The daily business briefing: April 19, 2019
Pinterest and Zoom shares jump after IPOs, Hudson News' chief agrees to buy National Enquirer for $100 million, and more
Pinterest, Zoom shares soar after IPOs
Pinterest shares jumped by 25 percent above their initial public offering price of $19 on Thursday, closing at $23.75 on the stock's first day of trading. The IPO price valued the digital pin board startup at more than $12 billion. Pinterest's IPO demonstrated strong demand for so-called unicorns, or startups valued at more than $1 billion. Another unicorn, video conferencing company Zoom, also held its IPO on Thursday. Zoom shares shot up by 80 percent in early trading and ended the day up 72 percent. Zoom was valued at about $1 billion. Unlike Pinterest and ride-hailing company Lyft, which recently had a bumpy IPO, Zoom is profitable. U.S. markets are closed Friday in observance of Good Friday. Normal trading resumes Monday.
Report: Trump's NAFTA replacement would give economy slight boost
President Trump's new North America trade deal would give the U.S. economy a modest 0.35 percent boost, the International Trade Commission said Thursday. The independent federal agency said Trump's U.S.-Mexico-Canada agreement would add 176,000 jobs six years after taking effect, a slight uptick in a job market of almost 151 million people. The analysis, which is required by law, comes ahead of what is expected to be intense congressional debate on the regional deal Trump wants to replace the 25-year-old North American Free Trade Agreement, which dismantled most trade barriers between the three countries and resulted in a surge in regional trade. Trump has called NAFTA a disaster that encouraged American companies to relocate in Mexico, where wages are lower.
Hudson News chief buying National Enquirer
Hudson News CEO James Cohen has reached a deal to buy the National Enquirer, the tabloid's publisher, American Media Inc., announced Thursday. The Washington Post reported that Cohen would pay $100 million for the Enquirer and sister publications the Globe and the National Examiner. American Media's principal owner, the hedge fund Chatham Asset Management, pressured publisher David Pecker, a longtime friend of President Trump, to jettison the money-losing Enquirer after it was accused of trying to blackmail Amazon founder and Washington Post owner Jeff Bezos and burying the story of an alleged mistress of Trump, former Playboy model Karen McDougal. As part of a non-prosecution agreement with federal investigators, AMI admitted making hush money payments to McDougal to "influence the election" in 2016.
Sears sues former chair Eddie Lampert
Sears Holdings Corp is suing longtime former Chairman Eddie Lampert and his hedge fund ESL Investments, saying they "looted" the company and drove it into bankruptcy. The lawsuit was made public on Thursday, filed on behalf of Sears creditors by the restructuring team handling Sears' bankruptcy. The complaint says Lampert, who bought Sears' remaining assets for $5.2 billion in February, sold the iconic retailer's core assets with no plan to turn around the company, and demands the return of "billions of dollars of value looted from Sears." The lawsuit also names others, including Seritage Growth Properties, which took over 266 of Sears' best stores, and Treasury Secretary Steven Mnuchin, a Yale roommate of Lampert's and former director at Sears and ESL.
Facebook exposed millions more passwords than initially reported
Facebook stored the passwords of "millions of Instagram users" in plain text when they should have been encrypted, the social media company acknowledged Thursday. Last month in a blog post, Facebook said the issue had potentially affected "tens of thousands" of users. Facebook, which owns Instagram, said the passwords were stored in an unencrypted database available to 20,000 Facebook employees. The company updated the blog post to admit the problem was more widespread than previously stated. Earlier Thursday, Facebook said it collected email contacts from 1.5 million users who signed up after May 2016 and "unintentionally uploaded" them to Facebook, importing the information "to improve Facebook's ad targeting." Facebook said it had no evidence the data was "internally abused or improperly accessed."