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LinkedIn founder and Greylock partner Reid Hoffman apologizes for his role in rehabbing Jeffrey Epstein’s public image in 2015

Thu, 09/12/2019 - 5:25pm

Reid Hoffman, the founder of LinkedIn and one of Silicon Valley's most high-profile venture capital investors, apologized on Thursday for his role in helping to repair the image of convicted sex offender Jeffrey Epstein.

In an email to Axios, Hoffman acknowledged several interactions with Epstein, which he said were for the purpose of fundraising for MIT's renown Media Lab. Hoffman said he had been told that MIT had vetted and approved Epstein's participation in fundraising, but said his decision to be involved with Epstein was nonetheless a mistake.

"By agreeing to participate in any fundraising activity where Epstein was present, I helped to repair his reputation and perpetuate injustice. For this, I am deeply regretful," Hoffman said in the email. 

Epstein's ties to Silicon Valley and to MIT have come under scrutiny in recent weeks, following the financier's arrest on sex trafficking charges and his subsequent death by suicide. 

Hoffman invited Joi Ito, director of the MIT Media Lab, and Epstein to an August 2015 dinner in Palo Alto with Tesla CEO Elon Musk, Facebook CEO Mark Zuckerberg, and Palantir founder Peter Thiel.

"My few interactions with Jeffrey Epstein came at the request of Joi Ito, for the purposes of fundraising for the MIT Media Lab. Prior to these interactions, I was told by Joi that Epstein had cleared the MIT vetting process, which was the basis for my participation," Hoffman wrote.

Read More: We still don't know if Jeffrey Epstein's money is floating around Silicon Valley, but several top venture capital firms say they've never accepted funds from the disgraced financier

In addition to backing MIT Media Lab, Epstein also reportedly helped personally finance Ito's venture capital fund. Greylock, the venture capital firm at which Hoffman is a partner, has denied that Epstein had invested in any funds as a limited partner. There remains the possibility, however, that Epstein invested in Greylock and others through a "fund of funds," which does not have to disclose its investors to venture firms it backs

According to Axios, Hoffman funded the Media Lab's Disobedience Award for "individuals and groups who engage in responsible, ethical disobedience aimed at challenging norms, rules, or laws that sustain society's injustices," which last year went to leaders of the #MeToo movement.

Hoffman's email was made public only minutes after a letter from MIT president L. Rafael Reif, which also blamed Ito for the university's oversight of Epstein's involvement. The letter reported "preliminary" findings of an investigation that was sparked by revelations that Epstein had funded Ito's Media Lab in addition to his venture capital fund.

Epstein was convicted in 2008 of soliciting sex with a minor, and served 14 months in a Florida prison. In July, he was charged with sex trafficking of minors and conspiracy. He was found dead by suicide on August 10 in his prison cell at the Metropolitan Correctional Center in Manhattan after being refused bail.

Do you have a story to share about Epstein? Contact this reporter via encrypted messaging app Signal at +1 (331) 625-2555 using a non-work phone, email at mhernbroth@businessinsider.com, or Twitter DM at @megan_hernbroth.

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Buzzy healthcare startup SmileDirectClub just went public. Here are the execs and investors who stand to benefit the most.

Thu, 09/12/2019 - 5:11pm

  • SmileDirectClub, a company that provides clear aligners to straighten your teeth, tumbled 28% in its stock market debut Thursday after pricing its initial public offering at $23 a share. 
  • SmileDirectClub ended its first day of trading with a $6.4 billion valuation.
  • Here are the top investors in SmileDirectClub, including CEO David Katzman and cofounders Jordan Katzman and Alex Fenkell, and how much their stakes are worth.
  • Click here for more BI Prime stories.

Five-year-old teeth-straightening company SmileDirectClub went into its first day of trading on Thursday with high hopes and a near-$8.9 billion valuation.

The company on Wednesday priced its initial public offering at $23 a share, but started trading below that. The stock closed down 28% on Thursday at $16.67 a share. SmileDirectClub ended its first day of trading with a $6.4 billion valuation.

SmileDirectClub is a startup that provides clear aligners for teeth. While it typically costs anywhere from $3,000 to $7,000 to get traditional braces or Invisalign-brand aligners, SmileDirectClub goes for a fraction of that — you can either pay $1,895 up front or a total of $2,290 spread out over two years.

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The idea behind SmileDirectClub is to make straightening teeth more affordable by cutting out the steps of going in person to a dentist or orthodontist to get braces or other alignments. The company was started by Alex Fenkell and Jordan Katzman in 2014.

In October, SmileDirectClub raised $380 million from the private-equity firm Clayton, Dubilier & Rice and the venture firms Kleiner Perkins and Spark Capital. The round valued the company at $3.2 billion, up from $275 million just two years earlier.

In its filing, SmileDirectClub listed the top shareholders in the company and their stakes. These are SmileDirectClub's top investors:

  • David Katzman, 59, is the chairman and CEO of SmileDirectClub. Katzman is the largest shareholder in SmileDirectClub, and the filing said that at the completion of the offering, he would control a majority of the voting shares of the company. Katzman is the founder and managing partner of the Detroit-area-based Camelot Venture Group, which has invested in Quicken Loans, Sharper Image, and 1-800 Contacts. Katzman is the father of cofounder Jordan Katzman. After the IPO, he would own nearly 88 million shares, valued at about $1.4 billion, based on the closing share price of $16.67.
  • Jordan Katzman, 29, is a cofounder of SmileDirectClub and a director on its board. After an IPO, Jordan Katzman would own about 69.6 million shares, valued at about $1.2 billion.
  • Alex Fenkell, 30, is a cofounder of SmileDirectClub and a director on its board. (He and Jordan Katzman met at summer camp.) Post-IPO, Fenkell would own 63 million shares, valued altogether at up to $1.0 billion.
  • Steven Katzman, 56, is SmileDirectClub's chief operating officer and a member of the board. Steven Katzman is an adviser to Camelot and David Katzman's brother. He would own up to 6.3 million shares, valued at up to $104 million. That figure excludes the roughly 28 million shares (valued at up to about $473 million) that he is a beneficial owner of by way of the "David B. Katzman 2009 Family Trust," for which Steven Katzman is a trustee, according to the recent financial filing. 
  • Kyle Wailes, 35, is SmileDirectClub's chief financial officer. He joined the company in May 2018 after working at Intermedix, a billing-technology company. Wailes would own about 259,000 shares after an IPO, valued at up to $4.3 million.
  • Susan Greenspon Rammelt, 54, is SmileDirectClub's general counsel secretary and a member of the board. Greenspon Rammelt also serves as Camelot's general counsel. After an IPO, she would own up to 273,000 shares, valued at up to $4.6 million.

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MIT officials were aware of Jeffrey Epstein's donations to the Media Lab as early as 2013, an independent investigation found

Thu, 09/12/2019 - 4:56pm

  • In a letter made public on Thursday, MIT President L. Rafael Reif said an independently run investigation found that MIT officials were aware of Jeffrey Epstein's donations to MIT Media Lab run by investor Joi Ito.
  • According to the letter, administration officials were made aware of Epstein's donations as early as 2013. They allowed Ito to keep the donations although they "knew in general terms" of charges against Epstein, Reif said.
  • Administration officials were aware enough, however, to bar Ito from using the donations to enhance Epstein's reputation with public projects, instead directing the donations to be used for equipment and support for lab scientists.
  • The letter also stated that Epstein gifts were discussed at at least one of MIT's regular senior team meetings where Reif was present.
  • Visit Business Insider's homepage for more stories.

In a letter made public on Thursday, MIT President L. Rafael Reif said an independently run investigation found that MIT officials were aware of Jeffrey Epstein's donations to the MIT Media Lab run by investor Joi Ito.

In a letter addressed to the MIT community, Reif said that administration officials were made aware of Epstein's donations as early as 2013. They allowed Ito to keep the donations although they "knew in general terms" of charges against Epstein, Reif said.

"They accepted Joi's assessment of the situation. Of course they did not know what we all know about Epstein now," Reif wrote.

Read More: We still don't know if Jeffrey Epstein's money is floating around Silicon Valley, but several top venture capital firms say they've never accepted funds from the disgraced financier

Administration officials were aware enough, however, to bar Ito from using the donations to enhance Epstein's reputation with public projects, instead directing the donations to be used for equipment and support for lab scientists. The letter stated that Epstein gifts were discussed at at least one of MIT's regular senior team meetings where Reif was present.

