It also appears to be second in the state in terms of performance, based on the number of times a driver had to take over from the robotic vehicle. G.M. Cruise drivers had to take control once every 1,300 miles, while Waymo’s drivers intervened just once every 5,600.
The question: Is second place to Waymo good enough to seize a respectable slice of the autonomous car market?
— Jamie Condliffe
Sears’s latest loss shows time is ticking for a self-help plan
As the embattled retailer continues to struggle with its turnaround efforts, its first-quarter results show that its financial picture is getting cloudier — and that Eddie Lampert, the company’s C.E.O., has less room to maneuver.
The main takeaways
• The company lost $3.93 per share in the quarter ended May 5, compared to a $2.28 per-share profit a year ago. Revenue slid to $2.9 billion in the quarter.
• Same-store sales, a widely used retailer metric, fell 11.9 percent.
• It will close another 72 underperforming stores.
• The company had $466 million in cash and roughly $641 million in available credit as of May 5.
The big issue
Sears has a precarious cash position. While the company repaid some of its debt due next year, it still has more debt coming due in October of 2019. And over all it still has$3.8 billion in long-term debt that it must settle at some point.
Sears has already said that it will explore several strategic options, including potentially selling — sorry, “exploring third-party partnerships involving” — businesses like its Kenmore appliances brand and its home services unit. (Mr. Lampert has already offered to buy them.) The company has also pointed to some business initiatives, including business partnerships with Citigroup (a revised, co-branded credit card) and Amazon.com (tire installation) that are expected to bring in more cash.
But such efforts seem unlikely to counter its debts, and Thursday’s results are unikely to silence the whisperings of more financial troubles ahead.
— Michael de la Merced
The Fed lets Wall Street traders off the leash
The Fed has proposed relaxing the Volcker Rule, which restricts the risks banks can take when trading. They will no longer have to show how each of their trades would benefit customers or hedge risks, reopening a wider range of bets on derivatives and other financial products.
It’s part of a slow but steady removal of Obama-era limits placed on Wall Street — and a move that bank C.E.O.s like JPMorgan Chase’s Jamie Dimon had long pushed for. But critics like Senator Elizabeth Warren have warned that it could reintroduce a Wild West mentality on Wall Street, and potentially leave taxpayers on the hook if banks make poor decisions.
Paul Volcker himself has supported simplifying the rule — so long as the basic principle of no public bailouts for banks’ risky trades remained.
Peter Eavis’s take: The public can only hope that the people overseeing the big banks are up to their jobs.
Warren Buffett wanted a $3 billion slice of Uber. He didn’t get it.
Berkshire Hathaway offered a financial lifeline to the ride-hailing company earlier this year, according to Bloomberg. More from Eric Newcomer and Olivia Zaleski:
Buffett would have effectively lent Uber his sterling reputation, along with some capital, in exchange for cushy deal terms. Under the proposed agreement, Berkshire Hathaway would have provided a convertible loan to Uber that would have protected Buffett’s investment should Uber hit financial straits, while providing significant upside if Uber continued to grow in value.
Uber’s C.E.O., Dara Khosrowshahi, reportedly suggested a smaller $2 billion deal, but the two sides couldn’t agree on terms.
Andrew’s take: It’s hard to see how the two could have ever reached a deal. Mr. Buffett would only make an investment that came with a lot of strings to guarantee himself an outsized return. Uber may be desperate, but it isn’t that desperate — at least not yet.
More Uber news: The company says it’s on track for a 2019 I.P.O. And it’s trying to convince Waymo to add its autonomous cars to the Uber network.
The Dick’s gun-sales ban didn’t hurt after all
The retailer’s first-quarter sales far exceeded expectations, after it stopped offering assault-style rifles earlier this year.
Its success didn’t just arise from that decision: gun sales were always a small part of revenues, short sellers were forced to cover their bets, and Dick’s improved its overall business. But the C.E.O. said that gun-control advocates who decided to buy more from its stores had undoubtedly helped.
Andrew’s take: C.E.O.s around the country waiting to take a stance on guns, but worried that it might hurt their bottom line, should take note.
