DealBook Briefing: It’s Lyft I.P.O. Day

Category: Business,Finance Good Friday. (Want this by email? Sign up here .) The first gig-economy I.P.O. is here As of this morning, Ly...

Category: Business,Finance

Good Friday. (Want this by email? Sign up here.)

As of this morning, Lyft is officially the first in a new wave of Silicon Valley companies to begin trading on the public markets, Michael de la Merced and Kate Conger of the NYT report.

The ride-hailing service is now valued at more than $24 billion, after robust investor demand helped Lyft price its initial public offering last night at $72 a share, up from its first price range of $62 to $68. The company sold more shares than planned, raising over $2.3 billion.

It begins trading on the Nasdaq this morning, under the ticker symbol LYFT. Investors will be anxious to see how big a “pop” its shares will enjoy. Some analysts have already given it a “buy” recommendation.

Lyft’s stock sale will yield a windfall for its investors, including Rakuten of Japan, G.M. and Andreessen Horowitz. The company’s co-founders, Logan Green and John Zimmer, will become multimillionaires.

But a big challenge lies in sustaining its valuation. Lyft is deeply in the red — it lost nearly $1 billion last year — and has told investors that it will remain so for some time. Matt Phillips and Erin Griffith of the NYT note that early investors captured the biggest gains, making it unclear how much is left for the public market.

Tim Sloan, who took over Wells Fargo as the bank became embroiled in scandal, abruptly resigned yesterday, as the lender remains mired in legal battles.

He became C.E.O. in 2016 after his predecessor, John Stumpf, resigned amid growing scandals at Wells Fargo. (Among them: the opening of sham accounts in customers’ names and improper customer fees.) Mr. Sloan was supposed to help the bank move on.

But Mr. Sloan became a lightning rod, as employees complained about a toxic workplace culture and lawmakers and regulators fumed over a lack of reform at the bank. “I could not keep myself in a position where I was becoming a distraction,” he told investors yesterday.

Critics welcomed the news. Senator Elizabeth Warren, who had called on regulators to oust Mr. Sloan, tweeted, “About damn time.” Shareholders also appeared relieved, with Wells Fargo’s stock rising 2 percent in after-hours trading.

He’ll be replaced on an interim basis by Allen Parker, Wells Fargo’s general counsel and a former partner at the law firm Cravath, Swaine & Moore. Mr. Parker got the job in part because he has good relationships with the bank’s regulators, according to the NYT.

The Department of Housing and Urban Development accused Facebook in court yesterday of engaging in housing discrimination, Katie Benner, Glenn Thrush and Mike Isaac of the NYT write.

• H.U.D. says that the social network allows advertisers “to restrict who is able to see ads on the platform based on characteristics like race, religion and national origin.”

• It also says Facebook “uses its data-mining practices to determine which of its users are able to view housing-related ads.”

“The lawsuit coincides with a broader push by civil rights groups to scrutinize whether big technology companies are reinforcing real-world biases online by using algorithms to identify and target specific groups of users,” Ms. Benner, Mr. Glenn and Mr. Isaac write.

Facebook now faces federal investigations into its business practices from H.U.D., the F.T.C., the S.E.C. and the Justice Department.

More: The company has tightened rules on political ads in Europe ahead of the European Parliament elections in May.

Carlos Ghosn’s vision of merging Nissan and Renault was controversial within the companies. And according to the WSJ, it was Nissan executives’ fears over France taking a stake in one of Japan’s top companies that led to his downfall.

Senior Nissan executives “wanted to derail any possibility of a full combination of Nissan and Renault, which they feared Mr. Ghosn was pushing,” according to the WSJ, which cites documents and unnamed people.

They feared French control of the automaker, the WSJ adds. “Two Nissan executives, determined to halt further corporate integration, instigated a probe of Mr. Ghosn, chasing longtime rumors of wrongdoing, until they found evidence of alleged financial crimes to give prosecutors,” the WSJ writes.

