Do you know something we should know about L.A. tech or venture capital? Reach out securely via Signal: +1 917 434 4978.
Harrison is dot.LA's senior finance reporter. They previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find them on Twitter: @harrisonweber. Send tips on L.A. deals to firstname.lastname@example.org. Pronouns: they/them.
Amazon workers, unions and advocates plan a series of Black Friday protests against the Seattle retailer, demanding the conglomerate increase wages, pay more taxes and curb its harm to the planet.
Called Make Amazon Pay, the consortium spans 22 countries and will stage strikes in Italy and France, garment worker protests in Cambodia and Bangladesh, as well as protests across the U.S.
Among those actions is a virtual town hall in Los Angeles on Cyber Monday, hosted by progressive advocacy groups Courage California and the Los Angeles Alliance for a New Economy, along with union groups like the Los Angeles County Federation of Labor.
Organizers say the event will focus on both Amazon's practices as well as enforcement of new California rules that will require warehouses to disclose productivity quotas to workers and government agencies.
Amid its rocketing growth in the U.S. and across the globe, the firm has come under fire from not only labor organizers but also environmental groups and climate activists, privacy advocates, and tax watchdogs.
Concerns include reports that it destroyed millions of unsold goods, fought the passage of a major climate bill, and in some years paid nothing in U.S. federal income tax. Another sticking point is the company's ownership of security camera maker Ring, which has faced privacy and surveillance concerns over its collaboration with law enforcement.
Greenpeace, Oxfam, the Sunrise Movement and the Tech Workers Coalition are among the groups behind Make Amazon Pay. Protests and other actions are slated this week in Canada, Brazil, Argentina, Ireland, the U.K., Spain, Belgium, the Netherlands, Germany, Poland, Slovakia, Austria, Turkey, South Africa, Australia, New Zealand, and India.
For its part, Amazon said it's addressing many of these issues.
"These groups represent a variety of interests, and while we are not perfect in any area, if you objectively look at what Amazon is doing in each one of these areas you'll see that we do take our role and our impact very seriously," said Amazon's director of national media relations Kelly Nantel in a statement shared with dot.LA. "We are inventing and investing significantly in all these areas."
Nantel added that Amazon is "playing a significant role in addressing climate change with the Climate Pledge commitment to be net zero carbon by 2040, continuing to offer competitive wages and great benefits, and inventing new ways to keep our employees safe and healthy in our operations network, to name just a few."
But labor experts are skeptical that such promises amount to little more than lip service.
"They're going to make statements like that, all the while they try to bust union drives, or continue to get very favorable tax abatements to build larger and larger warehouses, and clog our roads and highways with trucks and delivery vans," said William Brucher, who teaches labor studies at Rutgers University. "That's what's going to happen, but they're going to say 'oh yeah, we sure care about workers and the environment.'"
Amazon has faced ratcheting pressure from workers and organizers in places like Staten Island, New York and Bessemer, Alabama. But so far, Amazon workers have not succeeded in unionizing in the U.S. Amazon's massive scale and ongoing growth are two of the main challenges cited by organizers.
Amazon told investors in October that it employs nearly 1.5 million people globally, excluding contractors such as delivery drivers who make speedy deliveries possible.
Out of the entire U.S. workforce, about 1 out of every 169 people works for Amazon, NBC News found as of June. Amazon trails Walmart in the U.S., which reportedly employs 1 out of every 100 workers.
Efforts to organize Amazon workers are relatively new, and Make Amazon Pay itself launched in 2020.
Burcher argues that the arrival of groups like this will make some impact. But this is likely to just be the beginning.
"I think we're also going to see a fair amount of experimentation to try and take on [Amazon,] which is now perhaps the most powerful company of the 21st century," he said.
- Amazon Fires Two Employees Who Called for Better Warehouse ... ›
- Amazon Employs More People in California than Anywhere Else ... ›
In a $2 billion case that's laid bare the clashes behind Tinder's meteoric rise, one person at the center of the dating app's finances is set to take the stand on Tuesday.
James Kim, Tinder's former vice president of finance, is the latest witness handpicked by the service's co-founders. His testimony will follow up weeks of arguments, in which Tinder's early staffers have claimed that Match Group — and its former owner, IAC — cheated them out of billions of dollars-worth of stock options back in 2017.
The livestreamed courtroom battle kicked off with jury selection on November 1 and was initially expected to wrap by Thanksgiving, but instead it's dragged on, due in part to technical issues as well as lengthy testimony from former Tinder CEO and dot.LA investor Sean Rad.
Here's what we have learned so far about the case and where it might be headed next.
The "Golden Parachute" and More Payouts
No matter what verdict is reached, one thing is certain: Tinder created a ton of wealth, and that means someone rich is going to win — be it billionaire media mogul Barry Diller and Match's current executives, certain members of the early Tinder team, or simply one of the groups' top-tier lawyers.
Match has "paid out in excess of a billion dollars in equity compensation to Tinder's founders and employees" since the app was launched out of its former incubator, Hatch Labs, according to a statement IAC made to TechCrunch in 2018.
