spoke with The Undefeated.
It is just one of a variety of measures the league is considering to express solidarity with the victims of police violence and in support of the Black Lives Matter movement, reports The Undefeated’s Jason Reid. One such idea, in collaboration with the NFL Players Association, includes placing a list of the names of victims, like George Floyd, on player jerseys or helmets.
It is a surprising development from an organization which had previously opted to punish players who protested police brutality on the field.
San Francisco 49ers quarterback Colin Kaepernick became the symbol of player protest in 2016 when he first refused to stand for, and then began kneeling during, the playing of “The Star Spangled Banner.”
“I am not going to stand up to show pride in a flag for a country that oppresses Black people and people of color,” Kaepernick said after a preseason game with the Green Bay Packers. “To me, this is bigger than football, and it would be selfish on my part to look the other way. There are bodies in the street and people getting paid leave and getting away with murder.”
The controversy caught the attention of President Donald Trump, who first attacked Kaepernick and the NFL over the player protests in 2017, erroneously linking them to disrespecting the national anthem. “Wouldn’t you love to see one of these NFL owners, when somebody disrespects our flag, to say, ‘Get that son of a bitch off the field right now, out, he’s fired,’” he said during a rally supporting Senator Luther Strange of Alabama.
In May 2018, NFL commissioner Roger Goodell announced a policy requiring any NFL players on the field during the national anthem to stand, empowering the league to fine any teams with players who didn’t comply.
But in an 81-second video of Goodell released early last month via Twitter, Goodell admitted that the league had been wrong in its handling of peaceful NFL player protests of police brutality and systemic racism. “We, the NFL, condemn racism and the systematic oppression of Black People,” Goodell said in the video. “We, the NFL, admit we were wrong for not listening to NFL players earlier and encourage all to speak out and peacefully protest. We, the NFL, believe Black Lives Matter.”
Whether he will learn the words to the Black national anthem in time to sing along, remains to be seen.
It’s a song worth knowing.
“Lift Every Voice and Sing” was first conceived as a poem by educator, author, lawyer, activist, and songwriter James Weldon Johnson (1871-1938) at the end of the 19th century. It was later set to music by his brother, John Rosamond Johnson (1873-1954), in 1899. James had an extraordinary career: He served as the first operating officer of the NAACP, became U.S. consul in Venezuela and Nicaragua under President Theodore Roosevelt, and later, the first African-American professor hired by New York University.
In 1900, the poem made its public debut as part of a recital performed by 500 children at the all-Black Stanton School in Jacksonville, Florida in honor of Abraham Lincoln’s birthday during Booker T. Washington’s visit to the school. By 1919, the NAACP adopted it as the “Negro National Anthem,” enshrining it in the hearts of generations of Black families.
And starting in September, it may become the opening act for the newly woke NFL.


fortune--2020-07-02--Only 4% of fraud is caught by outside auditors. It’s time for accounting to change its approach

