If at first you don’t succeed, try, try again. And if you fail to go public via an initial public offering, use a SPAC. That appears to be the story of WeWork. The quirky office space sharing startup is back after a failed 2019 IPO.
How quirky? The original IPO filing included a mantra-like dedication before its table of contents: “We dedicate this to the energy of we—greater than any one of us, but inside each of us.”
That’s a big number, but it’s a far cry from the $47 billion private market valuation achieved in 2019, before WeWork’s failed IPO attempt.
The new number seems far more sensible than the $47 billion. IWG, the company that owns outsourced office company Regus, is worth about $14 billion, including debt. The Regus parent company generated about $3.2 billion in sales during 2020. WeWork, for comparison, also generated about $3.2 billion in sales in 2020.
Bow Capital Management, the SPAC’s sponsor, is run by Vivek Ranadivé, owner of the NBA’s Sacramento Kings. Adam Neumann, the founder of WeWork, is no longer on the scene. He left WeWork in 2019 after the IPO fell apart.
It looks as if investors will have another office-sharing company to invest in, just not one as unique as WeWork first appeared to be under Neumann.
*** On this week’s episode of The Readback podcast, how Beyond Meat’s revolutionary idea became one of Wall Street’s favorite stories. Listen here.
Ship Stuck in Suez Canal Causes Huge Backlog, Disrupting Key Trade Route
A team of tugboats and a super-section dredger are working to dislodge an enormous freight vessel stuck in the Suez Canal, a rare event that continues to block passage through one of the world’s busiest shipping routes, causing shipping rates to surge and revealing yet another vulnerability in global supply chains.
- The 120-mile canal, which connects the Mediterranean to the Red Sea and narrows to 300 feet wide in some spots, remains blocked by a 1,312-ft. ship called the Ever Given operated by Taiwan’s Evergreen Group. A company spokesperson told The Wall Street Journal that strong winds likely caused the ship to run aground.
- The Ever Given was sailing northbound en route from China to the Netherlands when it got stuck early Tuesday morning. Since then, the container ship has created a huge backlog of more than 200 vessels waiting to pass.
- The canal accounts for 10% of global maritime trade and is used by ships carrying oil and natural gas as well as those transporting goods between Europe and Asia. An alternate route around Africa can add $450,000 per voyage, Anoop Singh, Singapore-based head of tanker analysis at Braemar ACM, told the Journal.
- Shipping rates from China to Europe have quadrupled from a year ago and shipments of everything from coffee to bulldozers have been delayed.
What’s Next: Freeing the ship could take several more days or even weeks. The canal authority reopened an older portion of the canal to divert some smaller ships and other ships have started rerouting away from the Suez Canal around the southern tip of Africa. A high tide over the weekend could help dislodge the vessel.
Biden Touts Vaccine Progress, Talks Foreign Policy in First Press Conference
In his first press conference since taking office, President Joe Biden spent more than an hour addressing everything from accelerating his administration’s vaccination goals to his intention to run for re-election in 2024 with Kamala Harris as his running mate. Here are the takeaways:
- After surpassing his original goal of administering 100 million doses in his first 100 days in office, Biden said he now plans to administer 200 million vaccine doses in that time. He added that a majority of kindergarten through 12th-grade schools will reopen for full-time in-person classes by then as well.
- Addressing domestic politics, Biden said that he is open to changing the filibuster, which he said is being “abused in a gigantic way” in the Senate. Biden said he wants to reinstate a rule requiring lawmakers to talk on the Senate floor to block bills.
- Regarding China, the president said he sees “stiff competition,” adding that he would hold the country accountable for following international rules. Of Chinese President Xi Jinping, he said, “He’s one of the guys like Putin who thinks that autocracy is the wave of the future.”
- Biden blamed former President Donald Trump for the crisis in dealing with the crush of migrants attempting to enter the U.S. from Mexico. Biden said Trump cut funding and resources. “What we’re doing now is attempting to rebuild,” he said, adding that he would commit $700 million to do so.
- The U.S. will have a hard time pulling out of Afghanistan by May 1, where at least 2,500 U.S. troops are still stationed, Biden added. When asked if U.S. troops would still be there next year, he said, “I can’t picture that being the case.”
What’s Next: The president plans to unveil his infrastructure plan, which could cost as much as $4 trillion, in Pittsburgh next week. He said Thursday that the plan will enable the U.S. to “compete and create significant numbers of really good paying jobs, really good paying jobs.”
—Janet H. Cho
Pfizer Joins Moderna in Testing Coronavirus Vaccine on Young Children
A little over a week since
announced that it has started testing its coronavirus vaccine in children,
announced Thursday that it, too, has administered the first doses of its vaccine to children ages six months to 11 years.
- Pfizer’s vaccine is currently authorized solely for those 16 and up. While children are less likely to catch the virus or experience serious illness from it, health officials say that vaccinating them is crucial to reaching herd immunity.
