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WeWork CEO Neumann's $700 million cash-out says a lot about how the massive influx in venture capital has changed the market

Thu, 07/18/2019 - 10:50pm

  • Traditionally, venture capitalists frowned on startup founders selling any of their personal stakes in their companies before the firms went public or were acquired.
  • But it's becoming more common for founders to cash in some of their stakes pre-IPO.
  • WeWork CEO Adam Neumann, for example, has raised some $700 million over the last five years by selling off stakes in his company or using his stock to guarantee personal loans, The Wall Street Journal reported Thursday.
  • The change in attitude about such moves is related to the big influx in late-stage capital to the venture industry, investors and analysts said.
  • Click here for more BI Prime stories.

It used to be that startup founders generally didn't try to personally cash in their stakes in their companies until they had at least gone public or been acquired. 

As WeWork CEO Adam Neumann has demonstrated — to the tune of $700 million, according to a report by the Wall Street Journal on Thursday — that norm is changing. And you can attribute that shift to the massive influx of capital into the venture markets and specifically into companies such as WeWork.

"Traditionally, it would be uncommon for this to happen," said Charlie Plauche, a partner with Austin, Texas-based S3 Ventures. "But traditionally, companies didn't raise this many billions in dollars of rounds of funding prior to an IPO."

The taboo on founders cashing in before their companies went public was rooted in desire to ensure that founders were fully invested in the long-term success of their startups and not just trying to make a quick buck. But the general prohibition on such moves has gradually been lifting, and the practice of founders selling off parts of their stakes for their own benefit while their companies are still private has becoming more common, especially since the last financial crisis.

More founders are cashing in, but Neumann stands out

Zynga founder Marc Pincus, for example, sold $109 million worth of his company's stock in a pre-IPO transaction in 2011. Evan Spiegel and his cofounders of Snap each cashed in $10 million worth of their stakes in 2013, four years before the company's IPO. And Uber's Travis Kalanick sold a 29% of his stake in the app-based ride-hailing company in 2018, after he had been ousted as CEO but before the company went public.

Neumann's transactions, though, stand out for their collective size, particularly for a founder who remains his startup's CEO. As the Journal reported, WeWork's Neumann has personally garnered some $700 million from a combination of selling his shares in the company and taking out loans from it that are backed by some of his remaining shares.

Read this: WeWork cofounder and CEO Adam Neumann reportedly sold shares he owned in the company and took loans worth $700 million

"The magnitude of Neumann's sales is an extreme outlier," said Jay Ritter, a finance professor at the University of Florida who closely tracks the IPO market.

It's impossible to determine without more details on the transactions just how much of his stake Neumann sold in the moves. That's because they took place over the last five years, according to the report, and WeWork's valuation has soared over that time — going from $5 billion at the end of 2014 to $47 billion at the beginning of this year.

Neumann, through a WeWork representative, declined to comment on the report or the transactions to Business Insider.

The influx of venture money is fueling the trend

Unlike founders in earlier eras, but like a growing number today, Neumann holds a controlling stake in this company despite not owning a majority of its shares. He's able to do that because the shares he does own get 10 votes each, while other shares only get one vote, as The Journal reported. That control means, generally, that he can run the company as he sees fit and doesn't have to worry as much as another founder might about whether his investors approve of his stock sales. Pincus, Spiegel, and Kalanick were in similar positions.

But the size of Neumann's sales is also a function of the value of his company. And that in turn is related to a big influx in late-stage capital. Firms such as Softbank have been buying up stakes in older, more mature startups. That money — Softbank alone has been investing out of its mammoth $100 billion Vision Fund — has allowed those companies to stay private longer. 

That trend, though, has also helped to shift attitudes about founders cashing in some of their stakes early, venture investors said.

In prior times, before the influx of late-stage capital, companies of the age and maturity of WeWork would have already been public. Founders frequently sell parts of their stakes in an IPO; it used to be the first time that many of them got to see a windfall from the success of their companies. Investors have come to see moves such as Neumann's in a similar light, Plauche said. Had WeWork been public by now — as traditionally it would have been — he would have been able to cash in anyway.

"In later stage companies, where the founder has put off liquidity events for years and the valuation has grown, the cash outs make a lot more sense," Plauche said.

Investors are actually encouraging it, in some cases

Another, related factor in the rise of such cash outs is that they often are the only way for late-stage investors to get the stake they desire in a particular company, investors said. In some of the more mature startups, the company itself doesn't necessarily need any more cash or the existing investors don't want to further dilute their stakes by having it issue new shares. So the new investors themselves may encourage founders and early employees to sell their shares in secondary markets.

"There's just more and more late-stage investors looking to put money to work," Pauche said, "and at some point, the only way to do that is to give liquidity to current holders than put money on the balance sheet."

But the trend is moving beyond just more mature startups to those that are earlier in their development, said Kristian Andersen, a partner with High Alpha, an Indianapolis-based venture studio. Investors have come to believe, from observing the growing number of cash outs at more mature startups, that there isn't as much risk as they may have previously thought in such moves, he said. And actually the startups may benefit from founders taking a little off the table, he said.

New founders at later stage companies tend to have a huge amount of wealth locked up in their shares. Worried that they could lose it all if they mess things up, they can become cautious, Andersen said. Allowing them to cash in some of their stakes before an exit can help them be a little more relaxed and more focused on the company's future beyond an IPO, he said. He still frowns on founders at really early stage companies trying to cash in. But for those at companies that are further along — ones in their series B funding rounds and beyond — he thinks it's perfectly fine.

"Increasingly, you're seeing early-stage investors not only being comfortable with it, but in many cases
encouraging it," Andersen said. He continued: "We have encouraged many of our CEOs to take a few chips off table as they take their ride up."

Still, there are legitimate reasons to worry if and as the trend becomes more prevalent. In some cases, a founder selling off early can be a sign of a lack of confidence in the company or worse. In 2000, for example, Nina Brink sold most of her stake in her startup, World Online, a few months before its initial public offering at a fraction of its IPO price. The company's stock price plunged soon after its IPO, and the company was sold months later. 

Got a tip about a startup or the venture industry? Contact this reporter via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: WeWork is setting up a $2.9 billion fund to buy buildings that it will lease to itself

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From Netflix's big flub to Microsoft's cloud attack: Here's the roundup of takeaways and insights from tech’s Q2 earnings reports (MSFT, NFLX)

Thu, 07/18/2019 - 8:49pm

  • The tech industry's second quarter earning season kicked off in mid-July, with Netflix first out of the gate with its results.
  • Over a period of several weeks all the leading tech companies, from Facebook to Google, will provide closely-watched updates on their businesses.
  • In addition to covering the headline numbers and results, Business Insider Prime will go deeper with smart analysis to give you the most important takeaways from the balance sheets to the earnings conference calls. 
  • Keep checking this page throughout the Q2 earnings season for the latest analysis, breakouts and interviews as the succession of tech companies report their earnings results. 

 

Netflix: 

Netflix's price hikes help explain its terrible quarter and Wall Street analysts say it needs to be careful as new competitors spring up

Exclusive data predicted Netflix's weakness in key markets before its huge subscriber miss, and could hold clues about future growth

Microsoft:

For the first time ever, Microsoft's cloud business unit generated more revenue than the Windows or Office segments

 

When is your company reporting? Check out Market Insider's 2019 Q2 Earnings Calendar.

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Reddit cofounder Alexis Ohanian: San Francisco is great but 'no one in their right mind' will build a company here anymore

Thu, 07/18/2019 - 7:22pm

The sun is setting on Silicon Valley. 

That was Reddit cofounder and venture investor Alex Ohanian's argument at an event on hustle culture and work-life balance in San Francisco on Wednesday. He cited the area's skyrocketing costs of living and doing business as key reasons why he is looking elsewhere as an investor.

"I will be shocked if I have anyone coming to our office anymore that is adamant about building a team in San Francisco or the Bay Area," Ohanian said. "It makes me sad because San Francisco is great but no one in their right mind will build their company entirely here, and that's just how you have to think now."

Read More: Reddit cofounder turned investor Alexis Ohanian opens up about the myth of work-life balance: founders that think they don't need coaching take 'amazing leap of arrogance'

Part of the push away from San Francisco, Ohanian said, was the mentality that pushes founders to work long hours because it feels "right." Even when a startup has matured beyond the two-guys-in-a-living-room model, founders set the example for the entire workforce and can't rely on brute forcing their success.

