FT : Jean-Paul Agon: L’Oréal has a ‘culture that’s not to everyone’s liking’

Jean-Paul Agon: L’Oréal has a ‘culture that’s not to everyone’s liking’ 
Outgoing chief of the giant cosmetics group on its demands on staff — and why it has yet to appoint a female CEO

As Jean-Paul Agon prepared to step down as chief executive of L’Oréal after 15 years, he knew he wanted the search for his successor to be “exemplary, transparent, and rigorous”.

However, the decision in October to appoint Nicolas Hieronimus, the deputy chief executive, to the top slot has disappointed some observers, who ask why the world’s biggest cosmetics company — one that caters to women in more than 150 countries — will not have a woman as CEO. 

Mr Agon, 64, is eager to explain the thinking behind the selection process. It is simplistic, he says, to think that just because L’Oréal’s brands such as Lancôme, Maybelline, and Garnier make women’s products that women are better at marketing them. He then comes to his real argument: L’Oréal’s board was guided in its choice of successor by “the principle of meritocracy”.

“Today, a man was chosen. It is totally possible that next time it will be a woman,” he says. “But it will not be a woman just for the sake of it. It will be a woman because she is the best person and the most deserving of the role at that time.”

Not only were there women on the shortlist this time around, he points out, but they have been steadily rising up the corporation’s ranks. For the first time in the group’s 111-year history, L’Oréal named a woman, Barbara Lavernos, as deputy chief executive, a post that has groomed past CEOs. 

“Today, women make up half of our board, more than one-third of top management, and more than half of the heads of brands,” says Mr Agon. “Their rise is irresistible. One day or another, a woman will run L’Oréal.” 

Mr Agon’s approach to leadership is patient yet demanding. Under his tenure the company nearly doubled its global revenue to nearly €30bn driven largely by expanding in Asia. These qualities underpin L’Oréal’s corporate culture. 

Behind the chic image of brands represented by celebrities such as Penélope Cruz and Beyoncé, L’Oréal is known for having a tough workplace culture. In the company’s internal jargon, managers should cultivate saine inquietude, or “healthy disquiet”, among their teams, so as to see who rises to the occasion — and who sinks. The approach can lead some to burnout and exits — the company has earned the sobriquet “L’Orehell” — but others flourish under the competition.

While breeding “disquiet” may seem out of step with the softer, more inclusive management styles at many other big corporations, Mr Agon defends his methods.

“We have a saying at L’Oréal that people either stay three months, three years or 30 years,” he says. “L’Oreal has a very distinctive culture that is not to everyone’s liking, but those who do like it will really invest and thrive here.”

L’Oréal’s culture has helped it cope with the shock of the pandemic. Although sales and profits are forecast to contract this year for the first time since the 2008 financial crisis, the group has limited the damage with its strong ecommerce operation. Its shares are up 16 per cent this year, lagging a 19 per cent rise for rival Estée Lauder.

Mr Agon certainly took to L’Oréal’s ways. Growing up in Paris, his father worked in pharmaceuticals while his mother was an architect. But the young Mr Agon wanted to travel, and that partly drove his decision to join L’Oréal as a salesman in 1978 straight out of HEC, one of France’s top business schools. The other factor was his affinity for marketing. 

“I thought beauty marketing was very interesting and rich since it is not only analytical and strategic, but also sensitive, creative, and very attuned to emotion, image and culture,” he says. “It is the supreme art of marketing.”

Two years after he joined L’Oréal, the company sent him to run its operation in Greece, which then had about 50 employees. This taught the 24-year-old executive how to manage people of different cultures and adapt to new environments — and also how to grow a business in a healthy, steady way.

At one of their first team meetings, he promised his new staff that he would learn Greek within a year. “They thought it was funny, but I was serious about it, and put a lot of pressure on myself to learn,” he says. “When you’re the only French person leading a team of Greeks who didn’t speak English that well, learning the language was indispensable.”

Mr Agon’s biggest mistakes as a manager in Greece turned out to be formative. His second year there was the best year ever for the Greek business. But then the third was the worst. “I had been over enthusiastic and aggressive, pushing the sales team too hard which led to a build-up of stocks in the channel,” he says. 

But he kept his promise on learning the language, and came to speak Greek fluently. “I love the country, and still visit often,” he says. 

From Greece, Mr Agon was on the fast-track at L’Oréal, switching jobs every five years or so, including stints to build a presence in China in the late-1990s and running North America. Paintings and memorabilia from his different postings — visible in a video call — decorate his office on the northern edge of Paris.

Living and working in different countries meant Mr Agon never got bored despite spending more than 40 years at the same company. Before Covid-19, he spent one-third of the year travelling.

Aggressive promotion of the most promising employees is a key part of the company’s culture. “Unlike many companies, L’Oréal does not give people jobs based on their past experience but rather with a view to helping them uncover and express new talents,” he says. “It can be risky but for me it was a great way to keep my enthusiasm going.” 

Mr Agon sees employees as part of a “tribe” who share specific customs and codes regardless of where they are located in the world. They are “l’Oréalien” — a term that is not overtly defined but rather picked up on the job through talking and working with managers and teams.

“When you visit teams in China, Argentina, Finland, the US or Russia, you can recognise a similar energy,” he says. “The culture of L’Oréal has been transposed in every country.” 

Mr Agon’s final big assignment at the company is letting go of power — though he will stay on as chairman after Mr Hieronimus steps up. Mr Agon has vowed not to micromanage his successor, explaining that when he took over he followed the company’s handover governance model and so has experience. “I’m actually quite happy about passing the baton to someone who I respect and who will do this job very, very well,” he says. 

Asked whether he was looking forward to retirement, he smiles. “I don’t consider this to be an ending. It’s a transition to a new mission that I have to invent myself — as I did all the ones in the past.” 

FT : Nikola: the clues in Trevor Milton’s past that investors missed or ignored

Nikola: the clues in Trevor Milton’s past that investors missed or ignored
Allegations about the founder’s business practices and personal life continue to raise due diligence concerns in the truck start-up

The operations boss of Worthington Industries was talking up the US steel processor’s new stake in a little-known start-up company. Mark Russell told investors on the 2014 earnings call that dHybrid Systems was “a leading manufacturer” of compressed natural gas fuel systems with “significant growth potential”.

It also, he stressed, had “very entrepreneurial leadership”.

