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Next stop on Steven Cohen’s redemption tour: Citi Field
Since
insider trading charges toppled SAC Capital, the hedge fund firm’s
billionaire founder, Steven Cohen, hasn’t necessarily shunned the
spotlight. But a $1 billion art collection and a new firm carry cachet only in certain circles.
Mr.
Cohen’s redemption tour has now taken him to Citi Field, home of the
New York Mets. But since he first expressed interest in buying the
professional baseball team, the sports world has been upended by protests for racial justice,
with players exercising their power to push for change with strikes and
other actions. For team owners — and for those like Mr. Cohen who wish
to enter the business — this presents both risks and opportunities. Mr. Cohen is in exclusive talks to acquire the Mets, DealBook has confirmed, edging out rivals including a consortium led by the former major leaguer Alex Rodriguez and the pop star Jennifer Lopez.
The deal, worth perhaps $2.5 billion, comes seven years after SAC
Capital pleaded guilty to insider trading (Mr. Cohen himself was never
charged with a crime).
• He is “always someone who cared a great
deal about his image, and he was determined to show the world he won,”
said Sheelah Kolhatkar, who documented the rise and fall of SAC in her
book “Black Edge.”
Owning the Mets would be a “capstone” in those efforts, she said.
Taking charge of a high-profile team at this moment gives the move even
greater weight and far more public prominence.
Professional sports have become the touchstone of a new labor movement,
with players increasingly empowered to voice views and take action on a
range of social issues. Their refusal last week to play games in order
to draw attention to police brutality was a watershed moment that has
radically altered the balance of power between ownership and labor.
“Quietly, I think league executives are scared about this,” Amira Rose
Davis, an expert on sports and labor history at Penn State, told The Times’s Noam Scheiber.
“It shows the potential of athletic labor power and that’s why they’ll
try to limit it by trying to co-opt it, contain it and declaw it.”
•
This is a very different situation from when Mr. Cohen bought a
minority stake in the Mets in 2012, or even when a previous bid to take
control of the team fell apart in February.
Burnishing his reputation as the owner of a team in the new era of
player power may not be what he had in mind, but now comes as part of
the deal. Will other owners approve his bid? He
needs 23 of the 30 team owners on his side to be successful, and that
might be tricky. Beyond the insider trading issues that brought down
SAC, Mr. Cohen’s new fund, Point72, has been accused of hostility to women.
What’s more, Mr. Cohen, a longtime Mets fan with deep pockets, may be
willing to spend in a way that could disrupt the pay scales, endearing
him to players but not owners who lack his resources. On the other hand,
baseball is ailing, and a big price tag for the Mets could raise team valuations for other owners.
•
There is also the matter of the Mets’ lack of on-field success. “If
Cohen leads the Mets to a win, he’ll have a table at any restaurant he
wants,” said Jeffrey Klein, a prominent sports attorney and partner at
Weil Gotshal & Manges. Younger fans won’t care about his past, he
added, if they even know about it.
____________________________ Today’s
DealBook Briefing was written by Andrew Ross Sorkin in Connecticut,
Lauren Hirsch in New York, and Michael J. de la Merced and Jason Karaian
in London.
____________________________
Image
Credit...Lucy Hewett for The New York Times
Here’s what’s happening
Confirmed coronavirus cases in the U.S. passed six million, just 22 days after hitting the five million mark. The head of the F.D.A. said that the agency might approve a coronavirus vaccine before clinical trials were complete, but denied that politics would play a role in the decision. Warren Buffett is betting big on Japan. Berkshire Hathaway invested $6 billion
in the country’s five biggest trading firms, according to a new filing.
It’s a classic contrarian bet by Mr. Buffett: investors have mostly
sold Japanese stocks in recent years, disappointed with stalled economic overhauls. New day, new Dow.
The Dow index starts trading today with three new members — Amgen,
Honeywell and Salesforce — and, perhaps more important, a lot less
Apple. Apple’s four-for-one stock split cut its weight in the Dow to 3
percent from 12 percent, giving it far less influence than it has on the
S&P 500, where it’s worth nearly 7 percent of the index. Apple and
other high-flying tech stocks like Amazon and Facebook (which are not in
the Dow) have helped the S&P 500 outperform the Dow recently, a gap
that seems likely to grow.
Image
United abandoned change fees for domestic travel, and has made it easier for passengers to book standby places on same-day flights. The customer-friendly policies come amid a deep slump in travel during the pandemic.
Poaching Lionel Messi will be hugely expensive.
After the soccer star said he wanted to leave his longtime club,
Barcelona, the Spanish league said that any team that acquired him — the
lead contender is Manchester City of the English Premier League — must pay a release fee of 700 million euros, or $833 million.
The Chinese government over the weekend imposed new restrictions on technology exports,
including what sound like the algorithms that underpin TikTok, and the
move has thrown a wrench into negotiations to sell the video app to an
American company. The surprise move may be China’s attempt to dictate terms of the sale,
which is happening under orders from President Trump. “At a minimum
they’re flexing their muscles and saying, ‘We get a say in this and
we’re not going to be bystanders,’” Scott Kennedy of the Center for
Strategic and International Studies think tank told The Times. Or, it could be an effort to block the sale. China effectively killed Qualcomm’s 2018 bid to buy the Dutch chip maker NXP by withholding approval.
As The Times notes, “If Beijing blocks the sale of TikTok, it would
effectively be calling the Trump administration’s bluff, forcing the
U.S. government to actually go through with restricting the app and
potentially incurring the wrath of its legions of influencers and fans.” People briefed on the talks had warned that Beijing’s approval was always important,
and appeasing both Mr. Trump and Chinese officials was a top priority
for TikTok’s main suitors, Microsoft and Oracle. (Given their extensive
business interests in China, the buyers now have to tread even more
carefully.) The FT notes that a deal — which could have been announced as soon as this week — has probably been delayed in light of the new rules.
The week ahead
Wall Street is eager for Zoom to report earnings after the market closes today. Last quarter will be a tough act to follow
for the videoconferencing company: One analyst called it the “the
greatest quarter in enterprise software history.” Investors also want to
see how the pandemic is affecting Campbell Soup and the workplace messaging servicing Slack, which both report earnings on Thursday.
