Is there a statute of limitations on attending “Davos in the Desert”?
‘Davos in the Desert’ is back
It’s been more than two years since bankers kept their name badges obscured behind ties at a high-profile investment conference in Riyadh, the capital of Saudi Arabia, held weeks after the killing of the journalist Jamal Khashoggi by Saudi agents at the country’s consulate in Istanbul. After a wave of cancellations at the 2018 event, the next year’s Future Investment Initiative, often called “Davos in the Desert,” saw many business leaders attend as the immediate furor over the killing subsided.
The next installment of the conference begins in Riyadh on Wednesday, and even more — and more senior — executives are expected to appear, both virtually and in person. It raises the question: Is there a statute of limitations in associating with a country accused of human rights abuses?
Who’s going: Some of Wall Street’s biggest names are scheduled to attend, mostly virtually, according to the conference’s itinerary. David Rubenstein of Carlyle is moderating a keynote panel that also includes Ray Dalio of Bridgewater Associates, Larry Fink of BlackRock, David Solomon of Goldman Sachs and Thomas Gottstein of Credit Suisse. James Gorman of Morgan Stanley will be interviewed by the CNN anchor Erin Burnett. Other executives set to appear are Steve Schwarzman of Blackstone, Masa Son of SoftBank, Adena Friedman of Nasdaq, Tom Barrack of Colony Capital and Jeffrey Ubben of Inclusive Capital.
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In 2019, Morgan Stanley and Goldman sent lower-ranking execs to the conference, not their C.E.O.s.
A possible morality test for business in a new administration. Joe Biden called Saudi Arabia a “pariah” on the campaign trail, and, while the new president may not drastically disrupt relations with the country — whose support he may need to renegotiate the Iran nuclear deal — “the atmospherics are going to change,” said Gregory Gause of the Bush School of Government and Public Service at Texas A&M University.
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On Friday, the chairman of the House intelligence committee, Adam Schiff, asked for declassification of a U.S. government report on the Khashoggi killing.
What companies are saying. Companies contacted by DealBook pointed to the important business relationships they have with cash-rich Saudi Arabia and others in the region. Some of those ties are long established — Nasdaq has partnered with the Saudi stock exchange for two decades — while others are related to the kingdom’s more recent efforts to diversify its economy beyond oil.
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A representative for BlackRock said that Mr. Fink “has been very public about the need for continued reform in Saudi Arabia and believes that engagement and public dialogue by global leaders like himself can help encourage Saudi Arabia’s path of reform.”
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“We have long standing clients in the region and continue to serve them,” a Goldman spokesman said.
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Representatives for Blackstone, Bridgewater, Carlyle, Nasdaq and Mr. Barrack declined to comment. Representatives for CNN, Credit Suisse, Morgan Stanley, SoftBank and Mr. Ubben did not return requests for a comment.
Legitimacy by association? “M.B.S. is going to be running Saudi Arabia no matter what David Solomon says or doesn’t say,” Mr. Gause of Texas A&M said, referring to the nickname of the Saudi crown prince, Mohammed bin Salman. He questioned the logic of withdrawing corporate ties from Saudi Arabia but keeping them in, say, China, which faces its own criticisms over human rights abuses.
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Thor Halvorssen, the founder of the nonprofit Human Rights Foundation, which has funded “The Dissident,” a documentary about Mr. Khashoggi’s killing, said that those attending the event gave the crown prince valuable legitimacy. “The message is, ‘Look, the world’s money and the powerhouses of finance and industry are my puppets,’” he said.
HERE’S WHAT’S HAPPENING
President Biden unveils a “Buy American” executive order. The action strengthens requirements for government contracts to buy domestic products. America’s trade partners will be watching to see how that meshes with Mr. Biden’s efforts to unwind the Trump trade wars.
A bipartisan group of lawmakers pushes back against the Biden stimulus bill. Centrists from both parties yesterday pushed the National Economic Council’s director, Brian Deese, to limit the $1.9 trillion bill’s scope. Among their concerns was whether a proposed $1,400 in direct payments could be restricted to the neediest Americans.
The virtual World Economic Forum begins today. More than 1,200 leaders from business, government and more will gather this week online — instead of at the meeting’s usual home in Davos, Switzerland — to discuss the theme, a “Crucial Year to Rebuild Trust.” The headline speaker today: President Xi Jinping of China.
Frenzy in options trading sends stocks soaring. Shares in the Chinese internet giant Tencent jumped 11 percent today, its biggest gain in nearly a decade, as Hong Kong traders snapped up call options en masse. And shares in the video game retailer GameStop soared more than 50 percent on relentless retail option buying.
Elon Musk’s new project is … drilling for natural gas. His SpaceX rocket company plans to sink wells near its launchpad in Texas, Bloomberg reports. It’s unclear why, but Bloomberg notes that SpaceX’s rocket engines will use supercold liquid methane.
You’ll never believe this clickbait SPAC deal
Taboola, one of the biggest purveyors of so-called chumbox ads — the collections of attention-grabbing links at the bottom of web pages — announced today that it would go public by merging with a blank-check fund at a $2.6 billion valuation, The Times’s Michael de la Merced and Tiffany Hsu report.
