A final reminder that we are holding a DealBook Debrief call at 11 a.m. Eastern today. Our special guest is Maggie Haberman, a star White House correspondent at The Times, who will discuss the Trump administration’s approach to containing the coronavirus, reopening the economy and preparing for the election. She will also take your questions, which you can send to firstname.lastname@example.org. R.S.V.P. here to join the call. (Want this in delivered to your inbox each day? Sign up here.)
‘If you send $1,000, I will send back $2,000’
Twitter got weird yesterday when dozens of prominent users — including Joe Biden, Elon Musk and Bill Gates — urged people to send them Bitcoin. The obvious scam was a brazen hack that highlighted a huge vulnerability at a major tech company.
Twitter determined that several employee accounts were compromised when they were tricked into giving up credentials by a “coordinated social engineering hack.” (Vice reports, citing sources it says were involved in the attack, that the hackers had help from inside the company.) That allowed someone to post from the high-profile accounts. Twitter restored service at 8:30 p.m. Eastern.
• “Tough day for us at Twitter. We all feel terrible this happened,” Jack Dorsey, the company’s C.E.O., tweeted afterward. At the time of writing, shares in Twitter are down 5 percent in pre-market trading.
It wasn’t a lucrative scam. About $118,000 went into Bitcoin wallets associated with the tweets. But crypto exchanges like Coinbase and Binance said they were working to block transactions involving those accounts.
Security experts are worried. The “effective but amateurish” demand for Bitcoin suggests that a state actor like North Korea wasn’t involved. But it points to a serious security flaw that, in the wrong hands, could have caused stock market turmoil (Mr. Musk’s tweets have been known to move stocks) or false political pronouncements (Former President Barack Obama’s account was compromised, though President Trump’s was not).
The full extent of the hack remains unknown. Researchers are concerned that the perpetrators may have gained access to users’ direct messages or other personal information. “Nothing is safe on Twitter right now,” the security consultant David Kennedy told The Wall Street Journal.
Here’s what is happening
China’s economy grew in the second quarter. It expanded 3.2 percent, versus the same period last year, rebounding from a 6.8 percent decline in the first three months of the year. China is the first major economy to return to growth after a coronavirus-induced downturn — but its reliance on factories, not consumers, has some doubting the recovery’s durability. Weak retail results dragged down Chinese stocks, and global markets are following their lead.
Europe’s top court rejected a trans-Atlantic data sharing agreement. Thousands of companies use the agreement, known as Privacy Shield, to shuttle data between the U.S. and Europe. The European Court of Justice ruled that the arrangement did not comply with privacy rights.
Boeing’s 737 Max may return to the skies this year. Airlines are wary of the model, which has been grounded since March 2019, but the fuel-efficient, narrow-bodied plane is well suited to the short domestic trips that are predominant in pandemic-era travel. And buyers have leverage to negotiate big discounts.
Black business owners had a harder time getting federal aid, one study found. Researchers sent pairs seeking small-business rescue loans to Washington-area banks. White applicants were more successful, even with slightly worse financial profiles.
President Trump is still fighting the release of his tax returns. Days after a Supreme Court ruling against the president, his lawyers said they would argue that the Manhattan district attorney’s subpoena was too broad and politically motivated.
TikTok fights back
As the Chinese-owned video app TikTok faces potentially severe restrictions from the Trump administration, it has hired an army of Washington fixers to make its case.
The company has hired more than 35 lobbyists, The Times reports, including David Urban, a former Trump campaign official who remains close to the president. TikTok’s parent company, ByteDance, has also tapped its well-connected backers, including SoftBank and the investment firm General Atlantic, for advice.
TikTok is fighting suspicions about its ties to the Chinese government, raised by Secretary of State Mike Pompeo, the White House trade adviser Peter Navarro and others. The most serious threat it faces is a review by the national security panel known as Cfius, which is looking into whether ByteDance’s 2018 takeover of the American app Musical.ly — which formed TikTok — gives Beijing too much access to American data.
• Wells Fargo and the Pentagon are among the U.S. organizations that have banned TikTok from employees’ phones. Amazon briefly did, until it didn’t.
TikTok denies the allegations, saying it stores data on servers in Virginia and Singapore. It also notes that its C.E.O., the former Disney executive Kevin Mayer, is an American who lives in Los Angeles.
