Just about every day now in D.C., lawmakers seem eager to show their might against Big Tech. Yesterday gave them the opportunity to flex their muscles in two high-profile events at the Senate: the confirmation hearing for Lina Khan, a “progressive trustbuster” who was nominated for a seat at the F.T.C., and a judiciary committee hearing about Apple and Google’s control over their app stores. For good measure, a group of seven House Republicans yesterday announced a pledge to no longer take donations from major tech companies.
Here’s what you may have missed on a busy, and bruising, day for Big Tech — and what it means.
Lina Khan said she’d bring her tough-on-tech stance to the F.T.C. Ms. Khan referenced a “whole range of potential risks” she sees in the tech giants, including how they could parlay their dominance in one market into adjacent spaces. She said that when it comes to online advertising, which is fueled by consumer data, “companies may think it’s worth the cost of doing business to risk violating privacy laws.” The Democratic nominee received little pushback on her views during questioning.
At the other hearing, companies complained about Apple and Google. Spotify, which is suing Apple in Europe, said the company blocked it from telling customers that they could find cheaper subscription prices outside its iPhone app. Match Group testified that it now paid nearly $500 million a year to Apple and Google in app store fees, its single largest expense. Tile said Apple boxed out its products and then copied them, referencing the AirTag product Apple unveiled Tuesday.
Google made a questionable call. Match Group’s chief legal officer, Jared Sine, said Google had called the company the night before, after its planned testimony became public, wondering why the comments appeared to be tougher than what Match had said on a recent earnings call. “It looks like a threat, it talks like a threat, it’s a threat,” Senator Richard Blumenthal said. Wilson White, a government affairs official at Google, told senators that Match was an important partner and that Google would never aim to intimidate the company.
sweeping antitrust bill, but a more targeted piece of legislation focusing on app store conduct could go through more easily.
In a trial next month, Apple is set to face off against Epic Games, which is suing Apple over the payment terms for its iPhone app, potentially providing more fodder for the critics of Big Tech who are looking to rein it in.
HERE’S WHAT’S HAPPENING
The E.U. plans to clamp down on A.I. Draft rules would set tight limits on the use of the technology, including in self-driving cars, hiring decisions, bank lending, school enrollment and more. It’s one of the most ambitious efforts to regulate A.I. before it becomes mainstream.
India suffers a surge in Covid-19 cases. The country recorded 312,731 new infections in a 24-hour period, the highest one-day level since the onset of the pandemic, raising concerns about its ability to control the coronavirus. Separately, Pfizer said it had identified counterfeit versions of its vaccine in Mexico and Poland.
Credit Suisse is raising nearly $2 billion after two trading scandals. The Swiss bank has been forced to rebuild its balance sheet following the collapse of Greensill Capital and the meltdown of Archegos. Meanwhile, it faces a new inquiry by Switzerland’s financial regulator over potential risk-management faults in its handling of Archegos.
Janet Yellen calls on corporate America to help the U.S. reach its climate goals. The Treasury secretary said the private sector would bear much of the burden of greening the American economy, and said the Biden administration was devising a financial reporting framework to make it easier to invest in assets like green bonds.
barred from the OTCQB over-the-counter market for failing to comply with listing rules. The investor David Einhorn had flagged the penny stock’s puzzling market cap as a sign of a “fractured” market.
Is the SPAC boom over?
Around 100 blank-check funds went public each month in the first quarter of the year. So far in April, you could count the number of those I.P.O.s on two hands. The sudden drop in debuts of special purpose acquisition companies, or SPACs, has market watchers asking whether this is a pause for breath — or a more permanent plunge in popularity.
a statement at the end of last month highlighting “the key considerations related to the unique risks and challenges of a private company entering the public markets through a merger with a SPAC.” Not long after, another note offered “guidance” on some of the trickier accounting issues related to blank-check funds. Neither statement suggested any rule changes, but with Gary Gensler, the S.E.C.’s new enforcement-minded chairman, taking over this week, SPAC sponsors have slowed their roll.
