Apple’s Tim Cook, Google’s Larry Page and Tesla’s Elon Musk were among the attendees at the American Enterprise Institute’s “World Forum” on Sea Island this weekend, according to a report in this morning’s Huffington Post. Also attending were Republican leaders of Congress, including Mitch McConnell and Paul Ryan. The event was off-the-record, but HuffPo says the main topic of conversation – no surprise here – was how to stop Donald Trump from winning the Republican nomination.
Trump is likely to take another step toward that nomination today. He’s leading the polls in Michigan, which could be an important test of his strength in a general election. (Trump has been criticizing Ford there, despite its announcement of new investments in the U.S.) Polling is scarce in Mississippi, but that Southern state will test the breadth of Ted Cruz’s appeal.
A CEO Daily reader, Danny B., chided me yesterday for saying Cruz is “the one candidate that business representatives in Washington say would be worse for business than Donald Trump.” Danny points out Cruz’s support for a flat tax and limited government, and says he is “the most free market and philosophically conservative of any of the candidates.” That’s certainly true. But his history in Washington has been one of obstructionism, and business groups looking to make progress on trade, taxes, education, infrastructure, the budget deficit, etc. see him as an obstacle, not a friend. That, of course, is his appeal to Danny B., and many other Americans.
The past ten days have been the most interesting, and perhaps most consequential, in American politics in decades. But there are other things going on in the business world. This morning, we publish Erin Griffith’s fascinating look at Jack Dorsey’s effort to save struggling Twitter. It’s worth a read.
This evening, I’ll be hosting an event at Time Inc. headquarters to honor the companies that made our 100 Best Companies to Work For list. I hope to see some of you there. We’ll hear from the CEOs of SAS, Wegmans and Edward Jones.
And tomorrow evening, we’ll assemble a group of tech leaders for our Brainstorm Tech dinner in San Francisco, where Adam Lashinsky will interview Steve Ballmer about basketball, basketball tech, his relationship with Microsoft, and his skills at dunking. We will stream that conversation live on fortune.com, and I’ll report back here Thursday morning.
More news below.
• Burberry takeover speculation surfaces
Shares of British fashion label Burberry jumped after it was reported the company was setting up defenses against a possible takeover offer. Burberry has reportedly asked its advisers to help prepare for a bid after a mystery investor built up a stake of about 5% in the trenchcoat maker. That investment comes as the stock has performed poorly, dropping 27% in the past year, as Burberry reported disappointing Christmas revenue. It is scaling back stores and cutting bonuses as earnings look poised to fall for a second straight year.
• DoJ won’t give up on Apple case
The U.S. Justice Department on Monday resubmitted its case for Apple to unlock an encrypted iPhone belonging to a drug offender to a higher judge in the Eastern District of New York. The move was expected, as the department said it would continue a fight after a magistrate judge previously sided with Apple, saying the Justice Department could not use a 1789 law known as the All Writs Act to compel the tech giant to unlock the phone. The government is relying on the same law in its fight against the tech giant in a California court where a judge has ordered Apple to unlock the phone belonging to one of the San Bernardino shooters.
• Don’t overreact to China’s export crash
China’s exports fell more than 25% year-over-year in February, the worst decline since 2009 and a drop that Fortune described as “downright frightening.” It was also well below the 14.5% drop expected by economists and the 11% decline recorded in January. But panicking now might be early, Fortune says, pointing out the Chinese stock market didn’t react much to the news (even if other stock markets did). While the figures are disappointing, part of what’s at play is a calendar distortion tied to China’s biggest holiday, the Chinese New Year.
• Theranos ran tests despite problems
A federal inspection report says a Theranos laboratory ran an important blood test on 81 patients in a six-month period despite erratic results from quality-control checks meant to ensure the test’s accuracy, The Wall Street Journal reported, citing people familiar with the report. While the report hasn’t been released publicly, it is far more detailed than the letter that summarized the results of last fall’s inspection of a California lab by federal agents. The test that inspectors reportedly found Theranos kept doing despite the erratic quality-control results was a hematology test that measures how long it takes blood to clot.
The Wall Street Journal (subscription required)
• SEC cites Wells Fargo with fraud
Wells Fargo was charged with fraud tied to a now-defunct video game company founded by former Boston Red Sox pitcher and three-time World Series champion Curt Schilling. The Securities and Exchange Commission said the bank failed to disclose an important financial gap facing Schilling’s startup, 38 Studios, to bond investors who lost money in the high-profile 2012 collapse. Specifically, the SEC alleged the bond offering document didn’t say the startup needed at least $75 million in funding to produce a particular video game.
Around the Water Cooler
• Bloomberg won’t run for president
Three-time New York City mayor and businessman Michael Bloomberg said he would not be running for president because his campaign could ease the passage of Republican candidates Ted Cruz or Donald Trump into the White House. “That is not a risk I can take in good conscience,” he wrote in a Bloomberg opinion piece. The Associated Press, meanwhile, reports Bloomberg has also considered implementing a new leadership structure at his company, Bloomberg LP. That structure would also reportedly include a succession plan, though the AP says that could be even 10 years in the future.
• Nike suspends Maria Sharapova ties
Athletic-gear giant Nike has suspended its relationship with the Russian tennis star after she announced on Monday she failed a drug test at the Australian Open. Sharapova told reporters during a press conference she held on Monday that she was informed by the International Tennis Federation that she had tested positive for Meldonium, which was added to the World Anti-Doping Agency’s list of banned substances at the start of 2016. She had been legally taking the drug for 10 years. Nike says it will be on the sidelines while the investigation continues. Separately, automaker Porsche also said it has suspended its sponsorship deal with Sharapova.
• ComScore stung by accounting worries
ComScore, the company that competes with Nielsen in measuring TV and online audiences, revealed Monday it is looking into “potential accounting matters.” That news sent shares plummeting as much as 35% after the company said it would delay the release of its annual report and suspend plans for a $125 million stock buyback. ComScore says it doesn’t expect to wrap up an internal review of the accounting matters before March 15, which marks the end of a 15-day extension window to file its annual report for 2015 with the U.S. Securities and Exchange Commission. It said it learned of the potential accounting issue last month, just a few days after releasing fourth-quarter results that showed record revenue for the quarter.