For too long, auditors haven’t held themselves as accountable as they should for identifying potential fraud, instead paying out massive settlements for missing the signs and red flags within audits. Looking at the big picture, it’s more than a matter of missing the signs.
Auditors aren’t necessarily looking for fraud and won’t see what they aren’t looking for. The numbers show the extent of this: Only 4% of occupational fraud is discovered by external auditors. Many auditors have shaken the responsibility in finding fraud, claiming the onus is on others or that finding fraud is too difficult, especially if there is collusion involved.
It’s time to step up and assume responsibility. The public looks to the accounting profession to be a watchdog, adept at recognizing and uncovering occupational fraud and protecting investments. If we continue to fail at upholding our duty to the public and investors, there is nothing stopping Congress from stepping in and taking away the profession’s exclusive right to perform external audits.
Part of the problem lies in the lack of training necessary to help auditors own the responsibility of fighting fraud. Since it has never been a focus, there are few measures in place to educate auditors on how to actually do it. The framework is there; standard setters have done a good job in setting the expectation that fraud does fall into auditors’ purview. But there’s catch-up that needs to be done to teach auditors the proper steps in identifying potential fraud, including integrating lessons into the education curriculum, inclusion on the CPA exam, and annual requirements for continuing education on finding fraud. Combining education with technology that puts the tools in auditors’ hands is the only effective way to combat financial fraud at a large level. (My firm makes anti-fraud technology, and could financially benefit from more accounting firms using such tools.)
The tone at the top must also set the stage for a drastic industry change. The longer executives balk at the expectation, the harder it will be to implement a new precedent. If this avoidance remains unchecked and firms continue to get banned from performing audits while getting slapped with increasing penalties and fines, they’ll be forced to change.
It shouldn’t have to come to that. The profession should take proactive steps now to prioritize fraud detection and avoid the mistakes that have led to major scandals, such as what we’ve seen with Wirecard, Luckin Coffee, Parmalat, Satyam, Olympus, Enron, HealthSouth, and Patisserie Valerie.
The likelihood of a forced reckoning is increasing. Congress has already taken away the profession’s authority to set its own standards for public company audits after continued missteps, putting this duty in the hands of the Public Company Accounting Oversight Board. Loss of the ability to self-regulate was the first step; if firms can’t follow set standards to protect the public, then it’s fair game to open auditing up to anyone who can.
If the profession continues on this trajectory, then there is no reason Congress won’t intervene further, especially if called for by the investing public. After all, there is precedent—just look at tax preparation. The IRS ruled that tax preparers don’t have to be CPAs, and now the profession has competition with technology providers like TurboTax and non-CPA preparers like H&R Block.
Calls for action aren’t just coming from Congress anymore, either; some countries are calling to break up the big accounting firms. As fraud scandals continue to be revealed, which is likely to happen, investors will have even more reason to hold accounting firms accountable for the supposed audit work being done. After all, investors are the ones that take the biggest hit when a fraud scandal breaks; when billions of dollars are lost, people start to pay attention and demand change.
This is our opportunity to take ownership of our role in identifying potential fraud at the companies we audit. Otherwise the accounting profession is at real risk of losing its exclusive hold on the audit process to potential disrupters. Let’s step up to our responsibility and do the right thing before we no longer have the option.
Brian Fox is founder and president of digital confirmation platform Confirmation.