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SPACs’ recent performance has also been lousy. Analysts at Goldman Sachs note that a stock price index of 200 SPACs (pre- and post-merger) has badly underperformed the market this year, down 17 percent versus a 10 percent gain in the S&P 500. SPACs have also lagged an index of unprofitable tech stocks, suggesting that investors have particular concerns about SPACs, since plenty of them have acquired other unprofitable tech companies.
But we haven’t heard the last of SPACs. The amount of money these shell companies have raised to date could drive $900 billion in M.&A. activity over the next two years, according to the Goldman analysts. And more than 25 SPACs filed I.P.O. registration documents this month, per SPAC Research, adding to a pipeline of more than 200 others that have disclosed plans to go public but haven’t yet sealed the deal, for whatever reason.
reassessing his approach to life and work has been shared more than 200,000 times.
players, coaches, fans and politicians — as an effort to import American-style competition and economics. Frank McCourt, the American owner of the storied French soccer team Olympique de Marseille, told DealBook that the league — which he publicly denounced — never made sense.
The Super League would have created a closed competition with guaranteed places for 15 clubs, and would have introduced revenue sharing and spending caps. That more closely resembles U.S. leagues like the N.F.L. than the more freewheeling system of European soccer.
“It felt like imposing an American flavor on a different culture,” said Mr. McCourt, who previously owned the L.A. Dodgers before buying control of Marseille (l’OM to its fans) in 2016. JPMorgan Chase’s role in financing the Super League bolstered this notion, though its architect was Florentino Pérez, the Spanish president of Real Madrid.
to drop out. “There is no football without fans,” Mr. McCourt said. “What is their perspective?” (Fan demands are something that he knows well: He met with several earlier this year after supporters stormed Marseille’s training grounds to protest the club’s performance.)
Mr. McCourt said he favors plans by UEFA, the European soccer overseer, to expand its Champions League tournament, a much-debated move that gained new urgency as the Super League became a threat. “There’s a process that UEFA is going through with all of the stakeholders,” he said, contrasting the approach with the more limited decision-making behind the Super League.
As Rory Smith of The Times put it: “It was all, in some way, unserious: There was a cobbled-together website, an uninspiring logo and an American banker, but no broadcaster, no suite of sponsors and, in the end, no commitment to see any of it through.”
THE SPEED READ
U.S. start-ups raised $69 billion in the first quarter, 40 percent more than the previous quarterly record; and private equity firms are more willing to fund mega-leveraged buyouts. (WSJ)
Shares in UiPath rose 23 percent in their trading debut, in one of the biggest public offerings by a software company on record. (Bloomberg)
Maybe the day traders were right: Hertz unveiled a bankruptcy reorganization plan that provides some value to pre-Chapter-11 stockholders. (MarketWatch)
Politics and policy
The White House is weighing options for overhauling opportunity zones, a Trump-era tax break meant to drive investment in poorer areas — but largely used for development in wealthier ones. (NYT)
The S.E.C. is reportedly weighing stricter disclosure rules for investment firms, which may require more frequent reports on a wider variety of holdings. (Bloomberg)
A jury ruled that Intel did not infringe patents held by an affiliate of the investment firm Fortress; at stake was $3 billion in requested damages. (Reuters)
The electric vehicle maker Arrival says it can replace huge assembly lines with much smaller factories. (NYT)
Apple reportedly plans to expand its ad business — just as it rolls out privacy rules for its devices that would hurt rivals like Facebook. (FT)
Best of the rest
Nike’s contract with the estate of Kobe Bryant has ended. What happens next is complicated. (NYT)
“Welcome to the YOLO Economy” (NYT)
The hottest investment in commercial real estate right now: the humble car wash. (Commercial Observer)
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After the January 6 riot at the Capitol, scores of companies vowed to pause their political donations. Some stopped giving to all politicians, while others shunned only those 147 Republicans who voted to overturn the presidential election results. A recent deadline for candidates to release fund-raising details for the first quarter revealed more details about how corporate giving has changed.
