2020年1月31日 星期五

DealBook: How Amazon Keeps Defying Gravity

The internet juggernaut enjoyed a stunning quarter where nearly every business worked. The results increased Jeff Bezos' wealth by $13 billion in 15 minutes.
 
 
January 31, 2020
Good morning. Weekend playlist: This new dance number by Elon Musk, if that’s your thing. (Was this email forwarded to you? Sign up here.)
Jeff Bezos has reason to feel good.
Jeff Bezos has reason to feel good.  Cliff Owen/Associated Press
Why is this man laughing?
It’s because Amazon reported another knockout quarter yesterday, sending its shares up 10 percent in after-hours trading, writes David Streitfeld of the NYT. The performance showed the power of Jeff Bezos’ internet juggernaut.
The company handily beat expectations, with quarterly profit coming in at $6.47 a share. Analysts had expected $4.04 a share, with profit weighed down by increased spending to build out Amazon Prime shipping services.
Amazon is now an even stronger powerhouse in e-commerce, online video and cloud computing. (A rare blemish was physical stores, including Whole Foods Market, whose sales dropped 1 percent.)
More highlights from Amazon’s report:
• Its third-party marketplace showed a 31 percent jump in revenue in the quarter, to $17.4 billion.
• Its advertising business helped push revenue for “other” operations up 39 percent.
• Amazon’s willingness to pay for faster package shipping may already be generating an uptick in goods sold, our new colleague Shira Ovide tweets.
A useful summary: “Amazon ads for Amazon products delivered in Amazon trucks to Amazon households, where Amazon cameras alert residents that their new toys have already arrived,” Mr. Streitfeld writes.
All that was great for Mr. Bezos’ wallet. The surge in Amazon shares yesterday grew his net worth by $13.2 billion in about 15 minutes.
What to watch for: Whether Amazon rejoins the $1 trillion market value club — and stays there.
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Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York and Michael J. de la Merced in London.
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Ginni Rometty
Ginni Rometty  Samuel Corum for The New York Times
Ginni Rometty is leaving IBM with work to do
Ms. Rometty announced yesterday that she will step down as the embattled tech icon’s C.E.O. this spring. She became one of Corporate America’s top women leaders — but couldn’t finish turning around her own company’s fortunes.
Since becoming C.E.O. in 2012, she pushed IBM further into businesses like cloud computing and A.I., buying up plenty of companies to help with that. Last year, she oversaw the $34 billion takeover of the Linux distributor Red Hat, IBM’s biggest deal ever.
Ms. Rometty was also one of the longest-serving female C.E.O.s in America and a role model for many executives. And she was outspoken on issues like whether companies should focus on more than shareholders.
But she struggled to make IBM more relevant:
• The company still relies more on slow-growing hardware and software businesses than cloud computing, A.I. and data analysis.
• Shares in IBM fell 25 percent during her tenure, while those in Microsoft jumped 500 percent.
Her successor will be Arvind Krishna, an IBM lifer who runs its cloud division and helped spearhead the Red Hat deal.
It’ll be up to him whether IBM enjoys a Microsoft-type revival — or a Nokia-type slide into irrelevance, write Jennifer Saba and Antony Currie of Breakingviews.
Face masks for sale in Bangkok.
Face masks for sale in Bangkok.  Diego Azubel/EPA, via Shutterstock
Wuhan coronavirus is officially a global emergency
The Wuhan virus outbreak is growing in scale and seriousness, as governments and companies alike struggle to figure out how to contain its spread.
Here’s the latest:
• The World Health Organization declared the coronavirus a global emergency yesterday, though it said it had confidence in China’s ability to respond.
• The State Department warned travelers to avoid China after the declaration.
The death toll as of today is 213, while the total number of cases is around 9,800 worldwide.
Facebook plans to remove posts with misinformation about the coronavirus, writes Kurt Wagner of Bloomberg. He adds, “The step of actually removing misleading content and not just labeling it as such is a significant one for a company that’s said it won’t fact-check political advertising.”
The Chinese billionaire Jack Ma said he would donate $14 million to help speed development of a coronavirus vaccine.
U.S. stock futures are down modestly this morning, following in the footsteps of Asian and European markets.
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What’s left out of the latest debate on capitalism