It was a reference to Trevor Milton, the serial founder who months later would quit to start Nikola. In the past 15 months, the electric truck group has struck a $250m investment and truck deal with Iveco owner CNH Industrial, secured a public listing in June through a reverse takeover, and three months ago announced a $2bn partnership with General Motors.

Mr Milton — described by some as an evangelical salesman — was selling the idea of a future where roads teemed with hydrogen powered trucks, each one leased by Nikola. A future where the company would claw back $1m for each $300,000 vehicle it produced via a subscription service and refuelling network created with a yet-to-be-named energy partner.

The GM deal was, it seemed, the latest stamp of approval from the very industry he sought to upend. But just two days after announcing the partnership, Nikola was branded “an intricate fraud” in a short seller’s report that detailed a litany of business failings throughout Mr Milton’s career. Nikola, the report claimed, had overstated its technology, passing off purchased components as its own and, once, even rolled a dummy truck down a hill for a video showing its product “in motion”.

The company vehemently disputed the report and its fraud allegation, but later admitted that some of the criticisms of Nikola were true.

Most damaging, perhaps, was the section on the turbulent history of businesses run by Mr Milton, which included repeated accusations of overstating technology and lying to customers. In several cases, business relationships soured and ended in lawsuits.

In the days that followed the report, with Nikola’s shares in freefall and personal allegations swirling online, Mr Milton resigned as executive chairman. He remains the company’s largest shareholder. Mr Milton, who has denied any wrongdoing, declined to comment for this article.

This account of his career is drawn from more than a dozen interviews with past employees, customers, advisers and investors in Nikola and some of his former businesses. It is a tale of company failures and lawsuits that beg the question of why investors did not look more closely at Mr Milton’s business history.

Nikola’s backers, including its chairman and former GM executive Steve Girsky, insist that “an army” of advisers conducted due diligence on the company before it went public. Now it is the turn of the US Department of Justice and the Securities and Exchange Commission, to pore over Nikola after they launched separate investigations into the allegations swirling around the company.

The repercussions are being widely felt. The incident has raised further doubts over the extent of due diligence being carried out on companies aiming to go public via so-called special purpose acquisition companies, rather than the more rigorous route of an initial public offering. “Nikola could have done with a little more disclosure,” says one banker who has worked on multiple Spac deals. “Someone missed the buck on that one.”

Mr Milton’s exuberance was a “yellow flag” for some investors, says one who did put money into Nikola before the listing.

“It’s clear he was a difficulty to manage going forward,” he adds. Despite the reservations, this investor says his company conducted no due diligence on either Mr Milton or his past business ventures. Instead, it weighed the passion of Mr Milton with the level-headedness of Mr Russell, who had joined Nikola in 2019, and pushed ahead.

Retrofitting spree
Mr Milton, 38, spent much of his youth in southern Utah. According to an interview he gave to trade publication Trucks.com in 2019, his father was a manager at the Union Pacific railroad, and his mother died of cancer when he was a teenager.

He dropped out of Utah Valley State College after one semester, then moved in 2003 to the small Utah city of St George. His early ventures included a failed home security business and an ecommerce website called Upillar “that competed with Amazon”, according to a now-deleted line on his LinkedIn page.

A 2018 patent infringement lawsuit filed by Nikola claims that: “from childhood, Trevor Milton wanted to revolutionise the trucking industry”. He entered the industry in 2009, when he began looking for investors to fund a new business, dHybrid Inc. It would build hybrid diesel and natural gas systems to retrofit trucks built to run on diesel. A former dHybrid Inc employee says Mr Milton tapped more than 40 people to raise at least $2m, the majority of them social acquaintances or connections through the Mormon church rather than experienced investors.

The company landed a $16m contract in 2010 with Arizona trucking company Swift Transportation, to install hybrid fuel systems on 800 trucks in its fleet, after first demonstrating that it worked on 10 trucks, according to records from an Arizona state court.

DHybrid Inc also sold fuel systems to Florida rubbish collector Waste Pro and Pennsylvania trucking company Birkmire Transportation Solutions. Owner Tim Birkmire Sr says the system was less durable than the company had wanted, but notes that Mr Milton “did his best to make it work for us”.

Workers at dHybrid Inc criss-crossed the US to make good on Mr Milton’s promises to customers. At other times, employees fixed the fuel systems when they malfunctioned. The natural gas tanks were mounted on brackets bolted to the trucks, and the bolts were prone to shearing off, taking the tank with them, according to three people familiar with the matter.

“I spent two years of my life . . . fixing the fuel systems,” a second former employee says. “They were under-engineered.”

Meanwhile, Mr Milton told investors it cost more than $100,000 a month to run the company, says the first former employee. “On top of that, Trevor was a spender. He would buy $10,000 four-wheelers in cash like he was buying a pack of gum.” Another former dHybrid Inc employee adds: “Most people building a business are very frugal . . . He's the opposite.”

Mr Milton attempted to sell dHybrid in May 2012 for $3m, but the buyer, the Salt Lake City-based Sustainable Power Group, backed out of the deal and sued a month later, saying the company had misrepresented its technological prowess and progress towards certification with the US Environmental Protection Agency. The lawsuit was dismissed without prejudice six months later leaving the claimants free to refile in the future.

Swift sued a month later. The trucking company said dHybrid had installed just five systems, which “did not in fact possess the technical efficiencies or capabilities as represented by dHybrid”. The lawsuit also claimed that the company used portions of a $2m advance payment “for its and/or its officers’ or directors’ personal use”. The Swift case was dismissed with prejudice in 2015.

As dHybrid Inc became embroiled in litigation, Mr Milton’s father, William, formed a new company in October 2012 called dHybrid Systems, which was legally distinct from dHybrid Inc and owned solely by William Milton and his son. The new company used the same building, tools, inventory and intellectual property as dHybrid Inc, a former investor says.

A few months after meeting Trevor Milton, Mr Russell shepherded Worthington’s 2014 purchase of an 80 per cent stake in dHybrid Systems — by then one of the oil supplier’s biggest customers — for $15.9m. Over time, Worthington would end up paying $1.5m in warranty costs and eventually write down the value of the investment by $2.3m before finally winding down the business in May 2019, according to SEC filings.

According to the first former employee — on the payroll when the initial $2m investment for dHybrid Inc was raised — many of the original investors lost their money on the deal. But there appears to be no record of any subsequent legal action seeking compensation.


