China Evergrande, the troubled property giant, made another debt payment ahead of a Friday deadline, averting default for the second time in two weeks, according to one of the company’s bondholders.
The company made an interest payment that had been due on Sept. 29, this person said, speaking on condition of anonymity to discuss the matter. Evergrande had a 30-day grace period on the bond payment; the extension was to end on Friday.
The company didn’t immediately respond to a request for comment on the payment.
The payment comes a week after the world’s most indebted property developer narrowly avoided defaulting on another bond. Evergrande made an $83.5 million interest payment to bondholders last Friday, according to Securities Times, an official newspaper. That payment likewise came just a day ahead of a default. The interest payment due this Friday totaled $45.2 million.
Weighed down by more than $300 billion of debt, Evergrande has been trying to sell off parts of its vast empire to raise enough cash to pay off creditors. Last week, one of those deals — largely seen as a last-ditch lifeline — fell through. Evergrande has warned in securities filings that “in view of the difficulties, challenges and uncertainties” it has faced in selling its assets, it could not guarantee it would “be able to meet its financial obligations.”
The company’s financial crisis is testing the resolve of Chinese officials who were once quick to step in to save struggling giants like Evergrande. They have pledged to clean up China Inc.’s mountain of debt and end the property sector’s binge-borrowing habits.
Yet if the authorities let Evergrande fail, they could hurt some of the estimated more than one million Chinese home buyers who have purchased apartments from the company and are waiting for them to be built. A collapse could also slam construction workers and subcontractors who are waiting to be paid.
Alexandra Stevenson contributed reporting.
Amazon on Thursday posted its slowest sales growth in almost seven years as the pandemic-fueled surge in online shopping eased.
The company’s profit shrank, driven in part by higher labor costs and more spending on new warehouses and other logistics infrastructure meant to speed delivery times.
Amazon told investors to expect sales growth and profit to continue contracting in the current quarter, which includes the holiday shopping season.
The company said sales in the three months ending in September hit $110.8 billion, up 15 percent from the same period a year earlier. It made $3.2 billion in profit, about half as much as last year.
The results fell short of investor expectations, and shares of Amazon’s stock were down more than 4 percent in aftermarket trading.
In a statement, Amazon’s chief executive, Andy Jassy, begged patience. He said the pandemic had “driven extraordinary investments across our businesses to satisfy customer needs — just one example is that we’ve nearly doubled the size of our fulfillment network since the pandemic began.” He went on to say that the company expected to have billions of dollars in additional costs in the fourth quarter, largely because of labor shortages, higher wages and global supply chain issues.
The company is in the midst of what the investment bank Cowen called a “historic investment cycle.” Cowen estimates that in 2020 and 2021, the company will have spent about $80 billion in logistics investments, compared with about $58 billion in the previous five years combined.
Since June, Amazon has hired 133,000 new employees, bringing its work force to 1.47 million, up 30 percent from a year ago, and it expects to grow more. In the past two months, it has announced plans to hire 125,000 hourly workers and 150,000 seasonal workers in the United States in advance of the holiday shopping rush, and it said it had at least 55,000 open technology and corporate positions globally.
Amazon has raised wages and offered bonuses to attract workers in the tight labor market, and that, combined with the expansion, has raised its costs. Brian Nowak, a Morgan Stanley analyst, estimates that by the end of the year, the labor costs for each item Amazon ships will be about 50 percent higher than it was a year earlier.
Analysts expect the hiring and new warehouses to be a long-term advantage for Amazon because it will drive faster delivery times, which make customers buy more from the company.
Those increased costs came as customers slowed what had been a burst in consumption. The number of units sold was up only 8 percent.
Some of Amazon’s most profitable businesses performed well. Its cloud computing businesses grew 39 percent to $16.1 billion, as the pandemic accelerated how companies adopt new technologies to run their businesses.
And its “other” business segment, which is primarily its advertising business, grew 50 percent to $8 billion.
Apple said on Thursday that its sales jumped by 29 percent and profits surged 62 percent in the most recent quarter, as the world’s most valuable public company continued to rake in money despite supply chain shortages that have slowed its growth.
Apple reported $83.3 billion in revenue and $20.5 billion in profits for its fiscal fourth quarter, which was slightly below Wall Street analysts’ expectations. Revenue growth slowed from 36 percent in the prior quarter. Tim Cook, Apple’s chief executive, told CNBC that the results were due to “larger than expected supply constraints” related to global computer chip shortages caused by the pandemic.
