View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

Rivian Loses Its Shine as Investors Fret About Production Delays

The company also did not tell investors that its chief operating officer, Rod Copes, a Harley-Davidson veteran, left the company last year. Public companies and those in the process of listing their shares generally disclose the departures of top executives. The news was first reported by The Wall Street Journal.

Ms. Mast said Mr. Copes had a “phased transition from Rivian in fall 2021, prior to the I.P.O.” and retired in December, after the offering.

Mr. Copes, 55, said in an interview that he did not leave Rivian because of concerns about his performance or because there were problems with production. He said that he had achieved key goals and that the structures were in place for Rivian’s ramp-up in production. “It was a smooth and seamless transition,” Mr. Copes said.

But corporate governance experts think Rivian ought to have disclosed his impending departure to investors during the I.P.O., given his senior role. “If they knew he was leaving, the optimal disclosure would have been to identify their C.O.O. but indicate that he was leaving,” John C. Coffee Jr., a professor at Columbia Law School, said in an email.

According to one former executive, Rivian has a poor management culture.

The executive, Laura Schwab, said she was fired last year from a high-ranking sales and marketing position after expressing concerns about what she called the “boys’ club culture” and “gender discrimination” at the company. She filed a lawsuit in state court in California accusing Rivian of violating the state law prohibiting employment discrimination and retaliation.

Ms. Schwab said she had been part of 30 vehicle introductions in prior auto industry jobs, including at Aston Martin and Jaguar Land Rover. Soon after arriving at Rivian, she said, she felt compelled to express concerns that the company was in danger of missing delivery targets.

“The production line doesn’t go from zero to thousands of cars overnight; it just doesn’t work that way,” she said.

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

Tech Start-Ups Reach a New Peak of Froth

Astonishing data for 2021 tell the story. U.S. start-ups raised $330 billion, nearly double 2020’s record haul of $167 billion, according to PitchBook, which tracks private financing. More tech start-ups crossed the $1 billion valuation threshold than in the previous five years combined. The median amount of money raised for very young start-ups taking on their first major round of funding grew 30 percent, according to Crunchbase. And the value of start-up exits — a sale or public offering — spiked to $774 billion, nearly tripling the prior year’s returns, according to PitchBook.

The big-money headlines have carried into this year. Over a few days this month, three private start-ups hit eye-popping valuations: Miro, a digital whiteboard company, was valued at $17.75 billion; Checkout.com, a payments company, was valued at $40 billion; and OpenSea, a 90-person start-up that lets people buy and sell nonfungible tokens, known as NFTs, was valued at $13.3 billion.

Investors announced big hauls, too. Andreessen Horowitz, a venture capital firm, said it had raised $9 billion in new funds. Khosla Ventures and Kleiner Perkins, two other venture firms, each raised nearly $2 billion.

The good times have been so good that warnings of a pullback inevitably bubble up. Rising interest rates, expected later this year, and uncertainty over the Omicron variant of the coronavirus have deflated tech stock prices. Shares of start-ups that went public through special purpose acquisition vehicles last year have slumped. One of the first start-up initial public offerings expected this year was postponed by Justworks, a provider of human resources software, which cited market conditions. The price of Bitcoin has sunk nearly 40 percent since its peak in November.

But start-up investors said that had not yet affected funding for private companies. “I don’t know if I’ve ever seen a more competitive market,” said Ambar Bhattacharyya, an investor at Maverick Ventures.

Even if things slow down momentarily, investors said, the big picture looks the same. Past moments of outrageous deal making — from Facebook’s acquisitions of Instagram and WhatsApp to the soaring private market valuations of start-ups like Uber and WeWork — have prompted heated debates about a tech bubble for the last decade. Each time, Mr. Bahat said, he thought the frenzy would eventually return to normal.

Instead, he said, “every single time it’s become the new normal.”

Investors and founders have adopted a seize-the-day mentality, believing the pandemic created a once-in-a-lifetime opportunity to shake things up. Phil Libin, an entrepreneur and investor, said the pandemic had changed every aspect of society so much that start-ups were accomplishing five years of progress in one year.

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

Fed’s Moves in 2022 Could End the Stock Market’s Pandemic Run

For two years, the stock market has been largely able to ignore the lived reality of Americans during the pandemic — the mounting coronavirus cases, the loss of lives and livelihoods, the lockdowns — because of underlying policies that kept it buoyant.

Investors can now say goodbye to all that.

Come 2022, the Federal Reserve is expected to raise interest rates to fight inflation, and government programs meant to stimulate the economy during the pandemic will have ended. Those policy changes will cause investors, businesses and consumers to behave differently, and their actions will eventually take some air out of the stock market, according to analysts.

