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(Some of you were not fans of my essay last Friday about the TikTok affair. Here’s Adam with a very different view. -Aaron)
Let’s pause for a moment and consider the bizarre state of play around us.
For years, the U.S. and its allies have mostly tolerated Chinese abuse of the free-market, globalization rules of engagement. China, which used to be a small, backward economy, blatantly restricted some Western industries—notably media, entertainment, and Internet firms—while actively and lucratively welcoming other sectors, notably agriculture, heavy industry, and even iPhones.
The West complained bitterly, particularly software companies and others whose intellectual property the increasingly affluent Chinese brazenly stole or otherwise extorted. But mostly we went along with China because more companies and people than not were getting filthy rich. Barack Obama began pushing back against the Chinese, and then Donald Trump, in his inelegant, inconsistent fashion, pushed back even harder.
This brings us to the current sad state of affairs, where the leader of the free world, the president of the country most devoted to the rule of law and a values system of fairness, arbitrarily orders a Chinese-owned American company, TikTok, to sell itself. Because he said so. In other words, the U.S., frustrated by Chinese behavior, has stooped to Chinese tactics, dictating without due process how businesses should operate—shamefully and inexplicably asking for a vig in the process.
Respectable Business Roundtable types, purpose be damned, act as if this were normal and say nothing.
More, in this upside down world, the nation’s finest companies, including Microsoft and Walmart, strap on their rubber boots and lower themselves into the muck because, well, that’s where the game is being played according to the governing regime’s derived-from-one-man rules. Just how it works in China.
Reputations of otherwise well-pedigreed people lie in the balance, a common theme in Trump’s America. Ex-Disney stalwart Kevin Mayer had been ridiculed as ByteDance’s American puppet, a reference to the Chinese owner of TikTok and its U.S.-based CEO. Mayer resigned Thursday. Not the job he signed up for. Also, according to a well-placed source I spoke to, Mayer had been cut out of the negotiations to sell the company. A puppet indeed, then, and for a man known for a healthy ego it was time to go.
He at least said enough was enough.
Adam Lashinsky
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Dance while the music still goes on. The electric vehicle bubble on Wall Street is going strong. Exhibit 77: Chinese electric vehicle maker Xpeng Motors raised $1.5 billion in an IPO on Thursday, then saw its share price jump 40%, giving it a value of around $15 billion. Then again, at least Xpeng has $300 million of annual sales.
Don't you hear them play our song. In a surprise turn for Amazon's health efforts, the company announced an app-based health and wellness advice service called Halo that requires its own activity tracking band. Sensors in the $65 band capture heart rate, skin temperature, movements, amount of sleep, and tone of voice. Early users will get six months of the service for free and then have to pay $4 per month.
God knows that we've been trying. It was a busy day of quarterly earnings. The pandemic-fueled need for laptops at home helped Dell and HP just about stave off lower business demand and beat analyst expectations. Overall revenue slumped 3% to $22.7 billion at Dell, as consumer sales rose 18%. Dell shares, previously up 21% in 2020, gained another 4% in pre-market trading on Friday. At HP, overall sales dropped 2% to $14.3 billion, with laptop sales jumping 30%. HP shares, down 9% so far this year, gained 3% pre-market. COVID-crushed cloud software provider Nutanix said its quarterly revenue gained 9% to $328 million, and also announced its CEO was leaving and Bain Capital was investing $750 million. Its stock price, previously down 31%, jumped 14% on Friday morning.
Let's make it a memory. As we mentioned on Monday, Tesla CEO Elon Musk today is unveiling the latest version of his brain-to-computer interface, called Neuralink. <Insert your own "how Elon Musk's brain works" joke here>. And speaking of living in a simulation, the new version of Microsoft Flight Simulator is so realistic that a bunch of users became virtual storm chasers and "flew" through Hurricane Laura.
So dance, it's our way to say goodbye. Former rapper and current podcasting star Joe Budden is leaving Spotify. Budden's show was one of the service's early breakout podcast hits, but apparently the company wouldn't give Budden a $100 million deal like it gave Joe Rogan, its most popular podcaster now.
Tonight's a night we borrow. Eyeglasses startup Warby Parker raised $245 million of venture capital in a deal that values the company at about $3 billion, almost double the value at its last raise two years ago. That's quite a sight.
(Today's headline reference explainer video for all you disco fans out there.)
FOOD FOR THOUGHT
The conference and events business has turned from lucrative to almost non-existent during the pandemic (as Fortune knows first hand). Writer and entrepreneur Rafat Ali, now CEO of Skift, has put on many an event and has a compelling essay on what he is calling the industry's "Napster moment."
Zoom is the Napster of the event industry, the ease with which you can put on good-enough virtual events with a global audience, almost for free, much to the undercutting of the underlying economics of the physical events world. All types of business event — conferences, trade shows, conventions — are in danger of their revenues streams of tickets, sponsorships, memberships, and other types of fees being eroded as the world gets used to digital formats and alternatives emerge to physical networking, matchmaking and other tasks we get out of these events.
Billions of dollars have been sucked out of the industry this year as it is completely shut, and virtual is making up only a tiny fraction of that.
FOR YOUR WEEKEND READING PLEASURE
A few great long reads I came across this week:
Rich Benoit Built a Career by Rebuilding a Tesla. What's Next for Rich Rebuilds? (Car and Driver)
Benoit set out to build a cheap Model S, he ended up with a massive YouTube following, an independent EV repair shop, and a highly visible challenge to Tesla's iron-fisted control over its cars.
The Reigning Queen of TikTok (Marie Claire)
She’s not lip-synching, breakdancing, or completing the #UmbrellaChallenge. She’s not Loren Gray, Addison Easterling, or Charli D’Amelio. But Vanessa Pappas is TikTok’s secret weapon, and, as the social media company’s U.S. general manager, she’s leading the unequivocally popular—and controversial—app into a future unknown.
The Wildest Insurance Fraud Scheme Texas Has Ever Seen (Texas Monthly)
Over a decade, Theodore Robert Wright III destroyed cars, yachts, and planes. That was only the half of it.
My three decades alone, basking in the company of a mountain (Psyche)
When I first moved to the mountain, the mountain men—the Mountain Posse, as this self-styled renegade group called themselves—placed bets on how long I, a 28-year-old single woman from the suburbs, would last. The longest bet, so I’ve been told, was two years.
IN CASE YOU MISSED IT
3 reasons why Walmart is chasing TikTok By Danielle Abril
PwC releases its first-ever diversity report By Ellen McGirt
After years of ‘too much TV,’ the pandemic means there’s now barely enough By Aric Jenkins
Tesla loses ground in Europe despite a local surge in EV purchases post-lockdown By Eamon Barrett
Why the Fed’s huge policy shift on inflation could be rocket fuel for stocks By Bernhard Warner
The future of working will be at home—and at the office By Alan Murray and Katherine Dunn
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
Among the sporting events making a comeback from COVID-19 is cycling. The Tour de France starts on Saturday, with a full compliment of bike racers though significant restrictions on the number of screaming roadside fans. Will defending champ Egan Bernal repeat? What about hometown hero Thibaut Pinot? Pedal on and have a great weekend.
Aaron Pressman
