DealBook Briefing: How Good Are Companies’ Tax Presents to Workers?

Good Thursday morning. Some big companies are giving tax-related gifts to their employees, but how generous are they? Uber reckons with its European court setback. And SoftBank is continuing to change Silicon Valley.

In a surely coincidental series of announcements, several companies — including AT&T, Comcast, Wells Fargo, Fifth Third Bancorp and Boeing — announced that they were giving their employees bonuses or higher wages, and increasing investment in light of the passage of the Republican tax bill.

An aim of the tax bill is to help American companies, in the belief that they will in turn bolster the economy as a whole. (Justin Fox of Bloomberg View writes that AT&T’s bonuses aren’t a gimmick, but a natural consequence of a corporate tax cut.)

But skeptics have asserted that those companies really just want to get on President Trump’s good side. (AT&T, for example, is seeking approval for its Time Warner deal despite a lawsuit by the Justice Department. At a news conference, Mr. Trump praised AT&T’s bonus and capital investment plans.)

Some back-of-the-envelope calculations, courtesy of Binyamin Appelbaum of the NYT:

A bigger question: How long can any economic stimulus from the tax bill last?

From Patricia Cohen of the NYT:

The tax flyaround

• Gary Cohn has asserted that the White House tried multiple times to eliminate the loophole for carried interest being taxed at a low rate, but was stymied by lawmakers he did not identify by name. (Axios)

• Expect more mergers next year, as clarity on tax policy settles in and penalties for selling businesses fall away, Aaron Back writes. (Heard on the Street)

• The tax overhaul doesn’t change the fact that automation will still cause job losses, and that giants like Apple and Alphabet will still pay lower taxes than nascent rivals, Farhad Manjoo writes in his latest State of the Art. (NYT)

• Highly indebted companies like Dell are still worried about the limits on deductions tied to corporate debt. (WSJ)

• Daniel Shaviro of N.Y.U.’s School of Law says of Mr. Trump, “I’m not even aware of a single provision in the bill that disadvantages him or his family, other than the change to state and local tax deductibility.” (WaPo)


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


The finding by the European Court of Justice that the ride-hailing giant is a transportation service instead of an online platform throws a hurdle into Uber’s expansion plan. The company won’t be kicked out of any countries, but the ruling does prevent the rollout of any services involving nonprofessional drivers — like UberPop (or UberX in the United States).

The decision comes as a group led by SoftBank is trying to buy out existing investors through a tender offer. Expect some negotiating between the two sides up until the last minute of the offer period, but SoftBank has gotten a bit more negotiating leverage thanks to the E.C.J.

Coming up fast in the rearview mirror: Didi Chuxing, Uber’s frenemy in China, has just raised $4 billion from SoftBank and the Abu Dhabi state fund Mubadala. Uber is technically an investor in Didi now, thanks to a truce the two struck last year — but Didi is reportedly weighing an expansion into North America.

It’s time for some math

• Technically, Uber has retained its $68.5 billion valuation because SoftBank’s group has bought $1 billion of new shares at that level.

• But the SoftBank consortium is trying to buy out shareholders at a $48 billion valuation.

• Didi’s new fund-raising round values that company at $56 billion.

Extra credit: Uber has hired Barney Harford, the former C.E.O. of Orbitz, as its chief operating officer.

Sequoia, the hugely successful venture capital firm, is raising at least $5 billion for its next growth fund. That target is more than double the size of the V.C. firm’s last fund.

It appears to be a reflection of an increasingly clear fact: When SoftBank has almost $100 billion in its Vision Fund to invest — and can write a $250 million check in one go — more traditional players will be forced to react. One way is to try to go bigger.

As one unidentified V.C. investor told Kara Swisher of Recode:

A different approach: Remember when we reported earlier this week TPG Growth raised only slightly more money for its own new fund? Why not go whole hog? The fund’s managing partner, Bill McGlashan, told Michael: “It’d change the kind of companies we’d invest in.” (Translation: Trying to play in the Vision Fund’s kind of megadeals means taking bigger risks to make the kind of returns that the fund earns now.)