Sales of the iPhone led the way as usual, generating $38.8 billion in revenue, up 47 percent from a year earlier, but down from $39.5 billion in sales the previous quarter. During Apple’s earnings report in July, the company had said that it expected the global chip shortage to hurt iPad and iPhone sales.
Apple’s results follow a spate of new product announcements. Last month, the company released the new iPhone 13s, which were available for sale for only about a week in the quarter. The company also recently unveiled new models of the Apple Watch, the iPad, AirPods and MacBook Pro computers.
Another profit engine, its App Store, has drawn increasing scrutiny and calls for regulation.
This month, Apple appealed a judge’s decision in its legal battle with Epic Games, the creator of the game Fortnite. Epic had sued Apple in federal court last year over antitrust concerns, but it was unsuccessful in persuading a judge to label the tech giant a monopolist. The judge in the case said Apple could not stop app developers from informing customers about ways to pay for their services outside the App Store.
Apple did not address a privacy change it made that has hurt other large tech companies. This year, it allowed iPhone users to decide whether they wanted to allow apps to track them across their devices, which gives advertisers information to target them with ads.
The change has hurt companies that depend on mobile advertising, such as Snap, the parent company of Snapchat, which last week said its business had been affected by the change. Facebook said on Monday that it was also retooling its advertising systems to address Apple’s privacy tweak.
Tucker Carlson, the top-rated Fox News host, faced criticism on Thursday — including from a prominent colleague at his own network — after he announced plans for a documentary series featuring debunked conspiracy theories about the Jan. 6 riot at the United States Capitol.
The three-part series, “Patriot Purge,” is set to be broadcast next month on Fox News’s streaming service, Fox Nation. An 84-second trailer that aired on Fox News on Wednesday included the baseless suggestion that the riot was a so-called “false flag” operation created to demonize the political right.
As tense music plays on the soundtrack, Mr. Carlson says in ominous tones that “the helicopters have left Afghanistan and now they’ve landed here at home.” Various speakers convey the false idea that Democrats want to persecute and imprison conservatives.
The trailer evoked a dismayed public response from Geraldo Rivera, the veteran Fox News correspondent, who used a profane term in a Twitter post to dismiss the claim that the Capitol riot was a “false flag” operation. That theory has repeatedly been debunked.
Speaking on Thursday with The New York Times, Mr. Rivera elaborated on his concerns.
“Tucker’s wonderful, he’s provocative, he’s original, but — man oh man,” Mr. Rivera said in a phone interview. “There are some things that you say that are more inflammatory and outrageous and uncorroborated. And I worry that — and I’m probably going to get in trouble for this — but I’m wondering how much is done to provoke, rather than illuminate.”
“Messing around with Jan. 6 stuff … ” Mr. Rivera added, pausing briefly. “The record to me is pretty damn clear, that there was a riot that was incited and encouraged and unleashed by Donald Trump.”
Asked if he would urge his Fox News bosses to reconsider airing Mr. Carlson’s special, Mr. Rivera demurred, saying, “I don’t want to go there, that’s not my job.”
But he added of Mr. Carlson: “He’s my colleague. He’s my family. Sometimes you have to speak out about your family.”
Fox News did not respond to a request for comment.
Mr. Carlson’s prime-time provocations have helped propel him to the highest ratings in cable news, even as he has used rhetoric sometimes used by white nationalists. He has frequently questioned the coverage of the Jan. 6 attack, asserting that government agents were involved in the events and portraying the rioters as mostly peaceful.
“The vast majority of people inside the Capitol on Jan. 6 were peaceful,” he told viewers on Sept. 23. “They were not insurrectionists, they shouldn’t have been there. They weren’t trying to overthrow the government. That’s a total crock.”
The trailer for “Patriot Purge” includes an interview with Darren Beattie, a former speechwriter in the Trump White House who was fired in 2018 after it was revealed that he had attended a gathering with white nationalists. Ali Alexander, a far-right activist and one of the most prominent advocates of the falsehood that President Biden stole the 2020 election, also appears in the trailer.
Among Mr. Carlson’s critics on Thursday was Representative Liz Cheney, a Wyoming Republican. In a Twitter post, she accused Fox News of giving Mr. Carlson “a platform to spread the same type of lies that provoked violence on January 6.”