"I am aware that we could and should have asked more questions about Jeffrey Epstein and about his interactions with Joi. We did not see through the limited facts we had, and we did not take time to understand the gravity of Epstein's offenses or the harm to his young victims. I take responsibility for those errors," Reif wrote.

Reif also revealed that the investigation had found a letter thanking Epstein for a donation to Seth Lloyd, a professor of mechanical engineering and physics at MIT, that contained Reif's signature.

The letter was a result of a preliminary update on the independent investigation run by Goodwin Procter into the extent of Epstein's involvement in the university's research and media institutions. The investigation was set off by revelations the now-deceased financier had personally invested in Ito's venture capital fund in addition to directing university donations to Ito's Media Lab.

Ito stepped down from his post as director of the Media Lab on September 7. 

Epstein was charged with sex trafficking of minors and conspiracy. He was found dead by suicide on August 10 in his prison cell at the Metropolitan Correctional Center in Manhattan after being refused bail.

Do you have a story to share about Epstein? Contact this reporter via encrypted messaging app Signal at +1 (331) 625-2555 using a non-work phone, email at mhernbroth@businessinsider.com, or Twitter DM at @megan_hernbroth.

SEE ALSO: Activist investor Starboard bought a 7.5% stake in Box. Experts say that what comes next could be restructuring, layoffs, and maybe even a big sale to a competitor.

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The US-China trade war is still in flux. Here are the 12 companies that have the most riding on a successful resolution.

Thu, 09/12/2019 - 4:48pm

  • There's still no clear outcome to the ongoing trade war between the US and China, and troves of companies around the world have huge chunks of their businesses riding on a long-awaited resolution. 
  • Businesses have increasingly looked to China to drive sales as the country's middle class has exploded in growth over the last decade. 
  • Goldman Sachs put together a list of companies with the greatest exposure to China based on revenue. 
  • Based on that data, here are the 12 companies with the most riding on a successful trade deal.
  • Visit the Markets Insider homepage for more stories.

Businesses are reeling from the effects of the trade spat between the US and China, and there's still no certainty the conflict is going to end any time soon.

However, there have been signs of progress. Both the US and China said this week they would delay tariffs on some products set to take effect in the coming months.

China announced a short-list of products would be temporarily exempt from upcoming tariffs, while President Trump reportedly said an increase in duties on Chinese exports would be delayed two weeks until October 15. Both moves were seen as an effort to cool down trade tensions between the countries ahead of scheduled talks. 

But both countries have extended olive branches before, and yet the trade war has raged on. It's unclear whether a deal will come from upcoming talks, but tons of companies are hoping a resolution will come soon, for the sake of their businesses. 

Goldman Sachs put together a list of companies that have the highest exposure to China based on revenue. To that end, they can be considered those with the most riding on a successful trade resolution.

Here are the 12 companies, ranked in increasing order of Chinese exposure:

12. IPG Photonics

Ticker: IPGP

Sector: Information Technology

Market value: $6 billion

Revenue exposure to Greater China (includes Taiwan): 43%

Source: Goldman Sachs

 



11. Texas Instruments

Ticker: TXN

Sector: Information Technology

Market value: $114 billion 

Revenue exposure to Greater China (includes Taiwan): 44% 

Source: Goldman Sachs

 



10. Applied Materials

Ticker: AMAT

Sector: Information Technology

Market value: $44 billion

Revenue exposure to Greater China (includes Taiwan): 45%

Source: Goldman Sachs

 



9. Broadcom

Ticker: AVGO

Sector: Information Technology

Market value: $109 billion 

Revenue exposure to Greater China (includes Taiwan): 49%

Source: Goldman Sachs

 



8. Nvidia

Ticker: NVDA

Sector: Information Technology

Market value: $100 billion

Revenue exposure to Greater China (includes Taiwan): 53%

Source: Goldman Sachs

 



7. Las Vegas Sands

Ticker: LVS

Sector: Consumer Discretionary

Market value: $42 billion

Revenue exposure to Greater China (includes Taiwan): 62% 

Source: Goldman Sachs

 



6. Micron Technology

Ticker: MU

Sector: Information Technology 

Market value: $50 billion

Revenue exposure to Greater China (includes Taiwan): 66% 

Source: Goldman Sachs

 



5. Qualcomm

Ticker: QCOM

Sector: Information Technology

Market value: $91 billion

Revenue exposure to Greater China (includes Taiwan): 67%

Source: Goldman Sachs

 



4. Monolithic Power Systems

Ticker: MPWR

Sector: Information Technology

Market value: $6 billion

Revenue exposure to Greater China (includes Taiwan): 70% 

Source: Goldman Sachs

 



3. Qorvo

Ticker: QRVO

Sector: Information Technology

Market value: $8 billion

Revenue exposure to Greater China (includes Taiwan): 74% 

Source: Goldman Sachs

 



2. Wynn Resorts

Ticker: WYNN 

Sector: Consumer Discretionary

Market value: $11 billion

Revenue exposure to Greater China (includes Taiwan): 75%

Source: Goldman Sachs

 



1. Yum China Holdings

Ticker: YUMC

Sector: Consumer Discretionary

Market value: $16 billion

Revenue exposure to Greater China (includes Taiwan): 100%

Source: Goldman Sachs

 



Stocks climb as ECB stimulus and trade progress temper global growth fears

Thu, 09/12/2019 - 4:24pm

  • Stocks climbed on Thursday after the European Central Bank moved to cut interest rates and the US and China cooled trade tensions with tariff delays and exemptions. 
  • The European Central Bank slashed its benchmark deposit rate deeper into negative territory and expanded its bond-buying program. 
  • China said it planned to exempt a short-list of items from US products from upcoming tariffs, while President Trump announced the US would delay increasing duties to October 15. 
  • Visit the Markets Insider homepage for more stories.

Stocks rose on Thursday after the European Central Bank moved to inject new stimulus into the European economy and the US and China soothed trade tensions with tariff delays and exemptions. 

The ECB lowered its key deposit rate to -0.5%, from -0.4%, driving interest rates deeper into negative territory. The central bank also it will continue to repurchase bonds for as long as necessary. The announcement providing reassurance that global central banks would step in to support economies in the event of a global slowdown. 

China said it planned to temporarily exempt a short-list of US products from upcoming tariffs. President Trump said shortly after China's announcement that the US would delay increasing existing duties on Chinese exports until October 15. 

Investors had been looking for signs of progress toward a trade deal for several weeks. The efforts by China and the US to delay tariffs appeared to traders hope a resolution could be reached in the near future. 

Here's a look at the major indexes as of the 4 p.m. close on Thursday:

Shares of Aurora Cannabis tumbled as much as 11% on Thursday after missing Wall Street expectations for earnings. The cannabis producer also said it no longer expects to achieve profitability this year, and now forecasting positive earnings in 2020. 

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Oracle's stock price sank as much as 6% after the company said chief executive officer Mike Hurd would be taking an indefinite leave of absence. Hurd pushed the company deeper in the cloud commuting market in attempt to compete with the likes of Amazon and Microsoft

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

And the largest decliners:

Materials posted gains of 0.7%, while financials and real estate rose more than 0.4%. Energy fell 0.6% and healthcare dropped slightly. 

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Teeth-straightening startup SmileDirectClub just tumbled in its stock market debut (SDC)

Thu, 09/12/2019 - 4:22pm

SmileDirectClub tumbled in its trading debut on Thursday, a rare setback for a buzzy startup amid a wave of digital health IPOs.

After selling shares to investors for $23 apiece, the stock closed down 28% at $16.67. 

SmileDirectClub sold 58.5 million shares, raising $1.3 billion in the offering. At its closing price, the company was worth $6.4 billion. 

Read more: SmileDirectClub's IPO could make the startup's top investors into billionaires.

The idea behind SmileDirectClub is to make straightening teeth more affordable by cutting out the steps of going in person to a dentist or an orthodontist to get braces or other alignments. 

SmileDirectClub sells clear aligners, an alternative to what you might get from an orthodontist. While it typically costs $3,000 to $7,000 to get traditional braces or Invisalign-brand aligners, SmileDirectClub goes for a fraction of that — you can either pay $1,895 up front or $2,290 spread out over two years.

Read more: These 10 buzzy digital health startups are poised to go public in the next 12 months

In October, SmileDirectClub raised $380 million from the private-equity firm Clayton, Dubilier & Rice and the venture firms Kleiner Perkins and Spark Capital. The round valued the company at $3.2 billion, up from $275 million just two years earlier. 

The company was started by Alex Fenkell and Jordan Katzman in 2014.