Mr Russell, now Nikola’s chief executive, told the Financial Times in October that the write-off in dHybrid Systems was because the price gap between diesel and natural gas had “collapsed” and “taken the wind out of the sails of the market”.

Asked if the state of the business Worthington purchased was exactly as he expected, he said, “Trevor built that company from scratch extremely rapidly . . . and took significant market share very quickly. We understood exactly what we were buying.”

By the time of the writedown, Mr Milton had already left the company. Only months after the 2014 purchase, he walked into Mr Russell’s office, and pronounced that he was going to build the “truck of the future” in a new venture he would later call Nikola.

“If you’re smart you’ll back me, but either way I quit,” Mr Russell recalled Mr Milton saying.

Route to a resignation
Some investors in Nikola say they overlooked Mr Milton’s brashness because of the other executives backing the company — including Jeff Ubben, the founder of activist hedge fund ValueAct and Mr Girsky, a respected automotive executive. Mr Ubben vociferously defended Nikola and Mr Milton in the wake of the short-seller report, though since the founder’s departure he has remained largely silent on the issue.

Ultimately, what felled Mr Milton was not the collapsing share price, nor the catalogue of legal fallouts aired in the short selling report, or even the DoJ investigation into the business. Instead it was a series of personal allegations, circulating online in the days following the report, that led him to offer his resignation, according to three people.

David Bateman, chief executive of software group Entrata and an acquaintance of Mr Milton from Utah, posted screenshots on Twitter in September — which are still on the site — allegedly showing Mr Milton pressuring women to sleep with other men in exchange for money.

A lawsuit filed by Mr Milton against Mr Bateman in October says the messages were sent “prior to his marriage” and that they paint Mr Milton in “a misleading and unflattering manner”. The suit requests “compensatory and punitive damages” for Mr Milton.

These allegations came perilously close to breaking into the public sphere just as Nikola prepared to become a public company. In April, a friend of Mr Milton’s, Jonny Robb, threatened to publish the same screenshots on his Instagram page. According to Mr Milton’s October lawsuit against Mr Bateman, Mr Robb asked the Nikola founder for $500,000 to prevent him from publishing the “damaging information”.

The pair agreed to meet — and when they did, Mr Robb was arrested, and charged with extortion. Shortly after his release, Mr Robb, who had been suffering from mental health issues, according to family and friends, committed suicide. A month after his death — with the full nature of the allegations still not public — Nikola listed through a reverse merger with VectoIQ, cementing Mr Milton’s status as a paper billionaire.

The publicly available lawsuit states that by posting the messages online, Mr Bateman “falsely portrayed Trevor Milton to the public . . . as some type of serial sex offender and even implies he was somehow partly responsible for the suicide death of one of Bateman’s friends.”

Mr Bateman, who did not respond to several FT requests for comment, told CNBC that the lawsuit is “not going to intimidate me”.

Mr Russell declined to comment on the personal allegations surrounding Mr Milton, saying only that his decision to resign was the correct one.


Nikola’s projects are still at an early stage. Its first commercial trucks, made by Iveco, will not enter production until late 2021. It had hoped to announce a hydrogen station partner before the end of 2020 but now says it might not happen until next year. And the GM deal, which was supposed to close at the end of September, was torn up, and replaced on November 30 by a supply agreement for the carmaker to sell its hydrogen system to the start-up.

Investors, particularly those who piled in after that deal was announced in September, have been left to ponder their decision to back the company. Shares that once valued Nikola at $30bn — above Ford — have more than halved since September 9.

That Nikola came so close to landing a transformational deal with the world’s fourth largest carmaker despite Mr Milton’s record is, in the words of the second former dHybrid Inc employee, “hilarious”. Nikola’s woes and the allegations of over-egged technology are, he adds: “a repeat of history from three companies ago”.

FT : Absolute return funds on course for worst ever annual outflows

Absolute return funds on course for worst ever annual outflows
Investors have pulled money from the all-weather funds after they disappointed during the coronavirus sell-off

Absolute return funds, products that promised investors positive returns in all markets, are on track to record their worst-selling year to date after suffering poor performance during the coronavirus market shock.

European investors withdrew a net €18.6bn from absolute return funds, which include former blockbuster products such as Standard Life Aberdeen’s Gars fund as well as quantitative strategies run by AQR and BlackRock, during the first 10 months of the year, according to data provider Morningstar.

This is just shy of the €21.3bn that was withdrawn from the funds over the whole of 2019, making the sector likely to end 2020 with its highest ever annual outflows, said Morningstar.

The data covers European-domiciled funds categorised by Morningstar as alternative multi-strategy. These products invest in a range of assets and derivatives to achieve a set level of returns above cash irrespective of market conditions.

Francesco Paganelli, an analyst at Morningstar, said that investors were frustrated with the funds’ failure to shield them from losses during the coronavirus-induced sell-off earlier this year.

“[Absolute return funds] are meant to provide protection or good returns in periods where traditional asset classes struggle,” he said. “But most of these funds did not provide the crisis alpha that many investors expected in March.”

Absolute return funds’ recent woes raise further questions about the future of the products, which were once one of the hottest growth areas in asset management.

After experiencing huge asset growth in the aftermath of the financial crisis, the funds began to lose their lustre when they failed to deliver during the market turbulence of late 2018. According to Morningstar, assets in European alternative multi-strategy funds have fallen by more than a third over the past three years.

Although returns improved for some absolute return funds during the market recovery in the second and third quarters, Mr Paganelli said that the steep losses they experienced at the height of the turmoil had spooked investors.

The worst-selling products include the BNY Mellon Real Return, Aviva Investors Multi-Strategy Target Return and Gars funds, which respectively suffered performance losses of 15.5 per cent, 9 per cent and 7.5 per cent between mid-February and mid-March.

Invesco’s Global Targeted Return fund suffered the highest outflows in the category, with €2.9bn flowing out of the door between January and October. While the fund recorded lower losses than peers in March, its performance is negative year to date, said Morningstar.

Quantitative strategies such as the LFIS Vision Premia fund, run by French fund group La Française, and the BlackRock Style Advantage fund also bled money after their returns were hit by the poor performance of value stocks. The funds have lost 8.4 per cent and 22.5 per cent respectively, year-to-date.

