Another Corporate Leader Clarifies His Remarks on China
Ray Dalio’s latest challenge: explaining his recent comments about China.Credit…Brendan McDermid/Reuters
Dalio on China — again
After being criticized for seeming to liken China’s human rights approach to that of a “strict parent” in an interview with Andrew on CNBC last week, Ray Dalio apologized for what he called a lack of nuance. In the moment, Andrew had pushed him to expand on his views about doing business in China — “I look to whatever the rules are,” the Bridgewater Associates founder said — and he made the “strict parent” remark in response. The comments reportedly generated internal disagreements, with Bridgewater’s C.E.O., David McCormick, who is considering a Senate run, criticizing Dalio’s remarks in a call with employees, Bloomberg reports.
“Now that things have calmed down I want to clarify what I meant when I sloppily answered a question about China,” Dalio wrote on LinkedIn yesterday. “I was not expressing my own opinion or endorsing that approach,” he said.
“I didn’t mean to convey that human rights aren’t important,” Dalio, the author of a new book on geopolitics, wrote.“I was attempting to explain what a Chinese leader told me about how they think about governing.” Dalio said that his book fully explained his views on American-Chinese relations.
Jamie Dimon also had to clarify a recent remark about China, walking back a joke he made at a conference comparing the longevity of JPMorgan Chase and China’s ruling party. As tensions rise between China and the U.S., financial firms that do business with both countries face a tricky balancing act. Executives are watching their words more closely for fear of upsetting officials in Beijing over human rights or courting controversy in the U.S. for appearing to endorse China’s crackdown on dissent.
This week, the U.S. may announce a diplomatic boycott of the Beijing Winter Games, CNN reports, in which no government officials would attend though American athletes could still compete. After the Chinese tennis player Peng Shuai went missing after publicly accusing a former government official of sexual assault, pro sports organizations and corporate sponsors that do business in China have come under pressure.
“It is a reality that many Americans and Chinese are intertwined,” Dalio wrote. Severing ties “would be terrible for just about everyone,” he noted. In other words, he believes that investors should continue to do business in China despite its human rights record. Bridgewater invests in about 40 countries, Dalio wrote, and clients “rely on us to invest in the best possible ways in all the countries that make sense from an investment standpoint.”
HERE’S WHAT’S HAPPENING
Markets take Omicron in stride. U.S. futures were up, while European markets were flat to up, as investors appeared to grow less worried about the latest coronavirus variant. Dr. Anthony Fauci said yesterday that initial data suggested Omicron didn’t lead to especially severe illness. That said, evidence of Omicron’s rapid transmissibility continues to emerge, and governments remain on alert as cases rise.
Tough times for Asian tech giants. Shares in Alibaba fell today after the Chinese e-commerce company said it was replacing its C.F.O. and other top executives. That — along with troubles at Didi and Arm — took a toll on SoftBank, one of its top investors, as well. (SoftBank’s founder, Masa Son, is also feuding with a top lieutenant, Marcelo Claure, over a huge pay package, The Times reports.)
Bitcoin takes a tumble. The cryptocurrency’s price plunged over the weekend, falling some 20 percent at one point. Beyond the volatile nature of crypto, some analysts chalked up the extreme moves to concern over the Omicron coronavirus variant and the Fed becoming more hawkish on interest rates.
CNN fires Chris Cuomo amid new allegations. The prime time anchor had been suspended after new revelations about his efforts to help his brother, the former New York governor Andrew Cuomo, but The Times reported that he also faced an accusation of sexual misconduct. Chris Cuomo, through a lawyer, denied the allegation.
Lucid Motors discloses a subpoena from the S.E.C. The electric vehicle maker said it has received a request for documents from regulators, apparently tied to an inquiry into its deal to go public by merging with a SPAC created by the financier Michael Klein. Shares in Lucid were down 14 percent in premarket trading.
BuzzFeed’s big day
BuzzFeed is going public today via a SPAC merger that values it about $1.5 billion. That’s less than the $1.7 billion the digital media group was reportedly worth when NBCUniversal invested in it a few years ago. But the deal makes BuzzFeed a public company, which many of its smaller competitors have been unable to achieve. BuzzFeed’s reception on the stock market will serve as a test for others, like Vice and Vox, that have considered a similar path.
The SPAC market has “flipped” since BuzzFeed first pursued its deal, BuzzFeed’s C.E.O., Jonah Peretti, told DealBook.SPAC deals took off last summer, amid high valuations that attracted digital media companies (among many others). But as SPACs have fallen out of favor, investor redemptions have risen, leaving SPACs’ merger partners, like BuzzFeed, with less money than anticipated. BuzzFeed structured its deal with that shift in mind, Peretti said, including a $150 million convertible bond as part of the transaction.
“I don’t care how we go public,” Peretti said. “Once we saw that we had our path through that market — even though the market was cold — it was just a means to an end to get public.” As a listed company, BuzzFeed plans to buy up competitors in an industry where scale is crucial. As part of the SPAC deal, BuzzFeed announced an acquisition of the sports and entertainment publisher Complex, adding to its purchase of Huffington Post last November.