An unexpected turn for an otherwise white-hot digital health IPO run

Up until now, most of the digital health companies that have gone public in 2019 have had successful first days of trading. Diabetes-technology company Livongo surged in its first day of trading, closing up 36%. Gene-sequencing technology company 10x Genomics also made its debut on the public markets on Thursday, closing up 35%.

Read more: Buzzy digital health startup Livongo surged in its stock market debut as the 3-year digital health IPO drought comes to an end

The drop was an unexpected turn for the company, which had priced its shares at $23 apiece on Wednesday, above its initial range of $19-$22. 

SmileDirectClub chief financial officer Alex Wailes said that during the IPO road show, investors had questions about the market the company's going for, which tends to skew more toward a broader market of people who want to make minor cosmetic fixed to their appearance.

Wailes said that those investors who signed on during the road show were supportive of the company's growth as well as the margins the company has on its business. 

"They were incredibly supportive of the growth we've had in the business over the last several years," Wailes said.

According to the IPO filing, SmileDirectClub's net loss widened from $33.8 million in the first half of 2018 to $52.9 million in 2018. The company increased its customer count from 22,000 in 2016 to about 246,000 in the first half of this year. 

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Global central banks are in a rate-cutting frenzy. Here are the 7 other meetings coming up this month, and what's expected at each.

Thu, 09/12/2019 - 4:12pm

  • The European Central Bank announced rate cuts and stimulus for the eurozone on Thursday. 
  • Turkey and Denmark also slashed rates on the same day.
  • Seven more major central banks including the Federal Reserve will meet in September, meaning more rate cuts are on the table.
  • Read more on Markets Insider. 

On Thursday, the European Central Bank announced a round of stimulus for the eurozone that included both a rate cut and quantitative easing. 

Interest rates were slashed 10 basis points to -0.5%, the lowest level ever and the bank said it will begin purchasing 20 billion euros of bonds a month starting in November to inject money back into the economy. 

It's the first time the ECB has changed the deposit rate since 2016, a bold cut for outgoing president Mario Draghi, who will be replaced by Christine Lagarde — the former International Monetary Fund Chairman — on November 1. The move is the latest in a trend of central banks lowering rates to boost local economies.

In addition, smaller banks have also handed down rate cuts. Turkey's central bank also surprised with a jumbo rate cut early Thursday before saying that it will begin to slow its pace of monetary easing going forward. Later in the day, Denmark also cut its interest rate to a historical low, following in the ECB's footsteps, Bloomberg reported. 

Read more: 'Being boiled like frogs': A Wall Street investment chief unloads on how the Fed's behavior is actually hurting the middle class it's supposed to be helping

However, not every central bank has handed down a rate cut this month. Earlier in September, Australia's central bank held interest rates at a low 1%, and Canada's held its rates at 1.75%. 

But going forward, there are likely more cuts from major central banks on the horizon. After the ECB decision, all eyes are on the Federal Reserve, which meets September 18. Most investors think that the Fed will cut rates, but it remains to be seen by how much. President Trump has stepped up his bashing of the Fed and Chairman Jerome Powell, saying they should cut faster. 

Trump has even gone as far to say that the US should have zero or negative interest rates, following in the footsteps of countries in Europe and Japan that have had very low and even negative rates for years. 

Here are the seven central banks that have yet to meet in September, as well as what markets and investors expect them to do at upcoming meetings:

1. US Federal Reserve

Next meeting: September 18 

Current interest rate: 2.25% 

What happened at the last meeting: The Fed cut rates by 25 basis points in July

What's expected at the next meeting: Consensus is for another 25 basis point cut 



2. Swiss National Bank

Next meeting: September 19

Current interest rate:  -0.75% 

What happened at the last meeting: The Swiss National Bank held rates steady 

What's expected at the next meeting: Unclear. While the bank has held rates for some time, pressure from the Fed and ECB could lead to another rate cut, Reuters reported.



3. Bank of England

Next meeting: September 19

Current interest rate: 0.75% 

What happened at the last meeting: The Bank of England held rates steady

What's expected at the next meeting: It depends. The bank has held rates steady for years, but a no-deal Brexit could change its course. 



4. Norges, central bank of Norway

Next meeting: September 19

Current interest rate: 1.25%

What happened at the last meeting: The bank held rates steady, pausing a cycle of rate hikes because of global uncertainty. 

What's expected at the next meeting: The bank signaled that a hike is likely in September, but beyond that they will wait and see, Reuters reported. 



5. Bank of Japan

Next meeting: September 19

Current interest rate: -0.1%   

What happened at the last meeting: The BOJ left interest rates unchanged in July. 

What's expected at the next meeting: The BOJ is likely to continue to hold rates steady. 



6. Reserve Bank of New Zealand

Next meeting: September 24

Current interest rate: 1% 

What happened at the last meeting: The bank surprised investors with a 50 basis point cut

What's expected at the next meeting: It's unclear after last month's surprise cut. That and a 25 basis point cut in May broke a pause that began in February 2017.



7. Bank of Mexico, Banxico

Next meeting: September 26

Current interest rate: 8% 

What happened at the last meeting: Banxico announced its first cut since June 2014 at its la ust meeting in August. 

What's expected at the next meeting: The bank is likely to cut further, the Wall Street Journal reported. 



The monthly median rent for a studio in Manhattan this summer hit an astonishing 11-year high, and the city's prices are driving people away in droves

Thu, 09/12/2019 - 4:04pm

Regardless of the size of their apartment, renters in Manhattan are bound to spend a not-so-pretty penny.

According to a market report released by the real-estate brokerage Douglas Elliman, the median rent for a studio in Manhattan in July and August was $2,700. That number, as Bloomberg reported, is the highest its been since June 2008.

Read more: NYC rents just hit a 3-year high, and the city's prices are pushing everyone from millennials to wealthy Wall Street bankers away

As Business Insider previously reported, one year's worth of rent in Manhattan is more than three-quarters of the country's average annual salary, which is $47,060. Even in Inwood, the cheapest neighborhood in Manhattan, the average monthly rent is more than $1,600.

But Manhattan isn't the only borough seeing outrageously high rents.

In June, Brooklyn's median monthly face rent hit an all-time high of $3,000. To put the extremity of that price into perspective, nearly 80 years ago, the cost of rental housing in most places in Brooklyn ranged from $20 to $49 a month — that translates to around just $350 to $700 in today's dollars.

The high cost of living is driving people out of the city

New York City's sales market, like its rental market, is also outrageously expensive. In fact, prospective buyers who earn the city's average annual household income of $62,000 must save $3,100 per year for 36 years in order to afford a 20% down payment on a median-priced home, which, as of June, is $558,000.

And the wealthy are feeling the heat too.

According to a SmartAsset study, New York is the No. 1 state rich millennials are moving away from. The study, which defined rich millennials as people who are younger than 35 with an adjusted gross income of at least $100,000, found that 14,915 of them moved out of the state from 2015 to 2016.

Business Insider's Katie Warren previously reported that wealthy New Yorkers looking to avoid the city's high taxes can save more than $1 million by moving to Florida.

SEE ALSO: NYC landlords were caught renting out 'micro rooms' for $600 a month. Here are 7 places in the US where you can legally rent an apartment for that much — or less.

DON'T MISS: In the 1940s, you could rent a Brooklyn apartment for $20 a month. Today, the median rent has skyrocketed to $3,000.

Join the conversation about this story »

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Saudi Aramco is gearing up for what could be the largest IPO ever. Here are 10 public offerings its massive listing would dwarf.

Thu, 09/12/2019 - 3:57pm

  • Saudi Aramco is preparing for what could turn out to be the world's largest initial public offering. 
  • The state-run oil company is currently aiming to list as much as 5% of its shares sometime between 2020 and 2021.
  • Saudi officials have suggested Aramco may be worth as much as $2 trillion in the past, which means the company could raise close to $100 billion through an IPO. 
  • Here are 10 IPOs that Aramco could dwarf with its proposed multi-billion-dollar public offering. 
  • Visit the Markets Insider homepage for more stories.

Saudi Aramco is preparing for what could shape up to be the world's largest initial public offering.

The massive state-run oil company is looking to list as much as 5% of its shares sometime in 2020 or 2021. Aramco officials have suggested the company could be worth as much as $2 trillion in the past. 

If Aramco were to list 5% of its shares at a $2 trillion valuation, it could raise as much $100 billion through the offering. That's four times the largest IPO in history. 

Aramco has reportedly hired JPMorgan, Morgan Stanley, and Saudi Arabia's National Commercial Bank for top underwriting spots on the offering, according to Reuters.