Penske — which already owns Variety, Deadline and WWD — has paid about $51 million for a majority stake in the onetime music industry touchstone. Rolling Stone was valued at about $100 million.

More from Sydney Ember of the NYT:

Whom Penske reportedly beat out: James Dolan of Madison Square Garden and the investment firm Rizvi Traverse, according to Variety.

• Two women who had settled sexual harassment claims with the former Fox News host Bill O’Reilly have joined a defamation lawsuit against him and the network, asserting that they had been wrongfully depicted as liars and extortionists. (NYT)

• The NYT said that it would remove the reporter Glenn Thrush from the White House beat, but would not fire him, after investigating accusations that he had sexually harassed women at previous jobs. (NYT)

• The artist Chuck Close apologized for making insensitive remarks to women after he faced accusations of sexually harassing them when they came to his studio. (NYT)

• Damian Green, one of Prime Minister Theresa May’s top deputies, stepped down from her cabinet after an investigation found that he had made misleading claims about pornography on his work computer. (BBC)

• The presenter Catt Sadler resigned from E! Entertainment because, she said, she was being paid half of what her co-host of “E! News” was making. (Chicago Tribune)

Bitcoin is arguably in a bear market — because it has fallen 20 percent off its high point, which was set on Monday. But that hasn’t deterred some of Wall Street’s most sophisticated investors from wanting to dive into the world of digital currencies. (Why? Bitcoin is still up some 1,600 percent for the year.)

From Greg Zuckerman of the WSJ:

The ongoing tale of Bitcoin Cash: Coinbase is investigating claims of insider trading in the Bitcoin offshoot. After the exchange reopened trading in Bitcoin Cash, the digital currency fell, and as of this morning was trading at about $3,632.

The digital currency flyaround

• North Korea is suspected of carrying out a heist at a South Korean Bitcoin exchange, Youbit, that led to the company filing for bankruptcy protection. (WSJ)

• An unidentified trader has made a nearly $1 million bet that Bitcoin will reach $50,000 next year, using options. (WSJ)

• The founder of Litecoin, another digital currency, has sold his holdings. (Reddit)

Backers of the Broadway production of “Hamilton,” including the billionaire Len Blavatnik, have made a return of about 600 percent on their investment, according to the FT. Investors in the London production, which officially opens today, expect to collect a similar kind of return.

— Anthony Scaramucci, speaking at a Hanukkah party hosted by Rabbi Shmuley Boteach this week about what it was like to work in the White House, according to Page Six. (It was hard choosing just one quote.)

• Royal Dutch Shell and Eni will go on trial in March on charges of corruption in a $1.3 billion oil deal in Nigeria. (NYT)

• The zero bonus, or doughnut, could be looming for bond traders as bank revenue from fixed-income sales and trading units has been falling. (FT)

• Facebook job ads, targeted to particular age groups, have raised concerns about age discrimination. (NYT, ProPublica)

• Millions of Americans have been caught up in the debate on repeal of net neutrality rules, but the most vocal and committed activity may have come from digitally savvy teenagers who grew up with an open internet. (NYT)

• Litigation for past misconduct that contributed to the financial crisis could cost European banks more than $100 billion, with several lenders still facing cases that could require billions of dollars to settle. (Bloomberg)

• The special-purpose acquisition vehicle Nomad Foods is in talks to buy Britain’s Goodfella’s Pizza for about 200 million pounds, or about $267 million. (FT)

• A New Zealand regulator blocked the HNA’s planned acquisition of UDC, a finance company, saying that it couldn’t determine which foreign person owned and controlled HNA’s local subsidiary. (WSJ)

• Guggenheim Partners has joined Carl Icahn in opposing a deal for the oil company SandRidge Energy to buy Bonanza Creek. (FT)

• CEFC, a Chinese oil conglomerate, and Penta Investments, a Czech-Slovak financial group, have submitted a joint bid for Time Warner’s Central European Media Enterprises, which could be worth about $2 billion. (Reuters)

• Spotify is expected to receive approval from the Securities and Exchange Commission for the direct listing of its shares on the New York Stock Exchange. (WSJ)

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