Business

1. BofA banks prisons again
2. BlackRock’s Texas surprise
3. Welcome back, Wells Fargo
4. Dealmakers test the waters
5. NYSE > LSE
6. Circle’s IPO looks to China
7. Lawmakers push bank dereg

Trump and Xi phone call readout…

Six years after Bank of America fired him as a client, and 131 days after President Donald Trump publicly accused the bank’s chief executive of political bias, Damon Hininger got a phone call.

Upon reconsideration, Bank of America would be happy to offer his company, the second-largest operator of US prisons and detention centers, a bank account.

“Times change,” Hininger told me this week.

Corporate behavior has changed too, and quickly, with Trump back in the White House and conservative states leading a backlash against Biden-era progressivism. Bank of America is banking prisons again, and this week Citigroup said it would start lending to gun manufacturers. Retailers that once leaned into Pride month are treading lightly this year, and this year’s Super Bowl ads were sufficiently un-woke to win faint praise from arch-conservative provocateur Matt Walsh.

But a word of warning: Trump has rewritten the playbook on how to revisit the political past and punish perceived sins. Democrats may be out of power now, but 2028 will be here soon. Companies scrambling to stay in Trump’s good graces may find themselves in his opponent’s crosshairs. There’s no easy answer here, but the era of companies “just sticking to business” is over. The middle of the road is vanishingly thin, and what seem like easy fixes today could just be tomorrow’s liabilities. As every CEO knows, past performance is not indicative of future results.

Re-banking the de-banked

Bank of America reopened the account of a private-prisons operator it had fired as a client in 2019. Financial firms are warming to customers they once shunned under progressive pressure, addressing conservative states lamenting the lack of “fair access” to banks, and more recently, trying to avoid the wrath of a president bent on settling scores. Citigroup said Tuesday it would start lending to gun manufacturers again and promised to conduct employee training to root out any political bias.

CoreCivic operates 43 jails and prisons, including for US Immigrations and Customs Enforcement. Bank of America dropped it as a client in 2019 during a retreat from banking private prisons, gun manufacturers, coal miners, and other industries then out of political favor. “These banks should be blind to politics,” CEO Damon Hininger told Semafor. “The questions they get to ask are: Are we a good credit risk? Are we in good standing with the government?”

He has lent his voice to the “de-banking” movement, which believes financial firms discriminate against conservatives by closing their accounts without warning or explanation. Among those decrying economic exile are venture capitalist Marc Andreessen, who told podcaster Joe Rogan in November that he knew 30 entrepreneurs who had been “de-banked,” and the Trump Organization itself, which sued Capital One this spring for closing its bank accounts after the Jan. 6 riots.

BlackRock’s playbook for the ESG backlash

BlackRock, the world’s largest asset manager, is back in business in Texas after the state removed it from a blacklist of financial firms that Republican officials deemed to be prejudiced against the oil and gas industry.

The decision is a victory for Republican state officials around the US, who have argued firms like BlackRock — but especially BlackRock, a particular lightning rod for conservative fury — put politics over their duty to investors, Semafor’s Tim McDonnell writes. But it’s an even bigger win for BlackRock, which can return to managing Texas pension money and has proven itself able to navigate a political storm without making too many costly compromises.

“A lot of this was about gamesmanship,” said Shivaram Rajgopal, a finance professor at Columbia Business School. “One side can declare victory and the other can get back to business.”

Wells Fargo, unleashed

Charlie Scharf cemented his reputation as a turnaround master this week, after the Federal Reserve lifted a painful asset cap that had limited its size. The question now is whether Wells Fargo can make up for lost time.

The lid, imposed after Wells was caught opening thousands of fake accounts in an effort to pad its numbers, kept the bank under $2 trillion of total assets since 2018 and complicated cleanup efforts by Scharf, a former JPMorgan and BNY executive hired in 2019. As rivals scooped up competitors, added branches, and won the loyalty of a new generation of savers and spenders, Wells was stuck. And staying under that asset cap became hard during Covid, when banks received a flood of deposits that Wells, hampered by its size limit, couldn’t easily channel into new business.