Companies largely kept their word. Only a handful of corporate PACs gave to the Republican objectors, whose total corporate and industry PAC donations dropped precipitously in the first quarter versus the comparable period in the last election cycle. The losers include powerful party leaders like the House minority leader Kevin McCarthy, whose two PAC donations came from the California Beet Growers Association and the National Federation of Independent Business. Mr. McCarthy had more than 100 donations from business groups in the same period in 2017.
But there areshades of gray. Some companies gave money to specific Republicans, taking the view that not all of the 147 lawmakers are the same, a stance adopted by the Chamber of Commerce (and one that DealBook hears is being contemplated by other PACs).
Toyota gave to more than a dozen of the Republicans who voted against certifying the election results.A company spokesperson said Toyota “does not believe it is appropriate to judge members of Congress solely based on their votes on the electoral certification.” The company decided against giving to unspecified others, who “through their statements and actions, undermine the legitimacy of our elections and institutions.” After the Capitol riot, the company said it would assess its “future PAC criteria,” a more vague pledge than those of many other companies.
Cigna gave to Florida’s Byron Donalds, South Carolina’s Tom Rice and other House members after it said in January it would “discontinue support of any elected official who encouraged or supported violence, or otherwise hindered the peaceful transition of power.” A spokesperson for the insurer said that congressional votes are “by definition, part of the peaceful transition of power,” and that its cutoff of donations “applies to those who incited violence or actively sought to obstruct the peaceful transition of power through words and other efforts.”
Lawmakers at the forefront of the push to overturn the election raked in cash from other sources. Senators Josh Hawley of Missouri and Ted Cruz of Texas each brought in more than $3 million for the quarter, tapping into the outrage of their individual supporters. Rep. Marjorie Taylor Greene of Georgia similarly raised $3.2 million, more than nearly every other member of House leadership. The financial haul for those with the loudest and most extreme voices, against the backdrop of the corporate pullback, highlights a shift in the Republican Party’s longtime coziness with corporate America. It also raises questions about big business’s ability to influence policy, as pressure builds on companies to weigh in on hot-button issues like restrictions on voting.
HERE’S WHAT’S HAPPENING
A decision on the pause to Johnson & Johnson’s vaccine could come soon. Dr. Anthony Fauci said that he expected federal health officials to decide whether to resume giving the shot as soon as Friday. The halt was reportedly imposed because of concerns that doctors would mistreat the rare instances of blood clots potentially related to the shot, according to The Wall Street Journal.
coalescing around 25 percent as the new rate, according to Axios — down from the 28 percent that President Biden has proposed, but up from the current 21 percent.
Crypto prices take a tumble. Over the weekend, cryptocurrencies suffered a big drop in value: Bitcoin, for instance, fell 15 percent. (It has since recovered somewhat.) The potential culprits: speculation about impending enforcement actions by financial regulators and power outages in the Chinese region that is home to major Bitcoin mining operations. Or crypto is just being volatile again.
selling his stake in Ant Group, the fintech company he co-founded, according to Reuters. The deliberations come amid pressure from Beijing officials on his business empire, including Ant and Alibaba.
withdrew after deciding it would be too difficult to turn The Chicago Tribune into a national publication, The Times’s Katie Robertson writes.
The big money behind European soccer’s huge rift
A dozen of the top European clubs announced plans to create a new soccer league that would rival the longstanding Champions League, The Times’s Tariq Panja reports. The plan could concentrate the billion-dollar sport’s economics with just a handful of teams — if it survives the potential legal challenges.
Meet the Super League. Twelve teams so far have signed up for the new league, which was hatched in secrecy over several months. Among them are Arsenal, Liverpool and Manchester United of England; Real Madrid and Barcelona of Spain; and AC Milan and Juventus of Italy. (A few more teams are expected to join.) The idea is for the league to hold exclusive midweek matches in between domestic league matches. The closed league would operate more like the N.F.L. or the N.B.A., doing away with different teams appearing in the pan-European Champions League tournament each year, based on their domestic league performance.
The share prices of publicly traded clubs, like Juventus and Manchester United, jumped more than 10 percent in early trading.