Standard Life Aberdeen and BNY Mellon, whose funds’ year-to-date performance is now in positive territory, said that absolute return strategies would continue to play a role in portfolios as investors sought flexibility amid heightened market uncertainty.

Aviva Investors, whose fund is also up year to date, said it had faith in its strategy to deliver on investors’ long-term objectives.

Invesco’s Scott Thomas said his team had preserved capital in the first quarter of this year, adding that the fund would remain relevant especially as investors faced lower returns from traditional assets.

BlackRock said that while the overall sector had delivered on investors’ expectations, it was “inevitable” that some funds had underperformed due to the high dispersion among managers. La Française declined to comment.

>>> Weekly Market Update: Markets remain squarely focused on the light at the en

Weekly Market Update: Markets remain squarely focused on the light at the end of the tunnel, despite warnings of a dark winter

Positive developments related to coronavirus vaccines and rekindled hopes on the US fiscal stimulus front breathed fresh life into risk assets this week. The Dow and S&P posted fresh all-time highs yet again while US Treasury yields backed up to the highest rates since March. The Dollar remained under notable pressure, highlighted by the Euro which punched through the 1.20 mark, providing a broad tailwind for gold and US multinationals. Crude oil tracked to the highest levels this spring as OPEC+ producers reached a deal to gradually raise output by 500K bpd per month, beginning in early 2021.

Friday’s November employment report underscored how the renewed surge in coronavirus cases and restrictions has weighed on services demand. A drop in the participation rate and a continued rise in long-term unemployment signaled some out of work Americans have given up looking for a job. The news was seen by many to support the need for urgent action on new fiscal stimulus and, along with surprising strong wage growth, kept upward pressure on US Treasury yields. The 2-10 year yield spread topped 80 basis points for the first time since February 2018 as the 10-year yield reached its highest level since March. The Greenback stabilized at two-year lows ahead of the data but its footing remained tenuous. For the week, the S&P gained 1.7%, the DJIA added 1%, and the Nasdaq was up 2.1%.

In corporate news this week, Salesforce confirmed a deal to acquire work communications platform Slack for $27.7B in cash and stock. Nikola signed a memorandum of understanding with GM, but the partnership did not include an equity stake or development of its Badger truck, which sent Nikola shares sharply lower. Zoom reported blow-out numbers and raised its outlook, but the beat was not enough to support its rich share price. Micron raised its guidance amid strong datacenter demand and the chipmaker said it was tracking ahead of schedule on mitigating Huawei matters. Reports said that AT&T plans to make the entire 2021 Warner Bros film slate available on HBO Max streaming service starting on the same day as their theatrical releases, which weighed on movie theater names. Discovery announced its streaming service Discovery+ would launch in January and most Verizon customers would receive the plan free for one year. Chevron cut its long-term capex plan significantly, while Exxon also reduced its five-year spending outlook. Moderna affirmed plans to have 20M COVID vaccine doses available in US by the end of 2020 and also pointed to new data that suggests the vaccine generates durable neutralizing antibodies. S&P Global agreed to buy IHS Market in the year’s largest all-stock deal, valued at $44B, combining two of the biggest providers of data to Wall Street. Pfizer and BioNTech's COVID-19 vaccine received the world's first approval in the UK and will be available there beginning next week.


SUN 11/29
PFE Reportedly UK govt expects to approve Pfizer/BioNTech COVID-19 vaccine 'withing days'; rollout could begin as soon as Dec 7 - FT
*(CN) CHINA NOV MANUFACTURING PMI (GOVT OFFICIAL): 52.1 V 51.5E (9th month of expansion and highest since Sept 2017)
883.HK US President Trump said to be planning to add CNOOC and SMIC to defense blacklist of alleged China military companies - press

MON 11/30
USD/CNY China calls on US to drop claim that the yuan (CNY) is undervalued, said prelim US ruling related to cables/twist ties violated international rules - press
(US) NIH's Fauci: US is heading into a difficult period of COVID-19 pandemic; Christmas and New Year’s restrictions will be necessary
INFO Confirms to be acquired by S&P Global in all-stock deal valued at $44B (including $4.8B net debt); IHS stock to be exchanged for ratio of 0.2838 S&P shares
*(DE) GERMANY NOV PRELIMINARY CPI M/M: -0.8% V -0.7%E; Y/Y: -0.3% V -0.2%E
*(US) OCT PENDING HOME SALES M/M: -1.1% V 1.0%E; Y/Y: 20.2% V 21.9% PRIOR
(EU) EU official: EU will begin no-deal Brexit contingency measures on Weds or Thurs (Dec 2-3rd) if it can't reach trade deal by then with the UK - press
OPEC+ meeting said to be pushed back until Thursday Dec 3rd as more talks are said to be needed (had been planned for Tues (Dec 1st)
XOM Affirms FY21 capex $16-19B; guides $20-25B capex annually through 2025; to prioritize capital investments on high-value assets; cutting global workforce 15% by end of 2021; sees doubling earnings by 2027
*(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 0.10%, AS EXPECTED; MAINTAINS A$100B BOND BUYING PROGRAM
(HK) Macau Nov Casino Rev (MOP): 6.8B v 7.3B prior; Y/Y: -70.5% v -69.8%e

TUES 12/1
*(IT) ITALY NOV MANUFACTURING PMI: 51.5 V 52.0E (5th month of expansion)
*(DE) GERMANY NOV NET UNEMPLOYMENT CHANGE: -39.0K V +8.0KE
*(EU) EURO ZONE NOV ADVANCE CPI ESTIMATE Y/Y: -0.3% V -0.2%E; CPI CORE Y/Y: 0.2% V 0.2%E
(US) Bipartisan group of senators plans to release $908B outline for coronavirus aid package; would include state/local aid, liability shield, and unemployment insurance boost but no stimulus checks - Wash Post
DRRD.IN Dr. Reddy's and RDIF commence clinical trials for Russian Sputnik V vaccine in India
MU Raises Q1 $0.69-0.73 (prior $0.40-0.54) v $0.47e, Rev $5.70-5.75B (prior $5.2B) v $5.23Be, gross margin 29.5-30.5% (prior 27.5%) - PR ahead of CS Tech conf
*(US) NOV ISM MANUFACTURING: 57.5 V 58.0E; PRICES PAID: 65.4 V 65.0E
(US) Dallas Fed Sep Texas Service Sector Outlook Survey: General Business Activity: -2.6 v +13.2 prior
WORK Confirms to be acquired by Salesforce in cash-stock deal valued at $27.7B (implies ~$45.51/shr)
HPE Reports Q4 $0.37 v $0.34e, Rev $7.21B v $6.88Be; to relocate its HQ from San Jose to Houston, Texas
President-elect Biden calls on Congress to pass a 'robust package' for coronavirus relief; any bill in lame-duck Congress would be 'just a start'
V Reports QTD US payments volume +8% y/y, cross border volume ex Europe -35% y/y, processed transaction +4% y/y - filing
PFE First US shipments of COVID vaccine to be delivered on Dec 15th (in line); Moderna vaccine is expected to be delivered on Dec 22nd - CNN

