12-15 minutes Source: NYT
A showdown looms over WeWork’s top jobSome directors and large investors in WeWork — including the company’s biggest backer, SoftBank — are discussing whether and how to oust its co-founder Adam Neumann as C.E.O., the NYT reports. But Mr. Neumann doesn’t want to go, setting up a potential boardroom battle for the ages.
The discussions arose after some big money managers refused to invest in WeWork unless the company brought in an experienced operator, according to the NYT. Their reluctance to take part in WeWork’s I.P.O. led the company to postpone the stock offering — even after reducing its valuation to as low as $15 billion, from $47 billion.
Having SoftBank on board for any insurrection is key. The Japanese tech giant has invested over $10.5 billion in WeWork. While SoftBank has tried to cultivate an image of supporting entrepreneurs, defending Mr. Neumann has become harder.
Ousting Mr. Neumann could be tricky, since he controls the company through a special class of shares. The WSJ notes that he could replace the entire board — though that would be a hugely risky move unlikely to ease investors’ concerns over the company’s stability.
Expect the drama to heat up quickly. The board, which is expected to meet as soon as this week, hasn’t yet formally approached Mr. Neumann about stepping down. Whether he bows to the pressure or prepares for a battle remains to be seen.
Today’s DealBook Briefing was written by Andrew Ross Sorkin, Michael J. de la Merced, Lindsey Underwood and Stephen Grocer.
Europe’s ‘right to be forgotten’ may growThe European Court of Justice is scheduled to rule on two cases this week that could further expand the right of European citizens to ask a website to take down material considered old or inaccurate, Adam Satariano and Emma Bubola of the NYT write.
The search engine has been the most frequent target of the policy. Since 2014, Google said, it has received more than 3.3 million requests in Europe to delete links from search results. The company has accepted about 45 percent of such requests.
Supporters say the right to be forgotten is an important online privacy tool. The concept has inspired similar legislation in jurisdictions like California, Brazil, Canada and India.
Others say that it has started to infringe on journalists’ work. A small Italian news site, for example, had to fold after a legal battle about its reporting of a stabbing. “There has been real mission creep with the right to be forgotten,” Daphne Keller, a lawyer at Stanford University’s Center for Internet and Society, told the NYT.
Did Juul dig its own grave?The vaping company has tried over the past year to clean up its image amid growing scrutiny about teenage use of its products. That has failed, badly, Jennifer Maloney and Stephanie Armour of the WSJ write.
• “The company flooded the White House with lobbyists and other advocates, making it appear that it was bypassing the F.D.A., which irked officials in the agency and some in the administration, according to people familiar with the discussions,” the WSJ reports.
• “And it made unauthorized claims to children and adults that its products were safer than cigarettes, the F.D.A. concluded, prompting a formal rebuke from the agency.”
• “ ‘I think Juul put the entire category at risk by pursuing top-line growth and market share without a real eye toward what was going on and who was using them,’ said Scott Gottlieb, who as federal Food and Drug Administration commissioner clashed with the start-up last year.”
More: Walmart announced Friday that it will no longer sell e-cigarettes.
China focuses on business for its Big Brother projectAs Beijing builds out enormous databases meant to control its 1.4 billion citizens — including a system known as “social credit” that grades compliance with Chinese laws and policies — it is putting pressure on companies, too, Alex Stevenson and Paul Mozur of the NYT write.
• “Social credit is one aspect of the Communist Party’s efforts under Xi Jinping, its top leader, to strengthen its hold over the country,” Ms. Stevenson and Mr. Mozur write. It’s being coupled with facial-recognition technology and other monitoring systems.
• For many companies, “social credit has become a fact of life. In September, China’s central economic planning agency announced that it had completed a first evaluation of 33 million businesses, giving them ratings from 1 for excellent to 4 for poor.”
• “It’s supposed to affect the decision making of businesses to conform to what the party wants,” Samantha Hoffman, a fellow at the Australian Strategic Policy Institute, told the NYT.
• China is also using the ratings to pressure foreign companies. American Airlines, Delta and United Airlines were told that their social credit score could be hit unless their websites labeled Hong Kong, Macau and Taiwan as part of China.
Indonesia prepares to blame Boeing and the F.A.A. for fatal crashIndonesian investigators have reportedly concluded that problems in the design and oversight of the 737 Max played key roles in the crash of a Lion Air flight last year, the WSJ reports, citing unnamed sources.
It’s the first formal government finding of fault in two fatal crashes involving the 737 Max, the WSJ notes. Together, the incidents killed 346 people and forced a monthslong grounding of the Boeing jets.
The draft report comes as Boeing strives to get the 737 Max airborne again. Though the company continues to work on updates to the plane — including to automated pilot software suspected of playing a crucial role in the crashes — it appears that global airline regulators are unlikely to let the plane fly again before the end of the year.