There’s a huge amount of money at stake. The Super League’s founding clubs would split 3.5 billion euros, or more than $4 billion, as part of its formation, or more than $400 million per team. That’s four times what the Champions League winner took home last year.
The news spurred an outcry from the establishment. The organizer of the Champions League, UEFA, criticized the proposal as a “cynical project” and has been exploring ways to block it. The governing body of European soccer also noted that FIFA, the global soccer governing body, has threatened to expel players who participate in unsanctioned leagues from tournaments like the World Cup.
“The Fed has become more emboldened to discuss issues that have an economic impact, even when they fall into areas of partisan disagreement.”
— The Times’s Jeanna Smialek, on how the U.S. central bank is facing criticism as it wades into climate and racial equity issues, leading some to question its political independence.
increase in investor demand for company disclosures on things like climate-related risks, board and leadership diversity and political donations. Most recently, it issued a risk alert about the “lack of standardized and precise” definitions of E.S.G. products and services, which could lead to confusion among investors and inconsistent reporting by companies.
At his Senate confirmation hearing, Mr. Gensler appeared inclined toward more expansive disclosures, noting that “it’s the investor community that gets to decide” what is material.
Blank-check companies: Special purpose acquisition companies, or SPACs, have been proliferating, raising many regulatory concerns. These include “risks from fees, conflicts, and sponsor compensation, from celebrity sponsorship and the potential for retail participation drawn by baseless hype, and the sheer amount of capital pouring into the SPACs,” said John Coates, the acting director of the S.E.C.’s corporate finance division, in a statement.
Given Mr. Gensler’s strong enforcement credentials, many predict more scrutiny of SPACs in the months ahead. This could take precedence over the other recent market frenzy, meme stocks, but regulatory action on the gamification of trading, payment for order flow and other factors in the mania around GameStop and others may not be far behind.
Bringing cryptocurrency into the mainstream: Mr. Gensler was confirmed on the day that the crypto exchange Coinbase went public, signaling a new era of legitimacy at a time when crypto rules are in flux. Blockchain executives and their growing lobby told DealBook that they welcome working with Mr. Gensler, who is more versed in crypto technology than most other policymakers. “He gets what’s going on,” Hester Peirce, an S.E.C. commissioner and vocal crypto champion, said of Mr. Gensler.
Clarity on when a digital asset qualifies as a commodity or a security tops Coinbase’s wish list, according to its chief counsel, Paul Grewal: He’s “hopeful” about Mr. Gensler’s tenure, noting that he will be well-informed and engaged on crypto issues, “even if we won’t always agree.”
THE SPEED READ
CVC Capital Partners has reportedly delayed submitting a final takeover bid for Toshiba following the resignation of the Japanese conglomerate’s C.E.O. (Nikkei)
Penske Media, the publisher of Rolling Stone, has reportedly agreed to buy a 50 percent stake in the South by Southwest festival to keep the tech, music, and film event afloat. (WSJ)
WeWork may be trying to go public through a SPAC instead of an I.P.O. this time, but concerns about its rosy projections for growth and profitability remain. (WSJ)
Politics and policy
All the ways British officials are trying to defend London’s status as a major financial hub after Brexit. (NYT)
Super PACs are starting to play an outsize role in the race for New York City mayor. (NYT)
President Donald Trump may be out of office, but the One America News Network has bet its business on essentially pretending he never left. (NYT)
Two men were killed in an accident involving a Tesla that was apparently operating in Autopilot mode. (NYT)
Clubhouse has raised new funds at a $4 billion valuation, but there are signs that the audio chat app’s popularity is waning. (CNBC)
Best of the rest
What research says about how to make hybrid work succeed. (Reset Work)
Speaking of the future of work: HSBC’s senior leaders have scrapped their own executive floors and now “hot desk” like everyone else. (FT)
“The New York Power Lunch Is Back, With New Rules” (WSJ)
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LONDON — Coming out of Brexit this year, Britain’s government needed a new blueprint for the future of the nation’s financial services as cities like Amsterdam and Paris vied to become Europe’s next capital of investment and banking.
