fortune--2020-11-10--What if Apple’s new Mac chips are trash?

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Apple’s reputation as a product hitmaker is nonpareil. So much so that it’s easy to forget the big whiffs—and yet the list of misses is long.
Remember those never-released AirPower charging mats? Those battery-preserving iPhone jam-ups? Bendy iPhone 6’s? How about the ill-fated G4 Cube, the Pippin, or the Newton? Or—I shudder even to mention it—Apple Maps?
These ghosts of Macs past haunt me as I gear up to watch Apple’s third virtual product event of the year today. The big reveal, as Aaron discussed yesterday: the first-ever Macintosh computers outfitted with chips of the company’s own make. (You can watch the broadcast, which starts at 1 pm ET, here.)
While forging a path independent of third-party silicon designers, like floundering Intel, could be good for Apple—especially, strategically, in the long term—the short term could have hiccups. This is a big switch, one that may lead to compatibility issues for app-makers and connected devices. Apple’s insistence that there will be “a smooth and seamless transition” to the new CPUs does not assuage my concerns; if anything, it makes me doubt Apple’s overconfidence.
After all, it wasn’t so long ago that redesigned MacBook keyboards ruined people’s lives. (Okay, gadget reviewers may have a penchant for hyperbole.)
I’m not the only one who fears the worst. Daniel Newman, principal analyst at Futurum Research, opines for MarketWatch that Apple’s bold transition could end up benefitting its old rival, Microsoft. The software giant has for a decade been fine-tuning its code to run smoothly on a variety of chips across its own Surface notebooks as well as Samsung- and Lenovo-made varieties.
Microsoft “could be the big winner during this transition for the Mac,” Newsman writes. “With Microsoft Surface continuing to gain momentum for its ultra-high-quality notebooks, Mac faces more competition and will be under pressure to get this right— sooner than later.”
One hopes that Apple has sufficiently prepared for its major overhaul, which involves nothing short of transplanting the very brains of its devices. We’ll just have to wait and see what Apple has in store.
***
In September, McDonald’s reported the best month it’s had in a decade. In this episode of Fortune’s Reinvent podcast, host Beth Kowitt speaks with CEO Chris Kempczinski about how McDonald’s finds itself in a surprisingly good spot in the pandemic, thanks to the premium customers are now placing on speed, efficiency, drive-thru, and delivery. Listen to the episode here.
Robert Hackett
Twitter: @rhhackett
robert.hackett@fortune.com
THREATS
Duel role. The European Commission has charged Amazon with violating antitrust laws. The regulators, led by Europe's digital maven Margrethe Vestager, accuse the ecommerce behemoth of abusing its powerful, dual role as a merchant and marketplace operator. The company should not be allowed to hoover up non-public data from sellers so it can create low-cost, competitive products, the regulators say.
Highway rupee-ry. In addition to its U.S. antitrust lawsuit, Google is facing down an investigation opened by a foreign monopoly-buster, the Competition Commission of India. The Indian watchdog is investigating the usual: Whether the Google Play Store, a.k.a. the Android app store, unfairly favors Google Pay, the company's payments app. Like Apple's App Store, Google skims 30% off in-app payments, a tax that developers despise.
Breaking the bank. Three of the most senior executives at Japanese tech titan SoftBank were removed from the company's board after activist investor Elliott Management called for a shake-up. Departures include Rajeev Misra, head of the $100 billion and once-again-profitable-on-paper Vision Fund, and Marcelo Claure, SoftBank's chief operating officer. Meanwhile, the Vision Fund is thinking about relocating from London to Abu Dhabi, the Financial Times reports.
Piggybank piggyback. Speaking of SoftBank, let's check on some of its investments. The sequel to its Vision Fund—Vision Fund 2—just led a $250 million fundraising round for Tier, a Berlin-based e-scooter startup. Self-driving delivery firm Nuro is getting a $500 million cash injection. And Full Truck Alliance, a Chinese Uber for trucks, is raising $1.7 billion at a $10 billion valuation ahead of an initial public offering planned for next year. (Not so lucky for Ant Group, whose valuation could get slashed by $150 billion after last week's surprise suspension of its IPO...)
Short-form resume. Kevin Mayer, who did a brief stint as the CEO of ByteDance's TikTok after losing the succession race at Disney, has a new gig. He's joining Access Industries, an investment firm founded by Russian-born billionaire Len Blavatnik, as an advisor on media businesses.
This is what I will name my child someday.
ACCESS GRANTED
Virgin Hyperloop completed its first human passenger test in the deserts outside Las Vegas on Sunday. Two people safely rode in the vacuum-tube train at 100 miles per hour. (The hyperloop idea, conceived by Elon Musk and converted into a startup by some engineers, adopted the Virgin brand after British billionaire Richard Branson bought into the venture in 2017.)
Despite the successful test, it's unclear whether the project will ever become a reality of mass-transit. Here's Sara Luchian, Virgin Hyperloop's head of passenger experience, trying to convince the Verge that this crazy idea is not that crazy.
“This is not like some crazy, newfangled science fiction invention... This is something that reminds me of a place that I’ve been and I’ve used many times, that I would feel comfortable putting grandma in and sending her on a visit somewhere.”
FORTUNE RECON
Regulations could speed up, not slow down, A.I. progress by Will Hunt
Conservative social media site Parler shoots to the top of the download charts post-election by Aaron Pressman
Plant-based ‘McPlant’ burger launching at McDonald’s by Beth Kowitt
SoftBank Vision Fund 2 is open for business by Lucinda Shen
Stocks rise on game-changing news: A new President and a possible vaccine by Anne Sraders
Web inventor Tim Berners-Lee’s Solid data-privacy project enters the real world by David Meyer
Infectious disease experts are very excited about the Pfizer and BioNTech vaccine by Katherine Dunn
(Some of these stories require a subscription to access.Thank you for supporting our journalism.)
ONE MORE THING
Stolen possessions once belonging to World War II code-breaker Alan Turing are returning to their rightful place at Dorset's Sherborne School in the UK, where the computing maverick studied as a child. (Oddly, the woman in whose Colorado home the historical items were found in 2018 changed her name from Julie Schwinghamer to Turing in 1988.) British Homeland Security informed the school's archivist that the missing items—including a letter from King George IV, presenting an Order of the British Empire award—would be restored "in due course."
Now that's what I call Turing completeness.


fortune--2020-11-10--Ulta’s plan to open mini shops in 100 Targets could create a new beauty superpower

Parler is the new Twitter for conservatives .
Here ’ s what you need to know

Target and Ulta Beauty announced one of the boldest retail partnerships in ages on Tuesday: The beauty store chain will open small shops inside hundreds of Target locations in the coming years—despite the fact that the two retailers compete in the category and face off at countless strip malls where they cohabitate.
Ulta, the fast-growing beauty products and services retailer, will open 1,000 square-foot shop-in-shops at 100 Target stores next year, with plans for many more. The Ulta shops will sit alongside Target’s existing beauty sections with prominent signage and be staffed by Target employees.
This is not the first time Target has turned to an outside company that is frankly better at something it wants to offer customers: A few years ago, Target got out of the pharmacy business and brought in CVS Pharmacy. Target also bought Shipt a few years ago rather than build its own fast delivery service from scratch.
While Target has a sizable beauty business, it is a crucial area for the retailer to improve upon. Beauty generates store visits, adds to the “fun” part of shopping at Target—and is becoming all the more essential to the retailer as Walmart, CVS, and Walgreens are also improving their beauty offerings.
Target will open hundreds of Ulta Beauty shop-in-shops, the companies announced on Nov. 10, 2020. Courtesy of Target
“Target is still not perceived by many consumers as a specialist player in beauty, and, as such, it has missed out on growth within the more premium part of the market,” Neil Saunders, managing director of GlobalData, wrote in a research note.
The Ulta tie-up should help its bigger rival address that weak spot. An Ulta spokeswoman tells Fortune that the shops will offer 40 brands that Target doesn’t currently carry and will include higher-end products. Ulta will continually rotate the selection to give customers incentives for repeat visits. (The Ulta shops will not offer salon services found at Ulta stores.)
What’s more, having Target staff trained by Ulta will deepen their knowledge of the products at a time getting advice and recommendations is core to beauty shopping.
The partnership also complicates matters for a number of Target’s competitors. By bringing in Ulta shop-in-shops, Target will make strip mall competitor Kohl’s strategy to build up its own small beauty business, a centerpiece of its newly announced multiyear plan, that much harder to pull off. In addition, this could siphon away more customers from J.C. Penney, which houses hundreds of Sephora shops, at a time that department store is emerging from bankruptcy protection as a smaller company.
As for Ulta, which pre-pandemic was one of retail’s hottest stories with net sales almost doubling between 2015 and 2019, teaming up with Target is a way to mine new areas of growth at a time when other expansion opportunities are drying up. The company currently has 1,264 stores and has said it sees room for 1,500 to 1,700 ultimately.
Ulta stands to benefit from diversifying its physical presence: Sales took a big hit earlier in the fiscal year because of the pandemic as stores were closed for weeks, while Target, deemed an essential retailer, stayed open.
There are other benefits to being at Target: Some 30 million shoppers visit its 1,900 stores every week, and the big box retailer has a massive e-commerce operation that could expand Ulta’s brand awareness among new audiences. GlobalData’s Saunders says Target will help Ulta expand its reach among younger shoppers, who tend to gravitate to Sephora, as well as more casual beauty buyers.
Ulta’s shares rose 6%, while Target’s were up a bit, as Wall Street cheered an illustration of how retailers can seek growth by looking beyond the same old playbook.
“This is yet another meaningful example of the creativity the larger brick-and-mortar players are utilizing in their efforts to ensure increased store and website traffic,” said Moody’s vice president Charlie O’Shea.


