Skip to Content

“Worse Than Tulip Bulbs” — CEO Daily, Wednesday 13th September

Good morning.

J.P. Morgan CEO Jamie Dimon yesterday said the Bitcoin craze, which has caused the cryptocurrency to soar some 300% this year, is a ‘fraud.’ “I’m not saying go short,” he said. “Bitcoin can go to $100,000 a bitcoin before it goes down.” But in the end, “it’s not a real thing.”

“It’s worse than tulip bulbs. It won’t end well.”

On the other side of the world, where Bitcoin and other digital currencies have been outlawed, Alibaba CEO Jack Ma did some serious Michael Jackson moves at a lavish party celebrating his company’s 18th anniversary in Hangzhou. Worth watching the video, here.

And it’s very unlikely Jim Hackett, the cerebral new CEO of Ford, will ever be seen in a Michael Jackson outfit. But he does have some interesting thoughts about the future of the auto industry. You can read Adam Lashinsky’s profile of him, which appears in the new issue of Fortune magazine, online here.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

Editor’s Note: In Monday’s newsletter, we referred to Paycom as a provider of financial applications. It is rather a provider of human capital management solutions, such as payroll and HR-related applications.

Top News

Apple Wows Everyone Except Wall Street

Apple’s eagerly-awaited and leakier-than-usual product launch delivered a $999 top-of-the-range model X, along with enhanced Augmented Reality capabilities, wireless charging, better camera, stronger screens and, not least, the first screen without a home button. It also updated its smartwatch product with cellular connectivity and a tool to measure heart rate. There were few pulses racing on Wall Street, though, after so many leaks: the company’s stock ended down 0.4% on the highest daily volume in a month. Tough crowd, New York. Fortune

Toshiba Twists, Western Shouts

Defying expectations, Toshiba’s board decided to step up talks with a consortium led by Bain Capital and South Korean chipmaker SK Hynix for the $18 billion sale of its chip unit. Western Digital said it was surprised and disappointed but remained confident of its pre-emptive rights at their key joint venture that makes NAND chips. Western is likely to seek an injunction blocking the sale in the event that Toshiba chooses another buyer. Reuters

 

NTSB Faults Tesla’s Autopilot, Partly

National Transportation Safety Board chairman Robert Sumwalt said “operational limitations” in the Tesla Model S played a “major role” in a May 2016 crash that killed a driver using the vehicle’s semi-autonomous ‘Autopilot’ system. The NTSB said Tesla could have taken further steps to prevent the system’s misuse, but faulted the driver for not paying attention and for “overreliance on vehicle automation.” Fortune

Governance Scandals Return to Haunt Fox

The U.K. threw another wrench in 21st Century Fox’s $15 billion bid to take full control of Sky Plc. Culture Secretary Karen Bradley referenced fears about the “Foxification” of Sky’s news channel, and intimated that the string of sexual harassment scandals had undermined broader confidence in its fitness to hold a broadcasting license. The bid is key to Fox wringing the maximum value out of its European franchises and defend its place in a fast-changing European media landscape. The U.K.’s antitrust authority will now have to conduct a full review of the proposed deal. Fortune

Around the Water Cooler

EasyJet Pushes Into Long-Haul

EasyJet, Europe’s second-biggest airline by passenger numbers, announced an alliance with Norwegian Air Shuttle and Canada-based WestJet, two discount carriers plowing the transatlantic route. It will significantly increase the connections available to all three airlines and likely keep the pressure on established carriers’ margins. Whether it will be enough to rescue the struggling business model of Norwegian, whose share have lost nearly half their value in the last year, is open to question, but it pushed them up 4.2% in early European trading. Elsewhere, pilots at the insolvent Air Berlin continued to sabotage negotiations to sell of its viable parts by sending in sick notes en masse. The pilots fear ending up out of a job, given that interested buyers all acknowledge the need to cut overall capacity. WSJ, subscription required

Going, Going, Gone…

Vikram Pandit, the former head of Citigroup, said that 30% of banking jobs could disappear in the next five years. That’s twice as fast as Citigroup itself reckons today. Pandit’s warning follows equally ominous words form Deutsche Bank’s John Cryan, who last week also warned that many current jobs in banking could be automated. Fortune

Amazon Whole Foods

A flash-in-the-pan or a harbinger of the much-hyped synergy effects? Only time (and the competition’s response) will tell, but Amazon’s decision to slash prices at Whole Foods generated a huge 25% rise in footfall at its stores last month. The acquisition also helped Amazon’s traditional site: all of the 2,000 Whole Foods private-label products on the site were sold out. Fortune

 

Their Own Worst Enemy

Jamie Dimon wasn’t the only one throwing shade at digital currencies yesterday, although he was almost certainly the one most responsible for pushing it back below $4,000. The U.K’s Financial Conduct Authority joined the list of regulators warning the public about the risks of initial coin offerings, and I2 Investments, an alternative investment fund specializing in Bitcoin, told clients it would shut after losing nearly all their money. Virtual currency fans still argue that a trashing from a Wall Street titan was the greatest badge of honor possible, and that it is emblematic of a more virtuous kind of finance. Virtue certainly seems like being its own reward in this case.   Coindesk

Summaries by Geoffrey Smith; geoffrey.smith@fortune.com

@geoffreytsmith