18-23 minutes - Source: NYT
The loans helped support more than 50 million jobs, according to the Small Business Administration. The average loan size was $107,000, although borrowers can take out up to $10 million. Not included in the data is the roughly $30 billion in loans that were returned by companies that realized they weren’t eligible, worried about meeting the conditions to make the loans forgivable or frightened by the public outcry about big firms getting funds. Only the names of borrowers who took out more than $150,000 were released.
• The loans are forgivable if borrowers use the bulk of the money to rehire workers on the same salaries as before the pandemic (or make a “good faith” effort to do so). If not, the fee-free, unsecured two- and five-year loans levy a 1 percent annual interest rate, which is still an attractive offer. “My 1,000-foot takeaway is that the government was handing out free money and the line went around the corner,” Aaron Klein, a fellow in economic studies at the Brookings Institution, told The Times.
Here are some of the recipients of P.P.P. money that may raise eyebrows:
• Investment firms that manage billions, including Semper Capital Management, Domini Impact Investments and Brevet Holdings.
• Some companies connected to federal lawmakers or their families, including the Republican representatives Markwayne Mullin and Devin Nunes and the Republican senator Susan Collins, as well as Ms. Collins’s Democratic challenger, Sara Gideon.
• Several start-ups that still laid off employees.
• The Ayn Rand Institute, which is dedicated to the anti-statist philosopher, and an arm of Americans for Tax Reform, the group founded by the famously anti-tax activist Grover Norquist.
Many companies listed as recipients said they hadn’t taken aid money. The C.E.O. of the electric scooter start-up Bird denied applying for P.P.P. money, explaining on Twitter that the company had considered an application but had not gone ahead with it. The investment firm Index Ventures also denied applying for federal aid money, despite appearing on the list. And a loan described as going to Andreessen Horowitz actually went to one of the venture firm’s portfolio companies.
Here’s what is happeningTech companies won’t comply with the Hong Kong government’s data requests. Facebook, Google and Twitter all said that they would temporarily halt processing of such demands in light of a new security law that binds the territory closer to Beijing. TikTok, which is owned by the Chinese giant ByteDance, is pulling out of Hong Kong altogether.
A federal judge ordered the Dakota Access Pipeline shut down pending a review. The decision, which is subject to appeal, is a victory for environmental groups. It follows the cancellation of the Atlantic Coast Pipeline on Sunday, amid legal and logistical challenges deemed too costly by its backers.
The home solar company Sunrun agreed to buy a rival. The $3.2 billion deal for Vivint would widen Sunrun’s lead in the residential solar power market, ahead of second-ranked Tesla.
Quibi faces a reckoning. Vulture takes a long look at Jeffrey Katzenberg’s embattled short-video streaming service, which has struggled to attract subscribers despite raising $1.75 billion in funding.
The messy fall semesterHarvard, Princeton and other schools have begun to outline how the coming academic year will play out amid the pandemic. It’s a mix of online and on-campus education — with a heavy emphasis on the former.
• Harvard will allow up to 40 percent of undergraduates on campus this fall, with first-year students getting priority. All classes will be held online, regardless. The university will charge full tuition — currently set at about $50,000 — but some students studying remotely will receive a $5,000 stipend.
• Princeton won’t allow more than half of undergraduates on campus at any point. Some small classes might be held in person. The school will cut its tuition by 10 percent, to $48,500.
• Georgetown will invite first-year students on campus only. It hasn’t yet decided whether to cut tuition, currently set at $57,000.
Expect lots of coronavirus testing. Harvard will test students on campus every three days, while Cornell will test weekly. Georgetown says tests will be available whenever they are needed.
Plenty of questions remain:
• What are students getting for their (mostly full-price) education? “They are exposing the kids to increased virus risk, something that is arguably justifiable in exchange for in-person learning, which everyone agrees is better than online,” Ken Bradley, the father of a Yale student, told The Times. “But no, the kids will do remote learning, from campus! At full tuition!”
