I’m in Rome this morning, for reasons unrelated to Bernie Sanders’. But I will be at the Vatican later today and will keep an eye out for the Senator chatting with the Pontiff. My guess: it won’t happen.
In the meantime, some odds and ends.
At yesterday’s CED panel on corporate short-termism, I asked State Street Global Advisers CEO Ron O’Hanley whether activist investors were a good or a bad influence on the long-term behavior of companies. His answer: it depends. Some activists help set a company on a better long-term course; others simply strip earnings for short-term gain. I followed up by asking whether, on balance, there were more bad activists, more good ones, or roughly as many good as bad. His answer: roughly as many good as bad.
He and his fellow panelists did agree that corporate incentives are skewed to the short-term. But they were not ready to go as far as Hillary Clinton, who in a recent interview with Henry Blodget said “quarterly capitalism” is “one of the biggest challenges facing our economy.” The Blodget-Clinton interview is worth watching; you can find it here.
Also this morning: China reported a better-than-expected 6.7% in the first quarter. If you believe those numbers, they suggest the Chinese economy is regaining its footing.
And Apple and the FBI will be back before Congress next week, to continue their bitter battle over encrypted devices. It’s clear this one is not over.
More news below.
• Wall Street’s deal making suffering a slowdown
Here’s a stat sure to scare Wall Street’s banks: Almost $340 billion worth of mergers in the U.S. have been withdrawn in 2016, while only $282 billion worth of newly signed deals were announced, according to data compiled by Dealogic. The cancellations are skewed toward megadeals, defined as those worth $10 billion or more, while smaller deals remain active and successful. The divergence in the deal market comes largely as a result of a regulatory clampdown. And advisers say because it is an election year, politically unpopular deals may have to wait. New York Times (subscription required)
• Verizon CEO makes pitch to striking workers
Verizon CEO Lowell McAdam took off his tie on Thursday and headed out to the picket lines where thousands of his own employees are on strike. At a picket line outside a Verizon network facility and garage on West 47th Street in Manhattan, McAdam engaged strikers in a discussion of the company’s offer versus the positions of their unions, the Communications Workers of America and the International Brotherhood of Electrical Workers. With some 40,000 workers off the job from Massachusetts to Virginia, McAdam also surveyed efforts for filling in for the striking workers, who mainly install and service traditional, wired telephone lines as well as the company’s newer fiber-optic FiOS service. Fortune
• Sumner Redstone won’t testify at trial
Media mogul Sumner Redstone won’t give a deposition nor testify in a Los Angeles trial next month regarding his mental competency. On Thursday, a California judge upheld his December ruling that Redstone, the 92-year-old controlling shareholder of Viacom and CBS, wouldn’t be deposed. The judge also said he wouldn’t accept testimony from Mr. Redstone in the form of a declaration. A trial in May is expected to weigh a lawsuit brought on by Redstone’s former Manuela Herzer, who is suing to be reinstated as his health-care agent. Herzer has said that Redstone lacked mental capacity when he fired her and had her thrown out of his Beverly Hills mansion in October. Wall Street Journal (subscription required)
• Apple wants to change the App Store
Apple has reportedly constructed a secret team to explore changes to the App Store, including a new strategy for charging developers to have their apps more prominently displayed. Bloomberg reports that among the ideas being pursued include a paid search, a Google-like model in which companies would pay to have their app shown at the top of search results based on what a customer is seeking. Paid search, which Google turned into a multibillion-dollar business, would give Apple a new way to make money from the App Store. About 100 employees are working on the project, including many engineers from Apple’s advertising group iAd that’s being scaled back. Bloomberg
• Valeant weighs asset sales
Valeant Pharmaceuticals has brought in investment banks to review its options amid interest from buyout firms and other companies in a number of its businesses, Reuters reports, citing people familiar with the matter. While Valeant has not decided to sell any major business thus far, the move represents the clearest indication yet that the Canadian drug maker needs to divest assets to bolster its finances. Both Valeant Chief Executive Officer Michael Pearson and board member William Ackman, who is also the CEO of activist hedge fund Pershing Square, have said that the company was considering selling “noncore assets” to help trim its $30 billion debt pile. Reuters
Around the Water Cooler
• Clinton, Sanders clash in New York debate
Ahead of next week’s critical New York Democratic primary, Hillary Clinton and Bernie Sanders came together for the first time in more than a month to debate issues including corporate influence, gun control, and energy. The Brooklyn debate was testier than previous affairs, as both candidates continued the race’s recent trend of more personal and nasty attacks. The role of big business in the American economy dominated the earliest portion of the debate, with Goldman Sachs, Verizon and General Electric all referenced at various points. Sanders called on Clinton to release transcripts of her speeches, while Clinton called on her opponent to release his tax returns. Fortune
• ‘Uber for kids’ is shutting down
Shuddle, a Bay Area startup that ferried children to school and after-school activities, is shutting down. Founded in 2014, the startup is ceasing operations this week after failing to raise more funding to support itself. “We worked hard with our existing investors to find new financial resources that would help us continue to grow. But, we could not raise the funding required to continue operations,” the company said. Shuddle, often referred to an “Uber for kids,” raised $12.2 million in venture capital. It is just the latest so-called “on-demand” service, once a hot niche in Silicon Valley, to shut its doors. Fortune
• Delta abolishes a hated fee
Delta Air Lines has abruptly stopped charging extra for booking seats offline. “It is much simpler for our customers to not have to worry if they will pay a fee for ticketing with Delta,” Glen Hauenstein, Delta’s incoming president, said. Phone reservation fees are among the most least popular charges in the travel industry. But the Delta announcement came as a surprise, given that the airline industry lately has based its business model on ancillary fees like these. Although Delta would not disclose how much money it collected from these particular reservation fees, it’s no secret that more airline reservations are being made online than by phone or in person. Fortune