AT&T vs. Trump, Walmart Shares Slump, New Gap CEO: CEO Daily for February 21, 2018

You have to admire AT&T’s chutzpah. The company argued for court access to Trump White House communications with the Justice Department in order to determine whether the president improperly influenced Justice’s decision to challenge the AT&T takeover of Time Warner. Yesterday, U.S. District Judge Richard Leon denied the request.

But let’s be honest: You don’t need discovery to divine the president’s views of the merger. He’s tweeted them to the world several times. As for his hatred of CNN — well, that’s near daily Trump fare. The ultimate irony is that the president’s bashing of CNN may ultimately make it impossible for AT&T to change the network and give Trump’s nemesis, Jeff Zucker, indefinite job security. If AT&T succeeds, it will be forced to leave Zucker and his all-Trump-all-the-time programming approach in place, just to prove it is not bowing to the president. And if AT&T fails…well, Trump may get some psychic pleasure, but CNN will persevere.

AT&T’s main argument, of course, is that there is no good reason to block the merger, because the two companies don’t compete directly, and because the Justice Department doesn’t have much of a recent record of challenging such “vertical” mergers. But Judge Leon took a different view. Challenging a vertical merger “may, indeed, be a rare breed of horse,” he wrote, “but it is not exactly a unicorn!”

Strike one for AT&T. More news below.

Alan Murray

Top News

Still Playing Catch-Up

Walmart had a particularly terrible Tuesday as its shares plunged after it unnerved investors with a sharper-than-expected decline in online sales growth. Some of the drop was expected since it's been a year since Walmart's $3 billion acquisition of, but additional underperformance due to operational problems revealed just how much more work Walmart has to do if it truly wants to rival AmazonFortune

Shopping for a New CEO

The head of Gap Inc.'s namesake brand is leaving after failing to improve operations and profit growth to the liking of the clothing retailer’s chief executive Art Peck. The company said on Tuesday that Jeff Kirwan, president and CEO of The Gap clothing stores, is out after managing only one quarter of comparable sales growth in 12 quarters on the job. Fortune

Cuban Plays Defense

Sports Illustrated on Tuesday reported sexual misconduct allegations against two former employees of the Dallas Mavericks. Current and former employees describe the NBA team's workplace as misogynistic and liken it to Animal House. The Mavericks' high-profile owner Mark Cuban told SI that the claims are "all new" to him. He's since fired his HR head and has vowed to clean up the team's act. "I’m embarrassed, to be honest with you, that it happened under my ownership, and it needs to be fixed. Period. End of story," he said. Sports Illustrated

Bump Stocks Soar

After President Donald Trump hinted at a possible ban on bump stocks, prices of the devices that increase the rate of fire of semi-automatic guns skyrocketed. The White House had been under pressure to take action on this front since bump stocks were used in the Las Vegas mass shooting. Trump said he'd asked Attorney General Jeff Sessions to propose the "critical regulation." The Gun Owners of America organization, meanwhile, characterized Trump's action as a disavowal of his campaign rhetoric. Bloomberg

Around the Water Cooler

Big-Name Backers

Celebrities are lining up to support the March For Our Lives organization founded by Parkland, Fla., high schoolers who survived last week's mass shooting and are organizing a pro-gun control march in Washington, D.C. next month. So far, Oprah Winfrey, George and Amal Clooney, and Steven Spielberg and Kate Capshaw are among those who've given. Fortune

Uncle Sam's Secret Windfall

The federal government has seized at least $1 billion worth of Bitcoin after busts in criminal cases. In a new feature out this morning, Fortune's Jeff John Roberts investigates where it all ends up. Fortune

Watch This Space

Just how big is Apple's watch business? Last quarter, the company—rather astonishingly—sold more watches than Rolex, Omega, and Swatch combined. Fortune

Vonn Voyage

American Lindsey Vonn completed what was likely her last downhill event at the Olympics on Wednesday, but—as The Washington Post reports—the outcome doesn't begin to tell the story of "the greatest female ski racer of all time." Washington Post

This edition of CEO Daily was edited by Claire Zillman. Find previous editions here, and sign up for other Fortune newsletters here.

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