fortune--2020-11-10--Peloton teams with Beyoncé to produce new workout series

Peloton Interactive announced a multi-year partnership with celebrity Beyonce Knowles to produce a series of workout for its members.
The company is collaborating with Knowles, the most requested artist by Peloton’s global community of more than 3.6 million members, according to a statement.
The partnership will commemorate homecoming season, an annual fall celebration for students at historically Black colleges and universities. Both Peloton and Knowles are also giving away two-year digital memberships to students at 10 of the institutions.
Its shares surged in early trading Tuesday but erased that gain and fell more than 3% as stay-at-home stocks were pummeled for a second day amid news of progress toward a vaccine developed by Pfizer and BioNTech.
Peloton’s shares have benefited this year as COVID-19 lockdown measures globally sent demand surging for its fitness equipment as consumers stayed at home. They are now up about 245% in 2020 after previously climbing more than fourfold.


fortune--2020-11-10--What a Biden-Harris administration means for artificial intelligence

If artificial intelligence researchers and companies were disappointed with President Donald Trump’s A.I. policies, they might be more hopeful about the future of A.I. now that Joe Biden has been elected President.
One of the major sore points with current federal A.I. policy was the amount of funding that the Trump administration has allocated for nonmilitary A.I.-related research. In February, the White House said it would bump non–defense-related A.I. investment to $2 billion annually by 2022, which was seen by some analysts as paltry considering the staggering amount of money that’s needed to produce cutting-edge A.I. research.
Although the Biden administration has not detailed its exact plans for A.I. research, the Democrat’s campaign indicated that it considers general scientific research and development to be crucial to the nation. Biden has proposed to increase the amount of federal R&D spending to $300 billion over four years. Meanwhile, the White House planned to spend $142.2 billion on federal R&D as part of President Trump’s 2021 budget.
The Biden campaign said that “declines in federal R&D spending have contributed to a hollowing out of the American middle class,” and that its proposed investment would benefit “key technologies” like “5G, artificial intelligence, advanced materials, biotechnology, and clean vehicles.”
Echoing sentiments by former Google chief Eric Schmidt, the Biden campaign pointed to China as a major reason the U.S. needs to ramp up technology and science spending, saying that “China is on track to surpass the U.S. in R&D.”
“China’s government is actively investing in research and commercialization across these types of important technology areas, in an effort to overtake American technological primacy and dominate future industries,” the Biden campaign said.
Companies and researchers will have to wait to see how exactly the Biden administration divvies its proposed funding to A.I.-specific initiatives. With so much attention on hot-topic issues like COVID-19, systemic racism, and the economy, both Trump and Biden paid little attention to A.I. as an important area for the nation to focus on during their heated political battles.
Still, previous statements and initiatives give us a window into how the new administration views A.I. and related technologies like facial recognition.
Vice President–elect Kamala Harris has previously called attention to the potential problems of using A.I. in the criminal justice system. Numerous researchers and activists are concerned about facial recognition software’s tendency to work better on white males than women and people of color, and its potential misuse by police departments with a history of racism.
Last December, Harris and other lawmakers like Sen. Cory Booker (D-N.J.) and Sen. Ed Markey (D-Mass.) also called on the U.S. Department of Housing and Urban Development (HUD) to review policies governing the use of facial recognition software in federally assisted housing.
Harris and the other lawmakers were concerned “that the expansion of facial recognition technology in federally assisted housing properties poses risks to marginalized communities, including by opening the door to unchecked government surveillance that could threaten civil rights.”
Of course, Harris has been criticized by activists for her tough-on-crime approach during her stint as a prosecutor that they claim resulted in the over-incarceration of Black people.
But judging by her rhetoric and actions so far, it’s possible the new Biden administration may propose tougher bans on federal use of facial recognition. As for what the Biden administration plans for corporate use of facial recognition, that remains to be seen.
Jonathan Vanian
@JonathanVanian
jonathan.vanian@fortune.com
A.I. IN THE NEWS
Sometimes big data isn’t enough. The Washington Post published a deep dive into the final days of the 2020 presidential election that contains an interesting look into the Trump campaign’s decision to emulate former President Barack Obama’s 2012 campaign and its emphasis on data. The Trump campaign “would invest heavily in data, build a massive volunteer network nationwide, and knock on millions of doors,” the report said.
From the article: “Down the stretch, the Trump campaign placed enormous faith in its massive voter contact and mobilization effort, a project that cost more than $350 million. All campaign events, including the president’s rallies, were used as opportunities to mine for new data and bring people into the political system.”
Clearly, that strategy didn’t quite work out as intended.
What is true? Facebook’s A.I. research group published a paper in August detailing a new way of identifying bad actors that have the potential to spread misinformation, tech publication One Zero reported. Although it’s unclear whether the social network used the technology described in the paper during the recent presidential election, it did reveal some insights like the fact “that some of the company’s existing algorithms built to detect fake behavior were laboriously built by hand,” One Zero noted. From the report: “This new tech can only surface posts or accounts that potentially break Facebook’s rules—but how those rules are enforced and when action is taken is mostly left up to Facebook’s human moderators.”
The Pony express. Pony.ai, a startup specializing in self-driving cars, scored $267 million in funding from lead investor the Ontario Teachers’ Pension Plan Board and others including Fidelity China Special Situations PLC and 5Y Capital. Similar to Alphabet’s Waymo, Pony.ai is developing so-called robotaxi services. With the new investment, Pony.ai said it now has a valuation of over $5.3 billion.
Intel’s A.I. acquisition. Intel has acquired the startup Cnvrg.io, which specializes in data science tools for machine learning practitioners, for an undisclosed sum, TechCrunch reported. The semiconductor giant recently bought another machine-learning software tool company SigOpt. TechCrunch posited that the recent deals make sense for Intel to “provide/invest in AI tools for customers, specifically services to help with the compute loads that they will be running on those chips.”
EYE ON A.I. TALENT
Weta Digital hired Joe Marks to be the digital effects company’s chief technology officer. Marks was the executive director for Carnegie Mellon’s Center for Machine Learning and Health.
Integrity Applications, Inc. picked Shalom Shushan to be the health tech company’s CTO. Shushan was previously the vice president of research and development for Crow Electronic Engineering.
EYE ON A.I. RESEARCH
U Can't Touch This A.I. paper. Researchers from the California Institute of Technology and Purdue University published a paper about using deep learning to solve several kinds of partial differential equations. As MIT Tech Review explained, these partial differential equations are “used to model everything from planetary orbits to plate tectonics to the air turbulence that disturbs a flight, which in turn allows us to do practical things like predict seismic activity and design safe planes.”
The paper’s authors explained the usefulness of using A.I. to solve these kinds of equations more quickly than existing methods, saying “Machine learning methods hold the key to revolutionizing many scientific disciplines by providing fast solvers that approximate traditional ones.”
And it’s not only A.I. researchers who seem excited about the paper. MC Hammer, known for the 1990’s hit "U Can't Touch This," tweeted about the paper, MIT Tech Review noted.
FORTUNE ON A.I.
U.K. to use A.I. to spot dangerous side effects in the millions of COVID-19 vaccinations it will deliver—By Jeremy Kahn
California just passed tougher privacy rules that may reverberate nationwide—By Jonathan Vanian
How A.I. and advanced tech are being used to stop the spread of COVID-19—By Brett Haensel
U.S. visas for Chinese students have all but dried up—By Naomi Xu Elegant
Massachusetts expands ‘right to repair’ law for automakers—By Robert Hackett
3 key takeaways from Uber’s latest pandemic-impacted quarter—By Danielle Abril
BRAIN FOOD
On ethics, transparency, and hype in A.I. Although researchers are excited about A.I.’s potential to improve health care, the technology’s so-called black box systems “raises ethical issues that are paramount and fundamental in order to avoid harming patients, creating liability for health care providers, and undermining public trust in these technologies,” Grant Thornton Public Sector director of health and health informatics Satish Gattadahalli wrote in an opinion piece published by STAT News.
Gattadahalli outlines some steps health care firms and researchers can do to improve A.I.’s transparency problems, including establishing digital ethics committees, subjecting algorithms to peer review, and testing the A.I. systems in “controlled experiments that are blinded and randomized.”
And it’s not just the health care industry that faces these ethical dilemmas posed by A.I. systems.
Fortune’s David Morris probed some of the concerns researchers have about Tesla’s“Full Self-Driving” features for its automobiles. There are concerns that describing Tesla’s technology as “full self-driving” overhypes the software’s capabilities.
From the article:
By industry standards, Tesla's system is considered an advanced driver assistance system, or ADAS, and not autonomous driving technology. There is hope that ADAS systems will increase road safety overall. But there is also concern that if drivers place too much faith in assistive technology, they may become inattentive, undermining those safety benefits.
EAR ON A.I.
This week on Fortune's Brainstorm podcast, we explore the technology that's helping fight COVID-19.
Brian O'Keefe speaks with Nvidia's VP and General Manager of Healthcare. The company's A.I. platforms are driving not only the search for a vaccine, but also developing therapeutics, COVID-19 testing, and more.
Then, Michal Lev-Ram points out that even once a vaccine is discovered, governments have to figure out the logistics of distribution. Lev-Ram speaks with Qualtrics President Zig Serafin about these problems. Listen to the episode here.