From boardrooms to Davos, the corporate world is debating whether companies should focus just on shareholders or on a broader group of “stakeholders.” Peter Orszag writes in Bloomberg Opinion that some things are being omitted from that discussion.
• Governments once controlled markets more tightly, writes Mr. Orszag, a former Obama administration official who is now head of financial advisory at Lazard. So it mattered less what companies did, because government constrained the consequences.
• “An extreme definition of capitalism has become dominant,” where the only capitalist markets are perfectly competitive ones, with hands-off governments and shareholder-focused companies. “It’s a strange argument,” Mr. Orszag writes.
• “The dominant paradigm of the past several decades has plausibly produced a dramatic rise in inequality and polarization, and that polarization in turn has made the government unable to function effectively.”
Mr. Orszag’s proposed solution: increased government intervention — with more focus on where people actually live and work, rather than blanket generalizations about how business should work.
  Matt Dunham/Associated Press
Brexit happens tonight. What next?
At 11 p.m. London time (midnight Brussels time and 6 p.m. Eastern), Britain will formally leave the E.U. It was a struggle to get to this point, but now the really hard part begins.
• “This is the moment when the dawn breaks and the curtain goes up on a new act,” Prime Minister Boris Johnson will say in an address tonight.
• But Britain needs to hash out a trade deal with the E.U. and the U.S., both of which promise to be difficult. (One example: Britain’s former ambassador to Washington warned that President Trump will want the British National Health Service to pay higher prices for American drugs.)
• Just yesterday, the Bank of England downgraded the economic outlook for the country.
“For the next 11 months, Britain will continue to abide by the European Union’s rules and regulations, while it decides what sort of Brexit it wants for itself,” Mark Landler of the NYT writes.
So for those weary of years of Brexit deliberations: Sorry, but they’re not done yet.
Revolving door
J. Crew hired Jan Singer, a former executive at Victoria’s Secret, as its new chief.
Renault named Luca de Meo, a former Volkswagen executive, as its new C.E.O.
JPMorgan Chase has hired William Vereker, who was a top business adviser to former Prime Minister Theresa May of Britain, as vice chairman of investment banking for Europe, the Middle East and Africa.
Adel Aslani-Far, a top M.&A. lawyer, left the law firm Latham & Watkins to join Greenberg Traurig.
The speed read
Deals
• Altria wrote down its stake in the vaping company Juul by an additional $4.1 billion, valuing its holdings down 67 percent from when it struck the deal in 2018. (NYT)
• Unilever is weighing a sale of its tea business, which includes the Lipton brand and could fetch billions. (WSJ)
• The parent company of One Medical, the health clinic operator, priced its I.P.O. at $14, the bottom of its expected range. (CNBC)
• The analyst Craig Moffett thinks AT&T will eventually need to break up, because combining telecom and media businesses isn’t working. (CNBC)
Politics and policy
• The U.S. economy grew 2.1 percent last quarter, its slowest pace since 2016. (NYT)
• When President Trump called Jay Powell, the Fed chairman, an “enemy” of America, the central bank’s vice chair responded in an internal email, “Ugh.” (NYT)
• A schism has opened up on the right over eroding tech giants’ legal protections, with conservatives like the Mercers squaring off against libertarians like the Kochs. (Bloomberg)
Tech
• The F.B.I. is reportedly investigating NSO, the Israeli cyberespionage company whose products were said to have been used in the hack of Jeff Bezos, over illegal hacking of U.S. citizens. (Reuters)
• An associate of Peter Thiel is working on a subscription-based social network called Column that will focus on business and tech leaders. (MIT Technology Review)
• A.I. won’t necessarily eliminate jobs. But it needs to be regulated to make future jobs fairer. (NYT)
Best of the rest
• Deutsche Bank lost $1.6 billion in the fourth quarter, underlining the depths of the German lender’s troubles. (NYT)
• A Transportation Department report is said to criticize Southwest Airlines for flying 17 million passengers on planes with unconfirmed maintenance records over two years. (WSJ)
• Members of The Omaha World-Herald’s union expressed dismay at Warren Buffett’s sale of their newspaper to Lee Enterprises. (Business Insider)
Thanks for reading! We’ll see you next week.
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