Three weeks ago today, a lawsuit for sexual assault was filed against Texans quarterback Deshaun Watson. On Tuesday, the plaintiff — who previously sued under the Jane Doe pseudonym — has disclosed her identity and spoken to the media.
At a press conference called by attorney Tony Buzbee, Ashley Solis attended and made a statement regarding her interactions with Watson.
“I’m here to take back the power and take back control,” Solis said. “I’m a survivor of assault and harassment.”
She said that Watson assaulted and harassed her on March 30, 2020 “in my own home, doing what I love most, massage therapy.”
“Some days I feel like a hero, other days I feel like a failure,” she explained, adding that she replays the interaction over and over in her head.
“I can no longer practice the profession I love the most without my hands shaking during the session,” she said. “I got into massage therapy to heal people. To heal their minds and bodies. To bring peace to their souls. Deshaun Watson has robbed me of that.”
She said that she has suffered panic attacks, anxiety, depression.
“We were all deceived into thinking Deshaun Watson was a good guy, and unfortunately we know that good guys can do terrible things,” Solis said.
“People say that I’m doing this just for money,” she added. “That is false. I come forward now so that Deshaun Watson does not assault another woman.”
Buzbee said that Solis had spoken with the Houston Police Department, and that at least one other person has as well.
Chairman of the Federal Reserve Jerome Powell listens during a Senate Banking Committee hearing on “The Quarterly CARES Act Report to Congress” on Capitol Hill in Washington, U.S., December 1, 2020.
Susan Walsh | Reuters
The Federal Reserve could remain a source of angst for markets in the week ahead, with chairman Jerome Powell scheduled to testify twice before Congress and more than a dozen other Fed speeches expected.
The bond market’s reaction to the central bank this past week was unusually volatile.
Though the market was initially steady after the two-day Fed meeting and Powell’s briefing Wednesday, Thursday came with a big selloff in bonds and spiking rates. Traders reacted to the fact that the central bank is willing to let inflation and the economy run hot while the job market recovers.
In the approaching week, bond market professionals will be watching Powell and other member of the Fed for further cues.
“This is bonds’ — I wouldn’t call it day in the sun — it’s more like day in the tornado,” said Michael Schumacher, head of rate strategy at Wells Fargo. “Clearly the bond market is the one the equity market is watching right now, and normally that’s not the case.”
Stocks were lower on the week, with the Dow off about 0.5% and the S&P 500, down 0.7%. The Nasdaq Composite was off 0.8% for the week.
The Russell 2000, however, was hit the hardest, losing close to 3% for the week.
Yields ratcheted higher as the market sold off. Bond yields move inversely to price.
The benchmark 10-year Treasury yield, which impacts mortgages and other loans, rose as high as 1.75% Thursday, a move of more than 10 basis points in less than a day. It was at 1.72% Friday afternoon.
“The bond move has been huge, and it’s starting to scare people,” said Schumacher.
“There’s been this question hanging out there for awhile: How much of an increase in yield can some of the higher octane stocks take?” he asked. “There’s no magic number, but as we speak, the 10-year is up 80 basis points this year. It’s incredible.”
Powell speaks
Powell testifies Tuesday and Wednesday before Congressional committees along with Treasury Secretary Janet Yellen on Covid relief efforts and the economy.
He also speaks on central bank innovation at a Bank for International Settlements event Monday morning.
Other central bank speakers this week include Fed Vice Chairman Richard Clarida, Vice Chairman Randal Quarles, Fed Governor Lael Brainard, and New York Fed President John Williams.
Inflation and the Fed
There is also some key data.
Important releases include the personal consumption and expenditure data on Friday, which includes the PCE deflator, the Fed’s preferred inflation measure. Core PCE inflation was running at an annual pace of 1.5% in January.
The Federal Reserve this past week took no action at its two-day meeting, but it did present new economic projections including a forecast of 6.5% for gross domestic product this year. The central bank’s forecast now shows PCE inflation going to 2.4% this year, but falling to 2% next year.
The majority of Fed officials did not see any interest rate hikes through 2023.
Powell reiterated that the Fed sees just a temporary pickup in inflation this year because of the base effects against last year’s numbers when prices fell.
The central bank will target an average range of inflation around 2%, so that number could exceed that threshold for some time. It’s a change to the Fed’s ground rules, which makes the bond market nervous.
Normally, the Fed would hike interest rates if inflation flared up to avoid an overheating economy and avert a bust cycle.
“For the bond market, and the Fed, there is a communications problem and there’s a consensus problem. There can’t not be tension,” said Diane Swonk, chief economist at Grant Thornton.
“They will be trying to clarify the Fed’s message, but without a consensus on what those numbers and guardrails mean, it will be hard,” she said. “They will be explaining themselves as economists, and they’ll be speaking a different language than the bond market speaks.”
Leo Grohowski, chief investment officer at BNY Mellon Wealth Management, expects the bond market could be more volatile than stocks, and inflation would be problematic for both.
At some point, he expects there could be a 10% stock market correction, and inflation or a sharp move in bond yields could be a trigger.
“The market is trying to make sense of what could be perceived as a disconnect, between their economic projections and the Fed’s dual mandate of unemployment and inflation,” said Grohowski.
“Yet, they’re committed to keep short rates on hold until the end of 2023,” he said. “That’s what the market is struggling with. I think it’s unsettling to me to hear words like ‘overshoot.'”
Rotation from tech into cyclicals
Grohowski expects what he calls the ‘great rotation’ from tech and growth stocks into cyclicals and value to continue. Growth and tech have been most sensitive to rising rates, and the Nasdaq has corrected more than 10%.
“I think we’re in the sixth or seventh inning of a nine-inning game. It’s not over, but I think we’ve seen the lion’s share of the great rotation out of growth, into value,” said Grohowski. He said that view depends on the 10-year not rising much above 1.75%.
