GOP Donors Face Dilemma as DeSantis Drops Out

The effort to pick anyone but Donald Trump as the Republican presidential nominee took another big, if expected, blow on Sunday when Ron DeSantis dropped out of the race and endorsed the former president. (Other former hopefuls, including Vivek Ramaswamy and Tim Scott, have also endorsed Trump.)

The Republican faithful are coalescing around Trump in a way that raises questions about the next move by the wealthy donors who have sought to stop him.

Nikki Haley is now the only potential roadblock to a Trump nomination. DeSantis came into the race as the most daunting opponent to the former president, but his misstep-laden campaign never turned into a serious threat. Among his strategic errors was betting that “anti-woke” fights, including his battle against Disney, would resonate with voters. (Politico reports that a top DeSantis fund-raiser had proposed a legally untested way for the campaign to remain afloat, but the Florida governor eventually yielded to electoral reality.)

Haley has embraced her status as the last anti-Trump candidate standing: “May the best woman win,” she said on Sunday. But polls put her some 15 percentage points behind Trump in New Hampshire, as voters head to the polls tomorrow.

It’s a sign that the influence of big-money donors is limited. DeSantis’s war chest was financed largely by deep-pocketed benefactors. And in recent months, Haley has drawn support from a bipartisan group of anti-Trump moguls, including the hedge fund billionaire Stanley Druckenmiller and the Democratic investor and LinkedIn founder Reid Hoffman. (JPMorgan Chase’s Jamie Dimon has publicly exhorted people of all political stripes to back Haley.)

But as The Times’s Ken Vogel notes, winning over the moneyed class hasn’t guaranteed electoral success for years. Just ask Jeb Bush.

What will those anti-Trump donors do? Some are continuing to back Haley: Several Wall Street titans, including Druckenmiller and Henry Kravis, will host a fund-raiser for her on Jan. 30, a week after the Republican and Democratic New Hampshire primaries. And Americans for Prosperity, a super PAC backed by the Koch business empire, said it would continue to back Haley through at least Super Tuesday in early March.

But if Haley loses badly in New Hampshire, how long will business leaders accustomed to success stick with a failing bet? Ken Langone, a co-founder of Home Depot and one of her backers, said recently that he wants to see how she does tomorrow before giving more money.

  • In other election news: The top outside political group backing President Biden raised $208 million last year. And Treasury Secretary Janet Yellen is heading to the Midwest this week to tout Biden’s economic record as data points increasingly turn positive.

The war in Gaza hits the Middle East’s economy. Three months in, the conflict has cost Egypt, Lebanon and Jordan more than $10 billion in economic losses, and risks pushing 230,000 into poverty. Meanwhile, international support for Israel is fraying as casualties in Gaza mount and as attacks by Houthi rebels on commercial vessels in the Red Sea are driving up shipping costs.

Exxon Mobil sues climate investors to stop a proxy fight. The fossil-fuel giant asked a federal court in Texas to throw out a proposal from Follow This and Arjuna Capital that calls for speeding up the company’s efforts to cut greenhouse gases. A decision could clarify S.E.C. guidance on which shareholder proposals can be put up for a vote by company shareholders.

Another Boeing model comes under regulatory scrutiny. The F.A.A. said on Sunday that airlines should inspect the door plugs on Boeing 737-900ER planes “as an added layer of safety.” Confidence in Boeing’s engineering and quality control has fallen after hundreds of Boeing 737 Max 9s were grounded in the wake of a door panel tearing off an Alaska Airlines jet in flight.

S&P 500 futures are up again on Monday. After hitting a record on Friday, the benchmark index looks set to extend those gains. Last week’s rally was driven by investor bets on interest rates cuts and the artificial intelligence boom buoying tech stocks.

Macy’s has rejected a $5.8 billion takeover bid from the investment firms Arkhouse Management and Brigade Capital that valued the struggling department store chain at roughly 20 percent above its closing share price on Friday.

The investor group is now threatening to take the offer to shareholders. With a potential hostile bid looming, here are DealBook’s questions about what may come next.

How would Arkhouse and Brigade pull off a deal? Macy’s board cited doubts about the investment firms’ financing when it rejected the proposal on Sunday. The company said the firms had proposed to pay 25 percent of the offer in equity. The rest would most likely be from debt such as leveraged loans, the market for which has been tight thanks in part to high interest rates.

Could the rejection open the door to other bids? Arkhouse’s 2021 offer for Columbia Property Trust led to another buyer entering the picture. Macy’s has not reached out to prospective buyers, people familiar with the matter tell DealBook. But the retailer indicated in a statement that it would “be open to opportunities that are in the best interests of the company and all of our shareholders.”