🏛 In a series of speeches, Fed officials will explain the implications of the central bank’s momentous announcement last week that it will tolerate higher inflation to foster a stronger labor market. Richard Clarida, the Fed’s vice chair, speaks today; Lael Brainard, a Fed governor, speaks on Tuesday; and the New York Fed president John Williams speaks on Wednesday.
📈 The biggest economic news is due on Friday, with the release of the monthly U.S. jobs report.
Economists expect that the U.S. economy added 1.4 million jobs in
August, and that the unemployment rate dropped below 10 percent. Both
would be big improvements, but far from restoring all the jobs lost
during the pandemic. Similar trends are playing out in the European Union, which releases its latest jobs numbers on Tuesday, and in Canada, which reports on Friday.
🗓 From the TimesMachine:
On August 31, 1976, a relatively new firm named Vanguard listed the
first index mutual fund open to retail investors, known as the First
Index Investment Trust. “Such funds have become popular with some
professionals,” The Times wrote before the I.P.O. The newfangled fund aimed to raise $150 million, but the listing took in only $11 million. Today, Vanguard has more than $6 trillion in assets under management.
Image
Credit...Andrew Harnik/Andrew Harnik, via Associated Press
The juiciest bits from our profile of Steven Mnuchin
The
coronavirus is an opportunity for the Treasury secretary to redefine
his legacy, The Times’s Jim Stewart and Alan Rappeport write in a big profile of Mr. Mnuchin. Here are a few of the most eye-catching anecdotes they dug up: “You’re to blame.”
President Trump reportedly snapped at Mr. Mnuchin this spring and said
he “never should have signed” the original coronavirus rescue bill,
which his Treasury secretary crafted with help from Democrats.
Conservative pushback has made prospects of a second stimulus bill murky
at best. “His politics appall me.” Mr. Mnuchin’s
father, Robert, reportedly told an acquaintance that he didn’t approve
of his son’s work for Mr. Trump. (“But he’s my son,” he added). Mr.
Mnuchin’s stepmother “has reminded people that she is not Steven’s
biological mother,” Jim and Alan write, and “pretended her arm was
injured in order to avoid having to shake hands with Mr. Trump” at Mr.
Mnuchin’s wedding. “He occasionally impersonates Inspector Clouseau from the ‘Pink Panther’ films.” Though he appears “stiff and aloof” in public, Jim and Alan write, Mr. Mnuchin has a go-to move to break the ice in private. Read the whole story — it is worth your time.
Image
Credit...Matt Kennedy/Marvel Studios/Disney, via Associated Press
Chadwick Boseman and the power of ‘Black Panther’
Over the weekend, the entertainment world mourned the death from cancer of the 43-year-old actor
who portrayed icons like James Brown, Thurgood Marshall and Jackie
Robinson. But he was best known as a star of Marvel’s “Black Panther,” a
superhero movie that shattered conceptions of how popular Black-led
films could be. Before its release, “Black Panther” labored under pervasive worries that a film with a primarily Black cast wouldn’t live up to the ticket sales of other Marvel blockbusters, especially overseas. Instead, it became the fourth-highest grossing movie
ever, with $1.3 billion in box office revenue, evenly split between the
U.S. and abroad. And it spurred conversations about Black-centered
entertainment getting its due, thanks in no small part to Mr. Boseman’s widely praised performance.
The speed read
Deals
• AT&T is reportedly in talks to sell a majority stake in its embattled DirecTV satellite-TV arm. (WSJ)
• Nestle agreed to buy Aimmune Therapeutics, a maker of treatments for peanut allergies, for $2.6 billion. (Bloomberg)
•
Mick Mulvaney, President Trump’s former chief of staff, has started a
hedge fund that draws on his experience with financial regulation. (Politico) Politics and policy
• Heather Boushey, a top economic adviser to Joe Biden, argues that fixing economic inequality is crucial to bolstering America’s growth. Democratic lawmakers are urging the Fed to fight racial income inequality as part of its mandate. (NYT, Politico) Tech
•
The fintech start-up Carta publicly called for fairness for workers.
Current and former employees of the company said it didn’t live up to
its mission. (NYT)
•
Facebook’s top policy executive in India expressed public support for
the country’s governing party, which some say violated company rules
about political neutrality. (WSJ) Best of the rest
• Warren Buffett turned 90 yesterday. Bill Gates baked him a cake and shared what he has learned from his longtime friend. (Gates Notes)
• The “rarest of book breeds”: A middle grade memoir about a teenager’s start-up. (NYT)
•
The Bank of Jamaica dropped a new reggae music video, promoting the
virtues of financial stability and featuring the “low, stable and
predictable inflation dancers.” (@CentralBankJA)
Take a look at some of the biggest movers in the premarket: Honeywell (HON), Amgen (AMGN), Salesforce.com (CRM) – Honeywell, Amgen and Salesforce become members of the Dow Jones Industrial Average as of today, replacing Pfizer (PFE), Exxon Mobil (XOM) and Raytheon Technologies (RTX). Apple
(AAPL) – Apple begins trading on a post-split basis today, following
its 4-for-1 stock split. With the reduction in Apple’s per-share price, UnitedHealth
(UNH) now has the highest stock price among the 30 Dow stocks.