“It’s going to be the first time in almost two years that the Fed’s incremental decisions might force investors or consumers to become a little more wary,” said David Schawel, the chief investment officer at Family Management Corporation, a wealth management firm in New York.

At year’s end, the overarching view on Wall Street is that 2022 will be a bumpier ride, if not quite a roller coaster. In a recent note, analysts at J.P. Morgan said that they expected inflation — currently at 6.8 percent — to “normalize” in coming months, and that the surge of the Omicron variant of the coronavirus was unlikely to lower economic growth.

16 percent gain during the first year of the pandemic. The index hit 70 new closing highs in 2021, second only to 1995, when there were 77, said Howard Silverblatt, an analyst at S&P Dow Jones Indices. Shares on Friday fell slightly.

The market continued to rise through political, social and economic tensions: On Jan. 7, the day after a pro-Trump mob stormed the U.S. Capitol, the S&P set another record. Millions of amateur investors, stuck at home during the pandemic, piled into the stock market, too, buying up shares of all kinds of companies — even those that no one expects will earn money, like the video game retailer GameStop.

Wall Street also remained bullish on business prospects in China despite Beijing’s growing tension with the United States and tightening grip on Chinese companies. Waves of coronavirus variants, from Delta to Omicron, and a global death toll that crossed five million did not deter the stock market’s rise; its recovery after each bout of panic was faster than the previous one.

“2021 was a terrific year for the equity markets,” said Anu Gaggar, the global investment strategist for Commonwealth Financial Network, in an emailed note. “Between federal stimulus keeping the economy going, easy monetary policy from the Fed keeping markets liquid and interest rates low, and the ongoing medical improvement leading to surprising growth, markets have been in the best of all possible worlds.”

400 private companies raised $142.5 billion in 2021. But investors had sold off many of the newly listed stocks on the New York Stock Exchange or Nasdaq by the end of the year. The Renaissance IPO exchange-traded fund, which tracks initial public offerings, is down about 9 percent for the year.

Shares of Oatly, which makes an oat-based alternative to dairy milk, soared 30 percent when the company went public in May but are now trading 60 percent lower than their opening-day closing price. The stock-trading start-up Robinhood and the dating app Bumble, two other big public debuts, were down about 50 percent for 2021.

supply chain disruptions stemming from the pandemic. Prices for used cars skyrocketed amid a global computer chip shortage. As Covid-19 vaccination rates improved, businesses trying to reopen had to raise wages to attract and retain employees. Consumer prices climbed 5.7 percent in November from a year earlier — the fastest pace since 1982.

But even when “inflation” had become a buzzword worthy of a headline in The Onion, the stock market appeared slow to react to price increases.

“The market is on the side that inflation is transitory,” said Harry Mamaysky, a professor at Columbia Business School. “If it’s not and the Fed needs to go in and raise interest rates to tame inflation, then things could get a lot worse in terms of markets and economic growth.”

And that is what the Fed has signaled it will do in 2022.

When interest rates go up, borrowing becomes more expensive for both consumers and companies. That can hurt profit margins for companies and make stocks less attractive to investors, while sapping consumer demand because people have less money to spend if their mortgage and other loan payments go up. Over time, that tends to deflate the stock market and reduce demand, which brings inflation back under control.

loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation costs and toys.

Mr. McBride said the values of many stocks were being supported by extremely low yields on Treasury bonds, especially the 10-year yield, which has held to about 1.5 percent.

“If that yield moves up, investors are going to re-evaluate how much they’re willing to pay for per dollar of earnings for stocks,” he said. Even if corporate profits — which were strong in 2021 — continue to grow in 2022, he added, they are unlikely to expand “at a pace that continues to justify the current price of stocks.”

quicken the pace of pulling back on that aid, set to finish in March.

“The nightmare scenario is: The Fed tightens and it doesn’t help,” said Aaron Brown, a former risk manager of AQR Capital Management who now manages his own money and teaches math at New York University’s Courant Institute of Mathematical Sciences. Mr. Brown said that if the Fed could not orchestrate a “soft landing” for the economy, things could start to get ugly — fast.

And then, he said, the Fed may have to take “very aggressive action like a rate hike to 15 percent, or wage and price controls, like we tried in the ’70s.”

By an equal measure, the Fed’s moves, even if they are moderate, could also cause a sell-off in stocks, corporate bonds and other riskier assets, if investors panic when they realize that the free money that drove their risk-taking to ever greater extremes over the past several years is definitely going away.

