Uber’s I.P.O. gets off to a modest start

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Uber’s I.P.O. values it at $82.4 billion

The biggest public offering from Silicon Valley in years turned out less impressive than some expected, Michael de la Merced and Kate Conger of the NYT write.

Uber was valued at $82.4 billion after pricing its shares yesterday at $45, near the bottom of its expected price range. The offering raised $8.1 billion and the shares start trading on the N.Y.S.E. this morning under the symbol UBER.

Investors will be disappointed. While the I.P.O. is the third-largest ever to hit U.S. markets, after only Alibaba and Facebook, its valuation was below the $100 billion that Uber had forecast to some investors, and even farther below the $120 billion that some bankers had suggested. (Though it was above the $76 billion that an August fund-raising round pegged it at.)

So will employees. Shira Ovide of Bloomberg Opinion notes that their stock options may not yield the dizzying riches they might have hoped for.

Why the low price? Underwriters at Morgan Stanley, Goldman Sachs and Bank of America were cautious, Mr. de la Merced and Ms. Konger write. They appear to have been concerned about the poor reception for Lyft after the Uber rival’s debut in March, longstanding questions regarding Uber’s business model and stock market turmoil driven by U.S.-China trade tensions.

But there could be a silver lining. “Underwriters hope that by pricing the stock offering conservatively, shares will enjoy a healthy first-day gain — known in Wall Street lingo as a “pop,’” Mr. de la Merced and Ms. Konger write. (Though not getting top dollar for the shares sold in the offering means investors who sold some of their holdings left money on the table.)

Uber’s concern now: avoiding a Lyft rerun. Its rival’s shares fell below their offering price within two days, and at Thursday’s close were 23 percent down.

More: How today’s tech I.P.O.s differ from those of the dot-com boom. And millennials made rich by tech start-up I.P.O.s are moving to places with lower taxes.

Welcome to the trade war (again)

President Trump escalated his dispute with China on Friday morning over what he said was Beijing’s attempt to “renegotiate” a trade deal, Ana Swanson and Alan Rappeport of the NYT write.

• The U.S. raised existing tariffs on $200 billion of Chinese goods to 25 percent, from 10 percent.
• Mr. Trump said that he may impose new tariffs on an additional $325 billion of products, which would affect nearly all imports from China.
• Beijing said that it “deeply regrets that it will have to take necessary countermeasures.”
• Talks continue today in Washington, “but it remains uncertain whether the two sides can bridge the differences that have arisen over the past week.”

This time last week, a trade deal looked near, but discussions fell apart “when China called for substantial changes to the negotiating text that both countries had been using as a blueprint for a sweeping trade pact,” Ms. Swanson and Mr. Rappeport write.

The decision to proceed with the tariff increase “came after a pivotal round of trade talks in Washington on Thursday night failed to produce an agreement to forestall the higher levies.”

“I have no idea what’s going to happen,” Mr. Trump told reporters yesterday. But he said that the alternative to a deal — his tariffs — was “an excellent one” that would bring in “billions” of dollars for the U.S. government.

The markets continued their fall on the trade news yesterday. The S&P 500 notched its fourth straight daily decline, ending the day down 0.3 percent. European and Asian markets are up this morning, but futures suggest that the U.S. markets will open lower again.

A Facebook co-founder wants it broken up

Chris Hughes, one of Facebook’s four founders, who left its ranks a decade ago, has written a 5,800-word NYT Op-Ed explaining why he thinks that Mark Zuckerberg wields too much power and that the social network needs to be dismantled.

• “Mark’s influence is staggering, far beyond that of anyone else in the private sector or in government,” Mr. Hughes writes. “Mark alone can decide how to configure Facebook’s algorithms to determine what people see in their News Feeds, what privacy settings they can use and even which messages get delivered.”
• Facebook is “a powerful monopoly, eclipsing all of its rivals and erasing competition,” he writes. “When it hasn’t acquired its way to dominance, Facebook has used its monopoly position to shut out competing companies or has copied their technology.”
• “For too long, lawmakers have marveled at Facebook’s explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive.”
• “Facebook should be separated into multiple companies. The F.T.C., in conjunction with the Justice Department, should enforce antitrust laws by undoing the Instagram and WhatsApp acquisitions and banning future acquisitions for several years.”
• But “just breaking up Facebook is not enough,” he continues. “We need a new agency, empowered by Congress to regulate tech companies. Its first mandate should be to protect privacy.”

Facebook fought back. “Facebook accepts that with success comes accountability,” Nick Clegg, Facebook’s vice president for global affairs and communication, wrote in a statement. “But you don’t enforce accountability by calling for the breakup of a successful American company.”

And others say they aren’t convinced by Mr. Hughes’s argument.Critics argued that a breakup wouldn’t fix the core problems with Facebook and that Mr. Hughes underestimates the difficulty of the process. Others said that some of Mr. Hughes’s points rang hollow because he had made hundreds of millions of dollars from the company.

Anadarko’s winner is ... Occidental

Chevron said yesterday that it would not raise its bid for Anadarko, handing the acquisition to Occidental, Clifford Krauss of the NYT writes.

The decision will make Occidental “the undisputed top producer in the Permian Basin, the field that turned the United States into a major oil exporter,” Mr. Krauss writes.

Chevron “could have easily outbid its smaller rival,” given that it is four times the size of Occidental and has vastly more financial resources. “But it decided to walk away from a bidding war and instead claim a $1 billion breakup fee.”

