April 15, 2024


The Business & Finance guru

Ford and Rivian no longer plan to work jointly on electric vehicles.

ImageWorkers at the Rivian factory in Normal, Ill., this year.
Credit…Akilah Townsend for The New York Times

Ford Motor and Rivian have dropped plans to develop an electric vehicle together, although Ford remains a major investor in the start-up automaker.

The companies formed a partnership in 2019 when Ford invested $500 million in Rivian. They originally envisioned working closely on electric vehicles, but Ford discarded a plan to use Rivian’s chassis for an electric model for its Lincoln brand while saying they still intended to cooperate. On Friday, the companies said collaboration was no longer in prospect.

“As Ford has scaled its own E.V. strategy and demand for Rivian vehicles has grown, we’ve mutually decided to focus on our own projects and deliveries,” Rivian said in a statement. “Our relationship with Ford is an important part of our journey, and Ford remains an investor and ally on our shared path to an electrified future.”

The change in plans was reported earlier by Automotive News, based on an interview with Ford’s chief executive, Jim Farley.

Since its investment in Rivian, Ford has started rolling out electric models of its own. The Mustang Mach E, a sport utility vehicle, has drawn favorable comparisons to competing models from Tesla. Ford is expected to start making a battery-powered version of its F-150 pickup next year, and it has taken tens of thousands of orders from customers.

“We respect Rivian and have had extensive exploratory discussions with them,” Ford said in a statement. “However, both sides have agreed not to pursue any kind of joint vehicle development or platform sharing.”

After an initial public offering of stock this month, Rivian has a market value of nearly $115 billion, significantly more than Ford’s valuation of $77 billion. Rivian has just started production of an electric pickup and an electric S.U.V., and has delivered only a small number to customers so far.

Ford’s holding in Rivian amounts to about a 12 percent stake.

Rivian is working on an electric delivery van for Amazon, another major investor.

Credit…Calla Kessler for The New York Times

In the battle for the Constitution, the traditionalist beat out the insurgents.

Ken Griffin, the chief executive of the hedge fund Citadel, was the winner of an auction for a rare original copy of the U.S. Constitution, Sotheby’s, the host of the auction, said Friday. He beat a group of cryptocurrency fans known as ConstitutionDAO, whose bid set off a frenzy of memes, jokes and financial pledges. But ultimately they couldn’t top Mr. Griffin’s $43.2 million offer.

The winning bid was more than double the $20 million the item was originally estimated to go for. Sotheby’s said the sale set a record for a book, manuscript, historical document or printed text.

“The U.S. Constitution is a sacred document that enshrines the rights of every American and all those who aspire to be,” Mr. Griffin said in a statement. “That is why I intend to ensure that this copy of our Constitution will be available for all Americans and visitors to view and appreciate in our museums and other public spaces.”

The first museum to display this copy of the Constitution will be Crystal Bridges Museum of American Art in Bentonville, Ark., which was founded by the Walmart heiress Alice Walton.

“We are honored to exhibit one of the most important documents in our nation’s history from our location in the heartland of America,” the chair of the museum’s board, Olivia Walton, said in a statement.

Mr. Griffin, who has a net worth of about $21 billion, according to Forbes, is accustomed to breaking records. He broke a real estate record in 2019 when he closed on his purchase of a Manhattan penthouse at 220 Central Park South for $238 million.

He also has been forthcoming about his concerns regarding cryptocurrency. “I worry that some of this passion has been misplaced when it comes to cryptocurrencies,” he told the New York Times journalist Andrew Ross Sorkin at the DealBook conference earlier this month.

Kevin Roose contributed reporting.

Credit…Mike Kai Chen for The New York Times

Elizabeth Holmes started testifying on Friday in her fraud trial. Ms. Holmes dropped out of Stanford University to create the blood testing start-up Theranos at age 19 and built it to a $9 billion valuation and herself into the world’s youngest self-made female billionaire — only to flame out in disgrace after it was revealed that Theranos’s technology had problems.

Erin Griffith and Erin Woo have been covering the trial and are providing live updates. FOLLOW ALONG LIVE →

Credit…Win McNamee/Getty Images

Google asked the Justice Department on Friday to investigate whether its new top antitrust official, who has represented Google rivals, needs to step back from inquiries and lawsuits against the company.