For some, the answer was Deliveroo, a London-based food delivery company with 100,000 riders on motor scooters and bicycles. Although it lost more than 226 million pounds (nearly $310 million) last year, Deliveroo offered the raw promise of many fast-growing tech start-ups — and it became a symbol of Britain’s new ambitions by deciding to go public and list its shares not in New York but on the London Stock Exchange.
Deliveroo is a “true British tech success story,” Rishi Sunak, Britain’s top finance official, said last month.
It was a false start. Deliveroo has since been called “the worst I.P.O. in London’s history.” On the first day of trading, March 31, the shares dropped 26 percent below the initial public offering price. (It has gotten worse.)
impacts from Brexit were immediate: On the first working day of 2021, trading in European shares shifted from venues in London to major cities in the bloc. Then London’s share of euro-denominated derivatives trading dropped sharply. There’s anxiety over what could go next.
Financial services are a vital component of Britain’s economy, making up 7 percent of gross domestic product — £132 billion in 2019, or some $170 billion. Exporting financial and other professional services is something Britain excels at. Membership in the European Union allowed London to serve as a financial base for the rest of the continent, and the City’s business ballooned. Four-tenths of financial services exports go to the European Union.
The government has begun hunting for ideas to bolster London’s reputation as a global finance center, in a series of reviews and consultations on a variety of issues, including I.P.O.s and trading regulations.
For many, the changes can’t come soon enough.
“The United Kingdom is not going to sit still and watch its financial services move across” to other European cities, said Alasdair Haynes, the founder of Aquis, a trading venue and stock exchange for equities in London. This will make the next three or four years exciting, he said.
But this optimism isn’t universal. The prospects of a warm and close relationship between Britain and the European Union have considerably dimmed. The two sides recently finished negotiations on a memorandum of understanding to establish a forum to discuss financial regulation, but the forum is voluntary, and the document has yet to be signed.
Duff & Phelps found that fewer see London as the world’s leading financial center but that it topped the leader board for regulatory environment.
Here are some of the plans.
Mr. Sunak told Parliament on March 3, the same day a review commissioned by the government recommended changes designed to encourage tech companies to go public in London. It proposed ideas, common in New York, that would let founders keep more control of their company after they began selling shares.
For example: allowing companies with two classes of shares and different voting rights (like Facebook) to list in the “premium” section of the London Stock Exchange, which could pave the way for them to be included in benchmark indexes. Or: allowing a company to go public while selling a smaller proportion of its shares than the current rules require.
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The timing of Deliveroo’s I.P.O. wasn’t a coincidence. It listed with dual-class shares that give its co-founder William Shu more than half of the voting rights for three years — a structure set to “closely align” with the review’s recommendations, the company said.
But the idea may be a nonstarter among some of London’s institutional investors. Deliveroo flopped partly because they balked at the offer of shares with minimal voting rights.
the latest craze in financial markets, having taken off with investors and celebrities alike. SPACs are public shell companies that list on an exchange and then hunt for private companies to buy.
London has been left behind in the SPAC fervor. Last year, 248 SPACs listed in New York, and just four in London, according to data by Dealogic. In March, Cazoo, a British used car retailer, announced that it was going public via a SPAC in New York.
Already there are signs that Amsterdam could steal the lead in this booming business for Europe. There have been two SPACs each in London and Amsterdam this year, but the value of the listings in Amsterdam are five times that of London.
Britain’s financial regulatory agency said it would start consultations on SPACs soon and aim to have new rules in place by the summer.
regain ground lost to Germany, France and other European countries on the issuing of green bonds to finance projects to tackle climate change.
The City’s future
London’s finance industry isn’t in danger of imminent collapse, but because of Brexit a cornerstone of the British economy isn’t looking as formidable as it once did. And as London tries to keep up with New York, it is looking over its shoulders at the financial technology coming out of Asia.
The government has continuously billed Brexit as an opportunity to do more business with countries outside of the European Union. This will be essential as international companies begin to ask whether they want to base their European business in London or elsewhere.
