US tariffs have reduced Chinese investment in the US by 92% and forced companies like Harley-Davidson to consider overseas options. The Hustle Tues, Jun 26 Brought to you by T-Mobile ONE… the ONE plan to rule them all. China’s US...
By: Wes Schlagenhauf
June 26, 2018
US tariffs have reduced Chinese investment in the US by 92% and forced companies like Harley-Davidson to consider overseas options.
Brought to you by T-Mobile ONE… the ONE plan to rule them all.
China’s US investments tank due to tariffs — and so does Harley production
Thanks to tumultuous tariffs, Chinese investment in the US dropped 92% in the first half of 2018 -- reshaping trade across the globe.
The “trade war” between the US and China has been largely bluster so far -- but recent escalations have affected everything from global stock markets to Harley-Davidson production.
Tariffs turned markets upside down
The trade troubles intensified yesterday when Trump announced plans to restrict Chinese investment. The plans, expected to be further detailed this week, ban companies with 25% Chinese ownership from investing in the US and also restrict US exports.
After the announcement, the Dow fell 1.33%, the S&P dropped 1.37%, the Nasdaq dropped 2.1% -- and tech and auto industries across the globe tumbled.
Panic on both side of the Pacific
In response, China’s central bank released $107B from its reserves to help jump-start the economy before American tariffs (which will impact $34B of China’s US exports) go into effect.
Meanwhile, China launched an ambitious plan, “Made in China 2025,” to establish Chinese tech dominance -- and President Trump has threatened to up tariffs on China to $450B to foil the program, which he calls unfair.
This may only be the beginning…
The EU has already launched a retaliatory tariff -- forcing US motorcycle company Harley-Davidson to move production of some of its motorcycles to Europe.
Harley-Davidson’s production shift was immediate, but other companies will lose contracts slowly -- Boeing is already expected to lose an $18B Chinese contract it had been negotiating.
China has also vowed to match US tariffs dollar-for-dollar if Trump follows through with his jabs -- so get ready to pay more for everything from cordless drills to Christmas lights as the international bickering continues.
Made In… Europe?
Your ears aren’t ringing, that’s just another IPO bell…
Axios reports that it’s shaping up to be 2018’s biggest week for US IPOs, setting June up to be the busiest IPO month in the past 3 years.
According to Renaissance Capital, total IPO funds raised are up 33% from this time last year to $26.3B and filings are up 30%. For context, there have already been 114 filings since January, compared to 126 in all of 2016.
Analysts had forecast a huge IPO year for tech companies, but so far the healthcare sector is putting up the biggest numbers, with 34 IPOs raising nearly $3B this year (36% of total IPOs in 2018 thus far).
Why the bell boom?
Axios says the cause of the hot streak is a bit unclear, as there is still plenty of private capital ripe for the taking. However, their sources say strong IPO pricing and post-IPO performance for new public companies have encouraged others to enter the water.
Restrictions on Chinese investments (see above) and election uncertainty have also magnified the usual pre-August-vacation IPO bump we see every year.
Gotta lock down that extra margarita money before you go full Buffett…
The local TV market is consolidating: Gray Television to buy Raycom for $3.65B
Yesterday, Gray Television announced its intent to purchase rival TV station owner, Raycom Media Inc, for $3.65B ($2.85B in cash, the rest in stock).
You may not hear these companies’ names thrown around every day, but if the sale is approved, the combined conglomerate will be the 3rd-largest TV station owner in America, and reach 1 out of every 4 households.
The big dogs of local TV
Gray and Raycom both serve small and midsize markets — if Gray wins its bid, it will own 142 TV stations in 92 markets across the US.
Right now, there’s a civil war going on between TV station owners (like Gray and Raycom), and broadcast networks (which make the content); consolidating gives them more leverage when it comes to dealmaking.
And luckily for them, the FCC is making it easier
Back in November, the US Federal Communications Commission voted against regulating the consolidation of media companies.
It’s big news for traditional outlets, who are grappling with declining TV subscription numbers and competing with streaming services for market share.
Behavioral science firm Mind Gym is going public at a $192m valuation
The corporate office culture development company, Mind Gym, announced plans on Monday for a $192m listing on London’s junior Aim market.
According to the Financial Times, the company said the IPO will raise around $67m for selling shareholders, and was a positive step in its plans to grow and diversify.
Mind Gym not Mindfreak
Not to be confused with Criss Angel’s place of pump (opportunity definitely missed), the London-based company offers classes that look to promote better office culture by teaching employees how to work in healthier and more productive ways.
We repeat: there are absolutely no classes that teach someone how to jump through a wood chipper and live to tell the tale.
Topics include performance management, diversity training, employee engagement, and most recently harassment, which has led to the company’s newest product, appropriately titled “Respect.”
Needless to say, the past 12 months have been busy for them
According to the company, the growth of the #MeToo movement inspired about half its existing clients to approach Mind Gym to help them with their company culture.
The group works with corporate big boys like Unilever, GlaxoSmithKline, and Microsoft, and their revenue spiked 17% YoY, with a 25% jump in operating profits.
We would also be remiss not to mention that the name of Mind Gym’s co-founder is Octavius Black, which sounds suspiciously like an alias Criss Angel would use… just sayin'.
1. A crucial hire in early-stage companies who is self-motivated and can work with minimal guidance. 2. Someone who will ‘hit the ground running.’ 3. Someone who can keep themselves busy in perpetuity and ask very few questions. 4. Someone who has little experience, and a lot to prove.
Hiring manager: We’re looking for a self-starter to launch our content strategy.
23-year-old: I can use Google.
Hiring manager: This role will have very little mentorship.
Hiring manager: You’re hired.
deals deals deals
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