fortune--2020-11-10--No, VF isn’t the death knell for Supreme

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You know Supreme. It’s the streetwear brand that’s gained a cult following.
On Monday, 121-year-old apparel maker VF Corp. announced plans to acquire the business for $2.1 billion in cash—triggering questions about whether this was the start of the end for the brand.
Founded in 1994 as a skateboard shop, Supreme is something of a marvel: It caught on to a wave of interest in streetwear, and managed to appeal to both mid-market and luxury shoppers by creating a sense of scarcity. Customers seeking its limited releases of sneakers or shirts are known for lining up around blocks at its 12 stores.
So can VF keep up or is this an ill-fated acquisition? Well, VF’s past track record has actually been pretty good, per my colleague Phil Wahba. VF’s portfolio also includes the likes of sneakers brand Vans as well as The North Face and Timberland.
“VF’s secret sauce with acquisitions has long been to keep brands’ management and identity separate from other labels in its portfolio rather than chase illusory synergies,” Phil writes.
“In addition, at a time when many top brands are eschewing the wholesale channel in favor of their own stores and website, Supreme gets more than 60% of its revenue by selling directly to customers, a key M&A criteria for VF in recent years and something VF wants to see its other brands do more of too.”
Read more.
THE FUTURE OF STAY-AT-HOME COMPANIES: Yesterday, the markets turned on its head when Pfizer said its coronavirus vaccine was 90% effective based on early data. So-called stay-at-home stocks like Zoom and Snowflake took a dip as the possibility of returning to normal arose.
So what happens to companies that have raised large amounts amid a surge in the stay-at-home trend? The question really comes down to which trends have staying power.
Here’s a notable round announced Tuesday, meaning the deal likely came together before Pfizer’s announcement: Hopin, a virtual events provider (that Fortune also uses), raised $125 million in Series B funding. IVP led the round and was joined by investors including Tiger Global, Coatue, DFJ Growth, Accel, Northzone, Salesforce Ventures, and Seedcamp.
The company says it’s experienced massive growth since the start of the pandemic, going from 5,000 registered users to 3.5 million users in the past eight months.
While I am feeling the fatigue of virtual-only conferences, its investors are betting that events in a post-pandemic world will have a hybrid model.
“Virtual events are here to stay. They often are better attended, have higher-quality speakers, and drive more efficient attendee networking,” says IVP General Partner Jules Maltz via email.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Nuro, a Mountainview, Calif.-based autonomous vehicle company, raised $500 million in funding. T. Rowe Price led the round and was joined by investors including Fidelity Management & Research Company, LLC, Baillie Gifford, SoftBank, and Greylock Partners.
- TIER, a European scooter company, raised $250 million in Series C funding. SoftBank Vision Fund 2 led and was joined by investors including Mubadala Capital, Northzone, Goodwater Capital, White Star Capital, Novator, and RTP Global.
- Better.com, a New York-based mortgage lender, raised $200 million in Series D funding. L Catterton led the round that values the firm at at $4 billion, per Bloomberg citing sources. Read more.
- Ambrx, a San Diego, Calif.-based clinical-stage biopharmaceutical company focused on developing protein therapeutics, raised $200 million in crossover financing. Investors including Fidelity Management & Research Company, BlackRock, Cormorant Asset Management, HBM Healthcare Investments, Invus, Adage Capital Partners and Suvretta Capital Management.
- Prometheus Biosciences, a San Diego, Calif.-based biotechnology company focused on gastrointestinal issues, raised $130 million. Eventide Asset Management and RTW Investments led the round and was joined by investors including Perceptive Advisors, Cormorant Capital, Cowen Healthcare Investments, Point72 Asset Management and Irving Investors.
- Scale AI, a San Francisco-based startup that helps train A.I. systems, has received investment offers from Tiger Global Management that could value it at above $3 billion valuation. Read more.
- Adagio Therapeutics, a Waltham, Mass.-based developer of antibodies for COVID, raised $80 million in Series B funding. GV led the round and was joined by investors including Polaris Partners, Mithril Capital, Fidelity Management & Research Company, and OrbiMed.
- Xpressbees, an India-based logistics firm, raised $110 million in Series E funding. Investors included Investcorp, Norwest Venture Partners and Gaja Capital. Read more.
- Decibel Therapeutics, a developer of treatments for hearing loss disorders, raised $82.2 million in Series D funding. OrbiMed led the round and was joined by investors including BlackRock Health Sciences, Janus Henderson, Casdin Capital and Surveyor Capital.
- JumpCloud, a Denver-based cloud-based user management model, raised $75 million in Series E funding. BlackRock led the round and was joined by investors including General Atlantic.
- Venminder, an Elizabethtown, Ky.-based risk management solution, raised $33 million in Series C funding. Silversmith Capital Partners led the round and was joined by investors including Bain Capital Ventures and MissionOG.
- Cellwize Wireless Technologies, a Dallas-Texas-based mobile network automation and orchestration company, raised $32 million in Series B funding. Intel Capital and Qualcomm Ventures led the round and were joined by Verizon Ventures and Samsung Next.
- Falkbuilt, a Calgary, Canada-based maker of interior design tech, will raise as much as C$20 million ($15.3 million) in Series A funding, subject to hitting certain milestones. RET Ventures led the round.
- Lightico, a London-based customer experience platform, raised $12.6 million. Oxx led the round and was joined by investors including Capital One Ventures and Harmony Partners.
- Tailscale, a Toronto-based corporate VPN for remote teams, raised $12 million in Series A funding. Accel led the round and was joined by investors including Heavybit and Uncork Capital.
- KINETIC, a maker of wearable technology for safety in industrial workforces, raised $11.3 million in Series A funding. Primary Ventures and Crosslink Capital led the round.
- Maestro, a New York-based private equity tech platform, raised $7.2 million in Series A funding by S&P Global Market Intelligence.
- Local Logic, a Montreal-based location intelligence platform for for homebuyers, real estate professionals, and developers, raised about C$7 million ($5.4 million) in funding. GroundBreak Ventures led the round and was joined by investors including Shadow Ventures, BDC Capital, Jones Boys Ventures, Cycle Capital, and Desjardins Capital.
PRIVATE EQUITY
- TPG and TA Associates are in advanced talks to acquire Planview, an Austin-based software maker, from Thoma Bravo for more than $1.5 billion including debt, per Bloomberg. Read more.
- TPG Capital and Canada Pension Plan Investment Board agreed to invest $500 million more in Viking Cruises, a Los Angeles-based provider cruises.
- Bain Capital Tech Opportunities acquired and merged HST Pathways and Casetabs, two Lafayette, Calif., and Boston, Mass.-based providers of cloud-based practice management software for ambulatory surgery centers. Nexxus Holdings also invested. Financial terms weren't disclosed.
- Battery Ventures made a majority investment in StoneEagle F&I, a Richardson, Texas-based provider in the automotive industry. Financial terms weren't disclosed.
- Cinven and GIC agreed to acquire Miller, an U.K.-based insurer, from Willis Towers Watson. Financial terms weren't disclosed.
- Discovery Life Sciences, backed by Water Street, acquired East West Biopharma, a Ukraine-based human biospecimen contract research organization. Financial terms weren't disclosed.
- Eurazeo Brands invested €56 million to become a majority shareholder in Axel Arigato, a Swedish premium sneaker, ready-to-wear and accessories brand. Financial terms weren't disclosed.
- insightsoftware, backed by TA Associates, Genstar Capital and ST6 Partners, agreed to acquire IDL Group, a Germany-based financial close and consolidation software maker. Financial terms weren't disclosed.
- Periscope Equity invested in MobiChord, a Salt Lake City, Ut.-based software platform automating the management of technology expenses, assets, and services with digital workflows. Financial terms weren't disclosed.
- Vance Street Capital acquired Wytech Industries, a Rahway, N.J.-based manufacturer of specialty core wires and related components for the interventional medical markets. Financial terms weren't disclosed.
- Varsity Healthcare Partners invested in Partners First Cardiology, an Austin-based cardiology and cardiovascular physician practice management company. Financial terms weren't disclosed.
- Web.com Group, backed by Siris Capital, acquired Freeparking, a New Zealand-based domain name registrar and web hosting provider. Financial terms weren't disclosed.
EXITS
- SoftBank Group is in talks to sell Boston Dynamics, the robotics company, to Hyundai Motor, per Bloomberg citing sources. A deal could value the firm at $1 billion. Read more.
- Adobe (Nasdaq: ABDE) agreed to acquire Workfront, a Lehi, Ut.-based work management platform for marketers, for $1.5 billion.
- 3i Group agreed to acquire MPM Products, a U.K.-based provider of natural pet food, from ECI Partners. Financial terms weren't disclosed.
- Blackstone has agreed to acquire Therma, a San Jose, Calif.-based provider of energy efficiency services, from Gemspring Capital. Blackstone also acquired RE Tech Advisors, an energy and sustainability consulting firm, to be combined with Therma. Financial terms weren't disclosed.
OTHERS
- NextEra Energy, the world’s largest producer of wind and solar energy, offered to acquire Evergy, a U.S.-based utility company, for $15 billion in stock, per Reuters. Read more.
- 40 North offered to takeover W.R. Grace & Co., a Columbia, Md.-based supplier of catalysts to refineries, for $4 billion. 40 North is already its largest shareholder. Read more.
- Lowe's Cos (NYSE: LOW) says it is not in talks to acquire HD Supply Holdings (Nasdaq: HDS), a construction materials supplier, denying reports from Bloomberg. Read more.
- Perspecta (NYSE: PRSP), a provider of information technology services, is weighing a potential sale, per Bloomberg. Read more.
- Orange (PA:ORAN) agreed to buy a 54% stake in Telekom Romania Communications, a telecom provider in Romania, from Deutsche Telekom's OTE, valuing the firm at €497 million. Read more.
- Entercom Communications (NYSE: ETM) acquired QL Gaming Group, a sports data and iGaming affiliate platform, for $32 million. Karlani Capital and Boston Seed Capital back QL, per PitchBook.
IPO
- Enthusiast Gaming Holdings, a Toronto-based e-sports firm, plans to list on the Nasdaq.
SPAC
- CBRE Acquisition Holdings, founded by commercial real estate company CBRE, filed to raise $400 million in an initial public offering.
- TS Innovation Acquisitions, formed by Tishman Speyer, raised $300 million.
F+FS
- Sumeru Equity Partners closed Sumeru Equity Partners Fund III with $720 million in total capital commitments.
- Red Dot Capital Partners, raised nearly $200 million, per Bloomberg. Read more.


fortune--2020-11-10--How Bed Bath & Beyond’s CEO tamed its trademark coupons—and turned the retailer around

