Uber dials down its I.P.O.

Good Thursday morning, and welcome to today's DealBook Briefing. (Was this email forwarded to you? Sign up here.)

Uber’s steadily deflating I.P.O.

The ride-hailing company’s market debut, which is set for tomorrow, has become “an exercise in dialing back expectations,” write Michael de la Merced and Mike Isaac of the NYT.

Uber’s I.P.O. may now value it at only $86 billion based on a share price of $47. According to unidentified sources, the company plans to price its offering at or below the midpoint of its announced range: $44 to $50.

“That would be well below the $100 billion that Uber had forecast to some of its investors,” Mr. de la Merced and Mr. Isaac write. “Last year, some bankers floated a potential $120 billion valuation for the company. It would still be valued above the $76 billion that it was appraised at in its most recent private fund-raising last August.”

Why the caution? The sources blame market turbulence in the face of recent U.S.-China trade tensions and the performance of Lyft, the rival whose shares have sunk since its I.P.O. in March.

The price should be set today. A last-minute shift is possible; Uber is still taking stock orders.

More: Uber drivers around the world went on strike yesterday to protest employment conditions before the I.P.O. Here’s how it played out.

Tensions mount in the U.S.-China trade fight

President Trump threatened yesterday to prolong his trade war with China, and Beijing immediately signaled that it would fight back, Ana Swanson and Keith Bradsher of the NYT write.

• “Mr. Trump, in a pair of tweets on Wednesday morning, said he would be happy to keep tariffs on Chinese exports rather than make a bad deal.” He has said he plans to impose higher tariffs on $200 billion worth of Chinese goods starting tomorrow.
• The Chinese Commerce Ministry “suggested that it was once again ready to retaliate against American companies and their products with its own countermeasures.”

China “broke the deal” in trade talks with the U.S., Mr. Trump said during a campaign rally last night in Panama City Beach, Fla.

Beijing started playing hardball because officials “interpreted recent statements and actions by President Trump as a sign the U.S. was ready to make concessions,” the WSJ reports, citing unidentified sources.

Chinese negotiators return to Washington today, and among them is Vice Premier Liu He. At the campaign rally last night, Mr. Trump said of the meetings: “Whatever happens, don’t worry about it. It will work out. It always does.”

Wall Street’s slide continued. The S&P 500 closed 0.2 percent lower yesterday after a 1.7 percent drop on Tuesday. It’s interesting that the losses haven’t been deeper, Neil Irwin of the Upshot writes.

How will Elizabeth Holmes defend herself?

The trial of Elizabeth Holmes, the former C.E.O. of the ill-fated blood-testing start-up Theranos, and Ramesh Balwani, the company’s C.O.O., could be the most extensive corporate prosecution since Enron executives were tried in 2006. What’s that going to look like?

The defense may go after the government, Peter Henning writes for DealBook, “by claiming that regulators improperly brought actions against the company for its blood analysis technology.” John Carreyrou, the WSJ reporter who exposed problems with that technology, may also figure as a central part of the defense.

• Ms. Holmes’s lawyers have claimed that communications between federal agencies and Mr. Carreyrou are “ ‘exculpatory’ information that must be turned over to the defendants.”
• Mr. Carreyrou “was exerting influence on the regulatory process in a way that appears to have warped the agencies’ focus on the company and possibly biased the agencies’ findings against it,” the filing states.

The lawyers seems eager to suggest that regulators overreacted and misunderstood what was going on, Mr. Henning writes.

Could that strategy work? “There is at least a possibility it could,” Mr. Henning writes. “The prosecution bears the burden of proving conspiracy and fraud beyond a reasonable doubt. One way the defense could undermine the government’s case would be to raise questions about possible bias and create enough doubt among the jurors that they vote to acquit.”

But this is hard, and high-risk. “It will depend on showing that the regulators were flawed in their analysis of the technology Theranos was using,” Mr. Henning writes.

The world’s biggest unicorn hunters

Backing start-ups that grow to be worth more than $1 billion is one of the investment world’s proudest boasts. CB Insights sifted through the 2,018 disclosed investors in the 344 private unicorn companies currently in operation to see who has collected the most.

By number of investments, Tiger Global Management wins: Its portfolio contains 42 unicorns. Tencent Holdings is second, with 40, and SoftBank is third, with 38.

How early those investments are made is potentially a better indicator of success: Early backers generally pay less and get more. So CB Insights also looked at the ratio of early unicorn investments to the total.

• By that metric, Y Combinator stands out, having made 16 of its 18 unicorn investments at an early stage.
• SV Angel, with 18 of 23, and IDG Capital, with 11 or 18, come in second and third.

Boeing finds trust hard to win back

Boeing’s charm offensive to persuade airlines, crews and passengers to rally behind its 737 Max jet after two fatal crashes is running into resistance, Natalie Kitroeff and David Gelles of the NYT report.

“When Boeing dispatched one of its top lobbyists, John Moloney, to the headquarters of the influential union representing flight attendants a couple of weeks ago, he arrived determined to win their support. He met a skeptical audience,” Ms. Kitroeff and Mr. Gelles write.

The talks were “punctuated by contentious moments,” underscoring “how difficult it will be for Boeing to restore credibility with airlines and passengers.”

Sticky meetings are Boeing’s new normal. Recently, it has updated the heads of U.S. airlines and held a series of meetings with global airlines to discuss the future of what had been its best-selling jet. It has also hosted hundreds of airline officials and pilots at its 737 Max factory in Renton, Wash., and is in constant contact with regulators.