"In the Valley we are mired in the 'butts in seats' mentality," Ohanian said. "But companies that grow and are entirely decentralized, they have the strongest company culture. They have to. They overthink company culture because it's core to their survival."

Ohanian said he built Initialized Capital, his venture firm, knowing he would be traveling often for business and personal reasons, and so has created an environment ideal for remote employees. He said he rarely spends more than four months in one location, and the firm's few employees are scattered across the United States. He claims this opens the firm up to new solutions and founders that would otherwise get passed over in red-hot Silicon Valley.

"Initialized was built to operate as a decentralized company, and I know it makes us a better firm because I'm not just in Silicon Valley problems and Silicon Valley solutions," Ohanian said.

The 36-year-old credited Generation Z with leading the charge on remote working and thinks more companies will be forced to accommodate remote workers as younger employees begin joining the corporate workforce.

"One of the best parts of this new generation, Gen Z and Millennials to a certain extent, is that they are optimizing around experiential living," Ohanian said. "Our parents were really into that white picket fence thing and we just aren't."

SEE ALSO: Investors are pouring millions of dollars into fertility treatment startups. Here’s how one of Silicon Valley’s legendary venture firms is approaching investment in the buzzy industry

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The head of Microsoft’s data cloud business is 'battle hardened' and ready to face Google and Amazon on his home turf (MSFT)

Thu, 07/18/2019 - 6:58pm

  • Rohan Kumar, who leads data applications on Microsoft's cloud, spoke to Business Insider about the company's strategy.
  • Kumar says Microsoft's early commitments to the "hybrid" cloud market, a blended model that customers to store and process data on a public cloud, while keeping some of assets in-house, has been one of the company's big advantages.
  • Now, as Google and Amazon come to that realization too, Kumar explains why Microsoft is in a strong position.
  • Read more BI Prime stories here.

Everyone has finally caught up to what Microsoft has been talking about for the past few years, says Rohan Kumar, corporate vice president of Azure Data at Microsoft.

Kumar, who leads data applications on Microsoft's cloud, is referring to hybrid cloud, a computing model that allows customers to store and process data on a public cloud, while keeping some of that work in their own data centers. 

"I think hybrid will be a pretty key play," Kumar told Business Insider. "It's something that guides all our investments."

The hybrid cloud market is now worth about $63 billion, and could grow to $155 billion by 2025, according to estimates from Constellation Research.

When Microsoft reported its fiscal fourth quarter earnings results on Thursday, the company's cloud business was the star of the show, helping boost Microsoft's revenue 12% year-over-year. Those results are in no small part thanks to Microsoft's early commitment to working with customers on their own terms, making it easy for corporations to move into the cloud one step at a time.

"It's really about the customer journey," Kumar said. "When you talk to an enterprise customer, you never have a greenfield scenario where they say, 'I have the budget to move everything to the cloud.' The conversation is always a lot more involved."

Back in April, Google launched Anthos, which is now available and allows customers to run their applications on Google's cloud, private data centers, and even other rival companies' clouds. AWS also announced its own hybrid offering AWS Outposts last November. It will be available later this year. 

Read more: For the first time ever, Microsoft's cloud business unit generated more revenue than the Windows or Office segments

Kumar says that unlike these companies, which focused on cloud first, hybrid cloud has been Microsoft's strategy "since the beginning," and that's because of Microsoft's deep relationships with enterprise customers as well as its technology.

"For years, we've spoken about this," Kumar said. "I do see when you look at the other clouds, they talk about having a hybrid story. The realization is coming."

You can build it, but that doesn't make it battle hardened

Kumar says that compared to newer players like Amazon and Google, products like Microsoft's data warehouse are powerful because they're steeped in a legacy of working with customer data.

"Decades of customer workloads have run on it," Kumar said. "Technically you can build this stuff up but it gets battle hardened by running a lot of customer workloads. We have an advantage over there."

And compared to other legacy companies, like Oracle, Kumar says Microsoft's data products are specially designed to work with the cloud.

"Take a look at the Oracles of the world. They run a lot of mission critical workloads," Kumar said. "We've come from that world and we sort of moved ahead."

Hybrid cloud is an "incremental step" that customers can take without disrupting the process, Kumar says, and if they want to move more of their applications to the cloud later on, hybrid cloud makes it a lot easier for them to do that.

"We're really meeting the customers where they are," Kumar said. "We're deeply understanding what is important for their business."

SEE ALSO: This startup is giving away all its database software for free as open source, and it says it's not afraid of Oracle or Amazon

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WeWork cofounder and CEO Adam Neumann reportedly sold shares he owned in the company and took loans worth $700 million

Thu, 07/18/2019 - 6:12pm

  • According to a Wall Street Journal report, WeWork cofounder and CEO Adam Neumann has sold sizeable portions of his stake in the office space sharing company.
  • Neumann also borrowed against his holdings, according to the WSJ report, buying more shares in his company as well as purchasing five homes and investing in real estate and startups.
  • Neumann's sales and debt transactions totalled $700 million in total, according to the WSJ. The news comes as WeWork and its parent company, last valued at $47 billion in private markets, is preparing for a highly-anticipated IPO.
  • Visit Business Insider's homepage for more stories.

The cofounder and CEO of WeWork, the fast-growing co-working startup, has sold and borrowed hundreds of millions of dollars in transactions involving his shares in the company, according to a report in the Wall Street Journal on Thursday.

According to the report, Adam Neumann, WeWork's largest single shareholder, has cashed out some of his stake in the company in recent years, while also borrowing money against his holdings. The news of Neumann's transactions, which the WSJ said totalled $700 million, comes as the office-space giant prepares for a highly anticipated IPO.

WeWork confidentially filed to go public in April and was valued at $47 billion in its most recent private funding round in January.

Neumann sold some of his stake through stock sales during several rounds of financing, according to the WSJ report, which said it was unable to confirm his current stake. The WSJ said that Neumann used some of the proceeds to exercise his stock options and purchase more shares in WeWork. Neumann, 40, has also used the money to buy five private residents as well as to invest in commercial real estate and startups, the report said.

Read More: More $10-plus billion companies have gone public in 2019 than at the height of the dot-com tech bubble. Here's how their businesses compare.

It is not uncommon for founders and other early stakeholders of private companies to cash out some of their holdings during financing rounds to entice largest investors. But selling sizeable stakes ahead of a planned public offering sends Wall Street mixed signals about the founder's confidence in the company's long-term viability on public markets. According to anonymous sources quoted in the WSJ report, Neumann's borrowing against his stake proves he is confident in the coworking giant's long-term success.

The company has raised $10 billion in venture funding and debt funding since Neumann cofounded the company in 2011. The company's financials have come under scrutiny in the run-up to its public debut as it struggles to turn large real estate investments into a profitable business model.

WeWork declined to comment.

SEE ALSO: Andreessen Horowitz partner Scott Kupor explains some of the secrets revealed in his new book about the venture capital industry

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uBiome just restarted lab operations, after the poop-testing startup brought back the lab director it laid off last week

Thu, 07/18/2019 - 6:07pm

uBiome is back to running its only lab test, the troubled startup told customers on Thursday, a week after it was forced to stop running the test after laying off key employees.

The company had to stop processing lab samples on July 10 after cutting its lab director, Susan Zneimer. She has since been brought back on, according to an email sent to customers that uBiome shared with Business Insider.

Lab testing has resumed for the company's Explorer test, a direct-to-consumer product that tells users what microbes are in their guts. The test costs $89 and uses a small sample of a person's poop.

"You may be aware that last week we temporarily paused processing Explorer samples while we executed an organizational change at the company," uBiome said in the email. "We are pleased to inform you that Dr. Susan Zneimer will continue as uBiome's Lab Director and we have resumed processing Explorer samples. We anticipate few if any delays in delivering results to customers."

Zneimer was let go as part of a round of layoffs in which uBiome cut about half its workforce. The startup is working to find a path forward after the FBI raided the startup in April. Following the raid, the company suspended sales of two doctor-ordered tests, SmartGut and SmartJane.

Read more: uBiome convinced Silicon Valley that testing poop was worth $600 million. Then the FBI came knocking. Here's the inside story.

Its cofounders and co-CEOs departed, and uBiome has been adding executives and board members who have experience with bankruptcies and turning around troubled companies.

Founded in 2012, uBiome raised $105 million from investors and achieved a $600 million valuation on the promise of helping people understand the bacteria in their bodies, called the microbiome. 

Click here to read more about uBiome.