Grohowski is concerned by the Fed’s willingness to let inflation overshoot because inflation is a negative for stocks.
Supply chain issues are a concern. He pointed to Nike’s comments Thursday that its sales were hurt by port congestion, and also the shortage of semiconductors, which is impacting automobile production.
“Inflation expectations are troublesome for P/E [price-earnings] ratios,” Grohowski said. The [stock] market is trading at 22 times our estimate for this year’s earnings.”
He said the market is having difficulty reconciling the lack of any forecasted interest rate hikes versus the strength of the Fed’s economic forecast.
“If you ask me what I lose sleep over? …It’s too much of a good thing. Too much of a good thing is being too accommodative,” Grohowski said.
Bond market direction
Schumacher said there’s a chance the bond market could steady in the next couple of weeks, even if yields tick up.
He said corporate pension funds appear likely to reallocate capital into bonds before the end of the quarter March 31, and that could be supportive. Also as the Japanese fiscal year is set to begin, there could also be new buying in U.S. Treasurys because on a currency adjusted basis U.S. debt looks very cheap, Schumacher said.
He is also watching Treasury auctions in the coming week.
The Treasury auctions $60 billion 2-year notes Tuesday; $61 billion 5-year notes Wednesday, and $62 billion 7-year notes Thursday.
In particular, Schumacher is watching the 7-year auction, which drew poor demand last month.
Week ahead calendar
Monday
Earnings: Tencent Music Entertainment
9:00 a.m. Fed Chairman Jerome Powell at Bank for International Settlement summit
It feels like a small point in the story of Tottenham’s increasingly volatile season, in which the successes seem only to buy temporary breathing space and the setbacks lay immediate waste to any momentum, but it is one that talks to the apocalyptic fear among the fanbase.
What does Harry Kane make of it all? The answer is we do not know and it is because the team’s talisman has stopped speaking to the media.
This is not meant to sound like a journalist’s quibble. The reason for mentioning it is because it is so out of character. In every season of his career so far, Kane has routinely given his pre- or post-match thoughts. Essentially, he is a good bloke who is happy to engage with supporters via the press, even in difficult times – which is always a marker of character.
Not any more. The matter was brought into plain sight when Kane dodged media duties during the November international break, which is highly unusual for an England captain. And it has carried on that way back at Spurs. The pandemic has affected the access that journalists are given but this does not give Kane a pass. Surely he has to break cover during the upcoming international window?
It has been impossible to ignore the suspicion that Kane has kept a low profile because he does not want to be put on the spot, to face questions he might struggle to answer honestly. Or, more precisely, a particular question. It is the one that has tracked him in recent seasons but now presses with greater urgency and discomfort. With his 28th birthday coming up in July, does he think he has to leave Spurs to fulfil his ambitions?
The club’s position is that Kane is not for sale. Moreover, with a contract until 2024, the chairman, Daniel Levy, is in control. Everybody knows a deal with Levy is practically signed in blood. But, at the very least, there was plenty for Kane to ponder as he trudged off the field on Thursday night after 120 soul-sapping minutes in the Europa League extra-time exit at Dinamo Zagreb. Ditto, José Mourinho.
There is a reason why the crisis always tends to come quicker to Mourinho than other managers. It is because with him the result can often feel like the only thing. Mourinho brings trophies to clubs straight away and then he leaves. There is never the sense he is shaping a squad for the longer term, possibly with young players. At Spurs, he has loaned out most of them.
José Mourinho reflects on Tottenham’s defeat at Dinamo Zagreb. Photograph: Pixsell/MB Media/Getty Images
The playing style is built to win first and entertain second, although this, frankly, is optional. The way Mourinho analyses matches is clinical. He is not bothered about possession statistics, action areas or expected goals. To him, it is purely about big chances created. If his team can do that once or twice at the right time – and, ideally, score – then nothing else matters.
The upshot is that when the result is not there, Mourinho has little to fall back on and when the attitude is not there, either, as was the case in Zagreb and in the derby defeat at Arsenal on Sunday, it leads to questions about the end of the road having been reached.
Kane stayed silent on Thursday night but the captain, Hugo Lloris, did not. In a searing interview with BT Sport he laid bare his frustrations and two things stood out. First, that Mourinho’s message to attack Dinamo and not sit back on the 2-0 first-leg lead had been clear. “But the opposite happened,” Lloris said. And, second, that there are players, mainly out of the team, who are not giving their all, presumably because they are disillusioned.
It has led to a damaging lack of togetherness, to players hiding – to borrow the word Mourinho used after the Arsenal game – and to responsibility being left to only a handful of stalwarts.
José Mourinho lambasts Spurs players after Dinamo Zagreb defeat – video
“One thing is to come in front of the camera and say: ‘I’m ambitious,’” Lloris said. “The other thing is to show [it] every day in training sessions and to show every time on the pitch. If you follow the team only when you are in the starting XI it causes big problems for the team because you pay. We had a great moment in the past because we could trust the togetherness that was in the team. Today, I’m not sure about that.
“On the bench there is an influence to have, to push the others. In training sessions the same. Everyone has to be ready to help the team when the moment comes. It is not only to stay on the side and complain.”
It is hugely worrying to think Mourinho’s message is not getting through because players are not listening or, to take it to the extreme, they do not want to hear it; they do not want to play for him. When that happens, it tends to lead to only one thing.
Managing a squad rather than just a starting XI is fundamental and it is an uplifting feeling when a reserve can step up. Witness Thomas Tuchel’s joy and that of everybody at Chelsea when Emerson Palmieri came on as an 89th-minute substitute to score in their Champions League win against Atlético Madrid on Wednesday night. Every player has to find the motivation from within but it is the manager who sets the tone.