“The men initiated the probe in April 2018, the same month the French government, which holds a 15 percent stake in Renault, laid out the reasons it wanted a merger,” it adds.

Merger discussions have indeed been stymied. The question now, according to Hiroko Tabuchi of the NYT, is whether the rifts are too deep to repair.

For two years, March 29, 2019, was supposed to be the day that Britain departed from the E.U. That hasn’t happened.

Brexit has now been delayed to at least April 12. Before then, Prime Minister Theresa May — who on Wednesday offered to resign in order to save her Brexit deal — will try once more to win support for her agreement.

Lawmakers are trying a new tack to push the deal through. “Ministers said they would disassemble Mrs. May’s deal into its two parts — one called the withdrawal agreement, and the other the political declaration — and ask Parliament to vote Friday only on the first,” Benjamin Mueller of the NYT writes.

But the withdrawal agreement is contentious. The document, which outlines the terms of Brexit, doesn’t have backing across Mrs. May’s Conservative Party, nor from Unionist allies in Northern Ireland. But it may appeal to some pro-Brexit Labour Party lawmakers whose issues are with the political declaration, which outlines Britain’s future relationship with Europe.

If the agreement passes today, Parliament will meet the E.U.’s deadline for completing the Brexit process, and would have until May 22 to extract Britain from the bloc. If not, Britain could crash out without a deal on April 12 — or it could ask for a longer extension.

The team studying the recent 737 Max 8 crash in Ethiopia has reportedly reached a preliminary conclusion, according to the WSJ: Glitchy automated anti-stall software activated shortly before the plane crashed.

• “The emerging consensus among investigators, one of these people said, was relayed during a high-level briefing at the Federal Aviation Administration on Thursday.”

• It is “the strongest indication yet that the same automated system, called MCAS, misfired in both the Ethiopian Airlines flight earlier this month and a Lion Air flight in Indonesia, which crashed less than five months earlier.”

• “The preliminary finding from the ‘black box’ recorders of Ethiopian Airlines Flight 302 is subject to revisions, according to the people briefed on the matter.”

Boeing announced a series of fixes for the anti-stall system on Wednesday. It said that based on what was known about the crashes, MCAS was in need of updating.

The first quarter of this year was the third-best for deal-making in two decades, according to data from Refinitiv. But that’s thanks largely to three mega-mergers, without which 2019 would be off to a miserable start.

• 8,765 transactions worth $927.2 billion were announced in the quarter. That’s a 30 percent drop in the number of deals and a 17 percent drop in their dollar volume compared with the same period last year.

• Bristol-Myers Squibb’s $74 billion takeover of Celgene, Aramco’s $69.1 billion bid for Sabic and FIS’s $34 billion offer for Worldpay helped keep M.&A. volumes up.

• Deal makers feel like there’s room for improvement. “We’ve been very happy in terms of big deals but we need more deals overall,” Anu Aiyengar, the head of North American M.&A. at JPMorgan Chase, told the FT.

• The fear that’s slowly putting clients off deal-making, according to some advisers: recession.

New York State’s attorney general sued the Sackler family, which controls the OxyContin maker Purdue Pharma, yesterday, accusing it of siphoning money from the drugmaker and erasing a paper trail.

• “The New York lawsuit alleges that Sackler family members abolished quarterly reports, insisted that numbers be recounted only orally to board members, and voted to pay themselves millions of dollars, often through offshore companies.”

• It also accuses the Sacklers of setting up a new drug company, Rhodes, in 2007 to shift the opioid business away from Purdue. (Rhodes eventually overtook Purdue in market share for opioids.)

• “The lawsuit also goes well beyond other cases in spelling out in granular detail how pharmaceutical distributors played a role in the opioid epidemic by ignoring blatant ‘red flags’ that indicated mountains of opioids were being diverted for illegal use.”