Mr. Rivera, who is scheduled to appear on Thursday’s episode of the Fox News afternoon program “The Five,” recently renewed his contract with the network in a multiyear deal. In an announcement last month, Suzanne Scott, the chief executive of Fox News Media, described Mr. Rivera as “an important voice on Fox News Channel over the last two decades,” adding, “We are thrilled to have him continue to be a part of the Fox family.”
Fox News was not the only arm of Rupert Murdoch’s media empire facing scrutiny this week. The Wall Street Journal was criticized on Wednesday for publishing a lengthy letter to the editor from former President Donald J. Trump that contained numerous falsehoods about the integrity of the 2020 election.
Davey Alba contributed reporting.
Higher inflation and supply chain bottlenecks will last longer than expected in Europe, the head of the eurozone’s central bank said on Thursday.
But Christine Lagarde, the president of the European Central Bank, insisted that the price rises would be temporary, and she said suggested that financial markets were wrong to expect an increase in interest rates next year.
“While inflation will take longer to decline than previously expected, we expect these factors to ease in the course of next year,” Ms. Lagarde told reporters.
Like many other major economies, the eurozone is suffering from supply chain disruptions. Higher shipping costs, delivery delays and other problems have raised manufacturing costs and led to higher consumer prices. The annual rate of inflation in the eurozone climbed to its highest level in 13 years last month, and inflation in Germany, the continent’s largest economy, was up 4.6 percent in October from a year earlier, the fastest pace in nearly three decades.
The central bank has previously estimated that exports would have been almost 7 percent higher in the first half of the year without these bottlenecks — a more severe impact than for the rest of the world, which would have seen exports rise an additional 2.3 percent.
“The euro area economy continues to recover strongly, although momentum has moderated to some extent,” Ms. Lagarde said on Thursday. “Consumers continue to be confident and their spending remains strong. But shortages of materials, equipment and labor are holding back production in some sectors.”
Still, the region’s economy will exceed its prepandemic size by the end of the year, the central bank predicted.
This week’s two-day meeting of the bank’s governing council, which sets monetary policy, was dominated by discussions about inflation, Ms. Lagarde said. But policymakers remained confident that it would start to decline next year. For one, base effects, such as the lagging impact of the end of the pandemic-related cut to German V.A.T., a type of sales tax, would no longer affect the inflation reading next year.
Two other key drivers of inflation are expected to dissipate over time: the jolt on supply and demand caused by the pandemic recovery, which has led to shortages of equipment and labor, and the jump in energy prices, which have risen sharply for several reasons including a tight supply of gas from Russia.
“We did a lot of soul searching to test out analysis,” Ms. Lagarde said. And she is confident these factors are temporary and that inflation will ease over the course of next year. “Granted, it will take a little longer than what we had expected,” she added.
The jump in inflation has shifted market expectations about when the central bank might raise interest rates. Before the meeting, traders indicated they expected the bank to lift rates in late 2022. But on Thursday, Ms. Lagarde said the bank’s analysis of the path of inflation did not support interest rate rises anytime soon.
The central bank has previously stated it would not raise interest rates until it was clear that the annual inflation rate would reach 2 percent “well ahead” of the end of the central bank’s projection horizon, and stay around that level over the medium term.
Using that guidance, “our analysis certainly does not support” raising interest rates late next year as markets imply, she said — “nor anytime soon thereafter.”
But some analysts still believe the central bank might have to act sooner than it anticipates.
“Over time, solid demand, rising wage costs in response to mounting labor shortages, and the transition to a greener economy will probably raise underlying inflation more than the E.C.B. currently expects,” Holger Schmieding, an economist at Berenberg Bank, wrote in a note to clients. The central bank could raise rates in late 2023, he said.
European bond yields and the euro were higher after Ms. Lagarde’s news conference.
On Thursday, the central bank kept interest rates steady, and said its 1.85 trillion euro ($2.15 trillion) pandemic-era bond-buying program would continue at a slightly slower pace than earlier this year. Last month, policymakers slowed down the pace of purchases in the program, from about 80 billion euros a month, attributing the change to an improved outlook for the economy and higher inflation expectations. The bond purchases are one of the ways the bank keeps interest rates low.
Ms. Lagarde said she expected the pandemic-era program to end in March. But a final decision on when to end those purchases, and whether the bank’s older bond-buying program will then be expanded to help meet the target of 2 percent inflation, isn’t expected until the central bank’s December meeting, when policymakers will get a new set of forecasts for economic growth and inflation.