fortune--2020-07-02--Netflix and the importance of Black-owned banks

John Rogers is the chairman, co-CEO and chief investment officer of Ariel Investments, an investment firm with some $10.2 billion in assets. He is a relentlessly patient and thorough investor and applies a rigorous approach to company analysis —in addition to considering environmental, social and governance variables. Ariel’s international fund has earned five stars on the mutual fund rating site, Morningstar.
Yet because he is one of the few Black investors operating at his level, he is primarily asked for his thoughts on diversity and equity, not the economy or trends in business. Since he’s typically as tireless in his social justice advocacy work as he is with his investment analysis, he’s always gracious about it.
That said, during a recent Fortune-led Zoom call with Rogers (along with McKinsey & Company diversity chief Lareina Yee), it did sound like he was running a bit low on his trademark patience. We were there to talk about the widening Black wealth gap, and the Black-company founder dropped a fundamental truth. “Black companies need customers,” he said simply.
And not the small allocations reserved for now outmoded “supplier diversity programs,” which typically cater to the lowest margin businesses like catering, janitorial, and construction. The good juice, the money that creates actual wealth, is in professional services — technology, financial, legal, and other high-margin businesses that scale. “That’s where the cash flow is. That’s where the jobs are,” he says. And as a Black man running a $10 billion business, he knows that’s where the bias is. “People continue to think that we’re not qualified to do the complicated tasks, the legal services, the counting services, money management, things like that,” he says. “When people close their eyes and think about an African American leader, they think about someone in sports or entertainment, not an investment banker.”
I was thinking about his comments when I read the news that Netflix, which seems to be doing so many things right lately, is committing some $100 million to lenders that serve the Black community, many of which are Black-owned themselves.
Black companies need customers. Black customers need companies who will actually meet their needs. And when it comes to growing their wealth, Black people need lenders they can trust.
Netflix says they will start by shifting $25 million into the Black Economic Development Initiative, a new fund that’s being managed by Local Initiatives Support Corporation, or LISC, a unique nonprofit that acts as a bridge between under-resourced communities and governments and for-profits. The initial investment will be allocated as bridge loans, participation loans, and bank deposits in Black-owned institutions, which in turn will be made available to Black businesses and borrowers in communities across the country.
Going forward, the company announced plans to steer 2% of its cash on hand, or around $5 billion, to financial institutions that serve Black communities—and then issued a call to action.
“If every company in the S&P 500 allocated a modest amount of their cash holdings into efforts like the Black Economic Development Initiative, each 1 percent of their cash would represent $20-$30 billion of new capital,” Netflix said in a statement. “And that would help build stronger communities, offering more Black families pathways to prosperity and a more equitable future.”
At this scale, a collective 1 percent investment turns a rounding error into a revolution.
Somewhere, I like to think, there’s a future John Rogers (or Ariel co-CEO Mellody Hobson) patiently sitting in a bank office looking for the next big investment idea. Maybe they’ll find it in Detroit, Atlanta, Newark, Tulsa. With some care and capital, a company prospers, taking families and communities along for the ride. With lots and lots of Johns and Mellodys making good loans and smart investments… who knows?
It kind of sounds like a screenplay, right?
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
Enjoy your holiday weekend! Be safe, be joyful. We are grateful to be part of your lives and part of the work. RaceAhead will return to our regular schedule next week.
On point
MIT pulls the plug on the online data set that turned AI racist The training set had been used to teach machine learning systems things like how to identify people and objects. In a much-used example, if you showed the system a photo of a park, it should be able to identify things in the park, like swing sets, trees and people walking dogs. “Thanks to MIT's cavalier approach when assembling its training set, though, these systems may also label women as whores or bitches, and Black and Asian people with derogatory language,” reports The Register. “The database also contained close-up pictures of female genitalia labeled with the C-word.” The database, called 80 Million Tiny Images, was simply too vast to manage. “We, therefore have decided to formally withdraw the dataset. It has been taken offline and it will not be put back online,” said MIT in a statement.