Coupons are as synonymous with Bed Bath & Beyond as foot-long receipts are with CVS pharmacy and Kohl’s Cash with that retailer.
But Bed Bath & Beyond has begun to rein in its addiction to giving shoppers coupons—and their addiction to getting them—as a centerpiece of CEO Mark Tritton’s efforts in his first year at the helm to restore the long beloved but troubled home goods retailer to glory. That’s not to say Bed Bath & Beyond is done with coupons. But Tritton is done with giving shoppers discounts that fail to gin up sales—perhaps because customers don’t really want them: Nearly half of all coupons go unused.
“We overflooded the market with coupons,” Tritton tells Fortune. What’s more, their overuse has muddled people’s sense of what Bed Bath & Beyond’s goods cost and are worth. He adds, “Customers don’t want to need a math degree to work out what value looks like.”
The move, announced at Bed Bath & Beyond’s analyst day last month, is just one of a number of radical steps taken by the CEO since he took the reins a year ago Wednesday. So far so good: In its most recent quarter, the 49-year-old retailer reported a surprise increase in comparable sales, its first since 2016. The stock, while worth only about a quarter of its all-time high in 2013, has risen sixfold since plumbing all-time lows back in March.
Tritton, an Australian native, has wasted no time in his first year as CEO: He quickly purged his C-suite last year and sold off a bunch of businesses that brought about $2 billion a year in sales but hurt the overall bottom line, reducing the company’s heavy debt load significantly in the process. What’s more, he has overhauled Bed Bath & Beyond’s antiquated e-commerce and announced he would close 200 stores, or about a quarter of the $7-billion-a-year chain’s fleet, and renovate 450 others. (The company also owns the billion-dollar Buy Buy Baby chain as well as Harmon Face Values.)
Next up for 2021: The Target alum plans to start 10 new store brands from scratch and vastly expand Bed Bath & Beyond’s assortment of inexpensive products.
If Tritton, a first-time CEO, is acting decisively, it’s because he has seen what dillydallying has done to rivals, like the defunct Pier 1 Imports, and was starting to do to Bed Bath & Beyond. The retailer had reported three years in a row of declining sales and net losses in the last two. Meanwhile, its strip center neighbors TJX’s HomeGoods chain and his alma mater, Target, have won a ton of market share. As Telsey Advisory Group analyst Cristina Fernández put it in a research note last week: “Competition in home remains intense, and Bed Bath & Beyond’s progress won’t be linear.”
The coronavirus has led to a boom in home spending, giving Bed Bath & Beyond the chance to reinvent itself—a chance that CEO Mark Tritton is determined not to waste. Courtesy of Bed Bath & Beyond
“They likely would have been roadkill,” says Charles Lemonides, founder of ValueWorks, a hedge fund that has held the stock since 2017.
Despite years of substandard merchandise assortments, poorly maintained stores, and a slow, subpar e-commerce site, Bed Bath & Beyond held a special place in many shoppers’ hearts: Countless Americans have set up a wedding registry there or decorated their first home with its bedding and chairs.
“There was great customer love, there was loyalty; we were just squandering it,” Tritton says.
Clearing the deadwood
Before leaving for Bed Bath & Beyond, Tritton had been enjoying a stellar run at Target as the discount giant’s chief merchant. He had junked many of Target’s big but stale brands and launched 30 new store brands in 30 months in areas like home goods and apparel, some of which became billion-dollar businesses in their first year. Before that, he had overseen Nordstrom’s store-brand business to great success.
But fixing his new company and its manifold problems would force the rookie CEO to go beyond his core strengths. “Clearing away that clutter was a completely different skill set than curating good product,” says Lemonides.
So Tritton had to bolster management. In a move that stunned many retail experts, just days before Christmas 2019 and just weeks into the job, Tritton sent six members of his C-suite packing. “They were expensive, and they were ineffective, so it wasn’t a hard decision,” he says.
Working with headhunters, he set about building his own team, poaching people from his alma maters Target and Nordstrom, as well as from retailers such as Gap, Dick’s Sporting Goods, Walmart, and Amazon. “I told recruiters, ‘I want the Avengers of retail,’ and I got them.”
In his first year, he proceeded to do the painful work of slimming down the company with reorganizations that eliminated thousands of jobs. He sold off the Christmas Tree Shops chain and other smaller businesses. The result will be a smaller, and he hopes, more profitable company.
But any turnaround offers low-hanging fruit in its initial stages. The tough part is poising a business to return to growth, rather than managing a slow decline. (Hello, department stores.) And here, Tritton again tapped into his own experience at Target.
He is planning to launch 10 new Bed Bath & Beyond store brands in the next three years, with the first one coming in the spring. Tritton wants store brands to hit 30% of sales in a few years, up from 10% now. And much of that will focus on lower-cost items, the better to recruit shoppers earlier and keep them as they graduate from life stage to life stage. “Customers used to go for big life events and then nothing until the next big life event,” says Lemonides. Some 35% of purchases at the retailer include only one item or items in one category, so the upside is enormous if Bed Bed & Beyond does this well.
At the same time, Bed Bath & Beyond has been faulted by customers and analysts alike for trying to be all things to all people buying home goods. So Tritton is trimming the number of individual items by 30% to avoid the so-called tyranny of choice. “How many potato peelers do you need?” he quips. What’s more, a smaller assortment makes inventory management less unwieldy and will help the retailer tame a persistent problem: out-of-stocks.
Stores overflowing with merchandise and selection were the way retailers conveyed opulence and leadership in the 1980s and 1990s, and Tritton says Bed Bath & Beyond never quite moved on from that mindset. “If you had masses of product, you were the authority.” Today, if shoppers want endless selection, they can go online to Amazon or Wayfair, which said on Tuesday its third-quarter sales rose 67%, a reminder of the formidable competition in the space.
That’s not to say online is an afterthought for Tritton. Bed Bath & Beyond’s e-commerce has roughly doubled this year and is on pace to hit $3 billion, thanks to quickly setting up curbside pickup and improving what had been a primitive in-store service for online orders to capitalize on strong pandemic-driven demand. And the company has also improved its site with faster load times and easier search.
In the current retail landscape, authority comes from having a clear point of view and sensibility and offering customers “curation.” Says Tritton, “When you show that to customers with authority, clarity, and affordability, they trust you.”
And that goes a much longer way than endless coupons ever could.


fortune--2020-11-10--The 5 women on Joe Biden’s coronavirus task force

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! A little-known Trump appointee controls some parts of the presidential transition, IMF chief economist Gita Gopinath gets a Vogue India cover, and the Biden-Harris administration starts to take shape. Have a restful Tuesday.
– The 5 women advising Biden on COVID. U.S. President-elect Joe Biden has vowed to seek a Cabinet that “looks like America.” And just days after he won the 2020 presidential contest, we’re getting an idea of who might be among his top advisors.
Yesterday, Biden announced his coronavirus task force, and the makeup of the 13-member group mostly meets the President-elect’s diversity pledge. As Fortune‘s Maria Aspan reports, 69% of the doctors and health experts named as advisors are Black, Latinx, Asian, or from other underrepresented groups. Thirty-eight percent are female. Marcella Nunez-Smith, the associate dean for health equity research at the Yale School of Medicine and a doctor who’s focused on structural inequities in health and health care, is one of the task force’s co-chairs. The other four women are: Luciana Borio, a doctor, VP of In-Q-Tel, and senior fellow for global health at the Council on Foreign Relations; Celine Gounder, a clinical assistant professor at the NYU Grossman School of Medicine and a doctor at Bellevue Hospital Center; Julie Morita, a doctor who’s EVP of the Robert Wood Johnson Foundation, and Loyce Pace, the executive director and president of the Global Health Council.
Including perspectives from people of color and women—which should be a given!—is critical since the pandemic has disproportionately hurt members of the two groups, from a public health standpoint and economically. The announcement itself acknowledged the unequal fallout of the virus, stating that addressing the pandemic’s “ongoing racial and ethnic disparities” was one of the group’s priorities.
Beyond the task force, there’s plenty of speculation about whom Biden will pick to lead top federal agencies. One of the most-watched Cabinet positions is Treasury secretary, and Emma has a story on an early frontrunner: Lael Brainard.
Now a Fed governor, Brainard previously served the Obama administration as under secretary of the Treasury and worked for the Clinton White House as an economic advisor. She’s considered a moderate pick, at least compared to more progressive contenders, and favors keeping rates low, Emma reports. If she winds up in the job, she’ll represent another first for the Biden administration; a woman has never led the Treasury before.
Meanwhile, a Trump appointee is likely getting more attention that she bargained for. Emily Murphy, administrator of the General Services Administration, has the little-known role of formally starting the transition between U.S. presidents; it’s an acknowledgement by the federal government that the election has a winner. The action—which usually takes place just hours after a winner is determined—is not just symbolic; it releases resources and information to the incoming administration so it can seamlessly assume power. Murphy, known as by-the-book and well-qualified, has not yet triggered the transition, an obvious nod to President Donald Trump’s refusal to concede. A spokeswoman for the GSA told the Washington Post that Murphy will act when a winner is “ascertain[ed].”
Claire Zillman
claire.zillman@fortune.com
@clairezillman
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Transition task force. Another forthcoming Biden transition team project is a task force on online abuse. The group will focus on the connection between online threats and stalking, and real-world consequences like extremism and violence against women. Fortune
- IMF gets glam. International Monetary Fund chief economist Gita Gopinath gets the glossy magazine treatment in Vogue India. Gopinath discusses everything from the globe's economic outlook to the moment she learned she had the job to her fashion choices. Vogue India
- On par. Athlete Michelle Wie West is figuring out her next act—whether that's returning to golf or dipping her toe into startup investing. The new mom talks about giving birth amid the pandemic, how injury and motherhood changed how she thinks about her body, and her future in the sport: Fortune
- In command. Congratulations are in order for Midshipman 1st Class Sydney Barber, who yesterday became the first Black female brigade commander in the U.S. Naval Academy's 175-year history. In the highest leadership position within the student body, she'll oversee the day-to-day activities and professional training of her 4,400 peers. Washington Post
MOVERS AND SHAKERS: Rental marketplace Zumper promoted SVP of sales Natalie Cariola to chief sales officer and head of people Tina Sy to VP of people operations.
IN CASE YOU MISSED IT
- Electoral challenge. Aaron Coleman's race for a statehouse seat in Kansas drew a lot of attention after he was accused of—and admitted to—participating in cyber exploitation, or revenge porn, of teen girls. The Democrat won the seat—and now the state's party leaders are trying to ensure he doesn't end up in the legislature. New York Times
- Keeping going. Michelle Mitchell, chief executive of Cancer Research U.K., talks about how she steered the organization through a £160 million drop in income during the coronavirus pandemic. Mitchell has chosen layoffs and salary reductions alongside continued support for families experiencing cancer. Financial Times
- Boss v. boss. In Hamilton County, Ohio, Charmaine McGuffey lost her job in the sheriff's department three years ago after speaking out against excessive force; she also says she was fired for being gay. This year, she ran against her former boss for the sheriff's seat—and won. (The outgoing sheriff Jim Neil says he fired McGuffey for creating a hostile work environment.) NBC News
ON MY RADAR
Oprah's Favorite Things 2020 support Black-owned businesses O Magazine
You can now listen to Blue Ivy Carter adorably narrate Matthew A. Cherry's beloved book, Hair Love Harper's Bazaar
The Trump presidency is ending. So is Maggie Haberman’s wild ride New York Times
PARTING WORDS
"There was a part of me that wanted to give up and quit. But this other part of me was like, this is why you’re here. It’s supposed to be hard."
-Rock climber Emily Harrington, who last week became the first woman and fourth person to free climb the Golden Gate route on Yosemite National Park’s 3,000-foot granite wall


fortune--2020-11-10--Uber to give users a $50 credit if their scheduled rides don’t show up

