The Gordon Gekko era: Donald Trump’s lucrative and controversial time as an activist investor

New York (CNN)At the height of the US economic boom in the 1980s, there was one clear star of Wall Street: the corporate raider, high-flying takeover artists registering big headlines and even bigger paydays. Naturally, real estate magnate Donald Trump wanted in on the game.

    For Trump, his brief period as an activist investor of sorts was a lucrative turn in his career — at one point netting him more than $200 million for just a handful of targets — but also a controversial one. His profits were real, but so was the appearance of strategy that brought allegations of stock manipulation from rivals, regulators and lawmakers.
    It’s a four year-period Trump, now the Republican presidential nominee, never mentions on the campaign trail. Yet his venture into the high-risk, high-reward world of the “Barbarians at the Gate” offers a window into the deal-making strategy that forms the basis for Trump’s presidential campaign — and remains the stated approach the New York billionaire plans to deploy with vigor from the Oval Office should he win.
    Trump had a contentious relationship with Holiday Corp. before he ever started buying stock in the company. The Trump Organization and Holiday skirmished repeatedly over their joint ownership of a casino in Atlantic City. They traded lawsuits, one of which included Trump’s description of himself as “an entrepreneur who has achieved national and international prominence, reputation, and recognition as the result of the outstanding success he has achieved in conceiving, developing, and promoting various enterprises.”
    Eventually, Trump would buy out Harrah’s ownership in the property in March 1986, seemingly putting an end to the drama.
    Five months later Trump went after the casino operator’s parent company.
    Trump quietly began buying Holiday Corp. stock that August, and shortly after, instructed investment bank Bear Stearns to do the same — just not under his name. It was a deliberate effort to dodge federal reporting requirements that would have tipped the company off to his intentions, according to a complaint the Federal Trade Commission later filed.
    “He wanted to accumulate as much as possible before he had to notify the target,” said Jeffrey Zuckerman, the former director of the FTC’s Bureau of Competition, who oversaw the suit. “That’s what this was all about.” By the time Trump was done, he would hold 4.9% of the company’s shares — and send the company’s management scrambling to block what appeared to be a takeover attempt.
    That reaction wasn’t off-base. Trump had amassed the reputation and cachet crucial to pulling off the kinds of hostile takeovers then dominating the headlines with names like Carl Icahn, T. Boone Pickens and Nelson Peltz. He was a newly minted billionaire with his own plane, helicopter, Fifth Avenue skyscraper and an oceanside compound in Palm Beach. He was the largest developer in Atlantic City and had the type of relationship with Wall Street banks that all but guaranteed he could get financing to take down any target.
    There were also clear strategic reasons why Trump would want to acquire the company. Trump had long been looking for a way into the Nevada gaming market, and Holiday, with two casinos in the state, offered the opportunity to make that happen.
    As Trump finalized his stake in the company, articles started to appear with “well-placed sources” in Trump’s orbit attacking the company’s management and threatening a takeover. A former Trump Organization official who worked with Trump during the period told CNN “it was almost always Trump who was the unnamed source or sources” in these stories.
    The effort had its intended effect. Holiday Corp.’s board would, by that November, propose a $2.8 billion plan to restructure the company’s debt — one that gave shareholders a $65 per share dividend. The intent was clear: Block Trump’s takeover effort. The company’s stock price jumped. Trump sold his stock. He made more than $30 million in four months, having never presented a tender offer to the company.

    ‘A gaming license is not a hunting license’

