(Bloomberg) — During a series of Cisco Systems Inc. online all-hands meetings on race in early June, some workers posted comments in message channels that other staff and company management said were demeaning to Black people, exposing racial divisions at the Silicon Valley tech giant and leading to the dismissal of a number of people.During the first videoconference on June 1, following the killing of George Floyd by Minneapolis police, Chief Executive Officer Chuck Robbins spoke with Ford Foundation President Darren Walker, who is Black, and Bryan Stevenson, a Black lawyer and author who founded the Equal Justice Initiative, in front of 30,000 employees. The conversations about race continued in subsequent online global staff meetings.“Black lives don’t matter. All lives matter,” one worker wrote in the comments during one of the virtual all-hands meetings, according to screen shots obtained by Bloomberg. Another said the phrase Black Lives Matter “reinforces racism” because it singles out one ethnic group. “People who complain about racism probably have been a racist somewhere else to people from another race or part of systematic oppression in their own community!” a third worker wrote in the chat section visible for all those online.Cisco, the world’s largest networking company, said it fired “a handful” of workers for inappropriate conduct because it “will not tolerate” racism. Bloomberg News wasn’t able to confirm the identities of all the fired workers so chose not to name any of them.Floyd’s death in late May under the knee of a Minneapolis police officer re-energized the Black Lives Matter movement and prompted a nationwide reckoning over the role of race in American life. Many technology companies, including Cisco, responded by affirming their support for equal rights and opportunities for Black Americans, donating to groups leading those efforts and educating their workforces on the struggle for racial equity.Internal BacklashExecutives have publicly positioned themselves against racism, but some workers inside these companies are chafing at the new focus on race. The incident at Cisco is just one example of a company facing an internal backlash to its support for racial justice.The conflict has intensified questions about how these largely forward-thinking companies should manage employees with differing views on race. While Cisco fired some workers, other tech companies facing dissent, such as Microsoft Corp.’s LinkedIn and HashiCorp Inc., have taken different approaches such as increased employee training. Automaker Toyota Motor Corp. dismissed U.S. workers involved in a video that mocked Floyd’s death.“Employers should be striving for zero tolerance when it comes to racism and discrimination, period,” said Kristen Clarke, the president and executive director of the Lawyers’ Committee for Civil Rights Under Law. “The protests we’ve seen in the streets have become part of our new normal and will eventually make their way inside workplaces if employers fail to meet the moment.”‘Heartbreaking’Cisco said 237 of 10,400 comments made during the June 1 videoconference objected to what was being presented or disagreed that the meeting should even be taking place. Most of the messages expressed praise for management, making the minority of reactionary posts stand out and sparking responses from other staffers. The posts, written while Robbins was announcing a $5 million donation to groups combating racism, shocked some executives.“I just felt sad to see it,” Francine Katsoudas, Cisco’s executive vice president and chief people officer, said in an interview. “I felt a ton of empathy. I knew that for the African-American and Black employees that were in the meeting, that it was heartbreaking to see that.”After the first meeting, Katsoudas and her team discussed the comments so they could address what went wrong. The following week during a worldwide videoconference with staff, she read some of the most offensive posts and explained what the San Jose, California-based company considered legitimate debate.“You have a framework where red absolutely is crossing the line,” Katsoudas said. “But if someone has a question or they don’t understand something, there’s a way for them to ask that question. We went through and just placed things on that spectrum.” In 2019, 3.8% of Cisco’s U.S. workforce and 2.2% of leaders and people managers were Black, according to the company’s diversity report.“A few” employees who had written some offensive posts during the video meetings sent notes acknowledging their mistakes and said they were learning, Katsoudas said. But the remarks remained seared in the minds of some Black employees, who were shocked by the audacity of the display.“Wow…and these people work at Cisco?” one outraged employee wrote. “If they are bold enough to say those things at work for all to see, imagine what is said behind closed doors.”Several employees said Cisco was guilty of hypocrisy because it wanted to silence those who disagreed with the movement to improve Black lives. “No place for contradictory opinions or feelings,” one wrote. “Wow. This is my first and last comment, then.”LinkedIn, a social network for professionals, also held an all-employee meeting about racism last month that ended up mired in bitterness, an event that was reported earlier by the Daily Beast. The company had an anonymous comment section, which some workers filled with vitriol against Black people. Among the posts were those saying Black people weren’t hired as much because they weren’t qualified; that LinkedIn was trying to foist White guilt on workers; and that law-enforcement killings of Black people weren’t important because more African-Americans were murdered by members of their community.The meeting devastated many Black employees, who were outraged by the remarks and became suspicious of some of their White colleagues, according to people familiar with the situation. Since the meeting, some Black workers at LinkedIn have been angered by what they see as a failure by senior