Trump marches on
As widely expected, Donald Trump handily won the New Hampshire Republican primary, defeating Nikki Haley by double digits.
That has left anti-Trump donors and the broader business community glimpsing an increasingly likely future: The former president will become the Republican nominee, and stands a good shot of winning in November.
Haley said she would fight on, arguing last night that “this race is far from over.” But the former South Carolina governor will head to her home state — she’s skipping the Nevada caucuses on Feb. 8 — badly trailing Trump in polls there, with many of her Palmetto State colleagues having endorsed her opponent.
A growing number of Republicans are now suggesting that she should drop out: Senator John Cornyn of Texas, a senior G.O.P. lawmaker, said that his party needed “to unite around a single candidate.”
Donors may start falling in line, too. A number of Haley supporters are reportedly heading to the exits: An unnamed Republican fund-raiser told CNBC’s Brian Schwartz that one of her donors was done with her campaign, declaring it over.
Meanwhile, Puck’s Teddy Schleifer wrote on the social media platform X that the casino magnate Steve Wynn and the financier John Paulson attended Trump’s New Hampshire victory party last night. And Senator Tim Scott of South Carolina, who appeared at the event, told Schleifer that he expected the Oracle co-founder Larry Ellison, his biggest backer before Scott dropped out of the primary race, to support Trump as well.
Investors are increasingly contending with what a Trump victory might mean. Many forecast a drastic pullback in regulation, particularly in antitrust, and a swing in support from clean energy businesses back to fossil-fuel producers.
Holger Schmieding, an economist at Berenberg, added in a note today that a second Trump administration may also include increased government spending and “a lack of fiscal discipline that would likely be at least as pronounced as currently under” President Biden. That said, he concluded, he would not expect forecasts for U.S. growth to change much under either a Trump or Biden second term.
HERE’S WHAT’S HAPPENING
The semiconductor equipment maker ASML reports blockbuster earnings. Shares in the Dutch company were up sharply in premarket-trading after it said that fourth-quarter profit jumped 9 percent over last year. ASML chalked up the bumper results to strong demand for chips tied to artificial intelligence applications, but it kept its 2024 sales forecast flat because of new limits on exports to China.
China’s central bank moves to bolster lending. The People’s Bank of China said today that it would lower banks’ reserve requirements, allowing them to provide more loans to homeowners and businesses. It is Beijing’s latest effort to stimulate growth, but some economists say such a move won’t be enough to shore up China’s economy.
The loyalty program operator Bilt raises funds at a $3.1 billion valuation. The start-up more than doubled its valuation in a new $200 million fund-raising round led by General Catalyst, according to Bloomberg; Ken Chenault, the former American Express C.E.O. who is chairman of the venture capital firm, will join Bilt’s board. It’s a sign of interest in company, which turns rental payments into points that can be used for rewards.
The winners and losers of the Oscar nominations. “Oppenheimer” collected the most, while “Barbie” was nominated for “Best Picture” but failed to win nominations for best actress or best director. Technology companies dominated, with Netflix receiving 18 nods, Apple TV+ 13 and Amazon’s MGM five.
Airlines C.E.O.s take Boeing to task
Loose bolts, a discarded wrench found under the floorboards, delayed shipments: Airline bosses on both sides of the Atlantic are lashing out at Boeing for a slew of issues as the 737 Max 9 crisis shows little sign of ending soon.
The ordeal is taking a toll. Boeing’s stock has fallen nearly 13 percent since a Jan. 5 episode in which a door plug flew off an Alaska Airlines Max 9 midflight.
Dave Calhoun, who became C.E.O. to right the company after fatal Max crashes in 2018 and 2019, is set to meet with a trio of senators, including Maria Cantwell, a Washington Democrat and chair of the Commerce Committee, today. Cantwell said last week that she planned to hold hearings on the Max 9 groundings.
Boeing’s customers are going public with their frustrations:
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“I am angry,” Ben Minicucci, the C.E.O. of Alaska Airlines, told NBC News after finding “many” loose bolts in its Max 9 checks. “My demand on Boeing is what are they going to do to improve their quality programs in-house.”
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Scott Kirby, United Airlines’ C.E.O., told CNBC that “the Max 9 grounding is probably the straw that broke the camel’s back for us.” The company isn’t sure that it will get the Max 10 planes — a new plane that hasn’t yet been certified — it has ordered any time soon. “We’re going to at least build a plan that doesn’t have the Max 10 in it.”
Airline bosses hope the tough comments will force Boeing to improve quality control and engineering. (Here’s an explanation from The Times about how the door panel may have flown off that Alaska plane.)
But they don’t want to stoke panic about plane safety amid a sharp rebound in bookings over the past year. And there aren’t many alternatives to Boeing or Airbus.