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The company is also considering a multi-stage IPO, listing about 1% on Saudi Arabia's stock exchange and another 1% on an international venue prior to its 5% offering. The proceeds from the IPO are expected to help Saudi Arabia diversify its economy away from oil. 

The public markets have seen some sizeable IPOs this year, from Uber raising $8.1 billion to Pinterest raking in $1.4 billion. But not a single public offering from this year cracks the top ten largest listings of all time. 

Here are the 10 largest IPOs that Saudi Aramco's potential listing could blow out of the water, ranked in increasing order of proceeds:

10. Deutsche Telekom AG

Industry: Telecommunications

Date of IPO: November 1996

Amount raised during IPO: $13 billion

Source: Investopedia



9. Facebook

Ticker: FB

Industry: Social media

Date of IPO: May 2012

Amount raised during IPO: $16 billion

Source: Investopedia



8. Enel

Industry: Gas and Electric

Date of IPO: November 1999

Amount raised during IPO: $17.4 billion

Source: Investopedia



7. AIA Group

Industry: Insurance

Date of IPO: October 2010

Amount raised during IPO: $17.8 billion

Source: Investopedia



6. Visa

Ticker: V

Industry: Payments

Date of IPO: March 2008

Amount raised during IPO: $17.9 billion

Source: Investopedia



5. NTT DOCOMO

Industry: Telecommunications

Date of IPO: October 1998

Amount raised during IPO: $18.4 billion

Source: Investopedia



4. General Motors

Ticker: GM

Industry: Automotive

Date of IPO: November 2010

Amount raised during IPO: $20.1 billion

Source: Investopedia



3. Industrial and Commercial of China

Market Value: 

Industry: Banking

Date of IPO: October 2006

Amount raised during IPO: $21.9 billion

Source: Investopedia



2. Agricultural Bank of China

Industry: Banking

Date of IPO: July 2010

Amount raised during IPO: $22.1 billion

Source: Investopedia



1. Alibaba

Ticker: BABA

Industry: Ecommerce

Date of IPO: September 2014

Amount raised during IPO: $25 billion

Source: Investopedia



We asked financial planners for the best strategy to tackle credit card debt, and there are 2 clear favorites

Thu, 09/12/2019 - 3:53pm

  • Business Insider asked financial planners how to get out of credit card debt.
  • They all recommended either the debt snowball method, which prioritizes paying off the smallest balance first, or the debt avalanche method, which prioritizes paying off the highest-interest rate balance first.
  • The debt avalanche method is heralded as the more cost-effective strategy, but the debt snowball method can help build momentum.
  • To be effective, both strategies require making at least the minimum payment on all balances. 
  • Visit Business Insider's homepage for more stories.

Nearly half of American households are in credit card debt, carrying an average of $6,929, according to a NerdWallet analysis.

Any amount of debt can feel suffocating and even insurmountable given that the average annual percentage rate (APR) is creeping toward 18%, but there are ways to get out from under it. 

Business Insider asked financial planners their favorite way to get out of credit card debt, and they all recommended two equally effective strategies: the debt snowball and the debt avalanche.

How to get out of credit card debt

"I would start with writing it all out," Nick Vail, a CFP at Integrity Wealth Advisors, told Business Insider. "This can be eye opening in and of itself."

First, write down exactly how much you owe and the interest rate on each account. Then figure out how much money you can afford to put toward debt payments every month.

In any case, you'll continue to pay at least the minimum payment on all debt balances. With the debt snowball method, you'll put any extra money toward your smallest debt until that's paid off, and then you'll tackle the next highest balance. With the debt avalanche, you'll prioritize the highest-interest rate debt first, and so on.

You must make at least the minimum payment every month

For either strategy to be effective, you must continue making at least the minimum payment on all balances. Making late payments or no payments can be damaging to your credit score, as can keeping total balances that take up more than 30% of your credit limit — known formally as your credit utilization rate.

"The avalanche method is typically the most efficient mathematically, but the snowball method might give you the most satisfaction to keep you motivated," said Luis Rosa, a CFP who founded the financial-planning firm Build a Better Financial Future

Read more: The 'debt snowball' and 'debt avalanche' might sound gimmicky, but they're both highly effective strategies to get out of credit card debt

"I'm usually an optimizer, but for those with balances on multiple cards, I love Dave Ramsey's snowball method," said Andrew Westlin, a CFP at Betterment. "Getting that first balance paid off builds confidence and momentum, and these small wins are crucial in long-term success," he said.

Most importantly, find a strategy you can commit to, said Bobbi Rebell, CFP. "It's like dieting — there are popular methods that are great, but the best one is the one that works for each person."

More coverage from How to Do Everything: Money

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A key Democrat is trying to block Trump’s multibillion dollar farmer bailout program

Thu, 09/12/2019 - 3:51pm

Democratic Rep. Nita Lowey, the chairwoman of the House Appropriations Committee, has taken steps to block a Trump administration program designed to mitigate losses from its trade disputes.

The Washington Post first reported Thursday that Lowey omitted a White House request on the program from draft legislation to fund the government this fall. The so-called continuing resolution has been circulated by congressional Democrats, according to House Appropriations Committee spokesperson Evan Hollander. 

In an email to Business Insider, Hollander said Americans "deserve a robust debate on the costs of the Trump trade war." Trump last year sought to placate farmers, who have lost business as a result of tit-for-tat tariffs, through a subsidy package called the Market Facilitation Program. 

A second stage of MFP was introduced this year, bringing its estimated total costs to at least $28 billion. That put the Commodity Credit Corporation, which the administration has used as a basis for the program, on track to hit its borrowing limit before the bailout payments to farmers were fully dispersed. 

The White House wasn't yet aware of the details surrounding the legislation as of this morning, an administration official said. But advisers sent Congress a request in August to raise the borrowing limit on CCC to above its current level of $30 billion, Roll Call reported this month

Facing allegations that it disproportionately benefited large corporations over small farms, MFP was under scrutiny from the start. The Department of Agriculture did not respond to an email requesting comment. 

Trump has faced an increasing amount of criticism for his broad use of tariffs as the economy slows, casting uncertainty onto his reelection prospects. But the president has maintained that his approach would ultimately lead to fairer trade deals for the farmers who helped elect him in 2016. 

"It is expected that China will be buying large amounts of our agricultural products!" Trump wrote on Twitter on Thursday morning

China has resumed purchases of American farm goods since it vowed to halt them last month, but exports have remained sharply lower than before the start of the trade war. The government distributed nearly $3.4 billion in bailout payments to farmers in the first six months of this year, according to USDA data.

Read more: A majority of Americans think a recession will strike in the next year — and they're blaming Trump's trade war

SEE ALSO: One measure shows Americans paid $6.8 billion in tariffs during July — the most in American history

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Kanye West just bought a $14 million Wyoming ranch. Take a look at the massive property that comes with a saloon, an events venue, and a shooting range.

Thu, 09/12/2019 - 3:51pm

The rapper Kanye West just bought a $14 million ranch in Wyoming, TMZ first reported. 

Kim Kardashian West, West's wife, confirmed the purchase on NBC's "Tonight Show Starring Jimmy Fallon" on Wednesday.

The ranch, which spans hundreds of acres of grassy plains with a backdrop of dramatic mountain scenery, includes a restaurant and saloon, a ranch-style event venue, a maintenance shop, an office building, and ranch improvements such as horse barns, sheds, corrals, storage facilities, and a state-of-the-art shooting range.

It's unclear whether West bought the whole property, which was listed as six separate parcels, or just a portion.

Take a look at the sprawling Wyoming ranch.

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Kanye West bought a Wyoming ranch that was listed for $14 million, TMZ first reported.

According to TMZ, West did not pay full price for the ranch, but the sale amount is unknown.

Kim Kardashian West confirmed that her husband bought a ranch in Wyoming on NBC's "Tonight Show Starring Jimmy Fallon" on Wednesday.

A representative for West did not immediately respond to Business Insider's request for comment.



The Monster Lake Ranch is in northwestern Wyoming, about 75 miles from Yellowstone National Park and just under 60 miles from the border with Montana.

Source: Google Maps



It's about a four-hour drive from the resort town of Jackson, which one report called the most unequal place in the US.

The average income of the richest 1% in the Jackson metropolitan area is more than $16.1 million, while the average income of the remaining 99% is $122,447, according to a 2018 report published by the Economic Policy Institute.



West and other members of the Kardashian-West-Jenner clan have previously been spotted in Jackson, as well as at the nearby luxury resort Amangani.

