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Here's the pitch deck a Virginia startup used to raise $6 million after seven years of bootstrapping its business (AMZN)

Fri, 03/22/2019 - 6:17pm

  • Amify helps product makers sell their goods on Amazon.
  • The startups works with companies including guitar-maker Fender guitars and running-shoe manufacturer Brooks to list their goods on the giant ecommerce site, battle vendors of counterfeit products, and handle returns.
  • Amify just raised its first outside funding — a $5.8 million Series A round — that it plans to use to build out its management and technology teams.
  • The pitch deck it used to raise its new funds is below.

Many people have been daunted by Amazon's large and growing share of the e-commerce market.

But Ethan McAfee saw an opportunity.

McAfee foresaw that Amazon was becoming like a mall on the internet, the go-to destination for online shopping. Companies that wanted to sell their goods online were going to need to offer them through Amazon, and many were going to need help doing that.

"If you're a brand, you need to have an Amazon [presence]," McAfee told Business Insider on Thursday, "because that's where people are buying your stuff."

The problem is that many product makers don't have any expertise in selling directly to consumers. To help companies out, McAfee in 2011 founded Amify. The startup helps create web stores and product listings on Amazon for companies with mid-tier brands.

Read this: Amazon generated $30 billion in cash last year, and it could be just the ammunition the company needs to start a price war

Amify says it can sell brands' goods better and cheaper

In exchange for a commission on their sales through the site, Amify helps customers market their goods on Amazon and battle counterfeit copycats of their products. It also can handle their supply-chain and inventory management for their online sales and deal with returned goods.

Amify's pitch to potential customers is: "You can outsource your Amazon presence to someone who can do it better, faster, cheaper," McAfee said.

The Alexandria, Virginia-based company already has partnerships with some 300 brands. Among them are Fender guitars and Brooks running shoes.

But McAfee thinks Amify has only just begun to tap the potential of the market. After bootstrapping the company with his own funds for its first seven years, he recently went out seeking venture funding. Amify announced Thursday that it just closed its first outside financing round — $5.8 million in a Series A round led by Mercury Fund.

The company, which has some 60 employees, plans to use the new money to beef up its management and its technology and product development teams, McAfee said. Amify is hoping to add some data analysis tools that will allow its clients to better understand who their customers are on Amazon.

"A lot of brands don't know who's buying their product," he said. "We can provide that information back to our partners. We think there's a data play."

Here's the pitch deck Amify used to raise its Series A funding:

SEE ALSO: Here's the pitch deck AI startup Skymind just used to scoop up $11.5 million in funding

See the rest of the story at Business Insider

The world's largest underwater restaurant just opened in Norway, and it has a 36-foot window that looks right out into the seabed so guests can watch marine life swim by as they eat

Fri, 03/22/2019 - 4:46pm

  • Norway just opened Europe's first underwater restaurant.
  • Fittingly called "Under," the restaurant — the largest of its type in the world — has three-foot-thick walls and is designed to withstand harsh weather and rough seas.
  • The 110-foot-long structure resembles a giant concrete tube that's half-submerged in the water.
  • The restaurant seats 35 to 40 guests each night, who can watch sea life go by through a 36 x 13-foot panoramic window as they eat.

Europe's first underwater restaurant — and the world's largest — just opened in Norway.

Designed by Snøhetta, "Under" sits half-submerged into the sea and has three-foot thick walls designed to withstand the area's rugged seas.

Guests at Under can gaze at marine life through a 36- x 13-foot panoramic window in the dining room, which seats between 35 and 40 guests each night. Muted lighting was installed on the seabed so that guests can see the marine life in any weather conditions.

According to Arne Marthinsen, the project manager for SubMar Group, which is responsible for the project's marine operations, Under is unique among other underwater structures.

"What makes it so complicated and unique, is the fact that it isn't going to be a simple, concrete storage tank, but rather an amazing, unique experience for people due to the location, the architecture, the interior, the underwater view and of course the delicious cuisine," Marthinsen said in a news release.

The cuisine is, of course, seafood. Danish chef Nicolai Ellitsgaard Pedersen will create locally sourced dishes that include cod, lobster, mussels, and truffle kelp, which is a local type of seaweed that apparently tastes like truffles.

Here's a look inside Under, the world's largest underwater restaurant.

SEE ALSO: This futuristic hotel is going to be built at the base of a glacier in remote, northern Norway — and it looks like it's straight out of a sci-fi movie

DON'T MISS: This cruise ship is full of apartments that were designed to look like luxury condos in NYC and London — and wealthy people are dishing out up to $36 million for them

The world's largest — and Europe's first — underwater restaurant has opened in Norway. It's aptly called "Under."

Source: Visit Norway

The restaurant is located at the southernmost tip of Norway, in the coastal village of Båly, in the Lindesnes region.

Source: Google Maps

The 110-foot long structure resembles a concrete tube that sits half-in and half-out of the sea. It rests on the seabed about 16.5 feet below the surface.

Source: Under

See the rest of the story at Business Insider

Pinterest just officially filed for an IPO

Fri, 03/22/2019 - 4:38pm

  • Pinterest, the website for "pinning" images and shopping, has publicly filed to go public in an IPO that could take place as soon as April.
  • The company will list on the New York Stock Exchange under the ticker symbol "PINS," according to its S-1.
  • Pinterest generated $755.9 million in revenue in 2018 but saw a net loss of $63 million.

Pinterest, the website for "pinning" images and shopping, filed a public S-1 on Friday in preparation for an IPO that could take place as soon as April.

The company will list on the New York Stock Exchange under the ticker symbol "PINS," according to its S-1. Goldman Sachs, JPMorgan and Allen & Company will lead the IPO.

Though frequently compared to the cohort of social media sites including Facebook, Twitter and Instagram, Pinterest characterized itself in the S-1 as a place to "discover ideas" and focused on its identity as a place for "search", "dreaming" and "productivity."

The company generated $755.9 million in revenue for 2018, up 60% from $472.9 million in 2017. But the company is still losing money. It had a net loss of $63 million in 2018, compared to a loss of $130 million in 2017.

The company also revealed statistics about its userbase — called "pinners" — which it said includes "eight out of 10 moms." The company said it has 250 million monthly active users, two-thirds of whom are women. In the US, that includes 43% of all internet users, the company said citing Comscore data.

Bessemer Venture Partners, FirstMark, Andreessen Horowitz, Fidelity and Valiant all own more than 5% of Pinterest, though the company didn't disclose specifics of ownership in the S-1.

The company will list with a dual-class structure in which Class A shares have one vote per share, while Class B shares have 20 votes per share, a voting structure which tends to benefit founders and early shareholders.

SEE ALSO: Hot video meeting startup Zoom filed to go public, and it's profitable

Join the conversation about this story »

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A glossy new startup in Hudson Yards that bills itself an 'urban sanctuary' is betting people will pay $6 to access showers, phone booths, and a nap pod for 30 minutes. Here's what it looks like inside.