It still has a tough road. Senator Marco Rubio, Republican of Florida, asserts that TikTok representatives have provided incomplete or conflicting information about data policies. The Senate is poised to vote next week on a bill that would ban all federal employees from using TikTok on work devices.
Goldman’s ‘indecent’ quarter
Goldman Sachs blew expectations away yesterday when it reported strong second-quarter earnings, thanks to bumper trading and underwriting fees. Revenue was up more than 40 percent compared to last year, and profit was stable — a major achievement, considering the impact of the pandemic.
Can it keep it up? The markets remain volatile, which is good for traders. But how much more will companies keep borrowing? In addition to a big jump in loan-loss provisions, as at other banks, Goldman has been building reserves against potential legal troubles tied to the 1MDB scandal: It set aside $945 million in litigation provisions, up from $66 million in the same quarter last year.
But wait, here comes Morgan Stanley. Goldman’s chief rival just reported a 30 percent rise in revenue and a 50 percent surge in net profit in the second quarter, lagging on sales growth but beating Goldman where it counts: the bottom line.
Business takes the lead on face masks
Walmart said it would require its customers to wear masks, making perhaps the strongest statement yet by corporate America on what has become a political flash point.
“We know some people have differing opinions on this topic,” Walmart said in a blog post. It’s telling that the retailer, which has historically been averse to making remotely controversial statements, is willing to wade into this minefield in the name of public safety, as it did last year when it stopped selling ammunition and discouraged customers from openly carrying firearms in its 5,000 stores.
Big companies are becoming leaders on public health, as coronavirus infections surge in the United States and threaten a nascent economic recovery. Walmart’s step is particularly notable because many outlets are in rural areas, which are seeing a rise in cases and tend to harbor more suspicion of face masks.
Political leadership on masks remains muddled. More Republican governors are pleading with the public to wear them. But President Trump has only recently — and grudgingly — offered his support for face coverings, and Gov. Kevin Stitt of Oklahoma, who has tested positive, said he would not mandate masks.
We have questions about Netflix
Well, The Times’s media reporter Ed Lee does. The streaming giant is to report quarterly earnings after the market closes today, and investors are anticipating a surge in subscribers. (The company’s first-quarter performance blew away expectations.) Here are three things on Ed’s mind:
Can you trust the forecast? Netflix said it expected 7.5 million more customers in the second quarter, based on “mostly guesswork.” (The company admits its guidance is often wrong and encourages investors to ignore it.) In a note last week, Goldman Sachs predicted 12.5 million. There’s a chance that some people signed sooner because they’re still stuck at home, can’t figure out TikTok and don’t care for Quibi.
How strong is its content pipeline? Netflix said its slate was on track, but that fresh programming would most likely slow in the current quarter. That’s important, because new shows drive new subscriptions. (Ed’s tip: “The Old Guard,” a smart, humane action epic starring Charlize Theron.)
Can it maintain positive cash flow? Netflix had positive free cash flow last quarter, and it’s likely to keep it up in its latest results — but not for the rest of the year. Expect it to burn about $1 billion in 2020.
The speed read
• Dell said it may spin off its majority stake in VMware, the network software maker, to bolster the stock of both companies. (Dell)
• Evercore named its chairman, Jon Weinberg, as co-C.E.O. alongside Ralph Schlosstein. (WSJ)
• Airbnb’s C.E.O., Brian Chesky, told employees that the company was reviving I.P.O. plans. (FT)
Politics and policy
• In an Op-Ed, Ben Bernanke, the former Fed chairman, urged Congress to give states billions more in financial assistance to help them recover from the pandemic. (NYT Opinion)
• “Government data is getting worse. That’s a catastrophe.” (Business Insider)
• Noticeably absent from the advertising boycott of Facebook: Hollywood. (NYT)
• A young tech entrepreneur was killed and dismembered in Manhattan in what investigators said appeared to be a “professional job.” (NYT)
Best of the rest
• The challenges of summer interns include bad Wi-Fi, struggles with making an impression over Zoom and more. (Forbes)
• Paying workers who live in lower-cost areas less won’t be easy. (FT)
• We’ll believe it when we see it: College students say they’d sacrifice partying to return to campus. (Axios)
We’d love your feedback. Please email thoughts and suggestions to email@example.com.