How Alabama’s Election Could Reshape Washington’s Policy Battles: DealBook Briefing

The odds: Pre-election polls have been incredibly volatile, though Nate Silver thinks Mr. Moore is in the lead. Polling stations close at 8 p.m. E.T.

Will Republicans enact their tax plan by year-end?

Odds on prediction markets have slipped to around 66 percent, Goldman noted. The firm, however, put a 90 percent chance of enactment by the end of the year.

That point was one of six observations that Goldman’s economic team put out Tuesday. Here are a few others:

The tax plan could cause a pick up in business investment next year. Goldman thinks the corporate tax rate will be cut to 20 percent, but will not take effect until 2019. That would give companies a reason to move up capital expenditures, or capex. “Given the incentive for companies to pull forward deductible expenses into 2018, the one-year delay combined with full expensing of equipment capex would create a more important incentive for capex in 2018 than prior capex incentives enacted by Congress over the last 15 years.”

American companies may issue more debt overseas. Goldman expects limits on interest expense to resemble the Senate’s plan. “Along with limits on the US share of worldwide interest expense and the indirect effects of a 20 percent rate and changes to taxation of foreign profits, companies will have a greater incentive to issue debt abroad than they do under current law.”

The current legislation would reduce the effective corporate tax rate by around 3 percentage points on average over the next ten years.”

The Republican tax plan likely overestimates the revenue gains from limiting the deductibility of state and local taxes, or SALT. “It is difficult to predict how and when states will adapt to the changes, but they have an incentive to do so. As the limitation of SALT deductibility is one of the largest sources of new revenue in the tax reform legislation, the proposed tax cut could turn out to be much larger than expected if states successfully adapt to the changes.”


Jim Wilson/The New York Times

What does Apple spend its cash on? Not acquisitions.

Apple’s purchase of Shazam for reportedly as much as $400 million, got us to wondering: How acquisitive has Apple been?

The answer? Not very, especially for a company with more than $250 billion in cash on its balance sheet and a market value within spitting distance of $1 trillion.

Apple has disclosed only 11 acquisitions valued at $4.5 billion in its history, according to Thomson Reuters.

To put that into perspective, we asked Thomson Reuters to pull some numbers. (One note on the data below, deal values include completed acquisitions and ones that are currently pending.)

• The most acquisitive company? General Electric, which has made 1,206 acquisitions valued at $311 billion. Of course, G.E. has been around for more than a century, while Apple went public in 1980. So how does Apple compare with other tech companies?

• Microsoft, Oracle, Cisco, HP and Intel each have made acquisitions valued at more than $50 billion.

• Google’s parent, Alphabet, which was founded in 1998, has done 223 deals valued at $29 billion. Facebook? The social media giant, which has been around since 2004, has pulled the trigger on 65 deals with a value of $23 billion.

• Apple, in fact, doesn’t even rank in the top 100 most acquisitive tech companies.

Extra credit: What have been the two most acquisitive tech companies? AOL — now a part of Verizon — and Broadcom. Both have been in the news lately. Broadcom made a $105 billion unsolicited offer for Qualcomm last month. Meanwhile, deals for Time Warner and Time Inc. has brought renewed attention to AOL’s $165 billion acquisition of Time Warner.


Hock Tan, the chief executive of Broadcom.

Evan Vucci/Associated Press

Is Broadcom making a jobs promise it can’t fulfill?

So argues Andrew in his latest column, citing the $1.5 billion in “synergies” — read, “cost-saving layoffs” — that the analysts think the chip maker could reap by buying Qualcomm. Based on Broadcom’s moves with previous takeovers, that could translate into about 5,400 jobs being cut.

That runs contrary to what Broadcom’s C.E.O., Hock Tan, told President Trump at a news conference last month announcing that the company would move its corporate headquarters to the U.S. from Singapore.

More from Andrew’s column:

Mr. Tan of Broadcom has boasted that he plans to spend $3 billion “in research and engineering.” Mr. Tan has been given high marks for managing the portfolio of Broadcom assets effectively, but he has never been known for industry-changing innovations.

Qualcomm has its own headache

With Elliott Management challenging the $110 a share price that the company agreed to pay for NXP Semiconductors, the chip maker must now wage two deal battles at once.