When it comes to the future of Britain, it’s “almost a back-to-the-future approach of London as an international center as opposed to being an international and European center,” said Miles Celic, the chief executive of the CityUK, which represents the industry. “It’s doubling down on that international business.”
The age of electric planes may still be years away, but the fight for that market is already heating up.
Wisk Aero, a start-up developing an electric aircraft that takes off like a helicopter and flies like a plane, on Tuesday sued another start-up, Archer Aviation, accusing it of stealing trade secrets and infringing on Wisk’s patents.
The lawsuit brings into public view a dispute between two little-known companies in a business that has become a playground for billionaires. It also entangles giants of aviation and technology. Wisk is a joint venture of Boeing and Kitty Hawk, which is financed by Larry Page, who co-founded Google. Archer’s investors include United Airlines, which is a major Boeing customer and plans to buy up to 200 aircraft from the start-up.
The niche market for electric vehicles and planes has become frenzied in recent months as so-called blank check companies, which have little more than a stock market listing and a pot of cash, have snapped up fledgling businesses with little or no revenue, let alone profits. Investors in the blank-check firms — formally known as special purpose acquisition companies, or SPACs — are hoping to acquire businesses that they believe could follow Tesla’s recent trajectory on the stock market. To entice those investors, start-ups like Archer promise top-notch technology and optimistic business plans.
the lawsuit accuses two engineers of downloading thousands of files containing confidential designs and data before leaving Wisk to join Archer. Wisk accused a third engineer of wiping history of his activities from his computer before leaving for Archer.
“Wisk brings this lawsuit to stop a brazen theft of its intellectual property and confidential information and protect the substantial investment of resources and years of hard work and effort of its employees and their vision of the future in urban air transportation,” the lawsuit says.
Archer denied wrongdoing.
“It’s regrettable that Wisk would engage in litigation in an attempt to deflect from the business issues that have caused several of its employees to depart,” Archer said in a statement. “The plaintiff raised these matters over a year ago, and after looking into them thoroughly, we have no reason to believe any proprietary Wisk technology ever made its way to Archer. We intend to defend ourselves vigorously.”
Archer also said it had placed an employee accused in the suit on paid leave “in connection with a government investigation and a search warrant issued to the employee, which we believe are focused on conduct prior to the employee joining the company.” Archer said it and three employees who had worked with the individual had been subpoenaed in that investigation and were cooperating with the authorities.
accused one of its former employees and Uber of stealing trade secrets to gain an advantage in the race to develop autonomous cars. The companies settled the case in 2018, and the former Waymo employee, Anthony Levandowski, a onetime confidant of Mr. Page’s, was sentenced in 2020 to 18 months in prison. Former President Donald J. Trump pardoned Mr. Levandowski in January.
Archer announced its merger in February with a SPAC, Atlas Crest Investment, in a deal that valued the company at $3.8 billion. Wisk said its suspicions were confirmed at that time when Archer released a presentation that contained designs similar to those in a Wisk patent filing.
when announcing the transaction.
“We had 35, 40 people on this — and we attacked this like venture growth would or anybody else,” Mr. Moelis said. “And we did it fast, too.”
A spokeswoman for Moelis declined to comment.
Other companies trying to make electric aircraft include Joby Aviation, which announced a $6.6 billion deal with a SPAC led by the LinkedIn co-founder Reid Hoffman in February, and the German start-up Lilium, which went public last month by merging with a SPAC led by a former General Motors executive, Barry Engle.
according to SPAC Research — more than in all of 2020.
But regulators and some investors say more scrutiny is needed. The Securities and Exchange Commission published two notices last month warning companies considering merging with SPACs to ensure that they are ready for all the legal and regulatory requirements being a public company entails. Many investors known as short sellers, who specialize in betting that share prices of companies are bound to fall, have targeted SPACs like Atlas Crest, which is among the 20 most-shorted SPACs.