Here's the letter sent to customers: 

Dear uBiome Customers, 

You may be aware that last week we temporarily paused processing ExplorerTM samples while we executed an organizational change at the company. 

We are pleased to inform you that Dr. Susan Zneimer will continue as uBiome's Lab Director and we have resumed processing Explorer samples. 

We anticipate few if any delays in delivering results to customers. 

We remain committed to our customers and to the integrity of our product. We thank you for your patience. 

Please do not hesitate to reach out to us at support@ubiome.com if you have questions. 

The uBiome Team

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The companies disrupting the payments industry in major markets through digital

Thu, 07/18/2019 - 6:00pm

This is a preview of the Global Payments Landscape report from Business Insider Intelligence. Current subscribers can read the report  here.

  • Noncash payments are on the rise worldwide.
  • As new players emerge to capitalize on consumer appetite for digital payment methods, three mature markets — the UK, Australia, and Sweden — have become standouts for what a more cashless society could look like.
  • The UK, Australia, and Sweden are transitioning to digital particularly well, and can serve as a roadmap for other mature markets seeking to overcome the legacy channel of cash.

Noncash payments have been gaining popularity around the world for the last decade. And though cash isn’t anywhere near dead, its global growth is slowing as consumers turn to emerging cashless alternatives.

But there are a few key markets - Australia, Sweden, and the UK - where annual noncash payments have already surpassed traditional cash transactions altogether — and they’re stong early indicators of what a truly cashless society could look like.

Why are digital payments on the rise?

The growing adoption of noncash payments is a direct result of the rise of e-commerce, but that’s not the only factor. Consumers today are adaptable to disruptive technologies and are generally open to trying new types of digital payment methods.

This consumer appetite is compounded by their access to infrastructure, as well as the emergence of government-backed initiatives, such as real-time transfers and the backing of electronic currencies, that make digital payments more enticing to both consumers and merchants.

How are Australia, Sweden, and the UK driving the world towards cashless payments?

Australia, Sweden, and the UK are emblematic of opportunities for payments players to lead the world away from cash. The Global Payments Landscape from Business Insider Intelligence, Business Insider’s premium research service, provides a snapshot of the payments industry in each of these three markets.

The report shows that several leading payments players have already emerged or are dominant within each of these regions — and they’re finding success in different ways. For other mature markets seeking to overcome the legacy channel of cash, the digital transformations of Australia, Sweden, and the UK can serve as a roadmap.

Here are the strategies these regions are implementing in the race to become the world’s first cashless society:

  • Australia is launching government initiatives and instating new regulations. The Australian government has banned purchases over AU$10,000 ($7,500) from being made in cash, as well as launched the New Payments Platform (NPP) to allow real-time funds transfer as a means of replacing transactions typically made in cash, such as paying back a friend.
  • In Sweden, consumers are rapidly abandoning cash in favor of cards. In fact, only 2% of the total value of transactions in Sweden consist of cash — a figure that’s expected to decline to less than half a percent by 2020.
  • Contactless payments are leading the shift away from cash in the UK. Nearly the entire population has a debit card, and debit card transactions surpassed cash payments for the first time at the end of 2017. This milestone was largely fueled by the surge in contactless cards, which grew 97% annually last year to hit 5.6 billion transactions.

Want to Learn More?

The Global Payments Landscape from Business Insider Intelligence compiles various payments snapshots, together illustrating how digital payment methods are supplementing or replacing cash in each market.

Each snapshot provides an overview of the payments industry in a particular country, and details the evolution of its development. They also highlight notable payments players in each region and discuss the opportunities and challenges that players are facing in their respective markets.

Get The Global Payments Landscape

 

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8 of the best credit card offers in July, from premium perks on Southwest to an almost-free flight to Hawaii

Thu, 07/18/2019 - 5:51pm

  • Signing up for a rewards credit card and earning its welcome bonus is one of the easiest ways to earn a ton of points, miles, or cash back.
  • While some credit card bonuses stay largely the same, others increase from time to time. Pay extra attention to these limited-time offers.
  • In July, you can score enough miles for a free flight to Hawaii with one limited-time bonus, or, if you're lucky, get a rare 100,000-point bonus on the Platinum Card® from American Express through the CardMatch tool. Plus, the Chase Sapphire Preferred Card's offer is a great way to get started with some of the most valuable points around.

If you want to earn points and miles, there's no quicker route than signing up for a rewards credit card and earning its sign-up bonus. This typically requires meeting a minimum spending requirement in the first three months or 90 days, and it's well worth it — you'll be rewarded with thousands of points or miles to put toward your next trip, or with a sizeable amount of cash back.

Before you apply for any new cards, make sure you understand how credit card applications affect your credit score. Then, scroll down to check out some of the best sign-up offers available in July.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which can far outweigh the value of any rewards.

When you're working to earn credit card rewards, it's important to practice financial discipline, like paying your balances off in full each month, making payments on time, and not spending more than you can afford to pay back. Basically, treat your credit card like a debit card.

1. The Platinum Card from American Express

Welcome offer: 60,000 Amex points after you spend $5,000 in the first three months. You could be targeted for a 100,000-point offer (with the same spending requirement) when you use the CardMatch tool. Note that the CardMatch offer could change at any time, but it's worth checking to see if you're targeted for an offer that would score you 40,000 extra points.

If you travel frequently and can put its many, many benefits to use, the Amex Platinum can be an easy decision even with its $550 annual fee. See how Business Insider's David Slotnick got more than $2,000 in value from the card in his first year for more info.

Some of the card's top perks include a 5x earning rate on airfare purchased directly from the airline, up to $200 in airline fee credits each calendar year, up to $200 in Uber credits each cardmember year, and up to $100 in Saks Fifth Avenue credits each calendar year. 

The card also stands out for its airport lounge access benefits. As a card member, you can access Amex Centurion Lounges, Delta Sky Clubs (when you're flying Delta), Priority Pass lounges, Air Space Lounges, International American Express Lounges, Escape Lounges, and Plaza Premium Lounges.

You can use the Amex Membership Rewards points you'll earn with this card to book travel with airlines like British Airways, Delta, and Emirates, and with hotel partners including Marriott.

Click here to learn more about the American Express Platinum from Business Insider's partner, The Points Guy. 2. Hawaiian Airlines World Elite Mastercard

Welcome offer: 60,000 Hawaiian miles after you spend $2,000 in the first 90 days. For a limited time — we don't know the offer end date, so act soon if you're interested.

Unless you're based in Hawaii, you probably don't fly to and from the islands enough to make this your credit card for everyday spending, but now's a great time to sign up since the bonus is an elevated 60,000 miles.

That's enough to book a round-trip economy award flight from anywhere in the mainland US to Hawaii. Keep in mind that award prices on Hawaiian Airlines fluctuate according to peak and off-peak dates, but in our sample searches we've found plenty of availability for flights that come under the 60,000-mile mark, from both the East Coast and the West Coast. You'll just have to pay taxes and fees, which are about $6 each way.

Click here to learn more about the Hawaiian Airlines Mastercard from Business Insider's partner, The Points Guy. 3. Chase Sapphire Preferred

Welcome offer: 60,000 Chase points after you spend $4,000 in the first three months.

If you want a rewards credit card with points that can be used with a variety of travel partners, you can't go wrong with the Sapphire Preferred. It's one of the best general credit card picks if you're new to the world of points and miles or if you don't want to pay the $450 annual fee of the Chase Sapphire Reserve, as the Sapphire Preferred has a $95 annual fee.

The card has been offering a 60,000-point sign-up bonus for the last several months, and you can use those points to book travel directly through Chase, or you can transfer them to partners like British Airways, Hyatt, Singapore Airlines, and United.

Beyond earning some of the most valuable points around, the Sapphire Preferred offers primary car rental insurance and doesn't charge foreign transaction fees.

Click here to learn more about the Sapphire Preferred from Business Insider's partner, The Points Guy. 4. Southwest Rapid Rewards Performance Business Credit Card

Welcome offer: 80,000 Southwest Rapid Rewards points after you spend $5,000 in the first three months.

Southwest's second credit card for small businesses launched in late June, and it offers some premium perks with the airline, along with what's currently the highest sign-up bonus among Southwest credit cards.

The 80,000 points from the sign-up bonus count toward Southwest's Companion Pass benefit, which lets you bring a friend along on flights for free minus taxes and fees. You need to earn 110,000 qualifying points in a year to get the Companion Pass, and if you wanted to open a personal credit card like the Southwest Rapid Rewards Premier Credit Card, that sign-up bonus would count toward it as well. 

