Black Corporate Leaders Call for Fight Against Voting Limits

Black Corporate Leaders Call for Fight Against Voting Limits


More than 70 Black executives have signed a letter calling on companies to fight a wave of voting-rights bills similar to the one recently passed in Georgia, which they say will make it harder for Black people to vote. Similar bills are being advanced by Republicans in at least 43 states, and the signatories are demanding that companies speak up more forcefully than they did in Georgia, Andrew and David Gelles report for The Times.

The effort is led by Ken Chenault and Ken Frazier, the former chief of AmEx and the departing chief of Merck, respectively. “There is no middle ground here,” Mr. Chenault said. “You either are for more people voting, or you want to suppress the vote.” The letter did not criticize specific companies, but called on corporate America to publicly oppose new laws that would restrict the rights of Black voters, and to use their clout, money and lobbyists to sway the debate.

  • The signers included Roger Ferguson Jr., the chief executive of TIAA; Mellody Hobson and John Rogers Jr., the chief executives of Ariel Investments; and Ray McGuire, a former Citigroup executive who is running for mayor of New York.

Corporations were circumspect as the debate raged in Georgia. Their muted response revealed a double standard. Last year, dozens of big companies signed a pledge that stated their “clear opposition to harmful legislation aimed at restricting the access of L.G.B.T.Q. people in society.” But “when it comes to race, there’s differential treatment,” Mr. Chenault said. “That’s the reality.”

Activists are calling for boycotts of Delta and Coca-Cola, which are based in Atlanta, for the tepid engagement in their home state. What happened in Georgia could easily spread to other states, the letter’s signers believe. “If corporate America doesn’t stand up, we’ll get these laws passed in many places in this country,” Mr. Frazier said.

Regulators scrutinize banks’ actions in the Archegos fire sale. The S.E.C. and Britain’s Financial Conduct Authority have reportedly asked for information from prime brokers involved with the stricken investment firm. A group of brokers met last week to discuss how to unwind the firm’s trading positions — only to break ranks and start selling them quickly, roiling markets.

Plans to fund President Biden’s infrastructure plan take shape. The White House will call for 15 years of higher corporate taxes to cover $2 trillion in spending that Mr. Biden plans to announce today. That includes raising the corporate tax rate to 28 percent, from the 21 percent set by President Donald Trump’s cuts in 2017.

The Supreme Court will hear arguments on compensating college athletes. At issue in the case today is whether the N.C.A.A. can put limits on education-related benefits. It comes amid a broader debate on whether student athletes can be paid.

New data show that the Pfizer-BioNTech Covid-19 vaccine is highly effective in adolescents. The shot showed 100 percent efficacy in children aged 12 to 15, according to a new trial by the drugmakers. Depending on regulatory approvals, inoculations could begin in time for the next academic year.

A backslide in the number of Black finance executives. Anonymized government data shows that Black people held fewer top roles at U.S. financial firms in 2018 than in 2007, according to The Financial Times. That was the only minority group whose share of senior positions fell during the period.

Shares in the British food delivery service Deliveroo tumbled as much as 30 percent in their first day of trading this morning, after the company priced its I.P.O. at the low end of expectations. It was an inauspicious debut for Britain’s biggest initial stock sale in a decade.

Anticipation for Deliveroo’s I.P.O. was high, especially since the company’s decision to list in London was praised as a victory for a post-Brexit Britain. Its debut was seen as a test for European stock investors’ willingness to back a company that, like many American rivals, runs up huge losses, relies on a gig-economy model and gives its C.E.O. outsized control. British regulators have also been studying ways to make London’s stock market more attractive to keep the city competitive in finance.

It turns out that many major British investors weren’t that eager. Deliveroo’s valuation dropped as low as 5.3 billion pounds ($7.3 billion), weeks after the company hoped to be valued at as much as £9 billion. Asset managers like Legal and General said they wouldn’t invest in the I.P.O., citing concerns about the compensation of the company’s drivers and a dual-class stock structure that gives Will Shu, Deliveroo’s C.E.O., more power than other investors for three years.

Tech investors questioned whether Europe would welcome other start-up listings. Deliveroo’s frosty reception may persuade other European tech businesses to list elsewhere, two of the company’s backers told DealBook. A potential alternative is merging with a U.S.-based SPAC, as the British used-car marketplace Cazoo and the German air-taxi maker Lilium are doing.

  • Cazoo’s founder, Alex Chesterman, specifically called out British investors’ risk aversion as a reason to list across the Atlantic: “U.S. investors tend to be prepared to take bigger risks on bigger outcomes,” he said.


— Marc Levinson, an economist, on the risks that ever-larger container ships pose to supply chains


One of the biggest criticisms of blank-check funds is the misalignment of interests between the companies’ sponsors and later investors, particularly retail buyers. In his latest column, Andrew proposes a fix that takes advantage of a unique aspect of the way SPACs are run.