Uber customers whose scheduled rides are late will get a consolation prize: a $50 credit.
The sweetener is part of Uber Reserve, the latest evolution of Uber’s scheduled ride program. It lets passengers arrange a ride up to a month in advance, with an on-time guarantee.
“What we wanted to do was make a statement that says…we’re willing to put our money where our mouth is,” said Geoff Tam-Scott, Uber product manager. “We wanted the amount to be noteworthy. We wanted people to say, ‘Hey, this is pretty serious.’”
Uber Reserve is available for Uber’s luxury vehicle service, Uber Black and Uber Black SUV, in 21 U.S. cities, including Dallas, New York City, Miami, Washington, D.C., and Seattle. It costs on average $8 to $12 per reservation, depending on the location.
Later this year, Uber plans to expand the program to its core Uber X ride-hailing service, in addition to its economy SUV service, Uber XL, and the roomier-ride option, Uber Comfort. More cities may also be added.
Customers who schedule a ride now get a 15-minute grace period to meet their ride. But if drivers are even a minute late, passengers get a credit in their Uber account that they can spend on future rides.
The overhauled reservation system comes as Uber struggles to attract customers back to its ride-hailing service. It also debuts as people are hesitant to take mass transit because of fears of catching the virus on overcrowded buses and trains.
While Uber Reserve aims to help riders plan ahead, it also could cost them if they fail to cancel their rides early enough. Any cancellations must be made an hour before a scheduled ride, or customers will be charged the full fare.
Tam-Scott said the new scheduled-ride feature was already being developed when the coronavirus hit and that its release was then accelerated.
“It turns out there’s a very big need for this,” Tam-Scott said.


fortune--2020-11-10--China approved early distribution of a COVID vaccine to tens of thousands. Now there are safety conc

China approved early distribution of a COVID vaccine to tens of thousands. Now there are safety concerns

On the same day that Pfizer and BioNTech released blockbuster results from the Phase III trial of their COVID-19 vaccine, Brazil threw a wrench into the plans of one of China’s most promising coronavirus vaccine candidates.
Brazilian health regulator Anvisa announced on Monday that it had suspended the Phase III clinical trial of a COVID-19 vaccine made by Sinovac, a Chinese pharmaceutical company. Anvisa said it had discovered that a participant in Sinovac’s trial had experienced a “severe adverse event” and that Sinovac’s trial would be delayed as it investigated the case. Anvisa did not provide additional details about the patient and did not explain why it announced the suspension more than a week after it became aware of the problem.
A spokesman for Sinovac told Fortune that after communicating with the Butantan Institute, its partner in Brazil, Sinovac does not believe the “serious adverse event” was related to its vaccine. “We are confident in the safety of the vaccine,” the spokesman said.
On Monday night, Dimas Covas, the director of the Butantan Institute, suggested that he disagreed with the government’s decision to suspend the trials. He said that a volunteer in the trials had died but not because of Sinovac’s vaccine.
“We found this Anvisa decision strange, because it is unrelated to the vaccine,” Covas told a Brazilian news channel.
The Monday announcement by Anvisa marks the first time a Chinese vaccine maker has been forced to delay the trial of a COVID-19 vaccine. Other COVID-19 vaccine makers have had to pause their Phase III trials because of unexplained health issues among participants. British pharmaceutical firm AstraZeneca and U.S. drug giant Johnson & Johnson experienced trial delays, but both companies have since resumed the tests.
But unlike AstraZeneca and Johnson & Johnson, Sinovac has already inoculated tens of thousands of people outside of clinical trials through China’s controversial emergency use program. Sinovac’s trial delay raises the prospect that China has been inoculating its citizens with a potentially unsafe vaccine and showcases the dangers of attempting to bulldoze traditional vaccine approval processes.
Process perils
Chinese vaccine makers either lead, or are involved in, five of the 11 vaccine efforts that have reached Phase III trials. Combined, they’re testing their candidates in hundreds of thousands of volunteers in over a dozen countries around the world.
Phase III trials are designed to evaluate a vaccine’s effectiveness and safety on a large scale. Each trial requires tens of thousands of volunteers so there’s a better likelihood of turning up rare side effects.
But beyond standard vaccine testing, at least three Chinese vaccine makers are involved in China’s emergency use vaccine program, which has allowed participating vaccine makers to inoculate hundreds of thousands of Chinese citizens—if not more—outside the bounds of clinical trials and before the candidates are proven safe and effective.
China’s government has not disclosed how many COVID-19 vaccine doses it has distributed through the emergency use program, but vaccine makers and local governments have released some limited data. State-owned vaccine maker Sinopharm reportedly distributed over 480,000 doses of its candidate in China as of mid-October; that total may include doses that were part of a clinical trial. China’s eastern Zhejiang province, meanwhile, also said in October that it had administered 743,000 flu and coronavirus shots in 2020 without providing further details on how many of the shots were for COVID-19 or which COVID-19 vaccine candidate it used.
In August, China allowed Sinovac to distribute the CoronaVac candidate to frontline medical workers, government employees, and other essential workers in China through the emergency use program.
By September, the company confirmed that it had inoculated tens of thousands of people through the program, including 3,000 company employees, plus their families.
News reports indicate that Sinovac may already be widely distributing its vaccine across China. In October, Jiaxing, a city in eastern China, announced that it was selling the Sinovac vaccine to government workers and high-risk residents for roughly $60.
If the Brazil investigation reveals that Sinovac’s vaccine is potentially unsafe, the tens of thousands of people who have received the vaccine may have been put at unnecessary risk. Such risks are why scientists have been skeptical of China’s emergency use program for COVID-19 vaccines from the start.
“Claims of having a vaccine ready to distribute before you do testing, I think, is problematic, at best,” Anthony Fauci, director of the U.S.’s National Institute of Allergy and Infectious Diseases, said in July.
Brazil’s Butantan Institute, a scientific research center that is partnering with Sinovac on the vaccine trials, said it will hold a press conference about the trial suspension on Tuesday morning in Brazil.
Battles in Brazil
Even before the trial pause, Sinovac COVID-19 vaccine candidate had become a flashpoint in Brazil.
The Butantan Institute and Sinovac started enrolling 9,000 Brazilian volunteers in Phase III trials in July. In late September, Brazil’s São Paulo state purchased 46 million doses of CoronaVac for $90 million and asked Brazilian health authorities to register the candidate for potential distribution.
In October, João Doria, governor of São Paulo, said CoronaVac was the “safest” and “most promising” of all the vaccine candidates tested in the country. (Brazil has also hosted Phase III trials for Pfizer and BioNTech’s vaccine candidate.)
Brazilian President Jair Bolsonaro took issue with Doria’s remarks and said Brazil would not purchase Sinovac’s or any other Chinese vaccine because of the country of “origin.” Even so, later in October, Brazilian authorities approved the import of 6 million doses of Sinovac’s vaccine candidate.
Before news of Sinovac’s trial delay, Doria announced on Monday that São Paulo is building a facility to produce 100 million doses of Sinovac’s candidate.


fortune--2020-11-11--Denmark’s mink-cull law is dead—but it’s still too late for the millions sent to slaughter

At least 10 million Danish mink have already been slaughtered, after farmers acted on a government order that has since been retracted because it broke the law.
The fate of the animals, some of which were killed in such haste that there were eye-witness reportsof thousands of mink carcasses strewn across a public motorway, provides a graphic reminder of the real-world consequences of a string of political missteps in Denmark that could have global consequences.
The country is grappling with a new mutation of the coronavirus found in its mink population. Prime Minister Mette Frederiksen says the variant has the potential to derail efforts to develop a Covid vaccine. The only option left to Denmark, she says, is to cull its entire mink population of roughly 17 million animals.
Denmark’s fur breeders’ association estimates that two-thirds of that population are now dead.
“It’s a terrible and difficult situation, with the industry being shut down in a single blow,” said Tage Pedersen, the chairman of the group. “There’s no way back…even if a few farmers somehow survive, there’s still no future. We can only survive if we have a large, robust business.”
Political Fight
Frederiksen’s handling of the crisis has drawn condemnation from a united parliament after mink farmers were ordered to cull their herds, including healthy animals. Frederiksen’s government has said it didn’t know the order required new legislation. An emergency bill needing a three-quarters majority has since failed, and the legislative process is now in limbo.
For the country’s mink farmers, the damage already done is so great that many wonder whether the industry will survive. What’s more, Frederiksen’s government, which still expects a standard bill to pass with more than 50%, wants all Danish mink farming to be banned until 2022. That means breeding animals will be wiped out, effectively shuttering the industry.
As Denmark gets dragged into a domestic political battle, scientists worry that the risk that mink mutations pose is misunderstood.
The arrival of Covid-19 in Denmark was a clear “game changer” for its mink farmers, Kare Molbak, the country’s top epidemiologist, told newspaper Politiken. Maintaining the industry now “represents far too high a national health risk,” he said.
“Mink are very easily infected by the coronavirus, and once it’s there, it spreads at the speed of light,” he said. “We’ve seen how that then spreads to humans. That makes it practically impossible to handle the spread during a pandemic.”