In a letter to Justice Department leaders, an outside lawyer for Google said the “reality, and the appearance, of partiality are fairly called into question” by Jonathan Kanter’s past work for the company’s critics. Google pointed to his work with Yelp and the News Media Alliance, which represents publishers including The New York Times Company.

“Mr. Kanter’s past statements and work representing competitors who have advocated for the cases brought by the department raise serious concerns about his ability to be impartial,” Peter Schottenfels, a Google spokesman, said in a statement.

Mr. Kanter, who was confirmed by the Senate earlier this week as the assistant attorney general for antitrust, has been a longtime behind-the-scenes player in building arguments against tech giants.

Google’s lawyer said Mr. Kanter had represented Yelp in connection with an antitrust case filed against Google that was led by a group that included the Justice Department. Google also claimed that Mr. Kanter has represented critics in an investigation — led by Texas — into its ad technology business.

The Justice Department declined to comment. Mr. Kanter did not immediately respond to a request for comment on Friday.

The request is the latest attempt by a tech company to discredit the regulators leading antitrust investigations into their practices. Facebook has asked for Lina Khan, the chair of the Federal Trade Commission and a prominent tech critic, to be recused from the agency’s lawsuit against the company. Amazon has also asked that Ms. Khan be recused from any antitrust investigation into the company.

While federal officials are supposed to avoid real or perceived conflicts of interest, experts have said that Mr. Kanter’s situation may be different because he is not switching sides in the cases against Google. Instead, he is going from being a Google opponent on behalf of private clients to arguing similar concerns on behalf of the government.

Google also said that Mr. Kanter had made previous statements critical of Google that showed he had “prejudged” whether it had violated antitrust laws. Failing to recuse Mr. Kanter “might also add fuel to suggestions that the department’s actions might be unduly influenced by Google’s competitors,” said the Google lawyer, Virginia Gibson, from the law firm Hogan Lovells.

The chief executive of Afiniti, an artificial-intelligence software firm, has resigned, the company announced on Thursday, two days after a former employee testified before a congressional committee that the executive had sexually assaulted and beat her.

The company’s board of directors said the executive, Zia Chishti, who also founded the company, had “stepped down from his role as chairman, chief executive officer and director of Afiniti, effective immediately,” according to a statement on the company’s website.

“The board will make additional organizational announcements in the coming days,” the statement said.

On Tuesday, Tatiana Spottiswoode, the former employee, testified before the House Judiciary Committee that Mr. Chishti harassed her for months after she began working for the company in 2016, when she was about 23 years old.

Credit…House Judiciary Committee

She said that he had sent her an email describing a sexual fantasy in which he strangled her and that he had once grabbed her buttocks in front of other employees.

Then, during a business trip to Brazil in 2017, he sexually assaulted and beat her, Ms. Spottiswoode testified. When she hired lawyers and accused him of attacking her, she said, he filed for arbitration against her.

“He knew that the secrecy of arbitration would protect him,” Ms. Spottiswoode said.

Ms. Spottiswoode said that when she started at Afiniti, she signed a contract that included “an arbitration agreement with a strong confidentiality clause.”

The same day as Ms. Spottiswoode’s testimony, a spokeswoman for Afiniti said in a statement that the company had investigated the claims “with independent counsel and concluded that the arbitral decision she references was erroneous.”

“Zia Chishti strongly disputes all accusations against him,” the spokeswoman, Natalie Cerny, said at the time. Reached on Friday, Ms. Cerny declined to comment on the record.

Mr. Chishti, 50, said on Friday that he denied “all the allegations.”

“I believe the evidence does not support them,” he said. “Quite to the contrary.”

Mr. Chishti added that he was “deeply supportive of women in the workplace.”

“It’s one of my priorities to see that they do absolutely as well as they can,” he said. “As a result these allegations are particularly hurtful.”

Ms. Spottiswoode’s testimony also led David Cameron, the former British prime minister, to resign as chairman of the company’s advisory board, according to the BBC.

Mr. Cameron said in a statement to the BBC that he understood that the allegations were in dispute but that he “disagrees with the approach being taken by the company in responding to the matter.”