Separately, the legal battle between Apple and Fortnite creator Epic
Games escalated as Apple terminated Epic’s account in its App Store. Tesla (TSLA) – Tesla will also begin trading on a post-split basis today, following a 5-for-1 stock split. AT&T
(T) – AT&T is exploring options for its DirecTV unit, according to
people familiar with the matter who spoke to The Wall Street Journal. Apollo Global Management (APO) is said to be among the interested bidders for the satellite TV operator. Gilead Sciences
(GILD) – The Food and Drug Administration expanded the emergency use
authorization for Gilead’s antiviral drug remdesivir, allowing use in
all hospitalized patients with Covid-19. Previously, the treatment had
been approved only for people with a severe form of Covid-19. BlackRock
(BLK) – BlackRock received approval from China regulators to set up a
mutual fund unit in that country, becoming the first global asset
manager to receive such approval. Beyond Meat
(BYND) – Citi upgraded the plant-based burger maker’s stock to
“neutral” from “sell,” noting its underperformance since early July and
its better-than-expected topline growth and saying the stock now offers a
more balanced risk/reward profile. Philips
(PHG) – The Dutch medical equipment maker said the U.S. government has
canceled the bulk of an order for 43,000 ventilators, and it has cut its
2020 earnings outlook as a result. A U.S. House panel had determined
last month that the government had overpaid Philips by at least $500
million. Aimmune Therapeutics (AIMT) – Switzerland’s Nestle will pay $2 billion
to acquire full ownership of the U.S.-based biopharmaceutical company,
best known for its Palforzia treatment for peanut allergies. Nestle
already had a 25.6% stake in Aimmune, and will pay $34.50 per share for
the remainder compared to Aimmune’s Friday closing price of $12.60. General Electric
(GE) – JPMorgan Chase analyst Stephen Tusa removed his price target on
GE, citing the lack of forward visibility. The firm’s rating on GE
remains at “neutral,” although the report said the fair value of the
stock is likely less than $5 per share. Yum China
(YUMC) – The restaurant operator has begun taking orders for a
secondary share listing in Hong Kong that could raise more than $2.5
billion, according to The Wall Street Journal. United Airlines (UAL) – The airline said it would permanently eliminate ticket change fees,
as it tries to woo customers back after the pandemic-induced travel
demand slump. United’s standard domestic ticket change fee had been
$200. Berkshire Hathaway (BRKB) – Berkshire acquired stakes of just over 5% in five large Japanese companies,
including Mitsubishi, Mitsui and Sumitomo. Berkshire said it regarded
the purchases as long-term investments and that it may boost its stakes
to as high as 9.9%.
U.S. stock futures rose Monday morning as the S&P 500 wraps up its best August performance since the 1980s.
Dow Jones Industrial Average futures were up 41 points, or 0.1%. S&P 500 futures added 0.2%. Nasdaq 100 futures gained 0.3%.
The
S&P 500 is up 7.2% month to date, putting the broader-market index
on track for its biggest August gain since 1984. The Dow has rallied
more than 8% this month and is also headed for its best August in 36
years.
This month’s gains have pushed the S&P 500 to record
levels, officially confirming a new bull market has started. The Dow,
meanwhile, erased its 2020 losses on Friday, closing the session with a
year-to-date gain 0.4%.
Two big stock splits take effect Monday.
Apple shares gained 1% in premarket trading as a 4-for-1 split took
effect. Tesla shares added nearly 3% following its 5-for-1 split.
The
August rally built on the market’s sharp rebound off the March 23
intraday lows. Since then, the Dow and S&P 500 are up 57% and 60.1%,
respectively.
We “had hoped that the market would consolidate its
gains since March 23, giving earnings a chance to rebound,” said Ed
Yardeni, president and chief investment strategist at Yardeni Research,
in a note. “However, Fed officials continue to drive up stock prices by
committing to keeping interest rates close to zero for a very long time …
Consequently, they are fueling the meltup in stock prices.”
Earlier
this year, the Federal Reserve cut rates to zero and launched an
open-ended asset-purchasing program to support the economy through the
coronavirus pandemic. Last week, the central bank laid out an inflation
policy framework that would keep rates lower for longer.
In an
apparent long-term bet on the global economy, Warren Buffett announced
Sunday that his Berkshire Hathaway conglomerate had acquired stakes of more than 5% in Japan’s five-leading trading companies.
Those companies are Itochu Corp., Marubeni Corp., Mitsubishi Corp.,
Mitsui & Co., and Sumitomo Corp. The five businesses import
everything from metals to food into Japan and provide services to
manufacturers.
New Dow look
The Dow will kick
off the week with three new constituents and with Apple having a much
smaller influence on the 30-stock average.
Come Monday’s open,
Salesforce, Amgen and Honeywell will be included in the Dow, replacing
longtime component Exxon Mobil, Pfizer and Raytheon Technologies.
Traders
will also look ahead to Friday, when the latest U.S. jobs report is set
for release. Economists polled by Dow Jones forecast that 1.255 million
jobs were created in August.
TikTok logos are seen on smartphones in front of a displayed ByteDance logo in this illustration taken November 27, 2019. Dado Ruvic | Reuters
Chinese-owned TikTok is not in talks to sell its U.S. business to rival short-video-sharing app Triller, the company told CNBC on Monday.
“We
can confirm that we are not and will not be in talks with them. Still,
we are flattered by how much they admire TikTok,” a spokesperson for
TikTok said.
Still, Triller executive chairman Bobby Sarnevesht
insisted that the bid had been submitted. “We have confirmation that the
chairman (Zhang Yiming) and people pretty high up at ByteDance are
aware of it, and, we have correspondence going,” he told CNBC’s “Squawk Box Asia” on Monday.
His comments came after Bloomberg News reported that London-based
Centricus Asset Management and U.S. app Triller were seeking to buy
TikTok’s operations in the U.S., Australia, New Zealand and India for
$20 billion, citing a person familiar with the matter. The bid was said
to have been submitted to TikTok’s Beijing-based parent company
ByteDance.
ByteDance pointed CNBC to TikTok’s comment
on the matter. The company also denied knowledge of the offer to
Reuters. TikTok executives are also said to be unaware of receiving such
a bid and said that no one from the Chinese-owned short-video-sharing
app has spoken with Triller on this matter.
TikTok, which has about 100 million monthly active users
in the United States, is being forced to sell its U.S. business by the
Trump administration, which says the app’s current ties to China make it
a national security threat. In an executive order signed by President Donald Trump on Aug. 6, the U.S. alleged China may potentially have access to “Americans’ personal and proprietary information” due to the data collected by TikTok.
For
its part, TikTok has consistently denied those allegations and says its
U.S. user data is stored in the country itself with a backup in
Singapore and that its data centers are located outside China, implying the information was not subjected to Chinese law.
TikTok has also sued the U.S. government alleging it was deprived of due process and former CEO, Kevin Mayer, recently left the company just months after joining in June.
ByteDance is in talks with Microsoft, Oracle
and other investors in the company for the sale of TikTok’s operations
in the U.S., Canada, Australia and New Zealand ahead of a Sept. 15
deadline. Earlier this month, CNBC’s David Faber reported that Microsoft could buy TikTok for as much as $30 billion.
