Stephen King Shines Light on Antitrust while Twitter sends Subpoena to Musk’s Circle — And Everyone Else
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It’s not every week that you see a horror novelist on the witness stand of an antitrust lawsuit in a Federal courtroom. Yet that’s what happened this week as the DoJ brought to court its challenge to Random House’s proposed acquisition of Simon & Schuster.
Stephen King appeared as a witness for the government in the opening days of the trial, helping the DoJ’s lawyers make a relatively novel argument: that the acquisition would ultimately hurt writers’ pay (this, as opposed to the more traditional argument that the affected parties are consumers). In true author fashion, King said in court that, “you might as well say you’re going to have a husband and wife bidding against each other for the same house.”
Over at the FTC, new arguments are also being tested. On Wednesday, the FTC asked a California court to block Meta’s proposed acquisition of Within, a small virtual reality company. In what is viewed as a shift to how the government approaches antitrust, Chair Lina Khan and her team are seen as looking to get ahead of any anticipated market dominance – in this case in the metaverse. Commenting on the suit, New York Times argued that this approach could be seen “wholesale shift in the way Washington enforces competition across corporate America.”
Another interesting element to note is the government’s selection of acquisitions to challenge. It has been remarked by some, including FTC Commissioner Noah Joshua Phillips, that new FTC policies aimed to target deals and perceived monopolies themselves will hurt smaller players due to the uncertainties and costs they create. Others in the press argue that DOJ enforcers may have other, more obvious fish to fry in the acquisitions they challenge.
Finally, in Twitter/Muskland, Twitter’s counsel is casting a very wide net in subpoenaing anyone linked to Musk’s Twitter deal, including Ken Griffin and over a dozen asset management firms that were involved in financing the deal. And this is only the beginning...
Have a great weekend,
GPP Team
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Breakingviews: Antitrust Watchdogs Go Big on Drama, Light on Plot
Jennifer Saba discusses ongoing trials and the antitrust approach of going after smaller deals, such as Penguin Random House’s proposed acquisition of Simon & Schuster. The government is arguing that such a deal would hurt writers and “lessen quality, choice and innovation.” Read More
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Axios: Biden’s DOJ Launches Two Major Antitrust Trials
In addition to the publishing lawsuit, the DOJ is suing UnitedHealthcare over its proposed acquisition of Change Healthcare, which regulators say would create a data sensitivity issue and give UnitedHealthcare’s Optum business monopoly power. Read More
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New York Times: F.T.C. Chair Upends Antitrust Standards with Meta Lawsuit
Lina Khan continues to go after Meta’s market power when she sued its proposed acquisition of Within Unlimited, a virtual reality startup that would advance the company’s advancement into the Metaverse and virtual reality marketplace. Read More
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“To the earlier subpoena additions incl. Tesla, SpaceX and Skadden, add some more!” Read More on @chancery_daily
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Bloomberg: Twitter Subpoenas Ken Griffin Amid Hunt for Musk’s Deal Backers
Although his exact involvement is unclear, Ken Griffin of Citadel was added to the list of those subpoenaed for the upcoming Twitter/Musk trial in October. Read More
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Financial Times: Elon Musk Subpoenas Goldman Sachs and JPMorgan in Twitter Takeover Fight
While Twitter subpoenas asset managers, Elon Musk has subpoenaed Goldman and JP Morgan for information about how the banks advised Twitter throughout the discussions. Read More
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ADDITIONAL READINGS AND LISTENINGS
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WSJ Opinion: Antitrust Attacks on Private Equity Hurt Consumers
Former U.S. assistant attorney general for antitrust, Makan Delrahim, argues against antitrust attacks on private equity investments because they benefit the economy through creating more competition and innovation. Read More
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New York Times: Forbes Explores Sale After SPAC Deal Collapses
After an unsuccessful attempt to go public via SPAC, Forbes has tapped Citigroup to explore a possible sale of the company. Read More
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The Deal: Activist Investing Today: Jefferies’ Young Reviews ISS, M&A
Christopher Young, global head of contested situations at Jefferies, believes “When an activist doesn’t get the support of either proxy adviser ISS or Glass Lewis it is pretty much “game over” for them. Listen Here
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Boardroom Governance Podcast: Derek Zaba, Partner and Co-Chair of Sidley’s Shareholder Activism Practice
Derek Zaba, a partner and co-chair of Sidley’s Shareholder Activism practice, joins host Evan Epstein to discuss the latest trends in shareholder activism, take-aways from last proxy season and the relevance of ESG in activist campaigns. Listen Here
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Lex: PayPal/Elliott: Pandemic Rally and Post-Pandemic Bust Look Superfluous
On its earnings call this week, PayPal acknowledged Elliott’s $2bn stake in the company and said it will bring down operating expenses and begin a$15bn stock buyback program. Read More
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POLITICO: Schumer’s Office Says He Plans to Hold Vote on Antitrust Bill
The Senate is expected to vote on the American Innovation and Choice Online Act, a tech antitrust bill. Read More
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Harvard Business Review: ESG Investing Isn’t Designed to Save the Planet
Professors Kenneth Pucker (Harvard) and Andrew King (Boston University) argue that recognizing ESG’s flaws, such as its confusing rating system, failure to deliver meaning impact, cost and misapplication could help refocus ESG investors on environmental impact. Read More
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World Economic Forum: Why Sustainable Governance and Corporate Integrity Are Crucial for ESG
The ‘G’ is too often overlooked in ‘ESG’ and this article takes a look at why addressing governance issues in companies is the key to gaining investor trust. Read More
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FROM OUR DESK TO YOURS
We also want to thank GPP’s fantastic class of summer interns! This was the last week for our interns and it ended with a bang. Our interns Nicole, Lorenzo, Shantinque, Jacob and Chapman worked on an in-depth analysis on the topic of current ESG trends and what role those three letters have had on companies in recent years.
Speaking of the next generation of the corporate workforce, HBO’s “Industry” is back for its second season. The show follows Gen-Z professionals as they navigate the fast-paced world of international finance. Similar to another office favorite, "Succession", “Industry” mixes current events with workplace issues — a must-watch as we wait to see what will come of Waystar Royco in season 4.
If East coast fishing is still on your summer bucket list, check out the East Hampton Star’s update on the big catches from fishing season out on the East end of Long Island written by longtime comms pro Jon Diat.
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PEOPLE MOVES
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Blake Jorgensen, most recently CFO for Electronic Arts, will be the next CFO at PayPal the company said in a press release. Read More
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Tim Wu, a top advisor to President Biden on antitrust, is said to be leaving his position and will return to teaching at Columbia Law School. Read More
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Preeti Singh, reporter covering institutional investors for the Wall Street Journal, is leaving her post. Read More
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Nicholas Jasinski has been promoted to Senior Reporter covering stock picking and investments at Barron’s New York. Read More
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