Fri, 03/22/2019 - 4:33pm

  • 3DEN at Hudson Yards offers work spaces, Casper nap pods, showers, a meditation room, soundproof phone booths, and coffee and snacks in a spacious, plant-filled lounge overlooking the Vessel
  • It costs $6 for 30 minutes.
  • Everything can be done on 3DEN's app, from seeing how busy the space is to reserving a nap pod and paying for food and drinks. 
  • "[3DEN] is an aggregation of all the supposed good things of a coffee shop or a hotel lobby or a gym ... We're just aggregating them into a much better space," CEO and founder Ben Silver told me.

If you find yourself at Hudson Yards, New York City's new $25 billion neighborhood, and you need to get some work done, make a private phone call, sit and meditate, take a nap, or even take a shower, there's one place where you can, in fact, do all of those things. 

Welcome to 3DEN (pronounced "Eden"), Hudson Yards' new multipurpose lounge space on the fourth floor of the Shops & Restaurants shopping complex.

Read more: I got an inside look at the brand new, 7-story 'vertical shopping experience' in Hudson Yards, which the developers insist is not a mall — here's what I saw on opening day

The space includes workspaces, soundproof phone booths, nap pods, meditation pillows, and private showers, all included in the price. Hanging out at 3DEN will cost you $6 for 30 minutes.

"[3DEN] is an aggregation of all the supposed good things of a coffee shop or a hotel lobby or a gym, which are actually performed in a very dysfunctional manner," CEO and founder Ben Silver told me. "We're just aggregating them into a much better space. People associate high design with high price, and we're trying to be the total opposite of that."

Most of 3DEN's services are included in the price, but you can buy additional products, snacks, and beverages through 3DEN's smartphone app. 3DEN is partnered with a number of retailers to offer products from brands including LOLI Beauty, Dirty Lemon, Seed, Goby, and Harry's.

Silver plans to eventually open up 40 3DEN locations in New York City. Four new locations are in the works for 2019, which will all be near major transit hubs, he says. The Hudson Yards space is open every day from 7 a.m. to 10 p.m.

I took a tour of 3DEN a few days after it opened. It struck me as a mishmash of a few different places I've visited: a members-only coworking space and social club, a napping lounge, and an upscale wellness center. 3DEN offers elements of each of those places in one unified, Instagrammable space.

Here's what it looks like.

SEE ALSO: I climbed Vessel, the $200 million, 2,500-step sculpture in Hudson Yards — and the view from the inside blew me away

DON'T MISS: I got an inside look at the brand new, 7-story 'vertical shopping experience' in Hudson Yards, which the developers insist is not a mall — here's what I saw on opening day

3DEN, pronounced "Eden," is a multipurpose space on the fourth floor of the Shops & Restaurants shopping center at Hudson Yards, New York City's new $25 billion neighborhood. I went to check it out a few days after it opened.

In a telling nod to its many — and varied — offering's, 3DEN doesn't seem to have one word to encompass what it is. On its website and in press materials, it bills itself as an "urban sanctuary," an "urban respite," and a "third place."

My first thought upon stepping inside the space was that the abundance of plants and light do give it a "Garden of Eden" vibe. The plant-filled lounge includes work spaces, Casper nap pods, private showers, a meditation room, soundproof photo booths, and coffee and snacks.

3DEN overlooks Hudson Yards' public plaza and the Vessel, the 150-foot tall climbable sculpture made of 154 interconnected staircases.

See the rest of the story at Business Insider

Billion-dollar startup Zoom filed to go public — and shares of a totally unrelated company also called called Zoom shot up 1,100% (ZOOM)

Fri, 03/22/2019 - 4:30pm

  • Zoom Video Communications, a $1 billion startup, filed for its much-anticipated IPO on Friday.
  • Zoom Technologies, a completely unrelated company, saw its shares spike 1,100% in the aftermath.
  • That company trades under the ticker symbol "Zoom," which likely led to some confusion by trigger-happy investors.
  • Zoom Technologies appears to be a mostly-defunct telecommunications company that hasn't reported earnings since 2011, and trades as an over-the-counter stock. 

On Friday, hot $1 billion startup Zoom Video Communications filed for its long-awaited IPO

And in the immediate aftermath, Zoom Technologies, a $150,000 company which has nothing to do with the other Zoom, saw its stock spike up as high as 1,100%. 

Zoom Technologies appears to be a mostly-defunct telecommunications company, and hasn't reported revenue since 2011. It trades as an over-the-counter stock, and was trading at $0.005 a share at market close on Thursday, giving it a market cap of about $15,000.

But it uses the ticker symbol "Zoom," and has the added benefit of a Google Finance description that bills it as a "communications equipment company." That may have fooled trigger-happy investors who wanted to get in on Zoom, the startup — at the closing bell on Friday, this other Zoom was trading at $0.60, giving it a market cap of about $180,000.

Zoom Technologies went public in 1990 when it was valued at $92.36 per share, according to Google Finance data.  The company once sold wireless communication products in the US, but it officially filed to terminate its listing with the Securities and Exchange Commission in 2015.

The other Zoom, the one more formally as Zoom Video Communications, said in its S-1 that it intends to list on the Nasdaq with the ticker symbol "ZM." This Zoom could start trading as soon as April.

SEE ALSO: Hot video meeting startup Zoom filed to go public, and it's profitable

Join the conversation about this story »

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11 stunning island and beachfront homes for sale across the US for under $1 million

Fri, 03/22/2019 - 4:21pm

Why take a vacation to an island when you can live on one? Turns out, you don't always need to spend a fortune to live in paradise.

We teamed up with Trulia to find some of the most affordable island and beachfront homes in the US, and there were plenty for sale under $1 million. 

There's a contemporary home surrounded by palm trees in Honolulu, Hawaii; a Southern-style country house complete with picket fence and front porch in Savannah, Georgia; and a modern condo right across the bay of San Diego.

There's even a charming cottage in the Hamptons, home to the most expensive zip code in New York and multi-million dollar real estate. The median asking price for a home in the Hamptons at the end of 2018 was $2.19 million, according to Out East, but the gem we found is listed for only a little over a quarter of a million dollars.

From Florida to Maine, scroll through below for a look at some island homes across the US that will make you feel like you're on a never-ending vacation.

SEE ALSO: The most expensive homes sold in the Hamptons in 2018

DON'T MISS: 9 of the coolest tiny homes around the world to rent on your next vacation

Full of southern charm, this $975,000 Wilmington Island house overlooks the Wilmington River and comes with its own private dock and sun deck.

City: Savannah, Georgia

Size: 3,429 square feet

Bedrooms/Bathrooms: 4 beds/3 baths

Situated on a 4,125-square-foot lot, this $967,000 Hawaiian home is in the Hawaii Kai neighborhood of O'ahu.

City: Honolulu, Hawaii

Size: 1,576 square feet

Bedrooms/Bathrooms: 3 beds/3 baths

Located on Peaks Island, this $875,000 home sits atop a hill looking out to Casco Bay and the Portland skyline.

City: Portland, Maine

Size: 1,773 square feet

Bedrooms/Bathrooms: 4 beds/2 baths

See the rest of the story at Business Insider

Dow plunges 460 points as yield-curve inversion sparks growth concerns

Fri, 03/22/2019 - 4:11pm

  • US equities were under pressure on Friday, with the major averages closing down at least 1.8%.
  • The sell-off could be attributed to a portion of the yield curve inverting, the economist Ed Yardeni said.
  • Crude oil plunged 2%, falling below $59 a barrel.
  • Watch the markets trade in real time at Markets Insider.