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Spurs go to Aston Villa in the Premier League on Sunday night but the game Mourinho has circled in his diary is the Carabao Cup final against Manchester City on 25 April. Win that – however unlikely it seems at present – and he would have delivered yet again. Would it be enough though, particularly if Champions League qualification were again to elude the club?
And so the tension bubbles. Kane wants more than this, so does Son Heung-min, who has still to sign his new contract, so does Levy, so does everyone. It was left to Joe Hart, the reserve goalkeeper, to provide a moment of light relief when he was forced to apologise for a post sent in error from his Instagram account. “Job done,” it read, in the wake of the 3-0 defeat against Dinamo. If only.
“Chris Harrison will not be hosting the next season of ‘The Bachelorette,'” reads a joint statement provided to USA TODAY.
Wochit
Matt James’ historic and messy season of “The Bachelor” is coming to a close. Spoiler alert: It isn’t the ending most were hoping for.
What was meant to be a historic season (the franchise’s first Black male lead and the most diverse cast in show history) took a turn for the worse on-camera with incessant bullying and off-camera with a racism controversy involving one of Matt’s final two women and host Chris Harrison.
The big question: Will Matt end up picking Rachael Kirkconnell, the woman at the center of the controversy? Or will he pick Michelle Young, widely deemed an unproblematic fan-favorite? And what will everyone have to say later during the “After the Final Rose” special?
In-depth look: What will it take to fix ‘The Bachelor’ franchise’s racism?
In Monday’s finale, both women meet Matt’s mom, Patty, and brother, John. Michelle is up first, and tells Patty she’s in love with her son. Patty tears up and says she can see Michelle as a part of the family. So… can we just end right there?
Nope, it’s Rachael’s turn. Rachael tells John she believes Matt is the other half she’s been looking for and Patty gets emotional again – she says Rachael’s love for her son “really means a lot” to her.
Matt tells his mom he likes how Rachael carries herself through “the little things”: “It’s got to be a foreshadowing of how she’s going to handle more important things,” Matt says.
Both women seem to be winners in Matt’s family’s book, but Patty and John stress that he doesn’t need to jump into something he isn’t ready for. And now the Bachelor is worried he may not be ready to get down on one knee, a fear he relays to Harrison without getting specific about what that means for a potential engagement.
Next up is Matt’s final date with Michelle, which starts off mirroring previous conversations: There’s lots of love to go around, but Matt is still paralyzed with doubt.
More: ‘Bachelor’ contestants set the record straight on dramatic season of bullying in ‘Women Tell All’
Michelle gives him matching basketball jerseys that read “Mr. and Mrs. James,” but that seems to be his moment of reckoning. He tells Michelle this is the first time he’s felt “anything outside of wanting to be with you forever,” and Michelle wonders out loud if she’s supposed to fight for him.
“I don’t think I can get there with you,” Matt says through a tearful goodbye. The conversation with his mom about love fading clearly “shook him,” Harrison notes.
“I don’t know how to go on,” Matt says. “How do you go on from there?”
Does Rachael get a final rose?
A torn Matt grapples with what his next move should be: There is only one woman left standing, but is Matt ready for an engagement?
Harrison alerts Rachael that Matt is feeling “lost” and has canceled their final date, leaving Rachael’s fate – and confidence in Matt – in question.
Regardless of Matt’s marital intentions, jeweler Neil Lane still needs to get his product placement in, so the Bachelor sits down to look at potential rings. He picks out one to “hold on to” just in case, but ultimately he won’t need it.
Proposal day arrives, and Matt is still bothered by his uncertainty, though he does love Rachael.
“I don’t know if you still feel this, but I feel so incredibly lucky to have felt this,” she tells him. (Side note: Even at a closed-off resort, it’s comforting to see the tradition of bad finale audio continuing.)
The Bachelor finally opens up to Rachael about his conflicting feelings and tells her that’s why he “can’t propose to you today.” But that doesn’t mean they’re calling it quits, at least for now. He still sees Rachael as his future wife and wants to continue their relationship, just without the pressure of an engagement.
We leave Matt giving Rachael the final rose without an engagement ring. Sorry, Neil Lane.
‘After the Final Rose’ special takes on racism controversy
Rachael, Michelle and Matt rehash the dramatic ending in the one-hour “After the Final Rose” special following the finale, during which Matt and Rachael spoke about her racism controversy that led to widespread backlash and defense from Harrison.
Former NFL player and Fox Sports analyst Emmanuel Acho took Harrison’s place after the longtime host announced he would be “stepping back for a period of time” following the controversy. Acho is the author of “Uncomfortable Conversations with a Black Man,” based on his online series that aims to open dialogue about racial ignorance and insensitivity.
Matt opens up to Acho about facing pressure and extra scrutiny as the first Black Bachelor, especially during a time of increased attention to social justice and issues of diversity within the franchise. He notes that for many viewers, watching his love story was the first time they had “someone like me” in their home.
Following the end of taping, things were going well for Matt and Rachael. But after the controversy broke and Rachael apologized, the couple broke up. Matt notes that he doesn’t think “anybody is irredeemable,” but there’s a “lot of work” Rachael needs to do alone.
“You hear things that are heartbreaking and you pray they’re not true. And then when you find out they are it makes you question everything,” Matt says. “I wasn’t OK because it was in that moment and that conversation (that I realized) Rachael might not understand what it means to be Black in America.”
To critics who argue that her actions three years ago shouldn’t reflect on who she is today, Matt urges those “who were so triggered to bring that energy to supporting folks of color who are asking for change.”
