The Week in Business: This Is Getting Awkward
The Week in Business: This Is Getting Awkward
Welcome to the weirdest Thanksgiving week ever. Whether you’re staying home — an excellent choice — or taking your chances by traveling, be safe, and keep your gathering small. (Remember, that means more pie for you.) — Charlotte Cowles
What’s Up? (Nov. 15-21)
Recovery on the Rocks
Despite more promising vaccine news, the economy’s recovery is looking shakier by the day. New claims for unemployment rose last week for the first time in over a month, and coronavirus outbreaks continue to shatter records and prompt new lockdowns. Despite these alarming developments, the Trump administration is actually ending some current pandemic relief programs. Treasury Secretary Steven Mnuchin asked the Federal Reserve to return unused funds earmarked for virus-related emergency loans by the end of the year. (The Fed said that it “would prefer” that the funding stay in place to support “our still-strained and vulnerable economy.”) In reclaiming the money, Mr. Mnuchin makes it harder for President-elect Joseph R. Biden Jr.’s incoming administration to restart the Fed’s aid efforts next year.
Speaking of 2021 …
In his first major policy speech since he won the election, Mr. Biden called on Congress to pass a large stimulus package immediately, even as lawmakers remain hopelessly deadlocked. He also met with business and union leaders, including the chief executives of General Motors, Microsoft, Target and Gap, to hear their concerns about safely reopening workplaces. But no matter what he does now, Mr. Biden will face an uphill battle once he takes office, especially if Mr. Trump continues to hobble the transition process. The president-elect will be contending with a dangerous phase of the virus, a floundering economy and a population that’s tired of being stuck at home. He may also be hamstrung by a divided Congress, depending on the outcome of two runoff elections in Georgia in January.
A Bruised Apple
Have you ever suspected that your iPhone was getting slower? You aren’t the only one: Apple paid $113 million to end an investigation into whether it purposely (and secretly) “throttled” the speed of its older phones to prolong their battery lives. Customers also accused the company of slowing down older iPhones after new models came out, ostensibly to encourage people to upgrade. As part of the settlement, Apple said it would be more transparent about how it manages battery life on its devices but did not admit any wrongdoing. The company previously agreed to pay up to $500 million to customers who “experienced diminished performance” on their iPhones in a separate class-action suit.
What’s Next? (Nov. 22-28)
Boeing’s Long Layover
It’s been more than 20 months since two deadly plane crashes led the Federal Aviation Administration to ground Boeing’s 737 Max jet and conduct a huge investigation into the plane maker’s safety practices. Now the F.A.A. has approved Boeing’s next steps to get the planes flying again. But don’t expect to see the 737 Max in the sky anytime soon. In addition to retraining pilots to use its upgraded software, Boeing has to regain the trust of the airlines that bought its aircraft and the passengers who fly on them (which aren’t many these days, given the pandemic’s blow to the travel industry). The 737 Max disaster has cost the company billions and tarnished its reputation as a leader in American manufacturing.
Airbnb Checks In
Airbnb long planned to go public in 2020, but the pandemic threw a wrench in its timeline. Now it’s rushing to finish the process next month, despite taking steep losses in revenue earlier this year. Why the hurry? Airbnb compensated many of its early workers with stock options, and a large chunk of that equity is set to expire next spring. To avoid making those long-term employees angry (and much poorer than they planned to be), Airbnb must stick to its deadline. The paperwork for its initial public offering, filed this past Monday, showed that the company turned a profit last quarter after making harsh cuts. It plans to raise as much as $3 billion in its I.P.O.
Early Christmas for Elon Musk
Tesla will become the largest-ever company added to the S&P 500 when it joins on Dec. 21. To qualify for the index, a company must be profitable for four straight quarters — which Tesla hadn’t accomplished until this year. It’s unusual for a company to be as valuable as Tesla when it earns S&P status, and its inclusion has already raised its stock price even further. Investors often scramble to buy shares of a company when it’s added to the index, because many investments are intended to reflect the index’s makeup exactly.
Amazon delivers drugs now, too: The e-commerce giant rolled out an online pharmacy that will bring your medication or prescription refills straight to your doorstep in a few days. Speaking of speed, the world’s most expensive racing pigeon sold for a record 1.6 million euros, about $1.9 million, after a bidding war between two Chinese buyers at a Belgian auction. And the digital media company BuzzFeed is buying the news website HuffPost from Verizon Media to better compete in an increasingly crowded field.