Business Stories of the Week: Nov. 17, 2017

by November 17, 2017
Bill Gates plans to build the city of the future on 25,000 acres of Arizona desert. (Lonely Cactus by Alan Levine via Flickr)

Bill Gates plans to build the city of the future on 25,000 acres of Arizona desert. (“Lonely Cactus” by Alan Levine via Flickr)

Digital pills get a thumb’s-up

The U.S. Food and Drug Administration has approved the world’s first digital drug, according to The Wall Street Journal. Manufactured by Japanese  company Otsuka, the antipsychotic pill will contain a tiny chip that mixes with stomach acids to send a signal to a patch worn on the abdomen. It’s designed for patients with mental illnesses, who can forget to take their medication. The WSJ article, reported on Tuesday, indicates that venture capitalists are keen on companies that mix softwear with medical devices, though it’s unclear how much insurers are willing to pay.

Huge fund may ditch oil

Norway’s Minister of Finance is weighing whether to pull the country’s $1 trillion wealth fund out of oil and gas stocks. A Fox Business report writes that the proposal was made by Norway’s central bank, spurred by two years of weak oil prices, and concern that a large share of the nation’s wealth is overexposed to the price of crude. While bank officials say the proposal doesn’t indicate a concern about the future of oil and gas prices, the fund has been divesting itself from power companies with significant dependence on thermal coal.

Sports Illustrated tries video

Time Inc.’s powers-that-be have said the media company’s future is video, and Sports Illustrated is heeding the call. On Wednesday, Variety.com detailed the magazine’s first subscription video service, available on Amazon channels for $5 a month. The programming will consist of sports-themed movies (including the first five “Rocky” films) and documentaries, as well as original programming that concentrates on storytelling. In other words: no live sporting events. In related news, the Los Angeles Times reports that the Koch brothers are said to be backing the Meredith Corporation’s latest bid to purchase Time Inc; Thursday’s news of their backing sent Time’s stock soaring.

GE switches tactics

Its share prices plunged to a five-year low on Monday as GE’s new chief executive revealed plans to pare the industrial conglomerate to just three units: power, aviation and health care. Reuters reports that the cost-cutting move may signal a sea change in business strategy for massive multi-industry companies such as GE, that until now have concentrated on expanding their portfolios. Dividends to its shareholders were cut, as was the 2018 earnings forecast.

Walmart wins big

The world’s largest retailer posted huge third quarter gains, with strong same-store sales (for the 13th consecutive quarter) and “e-commerce sales soaring 50 percent in the fiscal third quarter, a year after it acquired Jet.com,” according to CNBC. Food sales and hurricane-related purchases largely drove the increase, but analysts say other initiatives, including the company’s recently announced partnership with Lord & Taylor, are key to positioning Walmart for a fair fight with Amazon.

Bill Gates conjures the Jetsons

Bill Gates sees the future in the Arizona desert. Earlier this week the Microsoft billionaire paid $80 million for 25,000 acres west of Phoenix that he plans to turn into a futuristic city, complete with autonomous cars, high-speed data centers and cutting-edge technology. Popular Mechanics reports that the new “smart city,” dubbed Belmont, is reminiscent of another futuristic Arizona community, Arcosanti, planned (and partially built) by Paolo Soleri in the 1970s. The Gates project will encompass schools, retailers, offices and other business spaces, as well as 80,000 housing units.

Tax bill heads to the Senate

After the House passed a rewrite of the tax code on Thursday, a different version is in a precarious state in the Senate says ABC News. Two points in the Senate bill make passage uncertain: the elimination of the personal tax cuts by 2026, as well as elimination of the Obamacare provision that requires individuals to purchase insurance or pay a tax penalty. A vote is expected soon after Thanksgiving.