fortune--2020-11-11--It’s time to prioritize caregiving, America

Millions of Americans are facing an impossible choice right now: providing for their families or forgoing their paychecks to take care of a loved one. This decision, more often than not, falls upon women, as they represent 61% of caregivers in the United States. In September alone, 865,000 women left the workforce entirely, in comparison with 216,000 men who did the same. And for the women—especially women of color—who’ve been hit hard as joblessness skyrocketed, their responsibilities at home have only made it more difficult to find work.
Amid simultaneous public health and economic crises, the need to create long-term solutions that support caregivers and their families is urgent.
In the earliest weeks of the pandemic, Congress passed the Families First Coronavirus Response Act to temporarily extend paid leave benefits to those needing to care for themselves or their families during this health crisis. Next, the CARES Act was signed into law, giving direct relief to families and businesses, expanding unemployment benefits, and adding some much-needed capital to the economy. As important as these pieces of legislation were, they offered only short-term solutions. As we navigate our new normal, families will continue to face difficult choices between their work and their families.
Where does this leave us? With a need for private and public partners to take decisive action, create long-term solutions, and safeguard families for both the present and the future.
First, Congress must pass another stimulus bill to bring additional financial relief to American families and businesses and provide more unemployment support. This will offer immediate assistance, but it needs to be coupled with long-term solutions. In that regard, the private sector offers a model that can help lawmakers address this challenge.
For years, life insurers have supported initiatives to expand access to paid medical leave in the private sector. Policymakers in California, Connecticut, Massachusetts, New Jersey, New York, Oregon, and Washington recognized the value life insurers bring in protecting workers’ incomes through private disability income insurance and incorporated private options for paid family and medical leave into their state programs. In fact, life insurers pay around $19 billion in disability income benefits annually and help protect about 40% of private-sector workers from losing a paycheck when they are out of the workplace after welcoming a child or tending to a medical condition. Building on this foundation, lawmakers can work with insurers to develop national paid leave options that will serve our country’s caregivers long after the pandemic is over.
At the same time, COVID-19 has also created a need for a national standard for flexible work policies. Working parents are facing unprecedented challenges right now, and employers are stepping up to create flexible policies that support their employees. Even as offices start opening their doors again, remote or hybrid work will remain an option for many companies well into 2021. Among them: Guardian Life, Google, Airbnb, Microsoft, and American Express.
Following the lead of the private sector, public leaders can establish workplace options and guidelines that allow parents to meet their responsibilities at home and at their jobs. Plus, these types of flexible programs along with paid leave will help keep women in the workforce and, in turn, promote long-term economic growth. During a time when so much is at stake, we need to prioritize policies that support our caregivers.
The insurance industry is rooted in assessing risk to plan for the future. The COVID-19 pandemic is unlike anything we’ve seen in our lifetimes—and few could’ve predicted its widespread impact. But the actions we take today can help create a more resilient future by easing the economic burdens on our workforce and families.
Deanna Mulligan is the board chair of the Guardian Life Insurance Company of America. Susan Neely is the president and CEO of the American Council of Life Insurers.


fortune--2020-11-11--Beijing’s new antitrust rules have cost Chinese tech giants $260 billion in 2 days

Global investors pummeled shares of China’s tech giants for a second day Wednesday following signs of a crackdown by Beijing regulators.
On Tuesday, the Chinese government released sweeping new draft rules aimed at curbing monopolistic behavior among China’s largest Internet firms by imposing tighter restrictions on online payment systems, e-commerce platforms, and user data.
China’s State Administration for Market Regulation said it issued the draft rules to block anticompetitive behavior and create a more balanced playing field in China’s booming tech market.
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Investors saw the proposed rules as a direct threat to China’s tech giants, and by Wednesday Internet firms such as Tencent, Alibaba, JD.com, and food delivery company Meituan had lost a combined $260 billion in market value over a two-day period. Hong Kong’s Hang Seng tech index dipped nearly 8% on Wednesday, the biggest single-day drop since the 2008 Global Financial Crisis.
The proposed regulations are worrying for tech giants because the rules target practices that fueled their growth.
Perhaps most concerning is the rule that threatens Chinese tech’s biggest weapon: massive troves of data. Chinese tech companies like Tencent and Alibaba collect mountains of consumer data that they use to target consumers with personalized ads and purchase suggestions. The new rules may limit how platforms collect and deploy user data. The legislation also may prevent companies from employing price discrimination practices, in which the same products are sold at different prices based on the user.
For major e-commerce platforms like Alibaba and JD.com, the proposed regulations may eliminate their ability to enter into exclusive brand relationships with their retailers.
That Beijing proposed the new rules on the eve of Alibaba’s Singles Day, the biggest shopping event in the world, seems to underscore the message that the government is no longer interested in business as usual.
The new rules also came just one week after Beijing pulled the plug on Ant Group’s highly anticipated dual listing in Shanghai and Hong Kong. The fintech giant’s debut was set to be the world’s largest-ever IPO, but now appears to be delayed by at least six months after the company failed to meet new, separate legislation aimed at leveling the playing field in China’s fintech industry.


fortune--2020-11-11--The pandemic dramatically accelerated the digital shift. These CEOs explain how they got it done

The failure of corporations to embrace technological advances as quickly as consumers has, in the past, led to what C3.ai CEO Tom Siebel calls a “mass extinction event”—the demise of businesses that couldn’t catch up to new demands in time.
This year’s pandemic is only the latest thinning of the herd. The coronavirus has forced surviving organizations to not just implement new technology but also overhaul their culture and approach. The most surprising aspect this time around, says Siebel, is that the transformation is being led by CEOs, rather than chief technology officers.
“I’ve been in this business for four decades. I was very curious to see CEOs at first meetings [about digital transformation] personally driving those initiatives,” Siebel told Fortune’s own chief executive, Alan Murray, on Tuesday during a virtual event for Fortune’s Global Forum. “I was thinking: Why is the CEO here? Why is this so important?”
The answer, of course, was that no CEO wanted his or her company to be Toys “R” Us, Westinghouse, or Kodak—leaders in their time but now shadows of their former selves.
“We’re seeing [legacy] companies being replaced with companies with new DNA,” Siebel added. “Amazon replaced 10,000 retailers in the U.S. last year, applying technology to completely disrupt retailers. Companies like Tesla are using A.I. and big data to disrupt the automobile business. Airbnb is disrupting the hospitality industry. “
And: “Every project we’re seeing succeed is driven by the CEO,” Siebel said. “They will have a chief digital officer. But every project we’re seeing succeed is CEO driven: Bank of America, Enel, Shell, you name it.”
Speaking of Enel: Part of the reason why the Italian energy giant’s successful shift is so notable is because its more senior executives—but not necessarily older—were less likely to embrace digital initiatives, according to the company’s CEO Francesco Starace.
Enel conducted a survey of digital aptitude throughout the company and found some surprising results. “There was no relationship correlation between age, sex, gender, nationality,” Starace said. “There was one strong correlation, which was the inverse between digital capabilities and ranks within the company. The more senior you were, the less digital you were. We said, how can you drive digital transformation being the least digital in the company?” So the company made dramatic changes, such as embracing cloud computing, to stave off inertia, Starace said.
But the arrival of COVID-19 didn’t afford corporations the time to conduct surveys about digital aptitude. Consumer-facing organizations in particular have been forced to adapt to government lockdowns, social distancing measures, and ever-changing policies.
The companies that were successful in navigating such treacherous terrain tended to be more proactive before the pandemic ever struck. Among them: Chipotle and WW, the former Weight Watchers, whose CEOs also spoke during the event.
For its part, WW moved thousands of its workshops fully online. Chipotle meanwhile successfully transitioned to “digital kitchens”—a kitchen-within-a-kitchen exclusively serving digital customers.
“Now everyone’s trying to play catch-up. But if you were already proactive in the beginning, you’re ahead of the game,” said WW CEO Mindy Grossman.
The executive added that a crucial element of digital transformation isn’t just efficiency, but customization. “What [customers] value right now are companies they can trust that are giving them things they can utilize in their lives that are purposeful and seamless,” she said. “[They] will be attracted to brands who they feel understand them and give their lives purpose.”
In other words, serving the customer’s needs—a concept that, come to think of it, doesn’t sound too newfangled at all.


fortune--2020-11-11--Nov. 11 is Alibaba’s biggest day of the year. Beijing rained on the parade