While some analysts and investors think Qualcomm might raise its bid for NXP as a way to deter Broadcom — which doesn’t want the NXP deal to become any more expensive — Qualcomm says that for now it’s sticking by its $110-a-share offer.


Zvi Lowenthal/The New York Times

Read it here first: Interstate Batteries to partner with Advance Auto Parts.

Under the terms, Interstate will become the exclusive supplier of car batteries to Advance, one of the biggest auto parts sellers in the United States starting this spring.

Interstate believes that the partnership could bolster its sales significantly, while Advance is hoping that a product alliance with a well-regarded parts maker would help stanch a 43 percent drop in its stock price over the past year.

The big picture: The companies view this as a way to help guard against Amazon, which has been moving (among many, many product lines) into the aftermarket car parts business.

From a statement by Scott Miller, Interstate’s C.E.O.:

This alliance places us where our professional and retail customers are making purchasing decisions, allowing Advance Auto Parts and independent Carquest stores to serve as convenient, one-stop shops to meet our customers’ needs.

Who else is being troubled by Amazon: the Fed, which is reckoning with e-commerce’s effect on inflation as it decides how quickly to raise interest rates.


An excerpt of the Treasury Department’s one-page analysis of the Senate tax bill.

Treasury’s analysis of the tax bill is shorter than this briefing.

The department’s long-awaited study of the Senate Republicans’ proposed overhaul runs to about 489 words in length (including the title and footnotes) and, in the reckoning of even conservative commentators, does not actually detail the legislation’s economic effects.

The question: Will the Treasury Department’s paper change any lawmaker’s mind? The NYT quoted a senior Senate aide who said that congressional Republicans were blindsided by the move, especially since it came out so close to the start of formal talks between House and Senate negotiators to reconcile their tax bills.

The reaction from analysts

• It’s “an odd way to analyze a tax bill,” said Scott Greenberg at the Tax Foundation.

• “I don’t believe in magic,” said David Brockway, a staff director of the Joint Committee on Taxation during the Reagan administration.

• Of a 1-percentage-point difference between the Treasury’s economic growth assumptions and that of the Congressional Budget Office, Mark Mazur, an economist who worked for the Obama administration, told the WaPo, “It’s the equivalent of me being one foot taller and able to dunk a basketball.”

The tax flyaround

• Small investors remain unhappy about the Senate bill’s “first-in-first-out” stock-selling rule. (WSJ)

• Finance ministers from Europe’s largest economies wrote to the White House and the Treasury Department saying that tax cut plans would flout international agreements and undermine trade. (FT)

• The proposed tax code changes could make the United States far less friendly than financial centers abroad like Hong Kong and London, write Cliff Asness and Michael Mendelson of the hedge fund AQR Capital Management. (WSJ)


Chris Pizzello/Invision, via Associated Press

Fox’s assets are now Disney’s to lose.

Comcast acknowledged publicly yesterday that it’s out of the running. “We never got the level of engagement needed to make a definitive offer,” the cable giant said in a statement.

That clears the path for Disney to buy the Fox television and movie studios, stakes in the international broadcasters Sky and Star and other significant divisions. As we said yesterday, a deal could be struck this week, though it’s unclear whether an announcement would specify a role at Disney for James Murdoch. (If he does get one, it probably would involve overseeing the international broadcast businesses.)

A lighter take


That’s courtesy of Paul Pendergrass, formerly DealBook’s “Jack Flack” columnist.


Susan Fowler.

Damien Maloney for The New York Times

The latest in misconduct news.

• The FT named Susan Fowler, the former Uber engineer whose blog post helped kick off a reckoning about sexual misconduct by men in the workplace, as its person of the year. (FT)

• NFL Network suspended three analysts, including the Hall of Fame running back Marshall Faulk, after a former employee accused the men of sexually harassing and assaulting her. (NYT)

• Four women who had publicly accused Mr. Trump of sexual misconduct renewed their allegations publicly yesterday, demanding that Congress investigate the president’s actions. (NYT)

• Representative Blake Farenthold, Republican of Texas, is under scrutiny by the House Ethics Committee amid new allegations of a “frat house” atmosphere in his congressional office. (NYT)

• Mario Batali has stepped away from his restaurant empire after four women spoke with Eater about being groped and harassed by the celebrity chef. (Eater, NYT)

• The New Yorker fired a prominent political journalist, Ryan Lizza, over what a representative called “improper sexual misconduct.” (Politico)

• The kind of sexual harassment training that is increasingly spreading in corporate America doesn’t work. (NYT)


“I think we have created tools that are ripping apart the social fabric of how society works.”

