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wallstreetjournal 20180413 TheWallStreetJournal.pdf


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For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

DJIA 24483.05 À 293.60 1.2%

NASDAQ 7140.25 À 1.0%

STOXX 600 378.82 À 0.7%

10-YR. TREAS. g 12/32 , yield 2.832%

OIL $67.07 À $0.25

GOLD $1,338.40 g $18.10

Secretary of State Nominee Faces Questions as Syria Move Looms

What’s
News
Business & Finance
enture-capital investment from Asia is soaring,
possibly heralding a shift in
power over technological innovation away from the U.S. A1

V

U.S. stocks rebounded
as bank shares surged. The
Dow gained 293.60 points,
or 1.2%, to 24483.05. B11
BlackRock pulled in
nearly $57 billion in new investor cash last quarter, with
the bulk going to ETFs. B10
Some Rite Aid shareholders oppose the Albertsons
deal, saying it undervalues
the drugstore chain. B3
Zillow is getting into
the business of buying and
flipping homes. B2

World-Wide
The White House plans
to boost pressure on China
by focusing on new tariffs
and threatening to block
Chinese technology investment in the U.S. Meanwhile,
Trump has told aides to
investigate the possibility
of rejoining the TPP. A1, A4
The U.S. and allies united
around broad plans for a
military strike against Syria,
as they worked to bridge differences over its scope. A8
Trump intends to pardon
Libby, a former top aide to
Cheney who was convicted
in a CIA leak case. A4

Asia Funds Challenge Silicon Valley
America’s wide lead in
venture capital fades,
threatening to shift
power over innovation
BY PHRED DVORAK
AND YASUFUMI SAITO

Silicon Valley, long the undisputed king of venture capital, is now sharing its throne
with Asia.
A decade ago, nearly threequarters of the world’s financing of innovative, tech-heavy
startups and young companies

took place in the U.S., with
American investors plowing
money into mostly U.S.-based
venture firms.
Now, a surge of new
money—mostly from China—
has helped drive funding totals
into the stratosphere and has
transformed the venture landscape, according to an exclusive
Wall Street Journal analysis of
venture funding data.
Asian investors directed
nearly as much money into
startups last year as American
investors did—40% of the record $154 billion in global venture financing versus 44%, the

Going, Going, Gone

The glut of stored oil among industrialized economies—which
helped keep prices low for years—has shrunk after production cuts
by OPEC and Russia. That has sent prices higher. B11
Total oil inventories in OECD countries compared
with their five-year averages
400 million barrels

Above average

300
200
100
0

0

Below average

Former FBI chief Comey,
in a new memoir, describes
Trump as a “deeply flawed
person and leader.” A4
Pompeo sought to reassure a Senate panel that he
would be a sober voice on
foreign policy if confirmed
as secretary of state. A2
The Senate approved
former coal lobbyist Andrew Wheeler to be Pruitt’s
deputy at the EPA. A5
China staged a show of
force in the South China
Sea, with Xi presiding over
a parade of naval ships. A16
Trump issued an executive order creating a task
force to recommend reforms
in the U.S. Postal Service. A3
Oklahoma teachers
ended a strike that resulted in pay raises and
more education funding. A3
CONTENTS
Business News...... B3
Crossword.............. A10
Heard on Street. B12
Life & Arts....... A10-11
Mansion............. M1-14
Markets............. B11-12

Opinion.............. A13-15
Sports........................ A12
Streetwise................. B1
Technology............... B4
U.S. News............. A2-5
Weather................... A11
World News. A6-8,16

>

s Copyright 2018 Dow Jones &
Company. All Rights Reserved

–100

–200

2013

’14

’15

’16

’17

Source: Organization of the Petroleum Exporting Countries

GE Explores Further
Spinoffs, Joint Deals

As its strategic review
stretches into a ninth month,
General Electric Co. is exploring a public offering for
one of its divisions and discussing hybrid deals with
public companies to combine
assets, according to people
familiar with the matter.
By Thomas Gryta,
Dana Mattioli
and David Benoit

Unlike straight asset sales,
the hybrid deals would leave
GE shareholders with stakes
in multiple public companies.
The possibilities include spinning off a division and combining it with a smaller public
company in a way that avoids
a big tax bill. Such moves
would give the industrial conglomerate and its shareholders a chance to participate in
the turnaround of struggling
businesses.
GE Transportation could
be a model, according to
some of the people. GE is now

Journal’s analysis of data from
private markets data tracker
Dow Jones VentureSource
found. Asia’s share is up from
less than 5% just 10 years ago.
That tidal wave of cash into
promising young firms could
herald a shift in who controls
the world’s technological innovation and its economic fruits,
from artificial intelligence to
self-driving cars.
Silicon Valley previously was
far and away the leader for
tech entrepreneurs in both
money and know-how, says KaiFu Lee, a veteran tech executive
who headed China units of Mi-