The European Central Bank is likely to have a looser monetary stance, with lower interest rates, in place for longer than the policies of the Federal Reserve and Bank of England because its longer-term forecasts for inflation are still below the central bank’s target. In Britain, inflation is expected to rise above 4 percent, above the Bank of England’s target of about 2 percent. The bank’s governor, Andrew Bailey, has said the rate of inflation was concerning and that officials needed to prevent high inflation from becoming permanent.
Activision Blizzard, the embattled video game company behind Call of Duty and other titles, announced a slate of new initiatives Thursday morning aimed at improving diversity and the company’s work environment.
The company has faced intense pressure since July, when a lawsuit from a California fair employment agency accused the video game publisher of fostering a frat-like culture in which sexual harassment and gender discrimination were rampant. The lawsuit, the company’s fumbled response to the claims against it and the subsequent investigations by federal agencies prompted outrage among Activision’s game developers and the broader gaming industry, which has long grappled with sexism and toxic behavior.
Activision is putting $250 million toward hiring more women, people who identify as nonbinary and those from “underrepresented communities,” the company’s chief executive, Bobby Kotick, said in an email to employees. About 23 percent of Activision workers are women or nonbinary, Mr. Kotick said, and the goal was to increase that number by about 50 percent over five years.
The company said it was also waiving mandatory arbitration — a way of settling disputes outside of the court system — of sexual harassment and discrimination claims, a much-requested change by Activision employees and protesters in recent months.
Activision said it would adopt a zero-tolerance harassment policy in which those who were found to have harassed employees or retaliated against those who reported discrimination would be fired, rather than possibly receiving a written warning or other disciplinary action first. Mr. Kotick said that the company would also issue an annual report about pay equity.
He also said that to “ensure that every available resource is being used in the service of becoming the industry leader in workplace excellence,” he was asking Activision’s board to reduce his total compensation to $62,500 until the board had decided the company had reached its diversity goals. Mr. Kotick is one of the country’s highest paid executives, and had a $155 million pay package approved in June.
“I truly wish not a single employee had had an experience at work that resulted in hurt, humiliation, or worse — and to those who were affected, I sincerely apologize,” Mr. Kotick wrote to employees.
In contrast to past changes announced by the company, such as a proposed $18 million settlement with a federal employment agency that stirred derision, the announcements on Thursday were met with cautious optimism from Activision employees and activists who had been pushing the company to make changes in recent months.
Today was a huge win for ABK Worker’s Alliance! Forced arbitration has been removed for cases that deal in sexual harassment and discrimination. The company announced they will raise the number of women and non-binary people it employs by 50% 💙 https://t.co/N6ZGkUIsiA
— ABetterABK 💙 ABK Workers Alliance (@ABetterABK) October 28, 2021
“This is what happens when we work together to create a better future for game devs in our company,” tweeted ABetterABK, the group of workers at Activision and its subsidiaries, Blizzard and King, who have been fighting for improvements. “Together we will continue to push for other changes that need to be made so that we can make a better ABK.”
A Senate committee on Thursday approved a critic of the tech giants to lead the Justice Department’s antitrust division, sending his nomination to the full Senate for a final vote.
The Senate Judiciary Committee voted for Jonathan Kanter’s nomination to lead the division without taking a count of how each lawmaker voted. But one Republican senator, John Cornyn of Texas, asked to be marked down as voting against the nomination.
Mr. Kanter said during his confirmation hearing that he supported “vigorous antitrust enforcement in the technology area.” As a lawyer in private practice, Mr. Kanter has represented critics of Google, Facebook, Amazon and Apple — helping them make the antitrust case against the tech giants.
If confirmed by the full Senate, as is widely expected, he will join other critics of Silicon Valley in key antitrust positions. Lina Khan, a young legal scholar who wrote a popular critique of Amazon, leads the Federal Trade Commission. Another scholar who argues for greater antitrust enforcement against major companies, Tim Wu, holds an economic policy role at the White House.
Several lawmakers praised Mr. Kanter on Thursday, saying he was the right person to tackle problems with corporate concentration throughout the economy.
“We believe in allowing the markets to work,” said Senator Amy Klobuchar, Democrat of Minnesota. “And the markets aren’t really working really well right now for some people.’
Mr. Cornyn, who voted against the nomination, said he shared Mr. Kanter’s concerns about the tech industry but worried he would more broadly “use antitrust tools as a hammer to achieve political or social ends.”
Critics of Mr. Kanter have also questioned whether he could end up prosecuting cases he encouraged as a lawyer for competitors of the tech giants. The Justice Department has already sued Google, arguing it illegally maintained its monopoly over online search. And it is investigating whether Apple has violated antitrust laws.
