Let’s Talk About Bailouts …

The fund will be focused on N.E.A.’s traditional areas of interest, including start-ups in the health care technology, fintech and enterprise sectors. It plans to invest largely in early-stage businesses, where it tends to get its biggest returns, though Tony Florence, a general partner, added that it had the firepower to “double down” on promising older portfolio companies that need capital to grow. Neither partner professed worry about finding enough potential investments, a problem that has hamstrung Sequoia.

The firm isn’t too worried about the coronavirus … but is telling start-ups to look after employees and make sure the companies have enough cash to ride out a tough fund-raising environment. “When you don’t know where your money is coming from, you’d better be careful with the money you have,” Mr. Sandell said.

It had already been telling its start-ups to be more parsimonious, avoiding the sort of free-spending that led to WeWork’s meteoric rise and fall. Or, as Mr. Sandell put it, avoid taking $300 million from SoftBank’s Vision Fund, increase market share by a few percentage points and “become profitable when your grandkids grow up.”

Occidental pays dearly for its Anadarko gamble

Last year, Occidental was riding high after striking a deal to buy the fellow oil producer Anadarko for $38 billion, beating out Chevron and fending off Carl Icahn. This year, that all came crashing down.

Oxy will slash its dividend 86 percent, to 11 cents. (It’s one of the biggest such cuts in years.) The company also plans to cut capital expenditures this year to as little as $3.5 billion, down from a maximum planned spend of $5.4 billion.

Its market value has tumbled to $12.8 billion, well below the $42 billion when it closed the Anadarko deal in August. And the value of Oxy’s debt also sank: A long-term bond it issued last year now trades at 69 cents on the dollar.

The culprit: oil prices. Oxy is just one of many American shale producers that have been hit hard by a steep drop in the price of crude as the coronavirus outbreak and a price war between Saudi Arabia and Russia take their toll. Aramco, the giant Saudi oil producer, said this morning that it planned to produce an additional one million barrels per day, an effort aimed in part at squeezing U.S. shale rivals.

Article source: https://www.nytimes.com/2020/03/11/business/dealbook/coronavirus-bailouts-economy.html