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| Happy Tuesday, Insiders! I hope you enjoyed the long weekend! Today's newsletter covers: - 👨⚖️ A panel of judges will redraw Alabama's congressional map
- 🤿 Scientists cryopreserved & revived adult coral for the first time
- 🖥️ China plans to launch a $41B semiconductor-focused investment fund
And much more! If you find this newsletter useful, please share it with your friends and colleagues. Your faithful IDB writer, Daniel
p/Dan-Smith | |
| 1 | | A panel of federal judges plans to redraw Alabama's Congressional map to include two majority-Black districts after state lawmakers refused to comply with a judicial order to do so. In June, the U.S. Supreme Court upheld a ruling by the three-judge panel finding that Congressional maps drawn by Republican lawmakers were likely in violation of the Voting Rights Act. More: - In July, the GOP-controlled Alabama legislature approved a new map that maintained a single majority-Black district, a move that many saw as an overt rejection of the SCOTUS ruling.
- The three-judge panel that initially rejected the GOP-drawn map said it plans to appoint a special master to design a new Congressional map for the state.
- Alabama, which is 27% Black, has eight Congressional districts.
- Judges have previously ruled that the state should have two districts where Black voters constitute a majority or near-majority so that their vote is not diluted.
- Alabama will likely appeal the decision, possibly bringing the case before the Supreme Court again.
Zoom Out: - The judges' decision to draw a new map was praised as a "significant step toward equal representation for Black Alabamians" by former U.S. Attorney General Eric Holder.
- Holder is the chairman of the National Democratic Redistricting Committee, which supported one of the legal challenges that led to the judicial decision.
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| 2 | | DNA sequencing company Illumina's stock dropped 4.5% after the company named its new CEO. 
What happened: Jaco Thaysen, who spent nearly ten years at medical devices company Agilent, will start as Illumina's CEO on Sept. 25. Former CEO Francis DeSouza resigned earlier this year after a protracted proxy fight with activist investor Carl Icahn divided the Illumina board. Relevance: Illumina's market capitalization peaked at ~$75B in August 2021, shortly after it closed its $7.1B acquisition of cancer test developer Grail. Illumina proceeded with the acquisition without seeking approval from anti-trust regulators in the EU and U.S., which later issued orders to block the deal. Icahn pushed for more board seats after the Grail acquisition was announced and sought to unwind the deal. The company is now valued at ~$25B. | | | |
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| 3 | | New York City will begin enforcing new rules requiring Airbnb and other short-term rental hosts to register with the city government. The regulations will require short-term rental companies like Airbnb, VRBO, and Booking.com to confirm that hosts' registration applications were approved before collecting fees from short-term visits. More: - New York City law mandates that short-term rentals of 30 days or less can only take place if the host is present.
- Under the rules, no more than two guests are allowed during short-term rentals and guests must have access to the entire residence during their stay.
- The mayor's office says that companies like Airbnb have not enforced these regulations.
- According to city officials, more than half of Airbnb's $85M in net revenue in NYC came from ~10,800 illegal Airbnb rentals in the city.
- Hosts who violate the new rules repeatedly could be fined up to $5,000, while short-term rental platforms could be fined up to $1,500 per transaction involving illegal rentals.
- As of August 28, only 257 of the ~3,250 registration applications submitted to the city by would-be short-term rental hosts have been approved.
Zoom Out: - In recent years, cities around the world have passed legislation limiting short-term rentals or taxing them more heavily.
- Critics argue that short-term rentals drive up housing costs, while proponents say they make cities more accessible to tourists.
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| 4 | | GOOD NEWS: A group of scientists have successfully cryopreserved and revived adult coral for the first time. The breakthrough could be used to preserve coral reefs that are increasingly threatened by rising ocean temperatures and climate change. More: - The researchers used antifreeze and liquid nitrogen to freeze coral fragments in a glass-like state.
- The coral fragments were then thawed and returned to seawater, where they consumed oxygen at a normal rate.