Ms. Spottiswoode was one of four women who testified before the committee, which was considering legislation that would abolish forced arbitration for victims of sexual assault and harassment. Forced arbitration often requires an employee to go through a private proceeding with his or her employer after bringing an accusation of workplace misconduct, according to legislators.

On Wednesday, the committee agreed 27-to-14 to put the bill before the House for a vote. The bill has bipartisan support.

Credit…Sasha Maslov for The New York Times

A federal court in Florida this week dismissed one part of a proposed three-part class action lawsuit against Robinhood and others over their roles in January’s GameStop trading frenzy. Investors alleged that brokerage firms like Robinhood conspired with clearinghouses and the market maker Citadel Securities to restrict trading of meme stocks as they shot up in price. The judge found otherwise.

“A bare assertion of conspiracy will not suffice,” Chief Judge Cecilia Altonaga of the United States District Court for the Southern District of Florida wrote in the order dismissing the antitrust-based claim. Executives at Robinhood and Citadel Securities “exchanged various vague and ambiguous emails” around the time of meme-stock trading halts, the judge noted, which looked “somewhat suspicious given the participants and their timing.”

But claims of conspiracy were not “plausible,” the judge wrote. The firms had a “lawful, ongoing business relationship,” in which Robinhood routes customer trades to Citadel Securities to execute and gets paid for the order flow, a common but sometimes contentious arrangement.

The case isn’t closed. There are two more tranches in this litigation, which combined claims from across the country. Retail traders are also claiming Robinhood was negligent in its duty to customers and violated securities laws.

Maurice Pessah, the lead lawyer on the negligence tranche, told the DealBook newsletter that his case is based on “totally separate and distinct legal theories.” Robinhood has moved to dismiss the claims; there could be a decision by the end of the year.

Credit…Drew Angerer/Getty Images

If you want to own a piece of BuzzFeed, just wait till the first week of December.

The publisher’s plan to merge with 890 5th Avenue Partners, a blank-check company, will be put to a shareholder vote on Dec. 2, according to a recent securities filing. If investors agree to the deal, BuzzFeed could start trading on the public markets as soon as Dec. 6.

The extra few days are needed because of a second merger. BuzzFeed, led by its founder and chief executive, Jonah Peretti, will acquire the sports and entertainment publisher Complex Networks as part of its agreement with 890 5th Avenue Partners. Together, BuzzFeed and Complex are expected to generate $521 million in revenue this year with pretax profit of around $57 million.

For now, BuzzFeed, known for its meme-driven listicles, quizzes and a news division that earned the company its first Pulitzer Prize this year, still loses money. For the third quarter, the publisher recorded a 20 percent bump in revenue to $90 million, but lost about $3.6 million. When excluding certain items like taxes, interest and costs associated with the pending transaction, the company said it made almost $6 million. The gains in revenue came largely from a surge in display advertising a year after the pandemic gutted the ad business.

When coupled with Complex Networks, BuzzFeed would have generated $121 million in sales, a 17 percent gain from last year, meaning as a combined business, it would grow more slowly than BuzzFeed would as a stand-alone. Adding Complex, which also loses money, will nonetheless give BuzzFeed more readers, which would bring in more advertisers.

In a statement on Friday, Mr. Peretti called the company’s financial performance “impressive” and said the third-quarter results “highlight the strength of our diversified, cross-platform business model.”

Despite remaining in control of the business after the planned mergers, Mr. Peretti will face a new set of pressures once BuzzFeed becomes publicly traded. He will have to answer to institutional investors seeking quarterly returns, expectations at odds with the long-term financial targets that start-ups live (and die) by. In other words, continued losses and slower growth will only be tolerated for so long.

He might also have to sell some of his shares to NBCUniversal, one of BuzzFeed’s early backers, if the stock doesn’t reach a certain level, according to securities filings. The merger with the blank-check company values BuzzFeed at around $1.5 billion, but investors expect that to go up once it starts publicly trading.

Recent deal-making in digital publishing has potentially inflated valuations. The German conglomerate Axel Springer agreed in August to acquire Politico for $1 billion, or about five times its yearly revenue. If investors feel similarly bullish on BuzzFeed, it would be valued at more than $2.5 billion.

Credit…John G Mabanglo/EPA, via Shutterstock

In 2015, Elizabeth Holmes, the entrepreneur who founded the blood testing start-up Theranos, was named Glamour’s “Woman of the Year.” Time put her on its list of 100 luminaries. And she graced the covers of Fortune, Forbes, Inc. and T Magazine.

