The Economist - USA (2019-09-28)

10 The EconomistSeptember 28th 2019
The world this week Business

AdamNeumannquitaschief

executiveofWeWork, the

office-rentalstartupthathe

helpedfound.Hehadbeen

blamedbyinvestorsforthe

postponementofWeWork’s

ipo, whichwasshelvedaftera

sharpdropinitsexpected

value.MrNeumannisstaying

onaschairman,butisreport-

edlycedingcontrolofWeWork

bycurtailinghisshareholder

votingpower.

About to be stubbed out?

Juul replaced its chief exec-

utive, as concerns mount

about the health risks of

e-cigarettes. The firm’s new

boss comes from Altria, a

tobacco company with a 35%

stake in Juul. Health officials

have identified hundreds of

cases of lung illness related to

vaping. Walmart decided to

stop selling e-cigarettes

because of the “regulatory

complexity and uncertainty”.

Massachusetts banned the sale

of all vaping products for four

months.

With the market for e-ciga-

rettes facing a cloudy future,

Philip Morris International

and Altriaended their attempt

to merge, reportedly in part

because of the risk from

Altria’s exposure to Juul.

German prosecutors charged

Volkswagen’schief executive,

Herbert Diess, and chairman,

Hans Dieter Pötsch, with fail-

ing to tell investors in the

summer of 2015 that the car-

maker was being investigated

for cheating emissions tests.

When news broke of the scan-

dal in September that year vw’s

share price plunged. Martin

Winterkorn, the company’s

ceoat the time, was also

charged (he is also facing

separate indictments of fraud).

All three deny the charges.

Nissanand Carlos Ghosn

settled with America’s Securi-

ties and Exchange Commis-

sion for filing fraudulent

financial forms relating to his

retirement package. Mr Ghosn

was sacked by the Japanese

carmaker as chairman last

November for various alleged

misdeeds and awaits trial in

Tokyo. Both he and Nissan

neither admitted nor denied

wrongdoing.

Once described as a “Tesla

killer”, nioshed a quarter of its

stockmarket value after report-

ing a big quarterly loss and

drop in sales. The Chinese

maker of electric vehicles has

been hurt by a recall related to

battery problems and the

phasing-out of Chinese sub-

sidies for green-energy cars.

Kristalina Georgievawas

confirmed as the new manag-

ing director of the imf. Ms

Georgieva, a Bulgarian, is the

first person from a developing

economy to hold the job. In a

speech she said the world must

prepare for a downturn.

The eu’s second-highest court

struck down the European

Commission’s finding in 2015

that Starbuckshad benefited

from illegal tax breaks in the

Netherlands.

Anheuser-Busch InBevpriced

the shares being sold in the

forthcoming ipoof its Asian

business at the bottom end of

an indicative range it had set.

The brewer has already sold

some of the assets in the busi-

ness, but the scaled-down

flotation in Hong Kong should

still raise at least $5bn, which

would make it the world’s

second-largestipothis year,

after Uber.

Royal Bank of Scotland

appointed Alison Rose as chief

executive, succeeding Ross

McEwan, who has held the job

for six years. Ms Rose takes

over at a challenging time for

rbs. The bank is still majority-

owned by the taxpayer, 11 years

after a bail-out. The govern-

ment’s plan to return it to full

private ownership by 2024 is

less certain given rbs’s recent

warning that Brexit could

affect its profit.

The collapse of Thomas Cook

led to the largest ever peace-

time repatriation in Britain, as

the government chartered

planes to return 150,

stranded tourists. The holiday

firm requested a state bail-out,

which was rejected amid re-

ports that executives were still

rewarding themselves hefty

pay packages. Condor, a Ger-

man airline and subsidiary of

Thomas Cook, had better luck,

securing a bridging loan

backed by the German govern-

ment to keep it flying.

Facebookacquired ctrl-Labs,

a startup that is developing a

technology to enable people to

manage computers with their

brains. It has designed a wrist-

band that captures signals sent

from the brain to the hand and

transmits them to a computer.

The head of Facebook’s virtual-

reality business said this al-

lows someone to share a digital

photo “just by...intending to”.

A lot of spin

Pelotonlaunched its ipoon

the nasdaqstockmarket,

pricing its shares at the higher

end of expectations. It de-

scribes itself as “an innovation

company transforming the

lives of people around the

world through our ever-evolv-

ing fitness platform”. Translat-

ed, that means selling internet-

connected bikes for $2,245 and

subscriptions to workout

plans. A sensation with svelte

hipster-types, its finances are a

bit flabby; it lost $196m in its

latest financial year. Peloton

will have to up the pace as it

becomes a public company.