The move is Taboola’s Plan B, after its attempt to merge with its archrival, Outbrain, fell apart. The two called off their deal in September, amid the pandemic and lengthy antitrust reviews. Taboola’s C.E.O., Adam Singolda, said that, shortly after the merger’s collapse, he began talking with the Israeli financier Gilad Shany, who had recently raised $259 million for a SPAC and was seeking to buy another Israeli business “to build a global player.”
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Today’s deal fulfills an ambition of Mr. Singolda’s — “I always wanted to go public,” he said — with $285 million in additional investment from the likes of Fidelity, BlackRock and the frequent SPAC investor Hedosophia.
Being public will help Taboola strike more deals, Mr. Singolda said. Taboola generated $100 million in pro forma earnings last year and has $375 million in net revenue. But having a public stock as currency could help the company buy additional businesses to expand in areas like e-commerce. “We think this can be five times the size it is today,” said Mr. Shany, who will join Taboola’s board.
It’s the latest deal involving a SPAC, one of Wall Street’s hottest trends, as private companies increasingly seek out the deal vehicles to join the stock markets without the hassle of a traditional I.P.O. process.
In more SPAC news: A blank-check fund run by Tishman Speyer, the real-estate investment firm, will merge with the keyless-door-entry company Latch at a valuation of more than $1 billion. And Alight, a provider of H.R. services, is reportedly near a deal to merge with a SPAC at a $7.3 billion valuation. SPACs have raised nearly $20 billion so far just this month, already more than in any full year before 2020.
“It isn’t like I took any pleasure in contradicting the president of the United States.”
— Dr. Anthony Fauci, in an eye-opening interview with The Times about his time advising the Trump White House on the Covid-19 pandemic.
About Pelosi’s stock trades …
Nancy Pelosi, the House speaker, recently disclosed that her husband, the investor Paul Pelosi, bought stock options last month in Apple, Disney and Tesla and purchased shares of AllianceBernstein, valued at $1.75 million to $3.5 million in all. Her disclosure form attests that the trades did not rely on insider information, but as DealBook has written, the activity highlights why more transparency around lawmaker-associated trading of individual company stocks could benefit the public and the officials involved.
Lots of investors are buying Tesla, and it’s no secret that electric vehicles figure in the Biden administration’s expansive environmental plans. But the Pelosis aren’t average investors, because Ms. Pelosi has an outsize influence on policy. The Tesla trade, which cost between $500,000 and $1 million, was smart but not necessarily suspect, given the enthusiasm that investors have for the company, experts told DealBook. Tesla’s shares have risen more than 600 percent over the past year.
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Ms. Pelosi is among the wealthiest members of a millionaire-rich Congress; she was worth nearly $115 million in 2018. Much of that wealth was generated by her low-profile financier husband and a stock portfolio that has positions in many big corporate names, according to disclosure forms. The couple’s son, Paul Pelosi Jr., is a lawyer who has worked on sustainability and corporate governance in the public and private sectors; he was recently named a director at EVSX and an adviser to Altair International, both of which are involved in battery technology for electric vehicles.
“There ought to be more sunlight on the people who trade in Congress,” the former S.E.C. chairman Harvey L. Pitt told Andrew recently. A possible rule Andrew discussed would require broker-dealers to get “politically exposed persons” to answer a questionnaire within 24 hours of a trade. Ms. Pelosi did not respond to DealBook’s requests for comment on the proposal.
THE SPEED READ
Deals
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Kuaishou, a Chinese rival to TikTok, is reportedly set to raise more than $5 billion in its I.P.O. in Hong Kong, at a valuation above $60 billion. (WSJ)
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The private equity firm TPG is said to be the lead bidder for a stake in AT&T’s DirecTV division. (Reuters)
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The hedge fund industry — except for stalwart firms like Bridgewater and Renaissance — reaped its biggest returns in a decade last year, despite the pandemic. (FT)
Politics and policy
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President Biden’s election campaign was backed by a record $145 million in so-called dark money donations, despite Democratic opposition to the practice. (Bloomberg)
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Amazon and Facebook led U.S. companies in Washington lobbying in 2020, for the second year in a row. (WSJ)
Tech
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Colin Fan is reportedly stepping down as a managing partner of SoftBank’s Vision Fund, the second senior executive to exit this month. (Bloomberg)
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Uber was said to have laid off about 185 employees from Postmates, including most of the executive team, months after buying the food delivery company. (NYT)
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Clubhouse, an audio groupchat app, has raised new funds, reportedly at a valuation above $1 billion. (Clubhouse, The Information)
Best of the rest
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Morgan Stanley lifted the compensation of its C.E.O., James Gorman, to $33 million, making him Wall Street’s best-paid chief. (Bloomberg)
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“Europe’s Bankruptcies Are Plummeting. That May Be a Problem.” (NYT)
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The lessons from Enron, 15 years later. (Newsweek)
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