In exchange for a $199 annual fee, you get four upgraded boardings on Southwest per year, inflight Wi-Fi credits, an application fee credit of up to $100 for Global Entry or TSA PreCheck, and 9,000 points each year after your cardmember anniversary.

You'll also earn 3 points per dollar on Southwest purchases, and 2 points per dollar on social media and search engine advertising, internet, cable and phone purchases (and 1 point per dollar on everything else). 

While this is advertised as a small-business credit card, keep in mind that you could be eligible if you're a freelancer or have a side gig. 

Click here to learn more about the Southwest Performance Business Card from Business Insider's partner, The Points Guy. 5. Hilton Honors American Express Surpass® Card

Welcome offer: 130,000 points and a free weekend night after you spend $4,000 in the first four months.

If you stay at Hilton properties multiple times a year, you'll enjoy the complimentary Hilton Gold status you get as a card holder. Gold status offers benefits such as free breakfast and 18x points on Hilton purchases, and you'll earn another 12x points on Hilton stays by paying with the Surpass card. So it's quite easy to rack up lots of Hilton points by using this card, and by earning the welcome bonus you'll be starting with a healthy stash of 130,000 points toward an award stay.

Another reason to sign up now is the free weekend night currently being offered as part of the welcome bonus. And if you spend $15,000 on the card in a calendar year, you can earn a second weekend night reward.

Click here to learn more about the Hilton Surpass Card from Business Insider's partner, The Points Guy. 6. Capital One Venture Rewards Credit Card

Welcome offer: 50,000 miles after you spend $3,000 in the first three months.

The Venture Rewards card has consistently added benefits over the last year or so. While previously you could only use miles to erase purchases on your statement, you can now transfer them to a variety of airline programs, including Air Canada, Air France/KLM and Etihad. There are occasionally transfer bonuses that help you stretch your miles further, too.

This card offers a strong lineup of benefits considering the reasonable $95 annual fee (that's waived the first year). You get an application fee credit of up to $100 for Global Entry or TSA PreCheck, and earn 10x miles when you book hotels through the hotels.com/venture landing page.

Earning 10 miles per dollar on hotels is hard to beat, and that's in addition to the free night for every 10 paid nights you book that you'll earn through the Hotels.com Rewards program. You'll also earn 2x miles on all non-hotel purchases.

Click here to learn more about the Capital One Venture from Business Insider's partner, The Points Guy. 7. Hilton Honors American Express Card

Welcome offer: 90,000 Hilton points after you spend $2,000 in the first three months.

If you don't stay at Hilton properties frequently enough to pay $95 for the Hilton Surpass Amex but you want to boost your Hilton points balance for an upcoming stay, the Hilton Honors Amex with no annual fee is a good choice. 

You'll earn 7x points on Hilton stays, and you'll get complimentary Silver status, with the ability to upgrade to Gold status when you spend $20,000 in a calendar year. 

Click here to learn more about the Hilton Amex Card from Business Insider's partner, The Points Guy. 8. American Express® Gold Card

Welcome offer: 35,000 Amex points after you spend $2,000 in the first three months. You could be targeted for a 50,000-point offer (with the same spending requirement) when you use the CardMatch tool. (Note that the CardMatch offer is subject to change at any time.)

If you eat out or buy groceries on a regular basis, the Amex Gold card is made for you. You'll earn 4 points per dollar at restaurants, and 4 points per dollar on the first $25,000 spent at US supermarkets each year (then 1 point per dollar). The card also offers up to $120 in dining credits each year, split into $10 each month, at Grubhub, Seamless, The Cheesecake Factory, Ruth's Steak House, or participating Shake Shack locations.

As with the Amex Platinum, you can use the Amex Membership Rewards points earned from this card to book travel with more than 15 airline partners and three hotel programs (Choice, Hilton, and Marriott).

Click here to learn more about the Amex Gold Card from Insider Picks' partner, The Points Guy. Learn about more of the best credit card rewards, bonuses, and benefits of 2019 »

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AOC's policy adviser wants to tax high incomes at 99%. A tax attorney says it would be 'naive' not to expect high earners to change their habits in response.

Thu, 07/18/2019 - 5:40pm

  • Dan Riffle, Rep. Alexandria Ocasio-Cortez's senior counsel and policy adviser, believes that income over a certain threshold should be taxed at 99%, he told Vox.
  • Such a tax could persuade billionaire CEOs to stop working, the former Department of Justice tax attorney James Mann told Business Insider.
  • Riffle wrote the slogan "every billionaire is a policy failure," Vox reported.
  • Finding the solutions to social issues like infectious diseases should be left to democratically elected governments instead of billionaire philanthropists, Riffle told Vox.
  • Visit Business Insider's homepage for more stories.

Dan Riffle, the policy adviser who wrote Rep. Alexandria Ocasio-Cortez's "every billionaire is a policy failure" slogan, said in an interview with Vox's Dylan Matthews that the phrase had much clunkier origins: It started out as "tax income over $5 million at 99 percent."

Riffle told Vox that he nixed that version because it didn't "roll off the tongue" but said he believed the underlying policy was the right way to address growing wealth inequality in the US. Riffle said he wasn't sure that $5 million is the right threshold for the 99% tax but that it could be decided in a nationwide referendum.

"There's nothing in this world that anybody wants or needs to do that you can't do with, let's say, $10-15 million," Riffle told Vox. "And so at some point there has to be a line. To me, $1 billion is way, way, way, way past the line."

The revenue raised by a wealth tax could be used to tackle issues being worked on by billionaire philanthropists, Riffle told Vox. "Increasing taxes, and democratic control over the distribution of society's resources, is a hell of a lot more important to fairness and equality and progress than any philanthropy pledge," Riffle said.

Riffle is among a growing group of Democrats calling for new taxes to address wealth inequality. Sen. Elizabeth Warren's proposal for a wealth tax earned the support of some ultrawealthy Americans.

In June, a group of 19 multimillionaires and billionaires wrote an open letter to all 2020 presidential candidates asking them to consider a "moderate" wealth tax, citing Warren's "Ultra-Millionaire's Tax." Under Warren's proposal, wealthy Americans would pay an annual tax on high-value assets they already own, such as fine arts and superyachts, not their income. Riffle's proposal, in contrast, would tax billionaires' paychecks.

Unintended consequences

Riffle's plan may have unintended consequences, the former Department of Justice tax attorney James Mann, who is now a tax partner at law firm Greenspoon Marder, told Business Insider. The tax might cause high-net-worth people like CEOs to embrace leisure activities full time after they initially make their fortunes, Mann said.

Read more: The AOC adviser behind the 'Every billionaire is a policy failure' slogan says there's a critical issue with depending on the richest people to fix the world's biggest problems

"If an additional dollar of income is taxed at a 99% rate, who would go to the effort of making the additional dollar?" Mann said.

"The notion that people will not change their behavior in response to changes in the tax code is naive," Mann added.

Business Insider previously reported that a wealth tax like the one Warren is proposing could also help reduce wealth inequality but would likely not generate as much revenue as its proponents hope because it would be difficult for the IRS to enforce. 

SEE ALSO: Why Elizabeth Warren and billionaires like George Soros alike are calling for a specialized tax on the ultra-wealthy

DON'T MISS: Meet the 18 ultra-wealthy Americans begging for a wealth tax, from a Facebook cofounder to a Disney heiress

Join the conversation about this story »

NOW WATCH: The US women's national team dominates soccer, but here's why the US men's team sucks

A man who lost his entire family in a 737 Max crash says that Boeing is 'playing games' with its fund for the victims

Thu, 07/18/2019 - 5:22pm

  • Boeing announced that it hired the attorney Kenneth Feinberg to manage distributions of the first $50 million of a $100 million fund set aside for families of people killed in the two Boeing 737 Max crashes.
  • Paul Njoroge, who lost his three children, his wife, and his mother-in-law in the Ethiopian Airlines Boeing 737 Max crash in March, told Business Insider that he feels the fund is just a PR move by Boeing.
  • He testified in front of Congress on Wednesday and asked for Boeing to be held accountable for the crashes.
  • Visit Business Insider's homepage for more stories.

Boeing announced on Wednesday that it was set to begin distributing the first $50 million of a $100 million fund it created for families of victims of the two 737 Max crashes.

However, some of those family members found the announcement, and the fund itself, to be a poor effort to distract from Boeing's culpability in the crashes.