executives to adequately respond to the incident, said the people, who weren’t authorized to speak publicly about the internal communications.Executives at LinkedIn didn’t seek to unmask those making the offensive statements because they had pledged anonymity for the online comments section to create a “safe space” and felt they needed to honor that pledge, a spokeswoman said. LinkedIn’s leaders also suggested the incident was the result of a few bad apples rather than any larger issues with the culture at the Mountain View, California-based company, the people said. LinkedIn has one Black executive in its C-suite, Chief People Officer Teuila Hanson, who joined in June. The company’s workforce is 3.5% Black — in line with its tech peers — according to its most recent diversity report.After the meeting, LinkedIn CEO Ryan Roslansky said the display was “appalling,” apologized to employees and promised anonymous feedback wouldn’t be allowed in future virtual gatherings.Building AccountabilityThe spokeswoman pointed to other subsequent executive blog posts for the company’s response. Chief Marketing and Communications Officer Melissa Selcher said in June that LinkedIn would redouble efforts to diversify its people managers, teach employees through a companywide curriculum and develop an “accountability framework.”“We will do the hard work to build an anti-racist culture at LinkedIn, hiring and growing employees from under-represented groups and investing in a diverse and inclusive environment where all talent thrives,” Selcher wrote in the post.The company said it has donated $500,000 to the National Urban League, Southern Poverty Law Center, NAACP, Joint Center for Political and Economic Studies and other groups that work on advocacy and economic justice for the Black community. LinkedIn is also matching employee donations of as much as $15,000 to these types of organizations.The company is soliciting feedback from employees on what it should do next, the people said.Even before Floyd’s death, some tech companies had been forced to deal with contentious internal debate about gender, race and politics. Alphabet Inc.’s Google fired engineer James Damore in 2017 after he wrote a memo claiming the internet company was an ideological echo chamber that discriminated against men in favor of less talented women. Pundits such as Tucker Carlson of Fox News, then-Republican U.S. Representative Dana Rohrabacher and media outlets including Breitbart News came to Damore’s defense, pointing to the dismissal as an example of the company’s political bias against conservatives.Higher ExpectationsNow, with greater focus on issues facing the African-American community, Black tech workers have higher expectations for their employers. HashiCorp Inc., a software startup valued at more than $5 billion, recently announced a donation pledge to the Minnesota Freedom Fund, which gives bail money to low-income people awaiting trial, and the Southern Poverty Law Center in response to protests against policy brutality and racism in May and June. A vocal minority of its 1,000-person workforce complained in memos to human-resources executives, saying the company was supporting “looters and rioters,” according to a person familiar with the matter. Many other staffers told executives in written messages and calls that they wanted HashiCorp to go even further in support of Black lives, said the person, who wasn’t authorized to speak publicly about the situation.“Overwhelmingly, our employees have been supportive of the company’s actions and donations of support to the Black Lives Matter movement,” a HashiCorp spokeswoman said in a statement. “We heard from a couple of employees who expressed their disagreement through internal private channels. While we understand that some employees might have differing opinions, we stand by our actions.”As this debate plays out at their workplaces and across the country, some Black tech employees have been left feeling adrift — unwanted by some colleagues, unsupported by some employers.“We still have work to do as a nation,” one Cisco employee wrote on an internal message board seen by Bloomberg. “I pray my daughters have a better world to live in soon.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a…
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Brown Advisory recently released its Q2 2020 Investor Letter, a copy of which you can download here. The Equity Income Fund posted a return of 18.29% for the quarter, underperforming its benchmark, the S&P 500 Index which returned 20.55% in the same quarter. You should check out Brown Advisory’s top 5 stock picks for investors […]
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F […]
The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. Now, we are […]
Chris Taylor, CEO of Great Bear Resources, discusses where gold prices may go next with Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Jared Blikre.It's shaping up to be a tough period for Wells Fargo & Company (NYSE:WFC), which a week ago released some…
Another earnings season has arrived, and this time the bar is set seriously low. The upcoming reports will shed some light on the extent of the damage inflicted by COVID-19. Expectations are low, and while there’s plenty of room for disappointments, Oppenheimer’s Chief Investment Strategist John Stoltzfus believes that there’s also an opportunity for some upside.