To understand how supply-chain woes are holding back the economic recovery, look no further than auto sales.
Spending on motor vehicles and parts, adjusted for inflation, fell 17.6 percent in the third quarter, according to the government data released Thursday. The problem wasn’t that Americans didn’t want cars — it was that dealers didn’t have enough to sell them. A global shortage of computer chips led to a slump in auto production, which in turn led to a slump in sales.
When consumers can find cars to buy, they are paying more for them. Total spending on motor vehicles, not adjusted for inflation, fell 13.5 percent — still a big drop, but not quite as big as the inflation-adjusted figure. In other words, consumers were getting less for their money.
Personal consumption expenditures, adjusted for inflation and seasonality. Change since the first quarter of 2015.
Personal consumption expenditures, adjusted for inflation and seasonality. Change since the first quarter of 2015.
The drop in car production was big enough to drag down overall economic growth for the quarter. Gross domestic product would have risen 0.9 percent in the third quarter had it not been for the slump in auto output.
Supply-chain issues have been particularly acute in the auto sector, but they are much broader than that. Spending on other long-lasting goods also fell.
“It’s not just in autos,” said Robert Rosener, senior U.S. economist at Morgan Stanley. “There are other consumer goods that are also in short supply.”
The snarled supply chain is partly a result of the surge in spending on goods during the pandemic, as Americans bought cars instead of plane tickets, workout equipment instead of gym memberships and cooking equipment instead of restaurant meals. Those patterns have begun to reverse as the pandemic has ebbed, but not all the way. Spending on goods remains far above its prepandemic level, while services spending, adjusted for inflation, had yet to return to its prior level in the third quarter.
The spread of the Delta variant has slowed the service-sector rebound. Spending at hotels and restaurants rose just 3 percent in the third quarter, down from nearly 14 percent in the second quarter, adjusted for inflation.
As Royal Dutch Shell announced its quarterly earnings on Thursday, including a jump in profit that fell short of investors’ expectations, company executives were dealing with an activist hedge fund’s proposal that the oil giant be broken up.
Third Point, based in New York, has taken a stake in Shell worth about $750 million, according to a person familiar with the matter, and has called for it to be broken up into “multiple stand-alone companies” that could address competing shareholder interests.
These companies could include a unit encompassing Shell’s legacy oil and gas extraction businesses and another with its renewable-energy and liquefied-natural-gas activities, Third Point’s chief executive, Daniel S. Loeb, said in a letter to investors.
Mr. Loeb called Shell “one of the cheapest large-cap stocks in the world.” He also said that by most metrics, Shell was trading at a 35 percent discount to its rivals Exxon Mobil and Chevron, despite what he called “higher quality and more sustainable” business lines.
He blamed the company’s “attempting to appease multiple interests but satisfying none” for the lack of investor interest in Shell.
Mr. Loeb said pursuing a strategy like the one he suggested might lead to a reduction in carbon dioxide emissions and increased shareholder returns, “a win for all stakeholders.”
Third Point’s move recalled the successful battle waged this spring by another activist hedge fund, Engine No. 1, to install three directors on the board of Exxon Mobil with the goal of pushing it to reduce its carbon footprint.
Shell’s chief financial officer, Jessica Uhl, said on a call with reporters Thursday that the company did not have much information about Third Point’s intentions beyond the investor letter.
“We have had some very preliminary discussions with Third Point over the last year, not particularly specific,” she said. She added that Shell would “respond appropriately” after finding out more.
Ms. Uhl conceded that “we haven’t done a good enough job” in explaining Shell’s strategy for shifting to cleaner energy, which involves using the cash from oil and gas to fund new greener businesses.
Shell executives argue that as a large, well-capitalized organization with more than a century of experience delivering various forms of energy, Shell is well-placed to make multibillion-dollar investments in areas like carbon capture and storage and hydrogen that will be needed in the shift to cleaner energy.
“A very significant part of this energy transition is going to be funded by the legacy businesses that we still have,” said Ben van Beurden, Shell’s chief executive on the call. “If you want to exclude us from it, I don’t think it will go as fast as it would otherwise go,” he added.
Shell has also been under pressure to shed fossil fuel investments after a Dutch court ordered the company in May to cut greenhouse-gas emissions 45 percent by 2030 compared with 2019 levels. Shell is appealing the ruling. The company said Thursday that it would reduce emissions from operations by 50 percent by 2030, regardless of whether it won the appeal. Shell recently sold its interests in the Permian region, the prime shale drilling area in the United States, for $9.5 billion.