WEDS 12/2
(HK) Macau Gaming Inspection and Coordination Bureau has made initial inquiries to casinos about using digital yuan to buy chips, no final decision has been made yet - US financial press
PFE Pfizer/BioNTech COVID-19 vaccine candidate receives world first approval in UK; To be available in UK from next week (as speculated)
*(EU) EURO ZONE OCT UNEMPLOYMENT RATE: 8.4% V 8.4%E
(UK) France govt said to push for no-deal Brexit if UK does not change its stance - financial press
*(US) NOV ADP EMPLOYMENT CHANGE: +307K V +430KE
(EU) ECB's Lane (Ireland, chief economist): vaccines make a more severe economic scenario less likely; does not address Euro exchange rate
(US) Democratic leaders Pelosi and Schumer back the $908B bipartisan relief bill as a base for starting new stimulus talks
COST Reports Nov SSS +13.4% v +13.8%e
(CN) US House passes China delisting bill; now goes to Pres Trump to sign
(HK) Macau Gaming Inspection and Coordination Bureau denies report yesterday that casinos were being asked to consider the use of the digital yuan

THURS 12/3
*(IT) ITALY NOV SERVICES PMI: 39.4 V 40.8E (4th month of contraction)
*(DE) GERMANY NOV FINAL PMI SERVICES: 46.0 V 46.2E (confirms 2nd straight contraction)
*(EU) EURO ZONE NOV FINAL PMI SERVICES: 41.7 V 41.3E (confirms 3rd straight contraction)
*(UK) NOV FINAL PMI SERVICES: 47.6 V 45.8E (confirms 1st contraction in 5 months)
*(US) NOV FINAL MARKIT PMI SERVICES: 58.4 V 57.5E
*(US) NOV ISM SERVICES INDEX: 55.9 V 55.8E
(UK) Sky News' Parsons: 'EU sources suggest progress on fishing rights, based around this idea: UK fishermen get notably increased quota of stocks that are sold to UK customers; and EU boats keep similar quotas for fish loved in EU'
T To make all of its 2021 Warner Bros films available in theaters and on the HBO Max streaming service starting on the same day - press
DOCU Reports Q3 $0.22 v $0.12e, Rev $382.9M v $360Me
MRNA Affirms expectation to have 20M COVID vaccine doses available in US by end of 2020; expects to have between 100-125M doses available globally in the Q1; data suggest durable neutralizing antibodies
(CN) US DoJ said to be in talks with Huawei CFO Meng Wanzhou about resolving criminal charges - US financial press

FRI 12/4
FAST Reports Nov net sales $441M +6.8% y/y
(EU) European Parliament said to reach an agreement with EU govts on 2021-27 budget
*(US) NOV CHANGE IN NONFARM PAYROLLS: +245K V +460KE
*(US) NOV UNEMPLOYMENT RATE: 6.7% V 6.7%E
*(US) NOV AVERAGE HOURLY EARNINGS M/M: 0.3% V 0.1%E; Y/Y: 4.4% V 4.2%E; AVERAGE WEEKLY HOURS: 34.8 V 34.8E
(US) House of Representatives passes marijuana decriminalization bill (as expected); measure likely will not be taken up by the Senate and likely will not become law
(UK) EU's Barnier: Brexit talks are paused; after one week of intense negotiations in London, together with UK's Frost we have agreed that conditions for an agreement are not met; Johnson and Von der Leyen to speak tomorrow

WSJ : Scientists Investigate Whether Exposure to Earlier Coronavirus Helped Asia

Scientists Investigate Whether Exposure to Earlier Coronavirus Helped Asia Fight Covid-19
Some researchers looking at theory to explain why East Asia has experienced fewer cases, deaths than U.S. and Europe

TOKYO—An enduring mystery of the Covid-19 pandemic is why East Asian countries across the board have experienced far fewer cases and deaths than the U.S. and Europe.

Some doctors and scientists are beginning to take a closer look at theories that some people in East Asia and Southeast Asia have had different exposure to previous coronaviruses resembling the SARS-CoV-2 virus sweeping the globe. Such exposure could have protected them from getting sick from Covid-19 or lessened the severity of the disease.

Others doubt that the immune systems of people in the region differ from people in the rest of the world in any systematic way. They suspect cultural factors and, in some countries, government policies such as tightly enforced quarantines are playing the main role.


Whatever the case, doctors agree that some explanation is needed for why Japan, South Korea, China, Vietnam, Taiwan, Malaysia and Singapore all have experienced at most a few thousand new SARS-CoV-2 infections a day, even during the current surge. That compares with tens of thousands of daily cases in many European nations and more than 150,000 new cases on many days in the U.S.

Yasuhiro Suzuki has pondered the question as the highest-ranking doctor in the Japanese Ministry of Health, Labor and Welfare’s medical corps until his retirement in August.

“There’s a theory, and I think it’s quite a strong one, that in East Asia a cold similar to the novel coronavirus spread widely and a large number of people caught it,” Dr. Suzuki said. “As a result of having immunity to a similar virus—although it isn’t bulletproof immunity—they either don’t develop it or don’t get seriously ill if they do,” he said, referring to Covid-19.

He cautioned that there aren’t any solid studies to back up the idea.

Research in Western nations shows some people’s immune systems partly recognize SARS-CoV-2, the new coronavirus, even though they were never exposed to it, apparently because of previous infections by coronaviruses that cause the common cold. There are hints these people do better fending off Covid-19.