- Because children tend to have stronger immune systems than adults, they could experience stronger side effects from the vaccines, so dosages may need to be adjusted. Pfizer is testing different dosages to find the most appropriate one.
- Unlike broader trials in adults, which tested as many as 30,000 participants, the pediatric trials are much smaller, with Moderna and Pfizer enrolling 6,750 and 4,644 children, respectively.
- People under the age of 18 make up around 12% of U.S. cases of Covid-19 and fewer than 500 of the more than 500,000 U.S. deaths from the virus, according to the Centers for Disease Control and Prevention.
What’s Next: Pfizer said it expects preliminary results by the end of 2021. Moderna has not given a time frame for results in its pediatric trial. The Biden administration’s chief medical advisor Dr. Anthony Fauci has said that young children may be able to start getting vaccinated in early 2022.
—Janet H. Cho
Vaccine Shortages and Spreading Pandemic Exacerbate Tensions in Europe
During a video summit Thursday, EU leaders bickered on vaccine distribution among member states and gave lukewarm support to a plan to better control the exports of jabs to the rest of the world, as new restrictions are looming to avoid another surge of the pandemic.
- In a statement after their videoconference, EU leaders both “underlined the importance of transparency and the use of export authorizations” but also “recognized the importance of global value chains” in the distribution of vaccines.
- European Commission President Ursula von der Leyen, who has suggested a tougher export control on vaccines, noted Thursday that the EU has exported 77 million doses of vaccines to 33 countries, including 21 millions doses to the U.K. since December. It has imported none in return.
As Brussels keeps feuding with
which only delivered a fourth of its promised 120 million vaccine doses to the EU in the first quarter, production problems are postponing the signing of a contract with U.S. biotech
according to Reuters, delaying the eventual delivery of 200 million doses of its jab.
- German Chancellor Angela Merkel has decided to put France on the list of high-risk countries most affected by the Covid-19 pandemic, according to the Frankfurter Allgemeine Zeitung. If confirmed today, this would trigger new measures to restrict travel between the two neighboring countries.
What’s Next: France is emerging as the problem spot of Europe and travelers from the country could also soon face new, stricter restrictions to enter U.K. Meanwhile vaccine shortages and poor logistics continue to hamper inoculations throughout the EU, where only 14% of the population has received a shot so far.
Lawmakers Press Big Tech CEOs on Disinformation, Accountability
Big tech chief executives once again appeared before Congress to defend their practices. Disinformation and the liability shield Section 230 were once again in focus.
CEO Sundar Pichai,
CEO Mark Zuckerberg, and
CEO Jack Dorsey appeared virtually before the House Committee on Energy & Commerce.
- Asked about the Jan. 6 insurrection at the U.S. Capitol, Zuckerberg conceded that there was content related to it on his company’s services. “There’s further work that we need to do to make our services and moderation more effective,” he said.
- Zuckerberg also said he’d support changes to Section 230, which protects online platforms from liability for comments posted by others. He argued protections for larger ones could be contingent on moderation of “clearly illegal content” like sex trafficking and child pornography.
- Pichai said he’d welcome some changes to Section 230 related to transparency and accountability. Dorsey agreed that transparency would be important, but noted it would be difficult to determine what is a large platform versus a small platform.
What’s Next: Rep. Angie Craig (D., Minn.) quipped that tech giants have unified Democrats and Republicans, something she called truly rare in Washington. But what actions lawmakers may actually take is unclear.
Do you remember this week’s news? Take our quiz below about this week’s news. Tell us how you did in an email to firstname.lastname@example.org.
1. Canadian Pacific Railway announced it is planning to acquire which railway in a $29 billion deal creating the first freight-rail network linking Mexico, the U.S. and Canada?
a. Burlington Northern Santa Fe
b. Kansas City Southern
c. Union Pacific
d. Norfolk Southern
2. Which richly-valued unicorn has filed confidentially with the Securities & Exchange Commission for an initial public offering in what’s expected to be one of the year’s most eagerly awaited IPOs?
b. Epic Games
3. In the midst of a global semiconductor shortage, Intel CEO Pat Gelsinger announced that the largest U.S. chip maker by sales plans to spend $20 billion to build two manufacturing plants in which state?
d. New Mexico
4. Prince Harry is no longer an employed member of the royal family. He has landed a new job as an executive in the Silicon Valley start-up BetterUp, a coaching and mental health firm. What will the Duke of Sussex’s new title be?
a. Chief Information Officer
b. Chief Impact Officer
c. Chief Executive Officer
d. Chief Digital Officer
5. Since the U.S. Supreme Court reinstated the death penalty in 1976, only Texas has executed more people than this state which just abolished the death penalty making it the first to do so in the South and the 23rd in the nation. Which state is it?
Answers: 1(b); 2(d); 3(a); 4(b); 5(c)
—Newsletter edited by Anita Hamilton, Stacy Ozol, Mary Romano, Matt Bemer, Bob Rose