Sal Arnuk, a partner and co-founder of Themis Trading, said he expected 2022 to begin with something like “a hiccup.”

“China and Taiwan, Russia and Ukraine — if something happens there or if the Fed surprises everyone with the speed of the taper, there’s going to be some selling,” Mr. Arnuk said. “It could even start in Bitcoin, but then people are going to start selling their Apple, their Google.”

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

Trump’s $300 Million SPAC Deal May Have Skirted Securities Laws

Mr. Trump initially expected to announce his new social media company in August, according to a person briefed on the timing. But the plans were delayed after Mr. Trump’s son, Donald Trump Jr., voiced reservations about the Digital World deal, according to people familiar with the negotiations.

On Aug. 3, Mr. Orlando wrote to the S.E.C. asking for clearance to accelerate Digital World’s I.P.O. for that month, only to withdraw the request two days later. When the SPAC eventually went public on Sept. 8, raising $293 million, Digital World said it had still not identified a merger target.

Less than three weeks later, on Sept. 27, Mr. Orlando went to Mar-a-Lago, Mr. Trump’s private club in Florida, to sign a “letter of intent” — an initial formal step toward a merger of Digital World and Trump Media, according to a person with knowledge of the event. For a new SPAC, it was an extraordinarily swift turnaround; most SPACs take at least a year to find and merge with a target.

On Oct. 20, Mr. Orlando returned to Mar-a-Lago, where he and Mr. Trump signed the final paperwork under chandeliers in a cavernous golden ballroom, according to an attendee. Donald Trump Jr. and the former “Apprentice” contestants, Mr. Moss and Mr. Litinsky, were among those in attendance.

After the deal was announced last week, Digital World’s shares rocketed higher. This week, they plummeted. At least two of the anchor investors, D.E. Shaw and Saba Capital, sold much of their stock after the Trump deal came to light. Another prominent investor, Iceberg Research, announced that it was betting against the stock.

Even so, Digital World’s shares remain about seven times higher than before the Trump deal. On paper, at least, the company is worth more than $2 billion.

On Tuesday, as he was boarding a plane, Mr. Orlando wouldn’t say much about how the deal came together. “It’s been wild,” he said.

Kenneth P. Vogel, Michael Schwirtz and Shane Goldmacher contributed reporting. Susan C. Beachy contributed research.

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

BuzzFeed Is Going Public. Now What for Vox Media, Group Nine and Vice?

“For us, it’s a question of ambition and opportunity, and we are ambitious,” said Jim Bankoff, Vox Media’s chief executive. “We are going to evaluate our options, but we’re going to do it from a position of strength.” He would not comment on financial details or any potential deals.

Group Nine had talks with major publishers, including Vox Media, about a possible merger for its own SPAC listing, but so far none have materialized, according to three people with knowledge of the matter. Ben Lerer, the head of Group Nine, said in an interview that the company was “in an enviable position” given its recent sales growth.

“The SPAC obviously allows us to be even more ambitious,” he said.

An option for Group Nine would be a deal with one of its largest backers: Discovery Inc. The media giant recently orchestrated a daring takeover of WarnerMedia in an effort to better compete in streaming. Group Nine’s properties have helped drive hundreds of thousands of new customers to Discovery’s streaming platform through content partnerships, making it an attractive takeover target.

The digital ad market thrived during the pandemic, as people started spending more online; BuzzFeed, Vox Media and Group Nine all benefited. Still, their gains were nothing compared with the amounts brought in by the digital giants.

“Facebook, Google and Amazon’s crumbs are Vox, Group Nine and Buzzfeed’s cake,” said Brian Wieser, the lead analyst at GroupM, the media investing arm of the ad company WPP.

That disparity underlines the need of the ad-driven publishers to keep getting bigger.

BuzzFeed’s entry into the public markets is likely to give it an advantage. In addition to cash, it will be able to use its stock as currency to make another deal along the lines of its HuffPost purchase.

“We’ll have opportunities to pursue more acquisitions, and there are more exciting companies out there that we want to pursue,” Jonah Peretti, a BuzzFeed co-founder and the chief executive, said last month.

When asked if BuzzFeed would consider entering the subscription business, he said in a recent interview: “Sure, we’d consider it. Why not?”

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

For China’s Business Elites, Staying Out of Politics Is No Longer an Option

Internet infrastructure operators like Didi must now prove their political and legal legitimacy to the government, Ma Changbo, an online media start-up founder, wrote on his WeChat social media account.

“This is the second half of the U.S.-China decoupling,” he wrote. “In the capital market, the model of playing both sides of the fence is coming to an end.”