“We weren’t focused on expanding the product set [or] improving the digital capabilities because we were so focused on creating the right infrastructure to satisfy the regulators,” Scharf said at a Bernstein conference last week.

Getting out from the Fed’s restrictions is key to Wells Fargo’s ambitions — not for the first time — to compete in Wall Street dealmaking. Helping companies write big checks for takeovers requires balance-sheet space, which the bank will have again for the first time in seven years.“Our corporate investment bank has been limited in terms of what they can do,” Scharf noted.

He has hired star bankers including Doug Braunstein, Fernando Rivas, and tech dealmaker Jeff Hogan to compete with firms like Goldman Sachs and JPMorgan. Cracking into the top tier of investment banking has historically been a fool’s errand — ask Bank of America and Citigroup executives — but Wells Fargo has picked up some early wins. It advised on the $19 billion merger of Chart Industries and Flowserve this week and advised Worldpay on its $24 billion sale to Global Payments.

Dealmakers test the waters

Wall Street’s animal spirits are poking their heads out, but not far. A flurry of mergers have spurred cautious optimism among dealmakers who had been steeling for a dull year and slim bonuses. But recent transactions fall roughly into two camps, neither brimming with nerve: tuck-in deals where sellers are willing to swallow a haircut on price, and deals between counterparties that know each other well.

Salesforce is buying Informatica for $2 billion less than the two companies discussed last year, according to The Wall Street Journal, while ServiceNow struck a $2.9 billion deal for an AI assistant that was valued at $2.1 billion four years ago. One of the biggest deals this quarter was a $19 billion merger of equals between two industrial-process businesses, announced yesterday. We “have worked together for many years,” Flowserve CEO R. Scott Rowe said of the transaction. It’s a similar story at Dicks’, which struck a $2.4 billion deal for longtime competitor Foot Locker.

Whether regulators will encourage these tentative steps is an open question. HPE’s $14 billion acquisition of Juniper remains up in the air, and the populist tendencies of the Trump administration are most visible in its skeptical approach to corporate power and consolidation.

— Rohan Goswami

The Wall Street Rollup is a 5-minute finance blotter delivering sharp, high-signal M&A and earnings analysis. Trusted by dealmakers, analysts, and investors, it’s a smart, quick addition to your media diet. Sign up for free.

New York beckons London’s listings

Another London-listed company is leaving for New York, dealing a blow to Britain’s message of economic self-sufficiency. Wise, a money-transfer firm worth $15.5 billion, said it will relist on the NYSE, where it sees more investor interest and a higher valuation. It is at least the 30th firm to swap its London Stock Exchange ticker for a US one, underscoring the urgency — but so far, futility — of efforts by the Starmer government to get domestic pension funds to buy local stocks.

Some companies move because most of their revenue is generated in the US. Others shift because they believe they’re undervalued on the UK markets, although the actual data suggests relisting doesn’t always equal a valuation bump. Unspoken by pond-hopping executives is that they can likely get paid more under a US ticker.

“This notion of the mass exodus of companies to the US is not accurate,” London Stock Exchange Group CEO David Schwimmer told Semafor earlier this year. “If you look at the performance of companies that have gone to the US, it’s gruesome.”

Stablecoin firm Circle goes public

Shares of stablecoin issuer Circle soared in its NYSE debut today, though the company is still worth less than when it was last valued by private investors. Trading was halting just seconds after it began after the stock, which had been sold last night to IPO investors for $31 a share, opened at $69 and soared to nearly $76. The rise is both a validation of crypto’s Trump-aided mainstream shift and a symptom of investors starved for new issuances during a long IPO drought.

In an interview off the NYSE trading floor with Semafor, CEO Jeremy Allaire said he worried that if the US doesn’t create a trusted and useful digital dollar — something his company’s main product, USD Coin, aims to be — it might lose the “digital currency space race” to China, which has a formidable lead over the US with its digital yuan.

“The digital dollar should be the highest utility money in the world,” he said. “We are believers in the strength and continued preeminence of the dollar in the global financial system, and in the internet financial system that’s being built up.”