A study by scientists at the Francis Crick Institute in London and elsewhere in the U.K. looked at blood samples collected before the Covid-19 pandemic. The study, published in the journal Science, found that about one in 20 adults sampled had antibodies that recognized SARS-CoV-2, and that nearly half of children and adolescents had such antibodies.

Boston University scientists found that patients whose medical records showed confirmed exposure to common-cold viruses had better outcomes when they caught SARS-CoV-2. Among hospitalized patients, the risk of dying fell by some 70%, according to their study in the Journal of Clinical Investigation.

However, researchers haven’t compared populations across regions.

What intrigues some is the position of China as the origin not just of the current pandemic, but also of the first SARS epidemic in 2002-03 and earlier influenza epidemics. Those viruses got noticed, but others perhaps weren’t.

Tatsuhiko Kodama, who is studying SARS-CoV-2 antibodies at the University of Tokyo’s Research Center for Advanced Science and Technology, said infections with viruses resembling the new coronavirus have likely repeatedly occurred in East Asia. Dr. Kodama said he was sure that exposure was related to the immune response to SARS-CoV-2.

He said some unpublished initial data collected by his team suggest Japanese Covid-19 patients are producing a targeted antibody called IgG soon after the onset of illness while producing relatively little of another antibody called IgM that typically marks the initial immune response. This implies they have already seen something like SARS-CoV-2, he said.

However, Tetsuya Mizutani, a virologist at the Tokyo University of Agriculture and Technology, said he found it hard to imagine that earlier viruses would have stayed only in Asia, given China’s links to the world.

“Such viruses would spread around the world just as quickly as SARS-CoV-2 has done,” Prof. Mizutani said. He said cultural practices such as the high level of mask-wearing and hand-washing offered the best explanation for the regional differences in the pandemic’s severity.

Others are going farther back in history. An Australia-U.S. team recently said it found strong signs of selection among Chinese, Japanese and Vietnamese people in genes involved in combating coronaviruses. In a paper published online but not peer-reviewed, they said their analysis suggested East Asians started battling a coronavirus pandemic some 25,000 years ago and might have taken many millennia to conquer it. Another paper on a genetic risk factor for severe Covid-19 that was inherited from Neanderthals found the variant was almost absent in East Asians.

David Enard of the University of Arizona, co-author of the Australia-U.S. paper, said it was too early to know whether the changes his group detected in East Asians offered any help against SARS-CoV-2. “If there is a genetic effect, it will be small to the point of being irrelevant” compared with proven steps such as wearing masks and keeping social distance, he predicted.

Figuring out regional variation in Covid-19 immunity could come in handy in the next pandemic, Alireza Bolourian and Zahra Mojtahedi wrote in a recent commentary in Archives of Medical Research. If people in China had some pre-existing resistance to SARS-CoV-2, they said, initial data from that country could have led the West to underestimate how easily the virus could spread outside of East Asia.

In the future, they wrote, disease modelers might have to “scale up the severity of flulike epidemics” to account for that factor.

NY Post : Apple co-founder Steve Wozniak launches new company

Tech maven Steve Wozniak launched a new company this week — more than four decades after he started Apple with the late Steve Jobs.

Wozniak’s latest venture, Efforce, aims to use cryptocurrency and blockchain technology to make it cheaper and easier for companies to fund environmentally friendly projects.

The company says its goal is to “democratize” the $250 billion market for energy-efficiency projects, just like Apple expanded access to personal computers.

“We created Efforce to be the first decentralized platform that allows everyone to participate and benefit financially from worldwide energy efficiency projects, and create meaningful environmental change,” Wozniak said in a Friday statement.

Efforce has created a cryptocurrency token called “WOZX” — named after Wozniak — that investors can purchase and use to buy into in energy-efficiency projects that energy services companies list on its platform.

Efforce then tracks the energy savings achieved by those projects and returns them to investors in the form of an energy credit that can be used or sold, according to a news release.

The WOZX token started trading Thursday on the cryptocurrency marketplace HBTC.com — a listing that increased Efforce’s market value tenfold to $950 million, the company says. The token will also be listed next week on another marketplace called Bithumb Global.

Many small businesses “can’t afford to switch to LED lighting, streamline production processes, or even insulate to conserve heat, all of which could save them money in the long term,” said Jacopo Visetti, who’s an Efforce co-founder alongside Wozniak. “Efforce allows business owners to safely register their energy upgrade project on the web and secure funding from all types of investors around the world.”

Wozniak and Jobs formed Apple in 1976 and built it into a personal-computer pioneer. Wozniak stopped working at the company — which is now worth more than $2 trillion — in 1985, about five years after its initial public offering.

Reuters - EU's Barnier says still looking for a way to do UK trade deal

LONDON (Reuters) - The European Union’s chief negotiator Michel Barnier said on Saturday he would continue to look for a way to do a trade deal with Britain, but was non-committal on the chances of bridging the current impasse in the Brexit talks.

“We keep calm, as always, and if there is still a way, we will see,” he told broadcasters in London as he entered the train station to head back to Brussels after talks were paused.

WSJ : Abu Dhabi’s $230 Billion Man Bet the World Would Overcome Covid-19

Abu Dhabi’s $230 Billion Man Bet the World Would Overcome Covid-19
Khaldoon al-Mubarak made an assessment in March that this challenging year would bring new opportunities to lessen his homeland’s dependence on oil. He spent billions backing up that belief.

At the end of March the man who controls a $230 billion Abu Dhabi sovereign-wealth fund dialed up some of the world’s biggest investors as a new pandemic rattled the global economy. Khaldoon al-Mubarak wanted to know how bad things could get.

Japanese billionaire Masayoshi Son assured the chief executive of Mubadala Investment Co. that a fund housing $15 billion of Mubadala’s money was diverse enough to withstand the storm. BlackRock Inc. CEO Larry Fink explained to Mr. Mubarak how government stimulus could boost the U.S. economy. Egon Durban, co-CEO of private-equity firm Silver Lake, argued the market had become too bearish and was overlooking an eventual vaccine.

“In those early days I was on the phone all the time,” said the 44-year-old Mr. Mubarak, a Tufts University graduate who sports a crew cut and is as comfortable in a suit as a traditional Emirati thobe. “For me, it was instrumental in really forming a view.”