At Amangani, which features a heated outdoor infinity pool with stunning mountain views, a night's stay starts at an average of $975 and can go up to $2,100.



The Monster Lake Ranch that West is reported to have bought spans at least 1,400 acres of grassy plains with a backdrop of mountains.

Source: J.P. King Auction Company



It was listed for sale as six separate parcels with J.P. King Auction Company. It's unknown which of the parcels West purchased.

When reached by Business Insider to confirm the sale to West, the marketing director of J.P. King Auction Company said: "Unfortunately we do not comment on our clients or the purchasers of our properties that we represent."



The property includes a restaurant and saloon, a ranch-style event venue, a maintenance shop, an office building, and ranch improvements such as horse barns, sheds, corrals, storage facilities, and a state-of-the-art shooting range.

Source: J.P. King Auction Company



The property name comes from its freshwater lakes that are teeming with "monster trout," according to the listing.

There are two ranch-manager homes on-site, as well as eight luxury cabins that can accommodate up to 20 guests.

A landing page for the Monster Lake Ranch indicates it was used as a guest ranch, offering cabin and tepee rentals.

Source: Monster Lake Ranch



Horses have plenty of space to roam on the ranch.

Kim Kardashian West confirmed her husband's purchase of the ranch on NBC's "Tonight Show Starring Jimmy Fallon" on Wednesday.

"We love Wyoming; it's always been such an amazing place," Kardashian West told Fallon. "My husband did just buy a ranch there. His dream and his vision is to move there. I love LA, so I envision summers; I envision some weekends. But yeah, we love it."



The reality-TV star said she recently visited the property "in the wilderness" and wasn't prepared for the lack of electricity and a bathroom.

"My phone dies — there's literally, like, no service, no nothing," Kardashian West told Fallon. "I'm peeing in a bottle because there's, like, no bathroom."



In a Vogue Arabia interview published 10 days ago, West had asked Kardashian West where she saw herself in 10 years, and she told him: "I see us living on a ranch in Wyoming, occasionally going to Palm Springs and our home in Los Angeles — and becoming a lawyer."

Source: Vogue Arabia



The ranch's listing says that Wyoming is "a top-tier, tax-friendly state for landownership and business."

USA Today recently ranked Wyoming as the most tax-friendly state for business, citing its lack of individual and corporate income tax and low property and sales taxes.



Cadillac has affirmed its commitment to BMW-beating performance with the new CT4 sedan (GM)

Thu, 09/12/2019 - 3:35pm

  • The new CT4 and CT4-V retain Cadillac's commitment to rear-wheel-drive on entry-level luxury sedans.
  • All-wheel-drive is also an option.
  • Cadillac will offer its Super Cruise hands-free highway driver-assist system in 2020 on the CT4.
  • Two engines will be available, both turbocharged: a 2.0-liter inline-four-cylinder option and and high-performance 2.7-liter four tuned to higher power output for the CT4-V variant.
  • Visit Business Insider's homepage for more stories.

For years, Cadillac has tried to challenge BMW at the Bavarians' own game: high-performance sports sedans. 

But the brand is moving away from that preoccupation, as it becomes the lead all-electric nameplate for General Motors' future and shifts its portfolio toward the luxury crossover SUVs that consumers are now demanding.

That doesn't mean Caddy has given up on spirited motoring, however.

Case in point: the just-revealed, all new CT4 sedan. 

The 2020 CT4 follows the rollout of the CT4-V, which requires a convoluted explanation: that car was a downgraded update to the excellent ATS-V, intended to preserve some performance cred without continuing a possible futile battle against Germany's go-fast sheet metal.

We now have the CT4, logical successor to the ATS. This isn't some wild alteration of all that was once "A" and is now "C," but the CT4 does realign the Caddy lineup, with the four doors starting out at CT4 level, then moving up to the CT5 and the flagship CT6.

"We developed CT4 to appeal to youthful buyers in the luxury market who may be new to the Cadillac brand," Andrew Smith, Cadillac design global design chief, said in a statement. "The vehicle was intended to draw attention, using a combination of great proportions, taught surfacing and Cadillac family details that hint at the athletic driving experience this vehicle offers."

The sedan will go on sale in four trims: Luxury, Premium Luxury, Sport, and V-Series.

For purists, the appeal starts with Caddy's preservation of a rear-wheel-drive architecture for the car; it would have been oh-so easy to shift to front-wheel-drive for a car that should price just north of $30,000 and that might well be oft-ordered in a all-wheel-drive configuration. (Then again, it's also a major benefit for Caddy to retain the mechanicals from the ATS).

A RWD CT4 is music to the ears of enthusiasts. "Cadillac is dedicated to building the most exhilarating sport-luxury sedans," chief engineer Rob Kotarak said in a statement. "Every element of the CT4 is designed to bring innovative technologies right to the driver, providing discerning driving dynamics with cutting edge precision."

Two engine options will propel the CT4 and the CT4-V variant. The CT4 gets a 2.0-liter, twin-scroll, turbocharged four-cylinder, making 237 horsepower with 258 pound-feet of torque piped through an eight-speed automatic. The top-of-the-line CT4 and CT4-V get a 2.7-liter "Dual-Volute Turbo" four-banger that cranks out 309 horsepower with  348 pound-feet of torque in "Premium Luxury" trim and 325 horsepower with 380 pound-feet of torque in the V model. A 10-speed auto manages the power for the bigger motors.

The CT4-V also gets a limited-slip rear differential.

Cadillac will also make its Super Cruise semi-self-driving system available on CT4 in 2020. Super Cruise has thus far been limited to CT6; it enables fully hands-free operation on GPS-mapped highways.

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A Wall Street strategist has doubled down on his warning that the 'biggest bubble in history' will burst. Here are the 12 stocks he says investors should buy to weather the storm.

Thu, 09/12/2019 - 3:24pm

  • The BTIG strategist Julian Emanuel is reiterating his call that the bond bull market has become a bubble on the verge of bursting, and he's predicting a decline in prices that will reshape leadership in the stock market.
  • He said he's identified underappreciated and attractive stocks in the energy and financial sectors that should climb as the trend continues. 
  • Emanuel said bond prices were dipping and yields were rising again as investors have let go of some of their concerns about a recession — and that's a key part of the bond bubble popping.
  • Click here for more BI Prime stories.

The threat of a market bubble bursting is alarming, but it also creates opportunities in other areas.

Julian Emanuel, the chief equity and derivatives strategist for BTIG, is on record saying the bond market has become not just overinflated but also potentially "the greatest bubble ever." That's driven prices to historic highs and bond yields to all-time lows.

It's hard to predict what will make a bubble burst, but Emanuel wrote that a turn in investors' mindset was required. And an important one may have arrived.

"Investors' 'obsession with recession' appears to have topped as the Fed's rates cuts support inflation expectations," he wrote in a recent note to clients.

That means a slide in prices and a rise in yields, Emanuel said, with widespread implications for stocks. That trend might already be playing out.

"We expect further broad market upside to be led by the narrowing of the current valuation divergence – rotation – between cyclicals (Financials and Energy) and defensives/bond proxies (Utilities, Consumer Staples, Software)," he wrote, saying that the first group should outperform and the second would likely underperform.

To find the stocks most likely to climb, Emanuel screened the already struggling financial and energy sectors. He looked for stocks that did worse than their respective sectors in the market's downturn from July 26 to September 4 and which have appealing valuations based on their estimated price to earnings and price to earnings growth multiples.

"This list ... could be expected to outperform if bond yields rise," he wrote.