    It was one of two deals Trump pursued that directly affected the gaming industry and, as such, drew scrutiny from gaming regulators. Takeover efforts — or feints in that direction — were center stage at Trump’s April 1987 casino license renewal hearing in New Jersey.
    “A gaming license is not a hunting license,” Walter N. Read, the Republican-appointed chairman of the New Jersey Casino Control Commission, told Trump’s lawyers at a 1987 hearing, according to a transcript CNN obtained. The state’s gaming rules, Read pointedly continued, do “not encompass the use of a casino license as a weapon to weaken or undercut the financial integrity of its competitors.”
    Yet that, according to Read, was exactly what Trump had done over the course of the previous year.
    Trump’s emergence on the scene in Atlantic City had been generally welcomed by state gambling regulators. A fair-haired New York developer, Trump had a laudable attention to detail, a focus on building the best — and most competitive — casinos, and perhaps most notably, no sign of ties to the organized crime families that caused endless headaches for state officials, according to Carl Zeitz, a commissioner at the time.
    Trump repeatedly told regulators his goals in accumulating the stock of his competitor and former partner were not only benign, but also not at all informed by his past relationship or deep knowledge of the company. “I purchased it as an investment in a company that I thought was undervalued at the time,” Trump said of his sizable stake.
    Asked if he thought he was the reason the company moved quickly to restructure, he pleaded ignorance. “I mean, it’s possible it did, to be perfectly honest, it’s very possible, but I don’t know.”
    Asked if he thought the restructuring was good for the company, Trump said simply: “I don’t think it was.” He was right. Holiday Corp. was wounded. By 1988, the company’s management was forced to engineer the sale of its Holiday Inn franchise and the company’s parts were sold off for significant value for shareholders. Thousands of employees at the company’s Memphis, Tennessee, headquarters eventually would be laid off in the process.
    Trump, for his part, took to pointing out that by definition, his actions with Holiday Corp. weren’t greenmailing. He sold his stock on the open market, not back to the company at a premium. But that was more luck than strategy. As Trump made clear in his testimony, the stock jumped so much it was the only logical move.
    Despite his claims to the contrary, he’d explicitly broached the idea of selling his stock back to the company for a premium, the company’s CEO, Michael Rose, told the commission.

    ‘When I do research on things, they never work out well’

    Trump didn’t let his Holiday Corp. payday sit for long. Within days he’d picked out another target, one that just so happened to be another competitor in the casino business: Bally.
    Again, he instructed Bear Stearns to do the same on his behalf, but under its name. He would use his Holiday proceeds to purchase $14.8 million in Bally stock, Trump acknowledged in his casino commission testimony. The total fell deliberately just short of the $15 million line that would trigger a need for federal notification. The whole strategy, according to Zuckerman, the former FTC official, was simple: “You’re trying to keep it quiet.”
    But while Trump’s ability to establish a major position in these companies quietly was clearly strategic, his rationale for doing so appeared less so — at least according to him. In fact, when it came to Bally, he got the idea of going after the company from a single conversation with a single analyst — Dan Lee, his trusted confidante from Drexel Burnham, Trump told a Bally lawyer in a deposition reviewed by CNN.
    “He was certainly greenmailing,” said Zeitz, now a Democrat supporting Hillary Clinton. “There’s no doubt that was going on. That’s why Bally went out and made a really stupid deal.”
    Asked during his casino license hearing if he had greenmailed the company, Trump said no.
    “If I really wanted to, to use your term, greenmail, I could have probably done this a lot sooner and a lot easier and not have to go through all of the expensive litigation and the expense of, you know, the fight,” Trump told the casino commissioners. “I’m not a person that, despite what people think, particularly loves litigation.”
    Asked if he considered himself a greenmailer, Trump demurred: “I would rather say I sold my stock back to the company as opposed to greenmail, if I could do that. I’m not sure. I hate to refer to myself as a greenmailer.”
    Behind the scenes though, Trump was blunt about what he’d accomplished, according to John O’Donnell, a former Trump Organization executive.
    “Donald had bought a sizable chunk of Bally stock, then induced the company to buy it back at a premium to avoid a takeover — ‘greenmail,’ as the practice is known,” O’Donnell wrote in his 1991 book “Trumped! The Inside Story of the Real Donald Trump — His Cunning Rise and Spectacular Fall.”
    Trump’s lawyer at the time, Nicholas Ribis, made their position clear: “The record is clear in Mr. Trump did not buy stock with the intent of seeking a premium but, rather, to make a sound investment.”
    In 1990, Trump agreed to pay out $2.25 million to Bally shareholders who sued the billionaire and the company for allegedly artificially inflating the stock’s price during their negotiations over Trump selling the stock back to the company.

    American Airlines — one target too many?