Previously: ‘Bachelor’ frontrunner Rachael Kirkconnell apologizes for ‘offensive and racist’ actions
Acho shares the photo of Rachael at a 2018 Antebellum-themed party. Rachel, joining the host on stage, says she doesn’t want to “victimize” herself and was living in ignorance at that time. She never stopped to consider what the party represented.
“People need to realize saying this is normal where I come from doesn’t make it OK,” she says. Acho notes history is meant to be remembered, not necessarily celebrated.
When asked what specific actions she’s taking to rectify the situation, Rachael doesn’t get into specifics, but says her actions are worth more than promises to do better.
She says she still loves Matt and “always will” before Matt joins the discussion. Rachael reiterates her apology to him while holding back tears.
“For you to end things, I realize… you must have been hurting and I’m really sorry for not understanding that initially and I’m really sorry I hurt you,” she says.
Matt, who can’t seem to look at Rachael, struggles to find words other than reiterating his disappointment in “having to explain to you why what I saw was problematic.”
“I didn’t sign up to have this conversation,” he says.
A tearful Rachael concludes that she wants Matt to be happy and will “always be thankful for everything we shared.” Acho welcomes them to “share one final embrace,” but Matt, still hurt, clearly isn’t ready for that step.
And: Chris Harrison will be replaced by Tayshia Adams, Kaitlyn Bristowe as ‘The Bachelorette’ host
Michelle and Matt also reunite. She tells him she “crumbled” in the aftermath of their breakup, made all the more difficult by Matt’s refusal to talk to her for the sake of closure.
“It was a conversation so that I could have my inner peace when I left, and you said no,” she says. Matt apologizes and wishes he could go back and have that conversation with her.
They end with a friendly (we think?) zinger: Michelle hopes Matt’s future will entail less open-eyed kissing and more catchphrases other than “thank you for sharing that.”
But things are looking up for Michelle, who will become one of two new “Bachelorette” stars. Her season is coming this fall, while fellow former contestant Katie Thurston’s is coming this summer.
‘We’re the Bachelorettes’: Katie Thurston, Michelle Young to become next stars
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Air Force veteran Dale Storr, who was held and tortured by Iraqi forces for a month during the Persian Gulf War, said Saturday that he never lost hope of returning home.
“It was difficult. It was always hard trying to think about the future because it was so uncertain. It was a lot easier thinking about the past,” Storr told “Fox & Friends” on the 30th anniversary of his release.
The 1990-91 war against Iraq was fought by a coalition of forces from 35 nations led by the United States. The coalition formed in response to Iraq’s invasion of Kuwait due to a dispute over oil prices and production.
“It’s one thing we all truly believed in … that our country was going to get us home and that President Bush was not going to leave us there in that prison. I knew he would find a way to get us home somehow,” he said.
1991 GULF WAR LOOMS LARGE OVER BUSH’S MIDEAST LEGACY
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Storr said the war “brought the country together” and also “gave the military a lot of confidence in the capabilities they had.”
“I think it really united the country behind a common cause,” the veteran said.
“Not everybody will agree with the war, but I think they were really behind the military, unlike Vietnam … My father served in Vietnam. But it was really nice to see the country come together and focus on the military and on the service members.”
It was Jan. 4, and Chamath Palihapitiya was ready to tease another deal. “Shooters Shoot,” he tweeted to his followers, along with a GIF of Alec Baldwin berating weary salesmen to “Always Be Closing.” The retweets and likes for the “Glengarry Glen Ross” reference came fast and furious. “We’re ready,” one follower replied.
Three days later, when Mr. Palihapitiya announced his intention to take online lender Social Finance Inc. public via a “blank-check” company, Reddit message boards popular with the day-trading crowd lit up. One fan called it a “stock that you buy with hopes of transforming you into a millionaire”—even though SoFi did not expect to be profitable until 2023 and faced stiff competition.
Mr. Palihapitiya is the man of the market moment. The founder of tech-investing firm Social Capital Holdings Inc. has charmed Wall Street to raise billions of dollars to bring startups public. Amateur traders hang on his every word for clues about his next target—and for the insults he hurls at the high-finance elite. (Hedge funds, he said last April, deserved to get wiped out when coronavirus shutdowns devastated the economy.)
Wall Street has always had its rock stars.
Warren Buffett’s
carnival-like annual meeting, after all, is nicknamed “Woodstock for Capitalists.” But Mr. Palihapitiya, a former
Facebook Inc.
executive who now has 1.4 million
Twitter
followers, belongs to a new class of market influencers—social-media savants who’ve figured out how to take shots at the establishment while taking its money.
Mr. Palihapitiya, left, is a Sri Lankan immigrant to Canada whose family got by on welfare payments when he was a child. He moved to the U.S. during the dot-com era and eventually worked for Facebook Inc.
Photo:
Brian Ach/Getty Images for TechCrunch
No one has marshaled the twin forces reshaping markets—the blank-check boom and the retail-trading surge—quite like Mr. Palihapitiya. So far this year, as of Thursday, 225 companies that use money from initial public offerings to buy established businesses have raised roughly $71 billion—a figure that accounts for more than 70% of all public stock sales, according to Dealogic data. These outfits are known as “blank-check” firms or SPACs, an acronym that stands for special-purpose acquisition companies.
Ordinary investors, homebound and flush with cash, are fueling the surge. Social Capital raised $3.7 billion for five SPACs last year and filed confidentially to raise money for seven more, according to people familiar with the matter. They have helped make Mr. Palihapitiya a fortune—at least on paper. Their structure gives Mr. Palihapitiya the right to buy one-fifth of its outstanding shares at discount prices. That means he is sitting on a mountain of gains.
SoFi, a decade-old startup that made its name refinancing student loans, is his latest prize. He and his bankers pitched some of Wall Street’s top firms to participate in the deal, and Mr. Palihapitiya’s pull with stalwarts like money manager
BlackRock Inc.
was a big reason why the lender spurned other SPAC suitors and accepted Mr. Palihapitiya’s offer, according to people familiar with the matter.