"Boeing is just trying to play some games in people's minds, just like they played games with people's lives," Paul Njoroge, who lost his three children, wife, and mother-in-law in the second crash, said in an interview with Business Insider. "They ought to have grounded the Max after the crash of Lion Air Flight 610."

Njoroge, a Canadian investment professional, lost his family in March, when the Boeing 737 Max 8 airplane they were flying on crashed six minutes after taking off from Ethiopia — the second fatal crash involving a 737 Max in five months. Nine-month-old Rubi, 4-year-old Kelli, 6-year-old Ryan, their mother, Carolyne, and their grandmother Ann were heading to Kenya.

Read more: A man who lost his entire family in one of the deadly 737 Max crashes says he's haunted by the 'last 6 minutes' that they were alive

He testified in front of a congressional subcommittee on aviation safety this week, where he described the agony of his loss and asked Congress to hold Boeing accountable for the crashes. He also advocated for a full safety review of the Max aircraft, including its certification as a new plane model.

Among his criticisms of Boeing's fund is the fact that the announcement was made in an effort to generate positive publicity, despite the fact that there were no solid details ready.

"It has no structures. You know, they don't have a plan of how they will be spent," he said. "They juggled with the lives of people and now they just want to play with the minds of the public because they want the public to think that, oh, Boeing cares a lot."

Robert A. Clifford, a lawyer who represents numerous victims' families — including Njoroge — agreed.

"Even giving Boeing its due, it missed its mark," he said, "because they added a new layer of confusion to expedient and efficient relief to these families."

Part of the issue is that although Boeing is also working directly with Ethiopian Airlines and its insurers, none of them have begun making payments to families yet, and some of those families are struggling to get by.

The fund is unrelated to that, and, according to Clifford, adds a layer of confusion. He said families would prefer that Boeing focus on helping the airline's efforts.

SEE ALSO: Boeing just announced $100 million for families of 737 Max crash victims. It likely won't be enough.

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For the first time ever, Microsoft's cloud business unit generated more revenue than the Windows or Office segments (MSFT)

Thu, 07/18/2019 - 5:20pm

  • On Thursday, Microsoft announced it generated $11.4 billion in revenue from its intelligent-cloud unit, which includes Azure and other cloud-computing services.
  • For the first time since the segment was incepted in 2015, intelligent cloud generated more revenue than productivity and businesses processes and more personal computing, the units that include Office and  Windows, respectively.
  • Growth for its Microsoft Azure cloud has slowed down — although an analyst said it was likely because the revenue base is becoming larger, making it hard to keep up a high rate of growth.

For the first time, Microsoft's cloud business unit generated more revenue than its segments that include Windows and Office.

Microsoft announced on Thursday in its earnings that its cloud business unit, called intelligent cloud, generated $11.4 billion in revenue. In comparison, its more-personal-computing unit, which includes Windows products, the Surface line, gaming, and search, generated $11.3 billion. And its productivity-and-business-processes unit, which includes Office, Dynamics 365, and LinkedIn, generated $11 billion.

The company first instituted this corporate reporting structure, breaking its businesses down into these three specific segments, in 2015.

Intelligent cloud includes Microsoft's cloud Azure and other services. In total, revenue for this business increased 19% from this time the previous year. This was largely driven by Azure, which grew 64% from the previous year. Microsoft did not break out the revenue numbers for Azure.

However, Microsoft does share a figure it refers to as "commercial cloud," which basically sums up the revenue it gets from Azure, Office 365, and other business-focused cloud services. In the last quarter, commercial-cloud revenue was at $11 billion, up 39% from the same period in 2018. That accounts for about a third of overall Microsoft revenue.

Azure growth did slow down from the previous quarters. Last quarter, Azure's year-over-year revenue growth was 73%, and in the previous quarter, it was 76%.

Read more: Microsoft blew away Wall Street estimates in its most recent quarter and grew its revenue by 12% from last year

Still, Patrick Moorhead, the founder, president, and principal analyst at Moor Insights & Strategy, said he wasn't worried about this slowdown — it's only natural that as Azure gets bigger, it'll get that much harder to maintain growth.

"I am not concerned with the declining Azure growth rates right now," Moorhead told Business Insider. "I am keeping my eye on it, but right now, I attribute it to the law of very large numbers. As we have even seen from AWS, as the revenue base gets massive, it's hard to keep the rate of increase going."

SEE ALSO: A cofounder of NPM, a startup that 11 million developers rely on, has resigned in the wake of a period of employee unrest

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NOW WATCH: Jeff Bezos is worth over $160 billion — here's how the world's richest man makes and spends his money

Bernard Arnault just surpassed Bill Gates as the world's 2nd-richest person. Here are the 6 most recognizable brands he owns. (LVMH)

Thu, 07/18/2019 - 4:38pm

  • Bernard Arnault, the chairman and chief executive officer of LVMH, recently became the second-richest person in the world ahead of Microsoft founder Bill Gates. 
  • The company responsible for most of Arnault's wealth, LVMH, owns over 70 high-end fashion brands including perfumes, alcohol, and clothes. 
  • LVMH trades on the Euronext Paris exchange, and the stock is up 48% year-to-date. 
  • We've compiled the six most recognizable brands Arnault owns.
  • Visit the Markets Insider home page for more stories.

Bill Gates is no longer the second-richest person in the world. 

The tech billionaire who made his riches by way of Microsoft has found his fortune eclipsed by Bernard Arnault, the chairman and chief executive officer of luxury-goods conglomerate LVMH

Arnault's ownership in LVMH helped lift his net worth to $108 billion as of Thursday's market close. The Paris-based fashion house owns luxury brands in perfumes, watches, alcohol, and clothing. 

LVMH is listed on the Euronext Paris exchange, and the company is trading up 48% year-to-date. The rise in places Arnault behind only Amazon founder Jeff Bezos in terms of overall net worth.

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Here are some of the biggest brands owned by LVMH:

6. Hennessy

Fun fact: Hennessy's USA headquarters is located in New York City, and recently moved into the World Trade Center. 

 



5. Marc Jacobs

Fun fact: Marc Jacobs, the founder of the label, left LVMH in 2013. 



4. Christian Dior

Fun fact: LVMH purchased the Christian Dior brand for $13.1 billion in 2017. 



3. Tag Heuer

Fun fact: Tag Heuer sponsors a number of celebrities and athletes including golfer Tiger Woods, actor George Clooney, and world-famous soccer club Manchester United.



2. Sephora

Fun fact: LVMH purchased Sephora in 1997 and brought the cosmetic retailer global. 



1. Louis Vuitton

Fun fact: Louis Vuitton was one of the conglomerate's original brands when it was founded in 1987. 



Stocks snap a 2-day losing streak on further expectations of a July rate cut

Thu, 07/18/2019 - 4:19pm

US stocks snapped a two-day losing streak amid further anticipation that the Fed will lower borrowing costs in July.

John Williams, the president of the New York Federal Reserve, said the central bank should "act quickly and forcefully"as the economy starts slowing down and rates remain low. Lower rates are generally positive for stock prices because they reduce the comparative appeal of bonds.

"It's better to take preventative measures than to wait for disaster to unfold," Williams said during a speech to the Central Bank Research Association. 

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

Jerome Powell and the Fed are widely expected to lower its benchmark rate this month amid rising trade uncertainty and discouraging global economic growth. 

Here's a look at today's closing numbers: 

Shares of Netflix sank as much as 12% after the streaming giant reported its first loss in US subscribers in eight years. The company second quarter earnings report disappointed investors as subscriber growth also fell short of forcasts. Netflix added 2.7 million members during the period compared to analysts estimates of around 5 million. 

Chief Executive Officer Reed Hastings attributed the shortfall to price increases and its content lineup bringing in less subscribers than the company expected. 

Ebay jumped 7% to its highest intraday price in 15 months after reporting "better than feared" earnings. Both Morgan Stanley and Bank of America placed a buy rating on the stock and increased their price targets after the results. 

Morgan Stanley was the last of the major US banks to report second quarter earnings on Thursday. Profits came in above expectations despite the bank posting the worst decline in its stock-trading on Wall Street. 

Within the S&P 500, these were the largest gainers:

And the largest decliners: 

Consumer staples, technology, and financials were the best performing sectors in the S&P 500. The communications-services sector — which contains Netflix — fell by 0.9%.