The political flyaround
• President Trump said drug companies would voluntarily cut prices next month. The industry seemed surprised. (Politico)
• The financier Glenn Hutchins has gone from Silicon Valley investor to central banking power player. (Bloomberg)
• California’s Senate approved a bill to reinstate net neutrality. (The Verge)
• Brussels plans a multibillion-euro bailout fund to help E.U. countries weather shocks. (FT)
• Lawyers for Michael Cohen have two weeks to review evidence seized by a federal raid on his office and hotel room. (NYT)
America’s trade fight with Europe is on again
The Trump administration failed to negotiate permanent exemptions on imported metal tariffs for the E.U., Canada and Mexico. So now the president is ready to slap levies on their steel and aluminum, as soon as tomorrow. (The White House had hoped the threat of tariffs would bring trade concessions, but it only hardened allies’ opposition.)
More from William Mauldin, Bojan Pancevski and Vivian Salama of the WSJ:
European officials have said they plan to swiftly impose levies against as much as €2.8 billion ($3.3 billion) in U.S. exports under a rule at the World Trade Organization that allows members to punish a country immediately for inappropriately seeking a “safeguard” against their exports.
Critics’ corner: Greg Ip of the WSJ says President Trump is doing protectionism wrong. Karl Rove urged the White House to play a longer game on trade.
Elsewhere in trade
• The White House’s trade negotiators with China continued their public arguments.
• Beijing proposed loosening trade restrictions ahead of further talks.
• Toyota’s best-selling model in the U.S., the RAV4, is vulnerable to potential tariffs on imported cars.
Italy is calm after its storm
The next big financial crisis apparently didn’t last long. Stock markets and the euro largely returned to normal yesterday, as the threat of Italian political turmoil, including new elections, seemed to abate.
What gives? James Mackintosh of the WSJ has three explanations: Europe’s economies are more resilient than when the Greek crisis hit in 2012; investors elsewhere thought the risks weren’t that big; or, most troublesome, investors are complacent about the dangers Italy poses.
The bottom line: UBS Wealth Management’s chief economist Paul Donovan has some sage advice: “Take a deep breath and calm down.”
The deals flyaround
• The Redstones’ ultimate goal in pushing for a merger of CBS and Viacom: selling the combined company. (Heard on the Street)
• Disney and Fox investors will vote on their $52.4 billion deal on July 10. Lex says Rupert Murdoch is making a shrewd bet.
• Allergan plans to sell its women’s health and infectious disease units, to appease restless shareholders. (WSJ)
• Tencent has hired Goldman Sachs, Morgan Stanley and Bank of America Merrill Lynch to lead the I.P.O. of its music business. (FT)
• Goldman is said to be developing an app to help clients assess how vulnerable they are to activist investors. (Bloomberg)
How Airbnb did a U-turn on its China plans
The company had planned to merge its China operations with a local rival, Tujia. Then its C.E.O., Brian Chesky, decided it would do better going on alone. More details from Bloomberg:
It was Chesky who pulled the plug, these people say. He worried that Airbnb would lose control of its carefully curated brand, they say. One investor likened Chesky’s attitude to someone who couldn’t commit to a long-term relationship.
Investors are still unhappy about the move, as it means Airbnb continues to burn cash in China.
The tech flyaround
• Cambridge Analytica’s parent company helped shape Saudi Arabia’s reform movement. (NYT)
• Commerce Secretary Wilbur Ross says the E.U.’s new G.D.P.R. data privacy laws could hurt trade. How about an American alternative?
• Tesla sent out a software fix to improve its Model 3’s braking. It worked. (NYT)
• China now has nine of the world’s biggest internet companies, according to the venture capitalist Mary Meeker. (Kleiner Perkins)
• A shift to electric vehicles could lead to a global fuel tax shortfall of $92 billion. (FT)
• Bank of America’s hedge-fund services unit has lost at least six employees. (FT)
• Former Republican congressman Charlie Dent is joining the law firm DLA Piper as a senior policy adviser. (Politico)
• The P.R. firm Sard Verbinnen has hired Miriam Sapiro, a former U.S. deputy trade representative, and Bruce Haynes, a veteran Washington communications executive, to lead its new Washington practice. (Sard Verbinnen)
The speed read
• Bill Gross is having a no good, very bad year. (NYT)
• Walmart said it would pay for its workers to earn college degrees. (NYT)
• It’s getting more expensive for corporations to say, “I’m sorry.” (WSJ)
• Stockton, Calif., looks set to be the first U.S. city to test a universal basic income. (NYT)
• Deutsche Bank insists that it’s committed to the U.S., even as it plans huge staff cuts there. (Bloomberg)
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