He unveiled the $8.7 billion deal to the public on Jan. 7—on CNBC and on Twitter, naturally. Nearly 65 million shares of Mr. Palihapitiya’s
Social Capital Hedosophia Holdings Corp.
V changed hands that day, more than all but 22 U.S.-listed stocks, according to Dow Jones Market Data. IPOE, as it is known, closed up 58% at $19.14, even though the deal wasn’t final and the SPAC had no real assets yet.
Leaving Facebook
A Sri Lankan immigrant to Canada whose family got by on welfare payments when he was a child, Mr. Palihapitiya graduated from the University of Waterloo and worked at
Bank of Montreal
before moving to the U.S. during the dot-com era. He joined Facebook in 2007 to help grow its user base after stints at a venture-capital firm and America Online; he left in 2011 after he said Mark Zuckerberg denied his request to start a mobile-phone business and later emerged as a critic of his former employer.
He used the money he made at Facebook to fund a lifestyle of billionaire whimsy. He is a partial owner of the Golden State Warriors, a three-time contestant in the World Series of Poker and a cryptocurrency evangelist who said he paid $1.6 million in bitcoin for an undeveloped property in Lake Tahoe. “When BTC hits $100k, I’m going to buy @GoldmanSachs and rename it Chamathman Sachs,” he recently tweeted the weekend before he also publicly toyed with running for governor of California.
Chamath Palihapitiya, far left, is a partial owner of the NBA team Golden State Warriors and a three-time contestant in the World Series of Poker.
Photo:
Poker Go
Recently, Mr. Palihapitiya has been touting a plan to “fix climate change,” as he tweeted last month. He has approached potential investors about raising billions of dollars for a partnership with tech giants on climate efforts, people familiar with the matter said.
The year he left Facebook, he founded Social Capital with a mission of backing young startups that want to solve the world’s toughest problems. He gravitated to SPACs as a way to provide an alternative path to the public markets for startups that didn’t want to deal with the costs, hassle and uncertainty of a prolonged registration process.
Mr. Palihapitiya called the idea “IPO 2.0.” A SPAC avoids many of the rules governing a traditional IPO by executing a reverse merger between a corporate shell that raised the money and a private company that takes both the cash and the shell’s stock listing. Mr. Palihapitiya raised money for his first SPAC, Social Capital Hedosophia Holdings Corp., in 2017.
Not everyone was enamored with that first SPAC attempt. Tech companies, including
Slack Technologies Inc.
where Social Capital was an early investor, rebuffed Mr. Palihapitiya’s efforts to take them public via his SPAC, according to people familiar with the matter.
During this period Mr. Palihapitiya often frustrated his colleagues with his extended absences from the office and meetings. Those absences would occasionally cause him to miss fundraising meetings he had set up for himself and
Tony Bates,
a former Skype CEO who joined Social Capital to lead a growth-investing unit Mr. Palihapitiya launched in 2017, some of the people said.
Mr. Palihapitiya’s now ex-wife was a partner at Social Capital. While they were still married, he traveled with a new woman he was dating, according to people familiar with the matter. Partners left. Many other projects, including a credit-investing fund, fell by the wayside. Nonetheless, Social Capital was able to earn an annualized internal rate of return of 33% in its first eight years, it said in its most recent annual letter.
Mr. Palihapitiya got his big break as a SPAC investor from billionaire Richard Branson.
Mr. Palihapitiya, fourth from left, got his big break as a SPAC investor from billionaire Richard Branson, pictured here with a gavel in his hand.
Photo:
Richard Drew/Associated Press
Virgin Galactic Holdings Inc., Mr. Branson’s space-tourism company, called off a roughly $1 billion financing deal with Saudi Arabia’s Public Investment Fund in October 2018, after the Saudi government was linked to the disappearance of journalist Jamal Khashoggi.
Throughout 2019, Mr. Palihapitiya, Mr. Branson and their teams spent months negotiating a deal to take Virgin Galactic public through a SPAC merger. Over meetings in Park City, Utah, and at Mr. Branson’s Necker Island in the Caribbean, the two sides hammered out an arrangement that included a $100 million personal investment from Mr. Palihapitiya. The deal, which valued the company at roughly $2 billion, closed that fall.
Mr. Palihapitiya went viral in April 2020, just as he began fundraising for two additional SPACs. After appearing on CNBC to urge the government not to bail out wealthy investors in airlines and other hard-hit companies, he gained about 100,000 new followers on Twitter, according to social-media data company Captiv8 (Social Capital is an investor in Captiv8).
“We’re talking about—a hedge fund that serves a bunch of billionaire family offices? Who cares?” Mr. Palihapitiya said. “They don’t get to summer in the Hamptons? Who cares!”
The rant endeared him to amateur investors. “Through all the pain watching all of our portfolios go up in flames the past few weeks, this motherf—er came in and spoke for all us and really put a smile on my face,” one trader wrote in a post on Reddit’s WallStreetBets that was upvoted about 2,000 times.
Meanwhile, Mr. Palihapitiya was reeling in Wall Street investors. Before coronavirus lockdowns put an end to schmoozing, he hosted dinners and meetings to pitch his SPACs to hedge funds. When the SPACs made their market debut in April, hedge funds, the target of his flamethrowing, were the primary buyers.
Mr. Palihapitiya found big targets for two of his SPACs last fall, taking house-flipping startup Opendoor Labs Inc. public in a deal worth $6.3 billion and insurance-tech startup
Clover Health Investments Corp.
to market at a $4.4 billion valuation. Big institutional investors including BlackRock, Fidelity Investments and Healthcare of Ontario Pension Plan pumped hundreds of millions of dollars into the deals alongside Mr. Palihapitiya.