Didi, Ms. Liu and Mr. Liu didn’t immediately respond to requests for comment.

China’s internet companies have benefited from the best of two worlds since the 1990s. Many received foreign venture funding — Alibaba, the e-commerce giant, was funded by Yahoo and SoftBank, while Tencent, another internet titan, was backed by South Africa’s Naspers. They also copied their business models from Silicon Valley companies.

The Chinese companies gained further advantages when Beijing blocked almost all big American internet companies from its domestic market, giving its home players plenty of room to grow. Many Chinese internet firms later went public in New York, where investors have a bigger appetite for innovative and risky start-ups than in Shanghai or Hong Kong. So far this year, more than 35 Chinese companies have gone public in the United States.

Now the Didi crackdown is changing the calculations for many in China’s tech industry. One entrepreneur who has set her sights on a listing in New York for her enterprise software start-up said it would be harder to go public in Hong Kong with a high valuation because what her company did — software as a service — was a relatively new idea in China.

A venture capitalist in Beijing added that because of China’s data security requirements, it was now unlikely that start-ups in artificial intelligence and software as a service would consider going public in New York. Few people were willing to speak on the record for fear of retaliation by Beijing.

At the same time, the United States has become more hostile to Chinese tech companies and investors. As Washington has ramped up its scrutiny of deals that involve sensitive technologies, it has become almost impossible for Chinese venture firms to invest in Silicon Valley start-ups, several investors said.

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

A Tally of Resignations Tied to the Jeffrey Epstein Scandal

When Jeffrey Epstein gave The Times columnist James Stewart a tour of his apartment a few years ago, he boasted of his expansive Rolodex of billionaires — and the dirt he had on them. A year and a half after the financier’s death by suicide in a New York jail, the fallout for those in the registered sex offender’s orbit, and increasingly those a step or two removed from it, continues to spread.

For example, the latest management reshuffle at Apollo, as we reported yesterday, can be linked back to Epstein. Tracing all the resignations and reshuffles directly and indirectly tied to the scandal will take a while (we’re working on it), but here’s a tally of some so far:

  • The Apollo co-founder Leon Black said in January that he would resign as C.E.O. but stay on as chairman, after an internal inquiry found he had paid $158 million to Epstein for tax advice. He unexpectedly quit both posts in March, and later stepped down as chairman of the Museum of Modern Art. Josh Harris, a fellow co-founder who had unsuccessfully pushed Black to quit immediately, said yesterday that he was stepping back from Apollo after failing to become the next C.E.O.; Marc Rowan, Apollo’s third co-founder and Black’s pick as successor, now leads the firm.

  • When the details of meetings between Epstein and Bill Gates burst into public view in late 2019, the billionaire’s wife, Melinda French Gates, hired divorce lawyers. The couple’s split, announced this month, could upend their numerous investments and philanthropic ventures

  • Les Wexner announced last February that he would step down as C.E.O. of the Victoria’s Secret parent company L Brands, under pressure from multiple internal investigations about his close ties to Epstein. Earlier this year, he and his wife, Abigail Wexner, said they would not stand for re-election to the L Brands board this month. (The company is now in the process of spinning off Victoria’s Secret.) Mr. Wexner was Epstein’s biggest early client and, a Times investigation found, the original source of the financier’s wealth.

  • Prince Andrew of Britain gave up his public duties last November, days after a disastrous interview with the BBC centered on his relationship with Epstein. At least 47 charities and nonprofits of which he was a patron have since cut ties to the prince.

  • Joi Ito resigned as the director of the M.I.T. Media Lab, a prominent research group, in 2019 and as member of several corporate boards (including The New York Times Co.), after acknowledging that he had received $1.7 million in investments from Epstein.

  • Alexander Acosta resigned as Donald Trump’s labor secretary in 2019, amid criticism of his handling of a 2008 sex crimes case against Epstein when he was a federal prosecutor in Miami.

Morgan Stanley sets up its C.E.O. succession competition. The Wall Street firm gave new roles to four top executives, marking them as candidates to take over from James Gorman: Ted Pick and Andy Saperstein were named co-presidents; Jonathan Pruzan was named C.O.O.; and Dan Simkowitz was named co-head of strategy with Pick.

The U.S. endorses a global minimum tax of at least 15 percent. The proposal, which was lower than some had expected, is closely tied to the Biden administration’s plans to raise the corporate tax rate. Global coordination would discourage multinationals from shifting to tax havens overseas.

Treasury officials said they could capture at least $700 billion in additional revenue. That would involve hiring 5,000 new I.R.S. agents, imposing new rules on reporting crypto transactions and other measures.