The Register
Twitter takes on the racially-coded language in tech I have absolutely no coding chops, so I suppose I could be forgiven for being shocked by this story. But I’m having a hard time understanding how terms like "master," "slave," "whitelist" and "blacklist" could have survived this long when discussing things like databases and software. It has fallen to people like Regynald Augustin and Kelvin Oliver, two Black techies at Twitter, to reset the norms. "This has to stop. This isn't cool. We have to change this now."
CNET
Asians in tech show up for Black Lives Matter Michelle Kim, a very busy diversity and inclusion advocate and co-founder and CEO of the consultancy Awaken, is back with a detailed call to action for Asian tech employees. “We, especially overrepresented East and South Asians in tech, continue to enjoy relative privilege that gives us access to spaces and resources that exclude our Black colleagues,” she writes. But standing up doesn’t have to be challenging. She offers advice for company founders and investors, but reminds peers that they have a role to play, too. “Make sure your Black coworkers are included in meetings, in conversations, in all opportunities,” she writes. “Call out your company if your Black coworkers are shouldering a disproportionate amount of emotional and educational labor burden without their explicit consent and additional compensation.”
Medium
Investors ask Nike, Fedex, and PepsiCo to end their association with the D.C. area’s football team Investment firms and shareholders with some $620 billion in assets have asked the companies to end their business arrangements with the Washington Redskins because of its racist name and logo. “This is a broader movement now that’s happening that Indigenous peoples are part of,” said Carla Fredericks, director of First Peoples Worldwide, one of the firms who signed and sent a letter. “Indigenous peoples were sort of left out of the civil rights movement in the late 1960s in many respects, because our conditions were so dire on reservations and our ability to engage publicly was very limited because of that. With social media now, obviously everything is very different.”
Ad Week
On background
To be "Wasichu" is to be part of an important story I first heard the term on one of my visits to the Pine Ridge Reservation, which is not far from the Black Hills in South Dakota. "Wasichu" is the Lakota term for non-Indian white person, I was told. It also means "the one who takes the best meat for himself." This pervasive history of greed, violence, and treaties made and broken is the subject of this TEDx talk delivered by Aaron Huey, a Wasichu photographer who has spent a remarkable part of his life documenting poverty in the U.S. and ultimately within the Lakota-Sioux community of Pine Ridge, “which is sometimes referred to as Prisoner of War Camp Number 334,” he says.
TED
The “American dream” meritocracy thing is bad for everyone This study shows that the belief that society is inherently fair is particularly damaging to poor and disadvantaged youth. The findings are in Child Development, a peer-reviewed journal, and are pretty clear: “Traditionally marginalized youth who grew up believing in the American ideal that hard work and perseverance naturally lead to success show a decline in self-esteem and an increase in risky behaviors during their middle-school years.” A series of educators are interviewed and validate the findings with anecdotal evidence of their own. But what becomes clear is that the entire education system needs to be reviewed and re-thought. “We have to ask different questions around school,” said one educator. “Does [school] contribute further to our [students’] marginalization and oppression?” A must-read and share.
The Atlantic
Reminder! Cities are segregated by design Housing segregation and discrimination have shaped the lives of people in the country for decades – since 1934, to be exact – when maps drawn up by the government-sponsored Home Owner’s Loan Corporation tried to identify neighborhoods most likely to default on a brand new product called a 30-year mortgage. This invention of the New Deal also invented “red-lining” or the identification of neighborhoods with “foreigners,” “low-class whites,” and “Negroes.” This excellent, seven-minute video, narrated by NPR’s Gene Demby, draws a straight line between the Depression-era discriminatory lending to the creation of ghettos, environmental racism, poor schools, over-aggressive policing and the unique phenomenon of Martin Luther King Boulevards. Check it out, and then check out this curated Pocket reading list by raceAhead's own Aric Jenkins on how race shapes the American city.
Aeon
Speaking of: raceAhead is edited by Aric Jenkins.
Today's mood board


