The daily business briefing: September 21 , 2020
ByteDance rejects "groundless rumors" about its TikTok deal, a judge blocks Trump order to remove WeChat from app stores, and more
ByteDance stresses that it will still control TikTok Global
China's ByteDance on Monday disputed "groundless rumors" about its partnership with Oracle and Walmart to establish a subsidiary that will run its operations in the United States. ByteDance emphasized that it would control 80 percent of TikTok Global, while Oracle would own 12.5 percent and Walmart 7.5 percent. U.S. supporters of the deal have said that the Oracle and Walmart stakes give Americans a majority stake in TikTok Global because U.S. investors also own 41 percent of ByteDance. The Beijing-based company also rejected President Trump's assertion that it would pay $5 billion to establish an education fund dedicated to teaching U.S. students "the real history of our country." ByteDance said the $5 billion is not a special fee but an estimate of the U.S. taxes it would pay over several years if TikTok Global does well.
Judge blocks Trump order to pull WeChat from app stores
A federal judge in California on Sunday temporarily blocked the Trump administration's effort to ban downloads of Chinese-owned WeChat. The Commerce Department had planned to start forcing Apple and Google to yank WeChat from their app stores by Sunday night due to national security concerns. U.S. Magistrate Judge Laurel Beeler said WeChat users who filed a lawsuit "have shown serious questions going to the merits of the First Amendment claim, the balance of hardships tips in the plaintiffs favor." Beeler said in her order that the Trump administration's plans "burden substantially more speech than is necessary to serve the government's significant interest in national security, especially given the lack of substitute channels for communication." The Justice Department had urged Beeler not to block the ban, and made no immediate comment after the ruling.
Stock futures dive as Supreme Court tensions threaten stimulus deal
U.S. stock index futures plunged early Monday as tensions over filling the late Supreme Court Justice Ruth Bader Ginsburg's seat raised concerns about the likelihood that Congress and the White House will be able to reach a deal on a new coronavirus relief package. Futures for the Dow Jones Industrial Average dropped by 2 percent while those of the S&P 500 and the Nasdaq were down by about 1.7 percent several hours before the opening bell. Big technology shares continued to struggle after outperforming the rest of the market most of the summer and leading the recovery back from the lows hit early in the coronavirus crisis. Facebook, Amazon, Apple, Netflix, Google-parent Alphabet, and Microsoft all fell sharply last week as the S&P 500 tech sector lost 1 percent.
Milton resigns as Nikola executive chair
Trevor Milton, founder of electric-truck startup Nikola Corp., resigned as executive chairman late Sunday following a report last week by Hindenburg Research accusing him of making false claims about the company's technology. Hindenburg, a short-selling firm aiming to profit from a decline in Nikola's share price, called the company "an intricate fraud." The news came just days after Nikola struck a $2 billion deal with General Motors to cooperate on producing battery-powered pickup trucks and hydrogen-powered heavy trucks. Nikola called Hindenburg's allegations "false and defamatory" and said it would file a complaint with the Securities and Exchange Commission. The company's shares gained after the GM deal but lost 40 percent of their value after Hindenburg released its report.
Meat prices return to pre-pandemic levels as shortages end
Prices of some meats, including chicken wings and prime rib, have fallen below pre-pandemic levels as shortages seen during coronavirus lockdowns fade, The Wall Street Journal reported Sunday, citing data from Nielsen. Prices of other meats, including ground beef and pork, have fallen too, returning to pre-COVID-19 levels. Gordon Food Service Inc., a major distributor to restaurants, is selling some beef cuts at half the prices it was getting a few months ago. Meatpacking plant closures in the spring left cattle and hogs to fatten on ranches and farms. As production has caught up, the coronavirus kept many steakhouses closed and reduced exports, driving prices down. That has helped consumers but hurt meatpackers and farmers already battered by the spring coronavirus shutdowns.