DealBook Briefing: 2 Meetings With Jared Kushner, and $509 Million in Loans

Good Thursday morning. Jared Kushner is criticized for meetings with business moguls who later helped his family’s company. Walmart is the latest business to wade into the gun debate. And Spotify opens its books ahead of its direct listing.

We asked yesterday if his family’s real estate business was his biggest liability. Our colleagues’ latest story shows that might be the case.

What happened

• Josh Harris of Apollo Global Management, an adviser on infrastructure issues, met with Mr. Kushner several times last year. In November, Apollo lent $184 million to Kushner Companies, triple the size of the investment firm’s average property loan.

• Citigroup’s C.E.O., Michael Corbat, met with Mr. Kushner in the spring, and shortly afterward the bank lent Kushner Companies $325 million.

Mr. Kushner, his family business, Apollo and Citi all said that nothing improper had happened. But the meetings raise questions about how the Kushner Companies is weighing down the political fortunes of President Trump’s son-in-law. Mr. Kushner has already had his interim security clearance downgraded amid a feud with the White House chief of staff, John Kelly.

The WSJ editorial board writes, “Mr. Kushner and Ivanka have to decide if they’d serve themselves and the president better by walking away from their formal White House roles.”

The politics flyaround

• The White House is set to announce new tariffs on steel and aluminum imports, according to unidentified sources. (Bloomberg)

• Hope Hicks, the White House communications director and one of Mr. Trump’s closest aides, plans to step down. (NYT)

• Mr. Trump publicly criticized Attorney General Jeff Sessions as “DISGRACEFUL” for not ordering his own investigation into the handling of the Russia inquiry. (NYT)


Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.


It was one thing for Dick’s Sporting Goods to set an age requirement for firearms sales. It’s another for the country’s biggest gun seller to do something similar. What each is doing:

Walmart: Raising the minimum age for purchases of guns or ammunition to 21, and eliminating products that look like assault-style rifles. (The company stopped selling AR-15s two years ago.)

Dick’s: Requiring buyers to be at least 21 and dropping AR-15s from its 35 Field and Stream outlets.

The NYT notes that Walmart explicitly linked the new rules to the school shooting in Parkland, Fla. The company said in its statement, “In light of recent events, we’ve taken an opportunity to review our policy on firearm sales.”

The gun control debate remains a tricky one to navigate, though more C.E.O.s feel compelled to speak up. Michael Dowling of Northwell Health told the WSJ, “We are people that other people look up to.”

A caveat: While some capitalist activists are urging big mutual funds to sell stocks in gun companies, Stephen Gandel of Gadfly argues that such divestment campaigns don’t work.

The political context: President Trump made a surprising pitch for tougher gun regulations and urged Republicans to push back against the National Rifle Association. The group called his move “great TV” but “bad policy.”

The music streaming titan shed light on its finances yesterday in its first filing, as it marches toward a listing that bypasses the traditional I.P.O. process.

Key stats: The company’s operating loss last year was $461 million, up slightly from 2016. It had 159 million users last year. The company was valued at $15.9 billion to $23.4 billion this year. And it plans to trade on the N.Y.S.E under the ticker symbol “SPOT.”

Not quite a bank-free offering: The company is working with Goldman Sachs, Morgan Stanley and Allen & Company, though they won’t perform traditional underwriter roles like participating in meetings with potential investors. Perhaps investment banks should be a little worried about the precedent.

Peter Eavis’s take

• Spotify is getting paid to be the music industry’s savior, based on its growing margins. Its gross profit on streaming revenue last year was 22 percent, up from 16 percent in 2016. That shows the company signed better licensing arrangements with music companies. But can Spotify keep turning the screw?

• Operating cash flows benefited from the company waiting to pay some of its bills. Can it keep doing so for years to come?

The context: This year has so far been good for stock market debuts, with 30 companies listing in the U.S. as of this week. It’s the strongest start for offerings since 2000, according to Thomson Reuters. Dropbox could begin trading next month.

