Financial Times Europe 27Mar2020

6 ★ FINANCIAL TIMES Friday27 March 2020

H A N N A H M U R P H Y— S A N F R A N C I S C O

Regulators havestepped in to clear upa case of mistaken identity on Wall Street, suspending the shares of Zoom Technologies, a small Chinese company that investors were confusing with Zoom, the video-calling app that has seen spectacular growth during the coronavirus pandemic.

The Securities and Exchange Commis- sion saidyesterday that it was halting trading in the Beijing tech group, which uses the ticker ZOOM, until April 8 over concerns that investors were “confusing this issuer with a similarly named Nas- daq-listed issuer... which has seen a rise in share price during the ongoing Covid-19 pandemic”. Zoom Video Communication, a Sili- con Valley videoconferencing app that floated in April 2019, has experienced an explosion in popularity as millions confined to their homes under national lockdowns have used it to host group meetings as well as social catch-ups. The value of its shares has more than doubled since the beginning of the year, giving it a market capitalisation of $40.3bn. Meanwhile, Zoom Technologies’ stock has risen tenfold since the beginning of the year — including a dramatic rally last Friday followed by a sudden drop — although its valuation is a far tinier $31.3m. The Chinese company was also sus- pended because it has failed to issue any public disclosures since 2015, the SEC said, raising questions over its finances and whether it even has any continuing operations. The company voluntarily delisted from the Nasdaq exchange in 2014, filings show. The SEC added that “unsolicited cus- tomer quotations for its common stock are quoted by broker-dealers... under the ticker symbol ZOOM” on an inter- dealer quotation system operated by OTC Markets Group. It is not the first time the small group — a Delaware corporation — has bene- fited from its larger namesake: its stock also jumped more than 80 per cent on the day of Zoom’s 2019 listing. “The commission cautions broker- dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information sub- sequently issued by the company,” the SEC said.

US regulators

Zoom in on

mistaken

identity case

J O E M I L L E R— F R A N K F U RT
R O B E RT S M I T H— LO N D O N

Volkswagen has called on the European
Central Bank to speed up its plans to buy
short-term corporate debt to help com-
panies ride out the coronavirus crisis.
The world’s largest carmaker told the
Financial Times the ECB should send
“clear signals” and buy commercial
paper — a form of short-term debt that
often matures in as little as six or nine
months — “as soon as possible”.
VW is one of the Europe’s most regu-
lar corporate issuers ofsuch debt.
“There’s a lot of pressure on the
incoming money flow,” said Frank Wit-
ter, chief financial officer. “We have

different diversified funding sources
available, but not all of them are as liq-
uid as they were.”
VW closed all its European plants last
week as the motor industry, with the
exception of China, came to an almost
complete standstill. Large corporations
account for a fraction of the €1.4tn euro-
zone commercial paper market, which
is usually used by banks, but access to
such debt can be vital for companies
looking to plug short-term liquidity
gaps, a common consequence of the dis-
ruption caused by coronavirus.
Mr Witter’s plea comes after the ECB
announced last week €750bn of extra
asset purchases to contain the financial
fallout from the coronavirus pandemic.
The central bank pledged to make non-
financial commercial paper “eligible for
purchase” under he programme.t

However, while it started buying sover- eign and corporate bondsyesterday, it is still ironing out the technical and legal details for buying non-financial commercial paper, and has yet to put that part of the scheme into effect. “Providing funding opportunities is something essential in this crisis,” Mr Witter said. “The earlier, the better.” VW has the capacity to issue up to €15bn of this debt in the eurozone market, with another €5bn earmarked for short-term debt in a separate market in Belgium. The group’s ringfenced financial services arm has an additional commercial paper programme with a €2.5bn limit. Companies that typically rely on commercial paper could draw down credit lines with banks, a form of standby financing that businesses can turn to at times of stress. Mr Witter said that VW, which has yet to tap available credit lines in excess of €20bn, said the company considered that facility “a back-up” for when capi- tal markets are shut. US rivals GM and Ford have each drawn down about $16bn from their respective credit facilities to shore up their finances in the face of supply-chain disruption and factory closures. The US Federal Reserve announced last week that it would begin buying commercial paper, restarting a facility last invoked during the 2008 financial crisis. Mr Witter’s plea comes just a few weeks after VW reported a 17 per cent rise in pre-tax earnings in 2019 to €18.4bn with net cash flows of almost €11bn in its automotive division. He said that the group had not yet decided to scrap its substantially increased dividend of €6.50 per share, but would “have to monitor the situa- tion, as developments are progressing”. Additional reporting by Martin Arnold

VW urges ECB

to act quickly

on purchasing

corporate debt

3 Carmaker cites liquidity pressures

3 Increase of dividend under review

‘We have diversified

funding sources available,

but not all of them are as

liquid as they were’

Gillian Tett ed tapped Fink’s BlackRock again as its experience and database make it a natural partnerF yOPINION

A L I C E H A N C O C K A N D A N TO N I A C U N DY LO N D O N

High-end restaurants, including some with Michelin stars, re deliv-a ering stripped down versions of their menus in UK cities as they attempt to find ways to sell fine dining through the coronavirus lockdown.

