Welcome to the Weekly Scan. Here’s what we’re following for the week of September 14, 2020.

Make sure to check back as we update these stories.

It’s a deal. Software and cloud-computing company Oracle reportedly won its bid to buy the U.S. operations of video-creation app TikTok. Microsoft and Walmart had previously been frontrunners to acquire operations of the app from its Chinese parent ByteDance. In August, President Trump issued two executive orders that would have banned the app if it weren’t sold to a U.S.-based company, based on national security concerns over ByteDance’s use of customer data. 

  • The takeaway: The structure of the deal isn’t currently known, but Oracle has reportedly described it as more of a partnership than an acquisition. China recently issued new laws regarding how algorithms, such as TikTok’s, could be exported, which might have complicated Microsoft’s acquisition of the app. Treasury Secretary Steve Mnuchin and the Committee on Foreign Investments in the U.S. will reportedly review the deal with President Trump. TikTok, which is valued at $50 billion, has been downloaded about 2 billion times worldwide, including about 170 million times in the U.S. alone. Social media company Twitter had also previously expressed interest in acquiring TikTok.

Wall Street Journal

Women and Wall Street. Citigroup, one of the largest banks on Wall Street and in the world, has named Jane Fraser as its new chief executive officer. She is the first woman to hold the position at Citigroup, or any major Wall Street bank. Fraser has worked at the bank for sixteen years, and currently serves as the president of Citigroup, leading the global consumer banking side of the business. She will replace current CEO John Corbat when he steps down in February, 2021. 

  • The takeaway: Leadership roles at banks have been largely dominated by men, especially at big banks such as Citigroup. There are only four other banks with more than $10 billion in assets that are run by women. These are BNP Paribas, Synchrony Financial, CIT Group, and Bremer Financial. Fraser will be faced with managing the bank amidst the financial turmoil caused by Covid-19.

Wall Street Journal and CNN

Zooming to the top. Eric Yuan, the founder and CEO of video conferencing software company Zoom, is now one of the 400 richest people in the U.S. To date in 2020, Yuan’s net worth has increased 396.5% to $17.7 billion. Zoom is currently worth $35.5 billion. Yuan started the company in 2011 and was inspired by his once long-distance relationship with his now wife. 

  • The takeaway: Zoom has become an increasingly popular tool to connect with family and friends and to meet with colleagues as a result of Covid-19. The pandemic has forced many people to work and socialize from home via Zoom and other video conferencing technologies. Zoom brought in $328 million in revenue between February and April, 2020, more than double what it made the previous year.

Business Insider and The Verge

Layoffs at Juul. E-cigarette maker Juul is reportedly planning to cut more than half of its employees, reducing the number of workers to 1,000 from 2,200. With these layoffs, Juul could end services in 11 countries and focus its efforts in the U.S., Canada, and the U.K. Earlier in 2020, Juul laid off a third of its employees. Juul’s sales have fallen in the last year. Sales decreased 33% year over year in the four weeks ending on August 8, 2020.

  • The takeaway: Juul has struggled since September, 2019, when the Food and Drug Administration (FDA) warned the company about misleading advertising to teens about its flavored vaping products, claiming they are a safer alternative to smoking. The company has come under fire for a rise in vaping in teens and for potentially causing illness and even death. Juul stopped selling its sweet and fruity flavors in response to the accusations. 

Wall Street Journal.

Tiffany’s sings the (robin’s-egg) blues. Tiffany’s and LVMH Louis Vuitton Moët Hennesy, two of the biggest names in luxury products, are fighting it out in court. A proposed sale of jewelry maker Tiffany’s to LVMH fell through, reportedly due to a pandemic-related drop off in sales at Tiffany’s, and a request from the French government that LVMH delay the deal until 2021, citing potential new tariffs from the U.S. The $16 billion deal would have been the largest ever in the luxury industry, and would have added Tiffany’s, famed for its robin’s-egg blue boxes, to LVMH’s portfolio of ultra-luxury names including Dior and Givenchy. In its lawsuit, Tiffany said LVMH breached its merger obligations by failing to include it in talks with the French government about a delay.

  • The takeaway: The struggle between Tiffany’s and LVMH reflects the pandemic’s continued negative effects on the retail industry in general, and more specifically on the expensive luxury goods segment, where consumers are spending less. The pandemic-related shutdown of brick-and-mortar stores has forced many retail brands into bankruptcy as sales have dived. The ailing deal also shows the impact of new tariffs, which have strained the relationship between the U.S. and foreign allies. The U.S. government has suggested that it would levy tariffs on many French luxury goods in response to French tariffs on U.S. tech companies like Amazon, Google, and Facebook. 

New York Times

Find out what we covered in last week’s Scan.

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