The key is the companies’ financial forecasts. Unlike with traditional I.P.O.s, which restrict what a company can say about its business, a company that goes public by merging with a SPAC is free to make financial forecasts. Because many of these companies are too young to have profits — or in many cases, revenues — these projections can be all that prospective investors have to go on. Companies may make promises they struggle to deliver, particularly for projections several years in the future. Virgin Galactic, which published projections out to 2023 when it merged with a SPAC in 2019, has had to revise its forecasts as its flight timetable has slipped.

Tying sponsors’ stock commitments to those projections would lock them in for longer. If a target company makes forecasts for five years ahead, restricting its SPAC’s sponsor from selling for five years would better align backers with what they are selling to the public, Andrew suggests.

Not everyone likes the idea. The billionaire investor Chamath Palihapitiya, who drew criticism for unexpectedly selling some of his stake in Virgin Galactic this month (but not his sponsor shares), argued that it would unfairly punish sponsors for the shortcomings of management. Instead, he suggested making sponsors put more of their own money into SPAC deals: “The more they invest, the more they would need to scrutinize the projections,” he said.


Apple is investing in UnitedMasters, a music distribution company that lets musicians bypass traditional record labels. Artists who distribute through UnitedMasters keep ownership of their master recordings and pay either a yearly fee or 10 percent of their royalties. Apple led the funding round, announced today, which DealBook hears values UnitedMasters at $350 million.

Musicians are increasingly taking ownership of their work. Taylor Swift, most famously, and Anita Baker, most recently, have publicized their fights with labels over their master recordings. Artists once needed the heft of major publishing labels — which typically demand ownership of master recordings — to build a fan base. But with social media, labels no longer play as significant a gatekeeping role. “Technology, no doubt, has transformed music for consumers,” said Steve Stoute, the founder of UnitedMasters. “Now it’s time for technology to change the economics for the artists.”

The investment sets up a partnership between UnitedMasters and Apple. As streaming services, including Apple’s, compete for subscribers, they are cutting more favorable deals with the artists who attract users to platforms. Spotify announced a project this week to detail how it pays musicians following community pressure. The deal with UnitedMasters is about “empowering creators,” Apple’s Eddie Cue said.


Damien Hirst, the renowned British artist, is getting into nonfungible tokens, or NFTs. With a digital asset sale called “The Currency Project,” he’s among the first major established artists to join the crypto craze. It’s a natural fit for him, because NFTs turn common things into unique and valuable assets, and money is a key theme of Mr. Hirst’s art.

“NFTs are the most exciting new thing in the creative industry,” Mr. Hirst told DealBook. “The fact that they polarize people so much, and make so many people angry, just makes me even more sure of their importance.” Mr. Hirst irked people back in 1991 with a gallery display of a 14-foot-long glass tank with a shark preserved in formaldehyde. In 2007, he sold a skull encrusted in diamonds for $100 million to an investment group he was secretly in on, thus inflating its perceived worth. And while his latest project is not quite as outrageous, it certainly “challenges the concept of value through money and art,” he said.

Ten thousand paper prints of cherry blossoms will be linked to digital tokens. The NFTs are for sale on Palm, a new platform backed by the blockchain entrepreneur Joe Lubin. The works, which have been in storage for the past five years, are born again via a kind of market that didn’t exist when the prints were first made.

From an investment standpoint, most NFTs are iffy, and may ultimately be worthless, said Megan Kaspar, the co-founder of Magnetic Capital, a blockchain incubator and investment firm. Until there is data on resales, no one knows which way things will go. Mr. Hirst’s NFTs are arguably different from many, however, because they come with the physical prints — and his history of minting money.

Deals

  • The F.T.C. sued to block the medical diagnostics company Illumina’s $7.1 billion takeover of Grail, another sign of the U.S. government’s tougher approach to antitrust enforcement. (Reuters)

  • Dapper Labs, the blockchain company behind the N.B.A.’s “Top Shot” nonfungible tokens, raised $305 million at a $2.6 billion valuation. (NYT)

Politics and policy

Tech

  • A leaked document purportedly shows how Amazon handpicked employees to defend the company on Twitter against critics like Senator Bernie Sanders. (The Intercept)

  • PayPal rolled out a new service for paying online using cryptocurrencies. (Bloomberg)

Best of the rest

  • The latest signs that remote working is here to stay: JPMorgan Chase, PricewaterhouseCoopers and Salesforce are looking to sublease their office space. (WSJ)

  • Tech industry workers say remote working has led to more gender and racial harassment. (NPR)

  • Americans are increasingly souring on billionaires as the wealth gap increases during the pandemic, but they can’t stop talking about them. (Recode)

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