Assets of all stripes took a beating on Friday as a segment of the so-called yield curve saw a rare inversion, renewing investors' fears of slowing growth.

The S&P 500 and Dow Jones Industrial Average fell nearly 2%, while the Nasdaq composite tumbled 2.5%. The small-cap Russell 2000, meanwhile, plunged nearly 3.5%. 

The sell-off came as a portion of the yield curve had inverted, Ed Yardeni, an economist and the president of Yardeni Research, told Markets Insider.

The closely monitored spread between the three-month Treasury bill and the 10-year note inverted Friday for the first time in 12 years, sparking growth concerns and pushing the Dow down as many as 451 points. An inversion takes place when short-dated Treasury yields cross above their long-dated counterparts, which is classically interpreted as a recession indicator.

Still, the move comes just one day after the S&P 500 rose to its highest level since October and as the Dow trades within 5% of its all-time high.

Strategists said particularly weak European economic data exacerbated the sell-off.

Jeff Saut, the chief investment strategist at Raymond James, told Markets Insider that European weakness was behind Friday's drop. The eurozone's purchasing manager's index fell below 50, indicating the sector was contracting.

"German data was particularly bad and the weakness spurred selling across some emerging market currencies," Sam Rines, the chief economist at Avalon Advisors, said. "That spilled over to the U.S. with a weaker than expected Markit PMI."

Crude oil fell nearly 3%, sliding below $59 a barrel.

Nike was the worst-performing component of the Dow on Friday after the company reported quarterly sales that fell short of analysts' expectations. The stock closed down by nearly 7%, losing $5.82.

"It totally makes sense in my mind that people are worried about both the U.S. and global economy," Matt Maley, an equity strategist at Miller Tabak, said. "However, we also have to remember that the S&P has rallied over 20% in just 3 months!"

He added that a pullback "should be considered normal and even healthy."

Read more markets coverage from Markets Insider and Business Insider:

Join the conversation about this story »

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Hot video meeting startup Zoom filed to go public, and it's profitable

Fri, 03/22/2019 - 3:47pm

  • Zoom, the $1 billion video conferencing startup, publicly filed for an IPO on Friday.
  • The company didn't price its upcoming IPO, but indicated in the filing that it will list on the Nasdaq under the ticker symbol "ZM." 
  • The company is profitable, and grew revenue 118% in fiscal 2019.
  • Zoom was last privately valued at $1 billion or more.

Zoom, the $1 billion video conferencing startup that competes with Cisco WebEx, publicly filed its S-1 on Friday.  The news confirms Business Insider's earlier reporting that the company aims to go public in April

This makes Zoom the latest in a long list of IPO hopefuls expected to closely follow ride-hailing startup Lyft's big market debut, which is anticipated at the end of next week. Pinterest also has its eye on an April IPO and could list Friday as well, the Wall Street Journal reported Thursday.

Zoom didn't price its upcoming IPO in its S-1, but it indicated in the filing that it will list on the Nasdaq under the ticker symbol "ZM."

Unlike many of the other 2019 IPO candidates, Zoom is profitable. The company saw $7.5 million in profits in 2019, after losing $3.8 million in 2018.

It's also growing. The company brought in $330.5 million in revenue in fiscal 2019, up 118% from $151 million in fiscal 2018.

The more obvious ticker symbol, "ZOOM," is already taken by an unrelated company called Zoom Technologies, which opened at just $0.04 on Friday. That other Zoom's shares shot up 900% on the markets following news of this Zoom's IPO filing.

Zoom was founded in 2011 by CEO Eric S. Yuan, who was previously vice president of engineering at the video-conferencing company WebEx. Yuan joined Cisco in 2007 when it bought WebEx for $3.2 billion.

Zoom, which sells subscriptions for enterprise-grade video-conference services, is used by companies including Uber and Box.

Like many other IPO candidates in years past, Zoom will go public with a dual-class structure which allots Class A holders one vote per share, compared to 10 votes per share for Class B share holders. This will particularly benefit Yuan, who owns 22% of the company.

Among Zoom's biggest outside shareholders are Emergence Capital Partners, which owns 12.5% of the company, and Sequoia Capital, which owns 11.4%, Digital Mobile Venture, which owns 9.8%, and Bucantini Enterprises Limited, which owns 6.1%.

SEE ALSO: $1 billion Sequoia-backed data startup Health Catalyst has picked lead banks for its IPO

Join the conversation about this story »

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No, it’s not money — this is the one thing small businesses need to succeed, according to survey

Fri, 03/22/2019 - 3:40pm

  • Kabbage recently polled 600 thriving US small business owners to better understand their cash flow issues and found that a third of them started with less than $5,000.
  • In this op-ed, Kabbage CEO Rob Frohwein writes that traits like self-confidence, grit, and determination are what drives the most success for small businesses.

As any entrepreneur knows, it’s easy for doubts to creep in when starting a business. It’s no surprise that having enough capital tops the list of concerns, but there’s optimism to share for those starting their business journey when it comes to limited funding. Kabbage recently polled 600 thriving US small business owners to better understand their cash flow issues and discovered that the old adage, “it takes money to make money” is not always an initial obstacle in the early days of building a business.

Fortune favors the bold

The Kabbage survey found the majority of small businesses built long-lasting companies even when facing initial cash flow deficits and short run rates:

  • Of the respondents surveyed, 58 percent started with less than $25,000 and one-third started with less than $5,000.  
  • 65 percent of entrepreneurs admit they were not fully confident they had enough money to start their business.
  • 93 percent calculated a run rate of shorter than 18 months, of which 25 percent calculated a run rate of less than six months, and 36 percent didn’t calculate this at all.

Yet all companies in the survey have been successfully in business for an average of nearly 11 years.

Self-confidence drives success

Self-confidence drives the most success for small businesses. Despite the financial uncertainties, entrepreneurs have the grit, self-determination and confidence to jump start a business in an unfamiliar industry as 41 percent started a business unrelated to their previous profession. Yet, 82 percent didn’t doubt they had the right experience to start and run the new company. And like many entrepreneurs pursuing their passion — they made the crazy, risky, brilliant and bold decision to begin.

Admittedly, small business owners indicated they had the least amount of experience in financing and bookkeeping (35%), legal and compliance (29%) and marketing and advertising (28%) when starting their business.

Tony Hernandez, a Kabbage customer and owner of Cienfuegos Cuban Cafe in Simi Valley, Calif. was formerly a media executive in Los Angeles before taking the leap into entrepreneurship. He admits, “cash flow is king” when you're starting a business, especially a restaurant. “It’s critical to have enough capital in your account in case something comes up or slows down.”

Although he was confident in the business idea — his sandwiches had gained a following at local farmers' markets and street festivals — Tony encountered unexpected expenses before his grand opening of his brick-and-mortar location. A state health inspection required the purchase of an industrial floor sink and a new restaurant code required him to install a specific tile for the counters. The unplanned expenses totaled nearly $10,000 and caused a rippling effect in his business.

