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Amazon-MGM on pause?
Also in this edition: Jet set for takeoff, An eye-watering IPO, Kuaishou catches up to ByteDance.
Good morning! Microsoft has become the third company in the world to have entered the $2 trillion market cap club. Saudi Aramco and Apple are the other two. Only a handful of companies have crossed the Big T. Amazon, Alphabet, and PetroChina are the others in the $1 trillion club.
Anyway, on to the day’s stories.
The Covid-19 delta variant is now the most dangerous.
No more globetrotting for AV Birla group.
Pandemic helped the rich quickly get richer.
Amazon-MGM Awaits The Lina Khan Test
Barely a week after her confirmation as the Federal Trade Commission’s chairwoman, Lina Khan has a new task at hand: probing last month’s proposed $8 billion acquisition of Hollywood studio MGM by Amazon. It is particularly interesting because of Khan’s reputation in American antitrust circles as a fierce Amazon critic.
The paradox: Khan had authored a paper titled “Amazon’s Antitrust Paradox” in January 2017, an antitrust blueprint of sorts, which concluded that Amazon’s business strategies and market dominance posed “anti-competitive” concerns. Khan also served as a counsel to the House antitrust subcommittee, which recently introduced five legislations, focused on regulating Big Tech. One of those bills, introduced by Seattle congresswoman (also, Amazon’s HQ) Pramila Jayapal, could force the e-commerce giant to sell its logistics arm.
Lobbying: Facing antitrust heat, big technology companies have ramped up lobbying efforts in DC. A New York Times report stated that Apple CEO Tim Cook asked House Speaker Nancy Pelosi to delay the introduction of these bills while warning that they could hurt small businesses and stifle innovation. The efforts are said to be making little headway.
Delta Ravages The World
White House chief medical advisor Anthony Fauci has called the Delta variant of the Coronavirus the “greatest threat” to the US’s attempt to eliminate Covid-19. It now accounts for 20% of new cases in that country.
Fastest and fittest: WHO officials had warned earlier this week that the highly contagious variant was the “fastest and fittest coronavirus strain” yet, and it would “pick off” the most vulnerable people, especially in places with low vaccination rates. It had said Delta, which was first found in India, had become the dominant variant worldwide, spreading to 92 countries.
In Europe and Africa: It is sweeping through Europe beginning with Portugal's capital Lisbon and the UK, threatening to derail the European economic recovery. The virus is raging in Africa too, weekly cases jumping 44% and deaths rising 20% over the last week.
Vax no good: Meanwhile, one news report said that Seychelles, Chile, Bahrain, and Mongolia, which relied on Chinese vaccines, are seeing a surge in cases.
Aditya Birla Group To Stay At Home
Kumar Mangalam Birla, chairman of the $46-billion couture-to-chemicals conglomerate Aditya Birla Group, has said that the group will not buy companies that have globally diversified supply chains.
Rough weather: The billionaire tycoon, who grew his business empire acquiring more than 40 companies over 25 years, pointed to protectionism as a key risk that prompted the strategic reset. Growing protectionism and the pandemic have injected significant uncertainty into businesses that require reliable movement of raw materials, finished products, and people. The shipping and transport industry is also navigating choppy waters.
Going local: “We wouldn’t look at a company or a business where you source in one corner of the world and sell in another…,” Birla said, even though 50% of the group’s revenues currently flow from overseas operations spanning 36 countries. Birla now aims to consolidate by hiring locally and catering to regional demand. “We’re a global company rooted in local economics.”
Globalisation once helped companies reduce costs and diversify risks. But China’s rise as a global manufacturing hub for everything from safety pins to cars has altered the global supply chain dynamics. Even developed economies such as the US and the European Union are turning inward to mitigate this weakness in capacity. Another consideration for the Birla group could have been the difficulty in managing the external environment far from home turf. The Tata Group-owned Jaguar Land Rover, for instance, has had supply chain disruptions at its UK factories due to strikes. A withering tussle with green activists has delayed the Adani Group’s Carmichael mine project in Australia. Birla is taking no chances and staying at home.