Three years later, the collapse of Theranos in scandal helped sour the media on Silicon Valley.

That point was brought home on Thursday when Roger Parloff, a journalist who penned the Fortune cover story on Ms. Holmes and Theranos in 2014, testified in a federal courtroom in San Jose, Calif., where Ms. Holmes is on trial for 12 counts of fraud, The New York Times’s Erin Griffith and Erin Woo write.

Mr. Parloff said Ms. Holmes had made misrepresentations to him, including the volume and types of tests that Theranos could do, as well as its work with the military and pharmaceutical companies.

The discovery that Ms. Holmes, the tech industry’s most celebrated female entrepreneur, was misdirecting the world about her company was a turning point in the media, ending a decade-long run of largely positive coverage. Reporters cringed over glowing articles they had written about tech companies that turned out to have stretched the truth, glossed over the negative consequences of their products or generally abused the trust they had enjoyed with the public.

“Holmes just becomes this fable of ‘You can’t just buy what they’re selling,’” said Margaret O’Mara, a professor at the University of Washington and a historian of Silicon Valley. “‘This was not what it purported to be, and we fell for it.’”

After The Wall Street Journal published exposés in 2015 and 2016 showing that Theranos was not what it appeared to be, coverage of tech companies generally became more probing, digging into stories like:

  • The role Facebook played in the 2016 presidential election.

  • Scandals at Uber.

  • A series of #MeToo accusations.

  • Labor uprisings at Apple and Google.

The shift happened alongside the realization that the tech industry was no longer the niche realm of idealist computer geeks. It had become the dominant force in the global economy and needed to be held more to account.

Testimony in the fraud trial of Elizabeth Holmes shows how much coverage of the tech industry has changed over the years. READ THE ARTICLE

Credit…Charly Triballeau/Agence France-Presse — Getty Images

Japan’s government agreed on Friday to spend $490 billion on stimulus measures, a move by its prime minister to boost an economy battered by coronavirus restrictions and by a supply chain crunch that has affected the country’s largest manufacturers.

Japan announced a partial easing of border restrictions this month and has lifted virtually all restrictions on its economy amid a falling virus caseload. And its rate of fully vaccinated people — 76 percent of the population, according to a New York Times tracker — is one of the highest among rich nations. But a ban on international tourists continues to weigh on economic growth.

Source: Center for Systems Science and Engineering (CSSE) at Johns Hopkins University. The daily average is calculated with data that was reported in the last seven days.

The stimulus package, Japan’s largest to date, accounts for about 10 percent of the country’s economic output, officials said. Prime Minister Fumio Kishida said on Friday that it could increase economic output about 5.6 percent.

“I want to bring Japan’s economy, which has been severely damaged, onto a trajectory of recovery,” he told reporters.

The package includes aid to struggling businesses and hospitals, money for strengthening semiconductor supply chains, and programs to encourage domestic tourism and investment in a nationwide university endowment fund.

It also includes a one-time cash handout of 100,000 yen, or $878, per child under 18 for households where the highest-earning parent is paid less than about $84,300 a year. About nine in 10 households with children are eligible.

The cash handouts to young families are not especially popular. Critics have questioned the need for them in an aging society.

Last spring, the government sent stimulus checks to every resident, but they did little to raise inflation or consumer spending. Analysts estimate that 70 percent of the handouts went to household savings.

Mr. Kishida’s cabinet approved the stimulus package on Friday, less than two months after he won a runoff election for leadership of the country’s governing Liberal Democratic Party. Japan’s economy is the world’s third largest after those of the United States and China.

A group of cryptocurrency fans lost a much-anticipated bid for a rare first printing of the U.S. Constitution at a Sotheby’s auction on Thursday.

The group, ConstitutionDAO, conducted a frenzied, weeklong online crowdfunding campaign to place a bid on the artifact, one of only 13 copies known to exist. It had raised more than $40 million in less than a week for the bid.

The final sale price was $43.2 million, according to a Sotheby’s spokesman. The winner’s identity was not immediately known. Minutes after the gavel, ConstitutionDAO confirmed the loss on Twitter.