Tony reflects, “The biggest impact wasn’t realized until later because it delayed our final inspection, which pushed back our opening date, meaning we had to incur additional rent and labor costs without a single sale. The true impact might be closer to double the construction costs.”

With access to a line of credit, Tony surpassed his first-year business projections in just eight months after opening. Today, confidence still drives Tony’s success, but he says it has to be met with investments. “After being in business for 1.5 years, our systems and people are in place. We’re confident that our concept will continue to grow as long as we continue to invest time and money on scaling.”

The cost of starting certain companies

The data also showed that while start-up money was lower than anticipated for many, there are some industries that cost more to start a company than others. Based on the initial amount of money spent within the first six months of business, these business owners in these industries noted start-up costs of more than $100,000:

  • Restaurants (38 percent)
  • Medical Offices (23 percent)
  • Manufacturing Companies (19 percent)

Alternatively, these three business types required the least amount of startup capital — $5,000 or less during the first six months:

  • Accounting (45 percent)
  • Online retail (44 percent)
  • Construction and landscaping (39 percent)

Overall the data shows cash flow and run rate uncertainties are all too common among small business owners. But while small business ownership may seem daunting, today’s funding options open opportunities to better handle cash flow and smooth those uncertainties. This, coupled with the power of an entrepreneur’s tenacity and self-confidence to succeed, champions their doubts and compels them to start the amazing journey of entrepreneurship.   

Rob Frohwein is the CEO and co-founder of Kabbage, a global financial services, cash flow technology and data platform which has helped small businesses access billions of dollars in funding.

SEE ALSO: Today's CEO playbook is outdated. Here are 5 things rising stars should focus on to win in the next decade

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The US posted a $234 billion budget deficit last month, the biggest one-month deficit in history

Fri, 03/22/2019 - 3:16pm

  • The US budget deficit hit $234 billion in the month of February, up 8.7% compared to the same month last year.
  • The February budget deficit was also the highest one-month deficit on record, eclipsing the previous record set in 2012.
  • The deficit is growing as the GOP tax law slows revenue intake and the bipartisan budget deal drives up spending.

The US posted a record budget deficit in the month of February, according to a new report form the Treasury Department.

The budget deficit for February came in at $234 billion, according to the Treasury, higher than the previous monthly record of $231.7 billion set in 2012. The deficit was also 8.7% higher than the $215.2 billion deficit posted in February 2018.

The budget deficit measures the shortfall of government revenues compared to what the government spends. Recent legislative changes have driven the deficit up to its highest levels since the financial crisis.

The deficit for the first five months of the government's 2019 fiscal year, which runs from October 2018 through October 2019, hit $544.2 billion — up 40% from the first five months of fiscal year 2018.

Read more: Trump once promised to eliminate the national debt in 8 years — but his new budget shows the president is going in the opposite direction»

The growing deficit has been fueled by two big factors. First, President Donald Trump's and the GOP's tax reform law — named the Tax Cuts and Jobs Act (TCJA) — has caused revenues to slide. According to the Treasury, revenue for the first five months of fiscal year 2019 is down a little less than 1% compared to the same period the year before.

Second, spending is soaring due to the bipartisan budget compromise from early 2018 and long-term programs. Spending for the start of fiscal year 2019 is up 9% compared to the same time period last fiscal year.

The news comes as concerns about the debt have piled up in recent months. The budget deficit for the full 2018 fiscal year hit $779 billion, the highest since 2012. The US also issued just over $1.3 trillion in new debt during the 2018 calendar year, the most for any calendar year since 2010.

Based on projections from the Congressional Budget Office, it won't get any better with the deficit expected to top $1 trillion by fiscal year 2022. Even the president's own budget estimated that the deficit will top $1 trillion next fiscal year.

SEE ALSO: Trump got exactly what he wanted from the Fed, but for reasons he is going to hate

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Stephen Moore is going to embarrass himself (and us) at the Fed

Fri, 03/22/2019 - 3:01pm

  • President Donald Trump has asked the conservative economic commentator Stephen Moore to join the Federal Reserve Board.
  • This is a mistake.
  • The Federal Reserve is supposed to make policy independent of the White House and the GOP, and Moore has demonstrated he has no interest in doing that.
  • Plus, he lacks the economic training to do the Fed Board's work.

President Donald Trump has asked the conservative economic commentator Stephen Moore to join the Federal Reserve,according to reports. He is not suited for the role.

The Federal Reserve is supposed to work independently of the White House, and Moore will not be able to do that. He has already suggested that Trump should fire everyone at the Fed for raising interest rates against the president's wishes.

Moore has also demonstrated time and time again during his career that his policy positions depend on political expedience, and he lacks the training to sit on the Fed Board.

Moore — an economic commentator who has spent stints at the right-wing think tanks The Cato Institute and The Heritage Foundation — has made his career in Washington as a supply-side economics hand for hire.

He's now in position to sit on the Fed because he was one of the few members of the GOP establishment who joined the "Trump train" during the campaign. This despite the fact that Moore has a long history of supporting immigration and opposing tariffs — unlike Trump.

He has spent his time during the current administration defending Trump policies that defy any kind of economic sense. In a CNN appearance with this correspondent, he tried to argue away the impact the government shutdown would have on the US economy by saying that out of work government workers were on a "paid vacation." (Though some were never given back pay.) The conversation when downhill from there.


This kind of partisan hackery isn't new from Moore. He has a long history of changing his economic positions with the political climate. During the financial crisis, Moore called for tight fiscal policy, scaring Glenn Beck's readers with the spectre of runaway inflation.

Now that the economy has recovered and a Republican is in office, hyperinflation is not a concern of his. And even though inflation is hovering near the Fed's 2% target, he sees deflation everywhere. So he's calling for low rates. Obviously this pleases Trump — Moore's all important audience of one.

In a world where the president has suggested making his personal pilot the head of the Federal Aviation Administration maybe this point doesn't matter — but Moore is not anything near an economist of the caliber necessary to sit on the Fed Board. He does not hold a Ph.D. in economics, and is not published in academia on the topic.

He has shown a stunning lack of knowledge about economic topics, once saying the Volcker Rule, a financial-crisis bank regulation, was related to commodity prices. If it bothers you that unqualified people are being given positions in the administration based on loyalty alone, Moore's appointment is about to bother you.

Moore is not an economist, and he's not a member of the Federal Reserve Board. He's the talking head on your TV, splitting the screen with someone with positions to his left, saying whatever he has to say to stay relevant to the GOP. That's why Trump wants Moore for his show.

SEE ALSO: Larry Kudlow is the perfect person to keep Trump's economic sham going

Join the conversation about this story »

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NBA legend Kareem Abdul-Jabbar explains why the NCAA should pay college athletes

Fri, 03/22/2019 - 2:43pm
  • The NCAA made nearly $1.1 billion in revenue in 2017.
  • NBA legend Kareem Abdul-Jabbar says he thinks college athletes should be paid.
  • In the video above, the "Mycroft Holmes"  author explains why the NCAA should pay their athletes.

Following is a transcript of the video.