An unusual public feud between Tesla Inc. and federal accident investigators escalated
Thursday over the examination
of a fatal car crash, sidelining
the auto maker from an official

probe concerning its semiautonomous driving system.
In dueling explanations,
Tesla and the National Transportation Safety Board clashed
over whether the company
withdrew or was removed as
’18 an official party to the agency’s
investigation into last month’s
crash of a Model X sport-utility

unlikely to sell the business,
which makes diesel freight locomotives, and is preparing
for an initial public offering
or spinoff of the division,
some of the people said. The
unit could be merged with
another company that would
leave GE investors in control
of a new public business that
has a broader set of operations than the GE unit, one
person said.
GE, whose share price has
tumbled by more than half
over the last 12 months, will
be facing questions about its
portfolio review in coming
weeks.
The company reports firstquarter results on April 20
and hosts its annual shareholder meeting the following
week. Chairman and Chief
Executive John Flannery is
the headliner at a major industrial conference May 23.
“The pressure on GE to announce some sort of breakup
is very high,” analyst Scott
Please see GE page A8

crosoft and Google before
founding his own Beijing-based
venture-capital firm, Sinovation
Ventures, in 2009. The rise of
China’s venture market “signifies a shift from a single-epicenter view of the world to a
duopoly,” he says.
U.S. investors remain the
biggest single source of global
venture capital, and they do
more deals than anyone else—
nearly half of all venture
rounds in 2017, according to
VentureSource data. The U.S. is
still an important driver of innovation, with many of China’s
Please see FUND page A9

Tesla, Investigators
Feud Over a Crash
By Mike Spector,
Tim Higgins
and Andy Pasztor

no

Pressure on Rosenstein
intensified amid a dispute
between Congress and the
Justice Department over
access to documents. A4

U.S. Set
To Boost
Pressure
On China

WASHINGTON—The Trump
White House, confident that its
hard-line trade strategy is succeeding, is planning to ratchet
up the pressure on China by focusing on new tariffs and
threatening to block Chinese
technology investment in the
U.S., according to officials familiar with the strategy.
The additional moves come
as President Donald Trump has
told his senior aides to investigate the possibility of rejoining
the Trans-Pacific Partnership, a
move that would reverse a
Trump campaign promise and
further challenge China, which
isn’t part of the trade pact.
The president’s new openness toward the TPP comes as
he is seeking allies in his trade
battle with Beijing and faces
criticism from U.S. farmers
who now face retaliatory Chinese tariffs on their products.
For its part, China is looking
to line up other countries
against the U.S., Chinese officials
said—especially in Europe,
whose firms could benefit
should China react to the
stepped-up pressure by expanding its retaliation against the U.S.
Administration officials familiar with the U.S. strategy
say that the U.S. trade representative, as early as next
week, will detail which products are on the list of $100 billion in Chinese goods subject
Please see TRADE page A4

ly
.

Wynn has been in talks
to sell its partially built
Boston-area casino project
to rival MGM Resorts. B1

UNDER SCRUTINY: Central Intelligence Agency Director Mike Pompeo faced sometimes-contentious questions Thursday from senators
considering his nomination for secretary of state. Meantime, Britain, France and the U.S. agreed on the outline of a military attack on Syria. A2, A8

co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on

More private companies
are taking steps toward going public following a burst
of successful tech IPOs. B1

n-

Many financial firms are
shedding ties with Russia’s
En+ following the latest
wave of U.S. sanctions. B1

YEN 107.32

BY BOB DAVIS
AND LINGLING WEI

MICHAEL REYNOLDS/EPA/SHUTTERSTOCK

VW’s board ousted CEO
Müller and named Diess,
who ran the auto maker’s
namesake brand, as chief. B1

EURO $1.2327

White House proposes
tariffs on more goods,
explores rejoining
Trans-Pacific trade pact

A feud between Tesla
and the NTSB escalated,
sidelining the auto maker
from an official investigation into a fatal crash. A1
Uber is committed to its
self-driving-car program,
the company’s CEO said. B3
GE is exploring a public
offering for one of its divisions and discussing hybrid
deals with public companies to combine assets. A1

HHHH $4.00

WSJ.com

FRIDAY, APRIL 13, 2018 ~ VOL. CCLXXI NO. 86

* * * * * *

You Say
‘Fiddy,’ I Say
‘Foedee’
i

i

i

Tax Act yields new
jargon but no
pronunciation key
BY RICHARD RUBIN
AND THEO FRANCIS
WASHINGTON—Fiddy isn’t
just a rapper’s name anymore.
In 2018, it’s a tax break.
Technically, it is a deduction in the new tax law, for
Foreign-Derived Intangible Income, available to U.S. exporters. FDII, as it’s abbreviated,
could cause a trans-Atlantic
spat over whether it violates
international trade rules.
It’s already causing a
squabble over something
else—how to pronounce FDII.
The “F” comes from “foreign,” so some tax lawyers call
it “FOE-dee,” putting it alongside FOGEI and FORI, longPlease see TAXES page A9

vehicle that killed the driver
near Mountain View, Calif.
The NTSB said Thursday
that it tossed Tesla from the
probe, asserting the auto
maker violated a formal agreement when it released detailed
information this week about
the crash before government
investigators had vetted it.
Tesla late Wednesday, and
again on Thursday, contended
it dropped out, saying restrictions on disclosures could
jeopardize public safety by
blocking the timely release of
relevant information to the
Please see TESLA page A2

Uber is committed to selfdriving cars, CEO says.......... B3

West’s curbs on Russia
haven’t deterred trade......... A6

INSIDE

LOS ANGELES’S
HIGH-TECH
PLAYA VISTA
MANSION, M1

VOLKSWAGEN
OUSTS ITS
CEO
BUSINESS & FINANCE, B1