“COVID-19 resurgences notwithstanding the equity markets stateside have thus far shown persistent resilience that continues to confound bears and skeptics. It could be that their memory is lacking when it comes to previous recoveries from market events that have led us to the proverbial brink only to have the resilience of the of the U.S. economy save the day,” Stoltzfus commented.Putting the S&P 500’s rebound from its March 23 low into context, the index has clawed its way back, giving the strategist hope that the unprecedented levels of stimulus will get the market out of the mess the pandemic created. Even though the market is waiting for a catalyst to determine its direction, Stoltzfus points out that historically, “progress not perfection” is what drives a turnaround, noting that evidence indicates serious progress is in fact being made.Putting the strategist’s advice into concrete recommendations, Oppenheimer’s analysts point to two stocks in particular that could take off in the next twelve months. The firm, which lands among the top three on TipRanks’ list of Top Performing Research firms, sees over 80% upside potential in both. After using TipRanks’ database, we found out that each ticker has also received enough support from other Wall Street analysts to earn a “Strong Buy” consensus rating. GrowGeneration Corporation (GRWG)Taking its place as the largest hydroponic equipment supplier in the U.S., GrowGeneration owns and operates specialty retail hydroponic and organic garden centers. Given its strong long-term growth narrative and its $6.95 share price, it’s no wonder GRWG recently earned a thumbs up from Oppenheimer.Covering the stock for the firm, 5-star analyst Brian Nagel likes what he’s seeing, to put it lightly. “GRWG represents a leading, yet still early stage, up-and-coming retail chain within the rapidly expanding and dynamic market for hydroponic and organic gardening supplies,” he noted.Speaking to its footprint, the company operates 27 stores in ten states. That said, over the next few years, Nagel estimates that new store additions, including acquisitions and greenfield expansions, could approach more than 20 units per year, putting its total number of locations at over 90 stores by 2023.To help it reach its targets, the company is putting advanced infrastructure in place. As part of these efforts, GRWG implemented a new ERP system, and in June, the stores were connected to its website, allowing for BOPUS and other functionality. Expounding on this, Nagel stated, “Key to our initial positive outlook for GRWG is our view that the GRWG business model is now approaching a point of increased sustained underlying scalability… Our initial analysis suggests that, as GRWG accelerates further acquisition and organic expansion efforts, the company should increasingly capitalize upon scale-related synergies and over time deliver even better profit and cash generation.”Additionally, after an all-primary, secondary equity offering, GRWG’s cash position lands at over $52 million, with only $314,000 in short- and long-term debt. Based on this, Nagel thinks that the company should be able to fund its near- and longer-term expansion objectives.With the analyst projecting that through 2023, adjusted EBITDA will reach roughly $55 million on total company revenue of more than $400 million, Nagel doesn’t believe GRWG’s full value has been built into the share price.To this end, Nagel rates GRWG a Buy along with a $15 price target. This target indicates shares could skyrocket 110% in the next year. (To watch Nagel’s track record, click here)Turning now to the rest of the Street, other analysts are on the same page. Only Buy ratings, 5, to be exact, have been issued in the last three months, so the consensus rating is a Strong Buy. The $10.20 average price target puts the potential twelve-month gain at 42%. (See GrowGeneration stock analysis on TipRanks)Relmada Therapeutics (RLMD)Bringing extensive drug development capabilities to the table, Relmada Therapeutics is working to address the unmet needs in depression, central nervous system (CNS) and ophthalmological disorders. Based on the strength of its lead development candidate, REL-1017, Oppenheimer is getting on board.Looking more closely at the asset, REL-1017 (dextromethadone) is an oral NMDA-receptor antagonist designed for use in major depressive disorder (MDD). According to firm analyst Jay Olson, what makes the therapy stand out is that “as the d-stereoisomer of methadone, REL-1017 is devoid of opioid activity while preserving affinity for the ketamine-binding site on NMDA receptors, which are hyperactive in MDD neuropathology.” On top of this, it can also generate BDNF expression, and this in turn improves synaptic plasticity. The analyst added, “Based on its novel MOA, REL-1017 should provide rapid and durable antidepressant effects with clean safety/tolerability.”During the Phase 2a 202 trial in an MDD 2L+ adjunctive setting, the therapy showed statistical significance on all efficacy endpoints, including MADRS improvement, with the results supporting a differentiated profile, in Olson’s opinion.Going forward, a pivotal Phase 3 program is set to initiate in the fourth quarter of 2020, with the FDA stating that two positive trials with a primary endpoint of 28-day MADRS improvement and 52-week safety data would support an NDA filing in the chronic MDD 2L+ adjunctive setting. Adding to the good news, in 1H21, the company might kick off a Phase 2 trial in a 2L+ monotherapy setting. “We expect REL-1017 to be a schedule IV/V drug and widely prescribed,” Olson noted.Speaking to the market opportunity, the analyst told clients, “MDD occurs in ~7% of adults and remains a large unmet medical need despite multiple SOC treatments. SSRIs/SNRIs are predominantly prescribed but have slow onset and adverse side effects… REL-1017 would enter the treatment paradigm as an adjunctive to SSRIs/SNRIs in 2L+ patients.” The product could launch in 2023, with “total peak un-risk-adjusted sales for REL-1017 in MDD of $3.7 billion comprised of $3 billion and $700 million in 2L+ adjunctive and monotherapy settings, respectively, in 2035.”To this end, Olson rates RLMD a Buy along with a $75 price target. Shares could appreciate by 87%, should the analyst’s thesis play out in the coming months. (To watch Olson’s track record, click here) Looking at the consensus breakdown, the rest of the Street agrees with Olson’s assessment. With 3 Buys and no Holds or Sells, the word on the Street is that RLMD is a Strong Buy. At $72.67, the average price target implies shares could rise 82% in the next year. (See Relmada stock-price forecast on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.