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DealBook: How Ginsburg’s Successor Could Remake Business



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As the nation mourned Justice Ruth Bader Ginsburg, who died on Friday at 87, the politics of replacing her have surged to the fore — and a lot is at stake, including for the business world.

President Trump wants to seize the chance to lock in a conservative majority for generations. Political oddsmakers have identified two women as leading candidates for the nomination:

• The front-runner is Judge Amy Coney Barrett, long favored by anti-abortion activists who say she has the “perfect combination” of judicial wisdom and conservative bona fides. She has favored tightening restrictions for illegal immigrants, which may suggest how she would rule on the Obama-era immigration program known as DACA.

• Another strong contender is Judge Barbara Lagoa, a former commercial litigator who has ruled in favor of business groups who opposed raising the minimum wage in Miami Beach. She also supported withdrawing a law that helped homeowners recover legal fees from banks that improperly attempted foreclosure.

Here are some of the areas of legislation where a Trump appointee could make a significant difference:

• The Affordable Care Act, whose legality will again be reviewed in November. Judge Barrett criticized Chief Justice John Roberts’ defense of the law as going “beyond its plausible meaning to save the statute.” Judge Lagoa’s conservative-leaning views suggest she feels similarly. (It’s unlikely either could be seated in time for oral arguments, but legal experts say the law’s chances of survival have already been dampened by Justice Ginsburg’s death, and future revisions could go before her successor.)

DACA, an Obama executive order that shields about 750,000 young undocumented immigrants known as Dreamers from deportation. Some corporate leaders, like Apple’s Tim Cook, have publicly urged preserving the program. But neither Judge Barrett nor Judge Lagoa is expected to block the Trump administration’s efforts to end it.

Copyright law, in the form of Google v. Oracle America. A battle over copyright protection for software interfaces, the case has drawn more than 50 friend-of-the-court briefs from companies, technologists, scholars, tech investors, intellectual property experts, the media and the government.

But Mr. Trump may not be able to get his choice onto the court. Two Republican senators, Susan Collins of Maine and Lisa Murkowski of Alaska, have publicly opposed a confirmation vote before the Nov. 3 election. If two more Republicans switch, a vote could fail, and several — including Mitt Romney of Utah, Corey Gardner of Colorado and Chuck Grassley of Iowa — have yet to reveal their positions.

• Two other Republican senators, Martha McSally of Arizona and Kelly Loeffler of Georgia, face special elections, endangering the chances of the G.O.P. winning a vote in the lame-duck session.


Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut, Lauren Hirsch in New York, Ephrat Livni in Washington and Michael J. de la Merced in London.


ImageJustice Ginsburg taking the oath of office in 1993.
Credit…Marcy Nighswander/Associated Press

Here’s what C.E.O.s and other corporate figures said about the justice’s passing:

Mary Barra of G.M. said she was a “trailblazer” who showed “that all women belong in any industry.”

Adena Friedman of Nasdaq said Justice Ginsburg “opened new doors of opportunity for so many.”

Indra Nooyi, formerly of PepsiCo, said the justice showed that women “belong in the ring — fighting.”

Sundar Pichai of Alphabet said “women will always have a seat at the table” because of Justice Ginsburg.

Tim Cook of Apple said “we all can honor her legacy by working toward true equality, together.”

Credit…Hayoung Jeon/EPA, via Shutterstock

The Chinese-owned video app may have gotten President Trump’s blessing for a transaction to assuage his national security concerns. But announcements over the weekend left yet more mysteries about exactly what the deal does — and what it represents.

What we know: As expected, Oracle and Walmart will take a 20 percent stake in TikTok, which will be spun out from its China-based parent, ByteDance. The app plans to go public on an American stock exchange in perhaps a year. Four of five board members will be Americans, and Oracle will oversee the app and verify the security of any updates. The new company will create an “educational initiative.” And Mr. Trump said that TikTok will “have nothing to do with China, it’ll be totally secure.”

A pause for fact-checking

• Mr. Trump, who has history on his mind, told a rally that the deal would support “a fund for education, so we can educate people as to the real history of our country.” Walmart and Oracle described it only as an effort to “develop and deliver an A.I.-driven online video curriculum” for various subjects.

• Mr. Trump said TikTok had promised $5 billion “in new tax dollars to the U.S. Treasury” and suggested that was linked to the education program. But it’s separate, and ByteDance said the final amount was yet to be determined.

• Oracle, Walmart and others asserted that American entities would own 53 percent of TikTok, if one includes ByteDance investors like Sequoia. But the Sequoia funds invested in ByteDance include its big China fund, and representatives for Sequoia and TikTok did not clarify how much of a stake the China fund owns and whether that is counted as “American.”

And the questions we still have

• Does the deal really solve any national security issues? The Times’s David Sanger notes that with ByteDance retaining control over TikTok’s algorithms, it may be impossible to safeguard against Chinese state interference with its code base.

• Did Oracle win the deal on merit? The company’s co-founder and chairman, Larry Ellison, cited technical advantages. But others pointed to Mr. Ellison’s close ties to the president: “This appears as though what passes for process is what pleases one man: Donald J. Trump,” said Tom Wheeler, the former Democratic chair of the F.C.C.

• How much will TikTok be worth? ByteDance is seeking a $60 billion valuation in the deal, Bloomberg reports, citing an unnamed source. The Western investors have yet to agree.

• How much power would ByteDance retain, even after a TikTok I.P.O.?

• Will Beijing approve this deal? The potential blindsiding of ByteDance over the “educational grant” and the Trump administration’s threat to ban WeChat may not have helped.