Triller’s
supposed bid of $20 billion puts it at a similar level. But, Centricus
on its website says it oversees $27 billion of assets, so, it wasn’t
immediately clear how the deal could be funded.
Sarnevesht
insisted it was not a publicity stunt. “We are not crazy, we are not out
here just pretending to have a bid and not have a bid. That doesn’t
make any sense. It’s perplexing at least, but I think there’s just an
aggregate delay on their data and how they share that information,” he
told CNBC.
He said the reason Triller entered the bidding game
late was because it was working on an implementation plan if it acquired
TikTok’s operations.
He declined to say how much the potential
deal could be worth but added that Triller planned to migrate TikTok’s
users, metadata and content onto its platform.
China’s
five largest banks reported their biggest profit declines in at least a
decade as they brace for further increases in bad loans in an economy
weakened by the coronavirus pandemic.
The five lenders — Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China and Bank of Communications — released their latest financial report cards last week.
All
five posted at least 10% year-on-year declines in profit for the first
half of 2020 as they set aside more funds for potential loan losses in
the coming months — much like many banks around the world.
“The banks have been asked to ...perform
‘national service.’ They’ve been asked to support the economy at the
expense of their own operational strength,” said Jason Tan, research
analyst at CreditSights, told CNBC’s “Squawk Box Asia” on Monday.
Chinese
banks, among the world’s largest by assets, have been placed at the
front line of the government’s effort to soften the economic blow on
households and businesses. Authorities in Beijing reportedly asked financial institutions to sacrifice
1.5 trillion yuan ($219 billion) in profits this year to help companies
by lowering lending rates and deferring repayments on loans.
The
Chinese economy — the world’s second largest — is expected to grow just
1% this year as measures to contain the coronavirus hit global economic
activity, according to the International Monetary Fund. That would be China’s weakest growth in at least 40 years, according to data by the fund.
The
brunt of the asset quality pressures might not have come through yet
because of the still existing moratorium on the repayment of loans as
well as its interest payments.
Jason Tan
research analyst, CreditSights
China, the first country to be hit by the fast-spreading coronavirus, has shown some signs of economic recovery. But the effect of the economic slowdown on banks have not materialized fully, said Tan.
“The
brunt of the asset quality pressures might not have come through yet
because of the still existing moratorium on the repayment of loans as
well as its interest payments,” he explained.
“So, these will
probably come in the second half, if not in the first half of 2021 when
the moratorium lifts in March 2021,” he added.
Mid-sized banks perform better
Morgan
Stanley’s analysis of the latest earnings reports by Chinese banks
found that mid-sized lenders performed better than their larger peers in
terms of operating profits before taking into account provisions set
aside for future bad debt.
In a Sunday note, Morgan Stanley
analysts pointed out that pre-provision operating profits of most
mid-sized Chinese banks grew between 8% and 27% in the second quarter
compared to a year ago. That’s better than that of the seven largest
banks, which ranged between a decline of 2% and a growth of 6%, they
added.
Still, analysts at Jefferies said in a note that Chinese
banks are “highly likely” to cut dividends this year after setting aside
more provisions. But with bank earnings likely to recover after hitting
a bottom in the second half of this year, dividends could return in
2021, they said.
Shares of Chinese banks suffered in 2020. The
FTSE China A 600 Banks Index — which tracks large- and mid-cap banks
listed on mainland China exchanges — declining by around 8.9% so far
this year, according to Refinitiv data.
In contrast, the broader FTSE China A 600 Index has climbed by 17.9% during the same period, Refinitiv data showed.
A
pedestrian passes a Nestle SA logo at the Nescafe factory, operated by
Nestle SA, in Tutbury, U.K., on Thursday, Aug. 23, 2018. Simon Dawson | Bloomberg | Getty Images
Nestle plans
to pay $2 billion to gain full ownership of peanut allergy treatment
maker Aimmune Therapeutics, as the Swiss company expands its
fast-growing health science business.
Known for its KitKat
chocolate bars and Nescafe instant coffee, Nestle set up Nestle Health
Science (NHS) in 2011 to open up a new area of business between food and
pharma.
Nestle said in a statement that its offer for Aimmune
values the California-based biopharmaceutical firm, which it has been
working with since 2016 and in which it already has a stake of around
25.6%, at $2.6 billion.
“Aimmune has $261 million in cash and
$134 million in debt. With our prior investment of $473 million in
Aimmune, we’ll be making a cash payment of just under $2 billion,” NHS
head Greg Behar told Reuters in an interview.
Nestle estimates
that up to 240 million people worldwide suffer from food allergies,
with peanut allergy being the most common, and with Aimmune, NHS will
have prevention, diagnostic and medical treatment options available,
Behar said.
Aimmune’s Palforzia peanut allergy treatment,
which recently gained U.S. approval for children, has sales potential of
$1 billion, Behar said. The deal is expected to add to organic growth
in 2021 and to cash earnings by 2022/23.
The NHS business was
on track to more than double sales by 2022, from 2 billion Swiss francs
($2.21 billion) in 2014, and was expected to close 2020 at 3.3 billion
francs, he added.
”(Palforzia) has 12 years of exclusivity,
global rollout will follow and they have the technology platform for
other food allergies in development,” Behar said.
Nestle, whose
shares were up 0.6% at 0739 GMT, is offering a 174% premium to Aimmune’s
closing share price of $12.60 on Aug. 28. Aimmune shares hit a record
high in January when Palforzia was approved, then dropped during the
coronavirus crisis.
Vontobel analyst Jean-Philippe Bertschy said the deal was “another milestone” for NHS after it bought Atrium in 2017.
Nestle has a market capitalization of just under 317 billion Swiss francs ($350 billion), Refinitiv data showed.
Image copyright
Getty Images
Image caption
Capita manages London's congestion charge
Outsourcing firm Capita is to close over a third of its offices in the UK permanently, the BBC understands.
The firm, which is a major government contractor, is to end its leases on almost 100 workplaces.
Business lobby group CBI has warned that the fall in office working is damaging city centre economies.
It comes as the government prepares to launch an advertising campaign encouraging more people to return to workplaces.