Mr. Palihapitiya took insurance-tech startup Clover Health Investments Corp. public via a SPAC at a $4.4 billion valuation. Here a nurse practitioner for Clover Health takes a patient’s blood pressure.
Photo:
John Taggart/Bloomberg News
“It was like this guy walks on water,” said Michael Edwards, deputy chief investment officer of Weiss Multi-Strategy Advisers LLC, who invested in Mr. Palihapitiya’s first SPAC. “Everything he does is going to be oversubscribed.”
In December and March, Mr. Palihapitiya sold 10 million shares of Virgin Galactic to free up more than $300 million for other ventures, according to securities filings. (He indirectly co-owns another 15.75 million shares through an investment vehicle). Mr. Palihapitiya and the other managers of the SPAC that took Opendoor public are sitting on paper gains of about $475 million on the warrants and discounted shares they received through the IPO of the SPAC, as well as for their participation in a related private placement of the SPAC shares, according to estimates based on an analysis of securities filings by Michael Ohlrogge, a professor at New York University’s law school.
Mr. Palihapitiya is separately looking to start a new family of SPACs for biotech companies, some of the people said.
How much Mr. Palihapitya earned or invested personally is more difficult to discern from the filings. He highlights that he invests hundreds of millions of dollars in private placements accompanying his SPAC deals, a decision that helped sway Opendoor and SoFi to take his offers, according to people familiar with the matter. But it is sometimes unclear how much of that money is coming directly from him or from investment firms he helps manage. The Securities and Exchange Commission proposed new guidance in December for SPAC sponsors to provide more disclosure around their compensation arrangements.
Hype Man
People who know and have worked with Mr. Palihapitiya describe him as a great salesman but a poor manager. When Social Capital decided to transition away from a traditional venture-capital firm in 2018 to be more of a holding company for startups, many employees learned they would be losing their jobs from a Medium post Mr. Palihapitiya published, a person familiar with the matter said.
Mr. Palihapitiya’s skills as a hype man, though, are particularly well-suited to the features of SPACs. Unlike in a traditional IPO, executives and sponsors of SPAC transactions can make projections about the company’s future revenue and profits. Because such deals are structured as mergers, SPAC sponsors don’t have to worry about restrictions on talking openly about a business before its shares start trading.
Mr. Palihapitiya takes advantage of these loopholes. He talks his deals up on Twitter, which his lawyers then submit to the Securities and Exchange Commission to comply with stock-solicitation rules. Mr. Palihapitiya arranged with CNBC extended airtime on the days his deals were announced and went through slides from his investor presentation, according to people familiar with the matter. CNBC declined to comment. YouTube and
Amazon.com Inc.’s
Twitch have also approached him about moving his deal announcements to their live-video streaming services, some of the people said.
Mr. Palihapitiya talks his deals up on Twitter, which his lawyers then submit to the Securities and Exchange Commission to comply with stock-solicitation rules. Mr. Palihapitiya also arranged with CNBC extended airtime on the days his deals were announced, according to people familiar with the matter.
Photo:
David Paul Morris/Bloomberg News
As many as 70% of the investors in Mr. Palihapitiya’s SPACs are everyday investors, these people said. He allocates a small percentage of the shares in the offerings of his SPACs for that crowd, with an eye toward getting his underwriters to increase their share above 50%, the people said.
Alex Cruzado watched each of Mr. Palihapitiya’s CNBC clips after seeing his April 2020 rant. The 20-year-old university student living in Geneva, Switzerland, bought shares in IPOE on the day of the SoFi announcement and later posted positive reviews of it on WallStreetBets.
“For companies like Opendoor and SoFi, the fact that he talks about it and makes a public announcement directs people in,” Mr. Cruzado said in an interview. “He’s really great at marketing… [but] there’s no significant value he adds but that branding and packaging,” Mr. Cruzado said.
During his Jan. 7 appearance on the business network to elaborate on SoFi’s merits, Mr. Palihapitiya offered his thoughts on how SPACs are helping to reduce wealth inequality by letting ordinary Americans get earlier access to future blue-chip companies.
“How do you do that? You’re not going to do that by owning
American Express.
Those companies are dormant legacy businesses. That game is over. You need companies like SoFi. You need companies like Opendoor, like Clover and others,” he said.
The moderators of WallStreetBets later banned its millions of members from posting about SPACs. “They are too easily pumped to allow on a subreddit of our size,” one wrote at the time.
Mr. Palihapitiya jumped into the fray in late January when traders, inspired by posts on WallStreetBets, bid up
GameStop Corp.
and other beaten-down stocks, dealing painful losses to hedge funds that had bet the stocks would fall.
“This is some insane, crazy, baller shit: r/wsb just ran over one of the most successful hedge funds around,” Mr. Palihapitiya tweeted, linking to a Wall Street Journal article about hedge fund Melvin Capital Management’s emergency cash infusion.
In solidarity, he bought GameStop call options. He closed his position the next day and donated the proceeds.
When Robinhood Markets Inc. and other online brokerages restricted trading in hot stocks, enraging investors, Mr. Palihapitiya went on the attack. Robinhood executives were “corporatist scumbags” who “should go to jail,” he said on his podcast, “All-In.”
On Jan. 28 and 29, he told his Twitter followers that he turned Robinhood down when the startup was raising money years ago—and that Robinhood was misleadingly monetizing user data. He suggested they ditch the app and use SoFi, instead. A Robinhood spokeswoman declined to comment.
Over each of the two days, shares of the SPAC merging with SoFi notched double-digit gains. Retail interest was so strong that Robinhood placed limits on users’ ability to purchase them lest the brokerage have to deposit additional collateral with its clearinghouse to cover the trades. Of the 51 stocks in which Robinhood restricted trading on Jan. 29, Mr. Palihapitiya was tied to four.
