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CEO Daily: Friday, November 13

My colleague Dan Primack is on the Unicorn death watch these days, writing how Fidelity Investments has marked down its holdings in some privately-held, billion-dollar-plus startups like Snapchat, Zenefits, Dropbox and MongoDB, You can read his latest story here.

 

Some tempering of sky-high unicorn valuations was to be expected, especially since the last round of investors added special covenants to protect themselves, making the reported valuations a fiction. But it’s hard to compare what’s happening today with the bursting of the tech bubble in 2000, when small investors pored money into tech IPOs of companies with no revenues and only the hint of a business model.

 

I sat down yesterday with DocuSign CEO Keith Krach at EY’s Strategic Growth Forum in Palm Springs. His digital document signing company, valued at $3 billion, offers a triple play to its partners in real estate, finance and other industries. By partnering with DocuSign, those companies can sharply reduce the cost and time it takes to get papers signed; they automatically capture the signing digitally for compliance, control and other data applications; and they create a better experience for customers.

 

I asked Krach who his competition is, and he answered: “there are two of them – pen and paper.” As for other competitors, he said barriers to entry at this point are almost prohibitive. I asked if he worried about newer authentication technologies displacing DocuSign and he told me about a proof-of-concept the company designed with Visa that would allow someone to complete documents for a car lease on the screen of the car’s dashboard, using block chain technology.

 

“This is a huge market, it is absolutely inevitable that it will go digital, and the value proposition is clear,” says Krach. You can quibble with the $3 billion valuation, but there’s a real business here. That’s why investor Marc Andreessen told the Fortune Global Forum last week that while some unicorns may disappear, as a group they are still undervalued.

 

More news below. And take time today to read Roger Parloff’s extraordinary story about the monstrous legal battle over the U.S. government’s nationalization of Fannie Mae and Freddie Mac.

 

Alan Murray
@alansmurray
alan.murray@fortune.com

Top News

Fossil buys fitness tracker maker

The explosion of Apple Watch and other wearable devices like the Fitbit have presented a real challenge for wrist real estate that could greatly threaten the traditional watch market. With that in mind, it makes sense that watch maker Fossil would drop $260 million to buy Misfit, which makes wearable watches and Internet-connected devices. Misfit is probably best known for Shine, a fitness tracker that competes with Fitbit and Jawbone’s UP band. The deal isn’t exactly a surprise – Fossil CEO Kosta Kartsotis has said that the more successful devices in the future would be “smarter watches.” Fortune

Retail industry’s latest victim

A day after investors were surprised by a dreadful earnings report from Macy’s, luxury retailer Nordstrom’s shares took a dive after it reported same-store sales dropped at both the full-service department stores and its Rack outlets. The declines stunned Wall Street, especially because Nordstrom has consistently outperformed its peers in terms of sales growth. Because of the poor results for the third quarter, Nordstrom also lowered its comparable sales forecast for the year. Fortune

Mylan set to lose Perrigo bid

Mylan is expected to lose its $26 billion hostile bid for Perrigo, the Wall Street Journal has reported, with only a minority of Perrigo shareholders tendering their stock into Mylan’s proposal as of late Thursday night. To win the deal, Mylan needed at least 50% approval to take control of its smaller rival, which it had been pursuing since April. The cash-and-stock offer for Perrigo, which makes store-brand versions of cold and allergy medicines, expires Friday morning at 8 a.m. Wall Street Journal (subscription required)

Weakened China hurts Cisco

Although Cisco reported a 4% increase in revenue for the latest quarter, the networking titan slashed its second quarter guidance, as CEO Chuck Robbins raised concerns about unfavorable exchange rates felt across the Asia-Pacific region. Cisco has invested heavily in China to grow its business, though it has faced hurdles as Chinese officials have worried that U.S.-made networking technology could be a national security risk. Fortune

Roche to cut jobs in restructuring

Roche is planning to exit four manufacturing sites and cut jobs in a restructuring effort that will cost the drugmaker $1.6 billion over the next five years. The company said about 1,200 employee positions will be affected by the moves, which includes plans to look to divest sites in Ireland, Spain, Italy and the U.S. to limit job losses. Roche also said that new drugs based on small molecules will be produced in smaller quantities. Bloomberg

Tribune Publishing approves buyouts

The publisher of the Chicago Tribune and the Los Angeles Times has approved buyouts for 7% of the company’s 7,000 eligible employees. The payouts will result in a fourth-quarter charge of an estimated $47 million. The buyouts come as newspapers and other print publications have seen a steep drop in subscriber count and advertising revenue, while revenue from online advertising hasn’t grown fast enough to fill the gap. As such, many print publications have cut jobs to run leaner operations. Fortune

Around the Water Cooler

Comcast, Time Warner bet on VR

When media companies like Comcast and Time Warner invest in new, possibly disruptive technologies, it can certainly raise some eyebrows. Both cable giants were investors in a $30.5 million funding round for NextVR, which has already scored some high-profile wins by streaming the first Democratic debate and a NBA game in virtual reality. Why is this technology so alluring to cable companies? Experts say that VR can add an immersive aspect to video production, perhaps another incentive to encourage TV views to keep their pricy cable packages? It still remains to be seen which companies can best position themselves for a technology that could generate billions in revenue but is far from being a mass market. Fortune

Disney CEO wants the NFL in L.A.

Walt Disney CEO Bob Iger has teamed up with the National Football League’s Oakland Raiders and San Diego Charges to try to build the teams a stadium in a Los Angeles suburb. Iger has been named non-executive chairman of Carson Holdings, a venture between the two teams that is working with the city of Carson, Calif., on the stadium project. Iger could bring some clout to the project, especially his ability to attract major sponsors for the stadium project. Reuters

5 things to know today

Growth Gloom and J.C. Penney Earnings — 5 Things to Know Today. Today’s story can be found here.

Fortune Live

Tune in to Fortune Live today and every Friday at 3 pm ET at Fortune.com. Today’s show features an interview with Sebastian Thrun, CEO and co-founder of Udacity. There is also a segment on plans by antique experts the Keno brothers to launch their own premiere auction house startup in New York City.