Wednesday was supposed to be Alibaba’s best day of the year. Nov. 11 marked the second part of its gargantuan Singles Day shopping festival that is bigger than the U.S.’s Black Friday and Cyber Monday combined. The day started with the usual public relations bonanza, in which news outlets published eye-popping stats from the early hours of the shopping event. (Alibaba said shoppers had purchased $56.3 billion worth of goods as of 30 minutes past midnight.)
But the news soon collided with a continued selloff among Chinese tech stocks that followed Beijing’s unveiling of anti-monopoly regulations that could rein in Alibaba, an e-commerce giant, and its Internet peers.
The regulations, which are currently under review, seek to curb practices such as compelling vendors to sign exclusivity contracts, giving preferred treatment to customers who spend more, and requiring users to permit personal data collection.
In the two days since the antitrust rules were announced, Chinese tech stocks have lost a collective $260 billion in market value. Alibaba was among the worst hit; its Hong Kong–traded shares were down 10% as of the close of trading Wednesday.
Coming a week after Beijing halted the record-setting IPO of Alibaba’s sister company, Ant Group, the edict is another indication that the Chinese government is determined to curtail the enormous influence of digital behemoths like Alibaba and rival Tencent Holdings—after letting them grow at a blinding pace for decades.
The timing of the regulatory changes proposed by Beijing was a statement unto itself, since it encroached on Singles Day, the ultimate showcase of Alibaba’s sway.
Single shoppers
Singles Day—a holiday started by university students to counter Valentine’s Day—was co-opted by Alibaba in 2009 and spun into the world’s largest sales event, far outpacing Black Friday and Cyber Monday in the U.S.
The event has turned into a global spectacle, with Alibaba drafting U.S. celebrities like Pharrell Williams and Taylor Swift to perform at the all-night Singles Day Gala Alibaba hosts on Nov. 10. The tactic ensures that shoppers are engaged, awake, and ready to buy as soon as the clock strikes midnight. This year, Katy Perry performed at the Gala via live stream, owing to the onerous travel restrictions of COVID-19.
The huge shopping festival is normally held on Nov. 11—a date selected because its numeric representation is a group of single ones. But this year, Alibaba introduced a “Double” Singles Day event, providing a secondary sales period at the beginning of the month.
Alibaba CEO Daniel Zhang said the company made the change for a “number of reasons.” Alibaba wanted to give consumers “more time to browse” and give merchants “more exposure and selling opportunities” while “easing pressure” on the logistics infrastructure that supports Singles Day astronomical sales volume, he said.
Left unsaid is that Alibaba has a track record of reporting that every Singles Day has outperformed the last, with sales volumes growing by an average of 35% annually since 2014. The move to expand Singles Day in 2020 seems to be a guarantee that the trend continues, even in the midst of a pandemic.
“Singles Day has been a consistent forward-looking indicator of retail trends, as well as a guide to the health and outlook of the market. The impact of COVID-19 puts greater pressure on the day to make up for retailers’ lost sales in the first half of 2020,” said Jonathan Cheng, a partner at consultancy Bain & Company.
China’s economy has shrugged off the crippling effects of its COVID-19 lockdown early in the year. But retail sales have been slow to recover. According to the National Bureau of Statistics, retail sales returned to growth for the first time in August, at 0.5%, and then rose 3.3% in September over the year before. The economy overall grew 4.9% in the third quarter.
Doubling up
Singles Day 2020 could showcase a continuation of returning consumer confidence. A Bain survey finds that 40% of Chinese consumers intend to spend more during this year’s shopping festival than they did last year. But it’s difficult to parse Alibaba’s metrics, which are selected to highlight growth.
Last year, Alibaba said Singles Day sold $38.4 billion worth of goods, measured as gross merchandise value (GMV), on Nov. 11. The larger $56.3 billion tally for GMV Alibaba cited this year was accumulated over 11 days, reflecting Alibaba’s decision to introduce a new sales window to the festival.
The extended Singles Day will give Alibaba an impressive GMV figure to present investors even as the company’s share price tumbles. The tech giant’s stock has declined 20% from its peak at the end of October after the sudden halt of the mega-IPO of Ant Group, Alibaba’s financial affiliate.
Alibaba holds a 33% stake in Ant. The IPO was supposed to be record-breaking, much as Alibaba had hoped this year’s Singles Day would be the largest yet. But the messaging from Beijing is clear: Bigger is no longer better.


fortune--2020-11-11--On first call with Boris Johnson, Biden warns of risk to peace in Northern Ireland

Joe Biden used his first phone call with Boris Johnson as U.S. president-elect to warn the British leader not to compromise peace in Northern Ireland in his pursuit of Brexit.
During the course of a 20- to 25-minute conversation on Tuesday, Biden “reaffirmed his support” for the 1998 deal that put an end to the violence in Northern Ireland, according to a statement from the president-elect’s team.
A British official confirmed that Biden raised the Good Friday Agreement in the context of Brexit negotiations, and that Johnson responded by promising the president-elect that Britain would uphold the peace accord. Biden spoke later to Irish Prime Minister Micheal Martin, and again made a point of emphasizing his backing for peace in the region.
The fact that Johnson was number two on the list of leaders Biden called, after Canada’s Justin Trudeau, will be welcomed in London as a sign that the incoming White House team still regards Britain as a vital ally.
But the exchange over Northern Ireland marks an uncomfortable start to the newest incarnation of the so-called special relationship between the U.K. and the U.S. and suggests Biden will not be an unequivocal backer of Johnson’s Brexit project in the way President Donald Trump has been.
I just spoke to @JoeBiden to congratulate him on his election. I look forward to strengthening the partnership between our countries and to working with him on our shared priorities – from tackling climate change, to promoting democracy and building back better from the pandemic.— Boris Johnson (@BorisJohnson) November 10, 2020
The two men have never met in person, and Biden has shown himself to be fiercely proud of his Irish roots. His transition to power comes at a delicate phase in the U.K.’s divorce from the European Union. Unlike Trump, Biden was opposed to Brexit and has aired his views on it.
Known History
Back in September, Biden raised his concerns over Johnson’s plan to break international law by reneging on parts of the Brexit divorce agreement he struck with the EU relating to trade with Northern Ireland. President Barack Obama, who Biden served under, famously weighed in on the 2016 referendum to say that if the U.K. opted out of the EU the U.S. would be put at the “back of the queue” when it came to trade talks.
Those talks, begun under Trump, will now likely be followed up by a Biden administration in a process that could take years, judging by the length of previous trade negotiations.
Biden had said in September that any U.S. trade deal with the U.K. must be “contingent” on respecting the Northern Ireland peace agreement and avoiding a return to a hard border with the Republic of Ireland.
A British official said the call was friendly and good. The U.K. has always insisted its plans do not compromise peace in the region and are intended to safeguard stability.


fortune--2020-11-11--How CEOs should approach digital transformation

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
One of the conundrums of corporate digital transformation is this: Because it has such profound strategic implications, it has to be led by the CEO. But the CEO often lacks the knowledge to make critical technology decisions.
So how to proceed? That was the discussion at a fascinating Fortune CEO Roundtable yesterday, held in partnership with Tom Siebel and C3.ai. Francesco Starace of Enel—the Italy-based power company, second only to State Grid of China in size—laid it out clearly. “Ninety percent of the problem is that the people who are supposed to drive digital transformation are the most ignorant,” Starace said. He surveyed his employees on digital knowledge and found there was no correlation to age, gender or nationality, but there was an “inverse correlation between digital conversance and rank in the corporation.”
Some of Starace’s advice for solving the conundrum:
1. “Get the priests out of the room.” Don’t be held back by digital experts who are quick to tell you what you can’t do.
2. “Move everything into the cloud,” which gives you the flexibility to “compress time, make mistakes, fix, make mistakes, fix.”
3. Create a risk-taking culture. Noting that utilities are inherently risk-averse, Starace sponsored an employee contest around “My Greatest Failure.”
Mindy Grossman, CEO of WW, offered an additional piece of advice: Be clear about your purpose. “It’s not technology for technology sake,” she said. “What are you in pursuit of with that technology? What is the impact that is purposeful?”
And Brian Niccol, CEO of Chipotle, added that it’s also important to focus. “We asked, ‘What is the one thing we are going to do?’ And the answer was ‘digital kitchens,’” which separated digital orders from in-store orders and allowed Chipotle to maintain a high-quality experience for both.
In a separate CEO Roundtable on The Longevity Economy, Joe Coughlin, author of a book by the same name, dropped this nugget:
“The technology industry is the only industry in the history of the world that has the chutzpah to blame the customer for not knowing how to use their product.”
Coughlin is the author of this recent piece about technology policies to help prepare for the coming wave of baby boomers hitting old age.
More news below. And don’t miss Emma Hinchliffe’s profile of the person who may well be the next Treasury Secretary.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Record hospitalizations
Coronavirus hospitalizations in the U.S. hit a record 61,964 yesterday, passing the previous record set April 15: 59,940. Thomas Tsai of the Harvard T.H. Chan School of Public Health: "The current hospitalization surge is likely a prelude to an even greater surge in the coming weeks given the record-breaking number of cases each of the last few days." Wall Street Journal
New Macs
Apple has introduced new Macs that run on its own processors, rather than those from Intel, as has been the case for the last 14 years. The new chip is called the M1 and it's not very different from the chips used in iPhones and iPads; they're significantly faster than the Intel chips used in previous Macs. Many programs, such as Adobe Photoshop, will need to be rewritten to take advantage of that speed boost, though. Fortune
China tech
Chinese tech shares have fallen for a second day due to Beijing's clampdown on monopolistic practices. Shares in Alibaba, Tencent, JD.com and Xiaomi all fell at least 8% over the period, while the Hang Seng Tech Index is down almost 10%. Fortune
Singles Day
However, Alibaba has done just fine out of its annual Singles Day extravaganza—the world's biggest shopping event—with a whopping $56 billion in orders by Wednesday morning. Alibaba VP Liu Bo reckons online consumption is being stimulated in China because the pandemic is stopping people from going overseas. Reuters
Note: Yesterday’s edition neglected to note that, as part of Operation Warp Speed, the U.S. government has secured at least 100 million doses of the Pfizer/BioNTech vaccine.
AROUND THE WATER COOLER
Brace, banks
European banks should prepare for a wave of pandemic-induced non-performing loans biting them early next year, says Elke König, head of the Single Resolution Board (which was set up following the eurozone sovereign debt crisis, to help stricken banks wind down.) She said banks need to work hard to sort out which loans are viable and which not, but rejected the European Central Bank's idea of setting up a network of "bad banks." Financial Times
Russian vaccine
Russia looks at Pfizer and BioNTech's 90% COVID-vaccine efficacy rate and laughs, because its Sputnik V vaccine is 92% effective. So claims (minus the bit about laughter) the Russian Direct Investment Fund, which is backing and marketing the vaccine, on the basis of preliminary data from Phase III trials of the two-dose vaccine. Reuters
Minks win
Remember the enormo-cull of minks that Denmark was planning, in order to stop the spread of a mutated version of the coronavirus among people (a dozen of whom had caught it)? That's on hold, because the government doesn't actually have the authority to order it. Prime Minister Mette Frederiksen has apologized for issuing the order, and says a future cull may still be needed. As a result, the U.K. has reimposed quarantine requirements for people arriving from Denmark. Washington Post
TikTok waves
TikTok would like to remind the Trump administration that tomorrow is the deadline the company was given to sell off its U.S. assets, and it's "offered detailed solutions to finalize that agreement," but it hasn't heard back from the administration's Committee on Foreign Investment in the United States (CFIUS) in weeks. So…what's happening? Unsure of whether it will get the 30-day extension it requested, TikTok has now filed a petition in the Court of Appeals asking for a review of CFIUS's actions. The Verge
This edition of CEO Daily was edited by David Meyer.


fortune--2020-11-11--The great rotation into value stocks continues, lifting global markets