U.S. customs officials block a Uniqlo shipment over Chinese forced labor concerns. Agents at the Port of Los Angeles acted under an order prohibiting imports of cotton items produced in the Xinjiang region.

U.S. steel prices are soaring. After years of job losses and mill closures, American steel producers have enjoyed a reversal of fortune: Nucor, for instance, is the year’s top-performing stock in the S&P 500. Credit goes to industry consolidation, a recovering economy and Trump-era tariffs. Unsurprisingly, steel consumers aren’t thrilled about it.

Oprah Winfrey to Blackstone, made its stock market debut yesterday, ending its first trading session with a valuation of about $13 billion. DealBook spoke with Oatly’s C.E.O., Toni Petersson, about the I.P.O. and what’s next for the company.

resignation letter offering both praise of SoftBank’s chief, Masa Son — and unusually pointed criticism of the company’s corporate governance.


It’s been a while since we checked in on an alternative indicator of pandemic economic activity: the share price ratio of Clorox to Dave & Buster’s.

Wait, what? Nick Mazing, the director of research at the data provider Sentieo, came up with that metric to gauge the openness of the economy. The higher Clorox’s share price rises relative to Dave & Buster’s, the more people appear to be staying home and disinfecting everything than going out to crowded bars. By this measure, conditions have nearly returned to prepandemic levels — indeed, Dave & Buster’s recently lifted its sales forecast, as nearly all of its beer-and-arcade bars have reopened.

packed concert schedule, selling tickets to people who may have already binge-watched all of “Below Deck.” The second, however, suggests that people aren’t as eager to get back to huffing and puffing at the gym as they are content to exercise at home. As restrictions lift and people feel safer in crowds, drinking and dancing appear to be higher priorities.

new book, “Noise: A Flaw in Human Judgment,” the Princeton psychology professor and Nobel laureate Daniel Kahneman, along with co-authors Olivier Sibony and Cass Sunstein, argue that these inconsistencies have enormous and avoidable consequences. Kahneman spoke to DealBook about how to hone judgment and reduce noise.

DealBook: What is “noise” in this context?

Kahneman: It’s unwanted and unpredictable variability in judgments about the same situations. Some decisions and solutions are better than others and there are situations where everyone should be aiming at the same target.

Can you give some examples?

A basic example is the criminal justice system, which is essentially a machine for producing sentences for people convicted of crimes. The punishments should not be too different for the same crime yet sentencing turns out to depend on the judge and their mood and characteristics. Similarly, doctors looking at the same X-ray should not be reaching completely different conclusions.

How do individuals or institutions detect this noise?

You detect noise in a set of measurements and can run an experiment. Present underwriters with the same policy to evaluate and see what they say. You don’t want a price so high that you don’t get the business or one so low that it represents a risk. Noise costs institutions. One underwriter’s decision about one policy will not tell you about variability. But many underwriters’ decisions about the same cases will reveal noise.

WSJ)

  • An arm of Goldman Sachs has raised $3 billion from clients to invest in later-stage start-ups. (WSJ)

  • SPACs have raised $100 billion this year through May 19, a record, but new fund listings dropped sharply last month. (Insider)

  • Politics and policy

    Tech

    Best of the rest

    We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.

    View Source

    >>> Don’t Miss Today’s BEST Amazon Deals! <<<<

    Oatly Stock Price Jumps in Trading Debut

    Shares of Oatly soared 30 percent on Thursday as investors jumped at the chance to take part in rapid changes in the food industry driven by consumer tastes shifting to plant-based products.

    The company, which makes an alternative to dairy milk based on oats, priced its initial public offering Wednesday night on the high end of its range, giving the company a value of about $10 billion. Shares were priced at $17 and began trading at $22.12 on the Nasdaq under the ticker “OTLY.”

    The offering comes as money is flooding into the food tech space, with investors eager to catch a ride on the next Beyond Meat — the vegan food company valued at about $6.6 billion by public investors. And investors have put a heightened focus on companies like Oatly that say they meet environmental, social and governance standards.

    “Long term, it’s an opportunity for us to create a fantastic shareholder base,” Oatly’s chief executive, Toni Petersson, said of the offering. “So E.S.G. was definitely a huge, huge part of it — so we’re excited, we’re really excited, about the outcome here.”

    complained about Oatly’s marketing around its use of sugar. But Oatly has no plans to address its sugar content.

    “We’re just replicating what nature does before it enters your stomach,” Mr. Petersson said in describing the process of making oatmilk.

    View Source