Good Wednesday morning. A top European court dealt Uber a stinging blow. With the tax bill close to becoming law, what Republicans will do next. And Bitcoin falls as quickly as it rises.
The European Court of Justice ruled today that Uber is a transport company, instead of merely a platform that merely connects contractors to customers. It’s a significant blow to the $68.5 billion ride-hailing service in a year full of setbacks.
As the NYT points out, the decision by the court could stall Uber’s expansion plans in Europe and require the company to pay costly licensing fees and employee benefits.
From the ruling:
There is no appeals process for an E.C.J. ruling. But an Uber representative played down the impact of the decision:
Extra credit: Robert Cyran of Breakingviews wrote yesterday, “Europe will be the eye of the tech storm in 2018.”
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.
With the Senate having passed the reconciled tax legislation, and the House set to pass the proposal again — because of a technical issue — the $1.5 billion overhaul of the country’s tax code is set to reach President Trump’s desk within days. (Read a recap of Republicans’ legislative efforts.)
Here’s what Hank Paulson, the former Treasury secretary, emailed us about the bill’s passing:
Mr. Trump quickly took to Twitter to boast about getting the tax bill through Congress and predict an economic boom in the wake of its passage.
What’s next: Republicans say they are looking as soon as next year to overhaul entitlements like Medicare, Medicaid and Social Security with the aim of limiting spending. And Democrats plan to make the bill a central plank of their 2018 election platform, citing its unpopularity with voters.
The tax flyaround
• House Speaker Paul Ryan writes in a WSJ op-ed, “This is about helping a middle class that has been squeezed by a tax code that is expensive, complicated and skewed toward special interests.” (WSJ)
• Private equity firms will take some hits under the tax bill, but overall support the legislation. (Axios)
• Senator Bob Corker, Republican of Tennessee, probably didn’t ask for a provision in the tax bill that would benefit him financially — but he still voted against his principles, David Leonhardt writes. (NYT)
• The tax break for graduate students’ tuition fee waivers may have been preserved, but Republicans are still likely to take aim at other higher education subsidies. (NYT)
• Have questions about the tax bill? Our NYT colleagues Ron Lieber and Patricia Cohen will try to answer them. (NYT)
• Democrats won’t push for a vote this week on legislation to protect the young immigrants known as Dreamers, amid signs that the party doesn’t have enough votes to force the issue. But a compromise appears to be in the offing. (WaPo, Politico)
• A bipartisan group of senators on the Senate Banking Committee rejected the White House’s nomination of Scott Garrett, a former New Jersey congressman, to lead the Export-Import Bank. (NBC News)
• As more states run out of federal funding for the Children’s Health Insurance Program, parents are begging lawmakers to take action before their sons and daughters lose coverage. (NYT)
• The White House defended its judicial nomination process after three of its nominees withdrew their candidacies amid criticism. (Politico)
• It isn’t just the employees of famous men: Women on the factory floor of two Ford plants in Chicago say they have suffered harassment and groping for decades. (NYT)
• The “Today” show has consistently beaten its rival, “Good Morning America,” in viewer ratings since Matt Lauer was fired. (NYT)
• The House of Representatives paid $115,000 in taxpayer money to secretly settle three sexual harassment claims against lawmakers between 2008 and 2012. But the congressional Office of Compliance rejected a request by Senator Tim Kaine, Democrat of Virginia, to publish information about sexual harassment claims made against senators. (NYT, Axios)
• As awareness of sexual misconduct in the workplace is growing, the dearth of women in leadership positions — just 23 percent of C-suite positions at the top 1,000 American companies are held by female executives — is becoming more glaring. (Breakingviews)
Within the past day alone, the digital currency has plummeted from $18,385 to $16,626. It’s a timely reminder that when one chooses to jump in on an investing trend/fad, nerves of steel are required.
But believers in Bitcoin think that the currency will bounce back. From Jeremy Herron, Randall Jensen and Eric Lam of Bloomberg:
The WSJ says that the mini-crash appears to have been prompted by Coinbase beginning trading the alternative digital currency Bitcoin Cash.
Yes, they’re probably each a billionaire: The Winklevoss twins are largely known to the public — thanks to “The Social Network” — as haughty, naïve aristocrats given their comeuppance by Mark Zuckerberg. But in real life, their early bet on Bitcoin appears to have paid off handsomely, with their holdings worth about $1.3 billion as of yesterday.
More from Nathaniel Popper of the NYT:
Clearly, there’s no bubble here: A former fruit juice company briefly saw its stock price soar more than 200 percent yesterday when it changed its name from “SkyPeople Fruit Juice” to “Future FinTech” — despite its business having nothing to do with Bitcoin.
HNA’s efforts to cut its enormous debt load has led to some unintended — and probably unwelcome — consequences. Namely, that one of its portfolio companies now counts a major activist investor among its shareholders.
How Elliott gained its stake in the duty-free retailer Dufry is pretty complicated, as Robert Smith of the FT explains:
The big question: Since HNA has taken out equity collars for other portfolio companies like Deutsche Bank, have activists jumped into those other holdings as well?
In other hedge fund news: The Mexican billionaire Carlos Slim Helú is planning to sell more than half of his 17 percent stake in The New York Times Company to other investors, including hedge funds, Bloomberg reported.
Britain will remain subject to European Union rules during its transition period, which will end on Dec. 31, 2020, said Michel Barnier, the chief negotiator for the E.U. The transition is intended to give businesses time to adapt to the departure from the bloc.
And investment banks in Britain would have to stick closely to E.U. rules on issues like bonus caps after Britain leaves the union, even as the European Commission insists that financial services will not be included in a Brexit trade deal.
“It’s almost like this sick perversion I have, catching thieves.”
— Mike Armstrong, a contractor in Memphis who moonlights as a vigilante protecting Amazon packages against “porch pirates” who pilfer them from customers’ homes.
• “It’s becoming less and less sexy to be going to the United States.” The Canadian tech industry is aggressively courting foreign companies, with the help of immigration policies. (NYT)
• Elon Musk sent his telephone number to 16.7 million Twitter followers instead of to John Carmack, the chief technology officer at Oculus. Cue speculation that Mr. Musk is trying to recruit Mr. Carmack. (Bloomberg)
• Definers Public Affairs has pulled out of a federal contract to provide media-monitoring services to the Environmental Protection Agency after it was disclosed that a lawyer on its staff had been investigating E.P.A. employees critical of the Trump administration. (NYT)
• In Mr. Trump’s national security plan, intellectual property is king and deals will get a closer look. (NYT)
•Stitch Fix’s stock price plunged in aftermarket trading after the company reported earnings that were in line with expectations but which included a surge in ad spending. (Axios)
• Many Kushner buildings are mostly owned by others: The company owns less than 20 percent of half the buildings in which it has a state in New York City. (Bloomberg)
• An analyst at Nomura Instinet issued a rare downgrade of Apple’s stock, arguing that any surge in user growth is already baked into the share price — and, implicitly, betting that the iPhone maker won’t reach a $1 trillion market capitalization. (NYT)
• Journalists at Rolling Stone are “cautiously optimistic” about the prospect of being owned by Penske Media Corporation, according to Joe Pompeo. (Vanity Fair)
• Glencore and a group led by Apollo Global Management have been shortlisted to bid on the sale of Rio Tinto’s remaining coal mines, which could fetch more than $1.5 billion, according to people familiar with the matter. (Bloomberg)
• Michigan offered to let Amazon operate in Detroit with extensive tax breaks for three decades, among other incentives, while promising to create a $120 million program to meet the needs of its work force, according to documents laying out a bid for Amazon’s second headquarters. (Crain’s)
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