Here are 12 stocks Emanuel says fit the bill:

SEE ALSO: The chief strategist at a $1 trillion investing giant says Trump is doomed to lose his trade war — and explains why that would be the best possible outcome for markets

12. Capital One Financial

Ticker: COF

Loss from July 26 to September 4: 12.4%

2019 estimated P/E: 8.12

Market Cap: $42.5 billion

Sector: Financials



11. Cimarex Energy

Ticker: XEC

Loss from July 26 to September 4: 12.5%

2019 estimated P/E: 10.38

Market Cap: $4.6 billion 

Sector: Energy

 



10. Principal Financial Group

Ticker: PFG

Loss from July 26 to September 4: 13.4%

2019 estimated P/E: 9.73

Market Cap: $15.5 billion

Sector: Financials



9. Discover Financial Services

Ticker: DFS

Loss from July 26 to September 4: 14.6%

2019 estimated P/E: 9.41

Market Cap: $26.7 billion

Sector: Financials



8. Occidental Petroleum

Ticker: OXY

Loss from July 26 to September 4: 15.5%

2019 estimated P/E: 16.77

Market Cap: $39.9 billion

Sector: Energy



7. Affiliated Managers Group

Ticker: AMG

Loss from July 26 to September 4: 15.6%

2019 estimated P/E: 6.54

Market Cap: $4.2 billion

Sector: Financials



6. Comerica

Ticker: CMA

Loss from July 26 to September 4: 17.2%

2019 estimated P/E: 8.37

Market Cap: $9.3 billion

Sector: Financials



5. SVB Financial Group

Ticker: SIVB

Loss from July 26 to September 4: 17.8%

2019 estimated P/E: 10.39

Market Cap: $10.8 billion

Sector: Financials



4. Invesco

Ticker: IVZ

Loss from July 26 to September 4: 20.4%

2019 estimated P/E: 7.15

Market Cap: $6.8 billion

Sector: Financials



3. Lincoln National

Ticker: LNC

Loss from July 26 to September 4: 20.9%

2019 estimated P/E: 6.43

Market Cap: $11.4 billion

Sector: Financials



2. Prudential Financial

Ticker: PRU

Loss from July 26 to September 4: 22.9%

2019 estimated P/E: 7.28

Market Cap: $34.3 billion

Sector: Financials



1. Unum Group

Ticker: UNM

Loss from July 26 to September 4: 23.2%

2019 estimated P/E: 5.38

Market Cap: $5.8 billion

Sector: Financials



THE PAYMENTS FORECAST BOOK 2019: 22 forecasts of the global payments industry’s most impactful trends — and what's driving them

Wed, 09/11/2019 - 11:02pm

As cash usage declines slowly worldwide, the digital payments ecosystem is swelling around the globe: Noncash transactions are poised to exceed 1 trillion for the first time in 2023, driven by increased card penetration, wider access to mobile phones, and more access to payments infrastructure.

In emerging markets, these changes will be driven by Asia, which remains at the helm of digital transformation in payments as customers in major markets like China, India, and Southeast Asia flock to wallets like Alipay and Paytm and super-apps like WeChat and Grab in lieu of cash and cards for their payments, both online and in-store.

Change looks different in mature markets like the US, where the overall expansion of the digital payments market will remain more tempered, but mobile's impact will surge as customers move from PCs to mobile and other emerging connected devices for their online shopping, and replace small-dollar cash P2P transactions with mobile apps like Venmo and Zelle. For providers looking to make inroads in the space, understanding the dynamics of these changes will be key to growth.

In the 2019 edition of the Payments Forecast Book, Business Insider Intelligence will forecast growth in the major sectors of the payments ecosystem worldwide, with a particular look at the US market.

The forecast book, presented as a slide deck, highlights change by region in areas like noncash transactions, e-commerce, card adoption, and terminal penetration, and examines key areas of change, including contactless transactions, fraud, and mobile payments. Within each category, it provides insight into what the market will look like in 2024 and identifies key factors that will accelerate and inhibit growth.

The companies mentioned in this report are: Affirm, Alibaba, Amazon, Clover, Discover, Google, Grab, iZettle, NACHA, Klarna, Mastercard, PayPal, Square, Starbucks, The Clearing House, Venmo, Visa, Verifone, Zelle,

Here are some key takeaways from the report:

  • Globally, noncash transactions will exceed 1 trillion in 2024, driven by growth in APAC, which will comprise 40% of transactions by 2024.
  • Card adoption will grow rapidly in markets like Latin America and the Middle East to 2024, but stagnate in sub-Saharan Africa, where customers largely transact through nonbank methods.
  • US retail spending will grow modestly, but e-commerce will nearly double its share of total retail sales by 2024 as customers do more everyday shopping online.
  • Card payments will tick up as US customers continue to abandon cash, but mobile will remain the brightest growth driver, coming to comprise 44% of the $1.9 trillion in e-commerce and 68% of the $760 billion in P2P payments in 2024.

In full, the report:

  • Identifies big-picture trends moving the needle in the payments ecosystem both globally and in the US.
  • Forecasts growth in key sectors, including noncash transactions, card and terminal penetration, fraud, e-commerce, and mobile payments, through 2024.
  • Discusses what the global payments market will look like in 2024, and how that differs from the present.
  • Highlights key growth engines and inhibitors that will drive change between now and 2024.

Interested in getting the full report? Here are two ways to access it:

  1. Purchase & download the full report from our research store. >>Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of the fast-moving world of digital payments.

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International money transfers hit $613 billion this year — here's what young, tech savvy users value most about them

Wed, 09/11/2019 - 9:03pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here. Current subscribers can read the report here.

Remittances, or cross-border peer-to-peer (P2P) money transfers, hit a record high of $613 billion globally in 2017, following a two-year decline.  And the remittance industry will continue to grow, driven largely by digital services.

Several factors will fuel digital growth globally, such as increased smartphone penetration, greater demand for digital transactions, and an overall need for faster cross-border transfers. And with the shift to digital comes an audience of younger, digital-savvy customers using remittances — a segment that companies are looking to target.

As a result, the global remittance industry is becoming increasingly competitive for firms to navigate, with incumbents like Western Union and MoneyGram competing for the same pool of customers as digital upstarts like WorldRemit and Remitly. And in order to win, companies across the board will need to prioritize the four areas consumers value most in remittances: cost, convenience, speed, and safety.  

In The Digital Remittances Report, Business Insider Intelligence will identify what young, digitally savvy users value in remittances. We will also detail the concrete steps that legacy and digital providers can take to effectively capture this opportunity and monetize digital offerings — the primary growth driver — to emerge at or maintain their presence at the forefront of the space. 

The companies mentioned in the report are: MoneyGram, Remitly, Ria, Western Union, WorldRemit, TransferWise, and Xoom, among others.

Here are some key takeaways from the report:

  • The global remittance industry recovered from a two-year decline in 2017 to reach a record $613 billion in transfer volume. That growth will continue and will be fueled by digital remittances, which Business Insider Intelligence expects to grow at a 23% CAGR from $225 billion in 2018 to $387 billion in 2023.
  • There’s a new segment of customers that both legacy and digital firms are competing to grab share of. Young, digital-savvy consumers are the customer segment that all firms are vying to reach, which is creating a highly competitive dynamic. The needs of those consumers will precipitate transformational change in the industry.
  • We’ve identified several tangible steps firms can take to improve in four key areas — cost, convenience, speed, and security — to not only attract but also maintain this customer segment to align with their preferences and ultimately win in the space.

 In full, the report:

  • Outlines the global remittance landscape and sizes the opportunity that the industry presents. 
  • Identifies the new audience for remittances and future drivers of the remittance space going forward. 
  • Discusses four key areas that providers can focus on — cost, convenience, speed, and security — to improve offerings and ultimately capture that shifting audience. 
To get this report, subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to: This report and more than 275 other expertly researched reports Access to all future reports and daily newsletters Forecasts of new and emerging technologies in your industry And more! Learn More

Or, purchase & download The Digital Remittances Report directly from our research store

SEE ALSO: These were the biggest developments in the global fintech ecosystem over the last 12 months

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Now WeWork wants to be a manufacturer. The coworking company is opening a 200,000-square-foot New Jersey plant to make its signature aluminum and glass walls.

Wed, 09/11/2019 - 6:02pm

  • WeWork is hiring at least 50 people in Edison, New Jersey, to work at a new 200,000-square-foot manufacturing facility, according to job postings.
  • The jobs appear aimed at creating a manufacturing operation from the ground up, including roles in technical operations, supply chain management, quality assurance, human resources, and finance. 
  • In a departure from its focus on technology, the company will make modular glass and aluminum systems.
  • WeWork has been preparing to go public, which turned into a rocky process as the company's lofty valuation and corporate governance comes under fire. 
  • For more WeWork stories, click here. 

WeWork has already expanded its business lines from managing trendy workspaces for entrepreneurs to overseeing co-living facilities, a school, gyms, and more.

Now, the company is gearing up to be a manufacturer of the actual glass and aluminum parts used in its signature interiors, with a 200,000-square-foot facility located 35 miles from its New York City headquarters.

The company is seeking to hire at least 50 people to work in roles ranging from furnace operator to manufacturing director in Edison, New Jersey, per recent job postings on LinkedIn. The new hires will work in a new facility with "state-of-the-art" equipment, per the job postings. The company's design aesthetic relies heavily on glass and aluminum to partition rooms.