The
BBC understands that Capita, which manages London's congestion charge,
has been looking at various measures to help it simplify its business
for some time, such as embracing more flexible working, which is
supported by its employees.
So far, Capita has decided not to renew leases on 25 offices.
A
Capita spokesman said: "We take seriously the responsibilities we have
to the communities in which we operate and are mindful of the impact
that potential office closures could have on small businesses.
"Capita's
45,000 employees work in offices spread right across towns and cities
in the UK - we are committed to that continuing both now and in the long
term.
"Following dialogue with our employees it has become very
clear that they would like to work in a more flexible way, which will
involve increased working from home, but they will still spend a
significant amount of their time working from offices that are based in
the heart of our local communities."
Rise in flexible working
According
to the Chartered Institute of Personnel and Development (CIPD), which
represents HR professionals, there was a taboo around flexible working
prior to the pandemic - but seeing how employees worked from home during
the coronavirus lockdown has opened the eyes of many employers. "It's the biggest experiment we've ever had in homeworking," the CIPD's chief executive Peter Cheese told the BBC
in an interview in July. "Bosses are starting to shift towards judging
output, rather than the number of hours spent in front of the computer."
A recent BBC study found 50 major UK employers had no plans to return all staff to the office full time.
While
Prime Minister Boris Johnson is keen to reassure the public that it is
safe for more people to return to workplaces, the CIPD is more
circumspect about ensuring that employees do not feel pressured to do
so.
The CIPD wants employers to consider:
Is returning to the workplace essential?
Is it sufficiently safe to do so?
Is it mutually agreed with the worker?
"Working from home has proved to be a great success for many
individuals and organisations. Recent CIPD research found that a
majority of employers believe that homeworkers are either as productive
as other workers, or more productive," said Mr Cheese.
"However,
it's important that all employers take steps to support their employees'
mental health and address concerns they may have while they work from
home."
The CIPD says managers should be regularly checking in with
their staff, discussing their well-being and wherever possible,
ensuring decisions over working from home or returning to the workplace
"are based on individual choice and preference".
But the
Confederation of British Industry (CBI) warned this week that the
thousands of local businesses relying on the passing trade of office
workers are suffering. City centres could become "ghost towns" if employees do not return to work, stressed CBI boss Dame Carolyn Fairbairn.
Both the CBI and the CIPD are in favour of using effective test and trace systems.
Changing business processes
However,
an increasing number of employers say that home working - which was
initially brought in as a temporary measure in lockdown - could become a
more permanent state of affairs. The law firm Linklaters said this week that all of
its 5,300 staff could spend up to 50% of their time working remotely
from now on.
Lloyds Banking Group is reviewing its office space
needs and working practices after concluding that most of its 65,000
staff have worked effectively from home during the crisis.
Others
including NatWest, Fujitsu, Facebook, Twitter and HSBC have also said
they plan to allow much more flexible working in future.
Experts say it could allow firms to cut their rent and utilities costs, while offering employees a better work-life balance.
However,
the CIPD doesn't feel that masses of white-collar workers will end up
working from home permanently as a cost-cutting measure.
Instead,
it thinks office spaces will become places where just some staff are
based, or that employees work in the office at different times and on
different days on a rotation, and that the office space will be used
more for face-to-face meetings.
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AirAsia’s founder Tony Fernandes is building what he
hopes will be the region’s next "super app" as he deals with the
coronavirus travel downturn.
He wants to rival the likes of Grab,
GoJek and WeChat with an all-in-one app for food delivery, shopping,
payments, entertainment and travel.
As the airline’s boss, he has been looking at new ways to generate income while his planes were grounded.
AirAsia has struggled during the pandemic and cut 30% of its staff.
In
an interview with the BBC, Mr Fernandes said he has spent his time
during the travel slump improving the AirAsia app and the company's
payments platform BigPay.
"The downturn was a blessing in disguise
in some ways as it allowed us to focus more on it. Running an airline
takes up a lot of our time but we have been given the opportunity and
time to focus on our digital business."
AirAsia already has a "rich database" of over 60 million users as its starting point.
The
AirAsia app, which also offers users a messaging service, has set its
sights on super apps like Singapore-based Grab, Indonesia’s GoJek and
China’s Meituan.
"AirAsia has always been a digital company. We
were one of the first airlines to sell online. It’s in our bloodstream,"
added Mr Fernandes, who is also a major shareholder of English football
club Queen’s Park Rangers (QPR).
"I know a super app sounds like a
lofty target but Grab and GoJek also started out small as food or
mobility apps. Plus people also questioned me the same way when I said I
wanted to start AirAsia."
Mr Fernandes’ airline has now grown to become Asia’s biggest budget carrier.
Making music
Last year AirAsia launched its
own record label called RedRecords in partnership with Universal Music.
The aim is to discover stars from South East Asia who will appeal to a
Western audience.
The first major signing, Thai pop star Jannine Weigel, has already built up millions of followers across social media.
"Boy
have we got something special with the record label. The Koreans have
shown how Asian music can appeal to a global audience with K-pop and
there is huge potential for South East Asia."
"This also helps us engage with a younger audience and gives lots of content for our app."
ByteDance
Ltd.’s TikTok app is displayed in the App Store on a smartphone in an
arranged photograph taken in Arlington, Virginia, on Monday, Aug. 3,
2020.
Andrew Harrer | Bloomberg | Getty Images
Walmart said it’s teaming up with Microsoft in a bid for TikTok.
The retail giant confirmed to CNBC that it’s interested in buying the tech company.
Walmart shares are up more than 2% on the news.
TikTok
is nearing an agreement to sell its U.S., Canadian, Australian and New
Zealand operations in a deal that’s likely to be in the$20
billion to $30 billion range, sources say. With Walmart’s confirmation,
it joins several others bidding on the tech company, including Oracle.
In
a statement, the big-box retailer said TikTok’s integration of
e-commerce and advertising “is a clear benefit to creators and users in
those markets.”
“We believe a potential relationship with Tik Tok
US in partnership with Microsoft could add this key functionality and
provide Walmart with an important way for us to reach and serve
omnichannel customers as well as grow our third-party marketplace and
advertising businesses,” it said. “We are confident that a Walmart and
Microsoft partnership would meet both the expectations of US Tik Tok
users while satisfying the concerns of US government regulators.” CNBC’s Alex Sherman contributed to this story.