And it comes amid increased scrutiny on the F.A.A. for how it oversaw the plane’s development. Both the National Transportation Safety Board and Congress have proposed changes to the agency’s airplane certification process.
Thousands are stranded after a British travel company’s collapseThomas Cook, the world’s oldest travel firm, collapsed early this morning after last-minute negotiations to save the company failed. That left hundreds of thousands of customers stuck overseas.
The company ran hotels, resorts and airlines serving 19 million travelers a year, according to Reuters. But it has been hurt by online rivals, a big debt load and geopolitical tensions, and had sought to raise over 1 billion pounds, or about $1.25 billion, in emergency funding.
Negotiations failed over the weekend, however, leaving the company with “no choice but to take steps to enter into compulsory liquidation with immediate effect,” the board said.
The British government rejected a bailout request from the company, the FT reports. Prime Minister Boris Johnson confirmed that the company had requested £150 million, but added, “That’s a lot of taxpayers’ money and sets up a moral hazard.”
The collapse left 150,000 British travelers stranded abroad. The British government will work to bring them home in what it described as the largest repatriation in peacetime history. Another 350,000 travelers from outside Britain are also affected, according to the FT.
Revolving doorHumphrey Singer will step down as the C.F.O. of the embattled British retailer Marks and Spencer.
The speed readDeals
• Airbnb’s plans to go public reflect frustration among its 6,000 employees that they haven’t been able to cash in the stock they received as part of their compensation. (NYT)
• Walt Disney’s C.E.O., Bob Iger, said he withdrew from a deal to buy Twitter at the last minute because the “nastiness” on the social network was “extraordinary.” (NYT)
• The I.P.O. of SmileDirectClub, a maker of teeth-straightening products, performed so badly that its C.E.O. was said to have called Jamie Dimon of JPMorgan Chase, the offering’s lead underwriter, to ask what went wrong. (Business Insider)
• Fitbit is reportedly considering selling itself. (Reuters)
Politics and policy
• The Iranian foreign minister said that President Trump had “closed the door” to talks between Tehran and Washington to resolve a crisis over attacks on Saudi oil facilities. But Mr. Trump is unlikely to get other allies to put additional pressure on Iran. (FT, WSJ)
• Democratic lawmakers are increasingly calling to begin impeachment proceedings against Mr. Trump after he confirmed discussing corruption accusations against Joe Biden with Ukraine’s leader. (NYT)
• Democratic presidential candidates like Senator Elizabeth Warren and Mr. Biden are campaigning with striking U.A.W. workers, hoping to lock up support from organized labor groups. (NYT)
• Senator Bernie Sanders has called for eliminating $81 billion of Americans’ medical debt. (NYT)
• Mr. Trump held an unusual rally with Prime Minister Narendra Modi of India, hoping to build support for his re-election campaign among Indian-Americans. (NYT)
• British trade groups reportedly fear retribution from Prime Minister Boris Johnson if they raise warnings about the consequences of a no-deal Brexit. (FT)
• Fissures have opened up within the opposition Labour Party over whether it should openly support Britain remaining in the E.U. (BBC)
• Washington and Beijing say that trade discussions remain “productive,” even as tensions remain high. (NYT)
• Speaking of which: The U.S. Justice Department warned that Chinese theft of American trade secrets was growing. (CNBC)
• A Minnesota auto parts maker has filed more than 10,000 appeals against U.S. tariffs on Chinese imports. (WSJ)
• Uber sued the New York City Taxi and Limousine Commission over new limits on the number of ride-hailing vehicles allowed on city streets. (Bloomberg)
• The owner of the New York Stock Exchange has opened a Bitcoin exchange. (WSJ)
• The House Judiciary Committee reportedly asked more than 80 companies to explain how they had been harmed by Amazon, Apple, Facebook and Google. (NYT)
• “Across Silicon Valley, anxious tech workers are finally admitting they have a problem. And they are going to therapy.” (NYT)
Best of the rest
• Credit Suisse reportedly hired detectives to follow a former star banker after he left for its rival UBS. (Bloomberg)
• The S.E.C. brought 50 percent more Ponzi scheme prosecutions in the decade after Bernie Madoff’s arrest than in the 10 years before. (NYT)
• Is the Impossible Whopper actually better for you and for the environment than a regular one? (NYT)
• A high-profile scientific project at the M.I.T. Media Lab, the Open Agricultural Initiative, is under scrutiny after researchers who worked on the project said it had been promoted with misleading claims. (NYT)
• Errors and controversies involving several high-profile books are forcing writers and publishers to reconsider how they handle fact-checking. (NYT)