Good morning, Quartz readers!
To value a company, come up with a story and put numbers to it.
In recent years, technology startups have told the best stories. Uber promised to set the world in motion, Airbnb to create a world where anyone belongs, WeWork to elevate the world’s consciousness.
These big ideas came with even bigger numbers. Uber: $68 billion; Airbnb: $47 billion; WeWork: also $47 billion. A small circle of wealthy private investors birthed a new vocabulary of “unicorns” and “mega-rounds.”
Now, these stories are being tested with investors in the public markets, who have proved less willing to engage in magical thinking. Uber, which went public in May, is trading 30% below its IPO price; Lyft is down more than 40% since March. This week, Peloton took a 10% tumble on its first day of trading. Airbnb said it won’t risk a listing until next year.
No company has crashed into the reality of the public markets harder than WeWork, which shelved its IPO last week on reports that its valuation could fall as low as $10 billion. The company this week pushed out its cultish CEO after investors balked at his self-dealing and mismanagement. WeWork reportedly plans to lay off thousands of employees and halt all new lease agreements as it looks to cut costs.
Behind each of these troubled IPOs is a common problem: The companies lose tremendous amounts of money. This was fine when they were shielded from scrutiny by a circle of investors who were happy to provide cash as long as valuations kept climbing. It has been a tougher sell for public investors, who are more interested in profits and less keen on founders with outsized sway over shareholders.
Aggressive, deep-pocketed venture investors like SoftBank have made it easier for companies to stay private for longer, raising staggering sums in the process. But these backers have to cash out eventually, and that usually means an IPO. When the paper gains in venture rounds turn out to be fiction, later-stage investors will be telling a different kind of tale. —Alison Griswold and Jason Karaian
Not so peachy. Democratic lawmakers turned talk of impeaching Donald Trump into action this week after the release of a record documenting the US president asking his Ukrainian counterpart for help investigating a political rival. But declaring an investigation with an eye to impeachment is a long way from removing a president from office on constitutional grounds. Ephrat Livni and Pete Gelling break down the process.
The greater good. Kashmir has been in shutdown for over 50 days and mass detention centers are being built in Assam, yet the Gates Foundation gave a big award to Indian prime minister Narendra Modi this week. The decision generated much criticism, and, writes Annalisa Merelli, highlights the ethical challenges philanthropies face when dealing with controversial governments and leaders. Is the pursuit of development worth lending them legitimacy on a global stage?
The UN isn’t playing with small change. The organization pulled in $53.2 billion in 2017, and, yes, a significant portion of that came from the United States. But there’s much more to how the United Nations is funded than just the high-rolling US. In an array of charts, Amanda Shendruk breaks down who gives to the global peacekeeping body, and where that money goes.
City within a city. Chinatowns of old were home to low-skilled laborers seeking safety in numbers. Today, a new version of them in Western cities caters to wealthier arrivals who do white-collar work and live in freshly built high-rises with amenities catered to Chinese tastes. In a “Because China” video for Quartz members, Nikhil Sonnad explores one prominent example: Flushing, a thriving Queens suburb in New York that feels very much like modern China.
Apocalypse nah. Given the way some pessimists talk, you’d think humanity has little chance of surviving such threats as climate change, killer viruses, and nuclear war. But as the SETI Institute’s Seth Shostak argues, none of those dangers would wipe out Homo sapiens, even in worst-case scenarios. What could do us in is a nearby gamma ray burst. Fortunately that cosmic phenomenon—capable of sterilizing the planet—is exceedingly rare.
Moving pictures. Most of TikTok’s billion-plus global users turn to the app for lighthearted fun: cheerful singalongs, quirky comedy bits, and the like. But for rights activists, the app is an invaluable source of videos showing (or hinting at) the mistreatment of the Uyghur community in China’s Xinjiang region, as Isobel Cockerell writes for Wired. The key is to download the forbidden content before censors can remove it from the platform.
“Free” might mean “fraud.” Elderly Americans are being targeted with complimentary yet unnecessary and often useless cheek swabs and attendant Medicare billing, racking up over $1 billion in genetic-testing fraud over just the past few years, estimates the US Justice Department. For Reuters, Sarah N. Lynch reports on a burgeoning industry for scamsters.
Picturing the crash-out. What might the immediate aftermath of an Oct. 31 no-deal Brexit look like? Bloomberg Businessweek imagines the scenarios, using real companies as examples. Things look grim for a car-parts maker in central England, a sheep farmer whose land straddles the Irish border, and a biscuit maker in Scotland. Soon trade arteries are clogged, and supermarket inventories dwindle. Yet UK prime minister Boris Johnson continues to insist things will be better in the long run.
Climate progress requires economic regress. Enacting teen activist Greta Thunberg’s agenda to save the planet from climate catastrophe would mean fundamentally shifting away from the economic drive toward growth. As Osita Nwanevu points out in the New Republic, that renders most shows of support for Thunberg’s positions relatively shallow.
Catching on. Some ideas spread more slowly than others. About 200 years ago, Japan refined a relatively humane way of killing fish that also made them tastier. Today the ikejime method is starting to be more widely adopted in other nations, thanks in part to fishermen catering to Japanese standards, as Katherine Waters writes for The Economist’s 1843. Bonus: The technique also results in the meat staying fresh longer, allowing chefs to experiment more.
Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, fishing tricks, and Brexit scenarios to email@example.com. Join the next chapter of Quartz by downloading our app and becoming a member. Today’s Weekend Brief was edited by Steve Mollman and Holly Ojalvo.