That’s what Chamath Palihapitiya, the former Facebook executive turned venture capitalist said at a Stanford Graduate School of Business talk last month. Mr. Palihapitiya, who was a vice president of growth at the tech juggernaut, recommended that users take a “hard break” from social media.

More from his chat:

The short-term, dopamine-driven feedback loops that we have created are destroying how society works. No civil discourse. No cooperation. Misinformation. Mistruth. And it’s not an American problem. This is not about Russian ads. This is a global problem. So we are in a really bad state of affairs right now, in my opinion.

Extra credit: Kevin Roose of the NYT delved into the world of the alt-right tech start-ups and found design that’s reminiscent of the 1990s — and growth prospects that appear similar to the post-dotcom-bust 2000s, since these companies are largely shut off from mainstream sources of funding.

Regulators are keeping an eye on Bitcoin.

As Bitcoin continues its rocket-like ascent — “I don’t think anyone wants to go in and fight the trend,” a brokerage executive told the WSJ — both the Securities and Exchange Commission and the Commodities Futures Trading Commission are closely watching the frenzy over digital currency.

Regulators have already tightened the reins on at least one digital currency matter: The food review app Munchee canceled its initial coin offering yesterday after the S.E.C. issued a warning about the forthcoming deal.

The Bitcoin flyaround

• The gap between the futures price and the Bitcoin price has caused some concern. (Bloomberg)

• Futures tied to Bitcoin are a big deal, but a bigger one would be the emergence of options, according to Andy Mukherjee. (Gadfly)

Revolving Door

• Jessica Verrilli, the Twitter executive who oversaw the company’s mergers strategy, is leaving at the end of the year. (Recode)


Hector Retamal/Agence France-Presse — Getty Images

Quote of the Day

“Those who bought bonds in the hopes of windfall profits should not be protected at the expense of the island, its economy and its future. And they should certainly not be bailed out by U.S. taxpayers.”

— Martin Guzman and Joseph Stiglitz of Columbia University and Antonio Weiss, formerly of Lazard and the Obama administration, in a WaPo op-ed on how Puerto Rico bondholders must take a hit to help the island recover financially from catastrophic storm damage.

The Speed Read

• Mr. Trump has boasted of cutting more regulations than have other presidents, but government records tell a different story. (Bloomberg)

• Jim Simons, the billionaire founder of Renaissance Technologies, shares the key to his investing success: He says he “never overrode the model.” (New Yorker)

• Carl Icahn has picked another board fight with Xerox. (WSJ)

• SoftBank has agreed to invest another $500 million in the satellite broadband provider OneWeb, according to a person familiar with the matter. (WSJ)

• The French IT services firm Atos is making an unsolicited bid to buy the smartcard maker Gemalto for about $5 billion, adding to a series of deals in the payments sector. (WSJ)

• Westfield, the mall operator based in Australia, agreed to a takeover by the European property company Unibail-Rodamco, which valued it at $15.7 billion. (WSJ)

• The boom in special-purpose acquisition companies is driven by huge sums of money trying to find a home and any half-decent return, which gives it all a peak-of-the-markets feel. (Heard on the Street)

• K.K.R. will replace Blackstone as the manager of a credit vehicle focused on small and medium companies with below-investment-grade credit ratings. (WSJ)

• Steve Cohen’s Point72 Ventures has invested a fraction of his $13 billion fortune in early-stage fintech start-ups, but he’s not looking for VC returns. (The Information)

• Apple made less than $100 million by selling stock in Dec. 1980. Massachusetts regulators wouldn’t let individual investors touch it because they deemed it “too risky” under rules “aimed at wedding out highfliers that don’t have solid earnings foundations.” (MarketWatch)

• HSBC said that American authorities were preparing to dismiss criminal charges against the bank, five years after it reached an agreement to avoid prosecution related to lapses in its money-laundering controls. (NYT)

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