The other big Chinese app in the Trump administration’s sights caught a break over the weekend when a federal judge temporarily stayed an executive order banning it from operating in the U.S.

The stay on President Trump’s ban is rooted in the First Amendment. In her decision, Judge Laurel Beeler of the U.S. District Court for the Northern District of California wrote: “In the U.S., those in the Chinese American, Chinese-speaking and other communities rely on WeChat as opposed to other platforms as their primary source of communication and commerce.”

The administration may yet appeal. A Justice Department spokeswoman said it was reviewing Judge Beeler’s order. But given the administration calls WeChat a national security threat, more legal fireworks may be in store.

And the tech cold war between Washington and Beijing isn’t over. After the TikTok deal, the Trump administration’s fight may be refocused on other, bigger Chinese tech giants, like WeChat’s owner, Tencent. And China has threatened retaliation if a ban goes through, with the editor of the state-controlled Global Times tweeting yesterday that U.S. tech giants like Google and Facebook should have TikTok-style restructurings.

Nikola’s founder and executive chairman is out. Trevor Milton has stepped down, the electric truck maker announced overnight, after a short-seller accused the company of fraud. Stephen Girsky, the former vice chairman of G.M. and a board member, will take over as chairman.

A leaked Tesla memo suggests a “record” quarter for car deliveries. In an email to employees, Elon Musk said the company has “a shot” at such a record. The report could push Tesla shares up a day before it is expected to announce new battery technology.

A huge leak suggests trillions in dirty money is flowing through U.S. banks. Thousands of so-called suspicious activity reports — which American lenders file to the Treasury Department — obtained by BuzzFeed News purport to show how banks are handling suspicious payments around the world, including on behalf of entities tied to international criminals, the Taliban and North Korea.

AstraZeneca published its Covid-19 vaccine testing blueprints. The drug maker followed similar moves by Moderna and Pfizer after pausing some tests over safety concerns.

HBO and “Schitt’s Creek” dominated the Emmys. Netflix had the most nominations — 160 — but HBO shows like “Succession” and “Watchmen” were among last night’s big winners. “Schitt’s Creek,” the Canadian sitcom, broke an Emmy record for comedy awards.

Credit…USA Today Sports, via Reuters

The grooming products brand, which the N.B.A. star helped launch in 2018, plans to announce a $6 million fund-raising round today, its first since Mr. Bryant died in a helicopter crash. DealBook’s Lauren Hirsch spoke with Matthias Metternich, one of the brand’s founders, about growing the company in the wake of loss.

On the impact of Mr. Bryant’s passing:

“Obviously, first and foremost, it was majorly tragic to lose a founding partner, not something I’ve ever experienced and certainly the hardest thing I’ve ever experienced in my life,” Mr. Metternich said.

On whether Mr. Bryant’s death hurt fund-raising efforts:

“It wasn’t impacted at all,” Mr. Metternich said. (The round was led by CircleUp Growth Partners, and included the billionaire Mark Cuban, Lightspeed Venture Partners and BAM Ventures.) “The resonance of the brand that we’re seeing with consumers was the story that we told to the world. And that was the story that Mark heard, and the reason he got behind it.”

On continuing Mr. Bryant’s legacy of supporting female athletes:

Art of Sport, which says its products are unisex, recently added the U.S. women’s national soccer player Abby Dahlkemper as a partner. Mr. Metternich said that Mr. Bryant was firm in ensuring the company promoted women: “He was very engaged in his daughter’s lives and their sport careers, and he was a loud proponent of the company and the brand doing more for female athletes — and considering female athletes more in our product development.”

Credit…Mark Lennihan/Associated Press

Most companies have requirements for employees to disclose when they date co-workers. But the world’s biggest asset manager isn’t just demanding disclosure about colleagues, Charlie Gasparino reports for The New York Post.

From a new policy that BlackRock rolled out last week:

“Employees are required to disclose all Personal Relationships with other BlackRock employees or contingent workers; as well as Personal Relationships with employees of a service provider, vendor, or other third party (including a client), if the non-BlackRock employee is within a group that interacts with BlackRock.”

A BlackRock executive conceded to Mr. Gasparino that it might be “broadest dating disclosure requirement in the financial business, if not corporate America.” But in the #MeToo era, it’s perhaps better — and cheaper — to be safe than sorry.


• Playboy Enterprises is reportedly considering going public via — you guessed it — a blank-check company. (Reuters)

• Chamath Palihapitiya’s Social Capital Hedosophia plans to raise at least $2 billion for three new blank-check vehicles. (Bloomberg)

Politics and policy

• U.S. Postal Service leaders reportedly worried that President Trump’s threats against Amazon threatened their business. (WaPo)

• JPMorgan Chase notified 200 London-based traders to prepare to move to European cities including Paris and Frankfurt, expecting negotiations over a trade deal between Britain and the E.U. to fail. (Bloomberg)


• The E.U. wants more power to crack down on U.S. tech giants. (FT)

• Chime raised new funds at a $14.6 billion valuation, surpassing Robinhood as the most valuable U.S. consumer fintech company. (CNBC)

Best of the rest

• Campari’s former C.E.O. is accused of tipping off a friend about the acquisition of Grand Marnier Group over dinner. (BBG)

• What to do when your boss is a conspiracy theorist. (NYT)

Thanks for reading! We’ll see you tomorrow.

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


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The Trump campaign celebrated a growth record that Democrats downplayed.



The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.


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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.



The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.


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Ant Challenged Beijing and Prospered. Now It Toes the Line.



As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.


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