    Over the course of three years, with Holiday Corp. and Bally and followed by companies including Allegis Corp. and Federated Department Stores, Trump netted more than $200 million.
    But complaints about his tactics continued — so much so that Nevada state legislators pushed legislation explicitly designed to block Trump from targeting casinos in their state. And in 1988, Trump agreed to pay a $750,000 federal fine the same day the FTC filed a complaint alleging he dodged federal stock notification requirements due his agreement with Bear Stearns — though Trump admitted no wrongdoing.
    Zuckerman, now the chair of the antitrust practice at Curtis, Mallet-Prevost, Colt & Mosle LLP, said the fault for that civil suit lies more with the investment bank, which pitched several of its clients the idea, than Trump himself — a fact not lost on Trump, who at the time said he planned to force Bear Stearns to pay him back for the fine.
    By 1989, Trump launched his biggest — and most brazen — effort of his career, notifying American Airlines executives via fax that he’d acquired a significant amount of the company’s shares and was preparing a $7 billion takeover bid.
    “Donald was playing a favorite game, a carbon copy of his raids on the gaming industry three years before,” O’Donnell, the former Trump executive, said in his book. “The plan, as I saw it, was to spotlight the airline’s value, force its board of directors to restructure, thus inflating the price of the stock, or make them run up the white flag and submit to a greenmailing. Either way, he was hoping to stuff millions of dollars into his pocket.”
    Market analysts questioned whether Trump could actually muster the financing for the deal. Airline insiders couldn’t figure out how Trump could ever pull it off. The airline’s hard-edged CEO, Bob Crandall, made it clear he wouldn’t negotiate or pay ransom. It turns out, he wouldn’t have to.
    That very weekend, the financing of a separate, unrelated takeover effort of another airline by another investor fell through. A market crash followed, with airline stocks leading the way. Trump’s nascent effort never recovered, and he dropped it altogether within nine days. Analyst estimates at the time pegged his paper losses at more than $100 million.
    It was an unfriendly capstone to Trump’s corporate raider period — one punctuated by impressive success for a market first-timer but also plagued by controversy.
    As he told the New Jersey casino board: “I think my only goal was, as an investor, it’s a game that we all have to play, I guess is, to try and come out with more than what you put in. In that sense, yes, I achieved that goal.”

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    University of Arizona sues 'Scumdevils' owners over apparel, use of … – ABC15 Arizona (blog)

    University of Arizona sues 'Scumdevils' owners over apparel, use of …
    ABC15 Arizona (blog) says it has a trademark on the hand gesture, but UA claims it's a part of its brand.

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    There's more to food blogs than you think – Times of India (blog)

    Times of India (blog)

    There's more to food blogs than you think
    Times of India (blog)
    They weave magic with words and pictures, with food as their core element. Every little detail matters to them and they will not compromise on quality. We're talking about Hyderabad's food bloggers, for whom, blogging about food is serious business

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    Top HSBC manager charged in forex probe – BBC News

    Image copyright Getty Images

    A top HSBC executive has been charged with fraud in the US.

    Mark Johnson, the company’s global head of foreign exchange trading was arrested on Tuesday night and is due to appear in court later. A former colleague, Stuart Scott, has also been charged.

    The two traders are accused by the US government of using inside information to profit from a $3.5bn (2.6bn) currency deal.

    HSBC has so far declined to comment.

    The US Department of Justice (DoJ) accuses the traders of “front-running”.

    That is misusing confidential information provided by a client who planned to convert $3.5bn into British pounds.

    It is claimed that the two executives bought sterling themselves before handling the order, because they knew that such a large transaction would push up the value of the currency, and allow them to make money.

    Holding executives ‘accountable’

    They also timed the purchase in order to maximise its effect on the value of the British currency. As a result it’s alleged they were able to generate significant profits for the bank. They are also accused of concealing their actions from the client.

    “The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves,” said the US Attorney Robert Capers.

    US prosecutors cited emails and conversations from Bloomberg chats that indicated the two men plotted to see how high they could raise the the dollar to pound exchange rate before the clients would ‘squeal’.

    The DoJ said that HSBC brought in roughly $8m profit from the currency trades they conducted for client.

    What is front running?

    Front running is an unethical way for a broker to benefit from a client’s trade.

    When companies or individuals want to buy a substantial amount of currency- for example dollars in exchange for pounds – they typically go through a broker. A large purchase can push up the value of that currency.

    Knowing this, the broker can buy dollars on his own account ahead of the deal, carries out his client’s transaction, watches the value of dollars rise, and then sells his own dollars at a handsome profit.

    Specific charges

    In the charges released on Wednesday, the DoJ cites specific trades Mr Johnson and Mr Scott made in late 2011.

    In late November and early December of that year, Mr Johnson allegedly purchased pounds in exchange for euros, and pounds in exchange for dollars.

    Mr Scott allegedly made a purchase of pounds in exchange for euros.

    The two men are accused of then selling their sterling to HSBC, for a profit on the day of the alleged victim’s foreign exchange transaction.

    The DoJ also accused the two men of encouraging the alleged victim to conduct the trade at a specific time during the day, because it was easier to manipulate the price then.

