Tech: Uber sells stake to Japan’s SoftBank
The world’s biggest tech investor has landed a sizable stake in America’s most valuable startup, said Greg Bensinger and Liz Hoffman in The Wall Street Journal. Japan’s SoftBank and a consortium of smaller investors last week finalized an agreement to buy about 18 percent of Uber at a “steep discount.” The deal values the controversy-plagued ride-sharing app at $48 billion, about 30 percent less than its most recent valuation last year. For SoftBank, “the deal is a high-stakes bet on the future of transportation,” as it “owns big stakes” in other ride-sharing companies, including China’s Didi. SoftBank will also infuse $1.25 billion in cash into Uber.
Is SoftBank Uber’s savior? asked Len Sherman in Forbes.com. The tech conglomerate brings “fresh capital” as well as a record of making timely, highly profitable bets on Yahoo, Vodafone, Alibaba, and Sprint. But Uber has lost “more money faster than any enterprise in history.” SoftBank’s billionaire CEO, Masayoshi Son, clearly anticipates that Uber and its competitors can avoid “financially ruinous fare wars” and that the company’s huge investment in autonomous vehicles will pay off. For now, Uber must focus on improving its driver relations and getting “its operations and finances under control.”
Retail: Holiday sales give retailers a bounce
“Despite thousands of store closings this year, Americans supplied a final flurry of spending to give retailers their best holiday season sales since 2011,” said Kevin McCoy and Zlati Meyer in USA Today. Year-end holiday retail sales rose 4.9 percent compared with the same period a year ago, with online shopping jumping 18.1 percent. The results are “a welcome gift” to retailers as consumer confidence improves. Last-minute shopping helped, too: The biggest single spending day in stores, after Black Friday, was Dec. 23.
Mergers: U.S. denies Chinese firm’s MoneyGram bid
“Jack Ma’s charm offensive isn’t working in Washington,” said Tripti Lahiri in Qz.com. The Chinese billionaire this week withdrew his offer to buy Texas-based money transfer company MoneyGram, after U.S. officials rejected the $1.2 billion deal on national security grounds. Ma, the founder of Alibaba, China’s largest e-commerce enterprise, had lobbied Trump officials for months to allow his Ant Financial Services, which is 16 times bigger than PayPal, to buy MoneyGram, pledging to create U.S. jobs. Some lawmakers had expressed concerns that the Chinese government has a 15 percent stake in Ant.
Taxes: Companies announce bonuses after tax bill
Three more big companies this week announced either pay raises or employee bonuses following the passing of the new tax bill, said Matt Egan in CNN.com. American Airlines, Southwest Airlines, and Regions Financial joined firms including Bank of America, AT&T, Comcast, and Wells Fargo in awarding one-time raises or $1,000 bonuses. President Trump has cheered corporations for “showering their workers with bonuses,” describing the moves on Twitter as “Really great!” Eighteen of the firms listed on the S&P 500 have so far distributed bonuses, improved benefits, or raised wages in response to the tax overhaul.
Entertainment: MoviePass hits 1 million subscribers
Cinema subscription service MoviePass has signed 1 million subscribers in just four months, said Brooks Barnes in The New York Times. The startup offers a cut-rate plan allowing participants to visit cinemas 365 days a year for $9.95 per month. The “blistering growth” compares favorably with Netflix, which took more than three years to reach a million subscribers, and Spotify, which needed five months. MoviePass loses money on its $9.95 subscriptions—“a single movie ticket can cost almost twice that amount”—but aims to sell “the trove of data about consumer tastes and habits” it collects to marketers.