Not everyone is happy for Occidental. “The company’s shares dropped more than 6 percent on Thursday as some Wall Street analysts panned the acquisition as too expensive,” Mr. Krauss notes. “Moody’s, the credit ratings firm, said that the deal could increase Occidental’s debt by $40 billion and that the company could struggle to sell assets, reduce costs and effectively integrate Anadarko.”

Occidental shareholders don’t get to vote on the acquisition. “But some might register their disappointment in other ways,” and “the asset-management firm T. Rowe Price, one of Occidental’s largest shareholders, has threatened to vote against the board at the annual meeting.”

How Jeff Bezos plans to colonize space 

Amazon’s founder showed off a moon lander on Thursday at an event that felt more like an iPhone unveiling than the announcement of a space exploration plan, the NYT’s Kenneth Chang writes.

Future generations will build bucolic space colonies, Mr. Bezos said. And he wants his space exploration company, Blue Origin, to provide the infrastructure.

He’s starting with a lunar lander, called Blue Moon. It’s larger and more capable than those under development by other companies, capable of landing 8,000 pounds on the moon’s surface.

Mr. Bezos appealed to NASA and to the White House. The Trump administration wants to send astronauts back to the moon by 2024, and Mr. Bezos thinks that only Blue Origin can help that happen on time.

For the unconvinced, he offered a stark pitch: Earth’s resources will run out, and we can either endure that or head to space. “Do we want stasis and rationing or do we want dynamism and growth?” he asked.

Mr. Bezos isn’t alone in wanting to settle humans in space. Elon Musk’s SpaceX, which is a couple of years younger than Blue Origin, has similar plans. But while Mr. Musk envisages a colony on Mars, Mr. Bezos thinks giant space colonies, rotating to provide artificial gravity, would be more practical, accessible and hospitable. Living conditions would be like “Maui on its best day, all year round,” Mr. Bezos said.

It’s time to get tech savvy

Thousands of people look set to be pushed out of work by automation in advanced economies, and most countries aren’t prepared for it, according to a report on the future of work by the Organization for Economic Cooperation and Development.

The U.S. is roughly in the middle of the pack when it comes to how protected workers are from the looming threat.

• Leading the pack: Belgium, Denmark, Finland, the Netherlands, New Zealand, Norway and Sweden.
• Toward the back: Chile, Greece, Italy, Lithuania, the Slovak Republic and Turkey.

Everyone will need a grasp of basic technologies like email and smartphones, but many people will also need more advanced skills like coding. That will require global changes in workplace training and continued modernization of education systems, the O.E.C.D. says.

Revolving door

President Trump will nominate Patrick Shanahan, the acting Pentagon chief and a former Boeing executive, as permanent defense secretary.

Greg Clark stepped down as president and chief executive of Symantec, the cybersecurity company.

Pimco has hired the Nobel laureate Richard Thaler as a senior adviseron retirement and behavioral economics.

The speed read

Deals

• SoftBank is preparing to start another $100 billion investment fund, akin to its Vision Fund, after the group’s profits tripled in the last quarter. (FT)
• Anheuser-Busch InBev’s Asia unit has filed for an I.P.O. in Hong Kong. (Bloomberg)
• Reliance Industries in India has agreed to buy the London toy store Hamleys from the Chinese group Banner International Holdings. (Reuters)
• Boston Beer, which makes Sam Adams, has agreed to buy Dogfish Head Brewery in a deal worth $300 million. (Bloomberg)

Politics and policy

• President Trump said he would leave Attorney General William Barr to decide whether Robert Mueller should testify before Congress. Nancy Pelosi said that the country was in a constitutional crisis. (NYT)
• Mr. Trump’s team appears to be trying to call Democrats’ bluff, by daring them to impeach the president. (NYT)
• House Democrats passed legislation to reverse Trump administration rules allowing the expansion of health care plans that do not have to comply with the Affordable Care Act’s mandated coverage of pre-existing medical conditions. (NYT)

Trade

• The U.S. seized a North Korean shipping vessel that violated American law and international sanctions, the Justice Department said. (NYT)

Tech

• The U.S. government accused a Chinese state-owned chip maker, Fujian Jinhua, of stealing secrets from Micron. Now the Chinese company reportedly wants Micron to strike a deal with it. (FT)
• Elon Musk courted controversy by joking on Twitter about a video showing two people having sex in a self-driving Tesla. (Bloomberg)
• A U.S. start-up accused Huawei of enlisting a Chinese university professor to improperly access its technology. (Reuters)
• Instagram is trying to fight bullying, but first it has to define bullying. (NYT)
• The Justice Department charged two Chinese nationals with the 2014 hack of the insurance company Anthem and of three other unnamed American companies. (NYT)

Best of the rest

• Many hospitals charge private insurance companies two to three times what the federal Medicare program would pay for the same care. (NYT)
• Economists increasingly say they think that the Fed’s next rate move will be a cut, a survey says. (WSJ)
• Miguel Patricio, Kraft Heinz’s incoming C.E.O., says that he’s “not 3G’s man,” referring to the investment firm that is reshaping the food company. (FT)
• Vale, the world’s largest producer of iron ore, posted a $1.6 billion loss in the first quarter of the year in the wake of a deadly dam disaster that killed more than 230 people in Brazil. (FT)
• Anna Sorokin, the “faux heiress” who successfully conned businesses and banks, has been sentenced to at least four years in prison. (Vanity Fair)
• The corporate world apparently has its own squeezed middle. (Bloomberg)

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