It’s the digital version of a broader debate about the future of the dollar, as the global economy fractures under trade and geopolitical tensions. It’s also a politically expedient play for Allaire’s company, which, as the Financial Times notes, is quite exposed to the whims of central banks. A rival stablecoin issuers, Tether, has also latched onto the US-China rivalry.

Congress pushes Fed on bank deregulation

Top lawmakers in Washington are asking regulators to hand Wall Street a big win. Hoping to provide support for the jittery Treasury market, a group of bipartisan members of Congress sent a letter to Fed Chair Jerome Powell asking him to loosen post-2008 requirements for how much cash banks must set aside to offset potential losses. Easing that buffer would “support liquidity in the Treasury market, especially in times of stress,” they wrote in the letter.

The central bank was already working on modifying such rules, but on its own timeline: Semafor reported in April that Powell was resisting pressure from the White House to act faster to reduce those requirements, which could free big banks up to buy more Treasury bonds at a time when investors, rattled by Trump’s tariffs and his deficit-increasing tax bill, have been reluctant.

— Eleanor Mueller

Semafor’s Ben Smith and Max Tani will be in Cannes to cover media and marketing’s biggest annual gathering, where many of the most powerful people in media come to make deals, rub shoulders, win awards, and sip Aperol spritzes on the Côte d’Azur.

Starting June 16, they’ll deliver news, scoops, and insights on the year ahead in media — with all its dealmaking, gossip, and pretentious grandeur, from one of the industry’s true epicenters.

➚ BUY: Diamonds. The struggling De Beers’ gems business has already attracted interest from two former CEOs, even as younger buyers prefer lab-grown ones.

➘ SELL: Forever. Elon Musk and Trump’s bromance seems on the verge of collapsing, just a few days after the Tesla CEO officially exited the government.

Companies & Deals

• Putting down stakes: Private equity is having a tough go, but there’s still buzz around niche strategies: Blue Owl bought a stake in H.I.G. that values the firm at more than $10 billion, according to people familiar with the matter. Blue Owl’s business of taking stakes in other money managers is a hot business across Wall Street — though I have some questions about the end game. Blue Owl declined to comment and H.I.G. didn’t respond.
• To the mattresses: UnitedHealthcare tapped attack-dog defamation law firm Clare Locke to sue the Guardian over a report on the health care giants’ nursing home billing practices, Semafor’s Max Tani scooped yesterday. The company accused the Guardian of knowingly publishing false information and trying to capitalize on media interest after the killing last year of one of its top executives.
• Low Tide: P&G is cutting 7,000 jobs over the next two years, about 15% of non-manufacturing roles. The company recently revised its profit guidance for the year, partly blaming Trump’s tariffs for a consumer pullback in spending.

Watchdogs

• Big man on campus: Trump signed an executive order on Wednesday banning new foreign students from enrolling at Harvard for six months and directed his Cabinet to consider revoking visas for current visiting students.
• Swipe flight: Daily active users on the apps of low-cost Chinese retailers Shein and Temu plunged this month after Trump closed off their access to the tax-free de minimis loophole. Chinese platforms are “actively redirecting their efforts toward other markets such as Europe,” an analyst told CNBC.

Markets

• Powell pressured: The European Central Bank cut interest rates for the eighth time in the past year on Thursday, lowering borrowing costs to 2%. The move comes in response to slowing inflation, and amid intrigue about its boss, Christine Lagarde — World Economic Forum head Klaus Schwab said she’s discussed cutting her term short in order to replace him at the helm of the conference.
• Surveyor shortage: Economists are concerned that US’ inflation data may be skewed by budget cuts and short-staffing at the Bureau of Labor Statistics.

Recent remarkable and rapid improvements in vibe coding — using AI systems to write programs — are upending Silicon Valley’s balance of power, away from talented developers and towards startup founders with a good idea, Semafor’s Gina Chua writes.

But they will also remake the economics of scale and the corporate processes built around husbanding and prioritizing scarce tech resources.