In early February, investors in Mr. Palihapitiya’s SPACs were reminded that there is risk in taking unproven companies public quickly. Short seller Hindenburg Research published a report on Feb. 4 accusing Clover Health of failing to tell investors about a Justice Department investigation into its practices and misleadingly marketing its services to the elderly. Hindenburg previously exposed irregularities at electric-truck startup
Nikola Corp.
after it merged with a SPAC.
“Chamath has done a masterful job marketing himself, capitalizing on the recent chaos with GameStop and WallStreetBets to align himself with “everyday” investors – but his public persona strikes us as the sugar that helps the poison go down,” Hindenburg wrote in the report.
Clover said the report was full of inaccuracies and mischaracterizations. In a response published last month on Medium, Clover’s CEO and president said Hindenburg framed its report around Mr. Palihapitiya “in order to sensationalize what is otherwise a rather underwhelming piece of research.” Mr. Palihapitiya took to—where else—Twitter to defend Clover, saying he and the company would have been happy to have met with Hindenburg: “Instead, they chose to take the cheap path of screaming into the ether.”
The tweet got more than 3,000 retweets and 17,000 likes, but, since then, Clover shares are down 44%.
—Amrith Ramkumar contributed to this article.
Write to Peter Rudegeair at Peter.Rudegeair@wsj.com and Maureen Farrell at maureen.farrell@wsj.com
Lady Gaga’s dog walker is awake and Instagramming after an unknown assailant shot him in the chest last week: In the caption to a photo taken from his hospital bed, Ryan Fischer wrote that he is “still in recovery from a very close call with death” and that “a lot of healing still needs to happen.” Nonetheless, he added, “the gratitude for all the love I feel from around this planet is immense and intense.”
Fischer was walking Gaga’s three dogs in Hollywood last Wednesday night when two people got out of a white sedan and approached him on Sierra Bonita Avenue. One person reportedly held Fischer while the other produced a semiautomatic handgun. Per surveillance video, the pair drove off with two of the pop star’s French bulldogs — Koji and Gustav — as Fischer collapsed. Gaga’s third dog, Asia, was said to have run away from the scene, but in one of two Instagrams, Fischer said she “trotted over and laid next to [him]” as “blood poured from his gunshot wound.”
“I cradled Asia as best I could, thanked her for all the incredible adventures we’d been on together, apologized that I couldn’t defend her brothers, and then resolved that I would still try to save them … and myself,” he wrote, calling the dog his “guardian angel.”
Fischer arrived at the hospital in critical condition, but stabilized by Thursday night. Meanwhile, a woman whom police believe to be “uninvolved and unassociated” with the robbery dropped off Koji and Gustav at the Olympic Community Police Station on Friday. No suspects in the case have been publicly identified.
Gaga, who was in Rome working on Ridley Scott’s Gucci at the time of the attack, praised Fischer as a “hero” and is reportedly covering all of his medical bills. In his posts, he thanked her — along with his friends and his family — for her “unwavering” “support as a friend.” For now, he looks “forward to the future and the moment when [he] get[s] bombarded with kisses and licks (and maybe even an excitement pee?) from Asia, Koji, and Gustav.”
Joe Biden has spoken with Saudi Arabia’s King Salman for the first time as president, ahead of the publication of a US intelligence report expected to implicate the Saudi crown prince in the 2018 murder of dissident and Washington Post columnist, Jamal Khashoggi.
A White House account of the call did not mention the report, but did say, in another context, that Biden “affirmed the importance the United States places on universal human rights and the rule of law” and that the two discussed working on “mutual issues of concern”.
The Saudi embassy in Washington said the two men “confirmed the strength of bilateral ties and discussed Iran’s malign activities in the region and ways to advance peace in Yemen”.
Biden has been far cooler to Riyadh than Donald Trump, cutting off US support for the Saudi-led war in Yemen, and refusing to talk directly to Crown Prince Mohammed bin Salman, a close Trump ally, who US intelligence believes approved and possibly ordered the killing and dismemberment of Khashoggi, after he was lured to the Saudi consulate in Istanbul.
The CIA gave that assessment in a classified briefing to Congress in 2018 and is due to deliver an unclassified version imminently.
The White House has also strongly suggested it is preparing to take further actions against those who it deems responsible for the murder. White House press secretary Jen Psaki told reporters on Thursday that there were areas where the US would “express concerns and leave open the option of accountability”.
It followed remarks by national security adviser Jake Sullivan last week in which he said the administration would present additional actions when the report is released, a remark that was seen by human rights campaigners as opening the door to new possible sanctions against Saudi financial entities, and possibly the crown prince himself.
The call late on Thursday followed two days of anticipation in Washington, after the White House said repeatedly that the two leaders were due to speak “soon”. When the calls failed to materialise on Wednesday and Thursday morning, two sources following the matter told the Guardian that the apparent delay reflected the White House’s difficulty in reaching the king directly. The White House declined to comment.
“Historically, MBS has controlled his father’s switchboard,” said one person with close knowledge of the Saudi royal family.
The White House has made clear that Biden considers the 85-year-old king as his counterpart, rather than the crown prince, who runs an increasingly repressive regime in Riyadh. The US defence secretary, Lloyd Austin, has spoken to Prince Mohammed in his role as defence minister.
The White House version of Thursday’s call to King Salman emphasised the positive aspects of the relationship, saying the president “would work to make the bilateral relationship as strong and transparent as possible”.
The two leaders discussed Yemen and efforts to end the war there, and stressed that the US would continue to give military support “to help Saudi Arabia defend its territory as it faces attacks from Iranian-aligned groups”.