The market for electric aircraft is in its infancy but holds huge promise. The prospect of “Jetsons”-like flying vehicles has inched closer to reality in recent years thanks to advances in battery and aircraft design. A high-stakes race to build the first viable electric plane is underway, and some airlines are betting that such vehicles can help them reach their goals of eliminating or offsetting their greenhouse gas emissions.
Scott Kirby, the chief executive of United, said the Archer aircraft were unlikely to be used for commercial flights but were ideal for short trips to and from an airport.
“They’re not only more environmentally friendly, they’re far quieter than a helicopter,” Mr. Kirby said Tuesday during an event hosted by the Council on Foreign Relations. “And, because they have 12 rotors, they’re, I believe, going to ultimately be safer.”
Still, widespread use of electric air taxis is likely years away. Such aircraft may never become more than a luxury used by very rich people because businesses and governments may come up with far cheaper ways to transport people without emissions.
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Many companies made changes to survive the pandemic. For tech companies, the changes were also about seizing opportunities to thrive as life abruptly moved online. Few companies have juggled these risks and rewards in as many industries, across as many countries, as Prosus, an Amsterdam-based conglomerate that in 2019 was spun out of Naspers, the South African tech and media giant.
Prosus’ holdings run from e-commerce and classifieds to food delivery, fintech and more. The group is valued at around $180 billion, which makes it one of continental Europe’s 10 largest companies. It operates in more than 80 countries and owns sizable stakes in the internet giants Tencent of China and Mail.ru of Russia. The companies that Prosus controls employ around 20,000 people, and many more work as contractors or at companies in which Prosus holds smaller stakes.
Uber, DoorDash and others. But Prosus companies like Delivery Hero and iFood took steps to help preserve long-term good will with its partners at the expense of short-term profits. In Brazil, for example, “we paid restaurants much quicker than we usually did,” Mr. van Dijk said. “From a cash-flow point of view, that was actually pretty important” in keeping restaurants in their good graces, reducing potential tensions between restaurants struggling during the pandemic and online delivery apps seeing demand soar.
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It was a similar story in India for classifieds. “We reduced fees substantially, or we waived fees,” he said. “That allowed people to preserve cash. When things started to come back again, there was a lot of appreciation around that.”
digital services taxes throughout Europe, meant to collect more revenue from multinational companies that do extensive business in countries without much of a physical presence within their borders. Those wouldn’t apply to Prosus, Mr. van Dijk said — “we invest locally and pay taxes” — but he added that the charges could erode the industry’s profit margins.
“I understand where it comes from,” he said, but “sometimes the regulation is a little blunt.”
What could hurt Prosus, Mr. van Dijk said, are changes to the gig economy, particularly efforts to entitle delivery drivers to worker benefits. Some drivers prefer the flexibility of being contractors, he said, and “we try to pay people properly regardless of what the legislation is.” As far as he could recall, Prosus has never lobbied against classifying workers as employees, as rivals like Uber have.
Another area to watch is China, which has moved to rein in some of its homegrown internet behemoths. Though officials have focused largely on Alibaba, Tencent hasn’t escaped their gaze: The company, which Prosus bought into back in 2001, was among those fined last month for violating antitrust rules. It is Prosus’ single biggest investment, and a tougher crackdown could batter the conglomerate’s market value.
Despite the stakes, Mr. van Dijk downplayed the threat. “Our impression is that China is still very supportive of its tech giants,” he said.
Adevinta of Norway for $9.2 billion. That defeat followed a losing effort to acquire the restaurant delivery company Just Eat, which Takeaway.com bought for $7.8 billion.
Perhaps surprisingly, Mr. van Dijk said Prosus hadn’t encountered much competition from special purpose acquisition companies, or SPACs, which have raised nearly $100 billion this year and are very active acquirers of tech companies. This may be in part because SPACs are largely a U.S. phenomenon, although other countries have been trying to court the blank-check firms.
Mr. van Dijk said Prosus might eventually find itself competing with SPACs, particularly for later-stage private companies. In the meantime, Prosus itself invested $500 million in a SPAC last year when the shell company merged with Skillsoft, an education technology firm.
