Xiaomi’s trading slump spells trouble for China’s tech giants
The smartphone maker went public on the Hong Kong Stock Exchange today. It didn’t go well. The shares fell about 4 percent, even as the broader market rose. That may worry other companies hoping to follow in Xiaomi’s footsteps.
Trouble was apparent early on, when its I.P.O. priced at the low end of the expected range, with a valuation of $54 billion. Among investor concerns: Xiaomi hasn’t shown it’s evolving from a maker of cheap gadgets into a more lucrative internet company.
If investors feel burned by Xiaomi, that could dampen their enthusiasm for the many other Chinese tech companies headed for the public markets this year, from Alibaba’s Ant Financial to Tencent’s music subsidiary to the e-commerce platform Meituan-Dianping. Which means the backers who spent billions on those giants could miss out on huge windfalls.
In other I.P.O. news: Sonos, the American maker of wireless speakers, has filed to go public.
Brexit is blowing up, again
British Prime Minister Theresa May had a small moment of success on Friday, when she convinced her cabinet to support her vision of a soft Brexit. It didn’t last long.
Critics say her plan, which outlines a compromise on customs and trade that was meant to unify hard-line Brexiteers and Brexit skeptics, is too ambiguous. A senior E.U. official told the FT that it was “the fudge of the century.”
Brexit Secretary David Davis, Mrs. May’s top negotiator with the E.U., resigned last night, alongside at least one other minister, saying he could only be “a reluctant conscript” to the plans. Mrs. May has named Dominic Raab as Mr. Davis’s successor. Today, she must face fellow Conservative lawmakers, many of whom are deeply unconvinced by her plans.
They do not appear to be alone. With the government providing few clear solutions, businesses are running out of patience. Investment in Britain’s financial firms is falling, and firms like BlackRock and Citigroup plan to move employees to Paris from London.
In China, the future of surveillance is real — and scary
Much is written about China’s surveillance state, where cameras and A.I. combine to track citizens. But what’s it really like? An inside glimpse from Paul Mozur of the NYT:
In some cities, cameras scan train stations for China’s most wanted. Billboard-size displays show the faces of jaywalkers and list the names of people who can’t pay their debts. Facial recognition scanners guard the entrances to housing complexes.
The government also tracks the likes of internet use, hotel stays and travel. While Mr. Mozur points out that Beijing’s ambitions currently outstrip its abilities — not all cities are using this kind of technology — a long and growing list of convictions suggest that China’s high-tech authoritarian future is well on course.
Index Ventures raised two new funds to continue its hot streak
The trans-Atlantic venture capital firm, with offices in London and San Francisco, has enjoyed a run this year that included the multibillion-dollar I.P.O.s of Dropbox and the financial processor Adyen, and the $2.2 billion sale of iZettle to PayPal. It now has two new funds to help keep that momentum going.
Index plans to announce today that it has raised $1.65 billion for the two funds, DealBook’s Michael de la Merced reports. It’s looking to continue with its current strategy: Investing early in start-ups and playing on its understanding of global markets. That approach, one of the firm’s partners said, helped it recognize that electric scooters would be big — and invest in Bird well before that company became a $2 billion phenomenon.
AT&T has hired Margaret Peterlin, who was the State Department’s chief of staff under Rex Tillerson, as a top government affairs official. (WSJ)
Gemini, the Winklevoss twins’ cryptocurrency exchange, has hired Robert Cornish, the NYSE’s chief information officer, as its chief technology officer. (Business Insider)
The speed read
• The fight between Martin Sorrell and his old employer, the ad giant WPP, is getting bitter. (NYT)
• BP is said to be the front-runner to buy BHP Billiton’s American shale operations. (Bloomberg)
• Univision is said to be considering a sale of Fusion Media Group, home to former Gawker properties like Gizmodo and Deadspin. (WSJ)
Politics and policy
• Architects of the Republican tax cuts have left government for the private sector. (NYT)
• President Trump is scheduled to announce his nominee for the Supreme Court this evening. The Senate majority leader, Mitch McConnell, would prefer Thomas Hardiman or Raymond Kethledge.
• Health insurers are bracing for turmoil as the Trump administration suspends payouts tied to the Affordable Care Act. (NYT)
• Some supposed A.I. start-ups are relying on hidden armies of minimum-wage employees. (Guardian)
• Still, automation does seem to be working for buying and designing clothes. (NYT)
• Amazon is letting merchants sell white supremacist merchandise and content on its platform, two activist groups say. (NYT)
Best of the rest
• Farewell, quantitative easing. Hello, quantitative tightening. (Bloomberg)
• Inflation is rising, but raises are tougher to get than ever. (DealBook)
• Mark Zuckerberg has overtaken Warren Buffett as the world’s third-richest person. (Slate)
• The fake Saudi prince exposed by a plateful of pork. (Miami Herald)
You can find live updates throughout the day at nytimes.com/dealbook.
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