Take a look at some of the biggest movers in the premarket: Tiffany
(TIF) – The luxury goods retailer reported a mixed quarter, with
revenue below forecasts, but earnings beating analysts’ estimates.
Tiffany’s results were helped by an improvement in sales in China, and
the company said global sales trends are continuing to improve during
the current quarter. Comparable-store sales fell 24% from a year ago,
compared to the drop of 16.9% expected by analysts polled by FactSet. Abercrombie & Fitch
(ANF) – The apparel retailer reported an unexpected quarterly profit,
in addition to seeing revenue come in above Wall Street estimates.
Abercrombie said, however, that it expects continued material adverse
impacts from the Covid-19 pandemic. Burlington Stores
(BURL) – The apparel retailer lost 56 cents per share for its latest
quarter, compared to the consensus estimate of a loss of $1.04 per
share. Revenue came in slightly below estimates, with comparable sales
in re-opened stores down 14% from a year earlier. The company said it
should see improvement this quarter as it replenishes inventory, but
warns it sees “a lot of risk” as well. Coty
(COTY) – The cosmetics maker reported a loss of 46 cents per share for
its fiscal fourth quarter, wider than the 12 cents a share loss
anticipated by Wall Street analysts. Revenue also came in well below
forecasts. Coty said the quarter and the full fiscal year were severely
impacted by the pandemic, but that it expects significant improvement
for the current quarter. Dollar Tree
(DLTR) – The discount retailer earned $1.10 per share for its second
quarter, 18 cents a share above estimates. Revenue topped forecasts as
well. Comparable store sales were up 7.2%, better than the 6.2%
consensus FactSet estimate. Dollar General
(DG) – The discount retailer earned $3.21 per share for its latest
quarter, compared to a consensus estimate of $2.44 a share. Revenue was
also above forecasts. Comparable-store sales were up 18.8%, better than
the 14.9% increase anticipated by analysts polled by FactSet. Dollar
General also announced a $2 billion increase in its share buyback
program. Both Dollar General and rival Dollar General benefited from
pandemic-fueled shopping for essentials. Sanderson Farms
(SAFM) – The poultry producer reported quarterly profit of $1.48 per
share, well above the 95 cents a share consensus estimate. Revenue also
beat analysts’ forecasts. Sanderson saw strong demand for products sold
in the retail channel, although it did see volatility in other areas of
its business. Box Inc.
(BOX) – Box beat estimates by 6 cents a share, with quarterly profit of
18 cents per share. Revenue came in above forecasts as well. The
provider of cloud data storage services also raised its annual revenue
forecast, as the jump in people working from home boosts demand. Williams-Sonoma
(WSM) – Williams-Sonoma earned $1.80 per share for its latest quarter,
beating the $1.01 a share consensus estimate. The housewares retailer’s
revenue came in slightly above forecasts. Comparable-store sales were
better than expected and e-commerce jumped 46%. The stock is under some
pressure, however, with the company not giving forward guidance and
saying it sees a sizable headwind from shipping charges. WPP
(WPP) – WPP posted better-than-expected second-quarter results, thanks
in part to new business helping companies with expanded e-commerce. The
advertising giant also reinstated its dividend. WPP said it would
resume its share buyback program when the economic environment
stabilizes. Abbott Labs
(ABT) – Abbott won Food and Drug Administration approval for a rapid
Covid-19 test used by health professionals and medical labs. The
portable test will cost $5 and can deliver results in 15 minutes. The
approval was granted under the FDA’s emergency use authorization
program. Under Armour
(UAA) – Under Armour was sued by the University of California, Los
Angeles, for pulling out of a 15-year apparel deal with the school. UCLA
is seeking more than $200 million in damage after Under Armour ended
the pact after college sports were canceled due to the Covid-19
pandemic. NetApp
(NTAP) – NetApp reported quarterly earnings of 73 cents per share,
compared to a consensus estimate of 41 cents a share. The cloud storage
software company’s revenue also came in above analysts’ forecasts. Like
other companies in this sector, NetApp is benefiting from the
pandemic-induced surge in cloud computing as more people work remotely. Splunk
(SPLK) – Splunk matched analysts’ forecasts with a quarterly loss of
33 cents per share, but revenue fell short of expectations as Splunk
continued its shift from licensed software to a cloud-based subscription
model.
An
electronic screen displays international currency rates and the NZ
markets on the side of a building on February 7, 2018 in Auckland, New
Zealand. Phil Walter | Getty Images News | Getty Images
Trading was halted on New Zealand’s stock exchange on Thursday for a third day in a row following a cyber attack earlier in the week.
Bourse
operator New Zealand’s Exchange said trading in its cash markets
stopped at around 11:10 a.m. local time due to network connectivity
issues relating to this week’s cyber attacks. It then made the decision
to not re-open the NZX Main Board, the NZX Debt Market and Fonterra
Shareholders’ Market for the rest of the trading day and closed the
NZX Derivatives Market.
“This decision not to re-open has been
made while we focus on addressing the situation. We continue to address
the threat and work with cybersecurity experts, and we are doing
everything we can to resume normal trading tomorrow (28 August),” NZX said in a statement on its website.
NZX said on Tuesday it experienced a DDoS (distributed denial of service) attack
from overseas through its network service provider, disrupting the
final hour of trading in its cash markets. Its websites and the markets
announcement platform were also affected.
A day later, it said it faced disruptions from a similar attack, which halted trading at 11:24 a.m. local time until 3 p.m.
DDoS
attacks are among the simplest forms of cyber attacks to execute. It
involves delivering a heavy stream of information and internet traffic,
usually with the help of a network of hacked computers, to overwhelm the
systems of a target.
In
November, that same war room could be in operation for a week or longer
as officials ward off attacks aimed at undermining early voting,
counting late-arriving mail ballots and knocking back phony rumors that
try to erode faith in the election’s outcome. It will include
in-person meetings in Washington to hash through classified and
unclassified information and an online “situational awareness room” open
to election officials across the nation.