E-commerce is a key part of BuzzFeed’s growth plan. With many of its competitors putting content behind subscription paywalls, Peretti said there is an opportunity to “be the place where you can reach the broad public.” He sees other opportunities to accelerate BuzzFeed’s growth, like its shopping site that sells products directly to consumers, including via streaming video shows.
“I think what’s so wonderful about working in media is the constant change and seeing things move.”
— Anna Wintour, the top editor of Vogue since 1988 and chief content editor of Condé Nast. The embodiment of the media group’s glory days as a magazine dynasty, she is now pitching its global, digital future.
The week ahead
► Spending bill: Senator Chuck Schumer, the majority leader, has said that he wants to pass President Biden’s $2 trillion social safety net and climate bill before Christmas. The bill, which was approved by the House last month, faces a difficult path in the Senate and is likely to require changes to pass.
► Rising prices: On Friday, the Department of Labor will report the latest inflation data, covering November. The Consumer Price Index jumped more than expected in October, increasing at its fastest pace in more than 30 years. While many policymakers had expected a temporary, if rapid, rise in prices, some are beginning to say that high inflation may stick around longer than expected.
► Starbucks union: On Wednesday, ballots are due in a union election at three Starbucks locations in the Buffalo area. None of the more than 8,000 corporate-owned Starbucks locations in the United States are unionized, and though the election involves fewer than 100 workers, a union victory could disrupt the company’s labor model.
Inside Tesla’s Autopilot vision
More than two dozen current and former Tesla engineers have questioned whether the electric car company will be able to produce cars that can safely drive themselves, The Times’s Cade Metz and Neal Boudette report. Many of the engineers said that Elon Musk, Tesla’s C.E.O., pushed the Autopilot driver-assistance system in directions other automakers were unwilling to take, and misled buyers about the technology’s abilities.
Tesla’s Autopilot system relies solely on cameras. Other companies working on autonomous vehicles have decided that cameras alone, an approach embraced by Musk, are not reliable enough. Some experts say that they believe Tesla’s camera-only system will eventually work but that other sensors could be needed in the interim.
Consider a 2016 promotional video. As it was rolling out an updated version of its Autopilot, Tesla posted a video to its website that showed one of its vehicles driving itself at top speeds, making sharp turns and merging into traffic. But Tesla employees who worked on the video said the company used technology not available in Tesla’s vehicles at the time. Also, during filming the car hit a roadside barrier and had to be repaired, they said.
The revelations about Tesla’s self-driving efforts may attract more regulatory scrutiny. The National Highway Traffic Safety Administration is investigating why Teslas using Autopilot drove into parked fire trucks, police cars and other emergency vehicles. Musk’s company is also facing suits over fatal Tesla crashes, and customers are suing the company for misrepresenting Autopilot.
Musk has recently expressed some doubts about Tesla’s technology. In August, he called Full Safe Driving, a suite of services that respond to traffic signals, “not great,” and said engineers were working to fix it. Last month, Tesla recalled nearly 12,000 vehicles that were part of a test of new F.S.D. features.
Read the full article: “Inside Tesla as Elon Musk Pushed an Unflinching Vision for Self-Driving Cars”
THE SPEED READ
Walgreens is reportedly exploring the sale of Boots, its British pharmacy chain, potentially undoing a $22 billion takeover completed in 2016. (FT)
Toshiba is said to have spurned leveraged buyout offers, instead focusing on its plan to split itself into three. (Reuters)
CVC is reportedly the latest private equity giant to weigh going public via an I.P.O. (Sunday Times)
AstraZeneca is said to be considering an I.P.O. for its newly created vaccines division, including its Covid treatment. (Bloomberg)
Steve McLaughlin rode the fintech boom to become perhaps the highest-paid investment banker in America. (WSJ)
How a Democratic lawmaker from Florida held up President Biden’s social-spending bill — and then brokered a deal to win its approval in the House. (NYT)
Europe is inadvertently helping Elon Musk dominate the space industry, the head of the European Space Agency said. (FT)
Cryptocurrency miners are flocking to former industrial towns in upstate New York, drawn by cheap electricity and permissive regulations — and drawing concerns from environmentalists. (NYT)
Bob Dole, the long-serving Republican senator and the last World War II veteran to win a presidential nomination, died yesterday. He was 98. (NYT)
Best of the rest
The C.E.O. of the mortgage lender Better.com fired 900 employees via Zoom. Inevitably, the video leaked. (CNN)
Speaking of leaks, here’s an unauthorized look at how TikTok’s algorithms keep users hooked. (NYT)
Along those lines, here’s how Spotify’s algorithmically driven “Wrapped” feature influences what you listen to. (Recode)
“What Will Art Look Like in the Metaverse? (NYT)
In supply chain news: Here’s a graphical explainer of shortages, and why they pose a grave threat to New York City bagel shops. (NYT)
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