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Tonight: Unvaccinated workers dig in their heels and Biden targets stock buybacks to fund social spending. Plus: Don’t let Facebook’s pivot to the “metaverse” fool you — no matter what it calls itself, it’s still in deep trouble. Let’s get into it.
Once upon a time, it was The Facebook. Then that definite article got the boot, and the world got to know simply Facebook (good call, Justin Timberlake).
Now we have Meta, a nod to the company’s “metaverse” ambitions (more on that dystopian hellscape in a moment).
ICYMI: Mark Zuckerberg announced the company he founded 17 years ago is getting a rebrand, effectively demoting Facebook’s namesake site to just one of several in the company’s stable of apps, which also includes Instagram and WhatsApp.
Naturally, it’s getting a new stock ticker, too. The company will drop $FB and begin trading under $MVRS (get it?) in December.
It’s not an uncommon move for a tech company of such scale — Google created Alphabet as its parent company back in 2015 — but the timing of the Meta announcement is important. Facebook is desperately trying to army crawl itself out of a swamp of bad press revealing years of systemic failures to combat hate speech and misinformation. (The list of problems is so long and infuriating I’m not going to re-hash it all, but in case you’ve been snoozing on the Facebook Papers, you can get up to speed here.)
WHAT’S THE ‘METAVERSE’?
The name-change news capped a bizarre techno fever dream of a product presentation introducing the so-called metaverse. (As a quick aside: Do I want to write about the metaverse? For God’s sake no. Do I have to? A bit, yeah, sorry.)
In short, the metaverse is a dream of a future internet straight outta science fiction. No one has a set definition of yet, because, well, it doesn’t exist. But Facebook describes it as “a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you.”
The presentation showed a series of concept videos that highlighted Facebook’s Meta’s vision for a sort of augmented reality — one where you can send a holographic image of yourself to a concert with a friend attending in real life, or sit in a virtual meeting table with colleagues. Like, a more intense version of Zoom…and who doesn’t want more of that?
MY TWO CENTS
Let’s not let this Black Mirror-esque gobbledygook distract us from the very real hell Facebook has wrought in our non-augmented reality. No amount of corporate re-branding should let Zuck or anyone else off the hook for the real, tangible harms their product has manifested and continues to propagate without consequence.
NUMBER OF THE DAY
A large majority — 72% — of unvaccinated American workers say they’ll quit their jobs if their employers mandate vaccines, according to a survey by the Kaiser Family Foundation. But the survey results come with a big caveat: Telling a pollster you’re willing to quit on principle is a lot easier than actually leaving.
It won’t be a hypothetical for long. The Biden administration is drafting workplace safety rules that would require all businesses with 100 or more employees to mandate the vaccines for their employees or frequently test workers. That would apply to about 80 million people, or two-thirds of all workers nationwide.
THE BUYBACK TAX
The White House on Thursday released a framework for its slimmed-down, nearly $2 trillion social spending and climate plan, which includes funding for universal pre-kindergarten and tax breaks for families, among other things.
Biden framed the months-long haggling over the deal as a good-faith effort to find middle ground between liberal and moderate Democrats, CNN’s Kevin Liptak writes.
“No one got everything they wanted, including me. But that’s what compromise is, that’s consensus,” Biden said.
Biden cast the Build Back Better framework as “fully paid for.”
Here’s how: A 15% minimum tax on companies with more than $1 billion in profits and a 1% surcharge on corporate stock buybacks.
What’s a buyback?
For the uninitiated, a buyback, also called a share repurchase, is a commonly used Wall Street tactic in which companies use extra cash to buy its own shares in the open marketplace. It’s the corporate finance equivalent of #selfcare. The company is re-investing in itself. It’s also reducing the number of shares outstanding, goosing the relative stake of shareholders.
It’s entirely legal, though it has prominent critics including Warren Buffett and Senator Elizabeth Warren, who say companies have abused the mechanism to the detriment of the broader economy and everyday Americans.
The Biden framework notes that corporate executives often use buybacks “to enrich themselves rather than investing [in] workers and growing the economy.”
Why the surcharge?
The proposed 1% tax on buybacks could rake in significant revenue — $125 billion over 10 years, according to the administration’s framework.
In the first half of 2021 alone, S&P 500 companies repurchased $609 billion in stock, according to S&P Dow Jones Indices. Under the buyback surcharge, they would owe $6.1 billion.
Of course, the accounting wizards on Wall Street are likely already hunting for workarounds. Dividend payments, for example, could be one way for companies to reinvest their cash while avoiding the extra tax.
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