“That will remain in
place, frankly, until the election community says, 'Okay, you can stand
down now. We're in good shape,' " a senior official at DHS’s
Cybersecurity and Infrastructure Security Agency said. The
expanded operation is emblematic of how the coronavirus pandemic has
vastly complicated officials’ plans for what was already shaping up to
be the most complex and closely watched election in U.S. history from a
security perspective.
CISA is already running a 24/7
operation monitoring election offices across the country for hacking
threats through a network of hundreds of digital sensors, said the
official who spoke to reporters on condition of anonymity. The agency
will shift to an “enhanced readiness posture” during the last 45 days
before the election, ramping up how often it shares information with
agencies across the government. It will also begin offering biweekly
threat briefings to election officials then.
“The reality is, it’s not about Election Day anymore. It’s about an election time period and understanding what takes place over that [whole] time period,” the official said.
The
pandemic – and consequent surge in mail voting – made it easier for
adversaries to raise doubts about the election's legitimacy.
“The
opportunity for uncertainty is there… and uncertainty is a fertile
battleground for our adversaries to seek to divide us and undermine
trust in the process,” the CISA official said. “[That’s] why we need
prepared, patient and participating voters to engage in the process.” But it probably hasn’t made the election substantially more vulnerable to hackers from Russia or elsewhere. That’s largely because it’s comparatively easy to track mail votes and to audit them to make sure they were tallied correctly.
So far, there’s no evidence Russia or other U.S. adversaries are trying to sabotage mail voting.
While Trump and Attorney General William P. Barr have both suggested adversaries might print and mail in phony ballots, “we
have no information or intelligence that any nation-state threat actor
is engaging in any kind of activity to undermine any part of the mail-in
vote or ballots,” a senior intelligence official said during the same media briefing.
An
FBI official also said the bureau has not seen any “coordinated
national voter fraud effort” and warned such an effort would be
“extraordinarily difficult” to pull off. Nevertheless, the FBI is on the
lookout for such efforts, the official said.
Deputy Attorney General Jeffrey A. Rosen made a similar point at a separate appearance Wednesday, Devlin Barrett reports.
“We
have yet to see any activity intended to prevent voting or to change
votes, and we continue to think that it would be extraordinarily
difficult for foreign adversaries to change vote tallies,” Rosen said
during an address at the Center for Strategic and International Studies
think tank.
Election officials have also said it would be
impractical if not impossible to commit widespread mail ballot fraud
because of systems that allow election offices and voters to track mail
ballots during their journey and verification procedures once those
ballots arrive.
There also haven’t been any substantial efforts to hack election systems so far this cycle, officials said.
But that doesn’t mean such attacks won’t happen in the approximately three months remaining before Election Day.
DHS
has spotted a lot of hackers scanning county election offices looking
for vulnerabilities they might exploit — but that’s common for all IT
systems and it’s not clear the hackers even know that they’re looking at
election systems, the CISA official said. The scanning hasn’t been
aimed specifically at high-value targets that would make it easy to
disrupt an election such as voter registration databases, the official
said.
In 2016, Russian hackers compromised voter registration
databases in at least two states, but there’s no evidence they
manipulated them in any way that would have disrupted election
operations.
There have been a handful of instances where election
offices were affected by cyberattacks this year, but those attacks
weren't aimed specifically at the offices and didn't disrupt election
operations, the CISA official said. For example, there have been cases
where county governments were hit with ransomware attacks that impacted
their election divisions. In general, the election components have done
better at resisting those attacks than other agencies, the official
said.
“Frankly, what we've seen from the election community is a
level of resilience and responsiveness that outpaces their county
brethren,” he said.
The keys
TikTok CEO resigns as U.S. ban approaches.
Kevin
Mayer, a former Disney executive, had only been in the role for three
months. The company’s U.S. operations were upended soon after he took
the job by the Trump administration’s plan to ban the app over national
security concerns, Rachel Lerman reports.
“I
understand that the role that I signed up for — including running
TikTok globally — will look very different as a result of the US
Administration’s action to push for a sell off of the US business,” he
wrote in a letter obtained by The Washington Post.
TikTok is suing the administration over the ban and denies that it’s a security threat.
The
U.K. government’s review is likely to determine the app isn’t a major
security threat on the level of the Chinese telecom Huawei. But the app
is still sparking concerns from privacy hawks in Parliament —
especially a plan to open up an international headquarters in London.
TikTok has also discussed plans to open a European data server in
Ireland.
“With a flashy campus in the U.K., ByteDance
would be free to masquerade as a British equivalent to Facebook or
Google, gaining credibility in London,” said Conservative lawmaker Iain
Duncan Smith.
North Korean hackers are ramping up global attacks on banks.
The campaign has included initiating fraudulent
money transfers and forcing ATMs to dispense cash, a group of federal
agencies including the Treasury Department and FBI warned, Christopher Bing reports.
The bank heists have been going on since 2016 but they ramped up in February, the agencies said.
U.S.
officials have repeatedly accused North Korea of using such attacks to
fund its government, which has been crippled by severe sanctions imposed by the United States and other Western countries. The Treasury Department imposed sanctions on the same group of hackers in the fall.
“The
continued attacks are proof of the reliance the regime has on these
funds, along with being a testament to their technical ability and
determination,” Vikram Thakur, a technical director for the U.S.
cybersecurity firm Symantec, told Reuters.
North Korea has denied the charges.
Disinformation operations are targeting Black voters — again.
Researchers
are seeing actors in Iran, China and Romania pose as Black voters on
social media to exacerbate America's racial divide and suppress Black
voters as the election nears, Craig Timberg and Isaac Stanley-Becker report. It's a playbook popularized by Russia during the 2016 election.
One
such phony account featured a profile photo of a young Black man
claiming to be a former Black Lives Matter protester who switched
allegiances to the Republicans. It was retweeted 22,000 times and had
more than 15,000 followers before getting deleted.
Twitter
suspended the account and several others that posted similar messages
for violating rules about “platform manipulation and spam,” said a
company spokesman, Trenton Kennedy. The company didn't provide any
details about who was behind the account.