“There’s only one thing to do,” David Calhoun, the lead independent director of Boeing’s board, told the NYT. “And that’s to get a safe airplane back up in the sky. I can’t message my way into it.”

What keeps C.E.O.s up at night?

Gartner has published the findings of its annual survey of C.E.O.s and senior business executives, which identifies what’s on the minds of 473 business leaders. Here’s a peek at the results:

53 percent of respondents are thinking about growth, up from 40 percent last year. This suggests that C.E.O.s “have switched their focus back to tactical performance as clouds gather on the horizon,” Mark Raskino, a vice president of Gartner, said in a statement.

Most want to lean more heavily on tech. “82 percent of respondents agreed that they had a management initiative or transformation program underway to make their companies more digital — up from 62 percent in 2018,” Gartner said.

But many worry about the digital skills of their executives. “C.E.O.s are concerned that some of the executive roles do not possess strong or even sufficient digital skills to face the future,” according to Gartner. Sales, risk, supply chain and H.R. officers are particular concerns.

Everyone wants to regulate Big Tech. Agreement ends there.

Members of the Federal Trade Commission on Wednesday renewed their calls for Congress to regulate how big tech companies collect and handle user data, Cecilia Kang of the NYT writes. But there’s little agreement on how to do so.

The F.T.C. asked Congress for more power to police violations, more resources and greater authority to impose penalties.

But there’s tension inside the agency about how far it should be able to go in punishing companies that break its rules:

• “The two Democratic commissioners said a punishment should send a strong message that a tech company in violation of privacy rules must change behavior. And in some cases, the F.T.C. should name top executives as liable parties, they said.”
• “Republican members warned of going too far with a new privacy law. Christine Wilson, one of the three Republican commissioners, said there could be ‘unintended consequences,’ and added that some privacy laws could be more burdensome on small companies than tech giants.”

There’s also tension in Congress about what a privacy law should do. “Lawmakers of both parties agreed” that such a law is required, the WSJ reports, “but nevertheless appeared divided over key points that legislation might address.”

Revolving door

• Derek Flowers, a Wells Fargo veteran, will assume a new senior position to oversee changes demanded by regulators.
• Tanya Barnes, a former managing director of the merchant banking division at Goldman Sachs, will lead a socially conscious investment platform at Blackstone.
• G.E. investors chose not to separate the roles of chairman and C.E.O., leaving Larry Culp with both.

The speed read

Deals

• The electric vehicle maker Workhorse will buy the currently idle General Motors plant in Lordstown, Ohio. President Trump took credit for the deal. (NYT)
• The private equity groups Digital Colony Partners and EQT will buy the fiber-optic cable company Zayo Group for about $8.2 billion in cash. (Reuters)
• The shaving start-up Harry’s will be sold to Edgewell Personal Care, which owns Schick and Wilkinson, for $1.37 billion. (DealBook)
• SoftBank will spend $4 billion to increase its stake in Yahoo Japan and turn it into a subsidiary. (Reuters)

Politics and policy

• The House Judiciary Committee voted to recommend that the House hold Attorney General William Barr in contempt for failing to hand over the full Mueller report. The vote came hours after President Trump asserted executive privilege to shield the report from Congress. We explain the escalating fight. (NYT)
• The Senate Intelligence Committee subpoenaed Donald Trump Jr. as part of its investigations into Russia’s 2016 election interference. (NYT)
• The Pentagon has redirected enough money to build 256 miles of barriers along the southwestern border. (NYT)
• Mr. Trump defended his $1.17 billion in losses between 1985 and 1994 as just for “tax purposes.” (NYT)
• Prime Minister Theresa May of Britain plans to schedule a fourth vote on her Brexit deal at some point in the next two weeks. (FT)

Trade

• The U.S. has issued new sanctions against Iran after Tehran threatened to abandon a 2015 nuclear deal. (NYT)

Tech

• In a visit to London on Wednesday, Secretary of State Mike Pompeo struck out at China over security risks from Huawei, calling it “an authoritarian regime that’s integrated economically into the West.” Also: Huawei’s C.F.O., facing possible extradition to the U.S. on fraud charges, had her bail terms in Canada amended. (NYT)
• Amazon has had a rough week: It admitted to having been hit by an “extensive” fraud, got federal discrimination complaints from three Muslim workers, and has been accused of violating a child privacy law. (Bloomberg, NYT)
• Redfin, the Seattle-based real estate brokerage, is starting a program that lets house hunters bid on properties directly through its website. (NYT)
• Facebook hired Nick Clegg, a former deputy prime minister of Britain, to help it win arguments in Brussels. It’s not going well. (Bloomberg Opinion)

Best of the rest

• How a laptop in Lebanon helped Tokyo prosecutors charge Carlos Ghosn. (FT)
• Walmart is raising the minimum age to buy tobacco products to 21. (NYT)
• TV ads for prescription drugs covered by Medicare or Medicaid will soon have to include the list price if it is over $35 per month. (NYT)
• The U.S. Treasury experienced the weakest demand for its benchmark 10-year bond in a decade. (Bloomberg)
• Berkshire Hathaway is taking a $377 million tax hit after falling victim to a Ponzi-style scheme by a fraudulent solar company. (Bloomberg)
• Australia’s central bank misspelled “responsibility” on its $50 note. Three times. (CNBC)

Thanks for reading! We’ll see you tomorrow.

You can find live updates throughout the day at nytimes.com/dealbook.

We’d love your feedback. Please email thoughts and suggestions to [email protected].