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning, Bull Sheeters. And happy Armistice Day to all you veterans. The risk-on rotation is in full swing as vaccine optimism continues to buoy global markets.
Bank stocks and futures are flat today, but energy continues to rumble forward, helped by rising crude prices. The two-day sell-off in tech stocks, meanwhile, is on pause—with Chinese tech stocks the big exception.
Let’s check in on the action.
Markets update
Asia
The major Asia indexes are mixed in afternoon trading with Japan’s Nikkei up 1.8% .
are mixed in afternoon trading with up . It’s Singles’ Day , Alibaba’s mega online shopping event. This year it’s expected to shatter records, already pulling in more than $56 billion in sales.
, Alibaba’s mega online shopping event. This year it’s expected to shatter records, already pulling in more than in sales. Online retail therapy can’t help Chinese tech stocks. Last week’s abruptly halted Ant Group IPO is spooking investors, sending tech shares falling again today, wiping out $260 billion in value in the past two days. Alibaba’s Hong Kong shares are down nearly 10%.
Europe
The European bourses were a smidge higher out of the gates with the Stoxx Europe 600 up 0.25% at the open, before edging higher.
were a smidge higher out of the gates with the Stoxx Europe 600 up at the open, before edging higher. Europe’s beaten down bank stocks are once again in demand, but their troubles are far from over. An EU banks watchdog warns in the Financial Times that the sector faces a wave of nonperforming loans next year.
are once again in demand, but their troubles are far from over. An warns in the Financial Times that the sector faces a wave of nonperforming loans next year. Investors aren’t just snatching up value stocks. The demand for Greek sovereign debt has been so brisk it pushed the yield on three-year notes into negative territory this week, a startling first.
U.S.
U.S. futures are much more stable this morning, pointing to a positive open.
are much more stable this morning, pointing to a positive open. That’s after the small cap Russell 2000 ( +1.7% ) and blue chip Dow ( +0.9% ) closed higher on Tuesday, while tech stocks dragged down the S&P 500 and Nasdaq.
) and blue chip ( ) closed higher on Tuesday, while tech stocks dragged down the S&P 500 and Nasdaq. Apple shares are trading a tick higher in pre-market trading after the company unveiled a new lineup of computers yesterday. (Am I the only one who feels their last great laptop was the zippy MacBook Air, circa 2014?) Fortune‘s Aaron Pressman explains why these new models are so significant.
Elsewhere
Gold is down, stuck around $1,875/ounce .
is down, stuck around . The dollar is flat.
is flat. Crude is cruising again today. Brent futures are trading above $45/barrel , a 10-week high.
is cruising again today. futures are trading above , a 10-week high. Bitcoin bounced back. It’s up above $15,400.
***
Buzzworthy
We need an effective COVID vaccine. Stat!
The U.S. registered nearly 140,000 new COVID cases on Nov. 10, a new record. The data looks bad.
Vaccine shorts
Here’s the run-down of J.P. Morgan’s COVID-19 Vaccine Tactical Short Candidates.
FAAMG dominance, YTD
“while the S&P 500 is up this year, the gains have been extremely narrow: the five mega-cap “FAAMG” firms (Facebook, Apple, Amazon, Microsoft and Google, which account for about one-fifth of the index market capitalization) are up roughly 40%, while the rest of the market is still down on the year.” — Goldman Sachs on how a vaccine-led recovery for cyclical stocks is long overdue.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
A prime antitrust case. Shares in Amazon fell 3.5% on Tuesday (and they're down in pre-market trading today) after EU competition chief Margrethe Vestager laid out antitrust charges against the e-commerce behemoth. Fortune's David Meyer details the case Europe is bringing against Amazon, and how the retailer faces similar pressures in other big markets.
The soul of suburbia. Landlords are having a nutty 2020. Covid-stricken tenants are finding it hard to make rent, and yet there's surging demand in suburban communities as the market shifts from cities to a home on the outskirts with a bit of space. And that's lifting rental prices to new records. “It’s ridiculously high when you put it in a backdrop of a recession," a real estate research chief tells the Wall Street Journal.
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
Quiz time
Which sector of the S&P 500 was the best performer yesterday? Was it...?
A) Financials
B) Energy
C) Consumer Discretionary
D) Info Technology
The answer is B, energy, which climbed 2.5% yesterday and is up an astonishing 14.7% this week. The energy sector is still down 44% YTD, but its comeback is one of the more fascinating storylines of this rotation rally. So much for the campaign trail warnings of a Biden presidency crushing the sector.


fortune--2020-11-11--Cold storage requirements will create a vast logistical nightmare for distributing COVID-19 vaccine

When Pfizer Inc. and BioNTech SE’s Covid-19 vaccine rolls off production lines, Shanghai Fosun Pharmaceutical Group Co. will be waiting to distribute it through a complex and costly system of deep-freeze airport warehouses, refrigerated vehicles and inoculation points across China.
After they reach vaccination centers, the shots must be thawed from -70 degrees celsius and injected within five days, if not they go bad.
Then the herculean journey from warehouse freezer to rolled-up sleeve must be undertaken all over again — to deliver the second booster shot a month later.
The roadmap sketched out by the company, which has licensed the vaccine for Greater China, offers a glimpse into the enormous and daunting logistical challenges faced by those looking to deliver Pfizer’s experimental vaccine after it showed “extraordinary” early results from final stage trials, raising hopes of a potential end to the nearly year-long pandemic.
That euphoria is now being diluted by the realization that no currently used vaccine has ever been made from the messenger RNA technology deployed in Pfizer’s shot, which instructs the human body to produce proteins that then develop protective antibodies.
That means that countries will need to build from scratch the deep-freeze production, storage and transportation networks needed for the vaccine to survive. The massive investment and coordination required all but ensures that only rich nations are guaranteed access — and even then perhaps only their urban populations.
“Its production is costly, its component is unstable, it also requires cold-chain transportation and has a short shelf life,” said Ding Sheng, director of the Beijing-based Global Health Drug Discovery Institute, which has received funding from the Bill & Melinda Gates Foundation.
The expense of deploying the Pfizer shot will likely heighten existing fears that wealthier nations will get the best vaccines first, despite a World Health Organization-backed effort called Covax that aims to raise $18 billion to purchase vaccines for poorer countries.
It also presents a choice now faced across the developing world: to pay for the expensive construction of subzero cold-chain infrastructure for what seems like a sure bet, or wait for a slower, more conventional vaccine that brews batches of protein or inactivated viral particles in living cells, and can be delivered through existing health-care networks.
“If there is a protein-based vaccine that could achieve the same effect as an mRNA vaccine does and there’s the need to vaccinate billions of people every year, I’d go for the protein-based shots in the long run,” Ding said.
Even for rich countries that have pre-ordered doses, including Japan, the U.S. and the U.K., delivering Pfizer’s vaccine will involve considerable hurdles as long as trucks break down, electricity cuts out, essential workers get sick and ice melts.
Safe Delivery
To safely deliver shots in mainland China and Hong Kong, Fosun will partner with the state-owned Sinopharm Group Co., a pharmaceutical distributor with well-established networks across the country. One of Sinopharm’s subsidiaries has also been developing Covid-19 vaccines.
Packed into cold storage trucks, those vials will arrive at inoculation sites where they can thaw and be stacked in fridges at 2 to 8 degrees celsius for a maximum five days before going bad.
“The requirement for extremely cold temperatures is likely to cause spoilage of a lot of vaccine,” said Michael Kinch, a vaccine specialist at Washington University in St. Louis.
It’s also likely to cost Fosun tens of millions yuan, according to the company’s Chairman Wu Yifang. Fosun is considering importing the vaccine in bulk and filling them into vials at a local plant. That will also require further investment in production and storage.
The resulting price tag may be too hefty for many developing nations, including neighboring India, which has struggled to contain the world’s second-largest coronavius outbreak and currently has no agreement to purchase the Pfizer vaccine.
‘Forget It’
Many working in the country’s public health and the pharmaceutical industry have already voiced concern that India lacks the necessary capacity and capability to deliver a vaccine across its vast rural hinterland and population of over 1.3 billion people at the breakneck speed now expected.
“Most of these vaccines need minus 70 degrees, which we just can’t do in India, just forget it,” said T. Sundararaman, a New Delhi-based global coordinator of the People’s Health Movement, an organization that brings together local activists, academics and civil society groups working on public health.
“Our current cold chains are not able to cope with some districts’ need for measles vaccines, and that’s only for children below the age of 3,” he said. “That’s a really trivial number of people compared to the numbers that will need a Covid-19 vaccine.”
When asked at a Tuesday briefing if India’s government would look to buy any of the Pfizer vaccine, Rajesh Bhushan, the secretary at the health ministry, said New Delhi is in talks with all vaccine manufacturers. He added that India was in a position to “augment and strengthen” its existing cold-chain capacity, but declined to release any purchase details immediately.
Pfizer already has orders from some developing countries like Peru, Ecuador and Costa Rica. It’s unclear how widely those nations plan to distribute the shots, but their small orders of less than ten million doses suggest limited deployment.
After the release of their positive preliminary data, some governments have rushed to finalize orders and start negotiations with Pfizer and BioNTech. The European Union confirmed an order of up to 300 million doses on Tuesday, while the Philippines, Singapore and Brazil said they were in talks.
‘Last Mile’
Even without the subzero issue, rolling out a vaccine in a short space of time will be a “major challenge” requiring mass paramedical training to administer two-shot doses, said Pankaj Patel, chairman of Indian drugmaker Cadila Healthcare Ltd., which is developing its own experimental plasmid DNA Covid-19 shot.
This is especially so in areas where people are not easily contactable or have to travel long distances to reach vaccination centers. Past vaccination campaigns show that many simply never show up for the second shot, said public health experts.
The mounting obstacles mean that some developing countries may pass on the Pfizer vaccine, despite early signs of its exceptional efficacy.
“If we were to wait an extra year and have something that’s feasible for us to deliver to as many people as possible in this country, would that be a bad trade-off?” asked Gagandeep Kang, professor of microbiology at the Vellore, India-based Christian Medical College and a member of the WHO’s Global Advisory Committee on Vaccine Safety.
“Based on the cost of the Pfizer vaccine, the logistics of an ultra-cold storage — I don’t think we are ready and I think this is something that we need to weigh the benefits and the costs very, very carefully,” she said.