    “It was advantageous to them and HSBC, and disadvantageous to the victim company, to execute the victim company foreign exchange transaction” at the time they did, the DoJ said.

    Image copyright Getty Images
    Image caption The defendants are accused of using US dollars and Euros to buy pounds driving up the price for their client

    Forex market

    About 40% of the world’s currency dealing is estimated to go through trading rooms in London.

    The massive market, in which $5.3 trillion worth of currencies are traded daily, dwarfs the stock and bond markets.

    There is no physical forex marketplace and nearly all trading takes place on electronic systems operated by the big banks and other providers.

    Daily “spot benchmarks” known as “fixes” are used by a wide range of financial and non-financial firms to, for example help value assets or manage currency risk.

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    Here’s what Snapchat views as its biggest risks in the years ahead

    Image: snap inc.

    Snapchat essentially got its start by eliminating risk. Want to send a nude to a lover or a goofy face to a friend? Don’t worry, it’ll disappear in 10 seconds.

    But now, as a startup that just filed to go public, the risks look pretty damn real. The word “risk” appears 87 times in Snap Inc.’s Form S-1 filed Thursday.

    Here they are in summary, with our background and more plain English explanations:

    1. Keeping its users happy

    Our ecosystem of users, advertisers, and partners depends on the engagement of our user base. We anticipate that the growth rate of our user base will decline over time. If we fail to retain current users or add new users, or if our users engage less with Snapchat, our business would be seriously harmed.

    Snapchat is reminding the public that one day it may not be the hottest app to the kids. In fact, we’ve already seen a slowdown in the app’s growth. A Bloomberg report from June 2016 revealed Snapchat had 150 million daily active users. According to S-1 filing, that came more than 7 months later, Snapchat has added only 8 million daily active users.

    A lot of companies look outside the U.S. to boost growth. For Snapchat, that doesn’t look like the rosiest prospect.

    But while its army of Snapchat users is much smaller than Facebook’s at more than 1 billion daily active, Snapchat touts its engagement 25 minutes per user.

    2. Playing in Google and Apple’s worlds

    Snapchat depends on effectively operating with mobile operating systems, hardware, networks, regulations, and standards that we do not control. Changes in our products or to those operating systems, hardware, networks, regulations, or standards may seriously harm our user growth, retention, and engagement.

    Snapchat calls itself a camera company, but it doesn’t exactly own the entire camera. It relies on Apple iOS and Google Android to host its app, the “flagship product.”

    3. Relying on Google for a lot

    We rely on Google Cloud for the vast majority of our computing, storage, bandwidth, and other services. Any disruption of or interference with our use of the Google Cloud operation would negatively affect our operations and seriously harm our business.

    If Google, one of the most valuable companies in the world, were to shutdown its storage system, Snapchat could be in trouble.

    4. The fickle advertising industry

    We generate substantially all our revenue from advertising. The failure to attract new advertisers, the loss of advertisers, or a reduction in how much they spend, could seriously harm our business.

    Snapchat has been clawing its way into advertisers’ budgets. It faces stiff competition from Facebook and Google, who are in what amounts to a duopoly for digital ads. The two tech giants together represented 99 percent of the U.S. ad revenue growth in the last year.

    Meanwhile, each of these companies are trying to pull spending from TV budgets.

    Snapchat is also admitting in its risk factor that it’s not at least not yet pulling in a lot of revenue from products. In the end of last year, Snapchat began selling Spectacles, its video-camera sunglasses for $130 per pair.

    5. The need to keep making new stuff while maintaining the old stuff

    If we do not develop successful new products or improve existing ones, our business will suffer. We also invest in new lines of business that could fail to attract or retain users or generate revenue.

    Snapchat needs to keep making its stuff cool, while also making sure its existing stuff works as well. Otherwise, it won’t make enough money to justify the hype.

    6. A long list of powerful competitors

    Our business is highly competitive. We face significant competition that we anticipate will continue to intensify. If we are not able to maintain or improve our market share, our business could suffer.

    It’s not a one-horse race. Current competitors are formidable foes that also “focus on mobile engagement and advertising,” according to the filing.

    Here’s Snapchat’s full list of enemies:

    • Apple

    • Facebook, along with Instagram and WhatsApp

    • Google, along with YouTube

    • Twitter

    • Kakao

    • LINE

    • Naver, including Snow

    • Tencent

    Snapchat also writes that it competes with companies in “print, radio, and television sectors to underlying technologies like default smartphone cameras and messaging.”

