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Aramco lifts the curtain on its huge profits
Saudi Aramco began a road show to pitch prospective investors on a $10 billion bond offering, providing a peek into the state-owned oil company’s books — and showing how incredibly profitable it is.
Aramco made $111.1 billion in profit last year, according to data provided to credit ratings agencies. That means it was the world’s most profitable company in 2018, Bloomberg notes, making more than Apple and Alphabet combined.
The company produced 13.6 million barrels of oil equivalent a day last year, which far surpasses any other producer, such as Royal Dutch Shell or BP.
The disclosures finally shed light on the oil company’s finances and operations. (They were necessary as part of the bond offering that will support Aramco’s $69 billion deal to buy control of a Saudi chemical company, Sabic.)
Credit ratings agencies were impressed. Moody’s assigned Aramco’s bonds an A1 rating (though still below the Aaa that it gave to Exxon Mobil). The agency said the biggest risk to the rating was any downgrade to Saudi Arabia’s own financial picture.
Mark Zuckerberg wants Facebook regulated, on his terms
Facebook’s C.E.O. wrote an opinion piece for the WaPo on Saturday laying out how he believes his company should be treated. His top policy executive, Nick Clegg, echoed its points in an interview with Politico. Here’s how Mike Isaac of the NYT reads between the lines:
• Harmful content. Mr. Zuckerberg called for lawmakers to decide “what counts as terrorist propaganda, hate speech and more.” By adhering to the letter of the law, Facebook can effectively shield itself from blame if something goes awry.
• Election protection. “Our systems would be more effective if regulation created common standards for verifying political actors,” Mr. Zuckerberg wrote. That would serve Facebook well, Mr. Isaac writes: “When the next erroneous outburst inevitably occurs, Facebook could point toward the law it was forced to follow.”
• Privacy and data protection issues. “I believe it would be good for the internet if more countries adopted regulation such as G.D.P.R. as a common framework,” Mr. Zuckerberg wrote, referring to Europe’s data protection rule. If laws are enacted to limit data collection in the future, Mr. Isaac notes, Facebook might be able to squash smaller competitors.
• Data portability. “Regulation should guarantee the principle of data portability,” Mr. Zuckerberg wrote. Facebook claims its users would be able to freely take their information from one network to the next, Mr. Isaac says. But in reality, data portability could help the company combine its platforms, which include Instagram and WhatsApp.
How the U.S. and China could undercut their trade deal
As the two countries nudge ever closer to striking an agreement, Ana Swanson and Keith Bradsher of the NYT explain how one of its key tenets could undercut Washington’s vision:
• “Any agreement seems certain to involve China’s promise to purchase hundreds of billions of dollars of American goods. For Mr. Trump, this is an essential element that will help reduce the United States’ record trade deficit with China.”
• “But those purchases will be ordered by the Chinese state, and most will be carried out by state-controlled Chinese businesses, further cementing Beijing’s role in managing its economy and potentially making United States industries even more beholden to the Chinese.”
“Both sides are trying to iron out an agreement by next week, to coincide with a visit to Washington by Liu He, the Chinese special envoy charged with negotiating the deal,” Ms. Swanson and Mr. Bradsher write. The goal is reportedly “to have an agreement by the end of that meeting, with a signing ceremony between Mr. Trump and President Xi Jinping of China potentially later this month.”
But there are still sticking points. “Those include how an agreement will be monitored and enforced, and how many of Mr. Trump’s tariffs come off and when,” according to Ms. Swanson and Mr. Bradsher.
Lyft went public. Here’s who won.
The ride-hailing company began trading on the public markets on Friday, with its stock closing up about 9 percent. But the file of winners is bigger than just those who bought into the stock before it listed:
• Gig economy start-ups. Lyft showed that there’s interest in the public markets for companies that rely on part-time employees. (But the big question is still whether they can ever make money.)
• The Golden State, truly. Lyft’s success bodes well for its home state, California, which is set to collect a capital-gains tax bonanza from the tech companies planning to go public this year. Alejandro Lazo of the WSJ reports that the state is already expected to draw nearly 10 percent of its revenue for the next fiscal year from tech I.P.O.s — a figure that could grow if the offerings perform better than expected.
• Uber. The world’s largest ride-hailing company will probably be heartened by Lyft’s success. One unnamed investor told the FT that a $120 billion valuation for Uber now “doesn’t look too unreasonable.”
Who didn’t win: Anyone who bought shares in Lyft after it listed on the Nasdaq.
More: Meet the V.C.s who are expected to be big winners from the coming wave of tech I.P.O.s.
Lawmakers try to take control of Brexit, again
After rejecting Prime Minister Theresa May’s withdrawal deal for a third time on Friday, British lawmakers will attempt again to come up with an alternative.
Parliament will vote on options later today. There are eight proposals, none of which won a majority when they were voted on last week. John Bercow, the speaker of the House of Commons, may trim down the options, which could force cohesion around a plan.
Mrs. May continues to scramble. The FT reports that she is considering a fourth vote on her deal, while she grapples with a breakdown of trust inside her Conservative Party.