fortune--2020-07-02--Black worker files discrimination complaint against Facebook

A Black Facebook employee, joined by two others who were denied jobs at the social network, has filed a complaint against the company, saying it discriminates against Black workers and applicants in hiring, evaluations, promotions and pay.
The charge was filed with the Equal Employment Opportunity Commission by Oscar Veneszee, Jr., who has worked as an operations program manager at Facebook since 2017 and claims he has not been fairly evaluated or promoted despite his “excellent performance” at the company. Two others joined Veneszee’s complaint, saying they were unlawfully denied jobs at the company despite being qualified.
Facebook said in a statement it takes discrimination allegations seriously and investigates every case.
“We believe it is essential to provide all employees with a respectful and safe working environment,” said spokeswoman Pamela Austin.
Black workers account for 3.8% of all U.S. Facebook employees and 1.5% of all U.S. technical workers at the company. Those numbers have barely budged over the past several years, a common pattern across large Silicon Valley firms.
This isn’t the first criticism a Black employee has leveled at Facebook. Mark Luckie, who left the company in 2018, sent a memo to his coworkers on his last day — also posted on Facebook — that chronicled what he called Facebook’s “black people problem.”
“Facebook’s disenfranchisement of black people on the platform mirrors the marginalization of its black employees,” Luckie wrote. “In my time at the company, I’ve heard far too many stories from black employees of a colleague or manager calling them ‘hostile’ or ‘aggressive’ for simply sharing their thoughts in a manner not dissimilar from their non-Black team members.”
According to Veneszee’s complaint, filed on Thursday, “people of color and Black workers in particular remain underrepresented at all levels of Facebook and especially at the management and leadership levels. They do not feel respected or heard. And they do not believe that Black workers have an equal opportunity to advance their careers at Facebook.”
While there may be Black Lives Matter posters on Facebook’s walls, the complaint says, “Black workers don’t see that phrase reflecting how they are treated in Facebook’s own workplace.”


fortune--2020-07-02--Elon Musk taunts the SEC as Tesla stock price soars

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Elon Musk provoked the U.S. Securities and Exchange Commission in the course of taking a victory lap on Twitter over Tesla’s surging share price.
The chief executive officer first taunted short sellers in a string of tweets, writing that the electric-car maker would “make fabulous short shorts in radiant red satin with gold trim.” That’s an apparent reference to jokes he’s repeatedly made about sending “short shorts” to investors who bet against Tesla’s shares, such as hedge fund manager David Einhorn.
Musk, 49, then wrote Thursday that he would send shorts to the SEC, referring to the agency again as the “Shortseller Enrichment Commission.” He first used that phrase in October 2018 after the regulator sued him for securities fraud.
Will send some to the Shortseller Enrichment Commission to comfort them through these difficult times — Elon Musk (@elonmusk) July 2, 2020
Musk then tweeted a cryptic but profane play on the agency’s initials, prompting Ross Gerber, a fund manager who regularly engages with him on Twitter, to write back: “Dangerous.” Musk responded: “But sooo satisfying.”
Musk and the SEC have a combative history. The agency sued him in September 2018 over tweets he sent a month earlier claiming that he had secured funding to take Tesla private at $420 a share. As part of a settlement agreement, Musk was required to pay a $20 million fine, step down as Tesla’s chairman for three years and have some of his tweets pre-approved by a company lawyer.
The SEC took Musk back to court last year after he failed to clear a tweet about Tesla’s production with his in-house counsel. The two sides eventually agreed to amend the earlier settlement to add specific topics the billionaire can’t tweet about or otherwise communicate in writing without advance approval.
Hours after a federal judge signed off on the amended deal in April 2019, then-SEC Commissioner Robert Jackson publicly criticized it, saying in a statement that Musk had not been sufficiently punished for failing to adhere to restrictions on his social media use.
In December 2018, Musk told “60 Minutes” that he did not respect the SEC. A spokesperson for the agency declined to comment on his latest tweets.
Tesla disclosed in February that the SEC sent the company a subpoena regarding “certain financial data and contracts” including “regular financing arrangements.” One analyst speculated the regulator may have been looking into how the company managed to build an assembly plant near Shanghai last year while spending just $1.3 billion on capital expenditures.
A better-than-expected quarterly deliveries report sent Tesla’s shares surging 8% to a record close of $1,208.66 on Thursday. The stock has almost tripled this year.