The view that emerged was that the world would eventually bounce back from the pandemic and that an unprecedented crisis would bring big opportunities. Mr. Mubarak staked billions on that belief, committing to new investment partnerships with U.S. private-equity giants Apollo Global Management Inc. and Silver Lake while making new bets on everything from Alphabet Inc.’s self-driving car effort to a firm working on a coronavirus vaccine trial.

He made this push while many of his peers pulled back. Mubadala invested more than $11 billion this year as of December 1, according to consulting firm Global SWF, up 46% from the entirety of last year. That compares with a 36% decline in new capital deployed by all sovereign funds over the same period. A larger United Arab Emirates fund, the $500 billion Abu Dhabi Investment Authority, is among those that invested less, according to Global SWF. ADIA declined to comment.

The moves reinforce Mr. Mubarak’s standing as a key player in a larger effort by Abu Dhabi Crown Prince Mohammed bin Zayed Al Nahyan, the U.A.E.’s de facto ruler, to reduce the federation’s historic reliance on oil revenue and seek out newer and faster-growing investment prospects. The emirate discovered oil in 1958 and has since become one of the world’s biggest producers. Mr. Mubarak also chairs Manchester City Football Club, one of Abu Dhabi’s prized possessions, and oversees the U.A.E. nuclear energy program as well as the country’s relationship with China.

Growing up quickly
His rise mirrors that of Abu Dhabi as an emerging economic and political power. Mr. Mubarak’s family has long been close to Abu Dhabi’s royals; his grandfather was the emirate’s first chief justice following the formation of the U.A.E. in 1971 and his father was an Emirati diplomat who was assassinated in 1984 by a gunman in Paris. Mr. Mubarak’s sister is the head of Abu Dhabi’s environmental agency and his brother leads the emirate’s tourism authority.

The deaths of his father when he was 8 years old and his mother when he was 19 forced Mr. Mubarak to grow up quickly. He lived in a typical Emirati environment, with his grandparents in a house next door and cousins nearby. He attended the American Community School of Abu Dhabi and studied economics at Tufts in Massachusetts. Speaking English as adroitly as Arabic, he became adept at bridging cultural gaps that have bedeviled other sovereign-wealth funds. That is one of the reasons that he was chosen to be the face of the royal family’s purchase of Manchester City, according to people close to Mubadala.

He started his career at Abu Dhabi’s national oil company before joining a government group tasked with drawing investment and expertise into the U.A.E. In that role, he helped seal a deal to build a 226-mile undersea gas pipeline from Qatar to the U.A.E. and then overland to Oman. Mr. Mubarak was 26 years old in 2002 when he took the helm at Mubadala, launched to use oil wealth to create new industries at home and diversify the country away from hydrocarbons. Prince Mohammed wanted to empower talented Emiratis and Mr. Mubarak had demonstrated leadership by managing the complex gas project, according to people familiar with Mubadala’s founding.


With Mr. Mubarak as chief, Mubadala set up a lending partnership with GE Capital, launched aircraft-parts manufacturing with help from Boeing Co. and Airbus SE and invested in a 364-bed Cleveland Clinic hospital in Abu Dhabi. He helped negotiate the contract to bring the Formula One racing circuit to Abu Dhabi and put his own stamp on Mubadala by making it a research-based organization that could go toe-to-toe with any Western investment firm, these people say.

In the years before the coronavirus crisis, Mr. Mubarak put himself in a stronger position by amassing a lot of extra assets. In 2017 Mubadala absorbed another Abu Dhabi sovereign-wealth fund, International Petroleum Investment Co., which became entangled in a scandal that eventually sent its former head to prison. In 2018 Mubadala doubled its size to roughly $230 billion by merging with another government investment firm. Mr. Mubarak also freed up extra cash. Mubadala netted roughly $3 billion in 2019 from the sale of a stake in Spanish oil-and-gas company Cepsa, and this year it issued $4 billion in bonds while selling a stake in Austrian petrochemicals firm Borealis AG for $4.68 billion.

When the U.A.E. closed the country’s borders in March, Mr. Mubarak took several actions. He called dozens of top investors and health-care experts for their views—phoning Asia contacts in the mornings, Europe in the afternoons and the U.S. in the evenings. He asked his investment committee to assess the worst-case scenario for Mubadala’s investments while Mubadala executives checked with executives of companies in which it held stakes to understand funding needs. In April he phoned Manchester City manager Pep Guardiola following the death of Mr. Guardiola’s mother, who died after contracting Covid-19.

“It was hard,” Mr. Mubarak said. “There’s nothing worse than losing a parent.”

‘Big, bold bets’
A series of new private-equity partnerships demonstrated his willingness to embrace additional risk during this uncertain time. Mubadala invested alongside Silver Lake, the private-equity firm based in New York and Menlo Park, Calif., in the $2.25 billion funding round for Alphabet’s self-driving car unit in February. In May it pledged $1.2 billion for a stake in Indian tech and telecom giant Jio Platforms Ltd.—a company backed by Facebook Inc., Silver Lake and Saudi Arabia’s Public Investment Fund, among others. Then in September Silver Lake announced a $2 billion commitment from Mubadala to help it launch a new strategy that allows the private-equity firm to invest the money over a 25-year period, far longer than is typical for a buyout fund. Mubadala also took a stake in the tech-focused Silver Lake, which has itself emerged as one of the most active investors during the pandemic.

“People who are willing to be entrepreneurial in the finance industry are really, really rare,” said Silver Lake’s Mr. Durban of Mr. Mubarak and his deputies. “These are people who make big, bold bets.”

Acting as a lender during this period of uncertainty was part of Mubadala’s strategy, too. Reasoning that the market turmoil caused by the coronavirus could tighten borrowing standards, Mubadala became the central investor in a new $12 billion business Apollo launched to make big loans. While those discussions had been ongoing since last year, the pandemic added urgency, according to a person familiar with the fund’s thinking. Mubadala later announced a $3.5 billion partnership with Barings LLC to make smaller loans to midsize European companies.

“Mubadala said: ‘As everyone else is paralyzed, this is our time to strike big partnerships,’” said James Zelter, Apollo’s co-president.

Mr. Mubarak knows from experience that new investment partnerships can have ups and downs. In 2017, the fund committed $15 billion to the $100 billion SoftBank Vision Fund, which Mr. Son and his colleagues proceeded to pour into technology startups. Mubadala followed Saudi Arabia’s Public Investment Fund, which contributed $45 billion. Executives at the sovereign-wealth funds have privately expressed frustration with the Japanese entrepreneur’s investment style and his fund’s big bets on companies like WeWork that lack a clear path to profitability, The Wall Street Journal has reported. Publicly, all have consistently said their relationships are good. Mubadala and PIF so far have declined to contribute to a second Vision Fund.