The Next Big Crime: Ecocide
Hold your horses. The international criminal court (ICC) is considering its fifth crime to prosecute — ones against the environment. For the first time since the 1940s, the ICC is looking to add “ecocide” as a new offence on its list.
Severe consequences: This is a historic moment as global legal experts get together to define what ecocide could be. For now, the draft bill proposes that unlawful acts that could cause enduring damage to the environment should be investigated and treated at par with war crimes, crimes against humanity, genocide and the crime of aggression. This is a move to indict non-anthropocentric criminal activities that will invariably affect humanity as a whole in the long haul.
Creating consciousness: An ecocide law is central to the growing climate consciousness as the world grapples with a severe environmental crisis. Apart from water shortage and ecological damage, a new chilling report from the UN indicates that if temperatures rise by 1.5 degrees Celsius, then 14% of the global population will have to reckon with severe heat waves at least once every five years. Such a law will hopefully force governments and corporations to pay closer attention to how they handle sensitive environmental issues.
Pandemic Is Good For Business
Even as the pandemic slowed down economic activity, the rich got richer. In nations including the US, China, Brazil and India, according to a Credit Suisse Group AG report, the richest 1% saw a boost in their wealth because of the interest rate cuts following the Covid-19 outbreak.
The world’s 500 richest added $1.8 trillion to their combined net worth and the global household wealth added up to $418 trillion in 2020. Brazil’s rich saw a 2.7% rise in their share, totalling ~50% of the nation’s wealth. This is to say, the pandemic has fueled economic disparities. There have been consistent calls for “wealth tax” and it may finally be happening.
US President Biden is looking to increase capital gains taxes, and the UK has called for a one-off wealth levy to raise ~$361 billion. Other nations, too, have been working on ways of raising funds from measures targeting the rich.
What Else Made The Signal?
Jet begins to taxi: The National Company Law Tribunal has cleared a plan by Kalrock Capital and Murari Lal Jalan to revive the grounded Jet Airways. It still needs to get several regulatory approvals and may have to acquire slots at airports all over again.
Paid Spaces: Twitter is going to test-run its Super Follows and Ticketed Spaces features with a small user base in the US. These features will allow people to charge for exclusive content.
City riders: Honda Motorcycle & Scooters believes India’s urban buyers would drive the post-pandemic growth, indicating rural recovery could take longer. Last year, it was the rural markets that propped up two-wheeler sales.
Eye-PO: US eyewear company (and OG Lenskart) Warby Parker has filed for a stock market listing. Last year, it raised $120 million at a $3 billion valuation. Once listed, it will join Japanese eyewear company JINS, which trades on the Tokyo Stock Exchange.
Buffett splits from Gates: Billionaire investor Warren Buffett has resigned from the board of the Bill and Melinda Gates Foundation. A long-time friend of Bill Gates, Buffett quit without giving a reason.
Billion-dollar club: China’s second-largest short video company Kuaishou now has 1 billion monthly active users, matching rivals ByteDance and Tencent. These numbers also include Kuaishou's international apps like Kwai and SnackVideo.
EA bags Playdemic: Electronic Arts has bought mobile game studio Playdemic for $1.4 billion. The Europe-based studio, a Warner Brothers unit, is the developer of popular games such as Golf Clash.
Get out: Russia fired warning shots towards a British warship that trespassed in its waters near the Crimea peninsula in the Black Sea, Moscow alleged.
Unsolicited gifts from Amazon: A woman in New York received over 150 boxes from Amazon containing mask brackets. The twist? She never ordered them. This little goof up from the e-commerce giant tickled her philanthropic side as she used them to create DIY mask kits for the local children's hospital.
Panda attraction: You know what’s good for business? Pandas. Two restaurants in Tokyo saw their shares climb after a nearby zoo announced that one of their black-and-white bears had given birth to twins.
What’s in the sub? If you order a tuna sandwich at Subway, there’s a possibility that it could be… tuna-less. An NYT-commissioned lab test found no tuna DNA in over 60 inches worth of tuna sandwiches from three stores in Los Angeles.