Now read more markets coverage from Markets Insider and Business Insider:

'An unprecedented miss': Here's what Wall Street is saying about Netflix's disappointing quarter

Barclays surveyed more than 400 investors about their biggest market fear — and a clear majority cited Trump's global trade war

Morgan Stanley's wealth management arm is now the most profitable its ever been. Wall Street is already questioning how long that can last. 

Join the conversation about this story »

NOW WATCH: The US women's national team dominates soccer, but here's why the US men's team sucks

Take a look at Ford's most iconic cars through the decades — and how they evolved (F)

Thu, 07/18/2019 - 4:18pm

  • Ford has been around for 116 years, and in that long period of time, it's produced many important, powerful, and beautiful cars.
  • But several Ford vehicles stand out.
  • We've taken a closer look at the evolution of the Ford Thunderbird, the Lincoln Continental, the F-Series pickup trucks, and the legendary Mustang.
  • Visit Business Insider's homepage for more stories.


Ford has been around for over a century, and you could certainly argue that its most iconic car was the one that started the auto industry: the Model T.

But the Model T didn't change much. Ford later discovered the joys of new models, and ever since, the company has been pleasing customers with at-times iconic rides.

Several stand out, both for their longevity and their influence.

We rounded up four: the magnificent Thunderbird, the stylish Lincoln Continental, the indispensable F-Series pickup, and the glorious Mustang. Here's how they evolved over the decades.

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The Ford Model T. This is more of an honorable mention because although it's certainly the most important car Ford ever built, it didn't change much.

The Ford Thunderbird. Ford fired back at the Chevy Corvette with its own stylish American take on the roadster.

By 1957, the T-bird had established itself in the youthful US auto market.

The Thunderbird wasn't frozen in time. Through the 1960s, the car evolved.

By the early 1970s, however, the original DNA of the T-bird was definitely in the past. Gone was the snazzy two-door of the fifties, replaced by a long-hooded barge.

In total, eleven generations of the Thunderbird were produced by Ford — although the eleventh arrived after a five-year hiatus for the nameplate. The throwback design was controversial, but it attracted fans before the car went away for good in 2005.

The Lincoln Continental. Ford's luxury brand rolled out the storied Continental in the early 1940s. It was sold until the late 1940s, then retired.

The Continental returned in the 1950s, but it was the coach-doored (or "suicide" doored, if you will) sedan of the early 1960s that captured the popular imagination.

The Continental endured for several more decades, but its aesthetic fortunes rose and fell. The nameplate was finally dropped in 2002, only to return as the flagship vehicle for a resurgent Lincoln, first as a concept in 2015 ...

... And then as a production car in 2016.

In 2018, Lincoln celebrated its 80th anniversary with the special-edition Continental, complete with coach doors.

The Ford F-Series. The greatest pickup truck of all time came to life in 1948.

In the 1950s, the F-Series was a work truck, used by ranchers and farmers.

The F-150 designation arrived in the 1970s, and by the Reagan administration in the 1980s, the F-Series became America's best-selling vehicle, a title it would hold until the present day.

The 13th generation of the F-150 was introduced in 2014. It was the most risky F-Series redesign ever for Ford, as the automaker built it in much more lightweight aluminum.

Customers can now also buy the high-performance Raptor, which is based on the F-150.

The Ford Mustang. The original Pony Car was unveiled by Ford in 1965. It was an instant hit.

The Mustang would become an icon in the 1960s and 1970s, thanks to its muscle-car performance and aura of cool, endorsed by the likes of Steve McQueen in the movie "Bullitt."

The unloved Mustang II arrived after the long run of the first generation 'Stang.

The late 1970s and 1980s saw Ford develop the now-legendary "fox" body Mustang.

The sixth-generation 'Stang arrived in 2015, and Ford updated the design slightly in 2018.

Ford has created its fair share of iconic cars, but if you had to choose one that's at the heart of the 116-year-old automaker, it would have to be the Mustang.

Reddit cofounder turned investor Alexis Ohanian opens up about the myth of work-life balance: founders that think they don’t need coaching take 'amazing leap of arrogance'

Thu, 07/18/2019 - 4:09pm

Alexis Ohanian is a cofounder of forum site Reddit, founded a venture capital firm Initialized Capital, and married tennis star and investor Serena Williams. By most objective measures, he is one of Silicon Valley's biggest success stories.

So when Ohanian began opening up publicly about his mental health and the pressures tech industry founders like him are under, he said he was surprised by the supportive reception he received from the tech community.

"Running a startup is hard enough," Ohanian told attendees at an event in San Francisco on Wednesday. "What we put ourselves through as founders is bad for us and it's also bad for business."

Read More: This CEO got $3 million from investors including Serena Williams' VC firm to fix a problem with women's healthcare that even the star tennis player has struggled with

Ohanian said he and Reddit cofounder Steve Huffman didn't see each other for weeks on end even though they were living together while building Reddit because Ohanian preferred to work into the night while Huffman was more of an early bird. 

"Some amount of ego or pride convinced me it was right," Ohanian said of his past all-nighters.

With therapy, Ohanian said he now realizes how "stupid" his work schedule was, and has tried to take a page out of Williams' book by going all in on whatever he is doing in a given moment, whether that's doing due diligence on a prospective portfolio company or watching Golden Girls.

"In business we are playing ourselves," Ohanian said. "In sport, you have a win and a loss and you know where you stand. If I'm in business or I'm a doctor, and think I don't need coaching, it's an amazing leap of arrogance. I think that's really starting to seep into tech in big ways."

Now an investor, Ohanian says he is positioned to better implement his best practices for work-life balance. He's realized that he isn't necessary for every decision at either Initialized or Reddit, and even went as far as turning off the notifications on his phone.

"I no longer feel the tremor when you think your phone is buzzing but you're not even wearing pants," Ohanian said. "Creating those boundaries, and trying to be more like Serena Williams, is my professional goal. These tools work for us and we have the ability to say no."

SEE ALSO: This tech exec quit his job so he could invest in 'sexual wellness' startups, and he says cannabis investors showed him how to do it

Join the conversation about this story »

NOW WATCH: Jeff Bezos is worth over $160 billion — here's how the world's richest man makes and spends his money

An airline is getting slammed for asking a nursing mom to cover up. Here are the breastfeeding policies on 11 major airlines

Thu, 07/18/2019 - 4:01pm

  • Dutch airline KLM came under fire for asking a breastfeeding mother to cover up during a flight.
  • Many airlines have policies that explicitly allow mothers to breastfeed during flights, while other airlines don't have policies, but train crews to allow breastfeeding in-flight.
  • Read on below for the full breastfeeding policies at 11 major airlines.
  • Visit Business Insider's homepage for more stories.

Dutch airline KLM is facing criticism after it asked a woman who was breastfeeding her child to cover up.

In a Wednesday tweet, the airline clarified that it allows breastfeeding on flights, but it "may request a mother to cover herself while breastfeeding, should other passengers be offended by this," sparking further criticism.

Many airlines explicitly allow breastfeeding on planes, while others don't have official policies, but train crews to allow mothers to breastfeed in-flight. 

Take a look at the breastfeeding policies of major airlines that fly to the US.

Read more: United Airlines put an underage passenger on a plane to the wrong country, prompting a panicked mother to beg the airline to keep the plane from taking off

SEE ALSO: I took a $120 Blade helicopter flight from midtown Manhattan to JFK Airport — here's what it was like

American Airlines

American Airlines explicitly allows breastfeeding in its facilities, including in-flight seats. A spokesperson said:

We support breastfeeding and pumping in any of our customer facilities that mothers are comfortable using - that's inclusive of onboard our aircraft, in our Admiral's Clubs and other airport facilities.



Delta Air Lines

Delta also allows breastfeeding wherever nursing mothers are comfortable:

Delta fully supports a woman's right to breastfeed on board Delta and Delta Connection aircraft and in Delta facilities. Breast pumps are allowed on board. At the airport and if you prefer, many airports do offer private lactation rooms or spaces. Ask a Delta associate if you need assistance locating one at an airport.

It has more information about traveling with infants on its website.



United

United also allows breastfeeding while in flight, and provides useful information on its website:

Nursing mothers are welcome to breastfeed or pump on our aircraft and in our facilities. Dedicated nursing spaces, including nursing mother rooms and Mamava nursing pods, are available in many of our airports and we are in the process of adding more. You can locate nursing spaces by using the airport maps feature in the United app or by visiting the airport's website. In addition, some of our United Club℠ locations have family rooms available for our United Club members and customers who purchase a one-day pass.

