Sorry to dwell on guns, but I suspect we will look back at this week as a defining one in the history of relations between companies and society. Walmart announced yesterday that it would no longer sell guns to anyone under 21. And Dick’s Sporting Goods announced it was discontinuing sales of assault weapons. That’s not a huge deal for Dick’s, as the company already had stopped selling them at its 715 name brand stores, and was only still selling them at the 35 stores in the Field & Stream chain. But still, it’s significant, particularly given Dick’s clientele. And it leaves Bass Pro Shops as the only major retailer still selling the assault guns.
Not clear how far this will go, but easy to see it going too far. I talked to the CEO of a major investment company, who says he is under pressure to “divest” gun manufacturers—something that’s particularly difficult to do with index funds, when the gun making companies are part of the index. Similarly, the CFO of a credit card company said that it’s under pressure to prohibit use of cards for buying guns—something it has no technical means of policing.
Then there’s the case of FedEx and UPS, which are sparring over their NRA policies. FedEx first refused to end discounts for NRA members, saying it never sets pricing or discounts for groups “in response to their politics, beliefs, or positions on issues.” Then, when the heat intensified, it tried to deflect blame, saying “for shipping from its online store, the NRA uses UPS and not FedEx.” UPS countered that it’s just a common carrier, and doesn’t offer discounts to the NRA.
All would probably agree that gun policy should best be set by government, not private companies. But it’s the abject failure of government, in this and so many other areas, that’s spurring companies into action.
The world’s biggest advertising group, WPP, just lost a tenth of its value after reporting results for what CEO Martin Sorrell called “not a pretty year.” Its 2017 net sales were down 0.9%, thanks to large consumer goods firms cutting spending and rivals such as Google, Facebook and Accenture eating its lunch. WPP’s shares dropped 10% on the news. The company says it will now shift its structure “from a group of individual companies to a cohesive global team dedicated to the core purpose of driving growth for clients.” Reuters
The music streamer Spotify finally filed for its long-awaited IPO yesterday, suggesting it will begin trading publicly later this month. (It’s only floating existing shares, though, rather than offering new ones.) The filing showed heavy losses. Last year, when it made €4.1 billion ($5.02 billion) in revenue, it lost €1.24 billion—up from €539 million in 2016 and €230 million the year before that. According to the Journal, private transactions in February gave the Swedish firm a valuation of $22.6 billion. Wall Street Journal.
Trump Gun Stun
President Donald Trump surprised lawmakers by saying the White House was drafting an executive order to ban rapid-fire gun stocks—something he’d already told Attorney General Jeff Sessions to do, but now appears to have taken it upon himself to achieve. Trump said he wanted to turn tragedy into “something that’s beautiful,” but Republicans were less than impressed. NBC News
Gates Recession Prediction
Bill Gates believes another global recession is coming in the near future, he said in a Reddit “Ask Me Anything” session (his sixth). “It is hard to say when, but this is a certainty. Fortunately we got through [the 2008 crisis] reasonably well,” he said. (A few people may disagree with that assessment.) “Warren [Buffett] has talked about this,” the Microsoft co-founder said, “and he understands this area far better than I do.” Fortune
Around the Water Cooler
Handelsblatt has a profile (auf Englisch) of Annegret Kramp-Karrenbauer, who is looking increasingly likely to be Chancellor Angela Merkel’s successor at the helm of the Christian Democratic Union party in Germany. The premier of the Saarland state and now the CDU’s secretary-general, “AKK” or “mini-Merkel” (as the German press calls her) echoes Merkel in sitting at the political center, leaning left on economic issues but right on social issues. Handelsblatt
Putin Poverty Promise
President Vladimir Putin, currently in electioneering mode, has promised to halve poverty in Russia within the next six years. Putin also said he wanted Russians to live as long as those in Japan and France (Russia’s life expectancy is 72.5 years, versus 83.7 years in Japan and 82.7 years in France). “Every person matters to us,” said the incumbent, who faces no serious challengers in the March 18 elections, as main rival Alexei Navalny is not allowed to run. BBC
Google’s YouTube is hiring many new moderators to tackle the problems of disinformation and extremism on the video network, but it seems they may have failed an early test. New moderators removed entire channels from right-wing, pro-gun activists—something that would represent a major policy change if it hadn’t been, as YouTube claims, a mistake. Fortune
Fresh from the debacle over his security clearance earlier this week, Jared Kushner now finds himself the subject of a request for information, sent by the New York Department of Financial Services to Deutsche Bank, Signature Bank and New York Community Bank. The regulator wants to know about the banks’ relationships with Kushner and his businesses, and about loans granted to the son-in-law-in-chief. Bloomberg