Kareem Abdul-Jabbar: I think college athletes should be paid because they're being exploited. The NCAA makes a couple billion dollars each year and the people who actually do the work that enables them to make that money receive none of it. And that's absolutely exploitation.

[The NCAA made nearly $1.1 billion in revenue in 2017.]

We don't have to make them rich, but they should get some of the reward from their hard labor. Because going through college on a scholarship really is just a very wicked test of how long you can endure, and it shouldn't be like that.

EDITOR'S NOTE: This video was originally published on October 11, 2015.

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A little-known practice in the pharma industry is under threat, and a new memo reveals how the companies that rely on it are bracing for change (CVS, UNH)

Fri, 03/22/2019 - 2:33pm

  • CVS Health is asking drugmakers not to increase the net cost of their drugs should rebates go away, according to a letter obtained by Business Insider. 
  • It's a response to a proposed rule from the Trump administration that could end these payments. Pharmacy-benefit mangers like CVS have historically used rebates as a way to negotiate lower drug prices on behalf of health plans and employers. 
  • "The proposed rebate rule provides a windfall to drug manufacturers, but they’ve made no commitment to keep net costs at or below what’s currently negotiated for 2020," CVS Health spokesman T.J. Crawford told Business Insider.

A little-known practice that healthcare middlemen use to negotiate drug prices might go away, and one of the biggest company's in the space is bracing for it. 

On Thursday, CVS Health, which operates the pharmacy benefit manager CVS Caremark, wrote to drugmakers asking them not to increase the total cost of their drugs, should payments they typically make to PBMs as rebates go away as part of a proposed rule from the Trump administration. Axios reported that the letter was sent to 60 companies.

"We require assurances that, regardless of the issuance of any Final Rule, you will, at a minimum, honor the financial value of your Current Offer and continue to provide to the Part D Plans the same or lower net effective drug price for calendar year 2020," the letter obtained by Business Insider read.

In the letter, CVS asked that the pharmaceutical companies sign an acknowledgement that they agree to keep prices at the net cost CVS had been anticipating for its 2020 plans.

In February, the Department of Health and Human Services (HHS) said it's proposing a rule that would effectively ban rebates, which big pharma companies pay to middlemen known as pharmacy benefit managers, or PBMs.

Read more: The CEO of a $210 billion pharma company says that US drug prices are working against patients. One chart explains why.

Drugmakers offer those rebates to PBMs to get better insurance coverage for their prescriptions. The PBMs typically pass on most or all of those discounts to health plans and employers, but they don't always make it to individuals who're purchasing drugs at the pharmacy counter.

The Trump administration wants to limit rebates in order to reduce the cost of prescription drugs

Rebates have been blamed for contributing to the rising cost of prescription drugs in the US, and the Trump administration has said that limiting them would help bring down costs for patients. 

But it could also benefit big drugmakers. The pharmaceutical industry, for its part, has said it supports curbing rebates. In a recent congressional hearing on drug pricing, pharmaceutical CEOs were asked about the proposed change and indicated clear support for the proposal.

The executives stopped short of saying they would actually lower the prices of their prescriptions should the proposal go through. Leaders from the big PBMs are expected to testify at their own hearing in April. 

Read more: 7 pharma execs just told Congress: Don't expect the Trump administration's newest drug pricing plan to lower all US drug prices yet

"The proposed rebate rule provides a windfall to drug manufacturers, but they’ve made no commitment to keep net costs at or below what’s currently negotiated for 2020," CVS Health spokesman T.J. Crawford told Business Insider. "What we’re asking is very simple: help minimize uncertainty for plan sponsors and lessen the financial burden on beneficiaries and tax payers by making this commitment."

Under the rule proposed by the Trump administration, drugmakers and PBMs would be pushed to give rebates directly to patients at the pharmacy counter, at least in the government-funded Medicare Part D prescription drug program, which covers the elderly and some disabled individuals. Drugmakers currently pay out more than $100 billion in rebates annually. Rebates are a big business for PBMs such as Express Scripts, CVS Caremark, and OptumRx.

CVS is seeking a guarantee that prescription-drug prices will fall

CVS gave an example of a $100 drug on which a drugmaker had a $20 rebate. In today's model, that would lead to an $80 net cost for the drug. CVS says that should the $20 rebate go away, the company would like to see the net cost stay at $80, instead of increasing to $100.

CVS is worried that if the proposal to curb rebates goes into effect, the price of the drug could effectively jump from $80 to $100. That could hurt the company's bottom line.

The Trump administration is expected to issue its final rebate rule in May, about a month before Medicare plans have to submit their 2020 plan proposals to the government. It's left plans to form two different bids: one for if the rebate rule changes, and one if it stays the same, the letter noted. 

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Generally, eliminating the rebates could increase the cost of health insurance, because rebates right now are often kept by health-insurance companies and used to reduce premiums. The biggest benefit would be to people who need lots of expensive prescription medicines, particularly if they have health-insurance plans that require them to pay a fixed percentage of the cost of their drugs. 

Rising tensions in the drug industry

Tensions have been growing among the pharmaceutical industry as patients grow more and more upset over the high price of prescription drugs, with few clear-cut solutions in sight. 

For instance, in February, a letter sent by OptumRx to pharmaceutical companies demanded two years of advance notice from pharma companies before they lower the prices of their drugs. OptumRx, the pharmacy-benefit manager owned by UnitedHealth Group, said the goal of its letter was to make sure its costs were predictable so it could set the appropriate prices for prescription-drug insurance plans.

When it came to rebates, OptumRx demanded in the letter that drug companies keep their rebates at the same level, even if they lower the list price of a drug. That would make it difficult or impossible for drugmakers to lower their list prices, because lowering their list prices would automatically reduce their profits.

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NOW WATCH: Physicists have discovered that rotating black holes might serve as portals for hyperspace travel

Insurtech Research Report: The trends & technologies allowing insurance startups to compete

Thu, 03/21/2019 - 11:07pm

Tech-driven disruption in the insurance industry continues at pace, and we're now entering a new phase — the adaptation of underlying business models. 

That's leading to ongoing changes in the distribution segment of the industry, but more excitingly, we are starting to see movement in the fundamentals of insurance — policy creation, underwriting, and claims management. 

This report from Business Insider Intelligence, Business Insider's premium research service, will briefly review major changes in the insurtech segment over the past year. It will then examine how startups and legacy players across the insurance value chain are using technology to develop new business models that cut costs or boost revenue, and, in some cases, both. Additionally, we will provide our take on the future of insurance as insurtech continues to proliferate. 

Here are some of the key takeaways:

  • Funding is flowing into startups and helping them scale, while legacy players have moved beyond initial experiments and are starting to implement new technology throughout their businesses. 
  • Distribution, the area of the insurance value chain that was first to be disrupted, continues to evolve. 
  • The fundamentals of insurance — policy creation, underwriting, and claims management — are starting to experience true disruption, while innovation in reinsurance has also continued at pace.
  • Insurtechs are using new business models that are enabled by a variety of technologies. In particular, they're using automation, data analytics, connected devices, and machine learning to build holistic policies for consumers that can be switched on and off on-demand.
  • Legacy insurers, as opposed to brokers, now have the most to lose — but those that move swiftly still have time to ensure they stay in the game.