In the fiscal year ending in March, the first Vision Fund contributed to big losses at SoftBank. So far, however, it has weathered the coronavirus crisis, just as Mr. Son told Mr. Mubarak it would. It posted significant gains in the quarter ended Sept. 30 this year.

“From the time we met, Khaldoon and I have shared a vision that technology will transform every sector,” Mr. Son said in an emailed statement commenting on his relationship with Mr. Mubarak. Mr. Mubarak said that in challenging times he learned not to point fingers. “If you look at how the Vision Fund has performed, it’s been strong,” he added.

Fearing Missed Opportunities
The direct investments and big partnerships with other firms mean Mr. Mubarak is now more accountable than ever for future successes—and failures. In some cases his fund scrambled to offer support to firms it had previously backed. At the height of lockdowns in Europe, the fund and other investors extended a convertible loan to e-scooter company Tier Mobility that meant the Berlin-based startup could operate through the crisis even as people remained stuck at home. The debt was later converted into equity as part of a $250 million funding round that included SoftBank’s second Vision Fund.

“In the pandemic, they were very supportive while other investors were a bit scared and didn’t know what to do,” Tier Chief Executive Lawrence Leuschner said of Mubadala.

What helped was that Mubadala already had offices in San Francisco, New York and London. That allowed the fund to spot lesser-known tech firms or companies in the U.S. that could profit from the coronavirus chaos, according to people with whom the fund has co-invested.

Mubadala this year led or was part of investments in U.K. medical software and communications firm Envision Pharma Group, Pennsylvania-based pharmaceutical supply chain solutions company PCI Pharma Services, and drug discovery and development firm Evotec SE, based in Germany. Last month the fund also took a stake in the U.A.E. firm working with China’s Sinopharm on a phase-3 vaccine trial.

As it became clear the pandemic was deterring people from public transit, the fund invested more in companies it thought would benefit from the shift in transportation trends. It doubled down on Tier, joined another funding round in U.K. used-car marketplace Cazoo Ltd. and poured $100 million of fresh capital into Chinese electric-car maker Xpeng Motors.

Convinced the delivery industry would benefit from the pandemic, Mubadala also joined with Oaktree Capital Management LP to lead a $1 billion investment in Reef Technology Inc. It turns cities’ unused real estate into fulfillment centers for delivery firms, walk-in clinics for health care operators and kitchens for restaurants seeking closer access to customers. Reef says it can reach 70% of North America’s urban population via its hubs, many located in parking lots.

“Pre-pandemic, would we have invested this quickly? No,” said Ibrahim Ajami, Mubadala’s head of venture capital. “The pandemic has enabled unbelievable growth.”

Mr. Mubarak said his fear this year was that he would miss out on opportunities arising from the crisis. He wants to avoid the regret he said he felt about a prior investment in Santa Clara-based Advanced Micro Devices Inc., which his fund first bought in 2007. It sold most of its stake in 2019 when the chip maker’s shares were roughly $35 a share, making a solid return, but then watched as AMD stock subsequently soared, Mr. Mubarak said. AMD shares are now trading at roughly $94.

“It is important not to miss an opportunity,” he said.

Arte.fr : L'invention du luxe à la française - https://bit.ly/2VIlogE


Si la France symbolise le luxe sur le marché international, elle le doit à Louis XIV et son ministre Colbert. Un passionnant retour sur plus d'un siècle d'innovation scientifique et technique, mais aussi d’espionnage industriel.

À la veille de la Révolution française, toute l'Europe accourt dans la capitale du luxe pour s’approvisionner en draps fins, porcelaines de Sèvres, miroirs de Saint-Gobain, soieries lyonnaises, dentelles d’Alençon et autres témoignages éclatants d'un savoir-faire admiré dans toutes les cours du continent. Plus de deux siècles plus tard, la France reste un symbole international du luxe, entre haute couture, cosmétiques et grands vins, mais on a oublié qu’elle le doit à l’ambition de Louis XIV et à la vision de son ministre Colbert, qui ont créé de toutes pièces un appareil industriel sophistiqué pour se lancer à la conquête des marchés. Car en 1665, le royaume est exsangue. Le budget militaire assèche des finances déjà mises à mal par une sévère crise économique. Alors qu'il devient indispensable de créer des emplois, la France importe deux fois plus qu’elle n’exporte. De la Chine à Venise en passant par les Pays-Bas, chaque contrée garde précieusement le secret de sa spécialité. Face à ces difficultés, le Roi-Soleil innove résolument, en choisissant de développer des industries d’exception. Fer de lance de la politique mercantiliste du gouvernement, le luxe se développe à travers les manufactures royales grâce à l’innovation technique et scientifique et à de nouvelles formes de savoir-faire et de travail. Mais son essor repose aussi sur des méthodes moins avouables : espionnage industriel, débauchage systématique et, au besoin, rapt pur et simple.

Basses œuvres et haut de gamme
Ce choix du haut de gamme, fût-ce au prix de quelques basses œuvres, va s’avérer doublement payant, en renflouant les caisses de l’État et contribuant au rayonnement du souverain et de son royaume. Entre excellence industrielle, évolution économique, légende dorée et nouvelles sociabilités, Versailles impose le luxe français en Europe pour plusieurs siècles. À la fin du XVIIIe siècle, le goût du faste, apanage de la noblesse, laissera place à un nouvel art de vivre "à la française" dont s’empare une bourgeoisie en plein essor, tandis que ses produits phares s’exportent désormais dans le monde entier. De l’origine des glaces de la fameuse galerie du château de Versailles, conquises de haute lutte par Colbert en Italie, à la longue quête de la perfection en matière de fabrication textile, Stéphane Bégoin retrace, dans un récit fourmillant de détails et d’anecdotes, la palpitante genèse de l'industrie du luxe. Rythmé par des gros plans sur de précieux objets d’époque et des scènes de reconstitution éloquentes, son film entrelace les analyses et témoignages d’une multitude d’intervenants (archivistes, historiens, plasticiens...) avec de riches archives, notamment iconographiques.