CEO Daily: Monday, 17th July

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Good morning.

I'm in Aspen this morning, where Fortune Brainstorm Tech is about to get underway. Appearing under the conference big top this afternoon: Qualcomm CEO Steve Mollenkopf, who is in the midst of an epic patent battle with Apple and, I'm told, is prepared to unload on his opponent; and also Michael Dell and Silver Lake Managing Partner Egon Durban, who together have turned Dell into a technology colossus with some $70 billion in annual revenue.

Exactly five years ago, Durban was interviewed at Brainstorm Tech and talked about how he believed public markets were undervaluing tech companies. When he walked off stage, he met Michael Dell for the first time, and the rest is history. A year later, they took Dell private. Three years after that, they engineered the company's unprecedented merger with EMC.

There's a lesson in that. We live in a virtual age. Dell is building his business on what he calls a "Cambrian explosion" of big data, artificial intelligence, the Internet of everything, augmented reality, virtual reality and more, which will fundamentally change the way we live and work. Yet even as the world becomes ever more virtual, it is the face-to-face interactions, like the one that occurred between Durban and Dell in 2012, that seem to matter most. As my colleague Geoff Colvin says: Humans are Underrated.

Separately, if you didn't read Saturday's Wall Street Journal essay suggesting it may be time to take an antitrust approach to Facebook, Alphabet and Amazon, I'd suggest you do so. This piece appeared in the news pages, not the edit pages, so it doesn't mean the Journal's opinion writers have abandoned their long-held antipathy to antitrust. And it's worth noting the Journal, like the rest of us in media, has a particular grievance against the first two of those firms for scarfing up 80-90% of the increase in digital advertising revenues each year. But still, the story is an important indication that concern about the overwhelming influence of the tech giants may be spreading beyond its European incubator.

News below. And you can follow the proceedings in Aspen at fortune.com.

Alan Murray
@alansmurray
alan.murray@timeinc.com

&

Top News

[bs_bullet_primary] Peltz vs. Procter

Trian, the hedge fund of activist investor Nelson Peltz, is going after Procter & Gamble. Trian, which holds around $3.3 billion of P&G stock (some 1.5% of the company) aims to launch a campaign for a board seat with the goal of shaking up the staid consumer giant. With a market cap of $222 billion, P&G would be the biggest ever company to be subjected to such a proxy fight, according to The Wall Street Journal, whose weekend scoop was confirmed in a regulatory filing Monday. Peltz told the WSJ he was looking for a "game-changing attitude" from a management that has presided over stagnant profits and loss of market share. [bs_link link="https://www.wsj.com/articles/trian-to-launch-proxy-fight-against-p-g-1500264242" source="WSJ, subscription required"]

[bs_bullet_primary] Lloyd's Warns Insurers Over Cyber Attacks

Putting a price on cyber attacks is a mug's game, but someone has to do it. Lloyd's of London, a reinsurer, has put out a new estimate that a hack of a cloud service provider could cause economic losses of up to $120 billion, making it more expensive than Superstorm Sandy. In another scenario, it said a hack of a popular operating system could cause losses of $29 billion. The insurance industry that Lloyd's backstops is behind the curve in developing insurance against cyber-related threats, with both underwriters and regulators worrying that the risks aren't properly understood. KPMG said in a report last week that 60% of Fortune 500 companies have no insurance against cyber incidents.[bs_link link=" https://www.ft.com/content/dff0649c-671a-11e7-8526-7b38dcaef614" source="FT, metered access"]

[bs_bullet_primary] China Faces Steel Sanctions in Relatively Good Shape

China's economy grew more than expected in the second quarter, by 6.9% on the year, with both factory output and retail sales picking up from the previous three months. All the usual caveats about China's GDP statistics aside, the figures give Beijing a much-needed cushion as they tackle the twin challenges of corporate deleveraging and looming U.S. trade tariffs on steel and aluminum. China's steel output hit a record high in June, while its trade surplus with the U.S. rose to a near two-year high of $25.4 billion in the same period. [bs_link link="http://fortune.com/2017/07/17/china-gdp-growth-forecast/" source="Fortune"]

