Recode Daily: The hot new thing among the mega wealthy: Avoiding taxes by doing good
Plus: Silicon Valley stays quiet about the international backlash over the murder of a dissident Saudi journalist; Uber and Lyft are driving toward IPOs in 2019; emoji bagel justice.
By Recode Staff Oct 17, 2018, 8:31am EDT
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Sean Parker crafted a little-known part of the tax code called Opportunity Zones. Now every one-percenter in Silicon Valley wants in.
Nick Otto for The Washington Post via Getty Images
The new hot thing in the land of the mega wealthy: Do-gooder investments they can write off on their taxes. Expect big boasts from Silicon Valley titans next year about how their money is changing the world, thanks to a little-known part of the tax code called "Opportunity Zones" — a.k.a. "O-zones" — low-income areas designated by each state. Investors like Sean Parker, Peter Thiel, LinkedIn founder Reid Hoffman and venture capitalist John Doerr will soon be able to sink their recently realized capital gains into philanthropic-looking projects or companies based in one of 8,700 Opportunity Zones, in the process reaping extensive benefits — and a gold mine of positive PR — thanks to the tax bill passed by Congress earlier this year. [Theodore Schleifer / Recode]
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Saudi Arabia is the largest single funding source for U.S. startups, but Silicon Valley has remained mostly quiet about its connections to the kingdom as international backlash grows over the possible murder of dissident Saudi Arabian journalist Jamal Khashoggi. Crown Prince Mohammad bin Salman has directed at least $11 billion of Saudi money into U.S. startups since mid-2016, either directly or through SoftBank's $92 billion tech-focused Vision Fund, far more than the total raised by any single venture capital fund. Since Khashoggi's disappearance, powerful U.S. executives have withdrawn from a high-profile investment conference in Riyadh this month. [Eliot Brown and Greg Bensinger / The Wall Street Journal]
Uber and Lyft are both charging toward potential IPOs next year. Uber could be valued at $120 billion in an IPO as soon as early 2019 — that's nearly double the ride-hailing company's valuation in a fundraising round two months ago, and more than General Motors, Ford and Fiat Chrysler are worth combined. And rival Lyft has hired JPMorgan Chase to lead its 2019 IPO, which could value the company at more than $15 billion. [Michael J. de la Merced and Kate Conger / The New York Times]
Netflix is growing faster than even its most bullish fans on Wall Street predicted, calming doubts about its global prospects and sending its already-stratospheric stock higher. The world's largest paid online TV network added 6.96 million users in the third quarter, boosting its global total to 137.1 million, and said it plans to add 28.9 million customers in total this year, a new record for the 21-year-old company. The results should prolong Netflix's reign as one of the best-performing stocks on the Street, giving it leeway to spend billions of dollars more on original programming. [Lucas Shaw / Bloomberg]
A new study from Stanford University has once again confirmed that the majority of the U.S. public opposed the FCC's repeal of net neutrality. The Stanford report eliminated all automated or form-generated comments from the 22 million public comments submitted to the Federal Communications Commission — which boiled the results down to just 800,000 Americans who put their own thoughts on the net neutrality repeal into words; of those real people, 99.7 percent opposed the FCC's repeal. Meanwhile, New York Attorney General Barbara D. Underwood subpoenaed more than a dozen telecommunications trade groups and lobbyists, seeking to determine whether the groups submitted millions of fraudulent public comments to sway the federal decision on internet regulation. [Karl Bode / Techdirt]
"Microsoft would never have happened without Paul," says Bill Gates, who shared some memories of Paul Allen, one of his oldest friends and first business partner. The duo helped pioneer the personal-computer industry when they started Microsoft in 1975. Allen died on Monday at age 65 from complications of non-Hodgkin's lymphoma. [Bill Gates / gatesnotes]
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This is cool
Bagel emoji justice.