Moving into manufacturing represents a big pivot from WeWork's positioning as a tech company that does real estate. The manufacturing plant build-out comes as WeWork parent The We Company prepares to go public, a rocky process that's seen questions about the company's leadership, conflicts of interest, and basic business model.

The company has been trying to pivot to partnerships with landlords over signing traditional long-term leases, and has also flagged helping other companies design office spaces as a potential way to help narrow wide losses. 

See more: WeWork lays out its path to profitability – and most of its options involve slowing its breakneck growth

WeWork's spokeswoman declined to comment, citing the company's quiet period ahead of its initial public offering.

The company's pre-IPO filing last month flagged its drive to reduce costs by "vertical integration" – doing more in house: 

"Over the past several years, we have been able to achieve efficiencies in our capital expenditures through a combination of greater economies of scale resulting from the increasing size of our global network, vertical integration of our design and construction process and increased use of technology."

A handful of major real estate developers have tried to better control their supply chain and cut costs through owning manufacturing plants. Related Companies, which is developing the New York neighborhood Hudson Yards, built a wall manufacturer in Linwood, Pennsylvania.

The practice is rare for flexible office providers like WeWork, which has taken a more asset-intensive approach to its business than its peers. Seeking to own buildings rather than lease them, the company started raising a private equity real estate fund in 2017, eventually wrapping the fund into an investment platform called ARK this spring. 

The CEO of Knotel, a flexible office provider that raised $400 million last month at a $1.3 billion valuation, said WeWork's move into manufacturing was unusual. Amol Sarva told Business Insider that "if you're in traditional real estate, it makes sense." A developer like Related, for example, can make its supply chain more efficient by owning a plant and overseeing production instead of buying materials. 

See more: Mutual funds like Fidelity's famed Contrafund have slashed valuations on their WeWork stakes

Sarva said he's focused on innovating in other parts of the design and construction business, which he said is ripe for a shakeup overall.

"Every part of the office business has been untouched by time," he said.

But instead of changing the manufacturing process like WeWork's trying to do, Sarva said he's focused on reducing the amount of waste generated by office build-outs. 

Join the conversation about this story »

NOW WATCH: Nxivm leader Keith Raniere has been convicted. Here's what happened inside his sex-slave ring that recruited actresses and two billionaire heiresses.

This is how insurance is changing for gig workers and freelancers

Wed, 09/11/2019 - 6:01pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

The gig economy is becoming a core element of the labor market, pushed to the fore by platforms like Uber and Airbnb. Gig economy workers are freelancers, such as journalists who don’t work for one publication directly, freelance developers, drivers on platforms like Uber and Grab, and consumers who rent out their apartments via Airbnb or other home-sharing sites.

Gig economy workers are not employed by these platforms, and therefore typically don't receive conventional employee perks, such as insurance or retirement options. This has created a lucrative opportunity to provide tailored insurance policies for the gig economy. 

A number of insurtech startups — including UK-based Dinghy, which focuses on liability insurance, and US-based Slice, which provides on-demand insurance for a range of areas — have moved to capitalize on this new segment of the labor market. These companies have been busy finding new ways to personalize insurance products by incorporating emerging technologies, including AI and chatbots, to target the gig economy.

In this report, Business Insider Intelligence examines how insurtechs have begun addressing the gig economy, the kinds of policies they are offering, and how incumbents can tap the market themselves. We have opted to focus on three areas of insurance particularly relevant to the gig economy: vehicle insurance, home insurance, and equipment and liability insurance.

While every consumer needs health insurance, there are already a number of insurtechs and incumbent insurers that offer policies for individuals. However, when it comes to insuring work equipment or other utilities for freelancers, it's much more difficult to find suitable coverage. As such, this is the gap in the market where we see the most opportunity to deploy new products.

The companies mentioned in this report are: Airbnb, Deliveroo, Dinghy, Grab, Progressive, Slice, Uber, Urban Jungle, and Zego.

Here are some of the key takeaways from the report:

  • By 2027, the majority of the US workforce will work as freelancers, per Upwork and Freelancer Union, though not all of these workers will take part in the gig economy full time.
  • By personalizing policies for gig economy workers, insurtechs have been able to tap this opportunity early. 
  • A number of other insurtechs, including Slice and UK-based Zego, offer temporary vehicle insurance, which users can switch on and off, depending on when they are working.
  • Slice has also developed a new insurance model that combines traditional home insurance with business coverage for temporary use.
  • Other freelancers like photojournalists need insurance for their camera, for example, a coverage area that Dinghy has tackled.
  • Incumbent insurers have a huge opportunity to leverage their reach and well-known brands to pull in the gig economy and secure a share of this growing segment — and partnering with startups might be the best approach.

 In full, the report:

  • Details what the gig economy landscape looks like in different markets.
  • Explains how different insurtechs are tackling the gig economy with new personalized policies.
  • Highlights possible pain points for incumbents when trying to enter this market.
  • Discusses how incumbents can get a piece of the pie by partnering with startups.
Get the insurtech and the gig economy

 

SEE ALSO: These were the biggest developments in the global fintech ecosystem over the last 12 months

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Take a look inside the 100-square-mile Texas ranch that T. Boone Pickens, the oil magnate who just died at 91, listed for $250 million in 2017

Wed, 09/11/2019 - 5:44pm

T. Boone Pickens, a famous oil prospector, hedge fund founder, and philanthropist, passed away on September 11 at age 91.

Pickens had a long, successful career in business. He founded the oil and gas company Mesa Petroleum and the hedge fund BP Capital Management.

Read more: T. Boone Pickens, the 'Oracle of Oil,' Republican donor, and billionaire philanthropist, dies at 91

In 2017, he made headlines for listing his 100-square-mile ranch in the Texas Panhandle, northeast of Amarillo, for a whopping $250 million. 

Keep reading for a look inside.

SEE ALSO: A private island 60 miles outside of Manhattan just hit the market for less than $1 million, and it comes with a 4-bedroom home — take a look inside the property.

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When Pickens first bought about 2,900 acres of land here in 1971, the only structure was a corrugated metal house that he used to stay warm during days of hunting quail.

Source: Hall & Hall, Mesa Vista Ranch



Since then, the ranch has increased by 22 times its original size and now covers some 64,800 acres.

Source: Hall & Hall



Additionally, there are now a number of different structures: the 12,000-square-foot lake house; the 33,000-square-foot lodge; the 6,000-square-foot family house; the 1,700-square-foot gatehouse; the 1,600-square-foot pub; and the 11,000-square-foot kennel.

Source: Hall & Hall



Pickens' childhood home even sits on the property. It was moved there from Oklahoma in 2008.

Source: Wall Street Journal



There are roughly 12 miles of water in the form of man-made waterfalls, creeks, and lakes.

Source: Hall & Hall



In 2014, Pickens married his fifth wife — the couple later divorced — in a chapel on the premises.

Source: The Wall Street Journal



The front door of the lake house used to be situated on Bing Crosby's house. It's a metal door with stained glass.

Source: Hall & Hall



The Lake House has 3,800 square feet of patios and 11,500 square feet of living space.

Source: Hall & Hall



The ranch has its own FAA-approved airport. The hangar has a two-bedroom, two-bathroom apartment upstairs, which is meant to be for pilots.

Source: Hall & Hall



There is even a home theater that seats 30 people.

Source: Hall & Hall



All of the furnishings, farming equipment, pick-up trucks, and hunting gear are included in the purchase price.

Source: Hall & Hall



However, Pickens' personal art collection, according to the listing website, as well as other personal effects, are not included in the purchase.

Pickens reportedly owned pieces from artists N.C. Wyeth and Charles M. Russell, as well as an oil painting of his late dog, Papillon, that hangs in the master bedroom of the Lake House. 



The buyer will also get 40 bird dogs. Pickens was a seasoned quail hunter, but according to the Wall Street Journal, he planned to leave the dogs behind because he didn't have the space for them.

Source: The Wall Street Journal



The dogs can be housed in the 11,000-square-foot kennel on the property, which boasts a veterinary lab, an office, a meat-processing center, and an exercise area.

Source: The Wall Street Journal



There's also a single-story structure where ammunition, hunting gear, rifles, and shotguns are stored.

Source: The Wall Street Journal



Mesa Vista Ranch is one of the most expensive properties available on the US market.

Source: CNBC



Amex Platinum vs Amex Gold: Which rewards credit card is better for you?

Wed, 09/11/2019 - 5:38pm

  • Both the Platinum Card® from American Express and the American Express® Gold Card offer valuable rewards on purchases, along with large welcome bonuses and useful benefits.
  • Both cards also have a few annual statement credits that can offset their annual fees.
  • Given the similarities, we've laid out the differences to help you pick the best card for you.