If you will need to pump, we recommend bringing a battery-operated or manual breast pump, since the availability of in-flight seat power varies by aircraft fleet. Breast pumps and milk may be carried on board in addition to the one carry-on bag and one personal item allowed.

You are welcome to breastfeed from the comfort of your seat or in a lavatory, but due to the unpredictability of turbulence, nursing mothers are not allowed to pump in the aircraft galley areas or jump seats. Our flight attendants may be able to provide ice to keep pumped milk cool during a flight, but they are not permitted to store items such as milk or formula.



Southwest Airlines

Southwest's "baby on board" page states that mothers are welcome to nurse on aircraft:

Southwest welcomes nursing mothers who wish to breastfeed on the aircraft and/or within our facilities.

A spokesperson additionally clarified:

At Southwest, we promote a casual and family-focused atmosphere onboard our aircraft and in our airports, and mothers wishing to breastfeed infants and/or pump breastmilk (regardless of whether or not the infant is traveling with the mother) using a breast-pump are welcome to do so while traveling with us.



Alaska Airlines

Alaska Airlines does not list a specific policy on breastfeeding. However, in past tweets the airline has said that "we don't have any restrictions on breastfeeding while aboard our aircraft."

Additionally, a 2016 blog post on the airline's website implies that breastfeeding during flight is allowed.



Spirit Airlines

Spirit Airlines does not have a written breastfeeding policy on its website, and did not immediately return a request for more information.

In 2017, the airline came under fire when it removed a breastfeeding mother from a plane. The airline said the passenger repeatedly failed to follow crew instructions to buckle her son into a seat.



Frontier Airlines

Frontier allows breastfeeding on board. From its website:

We fully support a woman's right to breastfeed on our flights. Breast pumps are also welcome aboard. We consider a breast pump to be a medical device.

Read more: American Airlines made a doctor wrap a blanket around herself because a flight attendant found her summer outfit 'inappropriate'



Virgin Atlantic

Virgin Atlantic does not have a specific policy, according to a spokesperson. However, the representative said:

[We] of course welcome mothers looking to breastfeed onboard, and our crew helps make them as comfortable as possible.



Air Canada

Air Canada allows breastfeeding on board. A spokesperson said "we have a longstanding policy of proudly supporting breastfeeding onboard our aircraft wherever mothers feel comfortable."

The policy is confirmed on the airline's "traveling with children" page.



British Airways

British Airways does not have a policy outlined on its website, but the airline recently told the BBC "we carry thousands of infants and their families on our flights every year, and we welcome breastfeeding on board."



Air France

Air France does not have a breastfeeding policy listed on its website, and did not immediately respond to a request for comment.



Morgan Stanley's wealth management arm is now the most profitable it's ever been. Wall Street is already questioning how long that can last. (MS)

Thu, 07/18/2019 - 3:51pm

  • Morgan Stanley said on Thursday its wealth management division had a record pre-tax profit margin of 28.2% in the second quarter.
  • The strong showing from the firm's wealth management arm easily offset softness in equities and fixed-income trading, Wall Street analysts said. 
  • But some analysts wondered if the record wealth management margins could cost the bank future growth.
  • "You can always take it higher, but there's a trade-off between investing for growth and making sure you have the revenues coming in for the next several years," one analyst told Gorman on Thursday. 
  • Visit BI Prime for more stories.

Morgan Stanley's wealth management unit managed to bring in record revenue and margins for the second quarter even as many of the bank's other businesses stumbled, but it may have been too much of a good thing. 

Analysts voiced concerns about just how sustainable those margins might be, and pointed out that the bank has not updated its targets for the division, even though it has been running above its own goals. Still, most said that wealth had balanced out Morgan Stanley's more volatile businesses well in the second quarter. 

The New York-based bank's wealth management arm brought in record pre-tax income of $1.2 billion. Revenue rose 2% to $4.4 billion from the same quarter last year, and pre-tax profit margin came in at 28.2%. That was a record margin for wealth, Morgan Stanley chief executive James Gorman said.  

That solid showing stood in contrast to revenue drops in more market-linked areas like trading that have been erratic quarter-to-quarter.

"While it's never fun to see double-digit declines in M&A, debt underwriting, FICC and equities," growth in wealth management as well as investment management "led the way" for the quarter, Evercore ISI analyst Glenn Schorr wrote in a note. 

Some wondered what the future holds for a critical operation that's been a stable business for the bank. Morgan Stanley and its peers are all grappling with defensive investor positioning amid geopolitical uncertainty and a slowing economic backdrop, even with equity markets near record highs.

One analyst pressed Gorman about the wealth management profit margin on the firm's earnings conference call on Thursday. Goldman Sachs analysts questioned the margin's sustainability in a note. And another analyst pointed out that while margins in wealth management were high, management did not update its guidance on that front. 

Read more: 'Hong Kong, Singapore, go hard at it': Morgan Stanley CEO shares his plan to win over wealthy Asians

Mike Mayo, the veteran bank analyst now at Wells Fargo, asked Gorman about profitability and investing for the future. The bank had flagged its "tightly-managed" non-compensation costs for wealth management in its earnings release. 

"There's a trade-off between investing for growth and making sure you have the revenues coming in for the next several years," Mayo said.

"I don't sort of jump around and start dancing when we're a few basis points above our range, and I'm not going to be too distressed if it's a few basis points below the end of the range at any point this year," Gorman said. "It's in a great position, the margin in that business."

Goldman Sachs analysts, who have a neutral rating on Morgan Stanley, immediately flagged the wealth margin in a report to clients on Thursday morning.  

"We await clarity on the call on ... guidance around the sustainability of the PT margin in wealth management which is now running at a post-Crisis high of 28.2%," analysts led by Richard Ramsden wrote.

Brian Kleinhanzl of Keefe, Bruyette & Woods, who also has a neutral rating on the bank, noted that Morgan Stanley didn't take update key wealth management targets even after the solid results. 

"One key was that although the efficiency ratio was below management's target and WM pretax margins were above, management is not updating targets at this time," Kleinhanzl said in a report.

To be sure, the vast majority of analysts polled by Bloomberg are buy-rated on Morgan Stanley.

The quarter held few surprises, said Devin Ryan, equity analyst at JMP Securities in New York who holds a "buy" rating on the bank. Wealth management continues to be a stable corner of the bank, he said. 

"The business tends to be a lot steadier than the overall balance of Morgan Stanley," Ryan said in an interview.

Do you have a story to share about Morgan Stanley's wealth management division? Contact this reporter at rungarino@businessinsider.com. 

Join the conversation about this story »

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Microsoft blew away Wall Street estimates in its most recent quarter and grew its revenue by 12% from last year (MSFT)

Thu, 07/18/2019 - 3:40pm

  • Microsoft reported its quarterly earnings on Thursday — and posted results that easily surpassed Wall Street estimates.
  • The company's earnings per share came in at $1.37, beating estimates of $1.21.
  • Microsoft Azure saw its revenue grow 64% from the same period of 2018.

Microsoft reported its quarterly earnings on Thursday after the closing bell, and posted results that easily surpassed Wall Street estimates, reflecting the continued growth of its cloud business. 

Before the bell, Microsoft was already the most valuable company in the world, with a valuation of over $1 trillion. At the time of this writing, that seems unlikely to change: The company is up a little over 1% in after-hours trading.

Here's what it reported:

  • Earnings (adjusted) of $1.37 per share, handily beating estimates of $1.21.
  • Revenue of $33.72 billion, beating the estimate of $32.77. That's up 12% from the same period of 2018. 

Revenue in Microsoft's productivity-and-business-processes segment, which encompasses the Office business, was $11 billion, up 14% from the same period of 2018. Microsoft's results show that flagship businesses like Office 365, LinkedIn, and Dynamics all posted significant gains in the quarter — and that there are now 34.8 million subscribers to the consumer version of the Office 365 cloud suite.

Intelligent-cloud revenue was $11.4 billion, up 19% from the year-ago period. Notably, Microsoft Azure, the company's crucial cloud-computing platform, saw its revenue grow 64% from the same period of 2018, though Microsoft doesn't break out specific financial figures for that business. That represents a deceleration from the prior two quarters, when Azure posted growth of 73% and 76%. 

More personal computing, which accounts for the beleaguered Windows business, saw its revenue edge up 4% from the same time last year to $11.3 billion. That includes the Windows OEM business, which grew 9%, and the Surface hardware line, which saw revenues go up 14%. However, Microsoft also said that gaming revenue was down 10% in the quarter, with Xbox software and services specifically seeing a 3% dip. 