• Can institutions afford widespread testing? Big, rich universities have the money and resources to test students for the illness regularly. That is not the case for other institutions, including primary and secondary schools.
• What about older faculty members who are more at risk of contracting serious illness? Over 850 instructors at Georgia Tech signed a letter opposing the school’s reopening plans, which do not mandate face masks.
A three-way deal to create a new McKinsey of P.R. firmsThe race is on to become the world’s biggest, most prestigious public relations strategy firm — the advisers that manage corporate clients’ reputations, deal with headline-grabbing crises and shepherd the rollout of complicated mergers. This morning, three of the most prominent firms in the sector announced a tie-up: Finsbury of Britain, Glover Park Group of the U.S. and Hering Schuppener of Germany.
Behind the deal: The linkup would create a company with nearly 700 employees in 18 countries, making the new entity a strong competitor to Brunswick, headquartered in London, which has 1,100 employees in 15 countries and often compares itself to McKinsey, the high-end management consulting firm.
• The new company would be called Finsbury Glover Hering and would have more than $200 million in combined annual revenue.
• The three companies have already worked together in recent years, under the umbrella of the multinational WPP, which owns Finsbury and Glover Park outright and has a minority stake in Hering Schuppener. WPP will be the majority owner of the combined group.
• Finsbury Glover Hering would count companies like Adidas, Apple, Disney, the National Football League and ViacomCBS among its clients.
The Deal Professor: The urge to mergeSteven Davidoff Solomon, a.k.a. the Deal Professor, is an academic at the U.C. Berkeley School of Law and the faculty co-director at the Berkeley Center for Law, Business and the Economy. Here, he considers the shape of deal making to come.
M.&A. is back. Sort of.
With Uber agreeing this week to buy Postmates, and Lululemon announcing its acquisition of Mirror last week, we are starting to see the new face of M.&A.
It will not be marked by huge, industry-changing deals. Instead, as antitrust regulators scrutinize big deals, we are going to see a steady stream of acquisitions of medium-sized companies by technology giants and other big companies in high-growth industries. It will be about building brands and network effects.
That is what the Postmates deal is about. Having lost out on buying Grubhub over antitrust issues, Uber is buying a much smaller contender in food delivery. Still, the market loved it, sending Uber’s market cap up by more than the transaction’s $2.65 billion purchase price.
This is the kind of acquisition Wall Street likes. The U.S. food delivery market will go from four to three main competitors (DoorDash with more than 40 percent of the market, Uber-Postmates with around 30 percent and Grubhub with just over 20 percent). The deal will face an extended antitrust review, and Uber will argue that the deal won’t lessen competition in many major markets.
Lululemon’s $500 million takeover of Mirror is out of Google’s playbook of entering new, adjacent businesses and capturing lucrative network effects. Mirror sells an expensive mirror that displays live fitness classes for home workouts. It’s a way to showcase Lululemon apparel for people who aren’t shopping or going to gyms as much as before.
The speed readDeals
• SiriusXM is reportedly near a deal to buy the podcasting business Stitcher from E.W. Scripps for about $300 million. (WSJ)
• Sequoia has raised $1.35 billion for two new investment funds dedicated to India and Southeast Asia. (TechCrunch)
Politics and policy
• The president of the Atlanta Fed, Raphael Bostic, said that he had seen data suggesting a “leveling off” of the U.S. economy’s recovery from the coronavirus. (FT)
• Political campaigns choose their fonts very carefully. (Business Insider)
• Traditional consumer giants like Unilever may be boycotting Facebook, but fast-growing upstarts like Glossier and Harry’s aren’t. (Business Insider)
• Conservative personalities are flocking to the social network Parler — and the company is worried that the partisan lean will reduce its influence and user growth. (Politico)
Best of the rest
• Investors are starting to reckon with what a Joe Biden presidency might mean for stocks. (NYT)