 In full, the report:

  • Reviews major changes in the insurtech segment over the past year.
  • Examines how startups and legacy players across distribution, insurance, and reinsurance are using technology to develop new business models.
  • Provides our view on what the future of the insurance industry looks like, which Business Insider Intelligence calls Insurtech 2.0.
Subscribe to an All-Access pass to Business Insider Intelligence and gain immediate access to: This report and more than 250 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

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Nearly three-quarters of bills will be paid digitally by 2022 — this is how banks can stay ahead of the trillion-dollar opportunity

Thu, 03/21/2019 - 10:01pm

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.

Between housing costs, utilities, taxes, insurance, loans, and more, US adults paid an estimated $3.9 trillion in bills last year.

That market is growing slowly, but it’s changing fast — more than ever before, customers are moving away from paying bills via check or cash and toward paying online, either through their banks, the billers themselves, or using a third-party app.

Thanks to rising customer familiarity with digital payments, an increase in purchasing power among younger consumers more interested in digital bill pay, and a rise in digital payment options, nearly three-quarters of bills will be paid digitally by 2022, representing a big opportunity for players across the space.

In theory, banks should be in a great position to capitalize on this shift. Nearly all banks offer bill payment functionality, and it’s a popular feature. Issuers also boast an existing engaged digital user base, and make these payments secure. But that isn’t what’s happening — even as digital bill pay becomes more commonplace, banks are losing ground to billers and third-party players. And that’s not poised to change unless banks do, since issuer bill pay is least popular among the youngest customers, who will be the most important in the coming year.

For banks, then, that makes innovation important. Taking steps to grow bill pay’s share can be a tough sell for digital strategists and executives leading money movement at banks, and done wrong, it can be costly, since it often requires robust technological investments. But, if banks do it right, bill pay marks a strong opportunity to add and engage customers, and in turn, grow overall lifetime value while shrinking attrition.

Business Insider Intelligence has put together a detailed report that explains the US bill pay market, identifies the major inflection points for change and what’s driving it, and provides concrete strategies and recommendations for banks looking to improve their digital bill pay offerings.

Here are some key takeaways from the report:

  • The bill pay market in the US, worth $3.9 trillion, is growing slowly. But digital bill payment volume is rising at a rapid clip — half of all bills are now digital, and that share will likely expand to over 75% by 2022. 
  • Customers find it easiest to pay their bills at their billers directly, either through one-off or recurring payments. Bank-based offerings are commonplace, but barebones, which means they fail to appeal to key demographics.
  • Issuers should work to reclaim bill payment share, since bill pay is an effective engagement tool that can increase customer stickiness, grow lifetime status, and boost primary bank status.  
  • Banks need to make their offerings as secure and convenient as biller direct, market bill pay across channels, and build bill pay into digital money management functionality.

In full, the report:

  • Sizes the US bill pay market, and estimates where it’s poised to go next.
  • Evaluates the impact that digital will have on bill pay in the US and who is poised to capitalize on that shift.
  • Identifies three key areas in which issuers can improve their bill pay offerings to gain share and explains why issuers are losing ground in these categories.
  • Issues recommendations and defines concrete steps that banks can take as a means of gaining share back and reaping the benefits of digital bill pay engagement.
Get The Bill Pay Report

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Uber reportedly chooses the NYSE for IPO as competitor Lyft gears up to list on the Nasdaq

Thu, 03/21/2019 - 7:36pm

  • Uber has chosen the New York Stock Exchange for its upcoming initial public offering (IPO), according to Bloomberg.
  • The ride-hailing company is expected to publicly file for an IPO in April at a valuation that could hit as high as $120 billion.
  • Meanwhile, Uber's rival Lyft is revving up its own IPO on the other major US stock exchange, the Nasdaq.
  • Lyft is expected to start trading at the end of next week.

The competition between Uber and Lyft has no bounds.

Just days before Lyft is set to go public on the Nasdaq, Uber has chosen the rival New York Stock Exchange (NYSE) for its own forthcoming initial public offering (IPO), according to Bloomberg.

Uber, which is reportedly expected to file publicly in April, could hit the public markets at a valuation as high as $120 billion. That means Uber will bring the NYSE along for the ride on what will likely be the largest IPO of 2019.

Lyft is expected to start trading at the end of next week on the Nasdaq.

While all eyes are on Lyft as a test of the economy and public markets, its IPO is considerably smaller. Lyft is expected to price around or above $23 billion, the high end of the proposed valuation the company shared in an updated registration statement on Monday.

In addition to choosing different exchanges, the competing companies have taken steps to ensure they don't have too many of the same banks on their IPOs either, according to people familiar with the IPOs.

On Thursday, the jean company Levi Strauss went public on the NYSE, and Pinterest is reportedly planning to list with the same exchange in April.

SEE ALSO: Lyft's bankers are trying to compare the ride-hailing app to Grubhub and luxury retailer Farfetch — here's their pitch to investors

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The new CEO of Intuit says the rise of artificial intelligence will be as big a challenge as the company's shift to cloud computing (INTU)

Thu, 03/21/2019 - 6:49pm

  • Sasan Goodarzi stepped up as CEO of Intuit — the company behind products like Intuit and TurboTax — in January, replacing 11-year chief exec Brad Smith. 
  • Smith gets a ton of credit from parties inside and outside Intuit for helping the company successfully navigate to a largely cloud-based, subscription-based software model. 
  • To prepare to replace such a prominent figure, Goodarzi spent much of last year shadowing leaders like NFL legend Steve Young and Microsoft CEO Satya Nadella, trying to glean their wisdom for how to be a strong leader.
  • Now, Goodarzi says, his biggest challenge will be helping Intuit become an artificial intelligencecompany, the same way that Smith led Intuit to become a cloud company. 
  • Intuit has already begun working AI in to many of its products — and says that it's on the roadmap to make TurboTax a totally free product that uses AI to match users up with pre-vetted offers for credit cards, loans, and other financial products.

Sasan Goodarzi has some big shoes to fill, three months or so into his reign as CEO of $66.5 billion Intuit.

His predecessor, Brad Smith, successfully shepherded Intuit into the cloud computing era during an 11-year tenure, delivering huge growth in the subscription-based online versions of Intuit's flagship TurboTax and QuickBooks products. Smith's success endeared him to Wall Street, which propelled shares of Intuit to all-time highs. 

Goodarzi knows he inherited a good situation. But he also sees something on the horizon that could be as difficult, and potentially as lucrative, as anything faced by Smith. 

To Goodarzi's mind, he told Business Insider earlier this month, the rise of artificial intelligence represents a big opportunity for a company like Intuit — including the chance to adopt a new business model. He foresees a future where users don't pay for many of Intuit's products, and the company instead makes money on products like TurboTax by presenting customers with fine-tuned, personalized offers for other financial services. 

But Goodarzi says that even that potentially huge shakeup to its business model is secondary to the broader implications of applying artificial intelligence to the world of personal and business finance, where livelihoods literally hang in the balance.

