The Murky Tactics Used to Seize Billions in Saudi Arabia: DealBook Briefing

Good Monday morning. Here’s what we’re watching:

• David Solomon is Goldman Sachs’s heir apparent.

• What exactly happened during the Saudi government’s crackdown on businessmen?

• Dropbox unveils its I.P.O. target.

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From the outside, the Saudi businessmen (including Prince Alwaleed bin Talal) who were corralled into Riyadh’s Ritz-Carlton — in what Crown Prince Mohammed bin Salman described as an anticorruption campaign — seemed to be in a gilded cage.

The reality was far more disturbing. Many were physically abused and one captive was killed, witnesses told the NYT. The Saudi government extracted billions of dollars of assets from detainees to set them free.

More from Ben Hubbard, David Kirkpatrick, Kate Kelly and Mark Mazzetti of the NYT:

The net effect: Many outside investors, whom Saudi officials have hoped to woo to help transform the kingdom’s economy, are now rattled by what they say was a lack of transparency.

Of note: The roles of the accounting company PWC and the law firm Clifford Chance in the Saudi government’s takeover of MBC, a broadcaster.

Elsewhere in the kingdom: Aramco is more likely to go public next year than late this year as originally expected, Michael reported yesterday. Among the issues is that much of the work in pulling off the biggest I.P.O. in history has yet to be finished.

In a revised prospectus filed this morning, the online storage company said that it planned to sell 36 million shares at $16 to $18 a share. At the midpoint of that range, Dropbox would be valued at about $7.5 billion, compared to the $10 billion of its most recent private fund-raising.

The big thought: The Dropbox offering — along with that of Spotify — could show how interested Wall Street investors are in the latest batch of Silicon Valley “unicorns,” or privately held companies worth at least $1 billion.

The man who made Dropbox: Meet Drew Houston, who created a multibillion-dollar business because he forgot to bring a USB flash drive one day while a student at M.I.T. His holdings could be worth nearly $1.7 billion.

Elsewhere in unicorn listings: Spotify is planning to begin trading on the N.Y.S.E. the week of April 2, according to Bloomberg.

Students of Marjory Stoneman Douglas High School took out a full-page ad in the NYT over the weekend to thank businesses “who acted on their consciences and took positive steps for change” after the school shooting in Parkland, Fla. Among the companies thanked: BlackRock, Bumble, Delta, Dick’s Sporting Goods, Gucci, Kroger, REI and Walmart.

The students are looking for GoFundMe donations for their March For Our Lives on March 24 in Washington.

Lots of big businesses weren’t mentioned. Let us know if your company is changing its policies or donating to the march.

Broadcom said this morning that it now expected to finish moving its legal headquarters by April 3, more than a month ahead of schedule. (The redomiciliation, as the move is technically known, was originally scheduled for May.) It’s the latest effort by the Singapore-based chip maker to allay the U.S. government’s national security concerns about its hostile takeover bid for Qualcomm.

Elsewhere in the chip wars: Intel is reportedly weighing options to intervene in the wrangling, including the unlikely option of bidding for Broadcom itself, according to the WSJ.

The deals flyaround

• Eon, the German utility company, will buy Innogy, a renewable energy business, from its rival RWE in a complex deal worth 43 billion euros, or about $53 billion. (FT)

• The British online lender Funding Circle has hired Bank of America Merrill Lynch, Goldman Sachs, Morgan Stanley and Numis to manage its I.P.O., unnamed sources said. (Bloomberg)

• The online luxury shopping company Farfetch, based in London, plans to go public in the U.S., and has hired JPMorgan Chase and Goldman Sachs as underwriters, unnamed sources said. (FT)

• Silver Lake plans to invest more than $100 million in Oak View, which builds and operates entertainment and sports arenas. (WSJ)

History hasn’t been kind to those who seek victory in trade conflicts, though it remains unclear whether President Trump’s tariffs will play out the same way.

Farmers in the Midwest are fearful of a tit-for-tat response that could lose them customers. And investors are watching to see whether a full-blown global trade conflict will erupt.

The politics flyaround

• Mr. Trump’s unpredictability has helped cast China as a more stable superpower. And changes to the Chinese Constitution that allow President Xi Jinping to govern indefinitely could usher him into a global club of autocrats alongside leaders like Lee Kuan Yew of Singapore and Vladimir Putin of Russia.