The list of prospective suitors is short, given the challenges facing the retail sector and the scarring memories of buyouts-gone-bad like with Sears.

What is Macy’s turnaround plan? The retailer’s shares have fallen about 30 percent over the past five years, as the company lost significant market share, forcing it to close stores and lay off staff — including an announcement last week that it would cut 2,350 jobs.

All eyes are on Tony Spring, who takes over as C.E.O. next month after having led Bloomingdale’s, Macy’s much-healthier higher-end brand. But duplicating that kind of success could be challenging, given Macy’s large and underperforming store base and its different shopper demographics.

Tech sector C.E.O.s are more optimistic about the economy this year, especially the potential for artificial intelligence and the I.P.O. market. But they also remain wary that geopolitical tensions could disrupt trade and increase headwinds in the capital markets, SoftBank’s latest annual survey of its portfolio companies shows.

DealBook got an exclusive first look at the report, which includes start-ups backed bySoftBank’s two Vision Funds and its Latin America fund.

Hope is returning after a dismal two years. Almost half of the C.E.O.s surveyed were more upbeat about the economy than they were a year ago and expected to raise capital this year.

The improvement in sentiment is from a low base, cautioned Alex Clavel, co-C.E.O. of SoftBank Investment Advisers, which manages the funds. Last year was a hangover from 2022, when the fund-raising “faucets were turned off,” he said. Hopes didn’t pan out that I.P.O.s at the end of 2023 — including of the SoftBank-backed Arm — would lead to a flow of new listings, but 37 percent of C.E.O.s said public listings would pick up in the second half of 2024.

A.I. excitement is high, even if it’s unclear how it will be deployed. “There is an increasing sense that 2024 is the year when we go from A.I. enthusiasm to A.I. impact,” Clavel said. A third of the C.E.O.s said they had increased A.I. investment by 50 percent last year and were using it to make products more cheaply or to improve efficiency.

But some are proceeding cautiously. Clavel said one company has used A.I. to cut costs significantly but is holding off on more changes “because it’s going to be too unsettling” for the work force.

The C.E.O.s said tensions with China were the top geopolitical risk. Still, that obstacle hasn’t significantly affected their businesses yet. The biggest concern for 2024: that wider instability, including war in the Middle East, could sap investor interest in I.P.O.s or raise energy costs in Europe.

Larry Summers, the former Treasury secretary and ex-president of Harvard, after the university announced a new antisemitism task force on Friday. The committee is set to be co-chaired by Derek Penslar, a professor of Jewish history who Summers said was “unsuited” for the role in part because of his position on the extent of the school’s antisemitism problem.

On the agenda this week: earnings, inflation and central bank decisions.

Tomorrow: Netflix, Procter & Gamble, Johnson & Johnson and Lockheed Martin release quarterly results. Also, the Bank of Japan is expected to maintain its ultra-loose monetary policy; the markets predict the country will exit its negative rates regime as soon as March.

Elsewhere, the Academy Awards nominees are set to be announced.

Wednesday: The Dutch chips-equipment manufacturer ASML, Tesla and AT&T report earnings.

Thursday: It’s decision day for the European Central Bank, which is expected to hold steady on interest rates. On the other side of the Atlantic, U.S. fourth-quarter G.D.P. is set to be published.

In earnings, LVMH, Intel, Visa and a slew of airlines including American, Southwest and Alaska Air Group are due to report.

Friday: The Personal Consumption Expenditures report, the Fed’s preferred inflation gauge, will be released.


  • Sony ended a $10 billion deal to combine its Indian assets with Zee Entertainment, a Mumbai-based media company. (Reuters)

  • Macquarie, the big Australian investment firm, has raised 8 billion euros ($8.7 billion) for its latest European infrastructure fund. (FT)

  • What Citigroup’s exit from the $4 trillion market for municipal bonds, a field it once dominated, means for the business of financing state and local governments. (WSJ)

Artificial intelligence

  • Eleven Labs, an A.I voice-cloning start-up, raised $80 million in new funds from investors led by Andreessen Horowitz at a valuation of more than $1 billion. (Bloomberg)

  • How Japan is turning to avatars, robots and A.I. to tackle its labor crisis. (FT)

Best of the rest

  • “‘America is Under Attack’: Inside the Anti-D.E.I. Crusade” (NYT)

  • American clothing makers are pushing to change a trade rule that effectively lets foreign manufacturers ship directly to U.S. consumers without paying tariffs. (NYT)

  • The Chinese electric carmaker BYD is going upmarket with a Lamborghini-style E.V. to step up its fight with Tesla. (WSJ)

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