“While this wasn’t the outcome we hoped for, we still made history tonight with ConstitutionDAO,” it said, adding that contributors would have their donations refunded, minus fees.

ConstitutionDAO is what’s known as a decentralized autonomous organization, a new type of group that is governed by holders of a cryptocurrency token and enshrines its rules in blockchain-based “smart contracts.” The group was formed last week, and its last-minute effort to raise money for the auction became a cause célèbre among cryptocurrency fans online.

Crypto-collectives have bought high-priced art before, including a Wu-Tang Clan album, “Once Upon a Time in Shaolin,” which was bought by the anonymous investor collective PleasrDAO last month for $4 million. Had it won the auction, ConstitutionDAO would have made the biggest purchase by a DAO, and the first of such a prominent physical artifact.

The copy of the Constitution sold by Sotheby’s previously belonged to Dorothy Goldman, the widow of a New York real estate developer who bought it in 1988 for $165,000. Proceeds from the auction will go to the Dorothy Tapper Goldman Foundation, the auction house said.

The auction on Thursday night produced a frenzy of excitement among ConstitutionDAO participants, with thousands watching a livestream to cheer on the group’s bid. At first, it was not clear whether the winning bidder represented ConstitutionDAO or not, and several people affiliated with the group mistakenly claimed victory.

But after the loss became clear, the mood in the group’s Discord chat darkened. As they talked about getting their money back, some participants began making plans for the future.

“Okay so we didn’t get the Constitution,” one user wrote. “What are we going to bid on now?”

Credit…Jessica Rinaldi/The Boston Globe, via Getty Images

The head of a Boston local who urged a more assertive stand toward employers like the United Parcel Service — and an aggressive drive to organize workers at Amazon — declared victory Thursday in his bid to lead the International Brotherhood of Teamsters.

If the result is confirmed, the victory by Sean O’Brien, an international vice president of the Teamsters, would put a new imprint on the nearly 1.4 million-member union after more than two decades of leadership by James P. Hoffa, who did not seek another five-year term.

The outcome appears to reflect frustration over the union’s most recent contract with UPS and a growing dissatisfaction with the tenure of Mr. Hoffa, whose father ran the union from 1957 to 1971.

With about 90 percent of the ballots tallied, Mr. O’Brien had more than two-thirds of the vote in his race against Steve Vairma, a fellow international vice president who had been endorsed by Mr. Hoffa. The election was conducted by mail-in ballots that were due Monday.

Mr. O’Brien, 49, railed against the contract that the union negotiated with UPS — where more than 300,000 Teamsters work — for allowing the company to create a category of employees who work on weekends and top out at a lower wage, among other perceived flaws.

“If we’re negotiating concessionary contracts and we’re negotiating substandard agreements, why would any member, why would any person want to join the Teamsters union?” Mr. O’Brien said at a candidate forum in September in which he frequently tied his opponent to Mr. Hoffa.

Mr. O’Brien has also criticized Mr. Hoffa’s approach to Amazon, which many in the labor movement regard as an existential threat. Although the union approved a resolution at its recent convention pledging to “supply all resources necessary” to unionize Amazon workers and eventually create a division overseeing that organizing, Mr. O’Brien said the efforts were too late.

Credit…Noel West for The New York Times

The South Korean media conglomerate whose entertainment arm produced the winner of the 2019 Oscar for best picture, “Parasite,” has acquired a majority stake in the scripted arm of Endeavor Content, a subsidiary of the entertainment company Endeavor Group.

Upon closure of the $775 million deal, which was announced late Thursday night, the South Korean conglomerate, CJ ENM, will own 80 percent of the business and the Endeavor Group 20 percent. The companies said they expected the deal to close in the first quarter of 2022.

The Wall Street Journal reported the news earlier.

“At the end of the day, CJ ENM strives to become a major global studio that encompasses content that appeals to a global audience — like this deal with Endeavor Content, we will continue to expand our presence in the global market,” Kang Ho-Sung, the conglomerate’s chief executive, said in a statement.

Endeavor is being forced to reduce its ownership stake in its scripted content business as a result of a settlement this year with the Writers Guild of America, whose writers went on strike to protest what they saw as a conflict of interest at agencies that owned both talent representation businesses and production companies.