[bs_bullet_primary] Wanda Group: Please Do Not Ask for Credit

Beijing's pressure on Wanda Group to stop its debt-fueled spending spree came into sharper focus after news that Chinese regulators warned the country's state-owned banks off lending any more to finance its foreign acquisitions. The advice appears to leave two deals for European-based movie theater chains in limbo, as they haven't closed yet. The crackdown goes a long way to explaining why Wanda agreed to sell its tourism and theme park assets in China. In other news, China also moved to crack down on another existential threat, to wit, Winnie the Pooh. The guardians of the Great Firewall of China don't like online humorists comparing Xi Jinping to the cuddly bear. [bs_link link="https://www.bloomberg.com/news/articles/2017-07-17/china-is-said-to-punish-wanda-for-breaching-investment-rules-j57r4vzy" source="Bloomberg"]

Around the Water Cooler

[bs_bullet_primary] Uber Suspends Macau Service as Shareholders Look to Cut Exposure

Less than a week after scaling down its ambitions in Russia, Uber said it would suspend services in the small but lucrative market of Macau, China's offshore gambling hub. The news comes after a weekend of conflicting and unconfirmed reports suggesting that some of Uber's institutional shareholders were in talks to sell part of their stakes to Japan's Softbank. Softbank was also mentioned as a possible investor in a new $2 billion funding round for Grab, Uber's largest rival in rival in Southeast Asia. [bs_link link="https://www.reuters.com/article/us-uber-macau-idUSKBN1A20C3" source="Reuters"]

[bs_bullet_primary] McCall Swaps the Brexit Fry Pan for TV Fire

EasyJet's Carolyn McCall, one of the U.K.'s most successful female CEOs, will leave the discount airline to take over at free-to-air broadcaster ITV. ITV's shares rose over 3% in response. The maker of Downton Abbey and Who Wants to Be a Millionaire? had nearly quadrupled in value in the three years to 2015, on hopes that the spread of video streaming would benefit an established content originator. The belated realization that its ad revenue base is in apparently terminal decline has prompted a more sober assessment. EasyJet, meanwhile, faces an uncertain future itself as its model depends wholly on access to the EU's Single Market. It said last week that it had established an Austrian subsidiary that guarantees its right to continue flying in the EU after Brexit. What it doesn't guarantee is passenger growth in an environment where migration within Europe is being restricted. [bs_link link="https://www.bloomberg.com/news/articles/2017-07-16/easyjet-ceo-mccall-is-said-to-step-down-to-run-broadcaster-itv" source="Bloomberg"]

[bs_bullet_primary] Can New Mainframes Halt IBM's Losing Streak?

IBM will today unveil its new range of mainframe computers, a product that still accounts for 24% of Big Blue's revenue and over 40% of its operating profit when operations tied to mainframes such as support, software, storage and financing are included. IBM is betting on the new generation of mainframes to pep up profitability in its long struggle with reinvention as a cloud-based service provider (its quarterly figures, due out Tuesday, may post a 21st straight decline in revenue). The new mainframes, will be capable of encrypting data at all times, which should drive down its customers' cyber insurance premiums if nothing else (see above). [bs_link link="https://www.wsj.com/articles/ibms-latest-line-of-mainframe-computers-focuses-on-encryption-1500264061" source="WSJ, subscription required"]

[bs_bullet_primary] The Ageless, Peerless, Flawless Roger Federer

It was as if someone had rewritten the Obi Wan-Darth Vader fight with a less equivocal outcome. It also raises intriguing questions of how the judicious taking of time off can sustain and extend a career. Roger Federer won his 8th Wimbledon singles title - his 19th Grand Slam title in all - at the ripe old age of 35 Sunday. He's now 2-for-3 this year in Grand Slams after an unlikely comeback from a career-threatening knee injury. The sweet illusion of sport momentarily turning back time should be enough to put a spring in a step of all those who feel that their best years are behind them this week. It would have been doubly effective if Venus Williams, who has a couple of years on Federer, had managed to take the ladies' title too, but she succumbed to Spain's Garbine Muguruza. [bs_link link="https://www.si.com/tennis/2017/06/30/case-for-time-off-rest-roger-federer-wimbledon" source="Sports Illustrated"]

Summaries by Geoffrey Smith Geoffrey.smith@fortune.com;

@geoffreytsmith

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