    These competitors, with their wealth of resources and massive user base (for some), also have the potential to mimic Snapchat’s technology. Snapchat is already all too familiar with the game.

    7. Making money is… hard

    We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability.

    Snapchat has already been ridiculed for bleeding money. Its cash for 2015 was $640.8 million. In 2016, it was down to $150.1 million.

    The company also lost a whopping $514 million in 2016.

    Snapchat just admitted it may never make money. Like ever.

    8. Attracting talent

    The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified personnel in the future, could seriously harm our business.

    Silicon Valley is a land of competition. Software engineers aren’t cheap, and they’re always looking for the best, most fun, and perhaps more importantly, most financially lucrative jobs. One day, Snapchat might not be the hottest place to work.

    9. Young and unique

    We have a short operating history and a new business model, which makes it difficult to evaluate our prospects and future financial results and increases the risk that we will not be successful.

    Remember Snapchat is 5 years old. There’s still a chance that this whole thing just doesn’t work.

    Image: andrew hutchinson/snapchat

    10. Getting hacked

    If our security is compromised or if our platform is subjected to attacks that frustrate or thwart our users ability to access our products and services, our users, advertisers, and partners may cut back on or stop using our products and services altogether, which could seriously harm our business.

    Snapchat has been through quite a few user privacy scares. A hack in January 2014 leaked the usernames and phone number of 4.6 million users.

    Snapchat has since added two-factor authentication for users and worked to eliminate third-party apps from being used to scrap data.

    But that doesn’t eliminate the risk of being hacked again, especially when you rely on third-parties, like Google Cloud, to store your information.

    11. Math is hard

    Our user metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may seriously harm and negatively affect our reputation and our business.

    Snapchat relies on a lot of third-party companies and internal software to track its engagement. As Facebook has been shamed, publishers and advertisers rely on these metrics to do business.

    When you lose the publishers’ trust, you lose their attention.

    12. Complicated stock stuff

    We are not aware of any other company that has completed an initial public offering of non-voting stock on a U.S. stock exchange. We therefore cannot predict the impact our capital structure and the concentrated control by our founders may have on our stock price or our business.

    People who purchase Snap stock will have no voting rights. That means the board at Snap, led by cofounders Evan Spiegel and Bobby Murphy, will be able to make all of the decisions. As Snap notes, that type of distribution of power or lack of thereof is not popular in the U.S. market so it’s very much tbd on what will happen.

    But, in its carefully phrased S-1, Snap Inc. asserts that risk may also be its greatest strength:

    “In the way that the flashing cursor became the starting point for most products on desktop computers, we believe that the camera screen will be the starting point for most products on smartphones.

    This is because images created by smartphone cameras contain more context and richer information than other forms of input like text entered on a keyboard.

    This means that we are willing to take risks in an attempt to create innovative and different camera products that are better able to reflect and improve our life experiences.

    For potential stockholders, buying Snap is a bet on the future cards dealt by the two cofounders Evan Spiegel and Bobby Murphy. Some, like Facebook CEO Mark Zuckerberg and Amazon CEO Jeff Bezos, have earned that confidence.

    Be careful, Snapchat.

    BONUS: Google Glass gives the Snapchat Spectacles the reality check it needs

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    University of Arizona sues 'Scumdevils' owners over apparel, use of 'WC' hand gesture – ABC15 Arizona (blog)

    University of Arizona sues 'Scumdevils' owners over apparel, use of 'WC' hand gesture
    ABC15 Arizona (blog)
    "When looking at the Scumdevils' website, there is no question that their entire business is intended to try to make money from the University of Arizona's brand and reputation. UA works hard … Rocha said. "I was gonna start blogging, and it evolved

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    What Can The Cowboys Expect From Draft Pick WR Noah Brown? – Blogging The Boys (blog)

    Blogging The Boys (blog)

    What Can The Cowboys Expect From Draft Pick WR Noah Brown?
    Blogging The Boys (blog)
    To learn more about one of the newest Cowboys, we turned to Colton Denning of Ohio State blog and SBN sister site Land Grant Holy Land to find out just what makes Brown so special. Question: Noah Brown had some big moments in a Buckeye uniform this …

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    University of Arizona sues 'Scumdevils' owners over apparel, use of 'Wildcat' hand gesture – ABC15 Arizona (blog)

    University of Arizona sues 'Scumdevils' owners over apparel, use of 'Wildcat' hand gesture
    ABC15 Arizona (blog)
    "When looking at the Scumdevils' website, there is no question that their entire business is intended to try to make money from the University of Arizona's brand and reputation. UA works hard … Rocha said. "I was gonna start blogging, and it evolved