Shell may resist the idea of a breakup, but pressure from Third Point or others is likely to have an impact, analysts say. Most of the big European oil companies are investing in clean energy like wind and solar, as well as related businesses like electric vehicle charging, but are not being given credit by the markets for doing so, they say.
Analysts at Bernstein, a research firm, wrote that they did not think a “a full split” at Shell was imminent, but that the nudge from Third Point will “get management back on the front foot triggering their next shareholder-friendly step.”
In other words, Mr. van Beurden and his colleagues, who have laid out one of the more detailed strategies for shifting to lower carbon businesses among the large oil companies, may be prompted to do more.
Some energy companies are already making changes to appeal to investors. Eni, the Italian oil and gas company, said earlier this month that it planned to offer a separate stock market listing for its lower-carbon businesses — renewable energy, retail electric power, and natural gas — to be completed next year. The idea is to “provide investors with greater visibility of the value of the unit,” the company said.
In May the International Energy Agency said investment in new oil and gas facilities must stop in order for the world to reach net-zero carbon emissions by 2050. But Mr. van Beurden has said he is still willing to invest in what he considers the right oil and gas projects.
For instance, Shell is going ahead with an offshore drilling plan in the Gulf of Mexico and is a part-owner in a planned development of an offshore oil field west of the Shetland Islands, called Cambo, that has drawn protests.
On Thursday Mr. van Beurden suggested that the current shortfalls of natural gas in Europe and resulting record prices that have led to some factory closures were an illustration of what would happen if investments in fossil fuels are slashed before enough is done to reduce demand.
“If you just squeeze off supply and hope that demand will follow, this is what it feels like,” he said.
News of the Third Point’s interest came as Shell, Europe’s largest oil company, reported $4.1 billion in adjusted earnings for the third quarter of this year, a substantial increase over the $955 million reported in the period a year earlier, thanks mainly to higher oil and gas prices. The earnings came in below analysts’ expectations.
Emily Flitter and Michael J. de la Merced contributed reporting.
A special purpose acquisition company led by the buyout specialist Alec Gores, which announced a merger with the boutique apartment-hotel company Sonder in April, is restructuring the terms of its deal. The revised transaction will value Sonder at just over $1.9 billion, rather than $2.2 billion as originally planned, the DealBook newsletter reports.
The restructuring comes as SPACs strain under pressure. (At least, the SPACs not affiliated with former President Donald J. Trump.) Wariness of the blank-check vehicles is dragging many down below $10 per share, the price at which these companies tend to go public. This entices investors to exercise their right to redeem their shares at that price when a merger is consummated, a unique feature of the SPAC structure.
Every redeemed share means less cash available to the newly merged company. The Gores SPAC merging with Sonder has been trading just a few cents below $10 per share in recent months. The proposed business combination remains on track to close in the second half of 2021.
As part of the revised deal, affiliates of the Gores Group will contribute an additional $110 million in financing, alongside Fidelity, BlackRock and others. That’s on top of the deal’s original $200 million “PIPE” (private investment in public equity), which is a pot of money raised alongside a SPAC’s initial public offering. There’s also a new $220 million debt facility.
“The market has shifted — and we totally get that,” Mr. Gores told DealBook. “As long as you have a great company, the market is going to go in 100 different ways, and we just have to be smart enough to recognize where the market is.”
The Gores Group, a serial SPAC sponsor, has access to capital and a network that other SPACs might not, giving it the ability to shift with market conditions. Still, there are drawbacks to these adjustments: A larger PIPE means more dilution for shareholders.
“Our focus is to make sure the plan is fully funded,” said Sanjay Banker, Sonder’s president and chief financial officer. “The arithmetic in the short run is much less important.”
Food prices are surging, and food banks and pantries are struggling to keep up. To cope, they’re substituting or pulling the most expensive products, like beef, from their offerings, The New York Times’s Nelson D. Schwartz and Coral Murphy Marcos report.
The cost of food is soaring — and it’s changing shopping and eating habits for tens of millions of Americans. Some are skipping the most expensive items, while others are working longer hours to put food on the table.
Here’s what to know →
Responding to mounting pressure from activists, parents and regulators who believe tech companies haven’t done enough to protect children online, businesses and governments around the globe are placing major parts of the internet behind stricter digital age checks.