• The Sacklers and Purdue denied the allegations.

It’s well-known that President Trump exaggerated his riches to make himself seem wealthier. But David Farenthold and Jonathan O’Connell of the WaPo obtained his so-called “statements of financial condition” — and showed how he embellished the truth.

Many figures in the documents weren’t verified, even though they were prepared by his accountants. Instead, the accountants simply wrote down what Mr. Trump described. “In the compilation process, it is not the role of the accountant to assess the values,” one of them said.

That led to inflated figures like Mr. Trump claiming that he owned a 2,000-acre vineyard in Virginia (real size: 1,200 acres) or that an estate he owned in Westchester County, N.Y., was worth $261 million (local authorities’ assessment: $20 million).

But Mr. Trump may be shielded from fraud claims over some of these documents, because his accounting firm explicitly said it couldn’t vouch for the figures, legal experts said.

Morgan Stanley’s president, Colm Kelleher, will retire on June 30, after having helped stabilize one of Wall Street’s most prominent investment banks.

Kazuo Hirai, Sony’s chairman and former C.E.O., is retiring.

Campbell Soup has named Keith McLoughlin, who served as interim C.E.O. last year, as its new chairman.

Barclays has hired Kristin DeClark from Deutsche Bank as co-head of its U.S. equity capital markets business and head of its tech equity capital markets team.


• States like New York are reportedly considering suing to block T-Mobile’s proposed deal for Sprint, even if the Justice Department approves the transaction. (Bloomberg)

• Wow Air, a low-cost Icelandic airline, shut down yesterday after failing to find a last-minute financial lifeline. (NYT)

• Saudi Aramco reportedly plans to issue $10 billion worth of bonds to help finance its $69 billion deal for control of the petrochemical company Sabic. (WSJ)

Politics and policy

• Democrats questioned how accurately Attorney General William Barr’s four-page letter to Congress summarized Robert Mueller’s 300-page report. (NYT)

• While Mr. Trump called on OPEC to lower oil prices, his administration reportedly took the rare step of meeting with the oil cartel. (WSJ)

• Senator Amy Klobuchar, who’s running for the Democratic presidential nomination in 2020, proposed a $1 trillion infrastructure investment plan. (NYT)


• American and Chinese trade officials resumed negotiations today after what Treasury Secretary Steven Mnuchin said was a “productive working dinner” last night. (CNBC)

• China is offering foreign companies better access to its cloud-computing market as a concession in those trade talks. (WSJ)

• Canada may help its canola farmers after China restricted imports of their crops. (Bloomberg)


• Huawei may be struggling to convince the world that it’s not a security threat, but its revenue soared to $105 billion last year, up nearly a fifth from 2017. (NYT)

• The F.C.C. has fined robo-callers $208 million since 2015. But it has managed to collect only $6,790. (WSJ)

• Apple’s Tim Cook and Qualcomm’s Steven Mollenkopf are scheduled to testify in a trial that is part of a continuing legal battle between the two companies. (Bloomberg)

• Goldman Sachs is reportedly developing a subscription service for Wall Street data. (Business Insider)

Best of the rest

• Lawyers for Nigeria have sued JPMorgan Chase over $900 million withdrawn from a government bank account by corrupt former officials. (NYT)

• American companies more than quadrupled the amount of foreign earnings they repatriated from offshore accounts last year. (WSJ)

• A majority of revenue at Wirecard, the German financial-payments company, comes from referral partners — some of whom aren’t as significant as described. (FT)

• A top shareholder advisory firm has a new benchmark for measuring C.E.O. pay: “economic value added.” (Fortune)

• How a woman accused of being a con artist duped a bank out of $100,000: “She understood the financial jargon.” (Sky)

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Newsrust - US Top News: DealBook Briefing: It’s Lyft I.P.O. Day
DealBook Briefing: It’s Lyft I.P.O. Day
Newsrust - US Top News
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