If Parliament remains deadlocked, Britain faces a choice: Leave the European Union without a deal on April 12, or ask Brussels for another extension.
There is a feeling of anger and embarrassment. “In interviews, many Britons expressed despair over the inability of the political system to produce a compromise,” Ellen Barry and Benjamin Mueller of the NYT write. “No one feels that the government has represented their interests. No one is satisfied. No one is hopeful. It has amounted to a hollowing out of confidence in democracy itself.”
More: There is at least one Brexit winner in Britain: the corporate law industry, which is profiting from companies trying to prepare.
Was Jeff Bezos’ phone hacked?
The Amazon chief’s security consultant accused the Saudi government of gaining unauthorized access to Mr. Bezos’ phone, Karen Weise of the NYT reports:
• “In an opinion article in The Daily Beast on Saturday, Gavin de Becker, Mr. Bezos’ security chief, alleged the Saudis wanted to hurt Mr. Bezos because he owns The Washington Post. The Post has aggressively reported on the murder of Jamal Khashoggi, one of its columnists, who was killed last year in Turkey.”
• “Mr. de Becker’s claims about the Saudis are difficult to verify and raise many questions. Throughout his article, the security consultant was vague on details.”
• “On Sunday, American Media Inc., the parent company of The National Enquirer, which first reported earlier this year that Mr. Bezos was having an extramarital affair, issued a statement denying ‘the false and unsubstantiated claims of Mr. de Becker.’ ”
New York plans America’s first congestion pricing plan
State lawmakers reached a $175 billion budget deal over the weekend. It promises sweeping changes to the way New Yorkers commute, shop and live, the NYT reports.
Congestion pricing — a first in the U.S. — will subject vehicles traveling below 60th Street in Manhattan to a toll. The revenue will go toward the subway and other transportation projects. Specifics, like what the charge will be, have been deferred to other authorities.
The state also banned single-use plastic shopping bags, following California and Hawaii.
But it dropped plans for a recurring “pied-à-terre tax” of 5 percent on the value of high-end second homes, after opposition from the real estate industry. Instead, lawmakers adopted a “mansion tax” and a real estate transfer tax, two one-time charges that would top out at 4.15 percent on the sale of properties worth at least $25 million.
Revolving door
The Louis Dreyfus Company reportedly ousted Gonzalo Ramírez Martiarena as C.E.O. after he started holding deal talks with rivals.
Alok Sama, the C.F.O. of SoftBank’s international arm, is reportedly leaving the Japanese tech giant.
The speed read
Deals
• The activist hedge fund Starboard Value has dropped its campaign against Bristol-Myers Squibb’s deal to buy Celgene. (CNBC)
• The talent agency Endeavor is reportedly preparing an I.P.O. later this year. (WSJ)
• Vivendi withdrew a motion to replace directors of Telecom Italia, conceding defeat to Elliott Management. (Bloomberg)
• Jonathan Lavine, a managing partner of Bain Capital, worries that private equity firms are piling too much debt onto their deals. (FT)
• European lenders are starting to grow wary of giving money to WeWork. (Bloomberg)
Politics and policy
• President Trump reportedly thinks that a lawsuit to overturn the Affordable Care Act — which his administration is backing — will fail. (Axios)
• A federal judge ruled against the White House’s plan to open up the Arctic Ocean for oil drilling. (NYT)
• Joe Biden scrambled to defend himself after a former Nevada lawmaker accused him of inappropriately kissing and touching her. (NYT)
• Senator Elizabeth Warren has lost her presidential campaign’s finance director after a disagreement over abandoning big-ticket donors. (NYT)
• Mr. Trump reportedly wants to “save” Ruth Bader Ginsburg’s seat on the Supreme Court for Amy Coney Barrett, a conservative federal judge who opposes abortion. (Axios)
Boeing
• The inquiry into the fatal Ethiopian Airlines crash is said to believe a faulty anti-stall sensor was to blame. (NYT)
• “Pitch up, pitch up”: the final minutes of the doomed flight. (WSJ)
• U.S. and Ethiopian investigators are reportedly clashing over the investigation. (WSJ)
Tech
• The initial coin offering market has ground to a halt. (WSJ)
• Google has stopped serving ads in China for two websites that help bypass censorship. Skeptics say the move is an attempt to appeal to Beijing. (FT)
• Alphabet’s A.I. subsidiary, DeepMind, is readying its first commercial product: a device that will diagnose some complex eye diseases in real time. (FT)
• Some consumers are accusing Tesla of using upselling tricks to move more expensive cars. (Quartz)
Best of the rest
• Michael Avenatti has taken on many high-profile legal fights, but his biggest yet is his own court case. (NYT)
• How the financier Morrie Tobin became the whistle-blower in the college admissions scandal. (LAT)
• A federal judge wants to limit PG&E’s dividends to force the utility to reduce the risk of causing California wildfires. (WSJ)
• How tens of thousands of far-right extremists helped swindle $1 billion from the federal government. (NYT)
• Burger King is introducing a meat-free “Impossible Whopper.” (NYT)
Thanks for reading! We’ll see you tomorrow.
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