People in Japan must provide a document proving their age to use the dating app Tinder. The popular game Roblox requires players to upload a form of government identification — and a selfie to prove the ID belongs to them — if they want access to a voice chat feature. Laws in Germany and France require pornography websites to check visitors’ ages.
This month, lawmakers in Washington, which has lagged other world capitals in regulating tech companies, called for new rules to protect young people after a former Facebook employee said the company knew its products harmed some teenagers. They repeated those calls on Tuesday in a hearing with executives from YouTube, TikTok and the parent company of Snapchat.
The New York Times’s David McCabe reports that the changes, which have picked up speed over the last two years, could upend one of the internet’s central traits: the ability to remain anonymous. Since the days of dial-up modems and AOL chat rooms, people could traverse huge swaths of the web without divulging any personal details. Many people created an online persona entirely separate from their offline one.
But the experience of consuming content and communicating online is increasingly less like an anonymous public square and more like going to the bank, with measures to prove that you are who you say you are.
Critics of the age checks say that in the name of keeping people safe, they could endanger user privacy, dampen free expression and hurt communities that benefit from anonymity online. Authoritarian governments have used protecting children as an argument for limiting online speech: China barred websites this summer from ranking celebrities by popularity as part of a larger crackdown on what it says are the pernicious effects of celebrity culture on young people.
Stocks on Wall Street rose on Thursday, with the S&P 500 climbing further into record territory. The benchmark rose 1 percent, while the Nasdaq composite was up 1.4 percent.
Ford was among the best performers in the S&P 500, climbing about 8 percent after automaker raised its profit forecast and said it would begin paying a dividend again, noting its supply of semiconductors had improved. Ford’s profits during the latest quarter were hit by the global shortage of computer chips.
Investors were also considering the latest economic data out of the United States. Gross domestic product grew 0.5 percent in the third quarter, the Commerce Department said Thursday, marking a slowdown in economic growth during the summer. The growth was hampered partly by supply chain bottlenecks, as well as the spread of the Delta variant of the coronavirus, which led many Americans to pull back on travel, restaurant meals and other in-person activities.
Initial claims for state jobless benefits fell last week, the Labor Department reported Thursday. The weekly figure was about 281,000, down 10,000 from the previous week.
The yield on 10-year U.S. Treasury notes rose to 1.57 percent on Thursday from 1.54 percent.
Amazon and Apple are set to publish their financial performance reports after the market close on Thursday. Microsoft and Alphabet were among the best performers in the S&P 500 on Wednesday after both companies published their quarterly earnings reports the day before.
House Democrats are questioning executives of some of the world’s biggest oil and gas companies — Exxon Mobil, Chevron, BP and Shell — over allegations that the industry spread disinformation about the role fossil fuels play in global warming to derail action on climate change.
The hearings are the first time oil executives have been pressed to answer questions, under oath, about whether their companies misled the public about the reality of climate change by obscuring the scientific consensus: that the burning of fossil fuels is raising Earth’s temperature and sea levels with devastating consequences worldwide, including intensifying storms, worsening drought and deadlier wildfires.
“Today, the CEOs of the largest oil companies in the world face a stark choice,” Ro Khanna, the Democratic representative from California, who has been central to the effort to bring executives before a congressional committee, said in prepared remarks seen by The New York Times.
“You can either come clean, admit your past misrepresentations and ongoing inconsistencies, and stop supporting climate disinformation,” he said. “Or you can sit here in front of the American public and lie under oath.”
Industry executives are expected to defend their evolving statements regarding climate science, and stress that they support global action on climate, including the Paris accord — the agreement among nations to fight climate change and cut emissions of carbon dioxide — and that the oil and gas industry will play a critical role in solving the climate crisis.
“Inaction is not an option,” Suzanne Clark, president of the U.S. Chamber of Commerce is expected to say, according to prepared remarks.
House Democrats compare the inquiry with the historic tobacco hearings of the 1990s, which brought into sharp relief how tobacco companies had lied about the health dangers of smoking, paving the way for tough nicotine regulations. Climate scientists are now as certain that the burning of fossil fuels causes global warming as public health experts are sure that smoking tobacco causes cancer.
The evidence showing that fossil fuel companies distorted and downplayed the realities of climate change has been documented by academic researchers.
SAN JOSE, Calif. — The ninth week of testimony in the fraud trial against Elizabeth Holmes raised questions of what risks and responsibilities investors have when they put money into high-growth start-ups like Theranos, Ms. Holmes’s failed blood testing company.