Endeavor is not required to sell its unscripted assets and will maintain 100 percent ownership of that business.

Endeavor Content was formed in 2017 by Graham Taylor and Chris Rice. Today, it calls itself a global film and television studio, and it has produced such projects as “Nine Perfect Strangers,” a Hulu mini-series starring Nicole Kidman, and Maggie Gyllenhaal’s directorial debut, “The Lost Daughter.” It owns a minority stake in Bruna Papandrea’s production company, Made Up Stories, in addition to PictureStart and Media Res.

Mr. Taylor and Mr. Rice will remain co-chief executives of the new company.

CJ has been expanding its foothold in Hollywood in recent years. Miky Lee, the vice chair of CJ Entertainment, the Hollywood arm of CJ ENM, rose to the national stage when she accepted the best picture Oscar for “Parasite,” but she was an industry player before then, nudging CJ toward Hollywood in the 1990s with a stake in DreamWorks. Most recently, she invested $100 million in David Ellison’s Skydance Media and was elected vice chair of the board of the Academy Museum of Motion Pictures.

“Having known Miky Lee for more than 25 years, I’m confident that CJ ENM will be excellent stewards of the studio, accelerating and amplifying its projects on a global stage,” Ari Emanuel, the chief executive of Endeavor, said in a statement.

Credit…Scott Olson/Getty Images

The chief executive of Lucid Motors, Peter Rawlinson, is an auto industry veteran who engineered the Model S, the sedan that established Tesla as a serious carmaker. Now, he hopes that the $169,000 Lucid Air Dream Edition will do the same for Lucid.

“The first product defines the brand,” he said recently in an interview at Lucid’s factory in the Arizona desert. “We’ll need to create a technological tour de force, and I think that’s what we’ve got in Lucid Air. We define our brand, we define our future.”

But The New York Times’s Niraj Chokshi and Jack Ewing report that the list of things that could go wrong is long — 44 pages long, in the mandatory disclosure of potential risks in Lucid’s stock offering prospectus. The document notes that the company lacks experience mass producing cars, that it has no service network and that it is highly dependent on Mr. Rawlinson, a 64-year-old Welshman who is, after all, mortal.

Initial versions of the Air cost almost $35,000 more than a top-of-the-line Tesla Model S Plaid. Mr. Rawlinson justifies the high cost by saying that early, superluxury versions will establish that Lucid can deliver meticulous workmanship. Road & Track thinks Lucid has succeeded.

“Lucid’s posh quarters make a Tesla’s interior look like the mismatched Tupperware in the back of your cupboard,” the magazine wrote last month after a test drive. Ouch.

Mr. Rawlinson’s compact motors freed up interior space for passengers, and the car includes frills like an optional solid glass roof and seats that give passengers a massage. The most powerful version can outrun a Ferrari.

In Mr. Rawlinson’s telling, the luxury cars are just a steppingstone to his ultimate goal: making battery-powered mobility accessible to everyone. Lucid is open to selling its technology to companies that can produce millions of vehicles at low cost.

“I’m not here to sell ultraluxury cars,” Mr. Rawlinson said. “I want to mass-industrialize electric cars.”

Mr. Rawlinson has confounded naysayers before. He points out that some people doubted that the Model S would be a success, or said Lucid could not build a car with a range of 500 miles and get it out the factory door this year. READ THE ARTICLE →

  • Stocks on Wall Street were mixed on Friday, with the S&P 500 closing 0.1 percent lower, while the tech-heavy Nasdaq composite gained 0.4 percent.

  • European stock indexes dipped, with the Stoxx Europe 600 closing 0.3 percent lower. Austria will go into a nationwide lockdown on Monday and impose a coronavirus vaccination mandate in February, Chancellor Alexander Schallenberg said on Friday, as the country grapples with rising coronavirus infection rates.

  • Travel and leisure stocks fell, with Norwegian Cruise Line and Royal Caribbean Group down more than 2 percent. United Airlines stock fell 2.8 percent lower, and American Airlines fell 0.6 percent.

  • Shares of Foot Locker dropped 12 percent after the company reported on Friday that its profit fell to $158 million in the three months ending in October, compared with $265 million in the same period last year.

  • Oil prices fell on Friday, with West Texas Intermediate falling more than 3 percent to $76.10 a barrel.