Goodarzi says that there's a lot of societal upside here: Already, Intuit is using AI to vet applicants for small-business loans. Applicants who would have been rejected by more established lenders are now getting approved thanks to the technology, he says. And the borrower default rate is lower.

But there are lots of potential hazards and pitfalls, too. 

"It's actually a cultural change that we have to go through internally to understand the impact of artificial intelligence," Goodarzi said. "Right now, I would say that for the first time in a very long time, the technology can do things that our employees don't yet understand what it's capable of." 

We spoke with Goodarzi about how he prepared himself to take over from such a distinguished predecessor, and his philosophy on running a company as it faces the unprecedented challenge ahead. 

Shadow boxing

Last August, it was announced that Smith would be stepping down as CEO, with Goodarzi on deck to replace him. Goodarzi had been with Intuit for about 14 years at the time of the announcement, including stints as the leader of both TurboTax and QuickBooks, so he was no stranger to the company. Still, he wanted to prepare. 

"It's an enormous gift to step into this role having been with the company for 15 years," says Goodarzi. "But there's a shadow, and the shadow is that you make assumptions that you know everything about the company."

And so, Goodarzi spent some time with about a dozen CEOs and other leaders he admires, including Microsoft CEO Satya Nadella, Slack CEO Stewart Butterfield, and even NFL Hall of Famer Steve Young. He shadowed them in their daily duties, asking questions and getting their perspectives on the world of business. 

From Nadella, he learned that a CEO has a truly unique perspective: The CEO knows more about the day-to-day operations of the company than the board of directors; and the CEO knows more about the inner workings of the board than anyone involved in the company's day-to-day operations. Nadella's advice, then, was to always keep this "asymmetry" in mind, and consider those perspectives when you run into disagreement on one side or another. 

Butterfield's advice was simple, says Goodarzi: "Best product wins." Being a CEO is complicated, and requires a leader to pick up a lot of new skills. But if the product isn't any good, it's all for naught, says Goodarzi. 

He went to Young for a different perspective. In the same way that Goodarzi was preparing to replace Brad Smith, Steve Young had replaced the legendary Joe Montana as the quarterback of the San Francisco 49ers. Young's advice to Goodarzi on following such a tough act: "Be yourself, don't be Brad." 

In January, Goodarzi kicked things off with a series of meetings and events with Intuit's 9,000 employees around the globe. Now, a few months later, Goodarzi is settling in for the long haul.

Rethinking everything

The thing that makes Goodarzi's "heart beat fastest" — the very reason why Intuit exists — is the idea that technology can help people be more prosperous, he says. Artificial intelligence is a powerful lever to making that happen, says Goodarzi, and the company is working hard to integrate it into its products. 

As with cloud computing, AI is forcing Intuit to rethink and reorganize its approach to products, even its most successful products. It's early yet, Goodarzi says, but there are already signs of how AI is shaking up Intuit's business.

"We're gonna have to reimagine ourselves and not be afraid to disrupt ourselves once again," Goodarzi says. 

Goodarzi says that for TurboTax, its popular tax filing tool, this is most dramatically manifesting in the transition to an "AI-driven expert platform." The idea is that TurboTax's algorithms will work in concert with human financial experts: When the system finds a tax question it can't answer, it connects you with its network of CPAs and tax attorneys. He doesn't see TurboTax, then, as a replacement for humans, but rather a new way of interacting with them.

"[Customers] actually want to talk to an expert, a human being, to get their questions answered, and so in essence what we are focused on is connecting experts with those that we serve on our platform and fundamentally digitizing the entire service industry — which, by the way, lags behind the technology industry," Goodarzi says. 

More futuristically, Goodarzi praises recent Intuit efforts like QuickBooks Assistant, a voice assistant that lets small business users sift their data and turn up information on accounts payable and received.

He also says that he's proud of QuickBooks Capital, which weighs the creditworthiness of small business applicants — its algorithm looks at non-traditional factors to help candidates who might otherwise have trouble getting a loan, either because of their background or their lack of a strong credit history.

"We're able to crunch billions of data using decision engines and artificial intelligence to give you a loan that nobody else would give you," Goodarzi says. 

Away from 'user-paid'

Looking forward, Goodarzi says that there's a huge opportunity to use AI to make products like TurboTax free to users. Rather than pay up front, you might give your consent (Goodarzi says that consent is an important part) to have Intuit analyze your data to match you up with a vetted selection of financial products from partners that might include Roth IRAs and credit card offers. Turbo, a new, free Intuit personal finance product, does some of this already.

While everybody likes getting things for free, this plan might raise some eyebrows — Geoffrey A. Fowler of the Washington Post recently called Credit Karma Tax, a similar AI-powered product to what Goodarzi is proposing for TurboTax, a "bold grab for personal data" that's "taking a business idea that hasn’t worked out well for us with Facebook and applying it to even more sensitive information."

Goodarzi acknowledges that AI has its downsides, and that constant vigilance is required to guard against unwanted outcomes. He says that the company's algorithms include data from 26 billion sources, helping the company work to average out the kinds of bias that can sometimes pop up in AI systems. Still, he says, the company's engineers are always on the lookout to make sure that the systems are working for, not against, its users.

"For the first time in a very long time that technology can do things that our employees don't yet understand that it's capable of," Goodarzi says. 

Ultimately, it's important to learn from both the good and the bad, he says, and Intuit has to be willing to change its approach as results come pouring in, he says. 

"You know, we're in the money business so we have to be very thoughtful," Goodarzi says.

SEE ALSO: The CEO of Hewlett Packard Enterprise tells us why the company is 'under-appreciated' and how it can beat Amazon in a market that's bigger than cloud computing

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Elon Musk emailed every single Tesla employee saying car deliveries should be their 'primary priority' in what he's calling the biggest wave in company history (TSLA)

Thu, 03/21/2019 - 5:49pm

  • Tesla is racing to deliver cars before the end of the first quarter on March 31. 
  • Elon Musk told all employees in an email seen by Business Insider that deliveries should be their "top priority."
  • As the company ramps up sales in Europe and China, in addition to North America, Musk said this is the biggest wave of deliveries in its history. 

Elon Musk sent an email to all Tesla employees on Thursday afternoon informing them that car deliveries should be everyone's top priority until the end of the quarter on March 31.

Business Insider viewed a copy of the email, which was sent under the subject line "Vehicle Delivery Help Needed!" It follows a separate email from Sanjay Shah, a company vice president, last week asking for employees to once again volunteer for extra shifts delivering vehicles.

"What has made this particularly difficult is that Europe and China are simultaneously experiencing the same massive increase in delivery volume that North America experienced last year," Musk said in the email. "In some locations, the delivery rate is over 600% higher than its previous peak!"

Musk also said that supplier issues in Europe had further complicated the company's delivery situation. Business Insider reported last week that Tesla needed to deliver 30,000 more cars before the end of the quarter to meet internal goals.

Tesla did not immediately respond to a request for comment.

According to the email, this is the "biggest wave in Tesla's history" and "won't be repeated in subsequent quarters." During his unveiling of the Model Y last week, Musk said that the past year — as Tesla transitioned from "production hell" to "delivery hell" — was one of the most difficult in the company's history.