American Express refreshed and relaunched its Gold Card in late 2018, giving it new benefits and rewards — many of which are dining-focused — in an effort to make it a stronger competitor in an increasingly crowded credit card market.

That relaunch followed a refresh of the Amex Platinum Card, which also brought improvements and new benefits like 5x point earnings on flights booked directly with airlines or with Amex.

What's the difference between the Amex Gold and the Amex Platinum?

Both cards have tangible benefits like annual statement credits that make up for the annual fee, but there are some pretty significant differences between them. The Amex Platinum is the more premium of the two cards — it has a $550 annual fee compared to a $250 annual fee for the Amex Gold. The Platinum Card offers more luxury travel benefits, like airport lounge access and monthly statement credits for Uber, while the Amex Gold's perks and bonus categories are more geared toward dining.

Read on to learn more about the Amex Gold and Amex Platinum and to see which is better for you.

Click here to learn more about the American Express Platinum Card from Business Insider's partner The Points Guy. Click here to learn more about the American Express Gold Card from Business Insider's partner The Points Guy.

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Amex Platinum vs Amex Gold: Bonus categories

The Platinum Card

The Amex Platinum Card earns a massive 5 points per dollar spent on airfare, as long as you book directly with the airline or through Amex Travel, and on prepaid hotel stays booked through Amex Travel. It earns 1 point per dollar on everything else.

Travel website (and Business Insider e-commerce partner) The Points Guy subjectively values Amex Membership Rewards points at 2¢ each, so that means a whopping 10% of value back on the bonus categories.

While other credit cards offer a wider array of bonus categories, 5x points is a fantastic earning rate, and if you book your own travel frequently, the points will add up quickly.

The Gold Card

The Amex Gold Card offers 4 points per dollar spent at restaurants worldwide, 4x points back at US supermarkets (on up to $25,000 per year — 1 point per dollar for anything beyond that), and 3 points per dollar on flights booked directly with the airline or with Amex travel. It earns 1x point on everything else.

The Amex Gold Card's restaurant category is broad — I've gotten the category bonus at restaurants, bars, pubs, and cafes. The supermarket category excludes big-box stores where you might buy groceries, like Target or Walmart, but includes most dedicated US supermarkets.

Using The Points Guy's valuations, you get a huge 8% of value back on those two top bonus categories from the Gold Card. This makes it one of the best available cards for dining



Both cards have annual fees, but thanks to a few statement credit benefits, the effective fees are lower than you might think.

The Platinum Card

The Platinum Card has one of the highest annual fees you'll find in a mainstream charge or credit card — $550. However, the various annual statement credits the card offers bring the effective fee down to just $50.

The first is up to a $200 airline fee credit each calendar year. Every January, you pick one airline for that credit to apply toward. While the credit doesn't cover tickets, it covers incidental fees like checked bags, seat assignments on basic economy tickets, change fees, and more. 

Second, you can get up to $200 in Uber credits each cardmember year, which is broken down into monthly chunks. Each month, cardholders receive $15 of credits to use on Uber rides or for Uber Eats. In December, that's boosted to $35.

Finally, you can get up to $100 in shopping credits each year at Saks stores, broken into two chunks: You'll get up to $50 during the first six months of the year, and another $50 during the second.

Since the airline fee credit is given each calendar year, you can actually collect it twice if you open your card mid-year and maximize the credit before and after January of that first cardmember year.

That would mean you're not just making up for the annual fee, you're actually getting more value than the fee in the first place. That's without even considering the other benefits and rewards.

The Gold Card

The Amex Gold Card's $250 annual fee puts it squarely in the mid-tier category, although one could make an argument that it's really a premium card with a lower-than-premium fee.

Thanks to two annual statement credits, the effective fee is just $30 — as long as you maximize them.

The first is up to $120 each year in dining credits, broken into monthly $10 portions. These credits only apply to a few participating chain restaurants — specifically Cheesecake Factory, Ruth's Chris Steak House, and some Shake Shack locations — but they also apply to popular food ordering services GrubHub and Seamless. The credits apply automatically to any qualifying purchase.

The Amex Gold also offers up to $100 in airline fee credits each calendar year. This works just like the Platinum Card's credit, meaning it's possible to earn it more than once each cardmember year.



Both cards have a new member bonus, although the Platinum Card's is higher.

Since both cards are part of the Amex Membership Rewards program, it's easy to compare the welcome bonuses directly.

Platinum Card

The Platinum Card has a welcome offer of 60,000 Amex Membership Rewards points when you spend $5,000 on purchases within the first three months. Using The Points Guy's subjective valuations, that's worth about $1,200.

The Gold Card

The Gold Card's welcome bonus is 35,000 Membership Rewards points after you spend $2,000 in the first three months. That's worth about $700, based on The Points Guy's valuations.

Click here to learn more about, or apply for, the American Express Platinum Card from Business Insider's partner The Points Guy. Click here to learn more about, or apply for, the American Express Gold Card from Business Insider's partner The Points Guy.



Both cards earn Membership Rewards points, which you can pool between your Amex cards.

Amex offers a few ways to use Membership Rewards points.

However, redeeming for anything aside from travel offers a poor value, usually 0.5-0.8¢ each, and is generally a poor use of points.

You can get a slightly better value by booking flights through Amex Travel, either online or by phone. Points are worth 1¢ each toward flights, but if you book a hotel or anything else, you'll only get 0.7¢ per point.

Another option is to use points to bid for upgrades on a flight. You'll only get 1¢ per point, but it can be a decent redemption if you want to try for an upgrade but don't want to pay cash.

The best use and value — potentially — is to transfer points to airline frequent flyer partners and book flights that way. You might be able to get a dramatically higher value for points this way.

That's because booking frequent flyer "award tickets" is different than buying reservations outright — you can read more about how it works here. In most cases, the cash price and the miles price of a ticket aren't linked, so it's possible to get exponentially increased value from your points by transferring them and booking an award ticket instead.

That means potentially being able to fly long-haul in first or business class with points, among other things.

For example, my wife and I recently flew first class to Japan and back by transferring credit card points to Virgin Atlantic, then booking flights on Virgin's partner airline All Nippon Airways. You can read about exactly how we booked the flights here.

The only catch is that you may need to search for saver availability — which are lower-priced award tickets. This can be tricky, but there are a ton of helpful guides online. Once you have a flight in mind, if you're having trouble figuring out how best to use your points, just do a Google search for that specific trip.

Amex's partners include: Aer Lingus, AeroMexico, Air Canada, Air France/KLM, Alitalia, ANA, Cathay Pacific, Avianca, British Airways, Delta, El Al, Emirates, Etihad, Iberia, Hawaiian Airlines, JetBlue, Singapore Airlines, and Virgin Atlantic, as well as Choice Hotels, Hilton, and Marriott.

Click here to learn more about, or apply for, the American Express Platinum Card from Business Insider's partner The Points Guy. Click here to learn more about, or apply for, the American Express Gold Card from Business Insider's partner The Points Guy.



The cards come with a few other benefits and perks, too, although the Platinum Card's are more substantial

The Platinum Card

Added benefits is where the Platinum Card really shines.

One of the flagship perks is access to more than 1,200 airport lounges around the world.

The Platinum Card's lounge access is more extensive than anything offered by any other card. When you have the card, you can use Delta Sky Clubs whenever you fly the airline, Amex's own proprietary Centurion Lounges, and any airport lounge that participates in the Priority Pass network. You can also use any of 11 international Amex-branded lounges, and a handful of other random lounges, including ones that fall under the Plaza Premium, Air Space, and Escapes brands — these number more than 50.

The Gold Card

While the Gold Card doesn't have nearly as many flashy perks as the Platinum Card, it still has a few benefits worth keeping in mind.

  • Secondary rental car insurance
  • Roadside assistance
  • Various purchase and shopping protections
  • Baggage loss and damage coverage
  • Complimentary ShopRunner membership (it works like Amazon Prime in a lot of ways, at other retailers).



Bottom line

No matter which card you choose, both the American Express Platinum Card and the American Express Gold Card offer valuable rewards. Plus, both cards have benefits and rewards that significantly offset their annual fees, as long as you make the most of them.

However, if you're interested in a larger welcome bonus, or benefits on top of the rewards, the Platinum Card might be the best choice.

Click here to learn more about, or apply for, the American Express Platinum Card from Business Insider's partner The Points Guy. Click here to learn more about, or apply for, the American Express Gold Card from Business Insider's partner The Points Guy.





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