Boeing’s woes will have a lasting impact. Mike Leskinen, United’s C.F.O., told analysts that the groundings would dent growth in the “coming years.” Michael O’Leary, the C.E.O. of Ryanair, a low-cost European airline that is one of Boeing’s biggest customers, also doubts the Max 10 will be delivered soon.
The Rock in the boardroom
When the W.W.E. announced a mammoth $5 billion deal with Netflix to stream “Raw,” its weekly wrestling show, it also revealed an agreement that highlights the growing clout of celebrity brands — and the enduring power of the superagent Ari Emanuel.
Dwayne Johnson, the actor known as the Rock, will join the board of TKO, W.W.E.’s parent company, which is controlled by Emanuel’s Endeavor. As part of the deal, W.W.E. will also give Johnson the lucrative rights to the Rock trademark.
How the deal will work. Johnson will promote W.W.E. and license his trademark to the company for ten years, for which he’ll receive $30 million in TKO stock, subject to customary vesting. “The point is that this is now his, and in the future, he’ll be able to keep all the profits from exploiting that mark,” Michael Carrier, a professor and intellectual property expert at Rutgers Law School, told DealBook.
It’s the latest example of how companies are finding innovative ways to compensate stars and athletes whose power to sell and market products, particularly via social media, is circumventing traditional advertising. The deal to lure Lionel Messi, the Argentine soccer star, to Inter Miami last year included revenue-sharing agreements with Adidas and Apple.
Emanuel is front and center in how the new relationships are evolving. Endeavor is the parent company of talent agency WME, which has represented Johnson for 13 years. “There’s no C.E.O. in the world like this guy,” Johnson told CNBC as he sat next to Emanuel. “These game-changing deals that he’s making is a reflection of who he is,” he added.
Does the deal hint at Netflix’s future in live sports? Ted Sarandos, the company’s co-C.E.O., shot down speculation that the agreement meant that Netflix would go deeper into traditional sports.
“W.W.E. is sports entertainment,” he said on Tuesday on a fourth quarter earnings call, after the company reported bumper results and record subscriber numbers. “I would not look at this as a signal of any change to our sports strategy.”
Peak proposals
The pushback on E.S.G. investing shows no sign of letting up, with a decision by Exxon Mobil to sue investors pushing an environmental agenda.
Research from the Conference Board reveals that companies are feeling fatigue around E.S.G. — or business imperatives that focus on environmental, social and governance issues — when it comes to shareholder voting, and that they’re looking to the courts for support after regulators failed to help.
Exxon’s tactics are a sign of that. Three years ago, Engine No. 1, the San Francisco-based hedge fund, forced the energy giant to shake up its board with the goal of getting it to take more action to curb climate change. On Sunday, Exxon accused the activist investors Arjuna Capital and Follow This of advancing environmental agendas that the oil major says do little to help the company’s economic performance or create shareholder value.
It’s the latest flashpoint between business and regulators. If companies want assurances that they won’t face an enforcement action for excluding proposals, they typically ask the S.E.C. for review. But some say the agency hasn’t done enough to limit the number of motions climate activists are proposing at annual meetings.
Suing is “a very rare step,” Amy Roy, a partner at law firm Ropes & Gray specializing in securities litigation, told DealBook, but added that other companies would be watching the case closely.
Meanwhile, climate-related shareholder proposals fell last year, to 21 percent compared with 35 percent in 2022, according to an analysis by the Conference Board. Paul Washington, the executive director of the E.S.G. center at the research organization, told The Times that this reflected the growing unpopularity of the proposals rather than an underlying shift in commitment by institutional investors.
THE SPEED READ
Deals
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The financier Bill Ackman and his wife, Neri Oxman, have acquired a 5 percent stake in the Tel Aviv stock exchange, one of the highest-profile investments in an Israeli business since the Oct. 7 Hamas-led attacks. (Bloomberg)
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Figma is reportedly offering buyouts and revamping employees’ pay packages as it resets its valuation to $10 billion, half of the level it attained in its failed sale to Adobe. (Forbes)
Policy
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State lawmakers in Vermont will propose a wealth tax, joining a growing campaign by Democrats to fill in budget shortfalls with new levies on rich Americans. (NYT)
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The S.E.C. is set to vote on new investor protection requirements for special purpose acquisition vehicles, to make them more like I.P.O.s. (S.E.C.)
Best of the rest
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In layoffs news: SAP will change the jobs or offer buyouts for 8,000 workers; eBay said it planned to cut around 1,000 positions; and The Los Angeles Times will cut 115 newsroom jobs, or more than 20 percent of its journalists. (CNBC, The Verge, NYT)
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“Pastor Charged With Cryptocurrency Fraud Said God Told Him to Do It” (NYT)
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