Do you work for Tesla? Have a story to share? Get in touch with this reporter at Secure contact methods are available here. 

Here's the full email:

"For the last ten days of the quarter, please consider your primary priority to be helping with vehicle deliveries. This applies to everyone. As challenges go, this is a good one to have, as we've built the cars and people have bought the cars, so we just need to get the cars to their new owners!

"What has made this particularly difficult is that Europe and China are simultaneously experiencing the same massive increase in delivery volume that North America experienced last year. In some locations, the delivery rate is over 600% higher than its previous peak! This was further exacerbated by supplier shortages of EU spec components and a sticker printing error on our part in China that were only resolved in the past few weeks.

"North America is also stressed, as the final month of this quarter is almost all North America builds. Moreover, for the first two weeks of march most cars were sent from our factory in California to the East Coast to ensure arrival before the end of the quarter.

"The net result is a massive wave of deliveries needed throughout Europe, China and North America. This is the biggest wave in Tesla's history, but it is primarily a function of our first delivery of mass manufactured cars on two continents simultaneously, and will not be repeated in subsequent quarters.

"To help, please contact Sanjay Shah in North America, Robin Ren in China and Ashley Harris in Europe."

SEE ALSO: Elon Musk wore custom Tesla-branded Jordan sneakers made of python skin at the company's Model Y unveiling

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An attorney explains why she thinks the students involved in the college-admissions scandal probably knew about it

Thu, 03/21/2019 - 5:26pm

  • Thirty-three parents were indicted on charges of paying up to $6.5 million in bribes to get their children admitted into top colleges in the recent college-admissions scandal.
  • Rick Singer, who is accused of being the ringleader of the $25 million scam, said the students involved did not know that their parents were negotiating behind closed doors to secure their admission. 
  • One attorney said the students likely knew about the fraud, especially when it came to being recruited as athletes for sports they may never have even played. 

The wealth and fraud at display in the college-admissions controversy has stirred conversations about privilege and the flaws within the application process. Thirty-three parents have been indicted on charges of paying to fabricate their children's credentials to bypass the college-admissions process. 

The backlash has been widespread, even prompting responses from the White House. Colleges have already started to take action against coaches and administrators. Parents accused in the scandal have faced professional repercussions

However, aside from Sephora canceling its partnership with Olivia Jade Giannulli, the Instagram-famous daughter of Lori Loughlin — one of the parents accused in the scandal — there have been few updates about the repercussions the students involved have faced.

Rick Singer, who is accused of being the ringleader of the $25 million scandal, said that many of the students involved in the scandal were not aware of the measures their parents underwent to secure their admission.

Singer organized for students' exams to be corrected  after they completed them or taken for them, court documents said. Prosecutors also alleged parents worked with Singer to create false, nonexistent athletic profiles, even going so far as to edit their kids' heads onto stock photos of athletes. 

The actions the parents are accused of raise the question of whether the students themselves were complicit in the plot.

"The idea that [the students] would sort of miraculously get in and not think that they had some assistance, it just doesn't make any sense," said Midwin Charles, an attorney and the founder of the law firm Midwin Charles & Associates LLC, on a recent episode of "Business Insider Today."

Some cases of the alleged fraud entailed parents or the coach securing students spots on teams for sports they never played. One private-equity firm executive agreed to have his son pose as a prominent football player on his University of Southern California application despite his school not having a football team, according to the criminal complaint. 

"If you've never rowed crew and all of a sudden you show up on a college campus and you're part of the crew team, something's up," Charles said. 

According to the criminal affidavit, one student knowingly cheating on the SAT in 2015, and a proctor who fed exam answers to a student "gloated" with her and her mother, Elizabeth Henriquez, "about the fact that they cheated and gotten away with it."

The argument of whether these involved students deserve their spots at these schools echoes the debate over affirmative action. 

"What people fail to recognize is that affirmative action is an admission policy where they are allowed to consider the race of the person for purposes of diversity. But it doesn't mean that that person isn't also qualified," Charles said. "If you come across a person of color [in] a highly elite school or even job, trust and believe that that person of color is qualified for the job."

The outrage over the scandal can be attributed to the fact that privileged students already have an advantage in the admissions process, Charles said. The practice of legacy admissions has also faced criticism. Because a parent had the means to attend or donate money to a school, some say legacies could be considered a form of affirmative action.

"People tend to forget there is affirmative action for wealthy students," Charles said. "You cannot get certain jobs without having a higher-education degree. The system is stacked in favor of those who can afford the tutor. Those students [involved in the scheme] fell within that group, and yet their parents still chose to bypass that hard work and just cut a check."

To hear the full interview with Charles and her opinion as to why the students in the college scandal probably knew about it, watch the full episode of "Business Insider Today" below. 


Read more:

SEE ALSO: 8 colleges were named in the massive college-admissions scandal. Here's how they're responding.

SEE ALSO: 14 ridiculous things people actually put on their college applications

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NOW WATCH: Elon Musk sent a $100K Tesla Roadster to space a year ago. It has now traveled farther than any other car in history.

Nike slides after sales miss the mark (NKE)

Thu, 03/21/2019 - 4:51pm

  • Nike shares slipped in after-hours trading on Thursday after the company's third-quarter revenue fell short of expectations. 
  • North American revenue also fell slightly short of Wall Street's forecasts.
  • Shares have been on a tear in recent months, up 19% so far in 2019.
  • Watch Nike trade in live.

Nike shares fell nearly 4% in extended trading on Thursday after the company reported third-quarter revenue that fell short of analysts' expectations.

Here's what the sneaker giant for the three months ending February 28, compared with what analysts surveyed by Bloomberg expected. 

  • Adjusted earnings per share (EPS): $0.68 versus $0.65.
  • Revenue: $9.6 billion versus $9.65 billion.
  • North American revenue: $3.81 billion versus $3.85 billion.

Even as its sales just missed estimates, the Beaverton, Oregon-based company touted its digital strategy driving revenue growth for a second quarter.

"Our business momentum is being accelerated by our ability to scale innovation at a faster pace and expand new digital consumer experiences around the world," said Mark Parker, Nike's CEO, in a release.

Meanwhile, Nike said it repurchased 9.8 million shares in the third-quarter for a total of $754 million.

Nike shares took a hit last month after Zion Williamson, the star college-basketball player, was injured when his sneakers malfunctioned. But the episode did little to dent the stock's longer-term performance, with shares still up 19% this year.

Sam Poser, an analyst at Susquehanna who is generally quite bullish in his footwear coverage, had recommended buying Nike ahead of its report. He said solid results from Foot Locker earlier this month indicated Nike sales had gained momentum. 

"Footwear increasing market share across categories, distribution channels, geographies and genders," Poser told clients last week. "The momentum of apparel sales growth continues as well; we think women's apparel will continue to be the greatest opportunity for growth."

The third-quarter results come after a particularly strong showing last quarter, reflecting efforts around Nike's digital strategy had paid off.

Wall Street is generally pretty bullish on the company. Analysts surveyed by Bloomberg, carry 25 "buy" ratings, 10 "hold" ratings, and just one "sell."

Read more Nike and retail coverage from Business Insider:

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