In past weeks of the trial, the jury heard from former Theranos employees who were alarmed by its practices, as well as executives and board members who said they were taken in by Ms. Holmes’s pitch for blood testing machines that could conduct hundreds of blood tests accurately and quickly from a drop of blood.
That built up to testimony from investors, who prosecutors said are the victims in the 12 counts of wire fraud at the heart of the trial. Before Theranos collapsed in 2018, it raised $945 million from investors, valuing it as high as $9 billion and making Ms. Holmes a billionaire.
Ms. Holmes has pleaded not guilty. If convicted, she faces 20 years in prison.
Here are the key takeaways from this week’s proceedings, which took place only on Tuesday after a water main break near the courthouse on Wednesday forced the cancellation of the day’s events.
Lisa Peterson, an investment manager at RDV Corporation, an investment firm representing Michigan’s wealthy DeVos family, explained how the group came to invest — and eventually lose — $100 million in Theranos.
RDV’s chief executive, Jerry Tubergen, met Ms. Holmes at a 2014 conference and became enthusiastic about Theranos, according to an email shown in court. Ms. Peterson, who was put in charge of researching and facilitating the investment, testified that Theranos had handpicked a few wealthy families to invest and that Ms. Holmes made the firm feel lucky to be included.
“She was inviting us to participate in this opportunity,” Ms. Peterson said. Theranos purposely sought out private investors who would not push the company to go public, a presentation shown in court said.
With Ms. Peterson’s testimony, prosecutors built on how Theranos had appeared to use fake endorsements from pharmaceutical companies to deceive its partners and investors. Theranos had shown Walgreens and Safeway executives a validation report that displayed the logos of pharmaceutical companies and said they supported its technology.
Last week, a Pfizer executive testified that the company had dug into Theranos’s technology and “come to the opposite conclusion.” Ms. Peterson said she had seen the validation report and believed it had been prepared by Pfizer, which helped entice her firm to invest.
In a heated cross-examination, Ms. Holmes’s lawyers tried painting Ms. Peterson as a negligent steward of capital who did not do proper research before pouring cash into a young start-up.
Lance Wade, a lawyer for Ms. Holmes, highlighted contradictions between Ms. Peterson’s statements and an earlier legal deposition she had given. When Ms. Peterson insisted that her current testimony was accurate, he shot back, “Your memory has improved over time? Is that your testimony?”
Mr. Wade also prodded Ms. Peterson for not hiring scientific, legal and technology experts to dig into Theranos’s claims, nor did she demand to see copies of Theranos’s contracts with Walgreens and Safeway. “You understand that’s a typical thing to do in investing?” he asked.
Ms. Peterson said the firm relied on what Ms. Holmes and other Theranos executives told them.
Mr. Wade tried to diminish Ms. Peterson’s decision-making power within the firm by pointing out that she was not on RDV’s investment committee and was not present for all the meetings involving Theranos.
By arguing that investors like Ms. Peterson didn’t do enough research, Ms. Holmes’s lawyers walked a delicate line. That’s because their argument included an implied acknowledgment that Theranos’s technology did not do all that it promised, even as they also had to maintain that Ms. Holmes did not lie about the technology.
Elizabeth Holmes, the disgraced founder of the blood testing start-up Theranos, stands trial for two counts of conspiracy to commit wire fraud and 10 counts of wire fraud.
Here are some of the key figures in the case →
The ‘conspiracy period’
Jurors watched two videos of Ms. Holmes — most likely their first time seeing her face without a mask — as she defended Theranos in interviews after The Wall Street Journal reported in 2015 that the start-up’s blood testing machines did not do as much as claimed.
In an appearance on Jim Cramer’s “Mad Money” show on CNBC, Ms. Holmes said Theranos’s machines could do more than 100 tests, dismissing the critical report. In an interview with CBS in 2016, Ms. Holmes was more contrite, saying, “I’m the C.E.O. and founder of this company. Anything that happens in this company is my responsibility.”
Ms. Holmes’s lawyers argued to exclude the videos as evidence, at one point referring to the period of time after The Journal article as the “conspiracy period.”
Ms. Peterson testified that during that time, she and others at RDV met with Ms. Holmes. At the meeting, Ms. Holmes downplayed the revelations, Ms. Peterson said, saying The Journal’s reporting was “done by a very overzealous reporter who wanted to win a Pulitzer.”
Mr. Wade asked the court to strike that comment from the record.
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