- Matthew Powell-Palm, the lead author of the study published in Nature Communications, said that "cryo-conservation of endangered coral species can help to ensure that these invaluable and marvelous organisms do not go extinct."
- Marine biologist Mary Hagedorn, a co-author of the study, said the method could be used to preserve other organisms, and potentially human organs, for decades.
Zoom Out: - Due to climate change, pollution, and overfishing, half of the world's coral reefs have disappeared since 1950.
- A 2018 report by the Intergovernmental Panel on Climate Change estimated that an increase of 1.5C in the global average temperature would lead to a 70-90% decline in coral reefs.
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| 5 | | China plans to launch a 300B yuan ($41B) state-backed investment fund to boost the country's semiconductor industry. The fund would be the largest of three funds planned by the China Integrated Circuit Industry Investment Fund (also known as the Big Fund). More: - The Big Fund launched similar funds in 2014 and 2019 that raised 138.7B yuan (~$19B) and 200B (~$27.4B) yuan, respectively.
- Sources told Reuters that the new fund would focus on investing in computer chip manufacturing equipment.
- President Xi Jinping has repeatedly said that China needs to become self-sufficient as a producer of semiconductors.
- Sources said the government is expected to contribute 60B yuan (~$8.2B) to the fund.
- Major state-backed firms like China National Tobacco and China Telecom, which contributed to the previous two funds, could also invest in the new fund.
Zoom Out: Q: Do you think this semiconductor fund will help advance China's goals of technological self-sufficiency? Join the discussion here. | | | |
| 6 | | A judicial ruling against a private equity-backed company could empower other lawsuits filed against private equity giants Apollo and Carlyle Group. The judicial ruling came from a case filed against web domain host GoDaddy, which is backed by private equity firm KKR and other investors. More: - The lawsuits focus on tax-receivable agreements (TRAs), which can create valuable tax assets for the owners of companies after successful initial public offerings (IPOs).
- GoDaddy went public in 2015 in a deal that aimed to generate more than $1B in tax benefits for the company that would subsequently be shared via TRA.
- The company's stock price fell after the IPO, and it ultimately paid little in taxes.
- GoDaddy said that it didn't expect to use the tax assets and valued the potential payments that they could have generated at $175M.
- In 2020, the GoDaddy board voted to send $850M to the GoDaddy founder, KKR, and other private equity backers to buy them out of the obligation.
- GoDaddy shareholders then sued over the payout, and a Delaware judge bolstered their case last month by denying GoDaddy's motion to dismiss.
Zoom Out: - Legal analysts said the ruling could lead private equity firms into settlement talks with plaintiffs, when previously they would have fought the lawsuits in court.
- Ongoing lawsuits against private equity giants Apollo and Carlyle make similar allegations as in the GoDaddy case, with plaintiffs claiming that the private funds received massive payouts from the companies - and their shareholders - in exchange for tax assets that were never created.
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- Elon Musk claimed that the Anti-Defamation League, a group that campaigns against anti-Semitic hate speech, is partially responsible for X's declining advertising revenue.
- The Cuban foreign ministry said Moscow is trying to recruit Cubans to fight for Russia in Ukraine in exchange for Russian citizenship.
- British chip design firm Arm is seeking a $52B valuation in its IPO on the New York-based Nasdaq exchange.
- Two former executives of a major Swedish oil company are on trial over claims that they were complicit in war crimes committed in Sudan between 1999 and 2003.
- Instacart, ARM, and Klaviyo just filed for an IPO. Get access to the Top 25 pre-IPO deals like Stripe, OpenAI Databricks and Anduril.*
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 | Writer | | Dr. Daniel Smith is an Inside writer with a Ph.D. in Political Science from the University of Cambridge. Follow him on Twitter @DJS12321 or email him at Daniel@inside.com. | | This newsletter was edited by NO ACCOUNT ASSOCIATED WITH THE EDITOR | |
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