As this was the fourth quarter of Microsoft's fiscal year, it also announced full-year results: 

  • Revenue of $125.8 billion, up 14% from last year. 
  • Net income of $39.8 billion on a non-adjusted basis, up 137% from the year-ago period.
  • Diluted earnings of $5.06 per share, non-adjusted, up 138% from the year-ago period.

In short: Microsoft is a cloud powerhouse, and, other than a potential bump in Azure growth this quarter, shows no signs of slowing down.

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Opening a 401(k) can be a big step toward saving for retirement, but a financial planner says there's a mistake lying in wait

Thu, 07/18/2019 - 1:54pm

  • Eric Roberge, a certified financial planner and the founder of Beyond Your Hammock, says too many people treat their 401(k) like a savings account.
  • 401(k)s are a powerful, tax-advantaged investing tool, and choosing how the money is invested is up to you.
  • Roberge recommends choosing either an all-in-one target date fund, which automatically rebalances itself, or building a portfolio of individual funds that provide appropriate diversification.
  • Visit Business Insider's homepage for more stories.

Your office 401(k) may feel like an untouchable savings account, but it's actually a powerful, tax-advantaged investing tool.

A whopping $5.3 trillion was held in 401(k) plans at the end of 2017, accounting for nearly one-fifth of all retirement assets in the US, according to the Investment Company Institute. When you defer part of your paycheck into your 401(k), the money doesn't just sit there until you need it for retirement — you have to decide how to invest it.

About 55 million Americans contribute to a 401(k) plan at work, and according to certified financial planner Eric Roberge, too many people make the same mistake when it comes to managing theirs. He says it has more to do with perception than anything.

In a recent tweet, Roberge wrote: "Big #money mistake I see a LOT: ignoring how a 401k portfolio is invested b/c it feels like SAVINGS & only thinking it's INVESTING if your money is in a brokerage acct (then *over*reacting emotionally b/c you're checking it constantly/making poor investment choices as a result)."

Big #money mistake I see a LOT: ignoring how a 401k portfolio is invested b/c it feels like SAVINGS & only thinking it's INVESTING if your money is in a brokerage acct (then *over*reacting emotionally b/c you're checking it constantly/making poor investment choices as a result).

— Eric Roberge, CFP® (@beyondfinances) July 16, 2019

 

401(k)s are designed to make investing fairly simple. Most 401(k) plans offer between eight and 12 investment options, which can be a mix of mutual funds, stock funds, bond funds, and even annuities. That's far fewer than what's available in a typical brokerage account or IRA — and it can be both good and bad.

"When it comes to 401(k) investments, the challenge is typically the limited amount of investment choices," Roberge told Business Insider. "Many plans offer target date funds along with a handful of individual funds. So, the decision ends up being to choose the target date fund that is closest to your expected retirement date or build your own portfolio with the individual funds available."

It can be tough to find exactly what you want in a 401(k) with limited options, but you'll be in good shape so long as you choose investments that diversify your portfolio — i.e. a mix of stocks and bonds — and don't levy too many fees, though management fees are unavoidable in most 401(k)s.

"Sometimes the target date fund provides the asset class diversification needed and you may not get that same diversification ability with the individual funds. Sometimes the opposite is true," Roberge said. Target date funds are an "all-in-one" fund that automatically choose a blend of investments based on your age — the younger you are, the riskier the investments (more stocks).

In your 401(k), target date funds may be labeled by year of expected retirement, such as "Target 2040." In this case, the fund is made up of a blend of investments that assumes retirement in the year 2040, so investments will need to be as conservative as possible by that time. Oftentimes, if you don't choose another investment, you'll be defaulted to a target date fund usually matching your full retirement age.

"One great thing about the target date funds is that there is no rebalancing necessary as it is all done for you inside the fund," Roberge said. With individual funds, he said, you or your adviser will have to "rebalance" your asset allocation every year to ensure it aligns with your larger portfolio.

As you choose which funds to invest in, you'll decide how much of your 401(k) contributions will go toward each, usually expressed as a percentage. If you only choose one fund, 100% of your money will be invested in that fund. If you create a portfolio with three different funds, you can decide what percentage of your contributions will go toward each fund.

Remember, your investments aren't set in stone. You can, and probably should, make changes to your allocation periodically to ensure your overall portfolio — including all the other investments you have in an IRA or brokerage account — match your risk tolerance and time horizon. If you have a 401(k), you're as much an investor as you are a saver.

Need help with your 401(k) investment strategy? SmartAsset's free tool can help find a financial planner near you »

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KKR is creating a new role overseeing its data strategy as private equity giants bet high-tech analysis will give them an investing edge

Thu, 07/18/2019 - 1:08pm

  • Private equity giant KKR has hired Emilia Sherifova, the top technology officer at Northwestern Mutual, to develop a data-driven approach she says will play a "central role" in KKR's next stage of evolution. 
  • Private equity executives are seeing data strategy as a way to analyze investments and juice returns.
  • Blackstone said last February it had created a data platform to support decision-making. Matt Katz, hired from Point72 Asset Management in 2015, heads up data scientists who work with the firm's dealmakers.
  •  Data insights help create opportunities and avoid mistakes, said Patrick Davitt, an analyst at Autonomous Research who covers KKR.

Private equity giant KKR has hired Northwestern Mutual's chief technology officer to develop ways for the firm to scour data for investment ideas.

Emilia Sherifova will be based in New York and have the title "chief information and innovation officer," a broader role than her predecessor. She replaces CIO Ed Brandman, who retired in December after 11-1/2 years at KKR. 

The private equity industry is starting to pay more attention to data when deciding where to invest and how much to spend, with firms hiring data scientists to glean insights into buying patterns and broader economic trends. Firms have access to vast amounts of information from companies they own, including customer purchase receipts and occupancy rates. 

"There is enormous potential to leverage cutting edge technology and data in a transformative way for this industry and I am very excited to drive this for KKR," Sherifova said in a statement, adding that a data-driven approach will play a "central role" in the firm's evolution. 

Firms can see better returns if they put their data in one place that is easy to use for their investment professionals, said Patrick Davitt, an analyst at Autonomous Research who covers KKR and other private equity firms.

"It creates opportunities and helps you avoid mistakes," said Davitt. 

Last February, Blackstone said it had built its own data platform to support investment decision-making. Matt Katz, who Blackstone hired from Point72 Asset Management in 2015, now leads a team of data scientists who serve as a resource to deal teams and help Blackstone-owned companies improve operations. 

Sherifova will also help manage the firm's internal IT and make sure systems are up to snuff. KKR offered little detail on Sherifova's job responsibilities outside of a bare-bones press release.

One investment banker who works closely with private equity firms told Business Insider that he expected her role to include identifying trends in the investment due diligence process and aiding in the growth strategies of companies that KKR owns.

When asked about this possibility, a KKR spokeswoman did confirm that one of Sherifova's "key goals" would be to harness data to identify investment opportunities, "connecting the dots across the business and ultimately maximizing returns." 

Some smaller firms are offering data science as a product to help private equity firms make decisions. 

San Francisco-based Two Six Capital has two managing partners, nine data scientists and engineers and four advisers. The firm seeks co-investment opportunities alongside private equity and handles investment due diligence and operations improvement post-purchase, offering data analysis to inform judgment calls.  

Ian Picache, who co-founded the firm in 2013, said the private equity industry has been a laggard when it comes to data science. 

"The biggest technology advancement in private equity was the Excel spreadsheet, which came out in 1986," Picache said. "We thought there were a number of different ways to inject technology into the private equity process."

How KKR will change its own process going forward is yet to be seen, but the firm's recently-retired CIO offered some insight into where Sherifova may focus her efforts in a 2014 interview.

Brandman's biggest technology challenge, he told financial technology news site WatersTechnology, was the "rapid expansion of the business ... especially into new alternative asset classes, and creating a high-touch service model," while his IT wish list included a "fully integrated public and private data for the ultimate set of analytics." 

KKR's co-chief operating officers, Joseph Bae and Scott Nuttall, pointed to Sherifova's experience with "software development, digital transformation and operations management" in the statement announcing the hire. They said she has shown the value technology can create in "multiple industries." 

Sherifova spent more than four years at Northwestern Mutual. Prior to serving as its CTO, she held the top technology post at a startup it owned: LearnVest, a personal finance company. Before that, she was CTO at PulsePoint, an ad tech firm aimed at growing audiences for marketers and publishers. 

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