“These
methods seem crude, but at the end of the day it shows how easy it is to
game Twitter, and how a false account can get so many impressions and
potentially influence or reaffirm the existing prejudices of an untold
amount of people,” said disinformation researcher Marc Owen Jones, who found the account. Facebook has also run into coordinated behavior against Black voters.
Privacy patch
Apple is giving users more control over their privacy. Facebook is mad.
Under
the new rules, Apple will block Facebook and other companies that use
advertising software from tracking users without their permission.
Chat room
Facebook denounced Apple's update as harmful to small developers, But it didn't garner much sympathy.
Bloomberg News's Sarah Frier and the New York Times's Sheera Frankel:
CEO of Digital Content Next Jason Kint:
Facebook's Audience Network is also the part of the company we know least about, Elizabeth Dwoskin points out:
Global cyberspace
Coronavirus apps are raising privacy fears in India.
A
central government coronavirus app has already faced international
scrutiny over privacy issues. But there are also dozens of state-level
apps and its hard for experts to tell how effectively they're protecting
privacy, Reuters reports.
“Many
of them do not have a specific privacy policy and there is no
transparency about how these apps collect, process, store or share
personal data," said Devdutta Mukhopadhyay, a lawyer with New
Delhi-based digital rights group Internet Freedom Foundation.
More cybersecurity news:
Daybook
President Trump will speak at the Republican National Convention tonight.
Futures
contracts tied to the major U.S. stock indexes slipped in premarket
trading Thursday morning as Wall Street turned its attention to an
upcoming address from Federal Reserve Chairman Jerome Powell.
Dow
futures slipped 77 points, pointing to a lower open when regular equity
trading resumes Thursday morning. S&P 500 and Nasdaq-100 futures
were lower by 0.2%.
Thursday’s trading is likely to be driven in
large part by comments from Fed Chair Jerome Powell, who is expected at
9:10 a.m. ET to introduce a new pandemic-era tool
to combat the economic impact of Covid-19 and foster inflation in the
U.S. The Fed’s annual symposium will be held virtually this year instead
of the usual locale of Jackson Hole, Wyoming.
The central bank
has for years tried to keep inflation at 2%, a rate of price increase
that policymakers consider both manageable and indicative of a healthy
economy. But ever since the financial crisis, inflation in the U.S. has
more often than not lagged the Fed’s target.
Powell is expected to
acknowledge that ongoing inflation shortfall and announce that the Fed
will now have an “average inflation” target. Investors say that the move
will allow the Fed to be more comfortable with inflation creeping above
the 2% threshold so long as it’s eventually offset by periods of
below-average price growth.
Rick Rieder, BlackRock’s global chief
investment officer of fixed income, told CNBC that “the rates markets
are anticipating the Fed is going to be dovish and willing to withstand
inflation being higher for a longer period.”
The prospect of
continued stimulative policy could help push the major market indexes to
new record highs, a feat both the Nasdaq Composite and S&P 500
clinched on Wednesday.
A tech-led rally led the S&P 500 up 1% to 3,478.73 on Wednesday while the Nasdaq popped 1.7% to finish the day at 11,665.06.
Some
of the nation’s largest technology and consumer communications
companies were responsible for the upward pressure on Wednesday, with
blowout earnings from Salesforce sending its stock up 26%. Facebook and
Netflix jumped 8.2% and 11.6%, respectively, while Apple added 1.4%,
Amazon advanced 2.8% and Microsoft climbed 2.1%.
Wednesday’s
gains put the S&P 500 up more than 58% since hitting an intraday low
on March 23. The Nasdaq has soared by 75% in that time period.
Shares of Abbott Laboratories jumped 8% after the company won authorization for a $5 rapid coronavirus test.
Investors
will also pore through the government’s latest report on jobless claims
on Thursday. The Labor Department at 8:30 a.m. ET will release figures
on how many Americans filed for unemployment benefits for the first time
during the week ended August 22.
Economists polled by Dow Jones
expect some 1 million workers filed initial claims last week. That would
be a deceleration from the prior week’s print of 1.1 million first-time
claims. — CNBC’s Patti Domm contributed to this report.
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TikTok chief executive Kevin Mayer has quit after
just two months in the job ahead of an impending ban by US President
Donald Trump.
The Chinese-owned firm has been accused of being a threat to US national security by the Trump administration.
Mr Mayer joined TikTok in June after leaving his role as Disney's head of streaming services.
TikTok was given 90 days to be sold to an American firm or face a ban in the US.
"In
recent weeks, as the political environment has sharply changed, I have
done significant reflection on what the corporate structural
changes will require, and what it means for the global role I signed up
for," Mr Mayer said in a letter to employees.
"Against this
backdrop, and as we expect to reach a resolution very soon, it is with a
heavy heart that I wanted to let you all know that I have decided to
leave the company," Mr Mayer added.
Both TikTok and Chinese
messaging app WeChat face bans in the US as tensions rise between
Washington and Beijing over a wide range of issues including national
security concerns about Chinese tech firms.
"We appreciate that
the political dynamics of the last few months have significantly changed
what the scope of Kevin's role would be going forward, and fully
respect his decision. We thank him for his time at the company and wish
him well," a spokesman for TikTok said.
Kevin Mayer was brought into TikTok to help give the Chinese-owned app an American image.
The
thinking was that the former Disney man would be able to negotiate with
a tough-on-China Trump administration better than perhaps a Chinese
chief executive and that would help smooth TikTok's path into one of its
biggest markets - the US.
Instead, the intense pressure from the Trump administration on TikTok only grew.
President Trump claims TikTok is a national security threat because of who it is owned by, Chinese internet firm ByteDance.
Earlier
this month, he signed an executive order that would effectively ban
TikTok's operations in the US if it wasn't sold to another company by
mid September.
All of this is not what Mr Mayer signed up for when he left Walt Disney to take on the role at TikTok.
And after just two months in the job, he is now departing.
Executive order
President Trump's executive order prohibits transactions with TikTok's owner ByteDance from mid-September.
The firm has gone to court to challenge the ban.
Officials
in Washington are concerned that TikTok could pass American users' data
to the Chinese government, something ByteDance has denied doing.
TikTok said the Trump administration's move was motivated by politics, not national security.
US tech giant Microsoft has confirmed that it is continuing talks to purchase the US operations of TikTok.
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