While spokespeople for Rad did not respond to a request for comment on his net worth, both he and co-founder Justin Mateen are prolific angel investors, tapping the funds they secured via Tinder to snap up stakes in numerous growing tech startups.
Plus, there are the payments made to former Match and Tinder CEO Greg Blatt and former finance VP Kim.
When Blatt resigned from Match and Tinder, he allegedly received a $3 million bonus and retained 1.75 million Match stock options that were poised to expire, according to court documents. Early Tinder staffers characterized the payout as a "golden parachute" that was arranged in exchange for Blatt staying on in a limited capacity as an advisor.
Kim, meanwhile, was paid $2 million through the Tinder executives' litigation fund. Judge Joel Cohen declined to block Kim's testimony despite Match's request to do so over the payout, however the judge said it "approaches the line between legitimate litigation funding and illegitimate payment of witnesses."
A "Recycled" Valuation
Throughout the trial, Rad and other former Tinder executives have alleged that Match withheld key details from two investment banks, and provided inaccurate information, to suppress a private valuation of the dating app in 2017. The valuation was used at the time to set the price of their stock options.
At the time, the banks valued Tinder at $3 billion, but lawyers for Rad and other executives argued Tinder was actually worth far more. They say Match and IAC conspired to deflate the valuation in order to avoid a massive payout, while IAC has summed up the plaintiffs' complaints as merely "sour grapes," given the app's persistent growth.
Yet according to testimony from Rad, Match also valued Tinder at $3 billion in 2015. That's key to the case because the dating app's revenue skyrocketed in the years that followed — so why did Tinder garner the same valuation after a couple years of substantial growth?
Between 2015 and 2016, revenue generated by Tinder surged nearly 260% from $47 million to $169 million. Around that time Blatt called Tinder "a rocketship" in a call with investors. Tinder's revenue topped $403 million in 2017, according to data from Statistica.
IAC argues, however, that Tinder was not worth $3 billion in 2015. The company conceded in a statement to dot.LA that it bought shares based on a higher valuation — at a "premium price" — to keep talent around, but IAC says it did so "because Sean Rad misled employees about Tinder's value and they were understandably upset."
"IAC took accounting charges because the price at which we purchased the Tinder options was well above the market value of Tinder, at the time," the company added.
The Saga Could End By Early December
Following testimony from Kim and industry experts, we'll hear from expert witnesses called by Match and IAC. Closing arguments are anticipated for December 2, and from there deliberation could last anywhere between one and several days, potentially stretching through December 6, a spokesperson for the plaintiffs told dot.LA.
While Match cast the chances of an "unfavorable outcome" as unlikely in a recent disclosure to investors, it also cautioned that, "given the uncertainties inherent in jury trials[,] there is at least a reasonable possibility of an exposure to loss, which could be anywhere between a nominal amount and $2.5 billion."
Match also recently told investors that as of September 30, it had $523 million in cash, including "cash equivalents and short-term investments" on hand, as well as a $750 million credit facility.
Depending on where Match believes the trial is headed, it could seek a settlement before deliberations begin, as Susquehanna Financial Group analyst Thomas Claps suggested might happen before the trial even started.
- Tinder's is Now Under GDPR Probe - dot.LA ›
- Justin Mateen, Tinder Co-Founder, Raises $247M for Jam Fund ... ›
- Tinder $2B Legal Battle is Finally Getting Its Day in Court - dot.LA ›
Ford, one of Rivian's biggest investors, no longer has plans to develop an electric vehicle using the high-flying EV company's tech, Rivian said on Friday.
"As Ford has scaled its own EV strategy and demand for Rivian vehicles has grown, we've mutually decided to focus on our own projects and deliveries," the company said in a statement.
Ford and Rivian originally planned to co-develop an electric Lincoln SUV, but after the pandemic set in, the two canceled the collaboration.
Still, Ford had left the door open for a joint effort. "Lincoln essentially has decided that it was going to take its own approach to electrification," Ford's then-CFO Tim Stone told the Detroit News in 2020. "And we're similarly committed to Rivian as a partner and we will continue to look for opportunities to partner with Rivian on non-Lincoln product." [sic]
While announcing the split, Rivian called its "relationship with Ford an important part of [its] journey," and added that the company "remains an investor and ally on our shared path to an electrified future."
Ford had to elbow its longtime rival General Motors out of the way to secure its 12% stake in Rivian, the Wall Street Journal recently reported. Today, Rivian's market cap sits near $110 billion, while Ford's market value is tens of billions of dollars less, at approximately $77.5 billion.
Meanwhile, Rivian has its hands full. The company's backlog of about 55,400 pre-orders now stretches to the end of 2023, according to a recent regulatory filing. The firm is simultaneously racing to deliver 10,000 electric delivery vans to Amazon, its largest investor, by the end of 2022.
- Ex-Rivian VP Slowly Shut Out From Company Decisions - dot.LA ›
- Five Things You Should Know About Rivian - dot.LA ›
- Rivian Stock Soars 29% in Its Nasdaq Debut, Topping Ford and GM ›