• Meet Martin Gilbert, whose investment fund could help decide whether the satellite broadcaster Sky sells itself to Comcast or Fox. (Bloomberg)

• Bayer is willing to sell more assets to win regulatory approval of its $62.5 billion takeover of Monsanto. (WSJ)

• Saudi Arabia’s sovereign wealth fund has invested more than $200 million in Penske Media, the owner of Rolling Stone and Variety, according to an unidentified source. (NYP)

• The British insurer Equitable Life has hired Goldman Sachs to examine a possible sale. (FT)

The hedge fund mogul finally called quits on his five-year campaign against the supplements company Herbalife, which he called a pyramid scheme and whose stock he once declared would go down to zero.

A look back at the famous short bet, from Matthew Goldstein of the NYT:

Herbalife’s shares closed yesterday at $92.10, a record high.

Memories: Herbalife was at the center of Mr. Ackman’s infamous televised debate with Carl Icahn, who was (and still is) betting on the company’s ability to grow.

Where Mr. Ackman is focused now: United Technologies, the subject of rumors that the conglomerate may break itself up. Brooke Sutherland of Gadfly applauded the back-to-activism-basics bet.

In other hedge fund news: David Einhorn had a bad month. Viking Global Investors is the latest firm to wade into big-data analytics. The British retailer Whitbread is holding firm against an activist campaign by Sachem Head.

David Rubenstein, the Carlyle Group co-founder, told CNBC at the SuperReturn conference in Berlin that, over all, businesses support the White House’s economic policies:

Why? Largely the tax cuts, for which both Republicans and Democrats are compiling data to support their political arguments.

In other economic news: Liu He, Beijing’s top economic adviser, met with American business leaders like Jamie Dimon of JPMorgan Chase and David Solomon of Goldman Sachs amid heightening trade tensions between China and the U.S.

had a bad month. Viking Global Investors is the latest firm to wade into big-data analytics. The British retailer Whitbread is holding firm against an activist campaign by Sachem Head.

The commission has sent subpoenas to people and companies who have arranged initial coin offerings, signaling that tighter regulations may be in the offing.

More from Jean Eaglesham and Paul Vigna of the WSJ:

The virtual currency flyaround

• How productive is spending money and natural resources on … buying digital money? (NYT)

• Could your internet-connected security camera be hijacked to mine virtual currencies? (CNBC)

• Bitcoin is at $10,666.90 this morning, according to CoinMarketCap.

• As Brexit looms, not everyone wants Britain’s Serious Fraud Office to be completely successful in cracking down on corporate crime. (Businessweek)

• A former fraud investigator for Wells Fargo said the bank fired him in retaliation for his internal complaints about mishandled inquiries. (NYT)

• Bank of America has fired two employees for interfering in an investigation into Omeed Malik, a former executive accused of sexual misconduct, according to unidentified sources. (WSJ)

• Goldman Sachs and Société Générale have submitted final bids for the Commerzbank unit that houses the lender’s exchange-traded fund business, unnamed sources said. (Bloomberg)

• Two experts debate the merits of rolling back banking regulations. (FT)

• How low can unemployment go? Economists have no idea, and their uncertainty has huge consequences. (NYT)

• Auto-parts suppliers have called for cleaner cars, splitting with their main customers: automakers. (NYT)

• Exxon Mobil is abandoning its joint exploration ventures with Rosneft, retreating from what was one of its most promising investments until Western sanctions got in the way. (NYT)

• The tech entrepreneur Susan Wu has started a school in Australia, but critics worry about Silicon Valley overreach. (NYT)

• Everything that made Warren Buffett the celebrated investor he is lines up with what we’ve learned about the tendencies of female investors. (Bloomberg)

• Fosun International is looking for more deals abroad, and its chairman says there are no financial or political barriers in its way. (FT)

• The Microsoft co-founder Paul Allen said he was investing an additional $125 million into his nonprofit computer research lab for an effort to teach machines “common sense.” (NYT)

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