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Facebook Apologies, China Moves, Uber and Out: CEO Daily for March 26, 2018

Good morning.

When CEOs speak out on hot-button social issues, how does it affect their companies’ stock prices? That’s the question the Harvard Business Review asked recently, creating this cool interactive graphic to explore.

In some cases—Merck CEO Ken Frazier’s strong rebuke of President Trump’s waffling on the Charlottesville riots, for instance—the stock market response was strong and sustained. In others—Papa John CEO John Schnattner ‘s criticism of the NFL’s handling of national anthem protests—it was clearly negative.

But the bottom line: “Most companies did not see a sustained rise or drop in stock price following their CEO’s public statement” on a controversial issue. Most of the movement, the authors concluded, was associated with “normal economic factors.”

No big surprise there. The surge in CEOs speaking out on social issues isn’t aimed at investors—it’s aimed mostly at employees. Millennials, in particular—who are less likely to be married, less likely to belong to organized religion, and less likely to join outside organizations than previous generations—increasingly look to employers to give their lives purpose, meaning, and a moral anchor.

Separately, new signs of the growing split among tech companies emerged this weekend, as Apple’s Tim Cook called for “well crafted” regulations in light of revelations involving use of Facebook data in the election. And Elon Musk went further, deleting Tesla and SpaceX Facebook accounts. Last month, IBM posted this essay calling for “common sense changes to the balance of regulatory and liability rules governing the data economy.” That leaves Facebook and Google as the odd folks out…although even Zuckerberg now has opened the door to regulation. Facebook apologized over the weekend via full-page newspaper ads.

More news below—not including Stormy Daniels’ 60 Minutes interview last night. We’ll leave coverage of that event to others (for instance, TIME, here.)

Alan Murray
@alansmurray
alan.murray@fortune.com

Top News

Facebook’s Apologies

Facebook took out ads in major Sunday newspapers in the U.S. and U.K. to apologize for its role in the Cambridge Analytica scandal. However, over the weekend it was also hit by fresh outrage over the fact that—as people discovered when they downloaded their Facebook data—the company was for years quietly harvesting users’ call logs on Android phones. Advertisers are now nervous about the once-feted platform. Fortune

China vs Trade War

China is reportedly moving to avert a trade war, by speeding up the finalization of new rules that would let foreign financial groups take majority stakes in Chinese securities companies, and by offering to buy more semiconductors from the U.S. as opposed to South Korea and Taiwan. U.S. President Donald Trump announced $60 billion tariffs against China last week, although those won’t be introduced until 30 days after a list of affected Chinese goods is published. Financial Times

Uber and Out

Uber is pulling out of the Southeast Asian market. As was the case in China and Russia before, it’s merging local operations with the biggest regional rival, in this case Grab. Uber and Grab share a common investor in the shape of Japan’s SoftBank, which seems to be dictating which of its portfolio companies will dominate in which territory. SoftBank earlier this year told Uber to focus on Europe, the U.S., Latin America, and Australia. Fortune

Smurfit Kappa

The Irish packaging giant Smurfit Kappa has rejected a revised bid from U.S. rival International Paper Co. The original bid was €36.46 ($45.22) per share and the sweetened offer €37.54 per share, but Smurfit’s board still said this represented an under-valuation. International Paper hasn’t given up though, saying it wants to engage “quickly” with Smurfit. Bloomberg

Around the Water Cooler

Musk Rocks

Elon Musk’s Boring Company will be, um, boring a lot of rocks out of the ground as it builds its transportation tunnels. So now Musk has announced that the firm will be selling “lifesize LEGO-like interlocking bricks made from tunnelling rock” that people can use to construct buildings and sculptures. He said on Twitter that the bricks would allow two people to “build the outer walls of a small house in a day or so.” Fortune

Allianz Prediction

Allianz CEO Oliver Bate thinks there’s a “more severe” stock market correction on the horizon. Bate told CNBC that valuations are too high, “markets are starting to get jittery and we would expect a more severe correction over the medium to long term.” Allianz is being “very, very careful” at the moment because of these risks, he said. CNBC

GSK Overhaul

The Wall Street Journal has a piece on the changes that GlaxoSmithKline CEO Emma Walmsley has been making at the company. Walmsley has been in place for around a year, but has already replaced nearly half of GSK’s top executive team and has made sweeping changes in its R&D team, while shutting down many of its clinical drug trials in an effort to narrow the company’s portfolio. Experts say it’s an unprecedented turnaround plan in the pharma industry. WSJ

Russia Fire

A Sunday fire in a Siberian shopping center killed at least 64 people, including 11 children, and 16 people are still missing. The fire struck the Winter Cherry mall in the city of Kemerevo. According to reports, the mall’s fire alarm did not sound. The fire apparently started in one of the cinema halls—the roof collapsed in two theaters.The mall was converted from a candy factory around five years ago. Telegraph

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