fortune--2020-07-02--The Wing brought together powerful women. Now some of them are demanding big changes from the compan

The Wing brought together powerful women. Now some of them are demanding big changes from the company

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The Wing raised more than $100 million in venture capital funding, reached a valuation of $200 million, and signed names like Serena Williams and Megan Rapinoe as investors—all on the promise of bringing together powerful women to create something bigger than themselves. That pledge, it turns out, may be company leadership’s downfall.
A coalition of about 750 current and former Wing members, who paid up to $2,700 a year for access to the women’s co-working space with a dozen locations across the country and abroad, convened via Slack last month to discuss the treatment of Black and brown staffers who worked in Wing locations. On Wednesday, a group of 41 of those current and former members sent a letter to the four-year-old startup’s board of directors demanding the resignation of recently ousted CEO Audrey Gelman from the company’s board of directors, the departure of her co-founder Lauren Kassan as chief operating officer, and a complete revamp of the Wing’s way of doing business. (In addition to the 41 signers, the organizers say there is broader support for their missive, noting that they asked anyone who did not support the letter to leave the Slack chat; those 750 remain active in the channel.)
The letter, which organizers shared with Fortune, asks the Wing, currently run by an “Office of the CEO” consisting of Kassan and executives Celestine Maddy and Ashley Peterson, to meet the demands outlined in the letter by July 17. (The author of this article was a member of the Wing between March 2018 and March 2019.)
“We are always happy to have a conversation with our members about how we can reimagine the Wing’s post-COVID future and work together toward our shared goal of creating an inclusive community that lifts up all women,” the Wing said in a statement to Fortune. “We appreciate the passion our members have about the Wing community and hope to be able to constructively work with them.”
The members came together last month after Gelman resigned as chief executive. Weeks earlier the New York Times had published a report that described Wing employees—particularly the Black and brown women who work in hourly front desk, kitchen, and cleaning jobs—as being routinely mistreated by management and members. One former space staffer described in the Times article being treated as “the help” by white members. (In response, a Wing spokesperson told the Times that the company “maintained employment best practices.”) Such behavior would be unacceptable at any company, but the allegations had a special sting at the Wing, which built its brand around the language of feminism and equality. Were the women of color who worked for the company excluded from its professed mission?
‘What the Wing was designed to do’
Gelman’s resignation on June 11—spurred in part by the digital walkout of 67 Wing headquarters staffers—lit a fire under members of the co-working company. “I was embarrassed to be a member,” said Bianca Maxwell, a startup founder who joined the Wing in Boston last year and created the Slack channel for fellow members to congregate and discuss the stories they were hearing about workers’ experiences. “To read stories of what young women had to endure behind the scenes while the rest of us were sitting on pink couches—it was upsetting and made me feel complicit,” she says.
Those pink couches were a hallmark of the Wing’s feminist brand identity, which was on display in everything from its events with leaders like Hillary Clinton to its phone booths emblazoned with the names of fictional heroines (Hermione Granger and Ms. Frizzle) to a trademark phrase highlighted on $17.50 Wing keychains: “Girls doing whatever the f*** they want.”
The Wing members who came together to draft a list of demands for company leadership work across law, communications, journalism, and other fields. “That’s what the Wing was designed to do—connect members of different experiences, different skill sets, and different professional backgrounds,” says Jenina Nuñez, a Chicago PR professional and member involved in the effort.
The same qualities that attracted these women to the Wing—their principles, their ambition, and their desire for community—have spurred the members into action. The signatories say they couldn’t sit idly by while the Wing fell short of what they had been told was its mission. “Me being a young, Black woman who’s a paying member of a space that has harmed who could pretty much be my little sisters—why wouldn’t I advocate for them?” Maxwell says.
The Wing estimates its current membership at 10,000, in which case a coalition of 750 people would represent about 7.5% of total members. It’s clear, however, that not all members are on board with this effort. After Gelman’s resignation and reporting about problems at the Wing, some members posted on the community’s app that they would keep their membership “no matter what,” Maxwell said.
Making demands
In their letter, members make demands about current Wing leadership. Not only do they want Gelman’s resignation from the board, but they demand that she sell her 10% equity stake in the company (“We don’t want to make Audrey richer,” Maxwell says. “I don’t think anyone I worked with would step foot back in the Wing if Audrey was still on the board.”). They also want Gelman’s co-founder Kassan, director of community Frenchie Ferenczi, and Peterson, who is senior vice president of operations, to resign. (The Wing declined to comment on the demands or allegations addressed to specific executives).
The members’ demands go beyond company leadership. The letter also asks that any LGBTQ members or members of color who request refunds be granted them. And because some of the incidents of racism or other disrespectful behavior toward Wing staff—including one high-profile racist incident in West Hollywood in 2019—came from paying members, the signatories want the company to impose an anti-racism code of conduct that all members would be required to follow. (The Wing introduced a new “culture code” last week, including mission statements like, “We are building a legacy that our great-grandchildren will be proud of.”)
The letter signers say they seek to amplify demands already made by staff who worked in Wing spaces, some of whom have shared their experiences through an Instagram account called Flew the Coup. Those demands include closing what they say is a racial pay gap among staffers, improving employee health insurance, providing hiring preference for departed staff as the company reopens and rebuilds, and issuing a public apology. (The Wing says it did apologize to space staffers “for not internalizing our mission of intersectional feminism” in an email sent to members and employees last week. The company declined to comment the allegations of a pay disparity.)
But the members are also looking to the future. They want Gelman’s board seat to be filled by a person of color or an LGBTQ director. They want the next CEO, COO, and VP of People of the Wing to be external candidates—untied to the mess inside the company—and for at least two of those roles to be filled by LGBTQ people or people of color.
The path forward
Ultimately, the letter writers want the Wing to do something they say it has so far failed to accomplish: develop a financial model for how to run a feminist business. Under their proposed model, the highest paid non-exempt salaried employee could not exceed two times the salary of the lowest-paid salaried employee.
This demand gets at the core tension between the Wing’s stated mission and its status as a venture-backed startup. With investors including Kleiner Perkins and Sequoia Capital, Gelman and Kassan sought fast growth and a financial return for their backers. Some of the former staffers said in anonymous testimonials that complaints about their treatment by members or duties outside their job descriptions were ignored while headquarters employees were overwhelmed by demanding launch schedules.
“Capitalism and feminism are strange bedfellows,” says Thy Bui, a Los Angeles Wing member, signatory, and employment litigator who reviewed the letter before it was sent to the company. “[The Wing] isn’t going to be a mass profit machine if they implement the ideas outlined in the letter. … It’s a path that will take a lot of patience.”
The Wing itself acknowledged that same unease in an email sent to members and employees last week. “We need to reinvent the business in a way that reconciles the real tension between intersectional feminism and capitalism,” the company wrote. “We fundamentally believe in the Wing’s mission even if we haven’t yet achieved it.”
The members sent their letter to the company’s board of directors and to investors, who include Sequoia Capital’s Jess Lee, Google Ventures’ Jessica Verilli, Upfront Ventures’ Kara Nortman, and names from Hollywood, sports, and politics including Williams, Rapinoe, Valerie Jarrett, Kerry Washington, and Alex Morgan. Many of these investors, the members speculate, put their money behind the Wing for the same reason members did: they believed in its mission of “professional, civic, social, and economic advancement of women through community.”
They’re hopeful these influential figures will listen and take action. “I would hope they would say, what can we as decision-makers and leaders do to make sure this doesn’t happen again?” says Maxwell. “They can make sure the company is living out its mission statement and isn’t just pink walls and couches.”