• Business are scrambling to address errors and ambiguities in the U.S. tax overhaul. (NYT)

• Chris Liddell, a White House official and a former executive at Microsoft and G.M., is a front-runner to succeed Gary Cohn as the administration’s top economic adviser. (NYT)

• The White House has held discussions with a lawyer who represented Bill Clinton during his impeachment to help deal with Robert Mueller’s investigation. (NYT)

• The Trump Organization’s outside ethics adviser has raised questions about a potential hotel deal between the company and Kushner Companies. (NYT)

• Elon Musk outlined what the first colony on Mars would look like. TL;DR: It wouldn’t just be an escape for the wealthy, but “an explosion of entrepreneurial opportunity.” (Axios)

• Jeff Bezos said that he was using his “Amazon lottery winnings” to make space travel more affordable. (Bloomberg)

By the time he was essentially forced out of the ride-hailing giant, Mr. Kalanick had annoyed many onetime allies among the company’s senior executives and outside investors, according to Business Insider. Among them: Salle Yoo, Uber’s longtime top lawyer, and Rachel Whetstone, the company’s communications head, who have both since left the company.

And then there was Bill Gurley of the investment firm Benchmark. According to the article:

Elsewhere in Uber: How the company can still create its own reality distortion field for investors. How it plans to expand Uber Eats. Oh, and its brand chief, Bozoma St. John, has quietly been driving for Uber Pool.

The virtual currency corner: Bitcoin is at $9,882.73. Some investors are using the virtual currency as an indicator of when the stock market will drop. Some exchanges are reportedly charging up to $1 million for the listing of initial coin offerings on their platforms. And scammers made off with more than $2 million in digital money with a fake I.C.O.

The tech flyaround

• SoftBank is bringing together its Vision Fund and Fortress Investment to create an investing powerhouse. (NYT)

• Tim Berners-Lee, inventor of the World Wide Web, says internet giants need to be regulated. (Axios)

• Senator Mark Warner, who sits on the Senate Intelligence Committee, says he is worried about the security of internet-connected devices. (CNBC)

• Some former employees of Google say the company is going too far in its diversity efforts — others say it’s not going far enough. (NYT)

Employees in restaurants and bars face a daily struggle to balance abuse from customers with the need to earn tips, according to dozens of servers who spoke with the NYT.

Workers’ advocates are pushing a dozen states and the District of Columbia to change laws allowing restaurants to pay less than the minimum wage, which makes earning tips a necessity.

Please tell us your experiences with tipping, too.

The misconduct flyaround

• The U2 frontman Bono apologized after a charity he helped found was accused of fostering an atmosphere of bullying, abuse and, in one case, attempted sexual coercion in its Johannesburg operation. (NYT)

• Read the harassment policies of venture capital firms like Andreessen Horowitz, DFJ and Spark Capital, some of which promise to fire employees who violate the rules (even if that hasn’t always happened). (Recode)

• Andrew Liveris will step down as executive chairman of DowDuPont next month. Jim Fitterling, a lieutenant to Mr. Liveris, will take over the Dow materials science business after DowDuPont splits up. (WSJ)

— Lloyd Blankfein of Goldman Sachs, on the WSJ reporting that he could step down as C.E.O. as soon as year end.

• “Westworld” exists. HBO created an entire theme park based on the show for the film festival SXSW in Austin, Tex. (Business Insider)

• Insurers shuffle their customers among privately managed plans to bolster their federal bonus payments. (WSJ)

• The New York approach to running magazines may have run its course, making the approach of Des Moines-based Meredith Corporation look prescient. (NYT)

• Here’s how a French company pushed the limits in war-torn Syria. (NYT)

• Top executives at Deutsche Bank will forgo bonuses for a third consecutive year after another loss. (WSJ)

• An anticorruption group has called on the British authorities to investigate Royal Bank of Scotland and Standard Chartered over claims the banks handled more than $2 billion of allegedly embezzled funds from 1MDB, a Malaysian state investment fund. (FT)

• Global accounting watchdogs identified serious problems at about 40 percent of the audits they inspected last year. (FT)

• Big multinationals are paying significantly lower tax rates than before the 2008 financial crisis. (FT)

• Blackstone has turned India into its most profitable market. (Bloomberg)

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