The White House account said that Biden “noted positively” the release of political prisoner Loujain al-Hathloul and several Saudi-American activists, and “affirmed the importance the United States places on universal human rights and the rule of law”.
The Oklahoma football player who nearly lost an eye in a bar fight this month had it coming, according to the other side.
Walker Brown said he was “defending myself” when he charged at Sooners wide receiver and place-kick holder Spencer Jones in the bathroom of Logies on the Corner bar in Norman, Okla.
A 58-second video that went viral last week captured the moment Brown, a junior at the school and trained wrestler and mixed martial arts fighter, landed multiple punches and put Jones in a chokehold.
Jones, a redshirt senior, underwent a four-hour procedure to rebuild his left orbital socket following the fracas, according to The Athletic.
Police are investigating the incident, which reportedly took place in the early hours of Feb. 14.
No arrests have been made.
The video begins with Jones telling Brown to “get the f–k out of here.”
Brown was then shoved by someone standing next to Jones. Seconds later, Brown wiped blood from his face and struck Jones.
Spencer JonesIcon Sportswire via Getty Images
“There was something that occurred prior to the start of the video as my nose doesn’t bleed for no reason,” Brown wrote on a GoFundMe page aimed at helping pay his medical expenses.
Brown tore his bicep, according to the page, which has raised $35,745.
Woodrow Glass, an attorney representing Jones, said his client was “trying to de-escalate the situation,” and that the blood on Brown’s face wasn’t caused by Jones.
Glass said Jones went to the bathroom to check on his friend, when he ended up in the middle of an argument.
The video also showed Brown’s brother, Braden, fighting another man in the bathroom.
Braden Brown, who is also a student at Oklahoma, tweeted Saturday that he and his brother have “been wrestling since we were in diapers and MMA/Cage Fighting since we were 12. They gave us no options unfortunately. We showed restraint.”
Janet Jackson is thanking her fans for their support of her music career, just one day after Justin Timberlake made a public apology to her and Britney Spears.
Jackson took to her Twitter on Saturday afternoon to share her appreciation for her fans along with the revelation that her 1986 song “Control” has peaked at a No. 1 spot once again.
“I was at home just the other day by myself and I began to cry. I was crying because I was so thankful for all that God has blessed me with, all that he has given me. And I’m so thankful for him being in my life and I’m so thankful for all of you being in my life. You’re so special to me. And I want to thank all of you for making ‘Control’ No. 1 once again after 35 years,” Jackson said.
She added: “I never, never in a million years, I would never think thought this would happen. I really appreciate you and I love you so, so much.”
JUSTIN TIMBERLAKE APOLOGIZES TO BRITNEY SPEARS, JANET JACKSON AMID BACKLASH: ‘I AM DEEPLY SORRY’
It’s unclear what music chart the hit resurfaced on. The song was first released 35 years ago on Feb. 4.
Jackson, who is relatively private about her personal life, appears mostly covered up in the video as she’s wearing oversized sunglasses, a face covering, black hat and black coat.
Jackson’s statement is also significant in that it makes no mention of Timberlake despite the fact that the 40-year-old singer issued an apology to her and Spears one day prior.
Timberlake made the apology amid intense backlash he received this week following the release of the “Framing Britney Spears” documentary. The program analyzed Timberlake’s breakup from Spears, and given that it was released over Super Bowl LV weekend, it also sparked renewed interest in Timberlake and Jackson’s infamous 2004 Super Bowl Halftime Show performance in which he pulled back Jackson’s outfit and exposed her breast.
BRITNEY SPEARS FANS SLAM JUSTIN TIMBERLAKE AFTER RELEASE OF NEW DOCUMENTARY
Inductee Janet Jackson, left, holds her trophy as she poses in the press room with Janelle Monae at the Rock & Roll Hall of Fame induction ceremony at the Barclays Center on Friday, March 29, 2019, in New York. (AP)
Fans slammed Timberlake as they recalled the incident severely impacting Jackson’s musical career and boosting his own. The “wardrobe malfunction” led to an investigation by the Federal Communications Commission and Jackson’s music being pulled from Viacom channels and radio stations.
Reports this week also recalled Jackson’s Grammys performance getting nixed shortly after the 2004 Super Bowl scandal, while Timberlake’s remained.
On Friday, the “Suit and Tie” singer took to his Instagram to communicate his remorse.
“I’ve seen the messages, tags, comments, and concerns and I want to respond. I am deeply sorry for the times in my life where my actions contributed to the problem, where I spoke out of turn, or did not speak up for what was right. I understand that I fell short in these moments and in many others and benefited from a system that condones misogyny and racism,” Timberlake’s statement begins.
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Britney Spears’ fans have come to her defense amid renewed interest in her split from Justin Timberlake sparked by the documentary ‘Frming Britney Spears.’ On Friday, the ‘Cry Me a River’ singer took to his Instagram with an apology. (Getty Images)
“I specifically want to apologize to Britney Spears and Janet Jackson both individually, because I care for and respect these women and I know I failed. I also feel compelled to respond, in part, because everyone involved deserves better and most importantly, because this is a larger conversation that I wholeheartedly want to be part of and grow from…,” it continues.
Timberlake went on to call the industry “flawed” for setting “men, especially white men, up for success.”
“It’s designed this way. As a man in a privileged position I have to be vocal about this. Because of my ignorance, I didn’t recognize it for all that it was while it was happening in my own life but I do not want to ever benefit from others being pulled down again,” he wrote, adding that the apology is a “first step and doesn’t absolve the past.”
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“I want to take accountability for my own missteps in all of this as well as be part of a world that uplifts and supports. I care deeply about the wellbeing of the people I love and have loved. I can do better and I will do better,” Timberlake’s statement concludes.