Lately, Prosus has mostly been investing in its existing businesses. “Putting money into there is still a good idea,” Mr. van Dijk said. And a few months ago the company announced that it would buy back $5 billion of its shares.
Things are looking slightly more measured these days, Mr. van Dijk said, with valuations coming down “to much more sustainable levels.” For a serial dealmaker, that means opportunity: “It’s easier to do acquisitions in a market that is cooling off.”
A former Citigroup analyst in New York who left investment banking last summer said that in normal times managers would often be busy traveling, or would leave the office at night, which allowed analysts periods to focus on their existing work without being assigned new tasks. Those breaks disappeared during the pandemic.
“They were always available and working late,” he said of his managers during the pandemic. “They knew we were stuck working late. We couldn’t do anything else. So there was no separation from work and home.”
The analyst, who worked at Citi for three years, said virtual work was particularly hard on the first-year employees. “They weren’t able to learn how to be a banker in the office. They learned it virtually, and it’s so much harder,” he said. Working virtually, he believes, has also made it more difficult for new analysts to support each other. “They just get the downside to banking,” he said. “They don’t get the upside, the relationships.”
JPMorgan and Citigroup declined to comment.
As the work has become more isolating, the amount of it has exploded. At this point in the year, according to Dealogic, the value of debt issues are running a third higher than the previous 10-year average, acquisitions are more than double, and initial public offerings are some 15 times higher, propelled by the surge in blank-check shell companies known as SPACs, or special purpose acquisition companies.
“We recognize that our people are very busy, because business is strong and volumes are at historic levels,” Goldman Sachs said in a statement in response to the first-year analysts’ presentation. “A year into Covid, people are understandably quite stretched, and that’s why we are listening to their concerns and taking multiple steps to address them.”
On Sunday, Goldman’s chief executive, David Solomon, sent a memo to employees in which he promised to enforce the firm’s policy against working on Saturdays, to shift bankers to the busiest desks and to hire more entry-level employees. A day later, Citi’s C.E.O., Jane Fraser, introduced “Zoom-free Fridays” and said that most employees could work from home for two days per week when the firm reopens its offices.
Other banks decided to work in the medium they know best: Money. Credit Suisse on Wednesday said that it would give lower-ranking employees a $20,000 bonus to acknowledge their work during a period of “unprecedented deal volume.”
He and his partner in Slam Corp, the hedge fund manager Himanshu Gulati, are looking to acquire a business in the sports, media, or health and wellness industry — but not a sports team, he said. (Mr. Rodriguez was also an investor in the telehealth company Hims and Hers, which went public in a SPAC transaction valuing the firm at $1.6 billion last year.)
Rich Kleiman, manager and business adviser to Kevin Durant, the All-Star forward for the Brooklyn Nets, said having an athlete on an advisory board of a SPAC might help get a meeting with a company. Mr. Durant, he said, had been approached about such an arrangement but decided against it because he would have little control over the company’s direction.
While Mr. Durant, who with Mr. Kleiman runs a growing media and investment company, Thirty Five Ventures, has fielded suitors, other athletes are reaching out on their own.
Forest Road, an investment firm, was the entry point for Mr. O’Neal, who was already an investor there when he contacted its chief executive, Zachary Tarica, about getting involved in its growing SPAC business. Mr. O’Neal was an adviser on its first SPAC, which last month announced plans to buy Beachbody, a digital fitness company, at a $2.9 billion valuation. He’s now an adviser on a second Forest SPAC.
Kevin Mayer, a former Walt Disney and TikTok executive who advised the first SPAC and is helping lead the second, described Mr. O’Neal as “a real businessman,” although he cautioned against investing in a particular venture just because a famous person was involved.
“If anyone were to ask me, I say you should definitely not invest in this SPAC because there’s a sports star or any single person,” he said. “They should look at the totality of the investment.”
Securities regulators have taken notice of the celebrity-endorsement trend, which has also attracted nonathletes ranging from Sammy Hagar to Jay-Z. The Securities and Exchange Commission put out an investor alert on March 10 cautioning retail investors not to buy shares of a SPAC simply because some boldface names are attached to it.