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    Study Abroad Students Blog Experiences – The Arkanas Traveller

    The Arkanas Traveller

    Study Abroad Students Blog Experiences
    The Arkanas Traveller
    Her blog posts were nominated for awards by Laura Moix, the assistant director for study abroad and international exchange. Halford's post, “A Love Letter to Australia,” received an honorable mention by the organization Blogging Abroad, in the Best …

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    Clean Power Is Too Hot for Even Trump to Cool

    On Nov. 4, Walmart announced an aggressive plan to increase its investments in renewable energy, pledging to power half its operations from wind, solar, and other renewables by 2025 and to cut the carbon footprint of its operations by 18 percent over the same period. Ten days later, Microsoft made its largest wind-power purchase agreement ever, with a deal to buy 237 megawatts of electricity from turbines in Kansas and Wyoming to run data centers in Cheyenne.

    In between those announcements, Donald Trump was elected president, in part by calling climate change a hoax and vowing to gut most of Obamas clean-energy policies and revive coal mining. If the actions of Walmart and Microsoft are any indication, a Trump administration will do little to dissuade companies from continuing to invest in renewables. I think fears of a negative impact of Trump on renewable energy are really overblown, says Thomas Emmons, a partner at Pegasus Capital Advisors, a private asset management firm focused on sustainable and alternative investments.

    One reason is timing. The biggest economic incentives for clean energy are federal tax credits for solar and wind projects. Both were set to expire at the end of last year, prompting a surge in investments as companies raced to get in under the deadline. In December, Congress unexpectedly extended both credits (for solar until 2021 and for wind until 2019) as part of a deal to lift the 40-year-old ban on U.S. oil exports. Its not clear that Trump will try to persuade Congress to repeal the extensions. Wind power is especially popular across the Midwest, a Republican stronghold; in many cases its become cheaper than other sources of grid power.

    Sixty percent of Fortune 100 companies have renewable-electricity or climate change policies, and 81 companies globally have committed to get 100 percent of their energy from renewable sources, according to Bloomberg New Energy Finance. Companies tend to invest in renewable energy in one of three ways: sourcing clean power from wind and solar projects through long-term agreements; purchasing a stake in green power projects; or using renewable-energy credits to offset the dirtier power they consume.

    Since 2008, U.S. companies have signed agreements to purchase more than $10 billion worth of wind and solar power about 10Gw, enough to run almost 2 million U.S. households for a year. BNEF expects that pace to increase over the next decade, with at least 50 U.S. companies signing long-term agreements to buy an additional 22Gw of clean energy. A Trump presidency does not lower our expectations for the growth of the corporate renewable-energy market, says Nathan Serota, a clean-energy analyst at BNEF. If anything, a less ambitious stance on renewables at the federal level could encourage corporations to pick up the slack even further. With the government providing less support, more businesses may decide the best way to ensure clean-power projects get built is to sign long-term purchase agreements. That way, renewable developers have a guaranteed customer, ensuring they can finance new projects.

    These agreements are emerging as the preferred way to invest in clean energy. Locking in electricity prices for up to 15 years, the deals let companies hedge exposure to volatile natural gas and coal prices, which have historically determined wholesale power prices in the U.S. As wind and solar get cheaper, companies are able to lock in renewable power for less than the average wholesale power price, says Swami Venkataraman, senior vice president at Moodys Investors Service.

    Companies are investing in sustainability, not because theyre making a political statement, but because they have a fiduciary duty to protect shareholders and make money, says Mindy Lubber, president of Ceres, a nonprofit sustainability advocate. Even if Trump rolls back Obamas commitment to the Paris climate accord and his signature clean-energy initiative, the Clean Power Plan (CPP), which directs states to lower carbon emissions from power plants, its unlikely to influence investment decisions. Renewable developers werent building a business model premised on the CPP, Serota says.

    On Nov. 16, 300 U.S. businesses, including General Mills, EBay, and Intel, called on Trump to support the Paris accord. The sustainable investing trend has global momentum and big players such as Goldman Sachs and Bill Gates, said Amy Myers Jaffe, executive director for energy and sustainability at the University of California at Davis, in an e-mail. Corporate America has lots of millennial customers, and they want to buy from companies with sustainable supply chains and a commitment to renewable energy. I dont see that changing.

    The bottom line: Companies should continue investing in renewables despite Trumps promise to roll back clean-energy initiatives.

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