More than 100 restaurants have con- tacted Supper, the delivery service specialising in upmarket London restaurants, s they battle to maintaina revenues during theshutdown. Dishes available for delivery range from sous vide miso cod created by chefs who normally work on private jets, to a £135 dim sum menu from Mayfair restaurant Hakkasan. Sup- per’s customers typically spend between £90 and £120 per order. Daniel Hulme, a former private-jet chef, has spent £100,000 developing a blast chilling system that allows his chefs to prepare dishes to a point

where customers can reheat and fin- ish them to “Michelin star quality” with a set of provided gels and gar- nishes. Two courses cost £49.95. The service is in stark contrast to many people’s experience in obtain- ing food during the crisis — grocery delivery slots are sold out and house- holds are having to head to busy, understocked supermarkets. Campbell Mickel, head chef and founder of the Bib Gourmand restaurant Merienda in Edinburgh, said he viewed the delivery service as “a kind of public service”. He said the restaurant had moved from a small dish tasting menu to more “hearty food”, such as boeuf bourguignon, as it was easier for customers to dish up. “We prepare it 95 per cent the [same] way including the cooking, package it, and deliver,” he added. Supper said it had added more than 2,000 customers since March 20 and was processing in excess of 200 orders

a day. It has a waiting list of about 40 restaurants, while it has turned away 60 that did not meet its criteria, including high street chains or local kebab shops. Peter Georgiou, Supper’s chief exec- utive, said the stay-at-home economy was “a double-edged sword”. After theenforced closure of UK restaurantsa week ago,40 of the 80 restaurants on Supper’s books shut down. “One moment we’re doing a lot of business, at another we’re losing restaurants that don’t want their staff on site at all,” he said. The coronavirus outbreak has sparked a boom in meal deliverybut few services have been able to replicate the experience of fine dining. “Uber Eats and Deliveroo are fan- tastic companies but. a lot of the bet-. ter restaurants don’t want to use those delivery services because it doesn’t turn out as their chefs want it.” said Mr Hulme.

Posh noshHigh-end eateries adopt stripped

down home-delivered menus to navigate crisis

S

ilicon Valley’s preferred model of innovation — iterate fast, scale up rapidly — has met an adversary it can’t out- race. The Sars-Cov-2 virus moves even faster and, in some places, has hit an exponential growth curve. As the tech industry rushes to make a dent in this health crisis, it is facing a test of some of its most cherished ways of doing business — as well as its relationship with customers and users around the world. The can-do spirit and creativity unleashed by the public health crisis has certainly been heart-warming. Social media sites and mobile app stores, the open platforms on which crowdsourced innovation thrive, are awash with ideas. The Facebook page for Open Source Covid-19 Medical Supplies, for instance, has brought an outpouring of designs for essential medical gear. Much of it is protective equipment for people in the front lines of the battle against the virus, to be produced on home 3D printers close to where it is most needed. Ad hoc alliances are being formed to elevate makeshift designs like these into more robust supply lines. Carbon, a San Francisco-based 3D printing company, is trying to harness the customers who have installed 1,000 of its industrial- grade machines. Among its designs is a swab for coro-

New spirit of co-operation brings dangers for Silicon Valley

navirus tests that can bemade from resinused in dental labs. Ellen Kullman, CEO, says that more than 300 people joined a webinar this week to learn how to turn 3D printing machines to use for this and other designs. Protective gear and testing equipment are in short supply, and some lives will undoubtedly be saved by initiatives like this. But doing anything at a scale that will bring a real flattening in the Covid-19 morbidity — and mortality — curves is a different matter. Sometimes, only government will do. Centralised authorities are needed to pick the best ideas to back, provide vali- dation and certification, and command the resources on a scale that will make a real difference. Silicon Valley traces its origins to a close relationship with government — specifically, the defence build-up during the cold war. A series of similarly tight public/private partnerships, needed to deal with thehealth emergency, will test the Valley’s ability to meet a seriousneed, while retaining the methods and values it holds dear. The first results of this new spirit of co-operation have probably been clear- est in the information realm — specifically, when it comes to the collection and dissemination of reliable information about the nature and spread of the virus, and ways to limit the risks. App Stores, for instance, were designed to act as open platforms for anyone with a bright idea. But a search in Google’s Play store for anything coronavirus-related offers only a link to the World Health Organization, along with apps from the Centers for Disease Con- trol and the Federal Emergency Man-

agement Agency. Apple’s App Store is only slightly less restrictive, letting through a handful of vetted apps from medical researchers for tracking coronavirus symptoms. One of the most valuable locations on the internet, the Google homepage, now acts as a quasi-public service announcement, its single outbound link connect- ing to a trove of official coronavirus information. Searches for anything related to the pandemic bring special advice boxes, with most links leading back to the CDC and the WHO. A company that rose to prominence by finding relevance in the “long tail” of the internet has defaulted, at a time of global crisis, to being a con- duit for government-generated information and advice. This highlights just how serious a test the tech industry faces as it aligns itself with government to solve the current crisis, while at the same time defending its values and protecting user rights like privacy and freedom of speech. Thenature of a pervasive health scare makes this hard. Suppressing the spread of Covid-19 has already forced a limita- tion offreedoms — though Western gov- ernments have tried to do this through social pressure rather than coercion. The next phase, when it comes, is likely to involve attempts to partially reopen the economy while still regulat- ing individual movement. As China’s successful efforts to limit renewed outbreaks of the virus have shown, this is likely to require collecting information about individuals thought to pose a risk, such as where they have been and who they have had contact with. For the big tech platforms, stuffed with this kind of personal data, this could pose the biggest challenge.

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INSIDE BUSINESS

TECHNOLOGY

Richard

Waters

One of the most valuable

locations on the internet, the Google homepage,

now acts as a quasi-public service announcement

Despite the rise in home delivery, few services have been able to replicate the fine dining experience —Getty/Mint Images

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MARCH 27 2020 Section:Companies Time: 26/3/2020- 19:00 User:nick.miller Page Name:Comp&Mkts1, Part,Page,Edition:USA, 6, 1